So bottom is probably behind us....right?

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Noobvestor
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Re: So bottom is probably behind us....right?

Post by Noobvestor » Fri Mar 27, 2020 12:03 pm

Hogan773 wrote:
Fri Mar 27, 2020 7:44 am
Noobvestor wrote:
Thu Mar 26, 2020 10:14 pm
potatopancake wrote:
Thu Mar 26, 2020 10:10 pm
Noobvestor wrote:
Thu Mar 26, 2020 10:06 pm
Now assume that what you saw turns out to be temporary - like the tourist town in the off season, or shutting down to go on vacation together for a few weeks. Would that change your view at all? I'm playing Devil's advocate here, but I'm still unable to reconcile 'shutting down for a while' with '2/3 of business value wiped out around the entire world' (which would seem to align with your estimation of a 60%+ level crash).
This post was perfectly timed. This is exactly why the market has yet to bottom out. There is no way, absolutely no way that we will be returning to normal in a few weeks. Italy started a national lockdown 17 days ago and their death/day has not peaked. The USA has no national lockdown. We are nowhere near the peak. And, life will not return to normal with the snap of a finger. We will re-integrate slowly. Or we will integrate partway while waiting for a vaccine. Given our understanding of covid-19 R0, 50% of population needs immunity to reach herd immunity. That means that > 300 million people get sick or get the vaccine (or some combination of the two). This is not a three week event. The market, as I said above, has not priced that hurt in.
OK, replace weeks with months. Shut down non-essential business for 6 months. Let's say half the economy. Worldwide. And Corona persists, ebbs and flows. Terrible for earnings, but life goes on. I'm wondering how that translates into a permanent global loss on the scale being suggested.
Why "permanent"?

If it were permanent then I would think the market losses would be even worse than a down 50pct scenario

I am also in the camp that it is hard to believe that a 20pct down is all that is needed for this shock. You could use the same analogy for prior shocks...it was only some bad mortgage loans and credit default swaps and once we get through that quickly then no reason we won't go higher
I was younger (but invested) in 08/09. Things were crazy. Not the same kind of crazy, but still pretty wild. Watching big banks teeter on the brink (you know, those institutions that hold all the money) was just kind of eye-popping. There was a sense that capitalism itself was under threat.

Now, things are crazy in a different way - yes, we've never seen this level of (self-)quarantine before, and yes a lot of small businesses are under threat, and sectors/segments like the hospitality industry, but it seems clear the government is going to prop things up, come what may.

I'm just an observer here, and was in a different life phase at the time, so take it all for what you will, but to me, so far at least, even with the most dire prognostications, I don't see the same challenges this time around. As things get threatened, money gets printed.

Also, for clarity: we went down (I believe it was around) 30% so far to hit the latest (perhaps first of multiple) bottom, not 20%.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

Lee_WSP
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Re: So bottom is probably behind us....right?

Post by Lee_WSP » Fri Mar 27, 2020 12:46 pm

birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.

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birdog
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Re: So bottom is probably behind us....right?

Post by birdog » Fri Mar 27, 2020 1:04 pm

Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.

keelerjr12
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Re: So bottom is probably behind us....right?

Post by keelerjr12 » Fri Mar 27, 2020 1:06 pm

birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.

Lee_WSP
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Re: So bottom is probably behind us....right?

Post by Lee_WSP » Fri Mar 27, 2020 1:10 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
Because betting against the market just leaves a sinking feeling in our collective guts. Therefore wishing for a short seller to faceplant is kind of like wishing for someone who does bad things to get his comeuppance.

The difference in this case is that shorting the market is not at all evil, at worst, it is just greedy.

keanoz
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Re: So bottom is probably behind us....right?

Post by keanoz » Fri Mar 27, 2020 1:15 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
This!

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birdog
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Re: So bottom is probably behind us....right?

Post by birdog » Fri Mar 27, 2020 1:15 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.

keelerjr12
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Re: So bottom is probably behind us....right?

