I bet the house. [Rebalanced portfolio to a 10/90 asset allocation]

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Topic Author
TomCat96
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Re: I bet the house.

Post by TomCat96 »

VaR wrote: Sat Feb 29, 2020 3:42 pm What question are we trying to answer? I'm not sure this is actionable.
I disagree. Over the years there have been a number of such posts where people put themselves out there timing the market.

Most if not all stand as pillars of support validating the boglehead philosophy. Now it is my turn.
smitcat
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Re: I bet the house.

Post by smitcat »

TomCat96 wrote: Sat Feb 29, 2020 3:43 pm Let's be clear on how to splice this..

Bogleheads you are used to seeing it this way.

1. The market has gone down. I am so scared that I want to sell. I can't handle the drops.

The above is the type of market timing you perceive. I am sorry but that is not what is happening here.

This is how I perceive it.

2. The market is going to go down. Im 100% stocks for the long haul.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.


I am market timing, just not the standard assumption you all are so used to jumping to.
"Let's be clear on how to splice this..
Bogleheads you are used to seeing it this way."

Lets be clear how I always see these posts....

Tell me what you did after the fact and I do not believe them.
Tell me you are going to do something now or in the future I do believe it.

So when are you going back to 100% stocks in the future?
Triple digit golfer
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Re: I bet the house.

Post by Triple digit golfer »

TomCat96 wrote: Sat Feb 29, 2020 3:45 pm
VaR wrote: Sat Feb 29, 2020 3:42 pm What question are we trying to answer? I'm not sure this is actionable.
I disagree. Over the years there have been a number of such posts where people put themselves out there timing the market.

Most if not all stand as pillars of support validating the boglehead philosophy. Now it is my turn.
Why are you here on the Bogleheads forum when what you are doing is in such stark contrast to the Bogleheads investing style? There are many other more fitting placed where you and like minded people can discuss this. I wouldn't want to discuss buying and holding on a forum all about day trading.
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Kenkat
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Re: I bet the house.

Post by Kenkat »

TomCat96 wrote: Sat Feb 29, 2020 3:43 pm 2. The market is going to go down. Im 100% stocks for the long haul.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.
Because very few ever seem to pull this off. The time to buy back in will be when the very thought of putting money back into equities will make you want to be physically ill. In 2008, I forced myself to rebalance. It felt like I was flushing my money down the toilet. In fact, I couldn’t bring myself to do it all at once. The best I could do was to set up automatic transfers to to move money back in once every month for the next 12 months.

When you start feeling even semi-good about moving back in, you will have already missed a big up move in the market. My experience over 30+ years at least.
Last edited by Kenkat on Sat Feb 29, 2020 3:50 pm, edited 1 time in total.
KlangFool
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Re: I bet the house.

Post by KlangFool »

OP,

Good luck!

KlangFool
Topic Author
TomCat96
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Re: I bet the house.

Post by TomCat96 »

Kenkat wrote: Sat Feb 29, 2020 3:49 pm
TomCat96 wrote: Sat Feb 29, 2020 3:43 pm 2. The market is going to go down. Im 100% stocks for the long haul.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.
Because very few ever seem to pull this off. The time to buy back in will be when the very thought of putting money back into equities will make you want to be physically ill. In 2008, I forced myself to rebalance. It felt like I was flushing my money down the toilet. In fact, I couldn’t bring myself to do it all at once. The best I could do was to set up automatic transfers to to move money back in once every month for the next 12 months.

When you start feeling even semi-good about moving back in, you will have already missed a big up move in the market. My experience over 30+ years at least.
That is indeed the risk.
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TomCat96
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Re: I bet the house.

Post by TomCat96 »

TomCat96 wrote: Sat Feb 29, 2020 3:50 pm
Kenkat wrote: Sat Feb 29, 2020 3:49 pm
TomCat96 wrote: Sat Feb 29, 2020 3:43 pm 2. The market is going to go down. Im 100% stocks for the long haul.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.
The time to buy back in will be when the very thought of putting money back into equities will make you want to be physically ill. In 2008, at least.
Counting on it. :happy
That is indeed the risk.
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happyisland
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Re: I bet the house.

