Unprepared for Potential Great Depression Part 2

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CobraKai
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Re: Unprepared for Potential Great Depression Part 2

Post by CobraKai »

timboktoo wrote: Thu Mar 19, 2020 3:48 pm Mr. Bogle suggested that we manage risk by investing our age in bonds. That method would also have worked during the Great Depression.

Then why are so many people here recommending 75/25, 80/20, 90/10, and 100% equities. Some are 20 somethings but many are not.

60/40 used to be considered "ideal" for a 40 year old around here. Now that mix seems to be dismissed as too conservative by many here, unless close to retirement.

What changed?
CobraKai
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Re: Unprepared for Potential Great Depression Part 2

Post by CobraKai »

Kagord wrote: Thu Mar 19, 2020 3:52 pm I was going to go into recursion here, but went this way...

A successful country. In the middle of a historic, one might call epic, unstoppable stock bull market for 11 years. People going about their daily lives living the life of luxury. So peaceful. Then something mysterious, enters their world from the land of Wuhan, where they cannot be within 3 meters of each other, or 3.4% of the people die. That's the signpost ahead, your next stop, the Twilight Zone.

Anyways, yeah, we've been hunkered down and watching the Twilight Zone (1959-1964 ones)
This current crisis reminds me of several different episodes of the Twilight Zone.
chevca
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Re: Unprepared for Potential Great Depression Part 2

Post by chevca »

smectym wrote: Fri Mar 20, 2020 5:59 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....
I think what most probably mean when they say that "this was predictable," is, an 11-year bull market must predictably come to a messy end. There were many signs of bubble valuation, and classic warnings such as the implosion of IPO's like WeWork. And yet, such signs had been proliferating for years, and the market still trended higher. 2018 saw an ugly close which might have served as a trigger to get out: anyone who did would have missed a 30% pop in 2019. So it is possible to rationally say "a bear market is predictable" and yet remain in the market. Because the exact year, the exact month, the exact day is not predictable.

But on this forum, the primary reason people did not "get out" is that to have done so would violate the guiding mantra animating Bogleheads: "Stay the Course!" I and others have pointed out the shortcomings of an over-reliance on this slogan or a reductive reading of it; nevertheless, many investors believe that now is the time to prove their creds by valiantly "staying the course," even going so far as refusing to read the financial news or check their accounts. And I'm not criticizing them, and hope the markets come back in due course and justify their courage.

For myself, I always held large cash positions within investment accounts, and in addition have held enough in savings bonds and CD's and money markets that we wouldn't have to frantically rush to sell to preserve capital in order to maintain our retirement goals. So while I have readjusted some portfolios to raise still more cash, haven't done wholesale selling and have taken my lumps with others in stoic boglehead fashion.
Except that most of the ones I'm talking about are saying they were following China and saw THIS coming... as in saw it in February.
visualguy
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Re: Unprepared for Potential Great Depression Part 2

Post by visualguy »

chevca wrote: Fri Mar 20, 2020 8:43 pm Except that most of the ones I'm talking about are saying they were following China and saw THIS coming... as in saw it in February.
Maybe some did, but it wasn't obvious actually. It was easy to see that this was very serious stuff based on following China, but it wasn't clear until pretty late that it was going to spread all over the world. That wasn't a given since it hadn't been the case with other viruses that emerged previously in recent times.
kareysue
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Re: Unprepared for Potential Great Depression Part 2

Post by kareysue »

ochotona wrote: Thu Mar 19, 2020 12:32 pm
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.
I sold 90% of my equities at 3:30 PM Eastern on Friday, 2/28/2020. I was subscribed to a trendfollowing (6 month moving average) + macroeconomic system, I got the sell advisory, and I sold a million dollars of ETF in a few minutes from my phone. I'm happy to share the name of the service if you PM me. It's $35 per month. It's very similar to Gary Antonacci's "Dual Momentum", but I think it's better (obviously, or I would not pay for it).

At this point Mathguy, I would not sell, but my humble opinion is DO NOT DCA into a falling market, wait until you get a 200 day moving average cross which might indicate an uptrend before you rebalance. All new contributions to CASH. No one knows how low or how long it will be. Just be patient. The turn could come in weeks, months, or even years.

