Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Amateur Traders Corner -- Ignore unavailable to you. Want to Upgrade?

To: Tom Hua who wrote (13375)	9/4/2001 9:42:05 PM
From: SunSunM	Read Replies (3) \| Respond to of 19633

Tom, I know, 1300 might seem far-fetched. However, the market did go down to 1600 in early April and today's economics condition is worse than it was five months ago. Investors have seen all these rate cuts this year produced no effect on their portfolio. Just another wave of warnings might trigger the panic "rush to the door". I think there is a real possibility that there will be a panic. JMO, WDIK. KC.

To: Tom Hua who wrote (13375)	9/5/2001 2:00:39 AM
From: Doc Bones	Read Replies (1) \| Respond to of 19633

Tom, I'll take that bet <g>, or at least question your order of magnitude. The market dropped over 22% in one day in October 1987. 1300 is a big longshot, but not 100,000 to 1. I think there's enough weirdness in the air, and enough air in the stocks (chips anyone?) to allow the possibility of a big collapse. It's not directly comparable, but QAVXY, Dec 25 puts on QQQ, which is currently about 35.50, are .40 bid, .45 ask. Longshots are always high, but even Black-Scholes thinks these are worth .16, at recent volatility of 42%. And Black-Scholes is based on a (log)normal distribution, whereas many scientists think the stock market is a "chaotic" process, with a much wilder distribution. Tom, your predictions on the market have been really good, based on the logic of the warning & earning seasons, the poor results of the tech companies, etc., but sometimes logic takes a holiday. I have to fade that 100K. <g> Doc