Post by happyisland »

Reminds me of a great scene in one of my favorite tv shows of all time:

https://www.youtube.com/watch?v=Po4adxJxqZk
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DrPayItBack
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Re: I bet the house.

Post by DrPayItBack »

TomCat96 wrote: Sat Feb 29, 2020 3:43 pm Let's be clear on how to splice this..

Bogleheads you are used to seeing it this way:

1. The market has gone down. I am so scared that I want to sell. I can't handle the drops.

The above is the type of market timing you perceive. I am sorry but that is not what is happening here.

This is how I perceive it.

2. The market is going to go down. Im 100% stocks for the long haul anyway.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.


I am market timing, just not the standard assumption you all are so used to jumping to.
The problem is that all the evidence points to number 1, especially since you only posted this all after the fact.
Last edited by DrPayItBack on Sat Feb 29, 2020 3:55 pm, edited 1 time in total.
sambb
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Re: I bet the house.

Post by sambb »

great work to the OP for picking a good exit time. you can get in at any lower price and be in a better place. Some might say it was luck, some might say it was skill. To me, thats irrelevant. What is relevant is IF you get in at a lower price - congrats it was probably pretty good. The question is whether or not you will get in at a lower price. Most cant predict the market, so its not something advisable in most cases. but in this case, the market had it wrong.

its unclear why some think that you are inevitably going to get back in at a higher price point. Seems like you will be able to get in at a lower price point.

either way, good luck. im not much of a timer, but i do adjust to risk tolerance.
Cousin Eddie
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Re: I bet the house.

Post by Cousin Eddie »

TomCat96 wrote: Sat Feb 29, 2020 3:43 pm Let's be clear on how to splice this..

Bogleheads you are used to seeing it this way:

1. The market has gone down. I am so scared that I want to sell. I can't handle the drops.

The above is the type of market timing you perceive. I am sorry but that is not what is happening here.

This is how I perceive it.

2. The market is going to go down. Im 100% stocks for the long haul anyway.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.


I am market timing, just not the standard assumption you all are so used to jumping to.
1 is fear, 2 is greed.

In any event, if you stay out you may avoid another 10-30% drop. It's possible. When will you get back in?
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canadianbacon
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Re: I bet the house.

Post by canadianbacon »

DrPayItBack wrote: Sat Feb 29, 2020 3:39 pm
TomCat96 wrote: Sat Feb 29, 2020 3:35 pm I have the shared the conditions of when I will re-enter the market with a few on this site. I prefer not to share it here.
So what on earth is the point of this post? It’s clearly not for useful discussion.
Attention.
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Caduceus
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Re: I bet the house.

Post by Caduceus »

I don't like the way some of the posters are responding to you. While I don't agree with what you have done, I certainly am not rooting for you to fail. I genuinely hope this turns out well for you.

I hope you can take a step back and consider something. If you look back at your posting history - way back before any of us had any hard statistics or facts about the coronavirus, including things like its mortality rate, its nature, its mode of infection, etc., you already seemed extremely convinced - almost like a zealot, to be honest - that this was something so important and different and that everyone else just wasn't seeing the light.

It's fairly obvious you've become quite emotionally involved in all of this. But being completely certain that something is going to happen, when that thing in question is how the markets are going to respond in the next few weeks to this event, is not rational. I'd be a little more convinced if you'd said this was a guess, or what you considered a highly probable bet. Displaying such levels of certainty and conviction in something so essentially unpredictable as market movements does not seem like a reasonable way to handle your long term finances.

But I hope it works out for you. If it does, I'll be happy for your good fortune. And if it doesn't, I sure won't be crowing about it either. Good luck.
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DrPayItBack
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Re: I bet the house.

Post by DrPayItBack »

A week after the market hits a new high he’ll post and say he got back in a month ago, obviously.
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watchnerd
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Re: I bet the house.

