Black Monday Echoes as Computers Fail to Restore Confidence – Bloomberg 10-19-12

Salient to Investors:

Investors have pulled $440 billion from U.S. equity mutual funds since 2008.

E.E. Geduld at Cougar Trading says crashes happen when investors become convinced they’ve lost control – the volumes we can now handle are gigantic, but the exit door hasn’t changed in size.

Timothy Ghriskey at Solaris Group said volatility scares people to death, and there’s no such thing as a free lunch – you can theoretically protect yourself on the downside, but when things come unhinged, nothing’s going to protect you.

Within 10 years of the 1987 crash the Dow average had quadrupled and investors were enjoying the biggest bull market ever. Procter & Gamble and McDonald’s are up more than 800 percent since 1987.

After falling 999 points on May 6, 2010, the Dow ended the day down 348, and rose 6.5 percent through the end of the year.

Read the full article at http://www.bloomberg.com/news/2012-10-19/black-monday-echoes-with-computers-failing-to-restore-confidence.html