I know this is BH territory, and I know visitors like me should be polite when in a strange neighborhood, but I must admit I am dismayed by the non-acceptance by BHers of even the most elementary technical trading system, like the 200 day or 10 month moving average. Trendfollowing systems don't try to "predict", they rely on historical behavior of prices. It's not sorcery... it's statistics. It can be totally non-emotional and rational, which I would expect BHers would embrace.

The market-cap weighted ETFs like SPY are implicit trend-following strategies. Just because you personally don't hit buy or sell doesn't mean there isn't an algo which governs the ETF behavior. Why market cap? Why not equal-weight, like the far less popular RSP? Just because Jack Bogle told you to do it? Isn't it better to think for ourselves based on a detailed read of the prospecti and thoughtful consideration of the math behind different ETFs?

Scroll down to the bottom of this page. Then tell me if 10 or 12 month moving averages would have served an investor during the Great Depression. Then ask yourself... might we be in the Great Depression 2.0?

It's been said many times by many pundits that all of passive investing itself is a bubble. Maybe you've (and me too at times) been wrapped up in a gigantic mania which has lasted for years, and the ride was so comfy and good that we just didn't recognize it as a bubble. I've been in the markets since 1985. Maybe the world changed recently, and most people haven't caught up to that yet.

YES - over the long run, buy and hold works. That's proven. That means it's great for institutions that don't have a fixed life span. For individuals over age 50? I don't think so! Not unless your name is Nosferatu!

Any reason why you sold 90% and not everything? And did you think about going short
All Seasons
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Re: Unprepared for Potential Great Depression Part 2

Post by All Seasons »

watchnerd wrote: Thu Mar 19, 2020 8:08 pm
GRP wrote: Thu Mar 19, 2020 6:36 pm
watchnerd wrote: Thu Mar 19, 2020 6:28 pm
PP's concept of risk parity matching conflates capital allocation with risk contribution, which isn't accurate.
That's not true.
Yeah, it is. Do a risk regression on it.
No, it's not true. The underlying assets have volatilities that are constantly changing. For instance, a 30 year long treasury at 3% is way more volatile than it is at 10%. So any strategy that always wanted to have equal risk contribution would necessarily involve a dynamic rather than static allocation. But that is simply too much to ask of everyday investors, and it's certainly not in keeping with the simplicity preached on this forum.

So, the volatility matching may not be perfect, but it wasn't intended to be. It's not because Browne conflated capital allocation with risk contribution. Quite the opposite. It's because Browne recognized that we are collectively ignorant about what the future brings. It's because these forecasting games and excessive complications tend to lead to really bad outcomes.

Investors need simple solutions, and that was Browne's brilliance. That's why the PP is 25% each in all 4 assets. So you can set it up and move on with your life and not think about it.

What happens when you try to toy with modeling, convoluted solutions, and excessive mathematization? You get outcomes like Long-Term Capital Management.

There is also an opportunity cost to that kind superfluous over-complication. Instead of going out and enjoying day to day life, and not having to think about your portfolio, you end up accumulating thousands of posts on a place called the Bogleheads forum.
I am no longer posting on the Bogleheads forum. I am still frequenting www.gyroscopicinvesting.com if you'd like to reach me. Thanks!
HawkeyePierce
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Re: Unprepared for Potential Great Depression Part 2

Post by HawkeyePierce »

welderwannabe wrote: Fri Mar 20, 2020 6:20 am
avenger wrote: Thu Mar 19, 2020 9:11 pm Why do you have cash?
Because i love cash and always have. Having cash reserves is what is keeping me from jumping out the window right now, and why I am not panic selling.
+1 Cash is fantastic. I've long been bothered by suggestions on BH that holding cash is a waste of resources. I keep a healthy slug of cash in a CD at all times, enough to see me through many months of unemployment if needed.

That CD is saving me from a mountain of worry right now.
HawkeyePierce
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Re: Unprepared for Potential Great Depression Part 2

Post by HawkeyePierce »

All Seasons wrote: Fri Mar 20, 2020 9:34 pm What happens when you try to toy with modeling, convoluted solutions, and excessive mathematization? You get outcomes like Long-Term Capital Management.
This is a great point, especially for those of us (myself included) on the leverage train. "When Genius Failed", the story of the rise and fall of Long Term Capital Management, should be required reading for anyone engaging is complex strategies involving leverage or timing.
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Re: Unprepared for Potential Great Depression Part 2

Post by technovelist »