Post by watchnerd »

TomCat96 wrote: Sat Feb 29, 2020 3:43 pm Let's be clear on how to splice this..

Bogleheads you are used to seeing it this way:

1. The market has gone down. I am so scared that I want to sell. I can't handle the drops.

The above is the type of market timing you perceive. I am sorry but that is not what is happening here.

This is how I perceive it.

2. The market is going to go down. Im 100% stocks for the long haul anyway.
Why don't I get out now, wait for it to drop more, and then buy back in at 100% stocks. I'll come out ahead.


I am market timing, just not the standard assumption you all are so used to jumping to.

One could also market time because the tarot cards, Ouija board, or Magic 8 ball advised it.

Does the rationale impact the likelihood of success?
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Archimedes
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Re: I bet the house.

Post by Archimedes »

I also changed my asset allocation in a big way a few weeks back. The gap between the progressive market highs and my perception of risk was too great for me to stay the course.

But I had enough assets to get us to age 100 when I made my decision. If I had chosen to ride out a big drop, I could potentially find myself with only enough to get me to 100 with a significant decrease in lifestyle.

I let go of greed and exchanged it for security. I admit I did abandon my written investment plan, but I did so because we have enough to last the rest of our lives. I am going to sit tight for 3 months and see where this goes.
whereskyle
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Re: I bet the house.

Post by whereskyle »

averagedude wrote: Sat Feb 29, 2020 2:21 pm The market participants have extremely smart people, but I have followed the markets for several decades and have learned that they are often wrong. My take on this is that the market does not like uncertainty, especially at a time when the markets were a little ahead of itself.
I agree that the confluence of articles and opinions for what has been at least a few years that the bull market's end is nigh and that the market is overvalued with the virus's providing a concrete reason to believe that earnings will not grow is the cause of the correction.

The next question is whether panicked behavior among the many holders of stock draws the correction further downward
Last edited by whereskyle on Sat Feb 29, 2020 4:10 pm, edited 1 time in total.
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Fallible
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Re: I bet the house.

Post by Fallible »

TomCat96 wrote: Sat Feb 29, 2020 3:43 pm Let's be clear on how to splice this..

Bogleheads you are used to seeing it this way:

1. The market has gone down. I am so scared that I want to sell. I can't handle the drops.

The above is the type of market timing you perceive. ...
This is not true market timing, which is predicting when the market will go down and when it will come back up and even by how much. If an investor panics and sells in a downturn, that is about taking too much risk, not timing the market. ... [/quote]
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
whereskyle
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Re: I bet the house.

Post by whereskyle »

Fallible wrote: Sat Feb 29, 2020 4:09 pm
TomCat96 wrote: Sat Feb 29, 2020 3:43 pm Let's be clear on how to splice this..

Bogleheads you are used to seeing it this way:

1. The market has gone down. I am so scared that I want to sell. I can't handle the drops.

The above is the type of market timing you perceive. ...
This is not true market timing, which is predicting when the market will go down and when it will come back up and even by how much. If an investor panics and sells in a downturn, that is about taking too much risk, not timing the market. ...
[/quote]

Interesting. I see withdrawing during a dip as poor market timing. I admit that I am assuming a time horizon on the investment of 5 years.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Caduceus
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Re: I bet the house.

Post by Caduceus »

DrPayItBack wrote: Sat Feb 29, 2020 4:01 pm A week after the market hits a new high he’ll post and say he got back in a month ago, obviously.
If you read his posts, you'll see that he has been genuinely worried (to the point of obsession) about this for a long time. I think it was actually quite predictable that he would end up doing something like this, if you've followed his posts over the last month. So I think you are out of line here - I do not believe he's lying or trying to make things up so that he can later boast about his market timing successes. And even if he is, then so what? The harm to you is exactly zero, so there is no point disrespecting someone's genuine fears in a market downturn. It is very human.
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climber2020
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Re: I bet the house.

Post by climber2020 »

What was the day you got out? You said last Tuesday, but was it Feb 18 or 25? Big difference. The only way to evaluate this in the future is to know exactly where the market was when you sold.
Last edited by climber2020 on Sat Feb 29, 2020 4:20 pm, edited 1 time in total.
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geerhardusvos
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Re: I bet the house.

