The Black Swan is Here

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TravelforFun
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The Black Swan is Here

Post by TravelforFun »

We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
Last edited by TravelforFun on Mon Mar 16, 2020 10:11 am, edited 2 times in total.
jebmke
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Re: The Black Swan is Here

Post by jebmke »

I've had a fairly conservative 40/60 portfolio since I retired. No changes. The strategy works as well for cyclical downturns as it does for exogenous shocks.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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JonnyDVM
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Re: The Black Swan is Here

Post by JonnyDVM »

What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
I’d trade it all for a little more | -C Montgomery Burns
yohac
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Re: The Black Swan is Here

Post by yohac »

JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.
Yup, there was plenty of warning. Of course there have warnings on lots of other things too, which fizzled out. This one blew up in our faces (to use another analogy.)
Topic Author
TravelforFun
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Re: The Black Swan is Here

Post by TravelforFun »

JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
Hope you weren't 100% equity.

TravelforFun
am
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Re: The Black Swan is Here

Post by am »

There is a chance that we may be well into recovery by summer to end of the year as market is forward looking. Dow/market has had huge inter year losses in the past only to finish the year up (think 1987 ). Staying the course is best. Obviously crystal ball is cloudy as we say here.
Blue456
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Re: The Black Swan is Here

Post by Blue456 »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it on this forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
I disagree about this being a true black swan. My definition of black swan is something from which economy will not recover or will take decades to recover. With Corona virus we do not have complete destruction of industries. Corporations may go bankrupt in worst case scenario but the infrastructure is there. There is no mass destruction of any sort like we have seen during WW2 or WW1.
VAslim16
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Re: The Black Swan is Here

Post by VAslim16 »

I'm early 40s with a decent (but not great) chunk saved for retirement. I am 75/25 with my stock portion 50/50 US vs INT. I would like to say I will rebalance according to my IPS 5/20 bands. But this recent drop is causing my to worry about my job a bit (among other things). My plan is to keep adding equity monthly but not rebalance. Part of me wants to add a bit more to my emergency fund but I'm not sure I will do that yet. I guess this is good in a way (if we ever come out of it) as my true tolerance for risk is being tested for first time.
Last edited by VAslim16 on Mon Mar 16, 2020 10:19 am, edited 1 time in total.
Dottie57
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Re: The Black Swan is Here

Post by Dottie57 »

jebmke wrote: Mon Mar 16, 2020 9:57 am I've had a fairly conservative 40/60 portfolio since I retired. No changes. The strategy works as well for cyclical downturns as it does for exogenous shocks.
I have the conservative portfolio too.40/60.

I hope bonds don’t fail. :confused
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watchnerd
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Re: The Black Swan is Here

Post by watchnerd »

Blue456 wrote: Mon Mar 16, 2020 10:16 am
I disagree about this being a true black swan. My definition of black swan is something from which economy will not recover or will take decades to recover. With Corona virus we do not have complete destruction of industries. Corporations may go bankrupt in worst case scenario but the infrastructure is there. There is no mass destruction of any sort like we have seen during WW2 or WW1.
I'm with you on that. Asteroid-strike, super volcanos...that's what I think of in terms of black swans.

Coronavirus is a Black Cygnet.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP
lostdog
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Re: The Black Swan is Here

Post by lostdog »

watchnerd wrote: Mon Mar 16, 2020 10:20 am
Blue456 wrote: Mon Mar 16, 2020 10:16 am
I disagree about this being a true black swan. My definition of black swan is something from which economy will not recover or will take decades to recover. With Corona virus we do not have complete destruction of industries. Corporations may go bankrupt in worst case scenario but the infrastructure is there. There is no mass destruction of any sort like we have seen during WW2 or WW1.
I'm with you on that. Asteroid-strike, super volcanos...that's what I think of in terms of black swans.

Coronavirus is a Black Cygnet.
+1

Using words like Black Swan and The Plague is a bit over the top.
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JonnyDVM
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Re: The Black Swan is Here

Post by JonnyDVM »

TravelforFun wrote: Mon Mar 16, 2020 10:13 am
JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
Hope you weren't 100% equity.

