Unprepared for Potential Great Depression Part 2

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mathguy3021
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Unprepared for Potential Great Depression Part 2

Post by mathguy3021 » Wed Mar 18, 2020 10:26 pm

I was prepared for this black swan event in my investment portfolio, but underestimated the potential for a second great depression. I have been calling for low annualized returns over the next decade since mid 2019 and made a permanent change in asset allocation in mid 2019. What I did not foresee is the potential for a total depression in stock prices. I don't like to be pessimistic, but I am now beginning to see that this is a real possibility if this coronavirus is not contained fairly quickly. I would not be happy if stocks crashed 80%. My early retirement dreams would be destroyed. I was prepared for a bear market, but not for a depression. In my opinion, this bull market peak has been one of the most predictable if you were on top of the news and technical analysis. I am certain many smart investors got out near the top. I should have been one of them, but was not on top of the news and markets. What should I do going forward? Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks? Unfortunately, I don't see a bear market rally as this market has been in free fall for a while.

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willthrill81
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Re: Unprepared for Potential Great Depression Part 2

Post by willthrill81 » Wed Mar 18, 2020 10:29 pm

To be honest, at this point, it may be too late. The time to get out was weeks ago. Now that you've gone this far, you'd probably best ride it out. At least you'll have a lot of company around here.
“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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9-5 Suited
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Re: Unprepared for Potential Great Depression Part 2

Post by 9-5 Suited » Wed Mar 18, 2020 10:37 pm

Postdicting an event is certainly very easy. Don’t fall into that trap. It just isn’t true that watching more news and reading more technical analysis would have made this string of events obvious. And I agree with willthrill. Not the time to get out now.

CoastalWinds
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Re: Unprepared for Potential Great Depression Part 2

Post by CoastalWinds » Wed Mar 18, 2020 10:42 pm

Hindsight is 2020 (pun intended)

chevca
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Re: Unprepared for Potential Great Depression Part 2

Post by chevca » Wed Mar 18, 2020 10:45 pm

I'm pretty amazed by the numbers of folks that have posted this was predictable, or they saw this coming.... yet, did nothing and are now asking what to do...

Why you asking us? You're the one(s) that predict and see these things coming....

fwellimort
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Re: Unprepared for Potential Great Depression Part 2

Post by fwellimort » Wed Mar 18, 2020 10:47 pm

chevca wrote:
Wed Mar 18, 2020 10:45 pm
I'm pretty amazed by the numbers of folks that have posted this was predictable, or they saw this coming.... yet, did nothing and are now asking what to do...

Why you asking us? You're the one(s) that predict and see these things coming....
Buy and hold mantra :)
We are too worried to do anything. That's the one bad side about passive investors. We act like herds of sheep so even if we see major red signs, we do nothing.
Oh well, I'm still a sheep and just watching.

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mathguy3021
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Re: Unprepared for Potential Great Depression Part 2

Post by mathguy3021 » Wed Mar 18, 2020 10:55 pm

If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets or the news.

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nedsaid
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Re: Unprepared for Potential Great Depression Part 2

Post by nedsaid » Wed Mar 18, 2020 10:58 pm

Oh my gosh, people jumping out of windows here on the Bogleheads. I think talk of a Great Depression is waaaaaaaaaaaaay early.
A fool and his money are good for business.

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Prokofiev
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Re: Unprepared for Potential Great Depression Part 2

Post by Prokofiev » Wed Mar 18, 2020 11:09 pm

mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets
It's not what we don't know that gets us in trouble, but what we think we know that's not true.

Your lack of doubt combined with your User name "Math Guy" suggests to me a lack of real-world experience
and misplaced confidence. Many posters here suggesting "if you know how to code . . ." as some magic elixir for
using science and math to conquer the market. Good luck with that . . .
Everything should be made as simple as possible, but not simpler - Einstein

CoastalWinds
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Re: Unprepared for Potential Great Depression Part 2

Post by CoastalWinds » Wed Mar 18, 2020 11:21 pm

mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets or the news.
If you have such clairvoyance, you’re in the wrong job. You could make far more $ with your “market analyses” abilities then you could in any regular old, stressful day job.

