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Comment by mmastrac | Hacker News Reader

Financial headlines have been really clickbait-y forever. Would anyone click if the headline was "IBM loses two months of gains" rather than "plunges"?.

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It looks like a 3 year low to me (as IBM has been trading sideways for years) personally I think the headline is accurate (down 7% for a stock with a float, institutional base, and capitalization of IBM is a huge amount of paper losses).

Abandoning the 2015 forecast is probably the bigger news vs any kind of daily price fluctuations, but the stock fluctuation underscores that this is somewhat big deal.

Sorry if you hold IBM. Oil stocks have been painful for me, I wish I was doing as well as IBM is doing.

Yeah, financial reporting tends to focus on "effect" (stock price) rather than "cause" (earnings/projections), but there is still usually a cause worth paying attentions.

Statistically, every three year period contains a three year low.

Nope. Every three year period contains a low-within-that-period but that's not what "three-year low" means.

Consider, e.g., an asset whose price is just going steadily upwards. Every 3-year period has a low point -- the start of the period -- but there is no point at which you can say "The price of this asset is now at a 3-year low".

By that reasoning, IBM is not at a 3 year low since it is up from earlier today. The concept remains meaningless. That's why it is used by those speaking to dumb money.

Can I ask if you consider yourself smart money, then? Because in almost 15 years of investing, fundamental research, and technical analysis [edit: and associated community participation, consumption of research products, and reading investment literature and publications] I have not seen anyone take issue with calling a 3-year low on a stock on the basis of an intraday low. It's a 3 year low. I didn't say that was particularly important, but it's true by any reasonable definition of the term (which is a common one). It might be important on the basis of the volume, as it crossed a technical level that it's held for quite a while and may be forming a downtrend, which is frequently interpreted as a sign of institutional selling.

edit: FYI, IBM hasn't traded below 170 since Oct 4, 2011. It hasn't closed below 170 since Sep 23, 2011.

Smart money? Me? No fucking way.

The few times in my life I've made money from an "I've got a deal for you phone call" the person on the other end wasn't making money from a cut of my check. Instead, I was making the deal bigger.

Stock market literature is a respectable pony system. The Dow goes up because they drop losers and add winners. The index funds were that were holding AIG didn't get Kraft Foods shares and their investors lost money. I feel I'm just smart enough to recognize that intraday is dead money for the quants in HFT.

Look, we actually agree on most things. But smart money also knows there's a durable advantage in patience, time frame, and liquidity. Something that the individual can general have an advantage against funds in (given substantial knowledge in fundamental valuation techniques and market dynamics - no small order). Describing it as a 3 year low is completely accurate. Saying there's a lot of dumb money in retail is, too. I respect your not playing a game that is set up against you.

Not true. IBM was trading at ~ $190/share two months ago, it's down to ~$169/share today.

Fair enough. Let's say "February" levels instead, which were $172ish at the low.

Call it what you want, but it doesn't change the numbers.

We're forgetting that the DJI itself has had some turbulence, too. IBM is not particularly out of step with the market itself... until just recently, which I believe lends some measure of credibility to the original headline because if you view stock behavior as something to be benchmarked with the greater market, it did certainly plunge beyond what most other stocks would have. See: http://goo.gl/fJkfpA

(Slightly related) Losses as percentages always annoy me - a 2% loss is not made up by a subsequent 2% gain.

The only meaningful numbers are market cap changes or percentage changes. The numbers for the market cap are much bigger than most people can think of, and you need to know what the absolute value is to know how big of a relative change it is.

What bothers me are per share prices. I don't remember the precise value of any particular stock, so IBM drops $13 means nothing to me. Also that a stock is $500 a share, so it must be good is another thing you see a bunch, so it must be great is another fallacy I see all the time; when really all that matters is the market cap not how many pieces it is divided into.

Share prices have a strong psychological affect on many investors. This is why you will see increased buying and selling around certain price points and not market cap.

Which just reinforces what a shell game all of it really is.

IBM just abandoned its $20 share price target so there was a bit of meaning in the price. But no there usually isn't.

Edit I think it was $200. See numbers matter.

This is why you shouldn't hold leveraged ETFs for more than a day or two. They end up decaying quite quickly as the bounce around.

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