Post by geerhardusvos »

TomCat96 wrote: Sat Feb 29, 2020 2:11 pm
arcticpineapplecorp. wrote: Sat Feb 29, 2020 2:06 pm will your sale of all stock (except the 10%) result in capital gains taxes owed?

why didn't you sell the remaining 10% in the one stock? mind sharing what that one stock is?

The one stock is Gilead Sciences, maker of Remdesivir.
So let me get this straight, you got scared and went against any sort of reasonable strategy? That’s betting the house??

Yawn......
VTSAX and chill
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DrPayItBack
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Re: I bet the house.

Post by DrPayItBack »

Caduceus wrote: Sat Feb 29, 2020 4:12 pm
DrPayItBack wrote: Sat Feb 29, 2020 4:01 pm A week after the market hits a new high he’ll post and say he got back in a month ago, obviously.
If you read his posts, you'll see that he has been genuinely worried (to the point of obsession) about this for a long time. I think it was actually quite predictable that he would end up doing something like this, if you've followed his posts over the last month. So I think you are out of line here - I do not believe he's lying or trying to make things up so that he can later boast about his market timing successes. And even if he is, then so what? The harm to you is exactly zero, so there is no point disrespecting someone's genuine fears in a market downturn. It is very human.
It’s not about boasting, it’s about the uselessness of reporting one’s noncontemporaneous market moves. Posting about a move that was supposedly made 5 days ago and refusing to entertain discussion ahead of time of what would trigger the reverse move is a conversation without purpose, even for posterity.
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nisiprius
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Re: I bet the house.

Post by nisiprius »

TomCat96 wrote: Sat Feb 29, 2020 3:35 pm
nisiprius wrote: Sat Feb 29, 2020 2:35 pm...I would like you to take the following statement and replace what is in the brackets with what you think is an accurate expression of your opinion. Or edit anything in it as needed.

Is this what you think?

An investor with
$10,000 in stock [XYZ]
and $90,000 in bond fund [TUVWX]
on 2/29/2020,
will find on [3/1/2023]
that they have at least [90%] as much money
as they would have had if they had put $100,000 into
[an S&P 500 index fund].
I don't think I have to answer that. It's not an accurate characterization.... So the way you characterize it is inapposite. It assumes that my market timing will be so specific, based on dates. It assumes time frames.
It is not. It is based on events.
That's why I said "edit anything in it as needed." What I'm asking is that you state an objective framework for appraising your results when we know what they are. Let me make it simple. Give us a date for evaluation. How long do we need to wait in order to say "the results are in" and say "TomCat96 did/did not outperform a buy-and-hold investor?"

If you are not willing to say "we will know [three] years from now," then make an event-based statement of when we should evaluate the results, but something objective that everyone can agree on. Based on number of cases or something like that.
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Cousin Eddie
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Re: I bet the house.

Post by Cousin Eddie »

nisiprius wrote: Sat Feb 29, 2020 4:20 pm
TomCat96 wrote: Sat Feb 29, 2020 3:35 pm
nisiprius wrote: Sat Feb 29, 2020 2:35 pm...I would like you to take the following statement and replace what is in the brackets with what you think is an accurate expression of your opinion. Or edit anything in it as needed.

Is this what you think?

An investor with
$10,000 in stock [XYZ]
and $90,000 in bond fund [TUVWX]
on 2/29/2020,
will find on [3/1/2023]
that they have at least [90%] as much money
as they would have had if they had put $100,000 into
[an S&P 500 index fund].
I don't think I have to answer that. It's not an accurate characterization.... So the way you characterize it is inapposite. It assumes that my market timing will be so specific, based on dates. It assumes time frames.
It is not. It is based on events.
That's why I said "edit anything in it as needed." What I'm asking is that you state an objective framework for appraising your results when we know what they are. Let me make it simple. Give us a date for evaluation. How long do we need to wait in order to say "the results are in" and say "TomCat96 did/did not outperform a buy-and-hold investor?"