TravelforFun
Supposed to be 80/20. It had been a while since I rebalanced though, so it was closer to 85/15. At least I have something to flip into equities. Most everyone else I know does not.

I don’t know what the actual definition of a “black swan” is supposed to be. But this sure feels like an appropriate time to use the term.
I’d trade it all for a little more | -C Montgomery Burns
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JonnyDVM
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Re: The Black Swan is Here

Post by JonnyDVM »

Here’s the definition

The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

If this isn’t it, what is ???
I’d trade it all for a little more | -C Montgomery Burns
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Wiggums
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Re: The Black Swan is Here

Post by Wiggums »

I don’t know what you call this. Maybe the perfect Storm for a selloff.

Two emergency fed cuts, is unusual and causing a choppy market. We have a public health and closures that make it harder yo determine the economic impact.
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fortfun
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Re: The Black Swan is Here

Post by fortfun »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
My defense strategy is watching reruns of: The Walking Dead. I just need to find a compound bow and my family should be okay.
CnC
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Re: The Black Swan is Here

Post by CnC »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
As per my thread on the matter I sold down to 50/50 in January when the market was at an all-time high.

I'm slowly buying back in 10k a day.
Broken Man 1999
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Re: The Black Swan is Here

Post by Broken Man 1999 »

Black Swan..... nah. Maybe a dirty white or grey swan at the most, for now.

People are acting crazy around here, but I haven't heard any gunshots yet. DW couldn't find distilled water for my CPAP machine, and not too much bread was available when she went shopping yesterday. I don't eat much bread anyway. A DD is looking for distilled water for me, if not found she suggested I fill the CPAP water tank with gin and tonic. Great fallback plan! :D

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
quantAndHold
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Re: The Black Swan is Here

Post by quantAndHold »

JonnyDVM wrote: Mon Mar 16, 2020 10:34 am Here’s the definition

The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

If this isn’t it, what is ???
And Taleb goes on to describe black swan events that have happened an average of once a decade between the beginning of the 20th century and his publication date in 2007. Then 2008 occurred. And now this.

It's important to note that black swans can be positive as well. And that a black swan might be negative for one person and positive for another. Taleb's backstory is that, completely by accident, he made millions on the black Monday crash in 1987.

For epidemiologists and public health experts, this is not a black swan. They knew this was coming sometime and were planning for it. The investing community....yeah, it probably is.
Yes, I’m really that pedantic.
at7000ft
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Re: The Black Swan is Here

Post by at7000ft »

The money I have in savings and CDs divided by my annual outlay (costs - income) comes to 32 years. The wife and I are almost 70 so that's good up to 102 years old. Of course you always have to worry about inflation, the other half I have in Wellesley and Vanguard 2020 (40/60 and 50/50) which average around 6% long term so hopefully that will cover a 3% average inflation rate. At least that's my current plan, haven't figured out yet when I will retire :( , is nice knowing you don't have to work anymore but it does take some of the excitement out of the thought of retiring (unless you really hate working).
Thesaints
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Re: The Black Swan is Here

Post by Thesaints »

JonnyDVM wrote: Mon Mar 16, 2020 10:34 am If this isn’t it, what is ???
We can't say yet. It could turn out to be just a big scare, but we can't exclude the possibility of a swan weighing 500 lbs.
UnLearnYourself
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Re: The Black Swan is Here

Post by UnLearnYourself »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
Patience and Equanimity
jjface
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Re: The Black Swan is Here

Post by jjface »

It is good to take the virus seriously but it isn't a plague. It isn't going to kill the majority of people nor will most get sick. There are vulnerable people sure that need looking after. Life will return to normal. Markets will recover. Much more chance of you dying driving to work but no one is banning cars. It is a risk we take.
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F150HD
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Re: The Black Swan is Here

Post by F150HD »

JonnyDVM wrote: Mon Mar 16, 2020 10:34 am Here’s the definition

The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

If this isn’t it, what is ???
+1. This is a Black Swan.
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Nate79
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Re: The Black Swan is Here

