U.S. stocks in free fall

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Perpetual
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Re: U.S. stocks in free fall

Post by Perpetual » Thu Mar 26, 2020 8:40 am

The numbers in the DOL report don't look accurate at all.

I summarized the discrepancies in the other thread:
Yesterday, California's governor said they have had more than 1 million claims since March 13th (through the 25th).

The DOL report shows a total of 186k (for March 14th through 21st). Where did the rest of 1 million go?

In contrast, Pennsylvania reports... 379k.

New York, where half of all known COVID cases are located, reports... 80k.

H-Town
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Re: U.S. stocks in free fall

Post by H-Town » Thu Mar 26, 2020 9:10 am

RayKeynes wrote:
Thu Mar 26, 2020 7:35 am
dukeblue219 wrote:
Thu Mar 26, 2020 7:27 am
RayKeynes wrote:
Thu Mar 26, 2020 7:21 am
2400 broken, nice. Lets get down to 2'100 - real quick. :mrgreen:
Edit: 3.28M claims
Nice, 5x times more than the worst week in the financial crysis 2008. So, now please lets go to fair value.
Just before the market opens today, I was sure that you would win that bet.... But now SPXU is in free fall.

H-Town
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Re: U.S. stocks in free fall

Post by H-Town » Thu Mar 26, 2020 9:12 am

I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.

Corsair
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Re: U.S. stocks in free fall

Post by Corsair » Thu Mar 26, 2020 9:13 am

Perpetual wrote:
Thu Mar 26, 2020 8:40 am
The numbers in the DOL report don't look accurate at all.

I summarized the discrepancies in the other thread:
Yesterday, California's governor said they have had more than 1 million claims since March 13th (through the 25th).

The DOL report shows a total of 186k (for March 14th through 21st). Where did the rest of 1 million go?

In contrast, Pennsylvania reports... 379k.

New York, where half of all known COVID cases are located, reports... 80k.
That's why individual states were told not to report numbers LOL

Never fight the Fed and US government :moneybag

keelerjr12
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Re: U.S. stocks in free fall

Post by keelerjr12 » Thu Mar 26, 2020 9:15 am

H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing. With zero data, to me, that's a bet and not a probabilistic approach. These were people that had a mere 'hunch' and gambled. Let's not confuse the two.

Furthermore, the day, month, year, investor's career isn't over yet; who knows where it will go from here.
Last edited by keelerjr12 on Thu Mar 26, 2020 9:21 am, edited 1 time in total.

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TheTimeLord
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Re: U.S. stocks in free fall

Post by TheTimeLord » Thu Mar 26, 2020 9:20 am

Corsair wrote:
Thu Mar 26, 2020 9:13 am
Perpetual wrote:
Thu Mar 26, 2020 8:40 am
The numbers in the DOL report don't look accurate at all.

I summarized the discrepancies in the other thread:
Yesterday, California's governor said they have had more than 1 million claims since March 13th (through the 25th).

The DOL report shows a total of 186k (for March 14th through 21st). Where did the rest of 1 million go?

In contrast, Pennsylvania reports... 379k.

New York, where half of all known COVID cases are located, reports... 80k.
That's why individual states were told not to report numbers LOL

Never fight the Fed and US government :moneybag
Anyone want to explain why no one else seems to see this discrepancy? Or is this forum just that good?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

H-Town
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Re: U.S. stocks in free fall

Post by H-Town » Thu Mar 26, 2020 9:20 am

keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?

keelerjr12
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Re: U.S. stocks in free fall

Post by keelerjr12 » Thu Mar 26, 2020 9:27 am

H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
From that perspective, yes I get your point. Market-timing or not, it's a poor strategy to assume that the market will do something based on your hunch (not saying you specifically). Now if you told me that 87% of the time the market shows a decline 1 year later, then I'd be more understanding. What would be even better data would be '6 month, 1 year, 2 year, 5 year returns vs difference between projected and actual unemployment numbers'. Now from here, you can begin to build a model to reflect the probabilities there will be an increase or decrease in the market for 6 months, 1 year, 2 years, etc. from this point.

