Stocks have worst day since 9/11 attacks

Stocks had their worst day of trading since the Sept. 11, 2001, terrorist attacks, hurtling the Dow Jones industrials down more than 400 points on a worldwide tide of concern that the U.S. and Chinese economies are stumbling and that share prices have become overinflated. The steepness of the market's drop, as well as its global breadth, signaled a possible correction after a long period of stable and steadily rising stock markets that had not been shaken by such a volatile day of trading in several years. The repercussions continued Wednesday in morning trading in Asia. Shares in Tokyo, Hong Kong, Australia, New Zealand, the Philippines and Indonesia all tumbled more than 3 percent.

It began with a 9 percent slide in Chinese stocks Tuesday, which came a day after investors sent Shanghai's benchmark index to a record high close. The Dow began the day falling sharply. Stocks took a huge plunge in late afternoon as computer-driven sell programs kicked in, and also as a computer glitch caused a delay in the recording of a large number of trades. It was the Dow's worst point decline since Sept. 17, 2001, the first trading day after the terror attacks, when the blue chips fell 684.81, or 7.13 percent. The drop hit every sector across the market, and a total of $632 billion was lost in total in U.S. stocks on Tuesday, according to Standard & Poor's Corp.

Traders' dwindling confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, just a day after former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.

- This is a backblog, and that was last week. My own portfolio went down by around $6000 right away, and at one point close to $10,000 was wiped out. No realized losses though. I was still comfortably in the black even at the low point. In the recent sessions, it has rebounded somewhat, narrowing the difference from the peak and pushing the portfolio further into the black, where it now sits at a 34% gain.

If you are curious as to how volatile the kinds of shares I trade are, well this is how volatile : the share price of one of the uranium companies dropped by 42% at one point. I was already out of it by then, having made a few thousands when it more than doubled (for an over 100% profit). Out of the various natural gas companies, one is down by over 50%, and another is down by around 60%.

Fun stuff. It has its ups and downs. Big ups - and big downs. As I remarked to a colleague recently, "the speculators have this saying : volatility is your friend". I'm not an "all-out crazy speculator" though. A separate chunk of cash and cash-equivalents is out there earning more sedate interest rates between 0.25% and 3.8% in various savings, money-market and fixed deposit accounts.

One can imagine the cliches; you've probably come across some of these in the news article that followed. What goes up must come down. Bull runs don't last forever. No market goes up in a straight line. Buying now is like catching a falling knife.

Interesting times, aren't they.

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