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asset_chaos
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Re: Unprepared for Potential Great Depression Part 2

Post by asset_chaos » Wed Mar 18, 2020 11:26 pm

mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets or the news.
Dude, I know you won't believe me, but you're fooling yourself. Just today M* has an article about how the largest active mutual funds have fared this year. The 20 funds have professional portfolio managers, not only whose job it is to watch and analyze markets and the news, but who have entire staffs of clever people to continuously watch and analyze markets and the news. The article is divided into sections titled "the worst", "the less worse", and "the rest". The rest are the funds only down by about as much as their benchmarks. You can guess where the others are. The same pattern of results of full time portfolio managers was observed in 2008 and 2000ff.

It's stressful stuff having stocks.
Regards, | | Guy

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Re: Unprepared for Potential Great Depression Part 2

Post by 2tall4economy » Wed Mar 18, 2020 11:30 pm

could be worse - I have an offer for one of my properties that the buyer won't complete until we get past the 2-3 week self-quarantine and he sees the fallout, and I have a refinance on other rental properties and the underwriters are now asking me for refreshed investment balances.

Let me share all the positive feedback I have for underwriters who drag feet and request things to be refreshed when markets move: .
You can do anything you want in life. The rub is that there are consequences.

Thesaints
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Re: Unprepared for Potential Great Depression Part 2

Post by Thesaints » Wed Mar 18, 2020 11:31 pm

mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
I have a stressful job, so I don't have the time and energy to watch markets or the news.
It appears that you picked the wrong job, given your skills.

Dilbydog
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Re: Unprepared for Potential Great Depression Part 2

Post by Dilbydog » Wed Mar 18, 2020 11:34 pm

While I was technically in the market during 08, I’d only been participating in my 401k for a few years, and didn’t have a ROTH or taxable account. I didn’t pay attention to my accounts beyond the quarterly report. Fast forward to this timeline, where market watching and economics has become a little hobby. Yes, the drop is painful, I’m down 21.5% so far from my 2/16 high. I’m a believer that you’ve got to ride this out. As willthrill81 said.. the time to get out is behind us.

I recommend looking for some 2008 threads with similar themes, and the outcomes for those followed their plan vs those who didn’t.

Best of luck, this isn’t an easy thing to go through.

vipertom1970
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Re: Unprepared for Potential Great Depression Part 2

Post by vipertom1970 » Wed Mar 18, 2020 11:35 pm

no way man, do you really think you are better then institutional investors or algorithmic trading ? Those guys could take you to the cleaner just couple days.

fingoals
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Re: Unprepared for Potential Great Depression Part 2

Post by fingoals » Wed Mar 18, 2020 11:42 pm

Pretending that you have a crystal ball ... How much lower do you think the market can go (5-10%, 15-20%, more) before reaching the bottom? How long do you predict the recovery to pre-pandemic levels would take (my quick look at 2008 info revealed that it took 5 years to get back)?

Loik098
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Re: Unprepared for Potential Great Depression Part 2

Post by Loik098 » Thu Mar 19, 2020 12:16 am

"The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge."

https://us.spindices.com/spiva/#/reports

khalestorm
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Re: Unprepared for Potential Great Depression Part 2

Post by khalestorm » Thu Mar 19, 2020 12:29 am

mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
What should I do going forward? Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks? Unfortunately, I don't see a bear market rally as this market has been in free fall for a while.
You should maintain your stock bond allocation and do nothing. Including not looking at your portfolio or 'trying to make your numbers make sense' for your pending early retirement. Like a bad breakup with a lover, time will heal all, including your portfolio. I'm dead serious. Even if the value of your portfolio drops to $0. What matters is you holding your stocks and bonds and not selling them to someone else. People will go back to work, start the process of negentropy and eventually the stock values will rise again. Put away your early retirement dreams and dust it off when the market is better. For now focus on keeping your job, increasing your cash reserves, and keeping your job skills relevant. That's the best you and pretty much anyone here can do.