So, I stand corrected. Yes, that would be market timing as well, but I think there's a spectrum. As I said, we'll have to see where it goes from here.

lostdog
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Re: U.S. stocks in free fall

Post by lostdog » Thu Mar 26, 2020 9:32 am

H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
is SPXU one of the inverse ETF's? I'll have to look up how those work. Does that mean he is in the red today base don his bet? 30% of his stock portfolio? wow....

From what I see it's down 12%....ouch!
Global Market Cap Equity || 6 Months Cash || Staying The Course

keelerjr12
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Re: U.S. stocks in free fall

Post by keelerjr12 » Thu Mar 26, 2020 9:34 am

lostdog wrote:
Thu Mar 26, 2020 9:32 am
H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
is SPXU one of the inverse ETF's? I'll have to look up how those work. Does that mean he is in the red today base don his bet? 30% of his stock portfolio? wow....

From what I see it's down 12%....ouch!
Yes, it's a 3x leveraged ETF. So it's even worse than just an inverse.

nigel_ht
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Re: U.S. stocks in free fall

Post by nigel_ht » Thu Mar 26, 2020 9:35 am

H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
He wrote: Sold 30% of my Investments in VIOV and VTI and went short with 10% of portfolio value.

And he only loses his bet if this isn't a bear rally and we already hit bottom. Then he wins with the other 90% of this portfolio. You'll always lose on the last cycle...which is why you don't want to bet the farm or just let your winnings ride.

Most likely this isn't bottom and he'll profit on SPXU.

lostdog
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Re: U.S. stocks in free fall

Post by lostdog » Thu Mar 26, 2020 9:39 am

nigel_ht wrote:
Thu Mar 26, 2020 9:35 am
H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
He wrote: Sold 30% of my Investments in VIOV and VTI and went short with 10% of portfolio value.

And he only loses his bet if this isn't a bear rally and we already hit bottom. Then he wins with the other 90% of this portfolio.

Most likely this isn't bottom and he'll profit on SPXU.
Hopefully you're right, for his sake.
Global Market Cap Equity || 6 Months Cash || Staying The Course

H-Town
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Re: U.S. stocks in free fall

Post by H-Town » Thu Mar 26, 2020 9:41 am

nigel_ht wrote:
Thu Mar 26, 2020 9:35 am
H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
He wrote: Sold 30% of my Investments in VIOV and VTI and went short with 10% of portfolio value.

And he only loses his bet if this isn't a bear rally and we already hit bottom. Then he wins with the other 90% of this portfolio. You'll always lose on the last cycle...which is why you don't want to bet the farm or just let your winnings ride.

Most likely this isn't bottom and he'll profit on SPXU.
Right. Good catch. It could be worse if he shorted the market directly. Buying SPXU isn't all that bad. The most you could lose the the investment you put in SPXU.

Question for you: what would you do right now, knowing what you know now?

RayKeynes
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Re: U.S. stocks in free fall

Post by RayKeynes » Thu Mar 26, 2020 9:42 am

Currently I am still in the Plus (as the other part of the portfolio profits more and I do not have a loss on SPXU currently +-0.

I've bought SPXU @ 25.50.

Seems like there is a chance of a rallye up to 2'650 - 2'700. Lets see. I am not going to sell SPXU.

BW1985
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Re: U.S. stocks in free fall

Post by BW1985 » Thu Mar 26, 2020 9:45 am

I don't understand the point of 'hedging' which seems to mean holding long positions and short positions at the same time.

If you're gonna be neutral then why not just go to cash?
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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Stef
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Re: U.S. stocks in free fall

Post by Stef » Thu Mar 26, 2020 9:47 am

BW1985 wrote:
Thu Mar 26, 2020 9:45 am
I don't understand the point of 'hedging' which seems to mean holding long positions and short positions at the same time.

If you're gonna be neutral then why not just go to cash?
Maybe tax implications?

