Bear Cub Smells Bubble

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000
Posts: 4625
Joined: Thu Jul 23, 2020 12:04 am

Re: Bear Cub Smells Bubble

Post by 000 »

latesaver wrote: Thu Sep 03, 2020 12:03 pm
000 wrote: Thu Sep 03, 2020 11:58 am
anoop wrote: Thu Sep 03, 2020 10:43 am
anoop wrote: Mon Aug 31, 2020 12:14 pm I sold FB today, in at 260 just a couple of weeks ago, out at 295 today. Still holding AAPL and ZM.
Sold AAPL and ZM today. Didn't quite make the peak, but still made 10% on AAPL and 20% on ZM for a few days of holding them. So back to 100% cash.
What's your long term strategy here? Sell stocks after X% gains?
That is a value-destroying long term strategy, in general.
I tend to agree. It caps the upside without minimizing the downside. But perhaps anoop has something else in mind.
Anon9001
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Re: Bear Cub Smells Bubble

Post by Anon9001 »

Would suggest a Momentum implementation if you are investing in individual stocks as insiders know much more about the company than you do and if they are driving the stock price down heavily compared to a Index in last 1 year than it is time to get out.
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nzahir
Posts: 138
Joined: Mon Jul 27, 2020 11:44 pm

Re: Bear Cub Smells Bubble

Post by nzahir »

knpstr wrote: Thu Sep 03, 2020 6:49 am
nzahir wrote: Wed Sep 02, 2020 5:44 pm Top 5 companies in the S&P500 now make up 25%, not concerning to anyone?

Has happened during huge bubbles near the peak
No. If I was a market timer I'd almost have surely sold very early this year when the pandemic was coming in full force, would still be sitting on the sidelines (pandemic is still "here" right, why buy now?). Vanguard says I'm up ~20% from this time last year. Buy and hold by DCA'ing every week, requires zero effort and as the peaks and valleys come I buy more shares low than I buy high. Simple and effective.

Many many decades of investing to go in my life (God willing), so a correction/crash in the next few years is of no concern.
Fair enough, lets see what happens in the next decade

For people who can diversify in other areas such as real estate (not reits), hard money, etc, timing can make some sense
Valuethinker
Posts: 42079
Joined: Fri May 11, 2007 11:07 am

Re: Bear Cub Smells Bubble

Post by Valuethinker »

adave wrote: Wed Sep 02, 2020 5:21 pm With respect, what is the catalyst for a crash here? Technology is here to stay and keeps inflation in check. Everyday we get closer to the end of the pandemic and a vaccine. After all, the virus will be gone eventually. Sure, many industries have been hurt but the government has stepped in (rightly so imo) to help and rates are zero. I know I have promised my kids a trip to Disney world to celebrate the end of the pandemic!
The catalyst for the next crash is almost by definition something we don't see coming.

A stock market decides it is just too high, and a correction brings a wave of selling, and a product called "Portfolio Insurance" then causes a meltdown (October 1987)

A masked revolutionary called "Commandant Zero" rides into a small town in southern Mexico (1994) ..

The nephew of the Thai Prime Minister has a property company that goes broke (1997) ... leading to the collapse of the world's largest hedge fund in 1998

An artificial border between 2 Middle Eastern countries, created by colonialist fiat, is erased over a dispute about oil production, after a US ambassador appears to signal that the US has no vested interests in the action of its ally who is also opposed to its mortal enemy in the Middle East, the Islamic Revolutionary Republic of Iran ... (August, 1990)..

A British dot com company goes up over 60% at IPO, and Barron's publishes an article saying many dot coms will run out of cash (May, 2000) ...

An over 150 year old American investment bank goes broke as authorities, concerned about "moral hazard", and lacking a full understanding of British insolvency law (v American), the authorities refuse to bail it out ... (September 2008)

I can think of a couple of "obvious" knocks to this market, but I am pretty sure the obvious ones will be discounted (mind, I thought that about the US housing market bubble). Maybe it just depends on how bad it will get ...

Don't count on Monetary Policy being able to save us, either. The effectiveness of MP at the "zero interest rate lower bound" is very much muted - this was Keynes' insight in the 1930s, and the Japanese have proven it the last 30 years.

