Thursday, January 22, 2004

The Big Kahuna

I love a good mataphor. Lawrence has awakened me to a great perceptive veiw, here. I think you may have to agree.

The Big Kahuna

Lawrence Schnurmacher is executive director/investments, private client division, for a national brokerage firm.

Did you have high speed internet access in 1987? Me neither. Isn't technology great? Today I can access the internet from my cell phone, I can e-mail you from my Blackberry, I can get instant alerts on my PDA. And I can do it all very fast from anywhere. What a world we live in. Some people say they are always "in touch" and can be reached anytime of day or night on any one of a number of devices that keep them connected to their business, friends, & loved ones.

While all the connectivity may be good for business and for staying in touch with your spouse, there may be one problem that nobody is thinking about. Being connected may let too many people know about, and act upon, a stock market correction or crash, faster than anybody might like.

In 1987, one of the biggest problems, other than the market dropping 23% in a single day, was that investors could not get through to there brokers or mutual fund companies to place orders, which were mostly to sell. By the time the dust settled, many investors were locked out of trading and it was too late to sell or buy anything. Today, with all the high speed internet connections, cell phones, PDA, blackberry pagers and the like, everybody will know what's happening at the same time, and will be able to act upon that information, in real time and very fast. No broker to call or mutual fund hold messages to annoy you. Just hit the "enter" key and its done. ...

...I do not know how the market triggers would hurt or help, but suffice to say, that traders and investors would not rely on those stop gap measures to see how and even if they would stem the declines. When I think about a 2004 market crash, it is not only scary but exciting as well, because nobody knows how it would look or feel. If its anything like surfing the web, I think the "Big Kahuna" will be an apt way for it to be described. ...Link

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