H-Town
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Re: U.S. stocks in free fall

Post by H-Town » Thu Mar 26, 2020 9:47 am

RayKeynes wrote:
Thu Mar 26, 2020 9:42 am
Currently I am still in the Plus (as the other part of the portfolio profits more and I do not have a loss on SPXU currently +-0.

I've bought SPXU @ 25.50.

Seems like there is a chance of a rallye up to 2'650 - 2'700. Lets see. I am not going to sell SPXU.
Good hedging technique there. Right out of a finance book. The point is to have derivatives that would go the opposite direction of the majority of your assets. Same as oil & gas companies would have derivatives contracts to hedge against the oil price. It smooths out the volatility.

I agree with what you're doing, but I still don't recommend this to most investors out there.

RayKeynes
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Re: U.S. stocks in free fall

Post by RayKeynes » Thu Mar 26, 2020 9:47 am

BW1985 wrote:
Thu Mar 26, 2020 9:45 am
I don't understand the point of 'hedging' which seems to mean holding long positions and short positions at the same time.

If you're gonna be neutral then why not just go to cash?
I am not hedging 100% of the portfolio value. I am just hedging probably around 20% of the portfolio invested. I am also holding 50% cash currently.

As my expectation is that this is still the beginning of a bear market which will last at least 6 months, I do not see the reason to rush and buy at these prices. So I am betting with a small position on the downside and having cash ready, but I am also invested with 20% already to not miss out of some uptrends.

MotoTrojan
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Re: U.S. stocks in free fall

Post by MotoTrojan » Thu Mar 26, 2020 9:52 am

Stef wrote:
Thu Mar 26, 2020 9:47 am
BW1985 wrote:
Thu Mar 26, 2020 9:45 am
I don't understand the point of 'hedging' which seems to mean holding long positions and short positions at the same time.

If you're gonna be neutral then why not just go to cash?
Maybe tax implications?
Yup. Avoids cap-gains on longterm holdings.

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gilgamesh
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Re: U.S. stocks in free fall

Post by gilgamesh » Thu Mar 26, 2020 10:20 am

J G Bankerton wrote:
Wed Mar 25, 2020 10:48 pm
gilgamesh wrote:
Wed Mar 25, 2020 5:42 pm
You are boglehead, they are not....they are day trading in a volatile market.
Even "true" Bogleheads are permitted 10% "mad money" to do wild and crazy things. I consider myself a Boglehead even though I don't do a three fund portfolio. Not holding as much foreign stock as is suggested has worked out for me. I will admit I now have a larger paper loss than a true Boglehead but that is temporary; “Lord Willing and the Creek Don’t Rise”. :greedy
Varying degrees of sin - not having 3 fund portfolio, foreign stock and the like could be forgivable sins, depending on detail.

Day trading is sacrileges.... :D

P.S: I do over-balancing - certainly not boglheadish, but I repent by keeping a good 3 fund portfolio, with low ETF fees etc...haha

dukeblue219
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Re: U.S. stocks in free fall

Post by dukeblue219 » Thu Mar 26, 2020 10:42 am

I have a co-worker who is a notoriously accurate market timer (in the opposite direction). He's all money market and planning to "call a broker to ask for advice when the market recovers." If I hear he's going back to stocks I'll be sure to let you know we are heading back down.

H-Town
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Re: U.S. stocks in free fall

Post by H-Town » Thu Mar 26, 2020 11:17 am

dukeblue219 wrote:
Thu Mar 26, 2020 10:42 am
I have a co-worker who is a notoriously accurate market timer (in the opposite direction). He's all money market and planning to "call a broker to ask for advice when the market recovers." If I hear he's going back to stocks I'll be sure to let you know we are heading back down.
I don't blame him. Emotional investors tend to sell near the bottom and buy near the top. They don't know how to account for the cost of their action. Their justification is fear of missing out and fear of losing everything.