Enzo IX
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Re: Unprepared for Potential Great Depression Part 2

Post by Enzo IX » Thu Mar 19, 2020 12:33 am

willthrill81 wrote:
Wed Mar 18, 2020 10:29 pm
To be honest, at this point, it may be too late. The time to get out was weeks ago. Now that you've gone this far, you'd probably best ride it out. At least you'll have a lot of company around here.
This.

One way or another, the world is gonna get through this and continue to thrive. The unknown is how long it's gonna take and what the damage is in the aftermath. From an investing standpoint only, the only thing lost is investing time. Your ending value when you what to spend your portfolio is gonna be down the lost time it takes for corporate profits to recover. Let's say it's two years, you basically lost two years of compounding growth.

Now if our sun's nuclear fusion furnace starts to sputter, I think we're screwed.

workingonit
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Re: Unprepared for Potential Great Depression Part 2

Post by workingonit » Thu Mar 19, 2020 1:20 am

Is it naive to think that the last month has been crazy, but really we're just backing up the clock to where the market was in Dec 2018 (close at least) or early 2017? (based on VTSAX closing prices and/or my portfolio balances over time)

That doesn't seem as catastrophic as the news headlines in part because we're giving back 2019's big run.

Sure the pain could continue but another 25% drop would put us back to early 2016. In 2016 I was pretty happy with where my investments were.

Losing four years sucks, but let's keep it in a bit of perspective, no?

Thoughts?

ulrichw
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Re: Unprepared for Potential Great Depression Part 2

Post by ulrichw » Thu Mar 19, 2020 1:37 am

Posted on Aug 5th, 2019:
mathguy3021 wrote: (from: viewtopic.php?f=1&t=287405&p=4681359#p4681120)
I buy only when I see blood in the streets, which is at least a 15% to 20% correction or worse.
fast forward to today with the markets down around 30%...
mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
[...] I am certain many smart investors got out near the top. I should have been one of them, but was not on top of the news and markets. [...]
From a little analysis of your post history, I see a repeated tendency to go for low volatility, with some interspersed attempts at market outperforming strategies (e.g., dogs of the Dow).

I think your desire for big returns has pushed you into an asset allocation that's uncomfortable for you (hence the search for low-volatility strategies).

I'm not sure where the market has put you now w.r.t. asset allocation, but I'd recommend picking a more conservative ratio and rebalancing yourself to that ratio (which probably means moving from stocks to bonds as the market recovers).

Either that, or get comfortable with the fact that higher returns come with higher risks, and resolve yourself not to sweat the downturns.

We're one month into this one - it's very early to call the next depression. Sure, it could happen, but there's a dozen other scenarios that are more likely.

chevca
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Re: Unprepared for Potential Great Depression Part 2

Post by chevca » Thu Mar 19, 2020 8:25 am

mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets or the news.
And, you think all the full timers that do this for a living got it right...... that's cute.

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Re: Unprepared for Potential Great Depression Part 2

Post by Call_Me_Op » Thu Mar 19, 2020 8:40 am

For me, whether I saw this coming or not is immaterial. My written plan said nothing about selling stocks in response to perceived events. The IPS says that if the market crashes I have two options: hold or buy more stocks. I have been doing the former (except for small periodic purchases with each paycheck). If it turns-out that selling into a panic is the right thing to do, we may as well close this website.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Unprepared for Potential Great Depression Part 2

Post by Beach » Thu Mar 19, 2020 8:46 am

2tall4economy wrote:
Wed Mar 18, 2020 11:30 pm
could be worse - I have an offer for one of my properties that the buyer won't complete until we get past the 2-3 week self-quarantine and he sees the fallout, and I have a refinance on other rental properties and the underwriters are now asking me for refreshed investment balances.

Let me share all the positive feedback I have for underwriters who drag feet and request things to be refreshed when markets move: .
I have a property scheduled to close in 10 days. While I haven't heard any bad news yet, I too am fearful it will not go through.

