options (finance)

[stinkypete]

[ QUOTE ]
[ QUOTE ]
The DOW bottomed out in October '02 and has been on the rise ever since, granted. The thing most people forgot to pay attention to is that the dollar has lost over 30% of its value since the high in January '00. Adjusted for actual dollar value right now, we're about 18% off its peak back in '00 which would put us square in bear market territory.

[/ QUOTE ]

This is such bollox. You are arguing that a market that has trended upwards every year for 5 years was in fact a bear market because of the currency the market trades in? Get out.

[/ QUOTE ]

no, quite the opposite. he's saying that the fact that it was a bear market was masked by the declining currency the market traded in.

whether or not you include the value of the currency in defining a bear or bull market is your choice, but he's not wrong to do so.

[The once and future king]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
The DOW bottomed out in October '02 and has been on the rise ever since, granted. The thing most people forgot to pay attention to is that the dollar has lost over 30% of its value since the high in January '00. Adjusted for actual dollar value right now, we're about 18% off its peak back in '00 which would put us square in bear market territory.

[/ QUOTE ]

This is such bollox. You are arguing that a market that has trended upwards every year for 5 years was in fact a bear market because of the currency the market trades in? Get out.

[/ QUOTE ]

no, quite the opposite. he's saying that the fact that it was a bear market was masked by the declining currency the market traded in.

whether or not you include the value of the currency in defining a bear or bull market is your choice, but he's not wrong to do so.

[/ QUOTE ]

So if the dollar rallied tomorrow that would retroactively transform the markets from bear to bull according to you. Also, according to you, however the market performed it could only ever have been a bear market due to the $ tanking unless it made uber fantastic gains. This is all nonsense.

The market increased in its nominal value, trended upwards and was stable and predictable, it was a bull market. (note the was)

[stinkypete]

[ QUOTE ]

So if the dollar rallied tomorrow that would retroactively transform the markets from bear to bull according to you.


[/ QUOTE ]

nobody's saying that. you're dumb.

[ QUOTE ]

The market increased in its nominal value, trended upwards and was stable and predictable, it was a bull market. (note the was)

[/ QUOTE ]

if that's how you choose to define a bull market as a trader, and it works for you, that's great.

i personally couldn't care less about nominal value, or the short-term stability or predictability of the market.

[greg nice]

graph the DOW in ounces of gold instead of dollars for past 5 years

edit/
nevermind i saved the link from a few months ago

http://goldsilver.com/the_dow_is_crashing.php

[teddyFBI]

[ QUOTE ]
You are completely incorrectly assuming that my recent results have anything to do with my attitude. As a matter of fact, I got my ass handed to me in the market every day for the past week or so, and today - sadly - was no exception. The thing is, I keep a log of all my trades, I am developing better systems and methods, and when I go back over my trades and "debrief" I can see that there's drastic improvements. It's a lot like poker, you can play it right and still lose, but you know you played the hand correctly. It's really tough to explain more than that.

[/ QUOTE ]

Come on, now -- this is a really bad analogy. In poker, after a hand is over (when you have complete information, that is), it's easy to conclusively determine, mathematically, that you played the hand "correctly" (e.g. that in the long-term getting all-in as a 80% favorite is going to increase your bankroll.)

I don't understand how you can make an analogous conclusion for trading. Are you saying that even when you get your ass handed to you, you can somehow determine that you "played it correctly" anyway? I don't understand this.

[The once and future king]

[ QUOTE ]
[ QUOTE ]

So if the dollar rallied tomorrow that would retroactively transform the markets from bear to bull according to you.


[/ QUOTE ]

nobody's saying that. you're dumb.






[ QUOTE ]

The market increased in its nominal value, trended upwards and was stable and predictable, it was a bull market. (note the was)

[/ QUOTE ]

i personally couldn't care less about nominal value, or the short-term stability or predictability of the market.

[/ QUOTE ]

They might not be saying that, but that is the inescapable logical outcome of that statement. Maybe that escaped you.
There are so many reasons why calling the market for the last 5 years bear is ridiculous. As I have said, if the dollar increases in value, that retroactively changes it from bear to bull, also, if you call it bear you have no way of distinguishing the last 5 bull years from the true bear period that proceeded it.

