NEWS CLIP: do you sense any kind of capitulation, if we’re asking the question are we nearly there yet, are we?
SIMONE DEL ROSARIO: IT’S THE MOMENT WE ALL WAIT FOR IN A BEAR MARKET.
NEWS CLIP: is this the big sell off that you’re talking about, what’s it called, a capitulation sell, is this it?
SIMONE DEL ROSARIO: CAPITULATION LITERALLY MEANS SURRENDER. SO WHAT DOES IT MEAN IN THE FINANCE WORLD? THAT’S TODAY’S WORD ON THE STREET.
CAPITULATION IS THE MOMENT A SIGNIFICANT NUMBER OF INVESTORS THROW IN THE TOWEL AND SELL STOCK AT A LOSS.
IT’S A PANIC SELL, AND IT COMES WHEN INVESTORS FEAR A STOCK OR ENTIRE MARKET WILL PLUNGE EVEN DEEPER. CAPITULATION, THEN, BECOMES SORT OF A SELF FULFILLING PROPHECY.
NEWS CLIP: right now we haven’t seen that sort of get me out moment. we’ve had customers continually buying the whole way down which means there is no capitulation yet.
SIMONE DEL ROSARIO: IT’S HARD TO KNOW FOR CERTAIN WHILE IT’S HAPPENING. BEAR MARKETS COME WITH MANY DRAMATIC SWINGS.
NEWS CLIP: so you say perhaps that was a capitulation but not the capitulation.
SIMONE DEL ROSARIO: THE CAPITULATION IS BETTER IDENTIFIED IN HINDSIGHT, AFTER THE PRICE HITS BOTTOM FOR GOOD AND REBOUNDS.
THAT’S THE POINT WHERE THE PRICE PLUNGE IS SO DEEP IT SHAKES OUT ALL OF THE INVESTORS WHO ARE LIKELY TO CUT AND RUN. AND THAT JUST LEAVES BUYERS, WHO THEN DRIVE UP THE PRICE.
NOW THAT YOU KNOW WHAT CAPITULATION MEANS, WHAT FINANCIAL TERM DO YOU WANT EXPLAINED NEXT IN WORD ON THE STREET? LET ME KNOW IN THE COMMENTS BELOW.