'Smart money' bailing on the market, time to get out?

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steve321
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'Smart money' bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 4:43 am

https://www.zerohedge.com/news/2018-10- ... ing-market

Whilst retail investors keep investing in the stock market, institutional investors have been decreasing their market exposure.
Is there something the 'smart money' knows, that we (the dumb money, I suppose) don't?
Should we decrease our exposure to stocks, as the institutional investors do? I mean, if you just 'stay the course', what makes you think you are smarter than institutional investors with all their resources and access to information?
Last edited by steve321 on Tue Oct 23, 2018 6:14 am, edited 1 time in total.
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Re: Smart money bailing on the market, time to get out?

Post by oldcomputerguy » Tue Oct 23, 2018 4:51 am

Four things:

(1) The article was discussing deleveraging, not getting out of the market entirely. The two are completely separate propositions.

(2) Stop reading Zerohedge. It's the worst sort of investment porn.

(3) If you were leveraging your equity investment (i.e. borrowing to invest), then yes, you too should deleverage, because borrowing to invest is a horrible idea in the first place.

(4) Who says they're "smart" and we're "dumb"? If index investors (as a whole long-term) outperform just about all active managers (as a whole long-term), I would think that means those designations are reversed.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 5:03 am

oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
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Re: Smart money bailing on the market, time to get out?

Post by raoul » Tue Oct 23, 2018 5:06 am

The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.

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Re: Smart money bailing on the market, time to get out?

Post by unclescrooge » Tue Oct 23, 2018 5:19 am

steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Yup, it's like the onion, but for investments.

ZH has been consistently negative since 2010. If you had followed their advice you would be a lot poorer.

I started reading in 2008 and stopped in 2011. Useless dribble designed to sell ad space.

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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 5:25 am

All right thanks; I am going to 'unfollow' them on Twitter then. This suits me as they were filling my timeline with dozens of messages a day.
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Re: Smart money bailing on the market, time to get out?

Post by 3-20Characters » Tue Oct 23, 2018 5:27 am

I can’t tell you what to do but one thing I’ve noticed from genius gurus is that they’re always right if you wait long enough. So one might say, “Now is the time to sell off stocks and go to cash, or gold, or fill in the ___.” Sure enough, 5, 10, 15, 20 years later they look like a genius. Problem is, what else happens during those years.

A better approach—if you have the jitters—is to have a band for equities AA. Say your equities band is 40-60% of total AA. Maybe feeling like you do, you might like to be ~45% in today’s market? Of course, use your own numbers.

Or you could just channel Osho for advice. :wink:

Good luck

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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 5:33 am

3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 5:37 am

3-20Characters wrote:
Tue Oct 23, 2018 5:27 am

A better approach—if you have the jitters—is to have a band for equities AA. Say your equities band is 40-60% of total AA. Maybe feeling like you do, you might like to be ~45% in today’s market? Of course, use your own numbers.

that's a good point; I actually was thinking of doing something along these line. Trouble is, when stocks started falling ten days ago, I thought of increasing my allocation to them as they seemed cheaper. Now I am thinking that Europe might get in a mess, and we might have a trade war etc so I am thinking of lowering my allocation to them!
So on the base of what do you decide whether to be on the lower or the higher side of your band? On valuations or your mood or what else?
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Re: Smart money bailing on the market, time to get out?

Post by CurlyDave » Tue Oct 23, 2018 5:44 am

steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
I think Rolls Royce is more an aircraft engine manufacturer than a car maker.

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Re: Smart money bailing on the market, time to get out?

Post by randomizer » Tue Oct 23, 2018 6:06 am

"Smart money"
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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 6:11 am

CurlyDave wrote:
Tue Oct 23, 2018 5:44 am
steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
I think Rolls Royce is more an aircraft engine manufacturer than a car maker.
I meant buy the car not the stock. I have one in the garage, it's given me a lot of pleasure and perhaps it will be worth a lot more in 20 years.
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Re: Smart money bailing on the market, time to get out?

Post by Cycle » Tue Oct 23, 2018 6:13 am

oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am
(2) Stop reading Zerohedge. It's the worst sort of investment porn.
Seriously. Zerohedge is just machine designed to advertise gold and silver to you. It's all doom and gloom. Don't read it.

