About

Thanks for visiting Dear Mr. Market… 

This blog attempts to educate and entertain investors about the world of finance and the stock market. It’s brought to you in the form of letters written to the fictional character, “Mr. Market”.

This character was created by Benjamin Graham who developed the Value based approach to investing in the 1930s. In Graham’s book, “The Intelligent Investor”, the character of Mr. Market is always willing to either buy your stock position or sell you more; sometimes at what appears to be a reasonable price and then at other times at a flat out insulting one.

Mr. Market can be very cruel and also quite rewarding to investors ; always playing with their emotions. He is volatile and very unpredictable.

Regardless of how much you study him and try to figure him out, Mr. Market can simply humble even the most educated and experienced investor…

Recent Posts

Black Monday Revisited?

Dear Mr. Market:Unknown

When we reminisce and think of some of your worst days it would be natural to assume it was sometime during the Great Depression. Believe it or not the worst drop in stock market history (at least percentage wise) was not in 1929 but rather on October 19, 1987.

Click here to see what happened on that day, which is now known as Black Monday.

There were a number of issues underneath the surface that led to that bloodbath of a day but what amplified things was the early practice of program trading. Computers were programmed to execute trades after being triggered by certain conditions and this literally made human traders almost worthless as automation took over!

Two years ago, on the 30th anniversary of Black Monday, we wrote an article and calculated what a drop would be in today’s stock market. Click here to check it out. On that day it would have been equivalent to about a -5,094 points drop in the Dow Jones Industrial Average. If it happened this coming Monday…we would see the Dow Jones go from about 26,965 to 21,033 for a drop of -5,932 points.

Are you ready and what would you do? How is your current portfolio positioned in the event of something even half of that type of drop? We’re not trying to be “doom and gloom” financial advisors but we’re also not so oblivious or positive that we’re “running East in search of a sunset”.

All this being said, get your plan in place now and prepare yourself for such an event. Even if you just let your mind get in front of it and don’t make any portfolio changes, your emotions will at least be more in check. History and reality tells us, however, that most people will read this and not prepare any differently.

PS- Don’t be “most people”!

 

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