HawkeyePierce wrote: Fri Mar 20, 2020 9:50 pm
All Seasons wrote: Fri Mar 20, 2020 9:34 pm What happens when you try to toy with modeling, convoluted solutions, and excessive mathematization? You get outcomes like Long-Term Capital Management.
This is a great point, especially for those of us (myself included) on the leverage train. "When Genius Failed", the story of the rise and fall of Long Term Capital Management, should be required reading for anyone engaging is complex strategies involving leverage or timing.
If you are wealthy, just about the only way to go broke is by using leverage.
I have no leverage, having learned my lesson in 1980 by buying silver on leverage.
On the day of the top.
In theory, theory and practice are identical. In practice, they often differ.
smectym
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Re: Unprepared for Potential Great Depression Part 2

Post by smectym »

HawkeyePierce wrote: Fri Mar 20, 2020 9:48 pm
welderwannabe wrote: Fri Mar 20, 2020 6:20 am
avenger wrote: Thu Mar 19, 2020 9:11 pm Why do you have cash?
Because i love cash and always have. Having cash reserves is what is keeping me from jumping out the window right now, and why I am not panic selling.
+1 Cash is fantastic. I've long been bothered by suggestions on BH that holding cash is a waste of resources. I keep a healthy slug of cash in a CD at all times, enough to see me through many months of unemployment if needed.

That CD is saving me from a mountain of worry right now.
Nothing like hard, cold cash in a crisis, and yes, its critical role in the portfolio isn’t well understood generally on this forum
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mathguy3021
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Re: Unprepared for Potential Great Depression Part 2

Post by mathguy3021 »

smectym wrote: Fri Mar 20, 2020 11:59 pm
HawkeyePierce wrote: Fri Mar 20, 2020 9:48 pm
welderwannabe wrote: Fri Mar 20, 2020 6:20 am
avenger wrote: Thu Mar 19, 2020 9:11 pm Why do you have cash?
Because i love cash and always have. Having cash reserves is what is keeping me from jumping out the window right now, and why I am not panic selling.
+1 Cash is fantastic. I've long been bothered by suggestions on BH that holding cash is a waste of resources. I keep a healthy slug of cash in a CD at all times, enough to see me through many months of unemployment if needed.

That CD is saving me from a mountain of worry right now.
Nothing like hard, cold cash in a crisis, and yes, its critical role in the portfolio isn’t well understood generally on this forum
I prefer stable value funds, I bonds, and high yield cash and CDs. I hold zero bond funds. I'm glad I stayed away from VTEB and BND etfs. The entire bond portion of my asset allocation consists of the stable value fund in my 401(k), I bonds, high yield cash and CDs.
smectym
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Re: Unprepared for Potential Great Depression Part 2

Post by smectym »

mathguy3021 wrote: Sat Mar 21, 2020 12:02 am
smectym wrote: Fri Mar 20, 2020 11:59 pm
HawkeyePierce wrote: Fri Mar 20, 2020 9:48 pm
welderwannabe wrote: Fri Mar 20, 2020 6:20 am
avenger wrote: Thu Mar 19, 2020 9:11 pm Why do you have cash?
Because i love cash and always have. Having cash reserves is what is keeping me from jumping out the window right now, and why I am not panic selling.
+1 Cash is fantastic. I've long been bothered by suggestions on BH that holding cash is a waste of resources. I keep a healthy slug of cash in a CD at all times, enough to see me through many months of unemployment if needed.

That CD is saving me from a mountain of worry right now.
Nothing like hard, cold cash in a crisis, and yes, its critical role in the portfolio isn’t well understood generally on this forum
I prefer stable value funds, I bonds, and high yield cash and CDs. I hold zero bond funds. I'm glad I stayed away from VTEB and BND etfs. The entire bond portion of my asset allocation consists of the stable value fund in my 401(k), I bonds, high yield cash and CDs.
math, agree re stable value when you can get it. I bonds are great and EE can also work if you hold it long enough. We do hold bond funds and right, their downside is apparent (on some days) in this correlated downturn environment. We hold some of it all. Right now we’re mainly thinking about how happy we are to have a large wad of cash
Seasonal
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Re: Unprepared for Potential Great Depression Part 2

Post by Seasonal »

chevca wrote: Fri Mar 20, 2020 8:43 pm Except that most of the ones I'm talking about are saying they were following China and saw THIS coming... as in saw it in February.
US intelligence services saw the risk of this coming and some who had access to their reports sold in mid-February, so it does seem possible.