The evidence, so far, suggests there will be no "end" to the pandemic, just as there is no end to the flu, or the common cold. Rather, we will have better tools to fight it (e.g. antivirals, annual vaccination), and we will have to remain watchful for a long long time to come. I hope that I am wrong.
Last edited by Valuethinker on Thu Sep 03, 2020 12:25 pm, edited 1 time in total.
Robot Monster
Posts: 1913
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: Bear Cub Smells Bubble

Post by Robot Monster »

Valuethinker wrote: Thu Sep 03, 2020 12:21 pm
adave wrote: Wed Sep 02, 2020 5:21 pm With respect, what is the catalyst for a crash here? Technology is here to stay and keeps inflation in check. Everyday we get closer to the end of the pandemic and a vaccine. After all, the virus will be gone eventually. Sure, many industries have been hurt but the government has stepped in (rightly so imo) to help and rates are zero. I know I have promised my kids a trip to Disney world to celebrate the end of the pandemic!
The catalyst for the next crash is almost by definition something we don't see coming.

A masked revolutionary called "Commandant Zero" rides into a small town in southern Mexico (1994) ..

The nephew of the Thai Prime Minister has a property company that goes broke (1997) ...

An artificial border between 2 Middle Eastern countries, created by colonialist fiat, is erased after a US ambassador appears to signal that the US has no vested interests in the action of its ally who is also opposed to its mortal enemy in the Middle East, the Islamic Revolutionary Republic of Iran ... (1990)..

A British dot com company goes up over 60% at IPO, and Barron's publishes an article saying many dot coms will run out of cash (May, 2000) ...

An over 150 year old American investment bank goes broke as authorities, concerned about "moral hazard", and lacking a full understanding of British insolvency law (v American), the authorities refuse to bail it out ... (September 2008)

I can think of a couple of "obvious" knocks to this market, but I am pretty sure the obvious ones will be discounted (mind, I thought that about the US housing market bubble). Maybe it just depends on how bad it will get ...

Don't count on Monetary Policy being able to save us, either. The effectiveness of MP at the "zero interest rate lower bound" is very much muted - this was Keynes' insight in the 1930s, and the Japanese have proven it the last 30 years.

The evidence, so far, suggests there will be no "end" to the pandemic, just as there is no end to the flu, or the common cold. Rather, we will have better tools to fight it (e.g. antivirals, annual vaccination), and we will have to remain watchful for a long long time to come. I hope that I am wrong.
Excellent post.
“I delight in what I fear.” ― Shirley Jackson
anoop
Posts: 2085
Joined: Tue Mar 04, 2014 1:33 am

Re: Bear Cub Smells Bubble

Post by anoop »

000 wrote: Thu Sep 03, 2020 12:04 pm
latesaver wrote: Thu Sep 03, 2020 12:03 pm
000 wrote: Thu Sep 03, 2020 11:58 am
anoop wrote: Thu Sep 03, 2020 10:43 am
anoop wrote: Mon Aug 31, 2020 12:14 pm I sold FB today, in at 260 just a couple of weeks ago, out at 295 today. Still holding AAPL and ZM.
Sold AAPL and ZM today. Didn't quite make the peak, but still made 10% on AAPL and 20% on ZM for a few days of holding them. So back to 100% cash.
What's your long term strategy here? Sell stocks after X% gains?
That is a value-destroying long term strategy, in general.
I tend to agree. It caps the upside without minimizing the downside. But perhaps anoop has something else in mind.
No strategy, just trying to make a few bucks here and there.
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knpstr
Posts: 2890
Joined: Thu Nov 20, 2014 8:57 pm
Location: Michigan

Re: Bear Cub Smells Bubble

Post by knpstr »

nzahir wrote: Thu Sep 03, 2020 12:15 pm
knpstr wrote: Thu Sep 03, 2020 6:49 am
nzahir wrote: Wed Sep 02, 2020 5:44 pm Top 5 companies in the S&P500 now make up 25%, not concerning to anyone?

Has happened during huge bubbles near the peak
No. If I was a market timer I'd almost have surely sold very early this year when the pandemic was coming in full force, would still be sitting on the sidelines (pandemic is still "here" right, why buy now?). Vanguard says I'm up ~20% from this time last year. Buy and hold by DCA'ing every week, requires zero effort and as the peaks and valleys come I buy more shares low than I buy high. Simple and effective.

Many many decades of investing to go in my life (God willing), so a correction/crash in the next few years is of no concern.
Fair enough, lets see what happens in the next decade

For people who can diversify in other areas such as real estate (not reits), hard money, etc, timing can make some sense
Indeed. Remember 2010-2020 was supposed to be the decade of 4% nominal growth.

At some point there will be a bad decade. But it is anyone’s guess.
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius
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