So just how volatile was October?

By: ispeculatornew
Date posted: 11.24.2008 (4:00 am) | Write a Comment  (2 Comments)

      Post a Comment

Is it me or did October look like it finance and the markets were always in the headlines? Friends, family, neighbors, it seems as though it was everyone’s favorite subject. And how could you blame them? Every day, when looking at a newspaper or any news broadcast on TV, the first story seemed to be a big day on the markets (usually a big DOWN day).

So let’s set a little perspective on the month, was it really that bad? Or was this an exaggeration by the media? Let’s look at a few stats:

Biggest intra-month losses (high close to low close):

Month

Date of High Close

Date of Low Close

Number of Days

High-Low Loss

October-29

10-Oct-29

29-Oct-29

19

-33.69%

October-87

5-Oct-87

19-Oct-87

14

-31.47%

September-31

1-Sep-31

30-Sep-31

29

-30.24%

October-08

1-Oct-08

27-Oct-08

26

-26.88%

May-32

6-May-32

31-May-32

25

-26.60%

March-38

1-Mar-38

31-Mar-38

30

-25.83%

May-40

3-May-40

21-May-40

18

-24.59%

November-29

4-Nov-29

13-Nov-29

9

-22.81%

October-37

1-Oct-37

18-Oct-37

17

-21.57%

September-32

7-Sep-32

19-Sep-32

12

-21.16%

July-33

18-Jul-33

21-Jul-33

3

-20.90%

April-30

2-Apr-30

24-Apr-30

22

-20.53%

October-32

3-Oct-32

10-Oct-32

7

-20.35%

See that? October 2008 is the 4th on record and apart from one instance in the famous 1987 market crash, all of the other instances occurred before May 1940..! Amazing isn’t it! So seeing that, you can understand why it made the news, the move was truly remarkable.

And another fact, it did not simply occur over a day or two, in fact, if you look at this graph published by the NY Times, you can see that the occurrence of “extreme day movements” is unlike anything we have ever seen in terms of the number of large movements (4% or more, up or down).

So the next time you see some headline about the markets, the apocalypse or anything of that nature, maybe you will know that it’s not as much of an exaggeration as you might think. Sure, it helps sell newspapers and magazines and to get good tv ratings, but it’s not all bluff.

In fact, it’s been interesting to see a lot of professionals, people who invest for a living, and who do not dare enter the market right now, simply because there is so little that is rational, which makes it very difficult to take a position. You might think that a stock is cheap under fundamental criteria’s only to see it decrease by a further 10-20%. You might make your money back soon, and might even be ready to take the risk, betting on a long term return. But any investor would still be looking for good entry points, and it’s difficult to know how you could determine where that would be….

I guess one of the better points of all of this is that we are all learning a lot of valuable lessons, and since it’s never too late to start learning and improving…

If you liked this post, you can consider subscribing to our free newsletters here


2 Comments

  1. […] Speculator presents So just how volatile was October? posted at Intelligent Speculator, saying, “Every day, when looking at a newspaper or any news […]

  2. Pingback by Investing Carnival #24 | Dividends Value — March 14, 2009 @ 5:56 pm

    […] Speculator presents So just how volatile was October? posted at Intelligent Speculator, saying, “Every day, when looking at a newspaper or any news […]

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.