Post by keelerjr12 » Fri Mar 27, 2020 1:24 pm

birdog wrote:
Fri Mar 27, 2020 1:15 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am


Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”

If you’re than unhappy with the market going down then time it. It’s naive to assume that it will only ever go up.

So since you’re all about ethics, how do you feel about stock buybacks?

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birdog
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Re: So bottom is probably behind us....right?

Post by birdog » Fri Mar 27, 2020 1:30 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:24 pm
birdog wrote:
Fri Mar 27, 2020 1:15 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm


We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”
I certainly never said that. His plan, if successful, involves millions of peoples' retirement accounts losing money. I therefore hope his plan fails. My statement is as simple as that.

keelerjr12
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Re: So bottom is probably behind us....right?

Post by keelerjr12 » Fri Mar 27, 2020 1:32 pm

birdog wrote:
Fri Mar 27, 2020 1:30 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:24 pm
birdog wrote:
Fri Mar 27, 2020 1:15 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm


Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”
I certainly never said that. His plan, if successful, involves millions of peoples' retirement accounts losing money. I therefore hope his plan fails. My statement is as simple as that.
But if they’re truly buy and hold and the market returns, how have they lost money? Not only that, if they keep DCAing, they are actually better off! Don’t believe me? Do the math.

And I never said you said that, I said “you give off”...

Lee_WSP
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Re: So bottom is probably behind us....right?

Post by Lee_WSP » Fri Mar 27, 2020 1:34 pm

birdog wrote:
Fri Mar 27, 2020 1:30 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:24 pm
birdog wrote:
Fri Mar 27, 2020 1:15 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm


Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”
I certainly never said that. His plan, if successful, involves millions of peoples' retirement accounts losing money. I therefore hope his plan fails. My statement is as simple as that.
It actually doesn't. People will only lose that money if they sell on that day. And since at least 90% of 401k ers are B&H ers, this too shall pass.

keelerjr12
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Re: So bottom is probably behind us....right?

Post by keelerjr12 » Fri Mar 27, 2020 1:35 pm

Lee_WSP wrote:
Fri Mar 27, 2020 1:34 pm
birdog wrote:
Fri Mar 27, 2020 1:30 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:24 pm
birdog wrote:
Fri Mar 27, 2020 1:15 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm


I’m confused why you’re hoping for someone to lose money.
Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”
I certainly never said that. His plan, if successful, involves millions of peoples' retirement accounts losing money. I therefore hope his plan fails. My statement is as simple as that.
It actually doesn't. People will only lose that money if they sell on that day. And since at least 90% of 401k ers are B&H ers, this too shall pass.
Thank you Lee_WSP. Succinct and correct.

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birdog
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Re: So bottom is probably behind us....right?

Post by birdog » Fri Mar 27, 2020 1:39 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:35 pm
Lee_WSP wrote:
Fri Mar 27, 2020 1:34 pm
birdog wrote:
Fri Mar 27, 2020 1:30 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:24 pm
birdog wrote:
Fri Mar 27, 2020 1:15 pm


Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”
I certainly never said that. His plan, if successful, involves millions of peoples' retirement accounts losing money. I therefore hope his plan fails. My statement is as simple as that.
It actually doesn't. People will only lose that money if they sell on that day. And since at least 90% of 401k ers are B&H ers, this too shall pass.
Thank you Lee_WSP. Succinct and correct.
I agree with you both that those that buy and hold will not be hurt and that those that DCA will actually improve their portfolios assuming a somewhat timely recovery. Not everyone will do this as evidenced by even people on this website posting how they've already panicked and did not stay the course.

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mrspock
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Re: So bottom is probably behind us....right?

Post by mrspock » Fri Mar 27, 2020 2:46 pm

Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .

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Re: So bottom is probably behind us....right?