Post by Nate79 »

2008/2009 was equally scary and we got thru it just fine after some time. This will pass as well.
perikleez
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Re: The Black Swan is Here

Post by perikleez »

Nate79 wrote: Mon Mar 16, 2020 1:54 pm 2008/2009 was equally scary and we got thru it just fine after some time. This will pass as well.
"got thru it just fine" is relative, of course.

many lost their homes (aka "best investment") and many seniors lost their 401Ks

sure, life went on, but lots of pain endured along the way.
Last edited by perikleez on Mon Mar 16, 2020 1:58 pm, edited 1 time in total.
GaryA505
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Re: The Black Swan is Here

Post by GaryA505 »

jebmke wrote: Mon Mar 16, 2020 9:57 am I've had a fairly conservative 40/60 portfolio since I retired. No changes. The strategy works as well for cyclical downturns as it does for exogenous shocks.
I'm about 2 years from retirement and dialed down to about 40/60 quite a while ago. It's funny, when I did that I was wondering of I was being too conservative. I guess I have my answer now.
TheDDC
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Re: The Black Swan is Here

Post by TheDDC »

GaryA505 wrote: Mon Mar 16, 2020 1:58 pm
jebmke wrote: Mon Mar 16, 2020 9:57 am I've had a fairly conservative 40/60 portfolio since I retired. No changes. The strategy works as well for cyclical downturns as it does for exogenous shocks.
I'm about 2 years from retirement and dialed down to about 40/60 quite a while ago. It's funny, when I did that I was wondering of I was being too conservative. I guess I have my answer now.
Nice. That 40% of your portfolio still NEEDS to grow. Otherwise why have any allocation to equities at all?

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex
Thesaints
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Re: The Black Swan is Here

Post by Thesaints »

perikleez wrote: Mon Mar 16, 2020 1:58 pm
Nate79 wrote: Mon Mar 16, 2020 1:54 pm 2008/2009 was equally scary and we got thru it just fine after some time. This will pass as well.
"got thru it just fine" is relative, of course.

many lost their homes (aka "best investment") and many seniors lost their 401Ks

sure, life went on, but lots of pain endured along the way.
Not to mention that back then hospitals didn't fill up and one could fly to Rome and Paris no problem...
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TravelforFun
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Re: The Black Swan is Here

Post by TravelforFun »

Can anyone remember the last time sport teams cancelled their seasons, the Masters was a no-go, stocks dropped 30% in 10 days, countries closed all their restaurants, bars, and theaters, and the US under a national emergency?

TravelforFun
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bligh
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Re: The Black Swan is Here

Post by bligh »

perikleez wrote: Mon Mar 16, 2020 1:58 pm
Nate79 wrote: Mon Mar 16, 2020 1:54 pm 2008/2009 was equally scary and we got thru it just fine after some time. This will pass as well.
"got thru it just fine" is relative, of course.

many lost their homes (aka "best investment") and many seniors lost their 401Ks

sure, life went on, but lots of pain endured along the way.
And the same will happen this time around too. In fact it already has. For several thousand people, it is already too late. Even if they were millionaires, it doesn't matter what their portfolio is doing, because now it is the worry of the beneficiaries of their estate.

Let's keep things in perspective. This isn't the bubonic plague. The economic crisis associated with this pandemic is self imposed. We as a society are choosing to inflict financial harm upon ourselves in order to save as many lives as we can. In fact, It looks like the UK isn't too keen on making that trade off at the moment. However, all this talk about "This time is different" and "The Black Swan has cometh!" is just panic. Panic also has a way of being infectious... that is what causes stampedes. It will be painful, almost certainly more painful than 2008/2009, not just due to the loss of human lives, but due to the loss of economic activity.

Anyway, back to the Original Topic -

Whether this is a black swan type event rests on how hard to predict and rare this event is. I mean you could argue that 2008-2009 was also a black swan type event, because most never expected financial system to collapse the way it did. I suppose you could label every major, unexpected/unanticipated/unplanned for financial or life event a "Black Swan" if you wanted to.