OTOH, those posting here did not appear to have had access to the same level of information or analysis. One call that turned out to be correct is indistinguishable from luck.
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Re: Unprepared for Potential Great Depression Part 2

Post by Seasonal »

Beezthree wrote: Fri Mar 20, 2020 6:05 pm
willthrill81 wrote: Thu Mar 19, 2020 10:31 am

And a vaccine may never come. We have no vaccine for many viruses, including other Coronaviruses.
that's only because the four endemic coronaviruses are so mild that there is no financial incentive to go after vaccines.

this is something that is unprecedented in history in the scope of the world's scientific research community. i would guess there will absolutely be an effective vaccine created. just a matter of when.
A vaccine may be developed quickly. However, unless it receives adequate testing it has the potential to do tremendous damage. Imagine vaccinating everyone in this country and then finding out that there are very serious and widespread side effects.

Adequate testing takes at least one year. You can speed up development, but testing is another matter.
Blue456
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Re: Unprepared for Potential Great Depression Part 2

Post by Blue456 »

moshe wrote: Thu Mar 19, 2020 10:42 am
I hope you know it might be just 3 weeks away.

These are the things i do know with 100% certitude:

1) Necessity can bend iron!
2) Panicking won't help!
3) Negativity won't help.
4) Providing support for those that need it WILL help.

Be well,
~Moshe
Moshe, I hope you do realize that if we get vaccine in 3 weeks, it means it is completely untested.
ochotona
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Re: Unprepared for Potential Great Depression Part 2

Post by ochotona »

kareysue wrote: Fri Mar 20, 2020 9:15 pm Any reason why you sold 90% and not everything? And did you think about going short
Going short is freaking dangerous, at least it is with short ETFs. I do have a position in Cambria's TAIL ETF, which in 90% Treasuries and 10% Put S&P 500 options, but the worst that could happen is the Puts expire worthless, but that's not the case now! Those short ETFs (SH, RWM, PSQ) are derivatives, and those contracts could blow up at any time, they are not meant to be held overnight, and the ETF could go against you even if the index is going down. By "blowing up" I mean you holdings go to zero. Not for me.
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willthrill81
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Re: Unprepared for Potential Great Depression Part 2

Post by willthrill81 »

Seasonal wrote: Sat Mar 21, 2020 2:54 am
Beezthree wrote: Fri Mar 20, 2020 6:05 pm
willthrill81 wrote: Thu Mar 19, 2020 10:31 am

And a vaccine may never come. We have no vaccine for many viruses, including other Coronaviruses.
that's only because the four endemic coronaviruses are so mild that there is no financial incentive to go after vaccines.

this is something that is unprecedented in history in the scope of the world's scientific research community. i would guess there will absolutely be an effective vaccine created. just a matter of when.
A vaccine may be developed quickly. However, unless it receives adequate testing it has the potential to do tremendous damage. Imagine vaccinating everyone in this country and then finding out that there are very serious and widespread side effects.

Adequate testing takes at least one year. You can speed up development, but testing is another matter.
Yes, those in the industry are saying that the soonest that a vaccine could be developed and administered on a widespread scale would be the summer of 2021. I expect that we'll be over the worst of the virus and that the markets will have at least begun to recover well before that time. Any vaccine will then likely become a preventative measure going forward, the same way that we use vaccines to help control many endemic diseases already.
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ochotona
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Re: Unprepared for Potential Great Depression Part 2

Post by ochotona »

CobraKai wrote: Fri Mar 20, 2020 7:43 pm Then why are so many people here recommending 75/25, 80/20, 90/10, and 100% equities. Some are 20 somethings but many are not.

60/40 used to be considered "ideal" for a 40 year old around here. Now that mix seems to be dismissed as too conservative by many here, unless close to retirement.

What changed?
A decade of a financial repression regime, yield-seeking behavior, and the highly ingrained Pavolvian investor response that the Fed's got yer back. That's what happened. Ten years of such a delightful bubble that those in it didn't realize they were in it. They is we. Now people are going to wait for things to get back to "normal". Could be a while. Your cheese has been moved.
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elpollo
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Re: Unprepared for Potential Great Depression Part 2

Post by elpollo »

willthrill81 wrote: 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.
I'm looking only @ the S&P 500 , ignore all the noise , unless you need say, 1-2 years of cash for expenses , at this point, not unlike 2008 , before I converted to Bogleheadism ,
Don't know what I'll do with my 70% bond funds per Larry tried to keep is < 5 year duration, myself . Guess 1/2 of the Bond are Treasuries



Thank You BH & Mr. Bogle for times like these (below)



Tip 1: Invest you must.