Post by Waiting_for_Godot » Fri Mar 27, 2020 2:57 pm

mrspock wrote:
Fri Mar 27, 2020 2:46 pm
Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .
Another last second drop like Wednesday, something actionable that's coming out of all this is my desire to learn more about 'the market' ... who are the market movers and how many are there, what volume of trades determine the shift in prices, etc.

mptfan
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Re: So bottom is probably behind us....right?

Post by mptfan » Fri Mar 27, 2020 2:57 pm

birdog wrote:
Fri Mar 27, 2020 1:39 pm
I agree with you both that those that buy and hold will not be hurt and that those that DCA will actually improve their portfolios assuming a somewhat timely recovery.
I think those that buy at these levels will improve their portfolio even assuming an untimely recovery.

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mrspock
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Re: So bottom is probably behind us....right?

Post by mrspock » Fri Mar 27, 2020 4:04 pm

Waiting_for_Godot wrote:
Fri Mar 27, 2020 2:57 pm
mrspock wrote:
Fri Mar 27, 2020 2:46 pm
Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .
Another last second drop like Wednesday, something actionable that's coming out of all this is my desire to learn more about 'the market' ... who are the market movers and how many are there, what volume of trades determine the shift in prices, etc.
My interpretation of those moves is people covering leveraged long (bullish) positions/trades as they don’t want to hold overnight or over the weekend. It makes sense people are making these kinds of “bullish” bets after such a draw down.

We see the opposite of this in a bull market: “melt ups” when the shorts cover at the end of the day.

vipertom1970
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Re: So bottom is probably behind us....right?

Post by vipertom1970 » Fri Mar 27, 2020 4:14 pm

Wannaretireearly wrote:
Thu Mar 26, 2020 9:42 pm
vipertom1970 wrote:
Thu Mar 26, 2020 9:07 pm
Market already priced in next two quarters of unemployment and negative GDP so yes we found the bottom.
I hope so, but what are expectations for unemployment next two quarters and what is the expected negative GDP? That's the issue...first piece of economic data gave a 4X increase then any previous unemployment weekly number. Extrapolate that to the next 2 months and unemployment could/will be 10 million or above. I dont think the market is smart enough or fast enough to have all that priced in. I wish it did, I truly do...
Only 40% of big institutions had rebalanced their portfolios so the is 60% will eventually go back to equities when they starting to rebalance.

APX32
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Re: So bottom is probably behind us....right?

Post by APX32 » Fri Mar 27, 2020 4:48 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:35 pm
Lee_WSP wrote:
Fri Mar 27, 2020 1:34 pm
birdog wrote:
Fri Mar 27, 2020 1:30 pm
keelerjr12 wrote:
Fri Mar 27, 2020 1:24 pm
birdog wrote:
Fri Mar 27, 2020 1:15 pm


Why? He's hoping for American's with 401Ks (and other investment accounts) who are buy and hold to lose money. Hence he's shorting the market. I hope that everyone who bets against the stock market going up and American businesses' stock price prospering loses money! Not that confusing.
The difference is that when you short you don’t hold forever. You capitalize on your gains at some point. For people buying and holding, eventually the market will return and their 401ks will be fine. Furthermore, with the price going down, you can buy at an even lower price.

You give off more of the “you didn’t follow boglehead principles so I want you to lose to prove a point.”
I certainly never said that. His plan, if successful, involves millions of peoples' retirement accounts losing money. I therefore hope his plan fails. My statement is as simple as that.
It actually doesn't. People will only lose that money if they sell on that day. And since at least 90% of 401k ers are B&H ers, this too shall pass.
Thank you Lee_WSP. Succinct and correct.
There’s nothing wrong with what RayKeynes, myself, or others are doing with respect to these extreme moves in the markets. Money can be made both on the up and down side. Buying insurance or hedges with a small portion of your portfolio is completely different than establishing high levels of short positions in the markets and then hoping the markets tank so that you cash in.