If you are not willing to say "we will know [three] years from now," then make an event-based statement of when we should evaluate the results, but something objective that everyone can agree on. Based on number of cases or something like that.
I agree, and it's not with the intent of putting the OP on the spot, I am truly interested in seeing how this works out from an intellectual standpoint. If the OP got out 5 days ago, he is sitting in the cat bird's seat right now, so I would like to know what will be the buy-in event.
minimalistmarc
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Re: I bet the house.

Post by minimalistmarc »

Bungo wrote: Sat Feb 29, 2020 2:10 pm If the world doesn't end and the market bounces back, how will you determine when to buy stocks again? Seems like it's all too easy in this scenario to sell low and buy high.
You just wait for the market to hit its bottom then buy. Can’t get easier than that, the rest of the money invested in the market is practically begging you to make an easy profit!
actx
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Re: I bet the house.

Post by actx »

LoveTheBogle wrote: Sat Feb 29, 2020 3:02 pm My favorite is that he said he sold 90% before the sell off. I wonder why he didn’t post that when he did it?

If you want to be totally transparent post your trades and fill prices when you do it not several days later when it makes you sound smart. It’s all luck anyway, even if true.
Bingo! And if you look up his other posts, he was posting on Wednesday and Thursday as though he were still in the market. I seriously doubt he actually sold when he said he did more likely he sold moments before he posted this and after the big break.
Enzo IX
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Re: I bet the house.

Post by Enzo IX »

First death of coronavirus this morning in my state, maybe 20 miles away from where I live, put the seriousness and reality of the situation in my mind finally.

Multiple cases showed up at assisted living facility, both patient and healthcare worker. Wow just thinking how many people work there and go home at night possibly as unaware carriers, all the daily visitors that come and go all day long. Isn't too long before you get the six degrees of Kevin Bacon effect happening. Hopefully this gets contained.

Good luck with the original posters decision, we are all guessing on the seriousness of this virus.
actx
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Re: I bet the house.

Post by actx »

Here is a post he made Tuesday night. So at 7:38 pm he intends to keep buying because that’s when you really make money. But didn’t his post in this thread say he sold it all on Tuesday?


by TomCat96
Tue Feb 25, 2020 7:38 pm
Forum: Investing - Theory, News & General
Topic: Isn’t this a fantastic time to buy what we believe in?
Replies: 55
Views: 4834
Re: Isn’t this a fantastic time to buy what we believe in?
Standard dollar cost averaging fo rme.

I still intend to keep buying. Now is when you really make money.

I actually dlslike buying in when the market goes up, but do it anyway
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DrPayItBack
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Re: I bet the house.

Post by DrPayItBack »

actx wrote: Sat Feb 29, 2020 4:40 pm Here is a post he made Tuesday night. So at 7:38 pm he intends to keep buying because that’s when you really make money. But didn’t his post in this thread say he sold it all on Tuesday?


by TomCat96
Tue Feb 25, 2020 7:38 pm
Forum: Investing - Theory, News & General
Topic: Isn’t this a fantastic time to buy what we believe in?
Replies: 55
Views: 4834
Re: Isn’t this a fantastic time to buy what we believe in?
Standard dollar cost averaging fo rme.

I still intend to keep buying. Now is when you really make money.

I actually dlslike buying in when the market goes up, but do it anyway
😬
Triple digit golfer
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Re: I bet the house.

Post by Triple digit golfer »

DrPayItBack wrote: Sat Feb 29, 2020 4:41 pm
actx wrote: Sat Feb 29, 2020 4:40 pm Here is a post he made Tuesday night. So at 7:38 pm he intends to keep buying because that’s when you really make money. But didn’t his post in this thread say he sold it all on Tuesday?


by TomCat96
Tue Feb 25, 2020 7:38 pm
Forum: Investing - Theory, News & General
Topic: Isn’t this a fantastic time to buy what we believe in?
Replies: 55
Views: 4834
Re: Isn’t this a fantastic time to buy what we believe in?
Standard dollar cost averaging fo rme.