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Re: Smart money bailing on the market, time to get out?

Post by Cycle » Tue Oct 23, 2018 6:14 am

steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.

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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 6:41 am

Cycle wrote:
Tue Oct 23, 2018 6:14 am

historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
so how do you know that? How will they move around? And if you are confident of that, do you still invest in EFTs that include the stocks of automobile companies?
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Re: 'Smart money' bailing on the market, time to get out?

Post by nisiprius » Tue Oct 23, 2018 6:55 am

Wikipedia: "Zero Hedge"
Zero Hedge or ZeroHedge is described as a "markets-focused" blog, that presents both in-house analysis, and analysis from investment banks, hedge funds, and other investment writers and analysts. Zero Hedge, per its motto, is bearish in its investment outlook and analysis, often deriving from its adherence to the Austrian School of economics and credit cycles. While often labeled as a financial permabear, Zero Hedge is also seen as a source of "cutting-edge news, rumors and gossip about the financial industry". Zero Hedge expanded into non-financial analysis, where its editorial has been labelled by some as being associated with the "alt-right", as well as being anti-establishment, conspiratorial, and showing a pro-Russian-bias. Zero Hedge in-house content is posted under the pseudonym "Tyler Durden", however, the founder and main editor was identified as Daniel Ivandjiiski.
While doubtless everybody will see different ads, at the moment the page with this article is showing me an ad with the caption Is This Book the Death Blow to Liberals?
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Re: Smart money bailing on the market, time to get out?

Post by VictoriaF » Tue Oct 23, 2018 6:57 am

steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Read Taleb's books, not whom he follows on Twitter.

Victoria
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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 7:04 am

VictoriaF wrote:
Tue Oct 23, 2018 6:57 am
steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Read Taleb's books, not whom he follows on Twitter.

Victoria
actually I have. As well as his papers. And watched his videos, including one in French. And since I like him a lot, I also follow him on Twitter and I am even considering giving up my vegan diet because of his arguments. Gabish?
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Re: 'Smart money' bailing on the market, time to get out?

Post by nisiprius » Tue Oct 23, 2018 7:05 am

steve321 wrote:
Tue Oct 23, 2018 4:43 am
Should we decrease our exposure to stocks, as the institutional investors do? I mean, if you just 'stay the course', what makes you think you are smarter than institutional investors with all their resources and access to information?
We don't know that "the institutional investors" are doing any such thing. This is your generalization, from a ZeroHedge article that says only that one person at Goldman thinks, based on indirect analysis of ETF flows, that professionals are "deleveraging." We aren't able to read John Marshall's piece directly. So we have an opinion, based on circumstantial evidence, from someone at Goldman, as interpreted by a pseudonymous author at ZeroHedge, and then further interpreted by you.

According to some figures, approximately 80% of the stock market is owned by institutional investors. That is, institutional investors are the market. They are not doing something shrewd or contrarian that is different from "the market." It is departing from staying the course in total market index funds that would require me to be "smarter than institutional investors."

In any case, I'm not leveraged, so what would it mean for me to "deleverage?"
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Re: Smart money bailing on the market, time to get out?

Post by VictoriaF » Tue Oct 23, 2018 7:08 am

steve321 wrote:
Tue Oct 23, 2018 7:04 am
VictoriaF wrote:
Tue Oct 23, 2018 6:57 am
steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Read Taleb's books, not whom he follows on Twitter.

Victoria
actually I have. As well as his papers. And watched his videos, including one in French. And since I like him a lot, I also follow him on Twitter and I am even considering giving up my vegan diet because of his arguments. Gabish?
I have not seen Taleb using the word "gabish." He is very careful with his vocabulary. Other than that, I cheer you as a fellow Taleb fan and envious of you because I can't read him in French.

Victoria
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Re: Smart money bailing on the market, time to get out?

Post by steve321 » Tue Oct 23, 2018 7:13 am

VictoriaF wrote:
Tue Oct 23, 2018 7:08 am
steve321 wrote:
Tue Oct 23, 2018 7:04 am
VictoriaF wrote:
Tue Oct 23, 2018 6:57 am
steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Read Taleb's books, not whom he follows on Twitter.

