Who's buying today? where's all the "dry powder" folks at? :)

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letsgobobby
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by letsgobobby » Mon Dec 24, 2018 1:36 pm

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by bargainhuntingking » Mon Dec 24, 2018 1:49 pm

letsgobobby wrote:
Mon Dec 24, 2018 1:36 pm
veggivet wrote:
Mon Dec 24, 2018 1:08 pm
You're probably right, but I did some buying already earlier this month so I'm OK with waiting til things settle down...I don't think we've seen a capitulation yet.
In 2007-09 I went from 25% stocks to 70% stocks by buying in 5-10% chunks every couple of months, but especially heavy in Jan 08, Jul 08, Oct 08, Nov 08, Feb 09, Mar 09, and May 09. It’s a bad strategy to wait for THE bottom as you’re highly likely to miss it. Just be happy enough with getting your stocks on sale.
That's quite a change to your equity allocation! What prompted the change?

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Artsdoctor
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Artsdoctor » Mon Dec 24, 2018 1:53 pm

The "dry powder folks" are waiting until it's time to rebalance. Hopefully, those moments have been described in detail in one's IPS, and not subject to emotion.

I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."

letsgobobby
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by letsgobobby » Mon Dec 24, 2018 1:59 pm

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jstatton
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by jstatton » Mon Dec 24, 2018 2:17 pm

Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
The "dry powder folks" are waiting until it's time to rebalance. Hopefully, those moments have been described in detail in one's IPS, and not subject to emotion.

I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
That is herd mentality. Everyone is afraid of catching the falling knife. Everyone is trying to be greedy and their instinct is to wait to buy at lower prices.

The blade of the falling knife is extremely narrow, especially at the lows. You will *not* time the tip of that knife.

Buy along the blade of the falling knife when the panic is maximum. average down and average up along that blade.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by theplayer11 » Mon Dec 24, 2018 2:19 pm

Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
The "dry powder folks" are waiting until it's time to rebalance. Hopefully, those moments have been described in detail in one's IPS, and not subject to emotion.

I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
I'm catching that falling knife with every 5% drop from here. The pain will be short lived IMO

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by billy269 » Mon Dec 24, 2018 2:58 pm

Yep, putting a chunk in on Wednesday. Seems like a fake drop and a sale to me short term. But an actual 40-50% crash I think is likely in the next few years under current policies.

International and emerging are ridiculously cheap, but they have been for quite some time and may get cheaper... As a relatively young investor, makes me wonder if my non US allocation should be 40-50% instead of 35%. Isn't foreign bound to make a come back in the next 30 years after how long it's lagged the US?
theplayer11 wrote:
Mon Dec 24, 2018 2:19 pm
Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
The "dry powder folks" are waiting until it's time to rebalance. Hopefully, those moments have been described in detail in one's IPS, and not subject to emotion.

I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
I'm catching that falling knife with every 5% drop from here. The pain will be short lived IMO

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by willthrill81 » Mon Dec 24, 2018 3:12 pm

billy269 wrote:
Mon Dec 24, 2018 2:58 pm
Yep, putting a chunk in on Wednesday. Seems like a fake drop and a sale to me short term.
I can't help but believe the same thing. Virtually all of the economic fundamentals are still solid, inflation is under control, etc. I suspect that this will turn into 1987's market (i.e. precipitous drop followed by a swift recovery). It's possible that the market anticipated significantly greater economic growth than has materialized, though why people would think we could be much better off economically than we are now is beyond me, and that the current selloff is a result of that.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by munemaker » Mon Dec 24, 2018 3:23 pm

Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
Yes, and also the term "dead cat bounce."

Image

atfish
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by atfish » Mon Dec 24, 2018 3:25 pm

i am waiting till there is blood in the street and newspapers have headlines that show nothing but doom and gloom for the stock market.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by bubbadog » Mon Dec 24, 2018 3:29 pm

I bought some S&P 500 today.