I still intend to keep buying. Now is when you really make money.

I actually dlslike buying in when the market goes up, but do it anyway
😬
:oops:
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hagridshut
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Re: I bet the house.

Post by hagridshut »

actx wrote: Sat Feb 29, 2020 4:40 pm Here is a post he made Tuesday night. So at 7:38 pm he intends to keep buying because that’s when you really make money. But didn’t his post in this thread say he sold it all on Tuesday?


by TomCat96
Tue Feb 25, 2020 7:38 pm
Forum: Investing - Theory, News & General
Topic: Isn’t this a fantastic time to buy what we believe in?
Replies: 55
Views: 4834
Re: Isn’t this a fantastic time to buy what we believe in?
Standard dollar cost averaging fo rme.

I still intend to keep buying. Now is when you really make money.

I actually dlslike buying in when the market goes up, but do it anyway
And also this:

viewtopic.php?f=10&t=80065&p=5044976#p5044976
TomCat96 wrote: Tue Feb 25, 2020 7:11 pm I intend to keep buying.
Busted. Why should anyone believe anything TomCat says?
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AlphaLess
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Re: I bet the house.

Post by AlphaLess »

Folks: this is a prime example why sell-offs turn into panics.

When more and more retail investors panic, the sell-off will get worse.

Monday SP500 intraday was flat, with a lot of variance.
Tuesday, it was all straight line down.

The reason is simple:
- Monday, there were a lot of knife-catchers especially from Sunday night,
- Tuesday, there were a lot of towel-throwers.

Expect a mix of days like this.

Friday, we saw another round of knife-catchers. Last day of the month, Friday, payday, and rebalance date.

Expect next week to be just as bad as this past week.
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Wanderingwheelz
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Re: I bet the house.

Post by Wanderingwheelz »

actx wrote: Sat Feb 29, 2020 4:40 pm Here is a post he made Tuesday night. So at 7:38 pm he intends to keep buying because that’s when you really make money. But didn’t his post in this thread say he sold it all on Tuesday?


by TomCat96
Tue Feb 25, 2020 7:38 pm
Forum: Investing - Theory, News & General
Topic: Isn’t this a fantastic time to buy what we believe in?
Replies: 55
Views: 4834
Re: Isn’t this a fantastic time to buy what we believe in?
Standard dollar cost averaging fo rme.

I still intend to keep buying. Now is when you really make money.

I actually dlslike buying in when the market goes up, but do it anyway
More than a little bit peculiar. No?
actx
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Re: I bet the house.

Post by actx »

AlphaLess wrote: Sat Feb 29, 2020 4:46 pm Folks: this is a prime example why sell-offs turn into panics.

When more and more retail investors panic, the sell-off will get worse.

Monday SP500 intraday was flat, with a lot of variance.
Tuesday, it was all straight line down.

The reason is simple:
- Monday, there were a lot of knife-catchers especially from Sunday night,
- Tuesday, there were a lot of towel-throwers.

Expect a mix of days like this.

Friday, we saw another round of knife-catchers. Last day of the month, Friday, payday, and rebalance date.

Expect next week to be just as bad as this past week.
And more people like Tomcat to MAKE UP STORIES ABOUT HIW SMART THEY WERE and brag about it...to what end? To lie about how smart they are to make others feel bad?

Unbelievable.

Unbelievable.
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watchnerd
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Re: I bet the house.

Post by watchnerd »

Caduceus wrote: Sat Feb 29, 2020 4:01 pm It's fairly obvious you've become quite emotionally involved in all of this. But being completely certain that something is going to happen, when that thing in question is how the markets are going to respond in the next few weeks to this event, is not rational.
These kinds behavioral issues are one of the main reasons I'm extremely wary about developing any hypothesis as to what the market will do or the future holds in the short to intermediate term.

https://www.bogleheads.org/wiki/Behavioral_pitfalls
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP
AlphaLess
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Re: I bet the house.