I'm not saying buy-and-hold is easy for most investors. It ain't.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Thu Mar 26, 2020 11:22 am

H-Town wrote:
Thu Mar 26, 2020 11:17 am
I'm not saying buy-and-hold is easy for most investors. It ain't.
Indeed. There are no behaviorally easy strategies other than perhaps living in a cave and never looking at what's happening in the markets.
“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

Leesbro63
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Re: U.S. stocks in free fall

Post by Leesbro63 » Thu Mar 26, 2020 11:24 am

willthrill81 wrote:
Thu Mar 26, 2020 11:22 am
H-Town wrote:
Thu Mar 26, 2020 11:17 am
I'm not saying buy-and-hold is easy for most investors. It ain't.
Indeed. There are no behaviorally easy strategies other than perhaps living in a cave and never looking at what's happening in the markets.
Even that's tough. The internet and news always seems to tell you when there's a big market move. I try to tune it out sometimes but it never works.

CoastalWinds
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Re: U.S. stocks in free fall

Post by CoastalWinds » Thu Mar 26, 2020 11:27 am

So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?

Leesbro63
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Re: U.S. stocks in free fall

Post by Leesbro63 » Thu Mar 26, 2020 11:37 am

CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Perhaps the optimism was due to Powell's comments that basically the Fed would do whatever.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Thu Mar 26, 2020 11:44 am

CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
“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

TropikThunder
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Re: U.S. stocks in free fall

Post by TropikThunder » Thu Mar 26, 2020 11:51 am

willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
Market-moving investors seem to have a paywall between their expectations for the economy and their expectations for the disease. It’s like the market doesn’t care if a million people die as long as businesses open back up. It’s understandable, I guess, but most of us see the two things as much more connected than “the market” does.
Last edited by TropikThunder on Thu Mar 26, 2020 11:53 am, edited 2 times in total.

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occambogle
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Re: U.S. stocks in free fall

Post by occambogle » Thu Mar 26, 2020 11:52 am

willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
It makes zero sense to me.
+1 - I just cannot imagine we have seen the bottom of the market when you see how things are going in the real world.

Perpetual
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Re: U.S. stocks in free fall

Post by Perpetual » Thu Mar 26, 2020 11:58 am

TropikThunder wrote:
Thu Mar 26, 2020 11:51 am
willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
Market-moving investors seem to have a paywall between their expectations for the economy and their expectations for the disease. It’s like the market doesn’t care if a million people die as long as businesses open back up. It’s understandable, I guess, but most of us see the two things as much more connected than “the market” does.
Yeah. Basically, it's easy for "the market" to think whatever it wants, until people around "the market" start dying, and "the market" himself/herself gets sick.

When CEOs and hedge fund managers start getting hospitalized, then we can expect a return to reality.

squirm
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Re: U.S. stocks in free fall

Post by squirm » Thu Mar 26, 2020 12:00 pm

H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
You get to extremes where it's not that difficult. I wrote a few days ago there is going to be a massive bear market rally very soon while all the shorts get squeezed, obviously that' s what's taking place. That was based on a very very oversold condition in the weekly charts. I'll be very surprised if this thing gets to above 2700. Shorts had an easy time taking this thing done to 2100 and change. It was quite fascinating to see the panic here.

I expect when the market hits lows again, the fed will jawbone it up as they've done in the past.

lostdog
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Re: U.S. stocks in free fall

Post by lostdog » Thu Mar 26, 2020 12:13 pm

I would hate to be one of the members on here who sold out only to see this.

Maybe it will go back to bottom again but maybe not. I would sure be wringing my hands right now.
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Corsair
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Re: U.S. stocks in free fall

Post by Corsair » Thu Mar 26, 2020 12:16 pm

occambogle wrote:
Thu Mar 26, 2020 11:52 am
willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
It makes zero sense to me.
+1 - I just cannot imagine we have seen the bottom of the market when you see how things are going in the real world.
The Fed has basically nationalized the markets. Their balance sheet is currently at 21% of GDP, highest ever was 25%. Ratio could go up to 30-40% this year.