However here is how Taleb explains it (from Wikipedia):

Code: Select all

What we call here a Black Swan (and capitalize it) is an event with the following three attributes.

First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme 'impact'. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

I stop and summarize the triplet: rarity, extreme 'impact', and retrospective (though not prospective) predictability. A small number of Black Swans explains almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.
So let us ask:
1) Rarity - Yes it is "quite" rare. I have heard it explained as a once in a hundred year type event. ie. Once is a lifetime type thing... "but nothing in the past can convincingly point to its possibility."... really? Spanish Flu? Swine Flu? SARS? MERS? This reminds me of how in California everyone knows that the "The Big One" is coming. A massive earthquake that we will all be completely unprepared for and will, in hindsight, wonder why we didn't prepare for it.
2) Extreme Impact - Yup.
3) Retrospective Predictability - Yup, See Spanish Flu, Swine Flu, SARS, etc..

I would say Covid-19 and its effects fits the description pretty darn well.
framus
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Re: The Black Swan is Here

Post by framus »

Broken Man 1999 wrote: Mon Mar 16, 2020 10:57 am Black Swan..... nah. Maybe a dirty white or grey swan at the most, for now.

People are acting crazy around here, but I haven't heard any gunshots yet. DW couldn't find distilled water for my CPAP machine, and not too much bread was available when she went shopping yesterday. I don't eat much bread anyway. A DD is looking for distilled water for me, if not found she suggested I fill the CPAP water tank with gin and tonic. Great fallback plan! :D

Broken Man 1999
Gin and tonic are ok but we've learned on the internet that you are supposed to use Corona beer. :sharebeer
CascadiaSoonish
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Re: The Black Swan is Here

Post by CascadiaSoonish »

I run a small business. Fortunately we're somewhat insulated from direct effects here (we can easily work from home) but I'm seeing a strong slowdown in the market and that's going to be a factor with the organizations we work with. And we just bought a building last year, so my spare cashflow is already largely spoken for. Not a good time for us for a surprise business downturn; even with having no other debt and a line of credit available, this isn't going to be easy. (on the bright side, the six digit balance we pulled out of the market last year to pay for the building is now parked in CRE and hasn't taken the same market hit as it would have in ETFs)

We have an SBA loan through Wells Fargo so it will be interesting to see if there's any relief there from the feds.

But the business climate went from bad to worse last week. Small services businesses in town are closing and many will not reopen. I know personally of different businesses that have already made significant layoffs.

I can ride out the market drop, we don't need that money now, but I do not discount the bigger impact in the slightest. A lot of businesses and a lot of employees are going to suffer terribly in the next couple months.
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Re: The Black Swan is Here

Post by z3r0c00l »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
It isn't a black swan if thousands of doctors and scientists, and more than a few authors, have been warning us about it for decades. I read "The Coming Plague" in high school in the 1990's. This is a known known or at most, a known unknown. It was not an unknown unknown. A black swan would be a comet discovered 3 months out on a collision course with Earth.
EFF_fan81
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Re: The Black Swan is Here

Post by EFF_fan81 »

JonnyDVM wrote: Mon Mar 16, 2020 10:09 am What annoys me about this swan is I felt like I could see it coming from a good distance away. Staying the course really led me strait into an iceberg.

My defense strategy is that I still have the benefit of time.
Yes! I felt it was so odd that the market was not falling in February. In the third week of February, before the CDC announcement, I was concerned and I stocked up on essentials. I felt it would hit and it would be very bad and we were not prepared. I felt the market would fall, but I did nothing because "stay the course."