Post by AlphaLess »

actx wrote: Sat Feb 29, 2020 4:53 pm And more people like Tomcat to MAKE UP STORIES ABOUT HIW SMART THEY WERE and brag about it...to what end? To lie about how smart they are to make others feel bad?

Unbelievable.

Unbelievable.
It's all noise. I think that a prerequisite to posting here should be to have ones portfolio allocation audited / examined.

If your portfolio allocation does not reflect what you are saying, advocating, posting, then you should be banned.

As for other topics, like what I fed my cat, how much I spend on my socks, or what books I am reading: that I totally don't care for.
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.
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hisdudeness
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Re: I bet the house.

Post by hisdudeness »

If the OP made his move on Tuesday at market close, the S&P closed at 3128, I believe.
Since then it's down another 174 points, or 5.6%.
He's avoided losing 5.6% of his total investment, and will come out ahead if he buys back in at any point below 3128.
Sure, he made a risky, unboglehead move, but it has worked out so far and it looks probable that he will come out of this better than buy and hold.

So he did a no-no.
That's not a reason to chastise him and hope it bites him in the butt.

Does an 11% drop in five days make some of us a little irritable?
carminered2019
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Re: I bet the house.

Post by carminered2019 »

Op, why stop there ? Short the market and go with your instinct that the market going to tank.
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DrPayItBack
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Re: I bet the house.

Post by DrPayItBack »

hisdudeness wrote: Sat Feb 29, 2020 5:10 pm If the OP made his move on Tuesday at market close, the S&P closed at 3128, I believe.
Since then it's down another 174 points, or 5.6%.
He's avoided losing 5.6% of his total investment, and will come out ahead if he buys back in at any point below 3128.
Sure, he made a risky, unboglehead move, but it has worked out so far and it looks probable that he will come out of this better than buy and hold.

So he did a no-no.
That's not a reason to chastise him and hope it bites him in the butt.

Does an 11% drop in five days make some of us a little irritable?
You’re missing a lot of the context of this thread eg the posts directly preceding yours
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willthrill81
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Re: I bet the house.

Post by willthrill81 »

Kenkat wrote: Sat Feb 29, 2020 2:22 pmThe odds are not in your favor but we shall see.
I don't see how you think that. As long as he buys back in at a lower price than which he sold, he'll come out ahead. The odds seem in his favor right now.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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hisdudeness
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Re: I bet the house.

Post by hisdudeness »

DrPayItBack wrote: Sat Feb 29, 2020 5:17 pm
hisdudeness wrote: Sat Feb 29, 2020 5:10 pm If the OP made his move on Tuesday at market close, the S&P closed at 3128, I believe.
Since then it's down another 174 points, or 5.6%.
He's avoided losing 5.6% of his total investment, and will come out ahead if he buys back in at any point below 3128.
Sure, he made a risky, unboglehead move, but it has worked out so far and it looks probable that he will come out of this better than buy and hold.

So he did a no-no.
That's not a reason to chastise him and hope it bites him in the butt.

Does an 11% drop in five days make some of us a little irritable?
You’re missing a lot of the context of this thread eg the posts directly preceding yours
You're right, Doc. I'm a very slow typer.
Elysium
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Re: I bet the house.

Post by Elysium »

Yawn.This too shall pass.

Portfolio down 6% YTD after being up 22% last year.

Wake me up when we get down to 25%, so I can buy more. Unlikely we'll get there though based on this event.

OP is wrong, most of the bad news about Corona virus is already priced in, rest of the days/weeks will be aimless action, market will go back up quicker than all the chicken little's are thinking, leaving them behind.
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willthrill81
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Re: I bet the house.

Post by willthrill81 »

Elysium wrote: Sat Feb 29, 2020 5:32 pm OP is wrong, most of the bad news about Corona virus is already priced in...
That's only theoretical, not proven fact.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
BillyK
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Re: I bet the house.

