A Quick Update on Yesterday’s Stock Market Craziness and what we can learn

It may be time for all of us to gain a little perspective on the events of yesterday. As of now…there are not any explanations that actually work.

 

There are still too many questions that the explanations don't answer. Could these things play a role…yes…but they don't tell the whole story.

 

Here are the 2 most used explanations:

 

News of great unrest in Greece with their failing economic system caused vast nervousness in the world markets.

 

Someone from some company (reportedly in Citigroup) pressed a "B" instead of an "M" on their keyboard and a whole lot more shares were sold than intended.

 

I have 2 brief comments about these…

 

1…the 300 plus point drop on the day would certainly reflect continuing bad news concerning Greece that could potentially affect the economy of most countries in the world. However, the huge free fall does not correspond on the timeline well enough to accept this explanation. Plus…1000 point drop in moments of time over this news that has been building over time is highly unlikely.

 

It sounds like the European Union is going to bail Greece out. The markets recovered slightly in some parts of the world with this news but overall it probably is not a great thing, in my opinion.

 

2…if someone pressed a wrong key on their keyboard and that created the mess we saw yesterday, we are in deep trouble economically (I know we already know this but this just makes it way too real). This explanation is not entirely helpful when multiple companies took a dive all at the same time. Perhaps this keystroke mess up was linked to multiple companies but it doesn't seem likely.

 

 

There just seems to be more going on here than people are saying or that anyone knows. It is not a good sign.

 

However…I have some good suggestions and some good news.

 

1. Invest in yourself…your education, your talents, your brand your business. You have control over your investment this way.

 

2. Invest in the market but invest in companies that have true value. Don't simply watch prices and invest in that way. If what happened yesterday is any indication to what is to come…you will in no way be able to keep up with the rising and falling numbers.

 

If you like that sort of thing…maybe try your hand at currency trading. It is fast moving and crazy. You can lose your shirt in a moment's time or you can gain a ton of wealth the same way…legalized gambling at its finest.

 

 

Anyhow…I'll just finish up with a quick note as to how (after the initial free fall of certain company's stocks the rest of the market would react so quickly…

 

Many people are on autopilot and when the overall market drops below a plateau the computers automatically kick in and sell. All of a sudden…there were tons of computers sending sell orders and the market took a real nose dive.

 

How and why did it bounce back the way it did? A very good question to which I don't have a clue as to what the answer is.

 

We better stick to investing in ourselves and in our own businesses…then you only have yourself to blame if your investment takes a tumble downward.

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