Even the most hands off investors have got to be concerned aboutrecent market volatility. Besides the dime-a-dozen opinions of top-down analyzers, I keep track of some bottom up observers from thetrenches. Not for fast trading information, but for early warning orconfirmation of trends. CNBC Jim Cramer may be an egotistic clown, buthis "Mad Money" opening comments have gotten more thought provokingrecently.Last week he outlined the history of last couple years as driven byhis fellow hedge funders yanking things around (a few paragraphs down)starting with "Go back to the colossal selloff that began in 2008. Thewhole thing started because "... after years of playing the know-it-all, yesterday he called therally and indeed the market as irrational and untrustworthy:

[snip]untrustworthy: but Cramer was a hedgie. The vix is today's M1. Ten years fromnow, it'll be something else. Not all stocks are volatile, and ofthose that are, if it's up 5% one day, then down 5% the next, why getbent out of shape over it? It's the CEO-orchestrated disasters thatbother me. The concentration of money into the hands of funds, and theinsane leverage some use, is the source of volatility, much as Cramersays. To a hedgie, that's his paycheck. And economically, one canquestion, I believe, seriously question whether there is a usefulproduct or social contribution there.

Market volatility explained?

Jun 16, 2010 21 Replies

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Thumper 16 years ago

Only if they guess right and don't run contrary to the speculators. THumper

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Ron Peterson 16 years ago

Speculators aren't the only risk to stock investors. Governmental policy, technological progress, and bad management can do damage to many corporations.

-- Ron

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