I don’t buy it. I’m sorry, but I just don’t buy what I have been reading about this recent blip in the stock market that everyone has been talking about across the country. I believe that within the next 12 months we will find out there is more than meets the eye about this story and what exactly happened.
I have been in the business of giving financial advice for 19 years. During those 19 years I have used various trading systems. To my knowledge there has not been a system I used where you actually had to type in the word million or billion to make a trade. In actuality, as most of you may do when you trade through any retail operation, you typically type in the quantity you want to buy numerically along with the appropriate ticker symbol. As with most computer programs today, there is generally also a failsafe that takes you to another screen asking you if you really want to make this transaction. Then, and only then, you can officially go ahead and make your trade.
Are we to believe that at one of the biggest trading houses on the street, someone typed in the word billion vs. million (wouldn’t make sense anyway), and then after the safety precautions in the trading system placed the order? I think not. This supposed trade was on Proctor and Gamble, yet other companies got as low as one penny and zero even for just a few minutes.
Then, a number of additional articles mentioned that the automatic sell offs in computer programs triggered this massive free for fall for about 20 minutes for slightly over 900+ points on the Dow Jones Industrial Average. How did the automatic buys go right back in that quickly to have the market recover by 500 points within a matter of minutes? Nobody has seemed to ask that question yet to the public.
Clearly, if you are under the tried and true strategy of asset allocation, you may need to rethink how you view your portfolio. The Warren Buffett way of investing can have a place for every portfolio, but clearly the Jimmy Buffett way will be an important part of the future. It will always be five o’ clock somewhere, and you need to be in a position to take advantage of that. In my opinion, the markets of the 1980’s were like VHS, and the markets today are like Blue Ray DVD with the speed of computer trading. You just need to find out what movie is playing in your portfolio.
As far as the rest of this news about what really happened with the recent market crash. Pop in the DVD, kick back in your recliner, and just wait for the real story to come out. My guess is that nobody replaced the ‘M’ key on the keyboard with the ‘B’ key. I suppose we should be thankful that they didn’t hit the ‘N’ key in between them or maybe the Dow Jones Industrial Average would have gone to nothing.
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oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
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