I can't cry over spilled milk but I did learn a lesson. Today, I bought. Specifically, I sold bonds in retirement accounts and bought stocks that I thought could weather a recession reasonably well. Then, I sold stocks for tax losses in taxable. My emergency fund is bigger, but my stock holdings are greater. I will continue this strategy each month for several months until at some point I'm going to have a big fat emergency fund, 100% stock, zero bonds, minimal stock in taxable accounts and a lot of tax losses. Then hopefully, I should benefit from the upside.
Last edited by EFF_fan81 on Mon Mar 16, 2020 2:47 pm, edited 1 time in total.
LiterallyIronic
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Re: The Black Swan is Here

Post by LiterallyIronic »

TravelforFun wrote: Mon Mar 16, 2020 2:13 pm Can anyone remember the last time sport teams cancelled their seasons, the Masters was a no-go, stocks dropped 30% in 10 days, countries closed all their restaurants, bars, and theaters, and the US under a national emergency?

TravelforFun
World War II?
Shallowpockets
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Re: The Black Swan is Here

Post by Shallowpockets »

JonnyDVM wrote: Mon Mar 16, 2020 10:34 am Here’s the definition

The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

If this isn’t it, what is ???
You can see the inappropriate rationalizing already, during the fact, without hindsight.
Rus In Urbe
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Re: The Black Swan is Here

Post by Rus In Urbe »

*
Yes the black swan sailed in. Our defense strategies?

I retired in December. Basic expenses well covered by RMDs + SS. I had us at a comfortable 50/50 AA.
On top of that, I put aside five years of CD's laddered (at 3.1%-3.4%) for dry powder and fun money @40K annum.

Then a bit of luck occured----in early Feb, I instigated a rollover from 403b (at aggressive 70/30 to an IRA and that necessitated going to 100% cash on that account). That resulted in an overall AA of 30/70. So, now I'll have the problem of getting the money back into the market to get back to our 50/50.
It's a good problem to have.

What's not good is to see the kind of suffering that is going to be happening all around us. There will be many job losses, bankruptcies, etc. So we are giving extra work (and pay) to the helpers we deal with (yard and house) as well as ramping up our philanthropy. Since we won't be doing any traveling in the near future, this is a good way to use that money.

Best to all in these odd times. :beer Rus.
I'd like to live as a poor man with lots of money. ~Pablo Picasso
Broken Man 1999
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Re: The Black Swan is Here

Post by Broken Man 1999 »

framus wrote: Mon Mar 16, 2020 2:21 pm
Broken Man 1999 wrote: Mon Mar 16, 2020 10:57 am Black Swan..... nah. Maybe a dirty white or grey swan at the most, for now.

People are acting crazy around here, but I haven't heard any gunshots yet. DW couldn't find distilled water for my CPAP machine, and not too much bread was available when she went shopping yesterday. I don't eat much bread anyway. A DD is looking for distilled water for me, if not found she suggested I fill the CPAP water tank with gin and tonic. Great fallback plan! :D

Broken Man 1999
Gin and tonic are ok but we've learned on the internet that you are supposed to use Corona beer. :sharebeer
Well, I like to fortify myself with liquor, as the saying goes "liquor is quicker!"

Every Christmas party we have we end up with 10-12 bottles of wine, more than we started with. Sometimes we score a bottle of Jack, or Jim Beam, so we are well-stocked with booze. One of my aides gave me a bottle of Bacardi Gold rum for Christmas.

Hopefully our annual St. Patrick 's outing tomorrow won't be cancelled. The pub near us puts out a great plate of corned beef and cabbage, and of course can't forget the cheap beer that has been dyed green. We are going with a group of retirees in our neighborhood, since we are all retired our plan is to go early afternoon, chow down, hoist a few pitchers and get out before it gets crowded.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
TravelGeek
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Re: The Black Swan is Here

Post by TravelGeek »

fortfun wrote: Mon Mar 16, 2020 10:40 am My defense strategy is watching reruns of: The Walking Dead. I just need to find a compound bow and my family should be okay.
Yeah, that was fun until the CDC headquarters blew up :twisted:

Is it a black swan? Grey swan? Does it really matter or make a difference?
TravelforFun wrote: Mon Mar 16, 2020 9:54 am
In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?
Same situation basically. Financially I have mostly refrained from looking at my accounts 24/7. I shifted some cash from money market funds into CDs (because I have CDs expiring in a few weeks and months). I also rebalanced a bit today overall. Sold my Fidelity zero total stock fund I bought last year at a 10% loss and bought Vanguard total stock market instead.
Last edited by TravelGeek on Mon Mar 16, 2020 2:59 pm, edited 2 times in total.
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Will do good
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Re: The Black Swan is Here

Post by Will do good »

CascadiaSoonish wrote: Mon Mar 16, 2020 2:24 pm I run a small business. Fortunately we're somewhat insulated from direct effects here (we can easily work from home) but I'm seeing a strong slowdown in the market and that's going to be a factor with the organizations we work with. And we just bought a building last year, so my spare cashflow is already largely spoken for. Not a good time for us for a surprise business downturn; even with having no other debt and a line of credit available, this isn't going to be easy. (on the bright side, the six digit balance we pulled out of the market last year to pay for the building is now parked in CRE and hasn't taken the same market hit as it would have in ETFs)

We have an SBA loan through Wells Fargo so it will be interesting to see if there's any relief there from the feds.

But the business climate went from bad to worse last week. Small services businesses in town are closing and many will not reopen. I know personally of different businesses that have already made significant layoffs.

I can ride out the market drop, we don't need that money now, but I do not discount the bigger impact in the slightest. A lot of businesses and a lot of employees are going to suffer terribly in the next couple months.
Best of luck to you.
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Ged
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Re: The Black Swan is Here

Post by Ged »

A Black Swan to me is an event outside the historical range of expected variations that invalidates the current theories in a field.

For example: All swans are white is the expected range of colors of a swan until you see a black one.

I don't think the current stock market fluctuations are a Black Swan, at least yet. It is a large variation, a shock that is likely to cause a recession. Yet we have had these sorts of events before. Example: Hong Kong Flu (1968-69).
Finridge
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Re: The Black Swan is Here

Post by Finridge »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
I disagree about this being a black swan. A black swan is something completely unforeseeable and unexpected. We knew something like this would happen; we just didn't know when. This like pulling up the "Go Directly to Jail" card in Monopoly. You know it's possible, and it's never a good time when it happens, but you hope it doesn't happen anytime soon.
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watchnerd
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Re: The Black Swan is Here

Post by watchnerd »

I don't know why swans are always getting blamed for this stuff.

What did they ever do to anyone?

I'd much rather blame it on albino crocodiles.

They're mean.
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MortgageOnBlack
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Re: The Black Swan is Here

Post by MortgageOnBlack »

"Revenge of the Pangolin" would be a appropriate title for this thread.
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Re: The Black Swan is Here

Post by Broken Man 1999 »

Many years ago the whole family was at Bok Tower having a picnic in the gardens. Beautiful, serene place.

One of the daughters was just a toddler at the time, and she got too close to a swan and the swan started chasing her. Poor daughter was scared to death, though the rest of the family members were all laughing.

Gotta watch those beautiful birds and respect their personal space. Probably scarred the poor child for life. :D

We talk about that experience to this day, though DD still doesn't find it very funny.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
TheMadEph
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Re: The Black Swan is Here

Post by TheMadEph »

Broken Man 1999 wrote: Mon Mar 16, 2020 2:46 pm
framus wrote: Mon Mar 16, 2020 2:21 pm
Broken Man 1999 wrote: Mon Mar 16, 2020 10:57 am Black Swan..... nah. Maybe a dirty white or grey swan at the most, for now.

People are acting crazy around here, but I haven't heard any gunshots yet. DW couldn't find distilled water for my CPAP machine, and not too much bread was available when she went shopping yesterday. I don't eat much bread anyway. A DD is looking for distilled water for me, if not found she suggested I fill the CPAP water tank with gin and tonic. Great fallback plan! :D

Broken Man 1999
Gin and tonic are ok but we've learned on the internet that you are supposed to use Corona beer. :sharebeer
Well, I like to fortify myself with liquor, as the saying goes "liquor is quicker!"