I didn't have a lot of "dry powder" lying around, just a little excess funds in my checking account.

:beer

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by DrGoogle2017 » Mon Dec 24, 2018 3:30 pm

letsgobobby wrote:
Mon Dec 24, 2018 1:36 pm
veggivet wrote:
Mon Dec 24, 2018 1:08 pm
You're probably right, but I did some buying already earlier this month so I'm OK with waiting til things settle down...I don't think we've seen a capitulation yet.
If you’re going to be a tactical asset allocation / market timer you’re going to have to get comfortable with buying before the capitulation. Waiting for THE bottom is likely to leave your hands cut-free, but holding an empty bag.

In 2007-09 I went from 25% stocks to 70% stocks by buying in 5-10% chunks every couple of months, but especially heavy in Jan 08, Jul 08, Oct 08, Nov 08, Feb 09, Mar 09, and May 09. It’s a bad strategy to wait for THE bottom as you’re highly likely to miss it. Just be happy enough with getting your stocks on sale.

Think of today as the after Christmas sale, two days early.

Waterfalling into the close, at multi-year lows, and reasonable valuations - yeah, I’m happy with that. If prices go lower next month, I’ll be happy buying then, too.
That’s my plan. I did a bit of nibbling today. Got VTI at 120.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Artsdoctor » Mon Dec 24, 2018 3:32 pm

munemaker wrote:
Mon Dec 24, 2018 3:23 pm
Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
Yes, and also the term "dead cat bounce."

Image
Yes, this is equally as descriptive. It's just that sometimes you might be talking to a cat lover, and it doesn't go over very well.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by jeffyscott » Mon Dec 24, 2018 4:00 pm

letsgobobby wrote:
Mon Dec 24, 2018 1:59 pm
My IPS is PE10 valuation based. As of Next week PE10 will be within the range again I should be back to 60-65% stocks.
What range, is it not still rather high at ~26?
Time is your friend; impulse is your enemy. - John C. Bogle

sambb
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by sambb » Mon Dec 24, 2018 4:20 pm

im slowly adding as market declines.. missed adding in 2008. Going to add now. Dont need the money for 10 years

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by noraz123 » Mon Dec 24, 2018 4:23 pm

I harvested losses selling total stock market and buying S&P 500.

Come next week, I'll be putting backdoor Roth IRA contributions to work. Hopefully not too much of a rebound between now and then. 😊

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by noraz123 » Mon Dec 24, 2018 4:23 pm

I harvested losses selling total stock market and buying S&P 500.

Come next week, I'll be putting backdoor Roth IRA contributions to work. Hopefully not too much of a rebound between now and then. 😊

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by squirm » Mon Dec 24, 2018 4:27 pm

sambb wrote:
Mon Dec 24, 2018 4:20 pm
im slowly adding as market declines.. missed adding in 2008. Going to add now. Dont need the money for 10 years
But the market is three times higher in price today.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Bacchus01 » Mon Dec 24, 2018 4:30 pm

Harvesting losses and holding until Jan 2 when I will start plowing back in via 529s, Backdoor ROTH and HSAs. 401K and def comp will also kick back in to the tune of 24% of gross pay and, after paying property tax bills end of January, will put bonus dollars to work and after tax starting in March.

Just like every year.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by are_cynic » Mon Dec 24, 2018 4:37 pm

Just shifted one of our Roth’s from 90/10 to 100/0; if we get another 10% drop might shift the other to 100/0 as well.
"Invert, always invert" ~Carl Jacobi

letsgobobby
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by letsgobobby » Mon Dec 24, 2018 4:54 pm

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by jeffyscott » Mon Dec 24, 2018 5:26 pm

letsgobobby wrote:
Mon Dec 24, 2018 4:54 pm
jeffyscott wrote:
Mon Dec 24, 2018 4:00 pm
letsgobobby wrote:
Mon Dec 24, 2018 1:59 pm
My IPS is PE10 valuation based. As of Next week PE10 will be within the range again I should be back to 60-65% stocks.
What range, is it not still rather high at ~26?
2008 real earnings of $17 will drop out on Jan 1, allowing E10 to go up by about 10%, so PE10 will fall by about the same. Anything under 25 I consider to be non actionable and I should be at my baseline range.
Shiller's data is monthly, so it seems to me there would be a monthly change rather than all of 2008 dropping off at once.

