Recessions & Crashes: Memories & Lessons

[winston]

Probably Everything You Need To Know About Bear Markets

BY MICHAEL BATNICK

Source: The Irrelevant Investor

https://theirrelevantinvestor.wordpress ... r-markets/

[winston]

Corrections, Bear Markets, Recessions and Crashes

By Barry Ritholtz

Since 1950, the Standard & Poor’s 500 Index has experienced a decline of 10 percent or more once every two years on average.

Since 1928, we have seen at least 23 selloffs of 20 percent or more, which is the official definition of a bear market.

Those 23 bear markets over a span of 85 years work out to one about every 3 ½ years or so.

“Wall Street indexes predicted nine out of the last five recessions”

There have been 16 corrections since World War II that didn’t lead to a recession. On average, markets fell 19.4 percent during those episodes

Source: Bloomberg

http://www.bloombergview.com/articles/2 ... nd-crashes

[winston]

The 2007-08 Financial Crisis In Review

By Manoj Singh

Source: Investopedia

http://www.investopedia.com/articles/ec ... er=YahooSA

[winston]

'Don't Panic' and Other Dangerous Words From 2008

By Ken Goldberg

Source: The Street

http://www.thestreet.com/story/13452076 ... _ven=YAHOO

[winston]

Koon’s way to profit from the stock market

Lessons learned over 30 years from making money when stocks sink and soar.

By Koon Yew Yin

The stock market has been falling recently and many investors are suffering losses. Of course those who have lost money feel miserable and do not know what to do. Some have margin calls and are forced to sell.

I wish to share with you my experience of making money when stocks sink and soar. Remember, after every crash the market will soar again. It is not the end of the world.

No share can go up or down indefinitely, for whatever reason. What goes down will come up again. What comes down rapidly will also rebound rapidly.

In 1983 when China gave notice to the British government to take back Hong Kong, the Hang Seng index dropped below 1,000. Almost all the investors rushed to sell their shares and properties.

This was the first time I started share investment seriously. I identified a few really undervalued stocks. For example, Hong Kong Reality and Trust Ltd fell from $13.50 to $3.50 but each share had a cash value of about $10.

I traded with Kaiser Stocks and Shares Ltd which offered me a margin finance at 5 percent interest. When China gave Britain an extension of 50 years’ lease, the market rebounded and HKRT jumped up to $13.50 overnight. Within a year I made enough money to buy 46 percent of Kaiser Sticks and Shares Ltd. Today the Hang Seng Index is 18,318.

You can learn the following lessons:

Never fall in love with the shares you have bought. You must sell, as profit is not a dirty word. Unless you sell, you have no money to buy back.

Never buy up to maximum margin limit. Always allow room for safety.

Do not be afraid to buy when people are rushing to sell.

I recommend you read ‘Crash Profits’ by Martin Weiss, who founded Weiss Research, an investment newsletter publisher in Florida.

Ooi Teik Bee, who is managing RM15 million for me, has a system based on financial and technical analysis which will be very useful. He also conducts training programmes and publishes a newsletter.

*Koon Yew Yin is a retired engineer turned philanthropist. He was a founder of IJM Corporation Bhd and Gamuda Bhd.

Source: The Star

[winston]

How to prepare for a recession, just in case

by Peter Dunn

Source: USA TODAY

http://www.usatoday.com/story/money/per ... /79645390/

[winston]

Six Bear Markets Over 30 Years

The losses we're seeing around the world at the moment don't happen very often.

In fact, the MSCI All-Country Index has only been through six bear markets in the past 30 years.

Source: Bloomberg

http://www.bloomberg.com/news/videos/20 ... o.headline

[winston]

What a recession does to your money

A drop of more than 20% should be expected, and most recessions have seen the S&P 500 fall at least that much.

Including the 19.9% drop around the 1990-91 recession, it's happened in 10 of the last 14.

The last recession was far more painful for investors, with its 57% plunge.

Size matters. The smaller the company, the more its stock tends to fall during a recession. The Russell 2000 index of small-cap stocks has done worse than the S&P 500 index of large-cap stocks in each of the last five recessions.

A similar scenario is playing out now. The Russell 2000 has lost about 25% since peaking in June, double the S&P 500's drop.

Source: LA Times

http://www.latimes.com/business/la-fi-r ... story.html

[winston]

It’s Time To Start Planning For The Next Recession

By BEN CASSELMAN

Source: Five Thirty Eight

http://fivethirtyeight.com/features/its ... recession/

[behappyalways]

Falling Earnings, Recession Warning
http://www.bloombergview.com/articles/2 ... n-warnings