TAPER! TAPER! TAPER!

"Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney" (braddelaparker) 12/18/2013 at 14:27 • Filed to: Oppo Finance

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And a chart of the S&P since 1:15pm EST until now looks like the mood swings of a meth addict

SkarTisu > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/18/2013 at 14:37

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This is why I can't play in the stock markets. I thought tapering would have crashed the markets. I always have this shit backwards. lol

The Dummy Gummy > SkarTisu 12/18/2013 at 14:40

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In this case it is a positive sign. Reduction of the $85B QE means the Fed has confidence that the economy is growing at a pace where reduction in the QE won't completely send us back in to the dark days.

wacopalypsenow > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/18/2013 at 14:43

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Is this because of the announcement by the fed?

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > SkarTisu 12/18/2013 at 14:45

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This one is a little more nuanced than that for a couple of reasons.

1. The size. 11.76% isn't insignificant, but it's not a full-scale paring back

2. The Fed stated pretty clearly that they're not tapering any more until unemployment drops below 6.5%, so that gives the market a very bright line as to when the real taper is going to occur. As that's some way in the future, lots of folks are seeing this as a time to double-down and add to their margins before it ends.

3. There's the thought that the uncertainty about the taper has been weighing on the market for the last week or two. Certainty, even if it seems slightly negative, can have quite the soothing effect on an uneasy mind

PatBateman > wacopalypsenow 12/18/2013 at 14:47

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Yes.

SkarTisu > The Dummy Gummy 12/18/2013 at 14:49

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I thought the markets would start bailing out because the "free" government money coming into the market was slowing down. I understand the concepts of why the market does what it does after the fact, but I never understand it beforehand.

SkarTisu > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/18/2013 at 14:51

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Interesting. Thanks for taking the time to explain it. #2 was particularly interesting to me. Grabbing the last few pennies before the party comes to an end makes complete sense.

PatBateman > SkarTisu 12/18/2013 at 14:51

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Actually, the thought of tapering has kept the market down over the past week or so. The fact that tapering has been announced and is not as bad as many had thought means that buyers can be buyers once again. Hooray!

SkarTisu > PatBateman 12/18/2013 at 14:52

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That makes sense. Thanks for taking the time to explain it.

PatBateman > SkarTisu 12/18/2013 at 14:53

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Also, if you "play" in the stock market, you WILL get burned. If you invest correctly with the aid of a financial advisor, you'll (probably) win.

Can't guarantee that, but you get my drift.

PatBateman > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/18/2013 at 14:55

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I've always laughed at people who dread this QE easing. What you're saying is that, since the economy is stronger and the fed thinks that it can stand without buying back their own debt, it's time to sell equities.

That's not how this sh*t works.

The Dummy Gummy > SkarTisu 12/18/2013 at 14:58

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Well the taper is only $10B. If other government reports start to reflect negatively then you will see a reaction. Personally I do think the markets are slightly inflated due to the government, but we will see what happens.

BKRM3 > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/18/2013 at 15:09

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Thank god the market took this turn today. It's been pretty depressing for the last week (longer, actually). I was really getting fed up (see what I did there?) with the lack of news about this jackass tapering thing. Now that there's some certainty, I hope the market can stop acting like an idiot.

And dont even get me started on how LNCO has been acting...wtf.

SkarTisu > PatBateman 12/18/2013 at 15:10

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After having watched my 401k get destroyed three separate times while being professionally managed, I've come to the conclusion that the safest place for my money is under the mattress. lol

PatBateman > SkarTisu 12/18/2013 at 15:23

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Your 401k isn't professionally managed. It's in random mutual funds or a timed mutual fund that is set to go more conservative as a particular date approaches. Professional management is when you have an advisor telling you what stocks to be in, which funds are good, and who will call you more than once per year.

Sinanigans > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/18/2013 at 16:06

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I still think that the market is waaay ahead of itself. I'd like to see a correction so we can at least get our clients back in the mix. Most of our guys are value investors- and most complain that its not cheap enough to get in. Volumes are meh as a result.

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > Sinanigans 12/18/2013 at 16:13

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Don't disagree, although I'm losing my faith in any kind of material correction.

It's hard to be an old school value investor when prices left their Graham Numbers behind 6 or 7 months ago and haven't looked back.

Sinanigans > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 12/19/2013 at 09:42

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Yeah this is depressing :*( I really wish I had money to invest early in the year. I was/am a big proponent of Japan's economic reform/social experiment. I'm on the Kuroda/Abe camp and was anticipating big things since December.

As for the US- its still caught me off guard. Frankly a lot of economic data is at best, mixed results. Which further leads me to believe that we're in an equities-based asset bubble. Otherwise- I'm confused as fuck...