Post by BillyK »

I would never consider selling stocks to buy bonds betting the house. It is more of a case of losing your nerve and folding. I wish you luck on timing your re-entry back into the market. Not sure why you are so keen on holding a 100% equity portfolio in the future when it looks like you have a tendency to bail in a hurry when the market goes south. You may want to adjust your future portfolio to take into account your tendency to abandon your IPS so quickly.
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TomCat96
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Re: I bet the house.

Post by TomCat96 »

DrPayItBack wrote: Sat Feb 29, 2020 4:01 pm A week after the market hits a new high he’ll post and say he got back in a month ago, obviously.
I'll tell you my buy in event right now.

The bogleheads who think this will all blow over, who think this is no worse than the flu, please raise your hands.

I will buy back in when you change your mind--when you think this is serious. You are my bellwether.
You are the average insight of the market. You know are the state of knowledge that knows what everyone else knows.

When it is absolutely unthinkable for me to buy back into the market. When it is unreasonable to do so, that is when I will buy back in.
When the tide of sentiment on this very website changes for the worst, that is when I will return to 100% stocks.

You buy when others are fearful, when theres blood in the streets.

and right now, here is what you know.
=========================================================
-This is no worse than the flu. The death rate is 2%. (even 1% based on a WHO report) There's nothing to worry about.
-The flu infects millions a year, kills 350k- 650k a year. COVID-19, only 3k.
-this issue is way overblown and the numbers speak for themselves.
-we just don't have enough information on the true death rate yet.
-we have to wait and see
-there are a few cases in the US right now; it is contained for now.
-the market has already taken all this into account.
Last edited by TomCat96 on Sat Feb 29, 2020 5:52 pm, edited 4 times in total.
halfnine
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Re: I bet the house.

Post by halfnine »

Hope it works out well for you.

The rest of us, let's not confuse strategy with outcome. The OP may have a good strategy and yet still have a poor outcome. Or could have a poor strategy and yet still have a favorable outcome. A one-off end result isn't going to tell us much either way.
GoldenFinch
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Re: I bet the house.

Post by GoldenFinch »

This thread is a good reminder to me that watching the market too closely might lead to an emotional reaction and a behavioral response. I try to avoid reacting emotionally to the market since I am still investing for the long run. I have seen 1987, the dot bomb, Y2K, 9/11, housing disaster, financial crisis, the “lost decade” Brexit, sea sick inducing volatility, and panic worthy CNBC commentary. Living through these experiences as an investor I have one important lesson to share (written below for emphasis).

Important lesson: Don’t touch the money.

Good luck TomCat96.

Sincerely,

GoldenFinch
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TomCat96
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Re: I bet the house.

Post by TomCat96 »

halfnine wrote: Sat Feb 29, 2020 5:51 pm Hope it works out well for you.

The rest of us, let's not confuse strategy with outcome. The OP may have a good strategy and yet still have a poor outcome. Or could have a poor strategy and yet still have a favorable outcome. A one-off end result isn't going to tell us much either way.
Trading off a one-off event is not a strategy. I am not pretending that what I am doing is. It cannot possibly be the basis of widespread dogma you can give to people to genuinely help them build their wealth for the long term.

It is perfectly understandable why the boglehead dogma remains as it is. Even if you could articulate a dogma that allows for trading on one-offs, can you disseminate that to the to the general crowd? Would that work? Certainly not.

It's understandable.
JonnyB
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Re: I bet the house.

Post by JonnyB »

willthrill81 wrote: Sat Feb 29, 2020 5:18 pm
Kenkat wrote: Sat Feb 29, 2020 2:22 pmThe odds are not in your favor but we shall see.
I don't see how you think that. As long as he buys back in at a lower price than which he sold, he'll come out ahead. The odds seem in his favor right now.
You don't even have to do that. You just have to buy back at a price that is lower than your alternate bond investment is doing.

This is an unusual example, but if you had sold S&P 500 at its peak in 2000, you could have bought back on any day for the next 17 years and come out ahead. That's a lot of leeway to buy back.

Buying back is generally easier than selling out because drops are very sharp and timing is critical but recoveries tend to be much slower, giving you more opportunities to buy.
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