The Market Today 5/6
 

What a day! Nearly had a bowel accident around mid-afternoon while watching CNBC. Talking heads say tomorrow could be ugly as well. What do we do now?

Well, is it beware of Greeks bearing debt? ... But that is just one factor in a whole huge global economy of factors. And so many of those factors -- not good.


And I guess there was some kind of fluke today, too. The talk I heard in the car on the way home just now (NPR, of course) had to do with a "fat finger trade" where they think somebody hit the wrong key for a sell. Of course, the place where they think it happened is denying it I heard. (I cannot even imagine that could happen. But I do not see why it could not either. Geez. How creepy is that. A "fat finger trade.") And it happened to P&G which plummeted to below 40. It came back though to close at 60.75 down 2.27% from yesterday. (Maybe that was because they sold a lot of Charmin there for a while.)

What to do?

Well, if this continues, I am going to start watching for some dividend payers that I wish I had bought when I tiptoed in about a year ago with some sideline money and picked up a little KFT and JNJ. There were some others that I liked at the time, too, but I did not buy them.

But please remember that I have no idea what I am talking about and I have absolutely no credentials as anything financial and for all anybody knows I could be an English major. And money in the market has to be such an individual comfort zone thing. Like I always say, I never bet the whole farm, just my little stash of butter and egg money.

Boomer, Longtime Fund Manager of the Teeny-Tiny Boomerfund

I think the reason for the decline is that I decided to move some money around in two of my accounts.

It is almost like when I wash my car it rains.

Never fails!!!

I have not read yet about how long that plunge lasted, but I have thought about what surely could be out there now...the buy orders that were in on those computers. (Some happiness in the land for those maybe.) But think about the sell orders. Can you imagine what that must be like for somebody who had a sell in on the computer and then that sell was followed by an instant big rebound. And some of those sells could get an insult upon injury cap gains hit. I don't know if I am reading all the possibilities right, but I think it might have been better when small investors would just squint at the print in the newspaper once in a while.

There will be some stories tomorrow I bet.

Boomer

Yep... ya only lose money if you sell it!

I heard that someone wrote billion instead of million and that set the whole thing off.

How the heck can they cancel trades? What about the guy who bought low, sold high and reinvested in another stock, all before the announced the canceled trades? Or the guy who sold stock as the fall started, bought at the bottom and recovered his loss? Or just the guys who saw the fall, and sold all his stock at a loss thinking the sky was falling? Are they gonna bail out all of those investors? There are many more examples.. who is going to trust the stock market from now on if they can just cancel trades they dont think were fair? WOW.

Your portfolio's end-of-day value
 

Sorry, but I respectfully disagree. You are worth -- at the end of each day -- the value of your portfolio.

Gene

On NPR this morning they said that a $16 Million trade was erroneously entered as $16 Billion (with a B!) and in nanosconds the program trade computers all shouted "sell, sell sell! I thought I remembered that the exchanges had put some rules in the system several years ago, which were intended to stop, or minimize, the tanking of a market when the computers all kicked in their sell orders in unison. Am I mis-remembering?

The measures you are talking about were REMOVED in 2007, I believe. Will check further.:mornincoffee:

Buy ! Buy ! Buy !!!

I wonder who the person is who made that huge mistake of entering billions instead of millions? Boy Howdy. Betcha he'll be looking for another job soon.

Collie,

I remember that, too.

I just heard that they are canceling trades that happened during yesterday's plunge. I think that's a new twist. Can't remember hearing such a thing before. Like you, I thought there was a "head 'em off at the pass" thing in place, but I have never heard of an "after the fact" fact.

And I doubt if we will ever know if it really was a "fat finger trade" because they are scrambling to cover and deny from what I am gathering from the news this morning. The fat finger trade thing was alongside a lot of bad news in the world economy though so, if it did happen, it was one of several factors that dropped the market. All the better for the street to rewrite history.

We are a nation of amnesiacs, way too willing to abdicate our power over our own financial decisions to the media and to the machine.

I don't think any of those people who get paid to fill television time with their theories can possibly know what they are talking about. All that media has time to fill. I rarely watch television coverage, but I have to admit that on days like this, it can be fun to just turn off the sound and watch only the facial expressions and gestures of all those talking heads. Maybe I am boring, but I remain a "buy what you know and like, trust gut instinct, sleep at night, and don't get greedy" kind of girl.

Boomer

I had heard this trade was just based on one company but I have not heard what company it was. Interesting that someone could make that error as I would think they would have some kind of protections in place. I am curious as to how many companies could have 16 billion shares on the market.

Today's NYT business page says that two Dow stocks, 3M and Proctor and Gamble accounted for about 300 points of the Dow drop yesterday, and were the result of the trading error, not market forces. Also, the stock of the consulting firm Accenture fell from more than $40.00 a share to one penny (this is the same firm that fired Tiger Woods as its spokesman last year). It's back in the $40 range again now, so this may be one of the trades that was cancelled due to the error. I've got to stop checking the markets several times a day - there's just no good news there . . . .