The biggest risk facing investors is not short-term volatility but, rather, the risk of not earning a sufficient return on their capital as it accumulates.

Tip 2: Time is your friend.

Investing is a virtuous habit best started as early as possible. Enjoy the magic of compounding returns. Even modest investments made in one's early 20s are likely to grow to staggering amounts over the course of an investment lifetime.

Tip 3: Impulse is your enemy.

Eliminate emotion from your investment program. Have rational expectations for future returns, and avoid changing those expectations in response to the ephemeral noise coming from Wall Street. Avoid acting on what may appear to be unique insights that are in fact shared by millions of others.

Tip 6: Never forget reversion to the mean.
........and Tip 7 *most of all re: this thread so we'll see 1 year from now or 2 ? or 10 ? https://theweek.com/articles/819010/jac ... ing-advice
Last edited by elpollo on Sat Mar 21, 2020 2:12 pm, edited 1 time in total.
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ballons
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Re: Unprepared for Potential Great Depression Part 2

Post by ballons »

CobraKai wrote: Fri Mar 20, 2020 7:43 pm
timboktoo wrote: Thu Mar 19, 2020 3:48 pm Mr. Bogle suggested that we manage risk by investing our age in bonds. That method would also have worked during the Great Depression.

Then why are so many people here recommending 75/25, 80/20, 90/10, and 100% equities. Some are 20 somethings but many are not.

60/40 used to be considered "ideal" for a 40 year old around here. Now that mix seems to be dismissed as too conservative by many here, unless close to retirement.

What changed?
10 year bull run.

In my short time at BH, it has changed rapidly:

Equities - buy and hold index, stay the course... j/k market time
Bonds - buy and hold index, stay the course... j/k market time treasures and cash

What is dangerous is that these market timers have convinced themselves they know more than the market.
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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd »

ballons wrote: Sat Mar 21, 2020 2:11 pm

10 year bull run.

In my short time at BH, it has changed rapidly:

Equities - buy and hold index, stay the course... j/k market time
Bonds - buy and hold index, stay the course... j/k market time treasures and cash

What is dangerous is that these market timers have convinced themselves they know more than the market.
All true.

But on the bond side, I see people genuinely struggling with how to understand & think about lower nominal yields, which is a secular issue, rather than a market timing issue, per se.

This anchoring on nominal returns can lead to yield chasing behaviors, which will probably continue into the intermediate future, beyond the near term crisis.
60% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS 10% cash || RSU + ESPP
CobraKai
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Re: Unprepared for Potential Great Depression Part 2

Post by CobraKai »

ochotona wrote: Sat Mar 21, 2020 12:02 pm A decade of a financial repression regime, yield-seeking behavior, and the highly ingrained Pavolvian investor response that the Fed's got yer back. That's what happened. Ten years of such a delightful bubble that those in it didn't realize they were in it. They is we. Now people are going to wait for things to get back to "normal". Could be a while. Your cheese has been moved.
ballons wrote: Sat Mar 21, 2020 2:11 pm
CobraKai wrote: Fri Mar 20, 2020 7:43 pm
timboktoo wrote: Thu Mar 19, 2020 3:48 pm Mr. Bogle suggested that we manage risk by investing our age in bonds. That method would also have worked during the Great Depression.

Then why are so many people here recommending 75/25, 80/20, 90/10, and 100% equities. Some are 20 somethings but many are not.

60/40 used to be considered "ideal" for a 40 year old around here. Now that mix seems to be dismissed as too conservative by many here, unless close to retirement.

What changed?
10 year bull run.

In my short time at BH, it has changed rapidly:

Equities - buy and hold index, stay the course... j/k market time
Bonds - buy and hold index, stay the course... j/k market time treasures and cash

What is dangerous is that these market timers have convinced themselves they know more than the market.
Makes sense!

