Uk stocks still sharply lower. Ftse 250 is uk economy not ftse 100

[Cicada]

The ftse 100, the UK dow Jones, back up almost to pre brexit. But those stocks are multinationAls not uk only firms. The ftse 250 index measures uk economy and it continues down down down. Free republic loons say ftse 100 has come back so brexit wasn't a disaster. Ftse 250 down sharply again today and is down one sixth from pre brexit. Brexit was a financial clusterfuck.

[niyad]

1. was listening to a guy this morning bragging about how much he has made off the market

because of the vote. wanted to slap him.

[whatthehey]

3. Why?

If you can predict a panic sell off, which was frankly obvious given a leave vote, you mwake money on that by either waiting for the panic and buying at low prices or selling short, which is pretty a much a straight bet that stock X will be lower on day Y. I personally have neither the nerve nor the knowledge for options, as if I buy a panic-sold stock and it takes longer than I think to recover, which happens quite frequently, I don't lose because of a fixed timeframe.

But either way who "loses" if he wins? First of all it could be nobody. The seller may have bought the stock at an even lower price than this panic and be locking in gains in a shaky market. All he "loses" on the bounce back is potential extra profit he could have made.

The company doesn't lose. IPO's generate funds for them but trades don't.

The workers don't lose even if they have company stock. The balance in their portfolio goes down, but they don't lose a dime.

Trades didn't cause the panic even. They are a reaction to the panic.

There's one iron rule in trading. You don't lose unless you sell (or gain of course, unless the stock pays dividends)


The only way anybody loses here is if a seller voluntarily trades at a loss, and barring insanity or pending starvation, the only reason they'll do that is if they think waiting longer will cause them to lose still more - in other words they are choosing what they see as a sound financial decision. What's to warrant slapping about that?

I'm no Gecko, but on just checking I've made 97 trades this year. All have been for a gain and all have been 100% voluntary. Nobody "stole" my investments and I lack the power to steal anyone else's. I buy on bad news and sudden drops. It's all I do. I have no clue, and no way of knowing, how many were sold to me at a loss but if so it was voluntary, because the seller thought they were making a good call, and at zero negative impact to either company or workers. I'm still "down" on a half dozen or so, including 3 of the 4 I bought on Brexit panic since last Friday. As soon as they are up a bit from when I bought, I'll sell them and rinse and repeat. I don't second guess but I have seen many where they went up hugely after I sold them and no doubt some guy like your putative slapee could crow that he made money from me, but he really didn't. He just got a different portion of the overall price gain from mine. We both made money. I've been as this about 5 years. Hundreds of trades. I sold one at a loss. One. I foolishly bought Weigtwatchers without checking debt load, and sold for a modest loss on the Oprah hype when it gained back much of the paper losses. It's bound to happen, but buying on panics with some basic parameters requiring no real financial wizardry has seen me gain hundreds of times, lose once and be "losing" on paper 6 times. I've caused no involuntary suffering by doing so and see no reason to be slapped even by proxy (I haven't mentioned trading to anyone this morning).

[niyad]

4. because he clearly didn't give a damn about the havoc the vote created, and will continue to

create world-wide. all he cared about was making money. he sounded just like der drumpfenfuhrer.

[whatthehey]

5. Quite possibly, but the two are not essentially linked

A quick search will show I have been consistent in thinking the leave vote was stupid, depressing to see, and thoroughly harmful. Most even vaguely economically savvy folks (and I can't claim to be a whole lot better than that) not blinded by xenophobia do think so. There is a reason the more highly educated and more business-centric folks trended heavily remain.

But my trading, or anyone else's. did not cause that stupid damaging vote. All we did was see the damage coming, know that people always overshoot a sell off in panic situations, and decide to make lemonades with lemons. Almost all economists, far more knowledgeable than I, told people it would be stupid to vote leave. What would a penny-ante day trader's voice add to theirs? I couldn't influence the vote. I could however see an opportunity in it that did zero to make it worse. Both I and the IRS get a tiny but more cashflow because the British, collectively, did something stupid. The only people even possibly harmed were harmed voluntarily by decisions they thought wise. Trading on panics, or in general, is pretty much a victimless "crime" at the individual level.

[FBaggins]

2. Actually, the FTSE 250 is up about 1,000 points over the last two days.

It has not "more than recovered" as the FTSE 100 has, but it has not "continu(ed) down down down"

[Major Nikon]

6. Neither index tracks the economy

They track the equity value of the stocks in the index which may or may not have an effect on the economy depending on longer term volatility. The FTSE 250 has not continued down. It's up 3.22% in one day which is pretty significant for that index.

While it's true the FTSE 100 tracks large caps which tend to make a bigger share of their profits internationally, the reason why the FTSE 100 is recovering faster is because the pound sterling is still down. International profits must be converted back to pounds, and since international currencies are worth more right now, the FTSE 100 is going to lead the FTSE 250 in recovery so long as the pound remains low relative to foreign currencies. The FTSE 250 always tends to be less volatile than the FTSE 100, so this is not really surprising. Long term both indexes show the same trends.

It's also important to note that all of this is speculative and has less to do with the UK's actual economy which is measured by GDP.