But using his spread sheet and filling in the missing months, under an assumption of no change in current earnings and no change in the S&P 500 price, I do see it would be 24.9 as of Jan. Is that how you are looking at it?
Time is your friend; impulse is your enemy. - John C. Bogle

letsgobobby
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by letsgobobby » Mon Dec 24, 2018 5:41 pm

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DanMahowny
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by DanMahowny » Mon Dec 24, 2018 5:57 pm

Lots and lots of dry power here. It will remain dry powder for some time.

This downturn is going to be very long. We are going LOW.

Of course, there will be lots of relief rallies followed by further declines.

Dow 16,000 before I consider adding any equities.
Funding secured

letsgobobby
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by letsgobobby » Mon Dec 24, 2018 6:12 pm

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sambb
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by sambb » Mon Dec 24, 2018 6:35 pm

squirm wrote:
Mon Dec 24, 2018 4:27 pm
sambb wrote:
Mon Dec 24, 2018 4:20 pm
im slowly adding as market declines.. missed adding in 2008. Going to add now. Dont need the money for 10 years
But the market is three times higher in price today.
yes, didnt have the income back then to add, now i do

Elysium
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Elysium » Mon Dec 24, 2018 6:37 pm

letsgobobby wrote:
Mon Dec 24, 2018 6:12 pm
Anything’s possible.

Usually stocks need a reason to collapse 50%; something beyond overvaluation alone. In 2000 we had a tech bubble - ill-considered capital deployment in money losing companies - which led to a credit contraction and stock collapse. The fed responded with a ton of liquidity which pumped up real estate and stocks and led to capital deployment in junk real estate, 125% LTV mortgages, and derivatives worth less than the paper they were printed on. The market and economy almost collapsed. Cue QE1, 2, 3, infinity.

But this time there is no obvious major economic imbalance. Large federal deficits, student loan bubbles, junk car loans, check, check, check. But none of them seem likely to bring the economy down in the short run. I just don’t see exactly what could bring on a 50% decline from 26,000 (another 40% from here) to 13,000. Meanwhile small value is down almost 30%. EM, International not much less. Trade restrictions are hurting some of those companies but further declines would signal secular changes in the pattern of free trade around the world - and while that’s possible, why would the stock market react so violently to that possibility just in the last 4-8 weeks? What did it figure out now that it didn’t know before?

I’m not expecting liftoff, but I’ve been contentedly tactically reallocating to stocks out of fixed income for the last couple of weeks.
What did it discover in last 4-8 weeks that it didn't know before? That is the question.

One possibility is that there was an irrational exuberance in 2017, which it has now discovered was misplaced, so that is getting corrected back to 2016 levels. Perhaps, market has discovered the risks that were present, that it overlooked, and went partying like drunks all of 2017. What was the reason for that exuberance? I have not figured it out, except some optimism about tax cuts and deregulations fueling the economy. Perhaps market figured out there are other negatives like trade wars and political instability cancelling out any potential benefits. Therfore going back to zero out everything. If this is true, then we should expect S&P 500 dropping back to mid 2016 levels before recovery.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by AlphaLess » Mon Dec 24, 2018 6:47 pm

hdas wrote:
Thu Dec 20, 2018 3:17 pm
Yes, VIX near 30 is a great opportunity to add. :greedy
What about 35, 40, 45, 50?
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by AlphaLess » Mon Dec 24, 2018 6:49 pm

letsgobobby wrote:
Mon Dec 24, 2018 6:12 pm
Anything’s possible.

