Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Flash Stock Market Crash and the Most Important Wealth-Protection Step You Can Take

Stock-Markets / Financial Crash May 10, 2010 - 07:09 PM GMT

By: DailyWealth

Stock-Markets

Best Financial Markets Analysis ArticleTom Dyson writes: They're calling it the "Flash Crash"...

With a market cap of $25 billion, Accenture is one of the largest technology, consulting, and outsourcing companies in the world. For a few minutes on Thursday, Accenture's stock price fell to zero. Its stock market value literally vanished.


Something similar happened to a dozen other companies and funds. Even Proctor & Gamble, one of the largest and most stable companies in the world, dropped 37%. CNBC observed it was a loss of $35 billion in market cap.

A few moments later, everything returned to normal...

Some are blaming an electronic trading glitch. Others say high-speed trading programs caused it. Some are even saying an individual trader caused the crash by entering a position incorrectly into the system.

But my first thought was the Daemon...
Main Ad
The Daemon (pronounced like "demon") is the fictional creation of author Daniel Suarez, in a novel titled Daemon.

The novel is centered on Matthew Sobol, a genius game designer from California. He creates a program, called Daemon, to hack global computer networks and wreak havoc.

Infiltrating the computer systems of major corporations is one tactic the Daemon uses. Once embedded in a corporate data system, the program contacts management and threatens to destroy the company's databases. The Daemon will allow the databases to function – and the business to operate – in return for billions of dollars in ransom.

Some companies refuse. The Daemon destroys their financial records, and their stock market values vaporize, just like we saw happen to Accenture last Thursday.

I'm not saying this was a cyberattack on the stock exchange. Truth is, I have no idea what caused this "flash crash," and nor does anyone else it seems. Even the Wall Street Journal refrained from speculating in Friday morning's edition. But a dozen stocks saw their value go to zero, and the stock market lost 10% of its value in seconds.

Now... think about how much of your business depends on the smooth functioning of computers, databases, and the Internet. Think about how much of your life is now online and vulnerable to genius computer criminals. If you're like most people, you don't know much about how it all works... You just go along with everyone else and trust the system.

As yesterday's stock market glitch – and our series on personal Internet security – showed, trusting 100% of your life and money to technology is risky.

Or as one of the characters in Daemon notes, "Apparently, people thought nothing of hanging their personal fortunes on technology they didn't understand."

Daemon is a brilliant book. I read it cover to cover without stop. It discusses all kinds of technology I didn't know about... and does it in an entertaining way. Best of all, all the technology featured in the book exists today. In other words, the book's premise is absolutely plausible.

The point Thursday's market action reinforces is this: If you hold wealth in electronic form, you're taking a risk. That risk is technological failure. It may be a tiny risk... or it may not be so tiny. You can't know. But are you willing to risk so much on something you don't understand?

Fortunately, it's an easy risk to insure against. You simply have to keep a small percentage of your wealth in physical gold, silver, and cash. And don't trust anyone else to store it. Keep it yourself, secure it, and don't tell anyone about it. And consider taking some of the online security steps we've discussed here before.

We've all come to rely and depend upon technology we don't understand to store our wealth. We're taking a small, but potentially catastrophic risk. By keeping a stash of physical wealth, you're taking the first step in mitigating this risk.

Good investing,

Tom

P.S. The story in Daemon is much more than ransoming corporations. It's a huge, interesting story about technology, freedom, and government. I highly recommend reading it. Here's the Amazon link if you're interested.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2010 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in