In the latter scenario you’d indeed be betting against America and our economy as well as the well being of millions of people for the selfish reason of boosting your own bottom line. My only wish here is that we gain the upper hand in our fight against this virus and start returning to our normal lives.
8% SPY | 5% GLD | 87% Cash

rudeboy
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Re: So bottom is probably behind us....right?

Post by rudeboy » Fri Mar 27, 2020 4:52 pm

Just noticed that VT (Total World Stock) paid out dividends on 3/20 -- just a day short of the bottom before that 20% US run-up. 8-)

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bluquark
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Re: So bottom is probably behind us....right?

Post by bluquark » Sat Mar 28, 2020 12:07 pm

mrspock wrote:
Fri Mar 27, 2020 2:46 pm
Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .
Interesting. My deeply held gut feeling is that this week has been one big dead cat bounce, and over the past two days I have been fighting the strongest urge to sell I've ever felt.

The news on unemployment looks too dark to quickly recover from, and I expect rolling economic shutdowns over the next 12-18 months as the virus resurges intermittently.
Whereas after the latest runup it seems clear the market is projecting a quick V-shaped recession more than ever. It seems like an obvious winning move to sell today and buy back when the bottom is retested again after the market catches up with my understanding.

(But instead of trusting my judgment, I followed my IPS.)
70/30 portfolio | Equity: global market weight | Bonds: 20% long-term munis - 10% LEMB

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mrspock
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Re: So bottom is probably behind us....right?

Post by mrspock » Sat Mar 28, 2020 12:20 pm

bluquark wrote:
Sat Mar 28, 2020 12:07 pm
mrspock wrote:
Fri Mar 27, 2020 2:46 pm
Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .
Interesting. My deeply held gut feeling is that this week has been one big dead cat bounce, and over the past two days I have been fighting the strongest urge to sell I've ever felt.

The news on unemployment looks too dark to quickly recover from, and I expect rolling economic shutdowns over the next 12-18 months as the virus resurges intermittently.
Whereas after the latest runup it seems clear the market is projecting a quick V-shaped recession more than ever. It seems like an obvious winning move to sell today and buy back when the bottom is retested again after the market catches up with my understanding.

(But instead of trusting my judgment, I followed my IPS.)
Remember Mr. Market is a tarot card reader, not a data scientist. I’d say about 300 points ago all of that was nicely priced in. 50% drops are usually multi, multi (5+) year recoveries. I just don’t think that’s plausible with this situation, 18-24 months max. So the 32% decline seems a bit more reasonable.

So to paraphrase Yoda... who himself was a very successful Boglehead: “Buy or buy not, there is no sell.”

Lee_WSP
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Re: So bottom is probably behind us....right?

Post by Lee_WSP » Sat Mar 28, 2020 12:34 pm

I'm fairly certain we're in for a re-testing of the bottom, but 2200 intra-day/2250 close seems like as reasonably deep a bottom as any. I wouldn't surprised if we never hit it again, and I wouldn't be surprised if we go deeper down to 2100 either.

theorist
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Re: So bottom is probably behind us....right?

Post by theorist » Sat Mar 28, 2020 12:51 pm

mrspock wrote:
Fri Mar 27, 2020 2:46 pm
Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .
I am still trying to decide whether it is truly attractive yet, or whether to just keep up my biweekly purchases and wait for another shoe to drop (or a return to 34% down) before investing all discretionary funds I have sitting around. I might just compromise and invest weekly instead of biweekly, matching what goes in to retirement funds with taxable contributions every other week.

The people who talk about P/E ratios or P/E 10s — presumably using the projection of very low earnings for this year — don’t like what they see that much yet. On the other hand, assuming the E recovers at least to last years level soon, this has got to be a pretty significant improvement in valuations, and hence ** expected ** future returns over a several year period (emphasis on expected, not obviously to be realized...).

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mrspock
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Re: So bottom is probably behind us....right?

