Nov 21 2008

Putting Recent Volatility in Perspective

Published by Manarin Investment Counsel at 4:40 pm under Bear Market, Investing, Stock Market

 

 

The first of the two charts above shows that the recent level of volatility in the stock market has been very uncommon.  The second chart shows the average daily move in the S&P 500 since 1993 has been 0.77%.  In the month of October, the average daily move was 3.71%. 

That means in intraday trading, the market is valuing companies at an incredible variance.  Historically, it doesn’t last very long, and it does point toward market bottoms. 

Are we close to a bottom?  Yes.

Can it go lower?  Always.

Unfortunately my crystal ball broke the first time I tried using it.  What I do know is that stocks are cheap now.  Don’t sell, and if possible, buy!  But I think I can say with confidence that five years from now today’s prices will have been a dream to buy. 

 

  • Share/Bookmark

Related posts:

  1. The Market is Cheap
  2. Short Interest and the Market
  3. We’ve Been Here Before
  4. John Templeton – Lessons on Global Investing
  5. Stock Market Volatility & Investor Expectations

No responses yet

Trackback URI | Comments RSS

Leave a Reply

DISCLAIMER: Information and analysis in Manarin Investment Counsel, Ltd. communications is compiled from sources believed to be reliable but its accuracy or profitability cannot be guaranteed. All Manarin Investment Counsel, Ltd. communications are intended solely for informational and educational purposes and are not to be deemed a prospectus or solicitation of orders, nor does it purport to provide legal, tax or individual investment or business advice. Readers should consult with expert legal, tax, business and financial counsel before taking any action. Advisory services offered through Manarin Investment Counsel, Ltd., an SEC Registered Investment Advisory Firm.