Victoria
actually I have. As well as his papers. And watched his videos, including one in French. And since I like him a lot, I also follow him on Twitter and I am even considering giving up my vegan diet because of his arguments. Gabish?
I have not seen Taleb using the word "gabish." He is very careful with his vocabulary. Other than that, I cheer you as a fellow Taleb fan and envious of you because I can't read him in French.

Victoria
you are right, he uses capish, sorry.
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Re: Smart money bailing on the market, time to get out?

Post by 3-20Characters » Tue Oct 23, 2018 7:14 am

steve321 wrote:
Tue Oct 23, 2018 5:37 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am

A better approach—if you have the jitters—is to have a band for equities AA. Say your equities band is 40-60% of total AA. Maybe feeling like you do, you might like to be ~45% in today’s market? Of course, use your own numbers.

that's a good point; I actually was thinking of doing something along these line. Trouble is, when stocks started falling ten days ago, I thought of increasing my allocation to them as they seemed cheaper. Now I am thinking that Europe might get in a mess, and we might have a trade war etc so I am thinking of lowering my allocation to them!
So on the base of what do you decide whether to be on the lower or the higher side of your band? On valuations or your mood or what else?
I consider AA adjustment based on what I think is likley to happen 5-10 years out. I re-evaluate my jitters every year to so but usually stay put. Of course, there’s no way to know what the future holds. All the more reason to stay put. But if it makes you more comfortable dialing down your equities 5-10%, I don’t consider that timing the market. Others will disagree with me.

So arrive at an AA that seems reasonable for your circumstances (age, need for growth, risk tolerance, etc). It’s a personal choice but you’ll see recurring themes here and elsewhere. For example, lots of people entering retirement are somewhere around 50-60% equities. But others in the same position feel more comfortable around 40-50%. So I would say a common AA for someone at or near retirement is 50% (adjust up or down by 5-10%).

Taking a look at the Vanguard Target Date funds, they have someone who retired in 2015 at 41% and someone retiring in 2020 is at 54%, so these numbers are based on something other than thin air. Now season to taste.

Good luck.

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Re: Smart money bailing on the market, time to get out?

Post by VictoriaF » Tue Oct 23, 2018 9:02 am

steve321 wrote:
Tue Oct 23, 2018 7:13 am
VictoriaF wrote:
Tue Oct 23, 2018 7:08 am
steve321 wrote:
Tue Oct 23, 2018 7:04 am
VictoriaF wrote:
Tue Oct 23, 2018 6:57 am
steve321 wrote:
Tue Oct 23, 2018 5:03 am


Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Read Taleb's books, not whom he follows on Twitter.

Victoria
actually I have. As well as his papers. And watched his videos, including one in French. And since I like him a lot, I also follow him on Twitter and I am even considering giving up my vegan diet because of his arguments. Gabish?
I have not seen Taleb using the word "gabish." He is very careful with his vocabulary. Other than that, I cheer you as a fellow Taleb fan and envious of you because I can't read him in French.

Victoria
you are right, he uses capish, sorry.
Actually, you were right the first time. I have just Googled on "Taleb" and "Capish" and found his tweets where he uses "Gabish": https://twitter.com/nntaleb/status/1015589974236958720

But it also confirms my point about Taleb being careful with his language:
Taleb on Twitter wrote:Gabish is old Sicilian preserved here in NY-NJ: Gabish: capisce; Gabagool: capicola. Gabish?
Thanks,
Victoria
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Re: 'Smart money' bailing on the market, time to get out?

Post by J295 » Tue Oct 23, 2018 9:23 am

Well, if the “smart people” said to do a that’s different ...

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Re: 'Smart money' bailing on the market, time to get out?

Post by tadamsmar » Tue Oct 23, 2018 9:37 am

steve321 wrote:
Tue Oct 23, 2018 4:43 am
https://www.zerohedge.com/news/2018-10- ... ing-market

Whilst retail investors keep investing in the stock market, institutional investors have been decreasing their market exposure.
Is there something the 'smart money' knows, that we (the dumb money, I suppose) don't?
Should we decrease our exposure to stocks, as the institutional investors do? I mean, if you just 'stay the course', what makes you think you are smarter than institutional investors with all their resources and access to information?
Hmmm. It seems that no matter what I do, I have some explaining to do.

If I hold, then I need to explain why I think I am smarter than institutional investors who sold stocks.