As for not caring about predictability etc, what you are saying (I dont think you think things through at all) in effect is you dont care if you can predict the market. What sort of trader are you?

[stinkypete]

[ QUOTE ]

They might not be saying that, but that is the inescapable logical outcome of that statement. Maybe that escaped you.
There are so many reasons why calling the market for the last 5 years bear is ridiculous. As I have said, if the dollar increases in value, that retroactively changes it from bear to bull, also, if you call it bear you have no way of distinguishing the last 5 bull years from the true bear period that proceeded it.


[/ QUOTE ]

uhmmm, like i said, you're dumb. the dollar would have had to be climbing during the time period in question for it to have any bearing on whether to consider it a bull or bear market. what happens tomorrow is obviously irrelevant to whether last year was a bear or bull market. come on, it's really not that hard to understand.

if the market drops 50% tomorrow does that suddenly mean the last 3 years were a bear market in your eyes? you might not be saying that, but that is the inescapable logical outcome of that statement. Maybe that escaped you.

[ QUOTE ]

As for not caring about predictability etc, what you are saying (I dont think you think things through at all) in effect is you dont care if you can predict the market. What sort of trader are you?

[/ QUOTE ]

i'm a trader of poker chips and a passive value investor. never said i was a trader.

[xxThe_Lebowskixx]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

So if the dollar rallied tomorrow that would retroactively transform the markets from bear to bull according to you.


[/ QUOTE ]

nobody's saying that. you're dumb.






[ QUOTE ]

The market increased in its nominal value, trended upwards and was stable and predictable, it was a bull market. (note the was)

[/ QUOTE ]

i personally couldn't care less about nominal value, or the short-term stability or predictability of the market.

[/ QUOTE ]

They might not be saying that, but that is the inescapable logical outcome of that statement. Maybe that escaped you.
There are so many reasons why calling the market for the last 5 years bear is ridiculous. As I have said, if the dollar increases in value, that retroactively changes it from bear to bull, also, if you call it bear you have no way of distinguishing the last 5 bull years from the true bear period that proceeded it.


[/ QUOTE ]

Wouldnt the correct way be to look at both the rate at which the dollar declined and the Dow rose? You said said "if the dollar falls 50% tomorrow"... Well the dollar didnt fall 25% in a single day, it slowly declined over a longer period of time, while the Dow also rose. The dollar is worth significantly less than before, so how the hell can you claim that it is a bull market if the value of a company has declined?

[The once and future king]

[ QUOTE ]
The dollar is worth significantly less than before, so how the hell can you claim that it is a bull market if the value of a company has declined?

[/ QUOTE ]

Easy. Say I have 100 dollars. I keep the dollars as currency in a standard savings account for the period of the bull market. I earn X amount interest but the dollar has lost Y value.

Alternatively I invest that 100 dollars in the DOW at the start of the five year bull period, I show much better returns than the above example even accounting for dollar devaluation. Thus by putting $ into the DOW I have shown much much better returns than had I left my $ as $. This would not be the case had the market been bear.

I cant actually believe I am having this conversation.If you think the last 5 years have been a bear market you are in for some very rude awakenings. The idea that the last 5 years have been a bear market are at best just uninformed but at worst totally retarded.

[emon87]

The point is that dollar movements don't make a market behave in a bearish way as it affects short term trading. If you were investing for long term growth, then you would absolutely be interested in how the dollar's movement affects the returns you get from American investments vs. foreign investments.

However, as a short term trader, you are interested not in the underlying value of a company but rather in using short term movements to make a profit. Many/most day traders know little about the companies behind the stocks that they are trading - some don't even know the actual name of the company! Rahter, they are focusing on those stocks because of easy to predict fluctuations.

In a bull market, the trend is upward and the volatility is relatively lower with high predictability of movement. In a bear markert, the swings are crazy and predictability goes to hell. Systems that worked for predicting movements in a bull market are worthless. As far as trading goes, the market recently has DEFINITELY been a bull market.