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What is capitulation? CNBC Explains
cnbc ^ | 10-15-2014

Posted on 10/15/2014 8:40:24 AM PDT by Citizen Zed

What is capitulation?

In simple terms, capitulation is when investors try to get out of the stock market as quickly as possibleand look for less risky investments. It's also described as panic selling. It's usually based on investor fears that stock prices will fall further than they have.

Capitulation is usually signaled by a decline in the markets of at least 10% in one day.

In getting out of the market, investors give up any previous gains in stock price. That means they take a financial loss, just to get out of stocks. The thinking is: take a smaller loss now rather than a bigger one later.

Real capitulation involves extremely high volume—or high numbers of traded shares—and sharp declines in stock prices.

(Excerpt) Read more at mob.cnbc.com ...


TOPICS: Chit/Chat
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Obama said these extreme market events will never happen again, so no worries.
1 posted on 10/15/2014 8:40:24 AM PDT by Citizen Zed
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To: Citizen Zed

We are far from capitulation. Valuations are still very high considering the general business climate.

Let me know when you can get good companies at 8 times trailing earnings paying a 6% dividend. That’s capitulation!


2 posted on 10/15/2014 8:47:51 AM PDT by proxy_user
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To: Citizen Zed

In my past experience, capitulation always seems to occur at the exact moment when I decide to sell. Not before, not after. Makes me want to cry sometimes.


3 posted on 10/15/2014 9:11:33 AM PDT by rbg81
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To: proxy_user
I agree. The Nasdaq of course is the biggest joke. So are dividends.
4 posted on 10/15/2014 9:40:43 AM PDT by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: Citizen Zed

We are retired and our IRA’s are in index funds (among a few other things. Plus we own hard assets, including our house and a couple of rentals. Up and down the markets go but we are in it for the long haul. We can’t worry about corrections. Life is too short to angst about the daily movement of markets.


5 posted on 10/15/2014 9:47:48 AM PDT by Cry if I Wanna
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To: Citizen Zed

I keep telling myself to get out of the market before October and get back in during November.

But I keep forgetting before the next year.


6 posted on 10/15/2014 9:51:29 AM PDT by toast
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To: Citizen Zed
Obama said these extreme market events will never happen again, so no worries.

...just like Obola will never reach the US

7 posted on 10/15/2014 9:52:48 AM PDT by BookmanTheJanitor
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