If I sell, then I need to explain why I think I am smarter than whoever bought the stocks that the institutional investors sold!

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Re: 'Smart money' bailing on the market, time to get out?

Post by ChinchillaWhiplash » Tue Oct 23, 2018 9:46 am

Didn't Mr. Bogle himself just say in his latest interview that it might be worth reducing your equities position by around 10%? He is definitly smart money :wink:

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Re: 'Smart money' bailing on the market, time to get out?

Post by UpperNwGuy » Tue Oct 23, 2018 10:55 am

ChinchillaWhiplash wrote:
Tue Oct 23, 2018 9:46 am
Didn't Mr. Bogle himself just say in his latest interview that it might be worth reducing your equities position by around 10%? He is definitly smart money :wink:
Even if Mr Bogle himself said that, I won’t do it.

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Re: Smart money bailing on the market, time to get out?

Post by jharkin » Tue Oct 23, 2018 10:59 am

steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Because its full of conspiracy theory, tinfoil hat, end of the world stuff? They where huge on the peak oil bandwagon and from time to time you will see crackpot articles about the illuminati, shadow world government, etc crap on there.

Move along....

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Re: Smart money bailing on the market, time to get out?

Post by fposte » Tue Oct 23, 2018 11:04 am

steve321 wrote:
Tue Oct 23, 2018 5:03 am

I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Or to know about counterarguments, or to see what popular thoughts exist. It's pretty common for theorists to stay abreast of people who believe different things than they do. I wouldn't assume approval just from proximity.

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Re: Smart money bailing on the market, time to get out?

Post by WanderingDoc » Tue Oct 23, 2018 11:10 am

raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
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Re: 'Smart money' bailing on the market, time to get out?

Post by Call_Me_Op » Tue Oct 23, 2018 11:20 am

steve321 wrote:
Tue Oct 23, 2018 4:43 am
Is there something the 'smart money' knows, that we (the dumb money, I suppose) don't?
Not really.
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Re: 'Smart money' bailing on the market, time to get out?

Post by bondsr4me » Tue Oct 23, 2018 11:30 am

Who is the REAL "smart money"??

It's people like the guy in this story...
I like to read it every time the market goes off the deep end.

I've posted this article before when we have days like this.

Attached is the link....I hope it works.

Don


https://www.dailymail.co.uk/news/articl ... tions.html

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Re: Smart money bailing on the market, time to get out?

Post by Nicolas » Tue Oct 23, 2018 11:46 am

Cycle wrote:
Tue Oct 23, 2018 6:14 am
steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
Collectors will still want them even if they can't drive them. I've been looking at Jaguar Type-E but at $200K+ never going to happen. Such a beautiful car.

LiterallyIronic
Posts: 824
Joined: Sat Dec 05, 2015 10:36 am

Re: Smart money bailing on the market, time to get out?

Post by LiterallyIronic » Tue Oct 23, 2018 1:33 pm

Cycle wrote:
Tue Oct 23, 2018 6:14 am
steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
Nah, the car turnover is too slow for that timeframe. Even if it became illegal starting today to manufacture cars that aren't self-driving, it's going to take a long, long time to get 99% of the manually-driven cars off the road. Existing manually-driven cars will obviously be grandfathered in, just like you can still legally drive without a seatbelt if your car is older than 196X.

I don't know if by "city dweller" you mean huge cities, but my city is 100,000 people and everyone drives everywhere.

TN_Boy
Posts: 535
Joined: Sat Jan 17, 2009 12:51 pm

Re: Smart money bailing on the market, time to get out?

Post by TN_Boy » Tue Oct 23, 2018 2:00 pm

WanderingDoc wrote:
Tue Oct 23, 2018 11:10 am
raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
Interesting comment about Warren Buffet.

https://www.cnbc.com/2018/05/08/warren- ... arket.html

Thanks for the smile this afternoon.

alfaspider
Posts: 1586
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Re: Smart money bailing on the market, time to get out?

Post by alfaspider » Tue Oct 23, 2018 2:16 pm

Nicolas wrote:
Tue Oct 23, 2018 11:46 am
Cycle wrote:
Tue Oct 23, 2018 6:14 am
steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
Collectors will still want them even if they can't drive them. I've been looking at Jaguar Type-E but at $200K+ never going to happen. Such a beautiful car.
You can get an E-type in the $50k range. The $200k+ ones are specific rare and sought-after examples in councours winning shape.