Post by mrspock » Sat Mar 28, 2020 2:35 pm

theorist wrote:
Sat Mar 28, 2020 12:51 pm
mrspock wrote:
Fri Mar 27, 2020 2:46 pm
Certainly starting to feel like a bottom under this thing. Calmer waters right now, bonds are almost back to even after this week. Pretty darn hard here to resist the urge to nibble at this thing :D .
I am still trying to decide whether it is truly attractive yet, or whether to just keep up my biweekly purchases and wait for another shoe to drop (or a return to 34% down) before investing all discretionary funds I have sitting around. I might just compromise and invest weekly instead of biweekly, matching what goes in to retirement funds with taxable contributions every other week.

The people who talk about P/E ratios or P/E 10s — presumably using the projection of very low earnings for this year — don’t like what they see that much yet. On the other hand, assuming the E recovers at least to last years level soon, this has got to be a pretty significant improvement in valuations, and hence ** expected ** future returns over a several year period (emphasis on expected, not obviously to be realized...).
I'm trying to take the attitude, that as a buy n' hold Boglehead I win no matter what. If valuations go down further, I'll buy up cheap (-50% is the next level I can buy again, rebalanced @ -32% already), or if they go back up, that's great too. As for how attractive, I actually keep a side spreadsheet which calculates the value of my portfolio once my shares return to "even", as I accumulate more through this it's nice to see that number go up pretty nicely. It helps me gauge potential gains as well as losses (which the mind does rather naturally on it's on). I also keep a graph which shows my potential return @ even:

Image

Image

This helps remind me of the opportunity, not just the risks when being faced with the decision to rebalance at various levels of market decline.

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bluquark
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Re: So bottom is probably behind us....right?

Post by bluquark » Sat Mar 28, 2020 3:13 pm

There's no elastic band pulling stocks back to "even" though. It merely can be expected to go back there someday because stocks slowly trend up. So there's nothing about a crash that automatically makes it a buying opportunity. It only means that, in useless hindsight, a month before the crash was an excellent selling opportunity.

For that reason my IPS says to go to a more aggressive AA when implied equity risk premium is unusually high, which means valuations look better *relative to earnings estimates*, and that therefore the market's risk aversion has changed. That might happen after some crashes (e.g. it was the case after the dot-com crash), but I see little reason to think it's the case now.
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watchnerd
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Re: So bottom is probably behind us....right?

Post by watchnerd » Sat Mar 28, 2020 3:16 pm

bluquark wrote:
Sat Mar 28, 2020 3:13 pm


For that reason my IPS says to buy when implied equity risk premium is unusually high, which means valuations look better *relative to earnings estimates*. That might happen after some crashes (e.g. it was the case after the dot-com crash), but I see little reason to think it's the case now.
+1

My IPS has an over-ride at -50% *valuation* decline to increase stock allocation by +10%.

That is not the same as a -50% price decline.
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Re: So bottom is probably behind us....right?

Post by adave » Sat Mar 28, 2020 4:24 pm

My feeling is that we really are not living in era of a free market system in the US. We have some sort of quasi-free market where very large corporations and industries will not be allowed to go under by the government. A better term is corporatism. We live in an era of corporatism, an era where large corporations have become so important that they are essentially backstopped by the politicians/fed/government. Sure, small and medium size companies will be continued to allowed to fail, but if you are one of the big and important dogs.... it isn't going to happen. Nobody really has the stomach for it any longer. Given this scenario, the best bet for us little guys, IMO, is to not get too scared of economic collapse and jump on the train and go along for the ride....

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watchnerd
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Re: So bottom is probably behind us....right?

Post by watchnerd » Sat Mar 28, 2020 4:26 pm

adave wrote:
Sat Mar 28, 2020 4:24 pm
My feeling is that we really are not living in era of a free market system in the US. We have some sort of quasi-free market where very large corporations and industries will not be allowed to go under by the government. A better term is corporatism. We live in an era of corporatism, an era where large corporations have become so important that they are essentially backstopped by the politicians/fed/government. Sure, small and medium size companies will be continued to fail, but if you are one of the big and important dogs.... it isn't going to happen. Nobody really has the stomach for it any longer. Given this scenario, the best bet for us little guys, IMO, is to not get too scared of economic collapse and jump on the train and go along for the ride....
Chrysler got bailed out in 1979.