Usually stocks need a reason to collapse 50%; something beyond overvaluation alone. In 2000 we had a tech bubble - ill-considered capital deployment in money losing companies - which led to a credit contraction and stock collapse.
How about 20161108 reasons?
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by jcar » Mon Dec 24, 2018 7:00 pm

I bought Altria Friday and again today. A wide moat company with a continuous growing dividend.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by jeffyscott » Mon Dec 24, 2018 7:04 pm

letsgobobby wrote:
Mon Dec 24, 2018 5:41 pm
I’m using the multpl data and I think for the author’s PE10 data, P is taken daily but the E is only annual:

http://www.multpl.com/shiller-pe/faq

http://www.multpl.com/s-p-500-earnings/
It appears to me that earnings figures may be updated monthly there too, based on table here: http://www.multpl.com/s-p-500-earnings/table?f=m

Figures there are close to those on Shiller's spreadsheet.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Chuffly » Mon Dec 24, 2018 7:12 pm

letsgobobby wrote:
Mon Dec 24, 2018 6:12 pm
Anything’s possible.

Usually stocks need a reason to collapse 50%; something beyond overvaluation alone. In 2000 we had a tech bubble - ill-considered capital deployment in money losing companies - which led to a credit contraction and stock collapse. The fed responded with a ton of liquidity which pumped up real estate and stocks and led to capital deployment in junk real estate, 125% LTV mortgages, and derivatives worth less than the paper they were printed on. The market and economy almost collapsed. Cue QE1, 2, 3, infinity.

But this time there is no obvious major economic imbalance. Large federal deficits, student loan bubbles, junk car loans, check, check, check. But none of them seem likely to bring the economy down in the short run. I just don’t see exactly what could bring on a 50% decline from 26,000 (another 40% from here) to 13,000. Meanwhile small value is down almost 30%. EM, International not much less. Trade restrictions are hurting some of those companies but further declines would signal secular changes in the pattern of free trade around the world - and while that’s possible, why would the stock market react so violently to that possibility just in the last 4-8 weeks? What did it figure out now that it didn’t know before?

I’m not expecting liftoff, but I’ve been contentedly tactically reallocating to stocks out of fixed income for the last couple of weeks.
I think this is a pretty good assessment.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by JonnyDVM » Mon Dec 24, 2018 7:22 pm

willthrill81 wrote:
Mon Dec 24, 2018 3:12 pm
billy269 wrote:
Mon Dec 24, 2018 2:58 pm
Yep, putting a chunk in on Wednesday. Seems like a fake drop and a sale to me short term.
I can't help but believe the same thing. Virtually all of the economic fundamentals are still solid, inflation is under control, etc. I suspect that this will turn into 1987's market (i.e. precipitous drop followed by a swift recovery). It's possible that the market anticipated significantly greater economic growth than has materialized, though why people would think we could be much better off economically than we are now is beyond me, and that the current selloff is a result of that.

Don’t see a quick turnaround as likely. My dry powder continues to bake at Ally. I am in no hurry to cash it out and jam it into the market. When the bonus is paid I’ll buy. If I had to bet I’d say this knife isn’t nearly done falling. TLH and rebalance in the meantime.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by hdas » Mon Dec 24, 2018 7:23 pm

AlphaLess wrote:
Mon Dec 24, 2018 6:47 pm
hdas wrote:
Thu Dec 20, 2018 3:17 pm
Yes, VIX near 30 is a great opportunity to add. :greedy
What about 35, 40, 45, 50?
Yes, you have to work your way in. One is also reminded of the mentor-friend words: "make sure you don't get in over your head". Thanks for keeping one's in check. :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by pascalwager » Mon Dec 24, 2018 7:29 pm

I bought back in today (retiree). I was out of the market for a few days during a large account exchange which probably avoided some losses. So this was my first re-balance (50/38/12) since the correction begin.

