Blood in the water- buying?

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telemark
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Re: Blood in the water- buying?

Post by telemark » Wed Feb 07, 2018 4:42 pm

abuss368 wrote:
Sat Feb 03, 2018 7:53 pm
I did not buy specifically yesterday. I plan to this week and will buy what is underweight in our asset allocation.
Me too. As of today, that would be REIT. I'm still overweight on U.S. and international stocks, so they'd have to drop a lot more before I start buying them.

Valuethinker
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Re: Blood in the water- buying?

Post by Valuethinker » Wed Feb 07, 2018 5:06 pm

Regressor wrote:
Mon Feb 05, 2018 3:15 pm
Sp500 dropped 4.5% moments ago, if that's not blood in the water, I don't know what is - only several times in history has the market dropped more in a day. I'm not saying that it's actionable, only that there's blood in the water.

Edit: Dow dropped 600 points in 5 minutes and recovered 500 in the next 3 minutes.
wTF? Flash Crash? Any explanation made public?

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abuss368
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Re: Blood in the water- buying?

Post by abuss368 » Wed Feb 07, 2018 5:16 pm

telemark wrote:
Wed Feb 07, 2018 4:42 pm
abuss368 wrote:
Sat Feb 03, 2018 7:53 pm
I did not buy specifically yesterday. I plan to this week and will buy what is underweight in our asset allocation.
Me too. As of today, that would be REIT. I'm still overweight on U.S. and international stocks, so they'd have to drop a lot more before I start buying them.
Hi telemark -

Indeed. I essentially purchased U.S. REITs and Bonds. U.S. & Domestic Stocks, and International REITs are still above my allocations.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

kappy
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Re: Blood in the water- buying?

Post by kappy » Wed Feb 07, 2018 8:22 pm

Emerging markets made it back down to where it was during the big dip Monday so I put a little more in taxable. Which probably means it'll drop 10% tomorrow :greedy

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randomizer
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Re: Blood in the water- buying?

Post by randomizer » Wed Feb 07, 2018 9:13 pm

Shallowpockets wrote:
Sat Feb 03, 2018 8:48 am
So this is the general premise, that when there is blood in the water you buy your investments.
How many have done this in the last three trading days?
Not I, and I never will. I don't believe in keeping "dry powder" on hand.
87.5:12.5 — HODL the course!

Regressor
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Re: Blood in the water- buying?

Post by Regressor » Wed Feb 07, 2018 9:41 pm

Valuethinker wrote:
Wed Feb 07, 2018 5:06 pm
Regressor wrote:
Mon Feb 05, 2018 3:15 pm
Sp500 dropped 4.5% moments ago, if that's not blood in the water, I don't know what is - only several times in history has the market dropped more in a day. I'm not saying that it's actionable, only that there's blood in the water.

Edit: Dow dropped 600 points in 5 minutes and recovered 500 in the next 3 minutes.
wTF? Flash Crash? Any explanation made public?
Here's a summary of the trading day, it went from 24800 to 24000 and back in a few minutes, the
http://money.cnn.com/2018/02/05/news/co ... index.html

"At one point before 3:12 p.m., the Dow was down 1,597 points. It was the most points the Dow had ever fallen in a single trading day.

By the time the market closed at 4 p.m., the Dow had recovered slightly. But was still down 1,175 points. The Dow had never closed down by that many points."

kappy
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Re: Blood in the water- buying?

Post by kappy » Thu Feb 08, 2018 7:52 pm

kappy wrote:
Wed Feb 07, 2018 8:22 pm
Emerging markets made it back down to where it was during the big dip Monday so I put a little more in taxable. Which probably means it'll drop 10% tomorrow :greedy
Yep, what did I say... well maybe not 10% but another sizable drop.

I bought some more.

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willthrill81
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Re: Blood in the water- buying?