It's not like this is new.
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adave
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Re: So bottom is probably behind us....right?

Post by adave » Sat Mar 28, 2020 4:29 pm

watchnerd wrote:
Sat Mar 28, 2020 4:26 pm
adave wrote:
Sat Mar 28, 2020 4:24 pm
My feeling is that we really are not living in era of a free market system in the US. We have some sort of quasi-free market where very large corporations and industries will not be allowed to go under by the government. A better term is corporatism. We live in an era of corporatism, an era where large corporations have become so important that they are essentially backstopped by the politicians/fed/government. Sure, small and medium size companies will be continued to fail, but if you are one of the big and important dogs.... it isn't going to happen. Nobody really has the stomach for it any longer. Given this scenario, the best bet for us little guys, IMO, is to not get too scared of economic collapse and jump on the train and go along for the ride....
Chrysler got bailed out in 1979.

It's not like this is new.
Sure, but now we are willing to bail out entire industries.... the banks back in 2008.... the airlines, Boeing, cruise ships soon....

Imagine if Wal-Mart or Amazon faced some externality which made it highly likely they would go bankrupt.... doubt the government would let it happen. Too many jobs lost, too much misery, too much fear of "domino effects" etc.

I am actually OK with this system, but I don't feel it is a free market. But who knows, maybe it is better this way? My only conclusion is that it is best for me to be a stock holder and go along for the ride.

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Re: So bottom is probably behind us....right?

Post by watchnerd » Sat Mar 28, 2020 4:34 pm

adave wrote:
Sat Mar 28, 2020 4:29 pm
My only conclusion is that it is best for me to be a stock holder and go along for the ride.
The downside is a potential reduction in the equity risk premium.
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Re: So bottom is probably behind us....right?

Post by adave » Sat Mar 28, 2020 4:39 pm

watchnerd wrote:
Sat Mar 28, 2020 4:34 pm
adave wrote:
Sat Mar 28, 2020 4:29 pm
My only conclusion is that it is best for me to be a stock holder and go along for the ride.
The downside is a potential reduction in the equity risk premium.
This is a good point. However, it seems a lot of people seem to believe that large corps or industries can still go bankrupt and cause a great depression. I just have a lot of doubt the government and Fed would ever allow it to happen.

I sometimes wonder if this is related to how so much in our modern times is tied to the stock market - executive comp now tied to stocks, stock options a major job perk to keep talent at companies, 401k replacing pensions and basically tying retirement savings to the market, HSA account can be invested in stocks etc....

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Re: So bottom is probably behind us....right?

Post by watchnerd » Sat Mar 28, 2020 4:44 pm

adave wrote:
Sat Mar 28, 2020 4:39 pm
I just have a lot of doubt the government and Fed would ever allow it to happen.
Ehhh?

Huge swaths of retail have gone bankrupt in the last decade.

Sears, Blockbuster, Forever 21, etc.

There are boundaries.
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Re: So bottom is probably behind us....right?

Post by adave » Sat Mar 28, 2020 4:55 pm

watchnerd wrote:
Sat Mar 28, 2020 4:44 pm
adave wrote:
Sat Mar 28, 2020 4:39 pm
I just have a lot of doubt the government and Fed would ever allow it to happen.
Ehhh?

Huge swaths of retail have gone bankrupt in the last decade.

Sears, Blockbuster, Forever 21, etc.

There are boundaries.
That's fair - perhaps individual names are not the best example, more like industry groups. But yes you make a good point that there are boundaries.... I feel the boundaries will continue to be pushed towards more industry bailouts. One could make an argument that cruise lines should be allowed to go bankrupt; for example, most avoid paying US taxes by registering in foreign countries, most of the behind the scene employees are foreign workers, they are not really a "critical" industry.... yet I believe they will eventually get bailed out also in some fashion.

