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QE3 has begun.


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#31 Jase

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Posted 14 September 2012 - 01:19 PM

forgive my imprecise language; that's exactly what I mean.

most average joes think that the market won't go higher, but will still hold on to their investments, usually until it is too late.

There's a difference between people thinking the market won't go much higher, and thinking that it will drop off a cliff.

#32 mmmbeans

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Posted 14 September 2012 - 01:24 PM

seemed like you guys were saying the same thing.

#33 Jase

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Posted 14 September 2012 - 01:27 PM

He is 1.2% more wrong than I am.

#34 mmmbeans

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Posted 14 September 2012 - 01:28 PM

1.2% and falling.

#35 Raleighcat83

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Posted 14 September 2012 - 01:29 PM

OK, fair enough. My expectation is that the action people are calling "QE3" will in fact increase economic growth, and that the stock market has efficiently priced that growth increase into share prices. The difference between the first two rounds of QE and this action is that this isn't really quantitative, it's open-ended. The FOMC said "we're going to stimulate, and we're going to keep doing it until either unemployment gets down to a level we're happy with or until inflation gets higher than we're comfortable with." This is what market monetarists have been wanting for the last 3 years.

#36 Raleighcat83

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Posted 14 September 2012 - 01:31 PM

For the record, I would still prefer the Fed set an explicit target for nominal GDP growth, but I am reasonably happy with yesterday's action.

#37 stirs

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Posted 14 September 2012 - 03:08 PM

http://www.cnbc.com/id/49037337

#38 pstall

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Posted 14 September 2012 - 06:25 PM

here is the more apt answer for what you guys are talking about in terms of the average joe and people thinking what they are about the market:


Definition of 'Odd Lot Theory'
A technical analysis theory/indicator based on the assumption that the small individualinvestor is always wrong. Therefore, if odd lot sales are up - that is small investors are selling stock - it is probably a good time to buy.

Read more: http://www.investope...p#ixzz26UPj5XHa



#39 Raleighcat83

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Posted 14 September 2012 - 10:35 PM

Ok, got it. I looked into odd lot theory because I think it's interesting, and I'd never heard of it before. Turns out its been disproven empirically as a predictive indicator, but a cool idea nonetheless.

#40 pstall

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Posted 15 September 2012 - 12:10 AM

some treat it like the wish bone offense in a pass happy game but really smart people who can quant stuff can do a superb job of being ahead of a curve. doing stuff under the radar instead of whats chic can make you money.

but what do i know?