User avatar
JoMoney
Posts: 6089
Joined: Tue Jul 23, 2013 5:31 am

Re: Smart money bailing on the market, time to get out?

Post by JoMoney » Tue Oct 23, 2018 2:28 pm

TN_Boy wrote:
Tue Oct 23, 2018 2:00 pm
WanderingDoc wrote:
Tue Oct 23, 2018 11:10 am
raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
Interesting comment about Warren Buffet.

https://www.cnbc.com/2018/05/08/warren- ... arket.html

Thanks for the smile this afternoon.
Here he is a month ago, he doesn't seem bearish to me, and the market was higher then compared to now
https://youtu.be/gwTeJvLAuxQ?t=102
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Nicolas
Posts: 1119
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Re: Smart money bailing on the market, time to get out?

Post by Nicolas » Tue Oct 23, 2018 2:33 pm

alfaspider wrote:
Tue Oct 23, 2018 2:16 pm
Nicolas wrote:
Tue Oct 23, 2018 11:46 am
Cycle wrote:
Tue Oct 23, 2018 6:14 am
steve321 wrote:
Tue Oct 23, 2018 5:33 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am


Or you could just channel Osho for advice. :wink:

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
Collectors will still want them even if they can't drive them. I've been looking at Jaguar Type-E but at $200K+ never going to happen. Such a beautiful car.
You can get an E-type in the $50k range. The $200k+ ones are specific rare and sought-after examples in councours winning shape.
Oops, I meant E-Type, not "Type-E". Yep, you're right! I just don't want one I have to restore. Like this one: https://www.hemmings.com/classifieds/ca ... 37358.html

Time to go shopping! :D
Last edited by Nicolas on Tue Oct 23, 2018 2:38 pm, edited 2 times in total.

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HomerJ
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Re: Smart money bailing on the market, time to get out?

Post by HomerJ » Tue Oct 23, 2018 2:34 pm

steve321 wrote:
Tue Oct 23, 2018 5:37 am
3-20Characters wrote:
Tue Oct 23, 2018 5:27 am

A better approach—if you have the jitters—is to have a band for equities AA. Say your equities band is 40-60% of total AA. Maybe feeling like you do, you might like to be ~45% in today’s market? Of course, use your own numbers.

that's a good point; I actually was thinking of doing something along these line. Trouble is, when stocks started falling ten days ago, I thought of increasing my allocation to them as they seemed cheaper. Now I am thinking that Europe might get in a mess, and we might have a trade war etc so I am thinking of lowering my allocation to them!
So on the base of what do you decide whether to be on the lower or the higher side of your band? On valuations or your mood or what else?
This is why we say pick an AA, and stay the course. Quit trying to predict the future.

Pick an AA that you can hold even if the market drops 50% this year. Because it might.

And then stick with it, even if market drops. Just ignore what the market is doing, and get on with your life.
The J stands for Jay

alfaspider
Posts: 1586
Joined: Wed Sep 09, 2015 4:44 pm

Re: Smart money bailing on the market, time to get out?

Post by alfaspider » Tue Oct 23, 2018 3:03 pm

Nicolas wrote:
Tue Oct 23, 2018 2:33 pm
alfaspider wrote:
Tue Oct 23, 2018 2:16 pm
Nicolas wrote:
Tue Oct 23, 2018 11:46 am
Cycle wrote:
Tue Oct 23, 2018 6:14 am
steve321 wrote:
Tue Oct 23, 2018 5:33 am

I already did. His advice: invest in Rolls-Royce :wink:
Actually it's probably not bad advice - I saw in the Credit Suisse yearbook by Dimson and colleagues that automobiles have been the best investment, historically, after stocks. :wink:
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
Collectors will still want them even if they can't drive them. I've been looking at Jaguar Type-E but at $200K+ never going to happen. Such a beautiful car.
You can get an E-type in the $50k range. The $200k+ ones are specific rare and sought-after examples in councours winning shape.
Oops, I meant E-Type, not "Type-E". Yep, you're right! I just don't want one I have to restore. Like this one: https://www.hemmings.com/classifieds/ca ... 37358.html

Time to go shopping! :D
It depends on what you are looking for. The Series 3 examples are worth a lot less than series 1 and 2. No need to pay $40k for a hulk!

https://classics.autotrader.com/classic ... /101017616

WanderingDoc
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Joined: Sat Aug 05, 2017 8:21 pm

Re: Smart money bailing on the market, time to get out?