I probably would pause if I were about to buy a property as well

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Re: Unprepared for Potential Great Depression Part 2

Post by midareff » Thu Mar 19, 2020 8:49 am

nedsaid wrote:
Wed Mar 18, 2020 10:58 pm
Oh my gosh, people jumping out of windows here on the Bogleheads. I think talk of a Great Depression is waaaaaaaaaaaaay early.
In every great depression is great opportunity.

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Re: Unprepared for Potential Great Depression Part 2

Post by whodidntante » Thu Mar 19, 2020 8:49 am

The fact that "everybody knows" this will be getting worse and possibly much worse makes me more excited to buy. However, I remain fully invested, so my opportunities to buy come from cash flow and leverage. I do not have cash on the sidelines.

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Re: Unprepared for Potential Great Depression Part 2

Post by nigel_ht » Thu Mar 19, 2020 8:52 am

Call_Me_Op wrote:
Thu Mar 19, 2020 8:40 am
For me, whether I saw this coming or not is immaterial. My written plan said nothing about selling stocks in response to perceived events. The IPS says that if the market crashes I have two options: hold or buy more stocks. I have been doing the former (except for small periodic purchases with each paycheck). If it turns-out that selling into a panic is the right thing to do, we may as well close this website.
No, sell BEFORE the panic.

It’s likely too late now unless you believe that a 80% drop is in the cards followed by 20 years of stagnation.

I dunno that international diversification really guards against that...if not us who’s going to be the big growth driver? China?

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Re: Unprepared for Potential Great Depression Part 2

Post by prairieman » Thu Mar 19, 2020 8:58 am

I saw something on FB calling this The Great Pause. Few people will actually die if we take this pause. The world will go on and make use of all of the wonderful new technologies that exist. Yes, there will be less productivity this year, and businesses that were already on the edge may not survive, but I believe we’ll come roaring out of this and be a better country for it.

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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd » Thu Mar 19, 2020 8:59 am

mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
My early retirement dreams would be destroyed.

Early retirement being deferred is hardly the end of the world.

mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
What should I do going forward? Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks? Unfortunately, I don't see a bear market rally as this market has been in free fall for a while.
9-10 years is the time horizon I use for stock returns.

This requires patience and emotional calmness relative to the short term pain and noise.

You can choose to cultivate this skill, and become a more emotionally resilient person while learning detachment from the physical.

Or you can change your AA, reducing your stocks to meet you where you are now, emotionally.

It's just money.
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Re: Unprepared for Potential Great Depression Part 2

Post by bloom2708 » Thu Mar 19, 2020 9:04 am

workingonit wrote:
Thu Mar 19, 2020 1:20 am
Is it naive to think that the last month has been crazy, but really we're just backing up the clock to where the market was in Dec 2018 (close at least) or early 2017? (based on VTSAX closing prices and/or my portfolio balances over time)

That doesn't seem as catastrophic as the news headlines in part because we're giving back 2019's big run.

Sure the pain could continue but another 25% drop would put us back to early 2016. In 2016 I was pretty happy with where my investments were.

Losing four years sucks, but let's keep it in a bit of perspective, no?

Thoughts?
I think you are lost in the numbers and underestimating the business/employment impact.

In 2008-2009, business kept going, travelers kept traveling. Sports kept sporting. This stop is new territory.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead

atdharris
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Re: Unprepared for Potential Great Depression Part 2

Post by atdharris » Thu Mar 19, 2020 9:16 am

We won't fall into another Great Depression. That period was exacerbated by poor government responses and policies. World governments will act and we will find a treatment/vaccine for this disease. It's going to be a rough few months, but I have all the faith in the world in our scientists.

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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd » Thu Mar 19, 2020 9:16 am

bloom2708 wrote:
Thu Mar 19, 2020 9:04 am
In 2008-2009, business kept going, travelers kept traveling. Sports kept sporting. This stop is new territory.
That won't go on indefinitely.