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Re: So bottom is probably behind us....right?

Post by mptfan » Mon Mar 30, 2020 12:19 pm

adave wrote:
Sat Mar 28, 2020 4:55 pm
One could make an argument that cruise lines should be allowed to go bankrupt; for example, most avoid paying US taxes by registering in foreign countries, most of the behind the scene employees are foreign workers, they are not really a "critical" industry.... yet I believe they will eventually get bailed out also in some fashion.
I certainly hope that you are wrong, I like to go on cruises, and I want to go on cruises again once this is all over, but I do not want my tax dollars to be used to bail out cruise lines, especially ones that are registered in other countries to avoid paying U.S. taxes and avoid U.S. safety and employment laws. (I know that ships who call on U.S. ports have to comply with U.S. Coast Guard regulations, but cruise lines register in other countries to avoid other U.S. regulatory and inspection requirements)

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Re: So bottom is probably behind us....right?

Post by Kalo » Tue Mar 31, 2020 6:41 am

As always I expect a range of outcomes and will react accordingly. We are told to buy low when there is blood in the streets and when others are fearful. But there is good reason for fear at those times. I find it best to not puzzle it out. Forget about why it's happening. If prices are down buy more. Have an AA and rebalance at a minimum. Tactical asset allocation at a maximum. Have a minimum dollar value in safe fixed income if your circumstances require it.

Keep calm and carry on. We shall overcome.

Kalo
"When people say they have a high risk tolerance, what they really mean is that they are willing to make a lot of money." -- Ben Stein/Phil DeMuth - The Little Book of Bullet Proof Investing.

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Re: So bottom is probably behind us....right?

Post by birdog » Fri Apr 10, 2020 7:54 am

RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
I'm not saying this is over by any means, but if you wouldn't mind updating, I am curious if you're still in SPXU from your March 26th buy?

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Re: So bottom is probably behind us....right?

Post by RayKeynes » Fri Apr 10, 2020 8:34 am

Still in SPXU with minor loss snd Upgraded heavily @2820. Current EP is 18.30

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Re: So bottom is probably behind us....right?

Post by IndexCore » Fri Apr 10, 2020 8:45 am

The last market high was Feb 19 and the this year's low point was March 23. For Vanguard Total Stock ETF (VTI):
https://finance.yahoo.com/quote/VTI/history?p=VTI
$171.32 on Feb 19
$111.36 on Mar 23 ( - 35% )
$139.36 today ( -19% )

RayKeynes wrote:
Fri Apr 10, 2020 8:34 am
Still in SPXU with minor loss snd Upgraded heavily @2820. Current EP is 18.30
https://www.morningstar.com/etfs/arcx/spxu/performance
SPXU is down -32% in one week, which matches it's average annual performance over the past 5 years.

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Re: So bottom is probably behind us....right?

Post by Lee_WSP » Fri Apr 10, 2020 10:24 am

My gut tells me that we retest a low point. The problem is, I don't know when it'll happen.

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Re: So bottom is probably behind us....right?

Post by mnsportsgeek » Fri Apr 10, 2020 10:31 am

What's up with all these market timing threads showing up? Is this just what happens when stocks go down? Never seen anything like it here, but I wasn't around in 2008.

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Re: So bottom is probably behind us....right?

Post by MotoTrojan » Fri Apr 10, 2020 10:35 am

rudeboy wrote:
Fri Mar 27, 2020 4:52 pm
Just noticed that VT (Total World Stock) paid out dividends on 3/20 -- just a day short of the bottom before that 20% US run-up. 8-)
It’s NAV also dropped on ex-div so this didn’t (never does) matter much. It only helps if there’s a huge drop between ex-div and reinvestment.

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Re: So bottom is probably behind us....right?