Is Jim Cramer telling people to buy or sell?

Perpetual
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Re: U.S. stocks in free fall

Post by Perpetual » Thu Mar 26, 2020 12:18 pm

lostdog wrote:
Thu Mar 26, 2020 12:13 pm
I would hate to be one of the members on here who sold out only to see this.

Maybe it will go back to bottom again but maybe not. I would sure be wringing my hands right now.
We have a lot of milestones ahead of us.

ADP numbers come out on April 1st, which will provide insight into jobs using payroll data. US govt official March jobs report comes out on April 3rd.

Then, throughout April, we get Q1 earnings reports, which will show everyone just how optimistic the Q1 projections were, and people will scramble to shift their Q2 projections down even lower.

All this against a backdrop of a horrifying pandemic that gets a lot worse before it starts getting better.

lostdog
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Re: U.S. stocks in free fall

Post by lostdog » Thu Mar 26, 2020 12:20 pm

Perpetual wrote:
Thu Mar 26, 2020 12:18 pm
lostdog wrote:
Thu Mar 26, 2020 12:13 pm
I would hate to be one of the members on here who sold out only to see this.

Maybe it will go back to bottom again but maybe not. I would sure be wringing my hands right now.
We have a lot of milestones ahead of us.

ADP numbers come out on April 1st, which will provide insight into jobs using payroll data. US govt official March jobs report comes out on April 3rd.

Then, throughout April, we get Q1 earnings reports, which will show everyone just how optimistic the Q1 projections were, and people will scramble to shift their Q2 projections down even lower.

All this against a backdrop of a horrifying pandemic that gets a lot worse before it starts getting better.
I agree but we thought the same about the 3 million unemployment numbers. No one knows nothing.
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Perpetual
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Re: U.S. stocks in free fall

Post by Perpetual » Thu Mar 26, 2020 12:23 pm

lostdog wrote:
Thu Mar 26, 2020 12:20 pm
Perpetual wrote:
Thu Mar 26, 2020 12:18 pm
lostdog wrote:
Thu Mar 26, 2020 12:13 pm
I would hate to be one of the members on here who sold out only to see this.

Maybe it will go back to bottom again but maybe not. I would sure be wringing my hands right now.
We have a lot of milestones ahead of us.

ADP numbers come out on April 1st, which will provide insight into jobs using payroll data. US govt official March jobs report comes out on April 3rd.

Then, throughout April, we get Q1 earnings reports, which will show everyone just how optimistic the Q1 projections were, and people will scramble to shift their Q2 projections down even lower.

All this against a backdrop of a horrifying pandemic that gets a lot worse before it starts getting better.
I agree but we thought the same about the 3 million unemployment numbers. No one knows nothing.
We don't know what the market will do, that is true. However, we have covid-related projections that we have a reasonably high level of confidence in. I mean, I guess it is possible that the market recovers despite hundreds of thousands of people dying within the span of a few months. But the chances of that happening is rather low, in my opinion.

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Re: U.S. stocks in free fall

Post by Lee_WSP » Thu Mar 26, 2020 12:27 pm

CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
The vid is way too high to even think that there is anywhere close to agreement on price amongst market participants.

That’s my take, anyway.

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Re: U.S. stocks in free fall

Post by Stinky » Thu Mar 26, 2020 12:29 pm

willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
I think that Mr Market sees a Congress and a Fed that is willing to drop almost unlimited barrels of money on the economy. Two bills passed through Congress, one on the way, and maybe more to come.

I think Mr Market sees that large swathes of the country are only nominally affected by the virus. Social distancing is becoming the norm. Yes, there are pockets of true horror (like NYC), but that’s not the whole country.

I think Mr Market sees a country that is likely to start reopening for business, in at least a nominal way, in a couple of weeks or so. It won’t be pretty at the start, and progress will be uneven.

I think Mr Market sees total uncertainty being slowly replaced by some degree of certainty.