In 2008, most of my portfolio was with an investment company. They never suggested any "dry-powder" rebalancing, but did re-balance quarterly. And I followed the same rebalancing schedule with my workplace account.

In the past few years I think I gained about $200k and now gave it back.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by dratkinson » Mon Dec 24, 2018 8:13 pm

Checked yesterday (Sunday) and noted market closed 3hrs early today (Monday). So set alarm to awaken early. Phone hold time was short. Bought VTSAX with VWLUX TLH proceeds and left over excess cash from not rebalancing at the first of this month.

Will see how it goes at next month's rebalancing.



I liked the above analogy of buying along the knife edge. Will just do it with what new money is available at monthly rebalancing as I've learned that I'd prefer to not spend into the last tier of my EFs. Might need it for something else.

In theory I'd earmarked VWIUX (IT national muni) for multiple roles: last/largest tier of my formal EFs, home projects, new car, dry powder fund. But in practice, I'm learning that I'd rather save it for things other than dry powder.

"In theory, theory and practice are the same. In practice, they are not." --Attributed to multiple people.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by reginekierkegaard » Mon Dec 24, 2018 8:19 pm

lxr184 wrote:
Thu Dec 20, 2018 6:33 pm
I've been buying the dips and will continue to do so. I am a recovering market timer who pulled out of the market too early and missed out on some major gains. These recent declines are enabling me to essentially "time travel" and fix my past mistakes. The lower it goes, the further back in time I can go. If S&P 500 hits 2000, I would go all in.
I too have sinned. I am a market timer. I have a 'funny money account' outside the pension. Instead of DCA in, I tried to 'buy the dip'.
I have a 100% equity, 'funny money account'.

I am running out of tax free allowance for this tax year. I will use the last of my allowance after Xtmas, to 'buy the dip' one last time! I will buy again when the next tax year is due. Of course, I am tempted to buy more if it drops further but I don't want to pay taxes.

I have a 100% equity portfolio. On a second thought, I will deploy some 'tactical allocation' in the next bull market.
At peak market, maintain 80/20 (Equity/ bonds)
At correction (10% loss), 85/15
In a bear market (20% loss) 90/10
At 30% loss, 95/5
At 40% loss, return to 100% equity.

At 50% - 80% loss, forget about the share market, prepare a 'bug out' location, stock up a 'bug out sailing boat', pile up food, drinking water, weapons and ammunitions.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by munemaker » Mon Dec 24, 2018 8:21 pm

Artsdoctor wrote:
Mon Dec 24, 2018 3:32 pm
munemaker wrote:
Mon Dec 24, 2018 3:23 pm
Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
Yes, and also the term "dead cat bounce."
Yes, this is equally as descriptive. It's just that sometimes you might be talking to a cat lover, and it doesn't go over very well.
It is a common investing term. I didn't invent it. Presumably the cat was dead before it bounced.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by rongos » Mon Dec 24, 2018 9:32 pm

Be careful out there.

You can't be sure that this isn't Japan 1989. Nearly 30 years, and they haven't bounced all the way back.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by smectym » Mon Dec 24, 2018 11:40 pm

For the next “March 9, 2009” buying opportunity (SPX 666) we may have to wait. But all things come to those who wait, so take heart

Smectym

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Doom&Gloom » Tue Dec 25, 2018 1:09 am

munemaker wrote:
Mon Dec 24, 2018 8:21 pm
Artsdoctor wrote:
Mon Dec 24, 2018 3:32 pm
munemaker wrote:
Mon Dec 24, 2018 3:23 pm
Artsdoctor wrote:
Mon Dec 24, 2018 1:53 pm
I'm betting that the "dry powder folks" are also familiar with the term, "catching a falling knife."
Yes, and also the term "dead cat bounce."
Yes, this is equally as descriptive. It's just that sometimes you might be talking to a cat lover, and it doesn't go over very well.
It is a common investing term. I didn't invent it. Presumably the cat was dead before it bounced.
No cats were harmed in the bouncing of this market.

