Reaching
2008 September 30
The “snare” or summation for this article on CNN.com mentions that the Dow today has rebounded a bit from yesterday’s dramatic drop, and claims “…today’s bump came after President Bush urged lawmakers to try again to pass a bailout bill.” Is it just me, or is this a classic case of creating a connection where there is little evidence a connection exists?
There couldn’t possibly be individual investors who, having lived through more than one wild bull market, are watching for opportunities to score stocks on their “watch list” at very attractive prices.
They couldn’t possibly be watching the market and thinking, “buy opportunity.” As I did. Yesterday.
When I decide to buy a stock, I usually place a limit order to purchase when the price drops below my target. How many others had limit orders that executed this morning?
:: | September 30th, 2008 at 2:26 pmI don’t doubt at all that the day after a dramatic drop would bring investors out the of the woodwork looking for an attractive price for a stock they feel is undervalued at said price; Apple dropped some 20+ percent yesterday, and somehow I doubt it won’t rebound down the road (though I’m clearly not terribly knowledgeable about these things).
What I was commenting on was the implication in the summation that President Bush’s urging of lawmakers to reconsider a bailout bill was the primary reason for the resurgence of the Dow. Yes, both are “facts.” Yes, one followed the other. But there is no evidence to truly link them. They could just have easily said “today’s bump came after Matt Simerson ate his usual breakfast this morning.”
Your own reasoning is obviously much more likely than the tenuous connection made by CNN, IMO.
:: | September 30th, 2008 at 2:56 pm