I was all in on equities pre-2008 (and foolishly sold near the bottom). I didn't now any better. Some of us have to learn the hard way.
rustymutt
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Re: Unprepared for Potential Great Depression Part 2

Post by rustymutt »

willthrill81 wrote: 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.
I agree that even a best shot now is a slow steady recovery, with many ups, and downs, and people won't be as willing to take risk.
Just my opinion people, and if you don't agree, that's cool. [OT comment removed by Moderator Misenplace]
Even educators need education. And some can be hard headed to the point of needing time out.
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Re: Unprepared for Potential Great Depression Part 2

Post by Call_Me_Op »

nigel_ht wrote: 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.
Let's be serious. There is always an impending crisis. Anyone who tells you they know which one will turn-out the be a market crasher with any degree of consistency - is lying.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
ruhigste
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Re: Unprepared for Potential Great Depression Part 2

Post by ruhigste »

fwellimort wrote: 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.
+1 Baaaaa.
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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd »

CobraKai wrote: Sat Mar 21, 2020 2:28 pm
I was all in on equities pre-2008 (and foolishly sold near the bottom). I didn't now any better. Some of us have to learn the hard way.

"There are three kinds of men.

The one that learns by reading.

The few who learn by observation.

The rest of them have to pee on the electric fence for themselves."

Will Rogers
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H-Town
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Re: Unprepared for Potential Great Depression Part 2

Post by H-Town »

watchnerd wrote: Thu Mar 19, 2020 8:59 pm We're not even at -50% yet...

What happened to the backbone of the latest generation of investors?
They only know the 11 year bull market...
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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd »

H-Town wrote: Sun Mar 22, 2020 12:31 pm
watchnerd wrote: Thu Mar 19, 2020 8:59 pm We're not even at -50% yet...

What happened to the backbone of the latest generation of investors?
They only know the 11 year bull market...
Sometimes I think the market crashes at decade-ish intervals because thats how long it takes for the next generation of unscarred enthusiastic investors to get into the market and pump it back up again.
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mathguy3021
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Re: Unprepared for Potential Great Depression Part 2

Post by mathguy3021 »

Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Blue456
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Re: Unprepared for Potential Great Depression Part 2

Post by Blue456 »

mathguy3021 wrote: Sun Mar 22, 2020 5:33 pm Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Stocks are going to keep crashing until this infection rate flattens. There is nothing else to it.
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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd »

Blue456 wrote: Sun Mar 22, 2020 5:54 pm
mathguy3021 wrote: Sun Mar 22, 2020 5:33 pm Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Stocks are going to keep crashing until this infection rate flattens. There is nothing else to it.
And yet the number of shares I own will keep going up. :sharebeer
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doss
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Re: Unprepared for Potential Great Depression Part 2

Post by doss »

Blue456 wrote: Sun Mar 22, 2020 5:54 pm
mathguy3021 wrote: Sun Mar 22, 2020 5:33 pm Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Stocks are going to keep crashing until this infection rate flattens. There is nothing else to it.
Other countries have and are flattening the curve and soon will the US. If I were you, i’d start buying ASAP.
“ The long-term 9%-10% nominal return of the stock market INCLUDES the crashes.” — calvin+hobbs
Blue456
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Re: Unprepared for Potential Great Depression Part 2

Post by Blue456 »

doss wrote: Sun Mar 22, 2020 8:25 pm
Blue456 wrote: Sun Mar 22, 2020 5:54 pm
mathguy3021 wrote: Sun Mar 22, 2020 5:33 pm Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Stocks are going to keep crashing until this infection rate flattens. There is nothing else to it.
Other countries have and are flattening the curve and soon will the US. If I were you, i’d start buying ASAP.
US is nowhere near flattening the curve. If something NYC is few weeks behind Italy with exponential growth of infections. CDC is now allowing Covid19 exposed individuals to work, which means nurses, doctors, police officers, fire fighters will be further spreading the infection (source: https://www.cdc.gov/coronavirus/2019-nc ... sment.html). There is a small study in Italy based on 3,000 tested individuals that 50-75% of them remain completely asymptomatic but actively spread the virus (source: https://www.scienzainrete.it/articolo/f ... oSM9thZkyg). Long story short, NYC will be the canary in a coal mine. If you want to market time and buy at the bottom you got few more weeks.
brajalle
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Re: Unprepared for Potential Great Depression Part 2

Post by brajalle »

Seasonal wrote: Sat Mar 21, 2020 2:47 am
chevca wrote: Fri Mar 20, 2020 8:43 pm Except that most of the ones I'm talking about are saying they were following China and saw THIS coming... as in saw it in February.
US intelligence services saw the risk of this coming and some who had access to their reports sold in mid-February, so it does seem possible.