Post by WanderingDoc » Tue Oct 23, 2018 3:06 pm

TN_Boy wrote:
Tue Oct 23, 2018 2:00 pm
WanderingDoc wrote:
Tue Oct 23, 2018 11:10 am
raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
Interesting comment about Warren Buffet.

https://www.cnbc.com/2018/05/08/warren- ... arket.html

Thanks for the smile this afternoon.
Would rather do as he does. Not as he says. Actions speak louder than words.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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JoMoney
Posts: 6089
Joined: Tue Jul 23, 2013 5:31 am

Re: Smart money bailing on the market, time to get out?

Post by JoMoney » Tue Oct 23, 2018 4:05 pm

WanderingDoc wrote:
Tue Oct 23, 2018 3:06 pm
TN_Boy wrote:
Tue Oct 23, 2018 2:00 pm
WanderingDoc wrote:
Tue Oct 23, 2018 11:10 am
raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
Interesting comment about Warren Buffet.

https://www.cnbc.com/2018/05/08/warren- ... arket.html

Thanks for the smile this afternoon.
Would rather do as he does. Not as he says. Actions speak louder than words.
:thumbsup
Warrent Buffett wrote:...My money, I should add, is where my mouth is: What I advise here is essentially identical to certain
instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s
benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to
certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee
could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P
500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to
those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee
managers. http://www.berkshirehathaway.com/letters/2013ltr.pdf
“Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”
http://longbets.org/362/
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

columbia
Posts: 977
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Re: Smart money bailing on the market, time to get out?

Post by columbia » Tue Oct 23, 2018 4:17 pm

TN_Boy wrote:
Tue Oct 23, 2018 2:00 pm
WanderingDoc wrote:
Tue Oct 23, 2018 11:10 am
raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
Interesting comment about Warren Buffet.

https://www.cnbc.com/2018/05/08/warren- ... arket.html

Thanks for the smile this afternoon.
Potentially actionable aspect for schlubs (like me): stop buying stocks at a certain valuation level. What that level is, of course, is the tricky part.

User avatar
JoMoney
Posts: 6089
Joined: Tue Jul 23, 2013 5:31 am

Re: Smart money bailing on the market, time to get out?

Post by JoMoney » Tue Oct 23, 2018 4:35 pm

columbia wrote:
Tue Oct 23, 2018 4:17 pm
...
Potentially actionable aspect for schlubs (like me): stop buying stocks at a certain valuation level. What that level is, of course, is the tricky part.
If you take the approach of averaging in over time (as Buffett has suggested), and stay the course with that, you can be reasonably assured that the valuation level you're getting is an "average" of what the valuations were over the period you made your purchases, and similarly over the period of your withdrawals. It won't get you the best possible price, but you can be reasonably assured that it wasn't all at the highest price either.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

TN_Boy
Posts: 535
Joined: Sat Jan 17, 2009 12:51 pm

Re: Smart money bailing on the market, time to get out?

Post by TN_Boy » Tue Oct 23, 2018 4:42 pm

columbia wrote:
Tue Oct 23, 2018 4:17 pm
TN_Boy wrote:
Tue Oct 23, 2018 2:00 pm
WanderingDoc wrote:
Tue Oct 23, 2018 11:10 am
raoul wrote:
Tue Oct 23, 2018 5:06 am
The other person is correct, stop reading the trash reports from people with an agenda. All you're talking about is what we call 'noise'. Ignore the noise and just stay the course. People who panic never make profits. The other person is also correct - those of us who use indexed funds make out better than the alleged 'smart' money people.
This is just wrong. Ray Dalio and Warren Buffet are sitting on billions in cash. You think you will "make out better" than them? Haha, that is a good one! Thanks for the smile this early morning.
Interesting comment about Warren Buffet.

https://www.cnbc.com/2018/05/08/warren- ... arket.html

Thanks for the smile this afternoon.
Potentially actionable aspect for schlubs (like me): stop buying stocks at a certain valuation level. What that level is, of course, is the tricky part.
Of course, the point of my post was that Buffet, in so many words, says there is no such valuation level for him. He does not "market time." I guess that would be actionable.