Never mind. This market hasn't even bounced yet so all cats are quite safe--including my own two.

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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by mmcmonster » Tue Dec 25, 2018 7:35 am

I'm saving up to put $$$ in the kids 529 plan in January. So I'll be buying a chunk on 20190101.

Also, I've got some cash vesting out of a 457(f) that I'll get in my first January paycheck. I'll be buying more as soon as that lands. All rebalancing towards my set allocation strategy. (68% stock/32% bonds (age-15%))

RobLyons
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by RobLyons » Tue Dec 25, 2018 8:37 am

Recently transferred all assets from another Roth IRA to Vanguard. Currently on a shopping spree!
"Great parenting sets the foundation for a better world"

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TheTimeLord
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by TheTimeLord » Tue Dec 25, 2018 10:08 am

F150HD wrote:
Thu Dec 20, 2018 3:15 pm
I just did....will hit at market close. Money won't be needed for 20+ years, so, why not.

Any insight or tips? Do many try to 'wait' for bottom? or buy on the way back up? (whenever that may be)

Not market timing, just buying on sale. :moneybag
From my perspective being a somewhat "Dry Powder" guy because I am FI, in what to me was an obviously downward trending market it doesn't start to get interesting until at 15% and probably would/did start nibbling around 20%. I mean why buy if it looks like there might be further markdowns? On the other hand if I were in the accumulation phase I would stick to my plan or regular purchases and rebalancing.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

Greg in Idaho
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by Greg in Idaho » Tue Dec 25, 2018 10:29 am

letsgobobby wrote:
Mon Dec 24, 2018 6:12 pm

Usually stocks need a reason to collapse 50%; something beyond overvaluation alone.

I just don’t see exactly what could bring on a 50% decline from 26,000 (another 40% from here) to 13,000.
Curious WHEN we became fully aware of the reasons for the last big drops

workerbeeengineer
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by workerbeeengineer » Tue Dec 25, 2018 11:01 am

staythecourse wrote:
Sun Dec 23, 2018 12:40 pm
Okay... So the BHB and BSB studies showed by looking at the top 100 or so pension funds which have access to the top money managers on Wall Street which all use proprietary algorithm by folks with double masters from MIT, Princeton, and Yale as their grunt workers trading at nanosecond speeds ALL against each other ended with a NEGATIVE value added for active management via security selection AND market timing. Knowing ALL of this there are folks who are not in finance, don't have access to all the available information (public or insider) using some random valuation points they came up with in about 1-2 days by reviewing data that has been combed through for DECADES think they are going to produce alpha market timing by buying on the dips when the top echelon folks couldn't do it?

Does this make any sense?

Good luck.
staythecourse, I've been wondering about those top 100 or so pension funds and all the smart Wall Street types in general. I can certainly understand that with Fed rate increases and trade uncertainties, that future expectations for equities might well be lowered. Where I have trouble is understanding how it works in practical terms for the "smart money"? How do the geniuses decide how much to lower those future expectations? At what point do they throw in the towel and sell (which apparently most of them are doing now)? I guess it's all in the proprietary algorithms you mention. If we are talking about pension funds or endowments with multiple decades to infinite time horizon, why be selling at all? This does not seem to be in the best interests of the beneficiaries of those funds/ endowments. How much of this selloff can be explained by a bunch of smart money managers all trying to lock in their yearly bonus by being the first out the door?

letsgobobby
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by letsgobobby » Tue Dec 25, 2018 11:06 am

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Last edited by letsgobobby on Mon Apr 22, 2019 2:27 am, edited 1 time in total.

staythecourse
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by staythecourse » Tue Dec 25, 2018 11:12 am

workerbeeengineer wrote:
Tue Dec 25, 2018 11:01 am
staythecourse wrote:
Sun Dec 23, 2018 12:40 pm
Okay... So the BHB and BSB studies showed by looking at the top 100 or so pension funds which have access to the top money managers on Wall Street which all use proprietary algorithm by folks with double masters from MIT, Princeton, and Yale as their grunt workers trading at nanosecond speeds ALL against each other ended with a NEGATIVE value added for active management via security selection AND market timing. Knowing ALL of this there are folks who are not in finance, don't have access to all the available information (public or insider) using some random valuation points they came up with in about 1-2 days by reviewing data that has been combed through for DECADES think they are going to produce alpha market timing by buying on the dips when the top echelon folks couldn't do it?