OTOH, those posting here did not appear to have had access to the same level of information or analysis. One call that turned out to be correct is indistinguishable from luck.
Chevca is right. The information was out there, there were some virologists/doctors practically screaming about it along with pretty knowledgable people repeating/linking to what they were saying. Yes, Twitter actually has value if you are intelligent about who you follow - it's a good platform to pick up various things from in order to do your own research on. Forums aren't the best at those sort of exchanges & sharing, but some people posted here about it fairly early (see below). They were mostly written off as loonies or market-timers and told to stay-the-course by most responses. I was pretty concerned near the end of Jan myself (proof - https://imgur.com/hR1Gs32 ), and moved funds early Feb.

https://bogleheads.org/forum/viewtopic. ... 0&t=302849 - Discussion started Feb 5
viewtopic.php?f=11&t=303695 - Discussion started Feb 12
smectym
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Re: Unprepared for Potential Great Depression Part 2

Post by smectym »

Blue456 wrote: Sun Mar 22, 2020 5:54 pm
mathguy3021 wrote: Sun Mar 22, 2020 5:33 pm Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Stocks are going to keep crashing until this infection rate flattens. There is nothing else to it.
The infection rate is only tangentially related to the real reason stocks keep crashing: um, the government has ordered a complete shutdown of the economy. Once the government allows people to go back to work, open the stores, start the baseball season, start the opera season, get the universities going again with the students sitting in the classrooms, and big crowds rubbing shoulders in the plazas and at the farmers market, and in the showrooms of auto dealerships...that scenario, or more precisely the market’s anticipation of that scenario as realistically imminent, is what will halt and reverse the crash, and nothing else (including, in isolation, news about a decline in the infection rate) will do it.
NMBob
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Re: Unprepared for Potential Great Depression Part 2

Post by NMBob »

the key to my mom surviving the great depression follows. Her family had a very large garden. they had a cow my mom or her sister milked daily. they had a relative with a farm they could get meat from.
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watchnerd
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Re: Unprepared for Potential Great Depression Part 2

Post by watchnerd »

NMBob wrote: Sun Mar 22, 2020 11:14 pm the key to my mom surviving the great depression follows. Her family had a very large garden. they had a cow my mom or her sister milked daily. they had a relative with a farm they could get meat from.
I have an acre of forested land.

My neighbor down the road has chickens, geese, and turkeys.

I can trade firewood and venison for eggs and meat, I suppose...
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technovelist
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Re: Unprepared for Potential Great Depression Part 2

Post by technovelist »

watchnerd wrote: Sun Mar 22, 2020 11:35 pm
NMBob wrote: Sun Mar 22, 2020 11:14 pm the key to my mom surviving the great depression follows. Her family had a very large garden. they had a cow my mom or her sister milked daily. they had a relative with a farm they could get meat from.
I have an acre of forested land.

My neighbor down the road has chickens, geese, and turkeys.

I can trade firewood and venison for eggs and meat, I suppose...
It's hard to make change in barter.
That's where a few hundred dollars face value of junk silver comes in very handy.
In theory, theory and practice are identical. In practice, they often differ.
smectym
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Re: Unprepared for Potential Great Depression Part 2

Post by smectym »

technovelist wrote: Sun Mar 22, 2020 11:42 pm
watchnerd wrote: Sun Mar 22, 2020 11:35 pm
NMBob wrote: Sun Mar 22, 2020 11:14 pm the key to my mom surviving the great depression follows. Her family had a very large garden. they had a cow my mom or her sister milked daily. they had a relative with a farm they could get meat from.
I have an acre of forested land.

My neighbor down the road has chickens, geese, and turkeys.

I can trade firewood and venison for eggs and meat, I suppose...
It's hard to make change in barter.
That's where a few hundred dollars face value of junk silver comes in very handy.
The junk silver comment is apt. Let’s face it, you don’t want to show up at the convenience store with a roll of “Gold Eagles”
smectym
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Re: Unprepared for Potential Great Depression Part 2

Post by smectym »

watchnerd wrote: Sun Mar 22, 2020 11:35 pm
NMBob wrote: Sun Mar 22, 2020 11:14 pm the key to my mom surviving the great depression follows. Her family had a very large garden. they had a cow my mom or her sister milked daily. they had a relative with a farm they could get meat from.
I have an acre of forested land.