Post by rockthisworld » Wed Apr 22, 2020 4:02 pm

Here is my guess:
SP 500 today 2800
SP 500 lows 1680 (sometime in the summer)
Sp 500 at years end 2020

Then it will climb to its previous high of 3386 in 4 years in 2024.

Hopefully beats out 10k in the next 30-40 years??? Who knows??

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Re: So bottom is probably behind us....right?

Post by watchnerd » Wed Apr 22, 2020 4:09 pm

rockthisworld wrote:
Wed Apr 22, 2020 4:02 pm

Hopefully beats out 10k in the next 30-40 years??? Who knows??
30-40 year market forecast!!
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Re: So bottom is probably behind us....right?

Post by Wanderingwheelz » Wed Apr 22, 2020 4:12 pm

keelerjr12 wrote:
Fri Mar 27, 2020 1:06 pm
birdog wrote:
Fri Mar 27, 2020 1:04 pm
Lee_WSP wrote:
Fri Mar 27, 2020 12:46 pm
birdog wrote:
Fri Mar 27, 2020 6:36 am
RayKeynes wrote:
Fri Mar 27, 2020 5:39 am
Yesterday was a very nice short opportunity :sharebeer

Shorted with 10% of portfolio value with SPXU @ 2'630
Sold 20% of portfolio value in VTI @ 2'630

Let's get into the 2nd stage of the bear :sharebeer
Man I sure hope you get burned!!!
We will probably be retesting the 2200 low, so even if it only drops to 2400, it is unlikely he will be burned as long as he doesn't get greedy and shoot for 2200.
Agree it's unlikely. Still hoping.
I’m confused why you’re hoping for someone to lose money.
He’s cheering short sellers making money. It’s okay to make money when stocks lose value, too.

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Re: So bottom is probably behind us....right?

Post by Wanderingwheelz » Wed Apr 22, 2020 4:15 pm

watchnerd wrote:
Sat Mar 28, 2020 4:44 pm
adave wrote:
Sat Mar 28, 2020 4:39 pm
I just have a lot of doubt the government and Fed would ever allow it to happen.
Ehhh?

Huge swaths of retail have gone bankrupt in the last decade.

Sears, Blockbuster, Forever 21, etc.

There are boundaries.
Where exactly are the boundaries? Asking for a friend.

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Re: So bottom is probably behind us....right?

Post by jrbdmb » Wed Apr 22, 2020 4:17 pm

dbadalam wrote:
Wed Mar 25, 2020 6:07 am
I’m learning from the FIRE club and boggle fans that nobody really knows if we hit bottom already. But everyone tries to guess and speculate. So are you thinking the bottom is probably in the review mirror? Or are you thinking we really have not priced in more bad news to come?
As of today (April 22) I do not think that we have not hit the bottom yet.

But any time I make a prediction I am usually wrong, so there's that. Or perhaps this time i am wrong about being wrong. Who knows? :|

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Re: So bottom is probably behind us....right?

Post by jrbdmb » Wed Apr 22, 2020 4:21 pm

mnsportsgeek wrote:
Fri Apr 10, 2020 10:31 am
What's up with all these market timing threads showing up? Is this just what happens when stocks go down? Never seen anything like it here, but I wasn't around in 2008.
I don't know about 2008, but there were plenty of market timing threads when the market was (generally) going up as well.

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Re: So bottom is probably behind us....right?

Post by rockthisworld » Wed Apr 22, 2020 4:43 pm

watchnerd wrote:
Wed Apr 22, 2020 4:09 pm
rockthisworld wrote:
Wed Apr 22, 2020 4:02 pm

Hopefully beats out 10k in the next 30-40 years??? Who knows??
30-40 year market forecast!!
Haha more so hope, I have 40 years to accumulate and maybe about 20 in retirement.

Praying for 1.5% real return on VTSAX over that long haul to reach my target number.

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Forester
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Re: So bottom is probably behind us....right?

Post by Forester » Wed Apr 22, 2020 5:47 pm

Banks look real ugly, some making fresh lows $KBE

Locked