And Mr Market likes certainty.
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Re: U.S. stocks in free fall

Post by Lee_WSP » Thu Mar 26, 2020 12:32 pm

Stinky wrote:
Thu Mar 26, 2020 12:29 pm
willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
I think that Mr Market sees a Congress and a Fed that is willing to drop almost unlimited barrels of money on the economy. Two bills passed through Congress, one on the way, and maybe more to come.

I think Mr Market sees that large swathes of the country are only nominally affected by the virus. Social distancing is becoming the norm. Yes, there are pockets of true horror (like NYC), but that’s not the whole country.

I think Mr Market sees a country that is likely to start reopening for business, in at least a nominal way, in a couple of weeks or so. It won’t be pretty at the start, and progress will be uneven.

I think Mr Market sees total uncertainty being slowly replaced by some degree of certainty.

And Mr Market likes certainty.
25% takes that position and 25% takes the opposing. The other half doesn’t know.

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Re: U.S. stocks in free fall

Post by columbia » Thu Mar 26, 2020 12:34 pm

If I were a stock picker, UAL would be tempting.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: U.S. stocks in free fall

Post by Perpetual » Thu Mar 26, 2020 12:36 pm

Stinky wrote:
Thu Mar 26, 2020 12:29 pm
willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
I think that Mr Market sees a Congress and a Fed that is willing to drop almost unlimited barrels of money on the economy. Two bills passed through Congress, one on the way, and maybe more to come.

I think Mr Market sees that large swathes of the country are only nominally affected by the virus. Social distancing is becoming the norm. Yes, there are pockets of true horror (like NYC), but that’s not the whole country.

I think Mr Market sees a country that is likely to start reopening for business, in at least a nominal way, in a couple of weeks or so. It won’t be pretty at the start, and progress will be uneven.

I think Mr Market sees total uncertainty being slowly replaced by some degree of certainty.

And Mr Market likes certainty.
So it is true then: the market is irrational! :D

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Re: U.S. stocks in free fall

Post by squirm » Thu Mar 26, 2020 12:44 pm

It's not like this is going to blow over anytime soon.
How many people will feel 100% safe they can go on a plane, shopping etc without infecting their elderly parents?

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Re: U.S. stocks in free fall

Post by Stef » Thu Mar 26, 2020 12:50 pm

squirm wrote:
Thu Mar 26, 2020 12:44 pm
It's not like this is going to blow over anytime soon.
How many people will feel 100% safe they can go on a plane, shopping etc without infecting their elderly parents?
I think this will change our behaviour in public places for decades.

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Re: U.S. stocks in free fall

Post by Seasonal » Thu Mar 26, 2020 1:10 pm

Corsair wrote:
Thu Mar 26, 2020 12:16 pm
occambogle wrote:
Thu Mar 26, 2020 11:52 am
willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
It makes zero sense to me.
+1 - I just cannot imagine we have seen the bottom of the market when you see how things are going in the real world.
The Fed has basically nationalized the markets. Their balance sheet is currently at 21% of GDP, highest ever was 25%. Ratio could go up to 30-40% this year.
The Fed has not nationalized the markets (for any reasonable definition of "nationalize"). What difference does the size of its balance sheet make to pretty much anything?

The Fed is supporting liquid and functioning credit markets, without which a modern economy cannot function. It certainly does not own or control the means of production. It has set its policy interest rate so as not to worsen the economy.

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Re: U.S. stocks in free fall

Post by grog » Thu Mar 26, 2020 1:13 pm

Stef wrote:
Thu Mar 26, 2020 12:50 pm
squirm wrote:
Thu Mar 26, 2020 12:44 pm
It's not like this is going to blow over anytime soon.
How many people will feel 100% safe they can go on a plane, shopping etc without infecting their elderly parents?
I think this will change our behaviour in public places for decades.
I think it will accelerate various trends that were already happening. More remote activity, less retail business, less personal interaction, etc. This is hurting (most) business in the short-run, but the long-term impacts are less clear. It might work out well from a corporate perspective if not a social one.