My neighbor down the road has chickens, geese, and turkeys.

I can trade firewood and venison for eggs and meat, I suppose...
Watchnerd, we have 5 acres of tall timber: couldn’t stand to sell any of it, but of course, our circumstances may change.

The neighbors do have chickens. I think we could just buy those with fiat. And the turkeys around here roam free on our land.

Reckon I better run a swab through the barrel of the ole 12 gauge. For the turkeys, I mean; not the neighbors
Blue456
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Re: Unprepared for Potential Great Depression Part 2

Post by Blue456 »

smectym wrote: Sun Mar 22, 2020 10:55 pm The infection rate is only tangentially related to the real reason stocks keep crashing: um, the government has ordered a complete shutdown of the economy. Once the government allows people to go back to work, open the stores, start the baseball season, start the opera season, get the universities going again with the students sitting in the classrooms, and big crowds rubbing shoulders in the plazas and at the farmers market, and in the showrooms of auto dealerships...that scenario, or more precisely the market’s anticipation of that scenario as realistically imminent, is what will halt and reverse the crash, and nothing else (including, in isolation, news about a decline in the infection rate) will do it.
The infection rate does set a panic selling. When there is too many people dying without horizon of things ending, the stocks will continue to crash no matter what the economy is doing. Like someone else said "we have nothing to fear but the fear itself."
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Re: Unprepared for Potential Great Depression Part 2

Post by ochotona »

doss wrote: Sun Mar 22, 2020 8:25 pm
Blue456 wrote: Sun Mar 22, 2020 5:54 pm
mathguy3021 wrote: Sun Mar 22, 2020 5:33 pm Looks like stocks are set to crash this week again. My prediction of a great depression is now closer. I feel like selling all stocks on a technical bear market rebound. This might be the fastest 50% crash in history.
Stocks are going to keep crashing until this infection rate flattens. There is nothing else to it.
Other countries have and are flattening the curve and soon will the US. If I were you, i’d start buying ASAP.
-800 in a few hours. You first!

This whole thing was predictable. Erik Townsend of Macrovoices.com was podcasting on this topic in January, and got dismissed and received nasty emails from people. Also Dr. Chris Martenson of PeakProsperity.com he was deplatformed for spreading "fake news". No good deed goes unpunished. Willful ignorance. Sins of omission. By people whose primary job is to secure the Nation!

I first wrote about it in my journal on 2/1/2020, and I sold most of my equities when my trendfollowing signal went off (and all of my trailing stop alerts) on 2/28/2020 at the market close.
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Vision
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Re: Unprepared for Potential Great Depression Part 2

Post by Vision »

That is a pretty bullish posts if you ask me OP.

When "this will be worse than the great depression" doomermaxxed posts start popping up you know we are nearing the bottom.
Should I maintain a 75/25 stock to bond allocation or sell on a bear market rally and reduce stocks?

Good old "buy high, sell low strategy".
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...
Only reason I "did nothing", was because of stubborn Boglehead dogma.
Seasonal
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Re: Unprepared for Potential Great Depression Part 2

Post by Seasonal »

Vision wrote: Mon Mar 23, 2020 6:51 amWhen "this will be worse than the great depression" doomermaxxed posts start popping up you know we are nearing the bottom.
We have a Fed bank president and major investment banks predicting unemployment levels or GDP drops at worse than great depression levels. That seems different from the usual "everyone has panicked, so the market has nowhere to go but up".
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Re: Unprepared for Potential Great Depression Part 2

Post by technovelist »

Seasonal wrote: Mon Mar 23, 2020 8:54 am
Vision wrote: Mon Mar 23, 2020 6:51 amWhen "this will be worse than the great depression" doomermaxxed posts start popping up you know we are nearing the bottom.
We have a Fed bank president and major investment banks predicting unemployment levels or GDP drops at worse than great depression levels. That seems different from the usual "everyone has panicked, so the market has nowhere to go but up".
No, that's just alarmism. What do major investment banks or the Fed know that we don't? :sharebeer
In theory, theory and practice are identical. In practice, they often differ.
yukon50
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Re: Unprepared for Potential Great Depression Part 2

Post by yukon50 »

OP, update? Looks like you deleted your account though
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