Does this make any sense?

Good luck.
staythecourse, I've been wondering about those top 100 or so pension funds and all the smart Wall Street types in general. I can certainly understand that with Fed rate increases and trade uncertainties, that future expectations for equities might well be lowered. Where I have trouble is understanding how it works in practical terms for the "smart money"? How do the geniuses decide how much to lower those future expectations? At what point do they throw in the towel and sell (which apparently most of them are doing now)? I guess it's all in the proprietary algorithms you mention. If we are talking about pension funds or endowments with multiple decades to infinite time horizon, why be selling at all? This does not seem to be in the best interests of the beneficiaries of those funds/ endowments. How much of this selloff can be explained by a bunch of smart money managers all trying to lock in their yearly bonus by being the first out the door?
I'm not in finance, but my not so humble opinion is right or wrong they really do feel they can add value by active management DESPITE the data. Keep in mind the studies (great read if you haven't done it) OVERALL have shown negative alpha for active management, but does not mean that there weren't money managers that did produce positive alpha. So if you asked the big shots they will say they EACH feel they are the ones who could produce the positive alpha in the next study and it is the other guys who can't.

The guys at UC Santa Barbara (Odean and Barber I believe) in their studies have shown over and over again overconfidence leading to the worst investing perforrmance comes from males with high levels of education. No surprise most of the big money managers out there are males with high level of education.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

marcopolo
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by marcopolo » Tue Dec 25, 2018 11:13 am

letsgobobby wrote:
Tue Dec 25, 2018 11:06 am
Greg in Idaho wrote:
Tue Dec 25, 2018 10:29 am
letsgobobby wrote:
Mon Dec 24, 2018 6:12 pm

Usually stocks need a reason to collapse 50%; something beyond overvaluation alone.

I just don’t see exactly what could bring on a 50% decline from 26,000 (another 40% from here) to 13,000.
Curious WHEN we became fully aware of the reasons for the last big drops
How many 20+% drops have there been in recent memory? 2007-09, 2000-02, 1987 , 1980-82, 1973-74 are the ones that come to mind. In every case but 1987 I'd say the reasons for the decline were obvious even in real time.
So many people say that in hindsight. The actual data show that it is practically impossible to do so in any reliable way, unless you also ignore all the false positives.
Once in a while you get shown the light, in the strangest of places if you look at it right.

staythecourse
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Re: Whose buying today? where's all the "dry powder" folks at? :)

Post by staythecourse » Tue Dec 25, 2018 11:15 am

letsgobobby wrote:
Tue Dec 25, 2018 11:06 am
Greg in Idaho wrote:
Tue Dec 25, 2018 10:29 am
letsgobobby wrote:
Mon Dec 24, 2018 6:12 pm

Usually stocks need a reason to collapse 50%; something beyond overvaluation alone.

I just don’t see exactly what could bring on a 50% decline from 26,000 (another 40% from here) to 13,000.
Curious WHEN we became fully aware of the reasons for the last big drops
How many 20+% drops have there been in recent memory? 2007-09, 2000-02, 1987 , 1980-82, 1973-74 are the ones that come to mind. In every case but 1987 I'd say the reasons for the decline were obvious even in real time.
Are you sure about that? Please link specific major articles posted the day before the falls that they were going to happen. It always seems obvious there is a correlation with x AFTER the fact. Is there fundamental changes the day before the falls that weren't there 2 days before the fall?

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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