Every Christmas party we have we end up with 10-12 bottles of wine, more than we started with. Sometimes we score a bottle of Jack, or Jim Beam, so we are well-stocked with booze. One of my aides gave me a bottle of Bacardi Gold rum for Christmas.

Hopefully our annual St. Patrick 's outing tomorrow won't be cancelled. The pub near us puts out a great plate of corned beef and cabbage, and of course can't forget the cheap beer that has been dyed green. We are going with a group of retirees in our neighborhood, since we are all retired our plan is to go early afternoon, chow down, hoist a few pitchers and get out before it gets crowded.

Broken Man 1999
Wow, with decisions like: "go to the local pub with a group of retirees in our neighborhood" you may not need to worry about your finances. Your kids may be getting their inheritance early. This virus is super super dangerous for the elderly and those with existing/underlying conditions. It sounds like you meet both of those categories. I hope that you reconsider, regardless of whether your pub cancels. Remember this can spread asymptomatically - virus shedding may occur without droplets in close circumstances. This is a very very risky decision.
I hope both you, your partner, and the other retirees are going into this eyes wide open. Good luck.
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HokeyPokey2020
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Re: The Black Swan is Here

Post by HokeyPokey2020 »

This will be a a V shape change. Time is the remedy.
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TravelforFun
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Re: The Black Swan is Here

Post by TravelforFun »

HokeyPokey2020 wrote: Mon Mar 16, 2020 3:45 pm This will be a a V shape change. Time is the remedy.
What would be the angle of the V and would the approach and departure angles be the same? All critical things for retirees like me to ponder.

TravelforFun
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Re: The Black Swan is Here

Post by indian86 »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
And in more than a month, probably as much as 3 months, that the virus has been here, we have a total of less than 200 deaths in the US, or about 0.15% of the total deaths we have each year from the common flu. Yeah I get the "flatten the curve thing" but really, why don't we worry about flattening the curve each year when we have 30-50k plus deaths from the common flu? There is more fear being created by the reaction of the markets, then the reality of the disease itself. Think about it, are you more worried about losing all your money or contracting and dying of the disease? Exactly....its the stock market panicking you and making you feel you should be panicking about the disease. I am not saying it is a hoax. Just that is there was no stock market, and money wasn't out god, then we would hardly notice this as much more than a "nasty" flu season. Sorry, its the truth. I will say this, as noted above American's would rather die than give up their consumerism. Our god is spending and eating out and going to the gym. We will give it 4-6 weeks and we will be sending out kids back to school and going back to work unless the disease truly becomes a plague. And the stock market will be in panic buy mode!!!! The market may have made this a Black Swan, but it is really just a menacing looking crow.
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Re: The Black Swan is Here

Post by keyfort »

TravelforFun wrote: Mon Mar 16, 2020 9:54 am We've been talking about it forever on this forum but I think it's here. The stock market is crashing, public places are closed, stores ran out of stuff, people will soon lose their jobs, and no antidote for the plague yet.

In time like this, this retired person is glad that I have 10 years of annual expenses in cash and bonds and don't have to worry about losing my job.

What are your defense strategies?

TravelforFun
I've been known to become a little hysterical in my time, but even I would say that this is not a black swan event, and I don't think it will totally crush the economy. It will be bad, and I think a lot of jobs will be lost, but I think there *might* be a quicker recovery than first thought.

This is because although there is no vaccine yet, and it has a higher death rate than flu so far, the world is now moving to contain it, and not only will eventually make a vaccine, but could in the meantime discover treatments for symptoms which lighten the healthcare load. Flattening the curve as we are now, and taking this into account gives me some confidence that we can deal with this. Sadly, it is affecting older people more severely, but on the other hand, the fatality rate or whatever it's called, is not high for most of the working age population.

Now, if there was a virus that was asymptomatic for 2 months, had a 30% fatality rate and no treatments, then I'd be extremely concerned and be saying "this time it truly is different". As it is, I think it will be very bad on the economy and very sad for those who lose loved ones, but not likely to be an all out devastating event. I sure hope it isn't anyway..
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