Post by willthrill81 » Thu Feb 08, 2018 8:01 pm

kappy wrote:
Thu Feb 08, 2018 7:52 pm
kappy wrote:
Wed Feb 07, 2018 8:22 pm
Emerging markets made it back down to where it was during the big dip Monday so I put a little more in taxable. Which probably means it'll drop 10% tomorrow :greedy
Yep, what did I say... well maybe not 10% but another sizable drop.

I bought some more.
I bought some EM yesterday, but it really had nothing to do with the current gyrations of the market. Some capital was freed up, and I invested it according to my strategy.
“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

bironology
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Re: Blood in the water- buying?

Post by bironology » Fri Feb 09, 2018 5:37 am

I'm chomping at the bit to buy. I bought last week with all of my spare cash, which was only a small amount unfortunately, since I continually buy each paycheck.

I don't keep a significant amount of "dry powder", but after a week like this I'm considering changing that habit. I wouldn't let it just grow indefinitely until there's a dip - I'd keep buying along the way, but I would have liked to have kept a $X0,000 cache of cash to capitalize on this opportunity right now, even if just to make me feel cool and powerful.

But then, I just realized I have such a cache of cash - it's my emergency fund.

Who wants to call me crazy for wanting to use my emergency fund to buy stocks right now?

Who else is thinking of doing that?

bironology
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Re: Blood in the water- buying?

Post by bironology » Fri Feb 09, 2018 5:52 am

bironology wrote:
Fri Feb 09, 2018 5:37 am
Who wants to call me crazy for wanting to use my emergency fund to buy stocks right now?

Who else is thinking of doing that?
Scratch that, I just came to my senses.

http://www.macrotrends.net/2324/sp-500- ... chart-data

We don't know if we just saw a quick dip or a 3-year bear market.

I had to smack myself around a bit to remember that. :oops:

lazydavid
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Re: Blood in the water- buying?

Post by lazydavid » Fri Feb 09, 2018 5:54 am

randomizer wrote:
Wed Feb 07, 2018 9:13 pm
Not I, and I never will. I don't believe in keeping "dry powder" on hand.
I don't believe in it either, but that's not the only way to buy stocks down. I have to run some numbers through a spreadsheet, but I suspect I'll be selling some bonds and buying some equity today. 10% should have been enough to shift my AA and merit a rebalance.

bironology
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Re: Blood in the water- buying?

Post by bironology » Fri Feb 09, 2018 5:59 am

lazydavid wrote:
Fri Feb 09, 2018 5:54 am
I have to run some numbers through a spreadsheet, but I suspect I'll be selling some bonds and buying some equity today. 10% should have been enough to shift my AA and merit a rebalance.
You would reallocate already? Or would you wait until the end of the month/quarter to see if the volatility settles?

minimalistmarc
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Re: Blood in the water- buying?

Post by minimalistmarc » Fri Feb 09, 2018 6:08 am

I have a 50k hard money loan expected to redeem end of feb. Hoping the markets stay down or drop more in time for a purchase. Otherwise I don’t keep any dry powder.

lazydavid
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Re: Blood in the water- buying?

Post by lazydavid » Fri Feb 09, 2018 6:08 am

bironology wrote:
Fri Feb 09, 2018 5:59 am
lazydavid wrote:
Fri Feb 09, 2018 5:54 am
I have to run some numbers through a spreadsheet, but I suspect I'll be selling some bonds and buying some equity today. 10% should have been enough to shift my AA and merit a rebalance.
You would reallocate already? Or would you wait until the end of the month/quarter to see if the volatility settles?
If I'm off by a significant amount, I will. Thinking more about it though, I might not actually have to after all. Since roughly half of our portfolio is in Wellington/Wellesley, that part has likely rebalanced already, so the remainder may not have shifted enough to warrant a change. I'll find out when I run the numbers.

mptfan
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Re: Blood in the water- buying?

Post by mptfan » Fri Feb 09, 2018 8:04 am

bironology wrote:
Fri Feb 09, 2018 5:37 am
I'm chomping at the bit to buy...