At some point, the governments of the world will decide that a recession + more virus is preferable to a depression + less virus. Plus we'll be post containment and into endemic scenarios.

We'll get new ways of doing business, mitigation strategies, and much like post 9/11 security theater, we'll get "virus theater."
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd » Thu Mar 19, 2020 9:18 am

atdharris wrote:
Thu Mar 19, 2020 9:16 am
We won't fall into another Great Depression. That period was exacerbated by poor government responses and policies. World governments will act and we will find a treatment/vaccine for this disease. It's going to be a rough few months, but I have all the faith in the world in our scientists.
+1

If you're not an optimist and don't believe people will figure out a way to move forward, you really shouldn't invest in stocks at all.

Investing in stocks is a bet that the future will be better than the present.
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Re: Unprepared for Potential Great Depression Part 2

Post by bloom2708 » Thu Mar 19, 2020 9:21 am

watchnerd wrote:
Thu Mar 19, 2020 9:16 am
bloom2708 wrote:
Thu Mar 19, 2020 9:04 am
In 2008-2009, business kept going, travelers kept traveling. Sports kept sporting. This stop is new territory.
That won't go on indefinitely.

At some point, the governments of the world will decide that a recession + more virus is preferable to a depression + less virus. Plus we'll be post containment and into endemic scenarios.

We'll get new ways of doing business, mitigation strategies, and much like post 9/11 security theater, we'll get "virus theater."
I agree. I think April 1 or May 1 or June 1 (or pick a date) we return to new normal. I know what that means, but most companies going out of business over the summer would be worse (just my opinion). But, I'm not in charge by a long shot.
Last edited by bloom2708 on Thu Mar 19, 2020 9:30 am, edited 1 time in total.
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Re: Unprepared for Potential Great Depression Part 2

Post by Blue456 » Thu Mar 19, 2020 9:28 am

mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
I was prepared for this black swan event in my investment portfolio, but underestimated the potential for a second great depression. I have been calling for low annualized returns over the next decade since mid 2019 and made a permanent change in asset allocation in mid 2019. What I did not foresee is the potential for a total depression in stock prices. I don't like to be pessimistic, but I am now beginning to see that this is a real possibility if this coronavirus is not contained fairly quickly. I would not be happy if stocks crashed 80%. My early retirement dreams would be destroyed. I was prepared for a bear market, but not for a depression. In my opinion, this bull market peak has been one of the most predictable if you were on top of the news and technical analysis. I am certain many smart investors got out near the top. I should have been one of them, but was not on top of the news and markets. What should I do going forward? Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks? Unfortunately, I don't see a bear market rally as this market has been in free fall for a while.
How long was recovery during Great Depression? I think it started in 1930 and we had recovery by 1945. So that’s 15 years. If you are near retirement I hope you weren’t 100% stocks because yeah then you are stuck. If you were conservative then you should be fine. I mean this is why I questioned in here Target Retirement funds as too aggressive in here. I am age in bonds. I just changed to 100% stocks because my projected retirement is in 15 years and I just started investing. I will not need to use my stocks for next 25 or more years. I will FIRE in 15 years not from stock portion of my portfolio but from Treasuries/TIPS/Cash.

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Re: Unprepared for Potential Great Depression Part 2

Post by Dave55 » Thu Mar 19, 2020 9:32 am

asset_chaos wrote:
Wed Mar 18, 2020 11:26 pm
mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets or the news.
Dude, I know you won't believe me, but you're fooling yourself. Just today M* has an article about how the largest active mutual funds have fared this year. The 20 funds have professional portfolio managers, not only whose job it is to watch and analyze markets and the news, but who have entire staffs of clever people to continuously watch and analyze markets and the news. The article is divided into sections titled "the worst", "the less worse", and "the rest". The rest are the funds only down by about as much as their benchmarks. You can guess where the others are. The same pattern of results of full time portfolio managers was observed in 2008 and 2000ff.

It's stressful stuff having stocks.
asset_chaos thanks for sharing that Morningstar article, very interesting indeed.