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Re: U.S. stocks in free fall

Post by nigel_ht » Thu Mar 26, 2020 1:14 pm

H-Town wrote:
Thu Mar 26, 2020 9:41 am
nigel_ht wrote:
Thu Mar 26, 2020 9:35 am
H-Town wrote:
Thu Mar 26, 2020 9:20 am
keelerjr12 wrote:
Thu Mar 26, 2020 9:15 am
H-Town wrote:
Thu Mar 26, 2020 9:12 am
I hope new investors would pay close attention and learn how it is very difficult to market time. If it's something you like doing, limit it to a very small portion of your portfolio as play money. It's no different than a trip to Vegas.
What do the release of unemployment numbers and the market going up today have to do with market timing? If you mean that people gambled assuming the market would go down with an increase in unemployment, I'm not sure how that correlates to market timing.
You got to see the last page where RayKeynes sold 30% of his U.S. stock holdings and bought SPXU. The thinking was that the unemployment numbers would bring the market down, hence RayKeynes "short" the market. It's a very logical choice, but the outcome is not great.

See what I meant by market timing?
He wrote: Sold 30% of my Investments in VIOV and VTI and went short with 10% of portfolio value.

And he only loses his bet if this isn't a bear rally and we already hit bottom. Then he wins with the other 90% of this portfolio. You'll always lose on the last cycle...which is why you don't want to bet the farm or just let your winnings ride.

Most likely this isn't bottom and he'll profit on SPXU.
Right. Good catch. It could be worse if he shorted the market directly. Buying SPXU isn't all that bad. The most you could lose the the investment you put in SPXU.

Question for you: what would you do right now, knowing what you know now?
Me personally? I made a few small bets on XOM, DAL, BA and RCL and standing pat on my existing portfolio while DCAing in a recent lump sum I got over 12 months.

I should try to do what he's doing with a small amount for fun and experience because how often do we have this kind of event?

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Re: U.S. stocks in free fall

Post by nigel_ht » Thu Mar 26, 2020 1:16 pm

columbia wrote:
Thu Mar 26, 2020 12:34 pm
If I were a stock picker, UAL would be tempting.
I picked DAL because Buffet did. :)

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Re: U.S. stocks in free fall

Post by J G Bankerton » Thu Mar 26, 2020 1:23 pm

keelerjr12 wrote:
Thu Mar 26, 2020 9:27 am
So, I stand corrected. Yes, that would be market timing as well, but I think there's a spectrum. As I said, we'll have to see where it goes from here.
No one knows what will happen but I'm 99 and 44/100% sure in the long run the market will go up, eventually. That is why I'm a buy and hold VOO investor.
MotoTrojan wrote:
Thu Mar 26, 2020 9:52 am
Stef wrote:
Thu Mar 26, 2020 9:47 am
BW1985 wrote:
Thu Mar 26, 2020 9:45 am
I don't understand the point of 'hedging' which seems to mean holding long positions and short positions at the same time.

If you're gonna be neutral then why not just go to cash?
Maybe tax implications?
Yup. Avoids cap-gains on longterm holdings.
OP doesn't pay taxes.

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Re: U.S. stocks in free fall

Post by nps » Thu Mar 26, 2020 1:47 pm

willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
Markets can be inscrutable.

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Re: U.S. stocks in free fall

Post by minimalistmarc » Thu Mar 26, 2020 1:52 pm

willthrill81 wrote:
Thu Mar 26, 2020 11:44 am
CoastalWinds wrote:
Thu Mar 26, 2020 11:27 am
So, we’re to believe that a 24% Market haircut from already-lofty valuations had priced in a record 3.3M in new unemployment claims?
Apparently the market believes the current situation to be only slightly worse than in late 2018, when the drawdown of TSM was 20%.

It makes zero sense to me.
Makes complete sense to me. Victory against COVID is inevitable, governments and central banks are responding with extremely aggressive fiscal manoeuvres and will likely continue to do so, economy may actually rebound too excessively.

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