Who wants to call me crazy for wanting to use my emergency fund to buy stocks right now?
So I have a question...the S&P 500 is back to where it was in mid November, less than 3 months ago...where you chomping at the bit back in November to buy stocks with your emergency fund? If not, why not?

Dudley
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Re: Blood in the water- buying?

Post by Dudley » Fri Feb 09, 2018 8:16 am

bironology wrote:
Fri Feb 09, 2018 5:37 am
I'm chomping at the bit to buy. I bought last week with all of my spare cash, which was only a small amount unfortunately, since I continually buy each paycheck.

I don't keep a significant amount of "dry powder", but after a week like this I'm considering changing that habit. I wouldn't let it just grow indefinitely until there's a dip - I'd keep buying along the way, but I would have liked to have kept a $X0,000 cache of cash to capitalize on this opportunity right now, even if just to make me feel cool and powerful.

But then, I just realized I have such a cache of cash - it's my emergency fund.

Who wants to call me crazy for wanting to use my emergency fund to buy stocks right now?

Who else is thinking of doing that?
I assume you were not "around" in 2008, (2001, 1987....)....

lazydavid
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Re: Blood in the water- buying?

Post by lazydavid » Fri Feb 09, 2018 9:09 am

lazydavid wrote:
Fri Feb 09, 2018 6:08 am
If I'm off by a significant amount, I will. Thinking more about it though, I might not actually have to after all. Since roughly half of our portfolio is in Wellington/Wellesley, that part has likely rebalanced already, so the remainder may not have shifted enough to warrant a change. I'll find out when I run the numbers.
My aggregator (Personal Capital) for some reason is flagging all of my funds at Wealthfront as being "cash". Since this is about 13% of my portfolio (more like 20% of what's not W/W), and I'm too lazy (right there in the username!) to do the AA calculation myself, I'm actually going to hold off on any rebalance until that's corrected.

wolf359
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Re: Blood in the water- buying?

Post by wolf359 » Fri Feb 09, 2018 9:40 am

Wildebeest wrote:
Mon Feb 05, 2018 10:23 pm
Nobody buys when there is blood in the water. Sharks win every time.

The expression is: " Buy when there is blood in the streets" and only buy if you think you smarter than every body else ( and have great resources).

There is no blood in the water, in the streets or anywhere else. Not even close. I do not see blood in the streets till there is a 50 % drop. I will not be buying or selling now or in the future, I do not think I am smarter, luckier and definitely not better looking.

Wildebeest.
Exactly. I think "blood in the water" is when the sharks are circling, and things are about to get very, very ugly. Not the best time to go swimming.

The phrase "Buy when there's blood in the streets," is attributed to Baron Roschild in 1871, who allegedly advised a young Frenchman to buy during the Siege of Paris in the Franco-Prussian War. In non-literal terms, it's interpreted as advice to buy after a major crash or bear market, or during panic selling. It is absolutely market timing advice.

The market has been climbing steadily for years. In the last year, it did not even have the minor pullback of previous years. Investors have gotten complacent, so this correction has a greater impact on investor sentiment than normal.

As the sign on Elon Musk's orbiting Tesla reads, "Don't Panic." There is little chance of your Total Stock Market Index Fund going to zero. The only question is how much it may drop before it recovers, and how long it will take to do so. It will come back before you need it. Fluctuations are part of the deal. The average bear market lasts 2-3 years. An extended bear may last 10 years, but if that happens while you're in accumulation mode, that's a good thing (because you'll get a chance to buy at depressed prices for 10 years.) Be mentally prepared for either.

If you're following the 3-fund strategy, then you're well diversified. Make sure your allocations are good, and don't increase your bond allocations after a big drop. (It's too late to decide that you didn't have enough bonds at that point. If you adjust AFTER the drop, you're just locking in your equity losses.)

The closest to market timing you should do is to rebalance by selling bonds and buying stocks after a big drop. Go back and read old 2008 threads for what it was like to live through that, and know that it's very hard to buy at the bottom (because people at that time didn't know where the bottom was until it had passed.)

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