Dave

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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd » Thu Mar 19, 2020 9:33 am

Prokofiev wrote:
Wed Mar 18, 2020 11:09 pm


It's not what we don't know that gets us in trouble, but what we think we know that's not true.

Your lack of doubt combined with your User name "Math Guy" suggests to me a lack of real-world experience
and misplaced confidence. Many posters here suggesting "if you know how to code . . ." as some magic elixir for
using science and math to conquer the market. Good luck with that . . .
Cognitive dissonance can be a harsh awakening.

My 20 years younger self thought I was clever enough to beat the market, too.

Creating alpha via burning neurons is best done in private, inefficient markets.

Public markets are best for burning liquidity and capturing beta as cheaply as possible.
Last edited by watchnerd on Thu Mar 19, 2020 9:36 am, edited 1 time in total.
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Elysium
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Re: Unprepared for Potential Great Depression Part 2

Post by Elysium » Thu Mar 19, 2020 9:36 am

Blue456 wrote:
Thu Mar 19, 2020 9:28 am
How long was recovery during Great Depression? I think it started in 1930 and we had recovery by 1945. So that’s 15 years.
There was a small thing called WWII in between. If there was no WWII, and the government had a response plan in place, then the stock crash of 1929 could have recovered within the next 5 years.

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Re: Unprepared for Potential Great Depression Part 2

Post by rbaldini » Thu Mar 19, 2020 9:41 am

mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
In my opinion, this bull market peak has been one of the most predictable if you were on top of the news and technical analysis. I am certain many smart investors got out near the top. I should have been one of them, but was not on top of the news and markets. What should I do going forward? Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks? Unfortunately, I don't see a bear market rally as this market has been in free fall for a while.
Total BS. "one of the most predictable if you were on top of the news and technical analysis"? Yeah right. Sure, there was noise about how stocks were overvalued and such - noise we've been hearing for 5 years. If it was so predictable, why did you end up losing so much money?

As far as I can tell, this wasn't the burst of a slowly building bubble. It wasn't a moment where we suddenly realized that we had built our wealth on a house of cards. It wasn't the collapse of a shaky financial system. It was an external, scary virus that came out of nowhere and shut the world down. No one could have predicted this in a way to consistently avoid losing money. People who got out in the last year or so got lucky; people who stayed in got unlucky. That's it.

What to do about it? First, realize that you could not have predicted this, even if - especially if - you were "on top of the news and markets". You're not that smart. Second, perhaps reevaluate your need and ability to take risk. If this sudden reminder that drops are possible has demonstrated to you that 75% is just too much stock, then reduce your allocation.
Last edited by rbaldini on Thu Mar 19, 2020 9:43 am, edited 1 time in total.

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Will do good
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Re: Unprepared for Potential Great Depression Part 2

Post by Will do good » Thu Mar 19, 2020 9:43 am

mathguy3021 wrote:
Wed Mar 18, 2020 10:55 pm
If I was a full time day trader and portfolio manager, and had the time to analyze the stock markets and news, I most certainly would've taken proper action to mitigate losses. I have no doubt about this. I have a stressful job, so I don't have the time and energy to watch markets or the news.
So you are saying full time day traders and portfolio managers are not losing much money during this time? Is that why most/all mutual funds are down just like the rest of the market, but you on the other hand could make a different if you had the time?
Last edited by Will do good on Thu Mar 19, 2020 9:43 am, edited 1 time in total.

Blue456
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Re: Unprepared for Potential Great Depression Part 2

Post by Blue456 » Thu Mar 19, 2020 9:44 am

Elysium wrote:
Thu Mar 19, 2020 9:36 am
Blue456 wrote:
Thu Mar 19, 2020 9:28 am
How long was recovery during Great Depression? I think it started in 1930 and we had recovery by 1945. So that’s 15 years.
There was a small thing called WWII in between. If there was no WWII, and the government had a response plan in place, then the stock crash of 1929 could have recovered within the next 5 years.
I know there was. But I always thought that WW2 stimulated US economy. United States infrastructure never got destroyed and probably thrived because of the increase need to produce bullets, rifles and tanks. I don’t know. You do have interesting point. And now I wonder that too. 80% crash within 5 years recovery might be possible I current situation. Unless of course we do get WW3.