Jiu Jitsu Fighter
Posts: 137
Joined: Mon Nov 21, 2016 10:22 am

Re: Smart money bailing on the market, time to get out?

Post by Jiu Jitsu Fighter » Tue Oct 23, 2018 4:45 pm

VictoriaF wrote:
Tue Oct 23, 2018 6:57 am
steve321 wrote:
Tue Oct 23, 2018 5:03 am
oldcomputerguy wrote:
Tue Oct 23, 2018 4:51 am


(2) Stop reading Zerohedge. It's the worst sort of investment porn.

Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh.
Read Taleb's books, not whom he follows on Twitter.

Victoria
I couldn't agree more. I believe people in general spend way too much time reading articles from links instead of books. Just think how much time someone puts into an article or blog post (usually trying to indirectly sell something) vs. the months it takes to research and write a book. Plus Taleb is incredibly intelligent and a very deep thinker.

Read books not blogs!

JJF

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arcticpineapplecorp.
Posts: 3332
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Re: 'Smart money' bailing on the market, time to get out?

Post by arcticpineapplecorp. » Tue Oct 23, 2018 4:56 pm

So one has to either be all in the market 100% or all out of the market 100%? Is that how it works? I mean if you're saying "time to get out" then that means you should leave absolutely nothing in the market and go 100% to cash.

Well, go ahead and follow their advice if you feel it's best.

Then wait for the time when they tell you to get back in the market (like 100%???)

Then compare your returns with how the market did over the same time period.

Which did better?

Sounds like more work than you're probably willing to do, right?

That's why you should have a predetermined mix of assets (risky and safe) and just stay the course. That way you don't have to get out or get in.

What's the result? Take the following example:

Say you're 50/50 stocks/bonds and the stock market drops 20%. Now what do you have?

44/56 stocks/bonds

What do you have to do?

Either/or buy stocks (with new money invested) until you get them back to 50/50 and/or exchange bonds for stocks.

Either way, you're doing what you're supposed to:
1. maintaining an asset allocation
2. buying low (and selling high when the inverse occurs)

Doesn't that sound better than screaming like chicken little "The sky's falling!! Everybody get out of the market!!"
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Cycle
Posts: 757
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Re: Smart money bailing on the market, time to get out?

Post by Cycle » Tue Oct 23, 2018 5:42 pm

steve321 wrote:
Tue Oct 23, 2018 6:41 am
Cycle wrote:
Tue Oct 23, 2018 6:14 am

historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
so how do you know that? How will they move around? And if you are confident of that, do you still invest in EFTs that include the stocks of automobile companies?
It's not that hard to extrapolate. Waymo will have fully autonomous (no safety driver) taxis in service this year, like next month. They'll then scale across the US the next few years. Waymo doesn't build their own vehicles, just their hardware/software.

This is bogleheads, I own the full market regardless of what i think may happen with individual companies.

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Cycle
Posts: 757
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Location: USA

Re: Smart money bailing on the market, time to get out?

Post by Cycle » Tue Oct 23, 2018 5:56 pm

Nicolas wrote:
Tue Oct 23, 2018 11:46 am
Cycle wrote:
Tue Oct 23, 2018 6:14 am
historically people owned cars. no city dweller (by no I mean 99%) will own a personal vehicle in 10 years. You won't be able to drive the rolls rice off the track unless you install self driving capabilities.
Collectors will still want them even if they can't drive them. I've been looking at Jaguar Type-E but at $200K+ never going to happen. Such a beautiful car.
I used to read motor trend / car & driver, and I would drool over photos of classic cars. I enjoyed doing my own car repairs. I would configure cars on the internet just for fun, or peruse used cars on cars.com even though I didn't need a new one.

When I stopped driving, all cars started to look equivalent. They are all just cars. Maybe your experience will be different. You'll find out.

edgeagg
Posts: 105
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Location: WA-US

Re: 'Smart money' bailing on the market, time to get out?

Post by edgeagg » Tue Oct 23, 2018 6:10 pm

This is bogleheads. Most of our IPs tell us to go back to our well-earned naps since our IP dont' generally say: "Take clickbait like ZH seriously"

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