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Re: Unprepared for Potential Great Depression Part 2

Post by livesoft » Thu Mar 19, 2020 9:47 am

You will become part of the Coronavirus Generation --- forever stigmatized by what is happening to you now.

Just like my MIL was part of the Great Depression Generation. Even more than fifty years after her experiences she always rummaged through our kitchen garbage can to find and eat the food scraps that we had thrown into it.
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Re: Unprepared for Potential Great Depression Part 2

Post by willthrill81 » Thu Mar 19, 2020 9:49 am

whodidntante wrote:
Thu Mar 19, 2020 8:49 am
The fact that "everybody knows" this will be getting worse and possibly much worse makes me more excited to buy.
But think of how many others there are like you that are still excited to buy. Everybody is not yet convinced that this will be as bad as I'm pretty sure that it will be.
“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

Keenobserver
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Re: Unprepared for Potential Great Depression Part 2

Post by Keenobserver » Thu Mar 19, 2020 9:50 am

I predict a V shape recovery, but what hell do I know

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Re: Unprepared for Potential Great Depression Part 2

Post by Keenobserver » Thu Mar 19, 2020 9:50 am

I predict a V shape recovery, but what hell do I know

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Re: Unprepared for Potential Great Depression Part 2

Post by bloom2708 » Thu Mar 19, 2020 9:51 am

Has anyone read about the hydroxychloroquine and azithromycin combo as treatment?

Both long established/in-expensive drugs.

News like this could show a light at the end of the tunnel.
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Re: Unprepared for Potential Great Depression Part 2

Post by technovelist » Thu Mar 19, 2020 9:53 am

whodidntante wrote:
Thu Mar 19, 2020 8:49 am
The fact that "everybody knows" this will be getting worse and possibly much worse makes me more excited to buy. However, I remain fully invested, so my opportunities to buy come from cash flow and leverage. I do not have cash on the sidelines.
So when are you going to 200% invested?
Inquiring minds want to know!
In theory, theory and practice are identical. In practice, they often differ.

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Re: Unprepared for Potential Great Depression Part 2

Post by technovelist » Thu Mar 19, 2020 9:54 am

bloom2708 wrote:
Thu Mar 19, 2020 9:51 am
Has anyone read about the hydroxychloroquine and azithromycin combo as treatment?

Both long established/in-expensive drugs.

News like this could show a light at the end of the tunnel.
Yes, it has been all over the news.
There's a press conference at 11 AM Eastern that might have news about it.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Unprepared for Potential Great Depression Part 2

Post by technovelist » Thu Mar 19, 2020 9:55 am

watchnerd wrote:
Thu Mar 19, 2020 8:59 am
mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
My early retirement dreams would be destroyed.

Early retirement being deferred is hardly the end of the world.

mathguy3021 wrote:
Wed Mar 18, 2020 10:26 pm
What should I do going forward? Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks? Unfortunately, I don't see a bear market rally as this market has been in free fall for a while.
9-10 years is the time horizon I use for stock returns.

This requires patience and emotional calmness relative to the short term pain and noise.

You can choose to cultivate this skill, and become a more emotionally resilient person while learning detachment from the physical.

Or you can change your AA, reducing your stocks to meet you where you are now, emotionally.

It's just money.
It's also possible that the drop could be severe enough for "auto-rebalancing".
In theory, theory and practice are identical. In practice, they often differ.

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Re: Unprepared for Potential Great Depression Part 2

Post by willthrill81 » Thu Mar 19, 2020 9:56 am

Keenobserver wrote:
Thu Mar 19, 2020 9:50 am
I predict a V shape recovery, but what hell do I know
Even if the current quarantining efforts are very successful and end in two months, I just don't see how millions of workers and companies will emerge in the same shape as they were in back in January.
“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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