U.S. stocks in free fall

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fortfun
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Re: U.S. stocks in free fall

Post by fortfun » Mon Dec 24, 2018 11:13 pm

rgs92 wrote:
Mon Dec 24, 2018 11:10 pm
For anyone curious, one of my old accounts that has a 60/40 (stock/fixed-income) AA auto-rebalanced every 3 months (including 10% international) has done this (with no deposits or withdrawals at all):
09/30/2016 $258,988.52
12/31/2016 $262,322.83
03/31/2017 $272,597.56
06/30/2017 $279,050.60
09/30/2017 $287,499.50
12/31/2017 $298,323.65
03/31/2018 $296,698.41
06/30/2018 $301,694.42
09/30/2018 $312,379.13
12/24/2018 $277,045.78
How do you auto-rebalance?

passiveTiger
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Re: U.S. stocks in free fall

Post by passiveTiger » Mon Dec 24, 2018 11:23 pm

letsgobobby wrote:
Mon Dec 24, 2018 10:26 pm
The Nikkei is down over 1000 points... 5%.
I guess anyone waiting for a return to the 1989 level will just keep waiting.

https://www.macrotrends.net/2593/nikkei ... chart-data

anoop
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Re: U.S. stocks in free fall

Post by anoop » Mon Dec 24, 2018 11:23 pm

willthrill81 wrote:
Mon Dec 24, 2018 10:33 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:24 pm
willthrill81 wrote:
Mon Dec 24, 2018 10:15 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:10 pm
I clarified my response as it didn’t make sense - take another look..
As I said, I see no benefit in holding an asset that is not in an upward trend.
Upward trends are backward looking, not forward looking. :confused
The data suggests otherwise. Momentum is a real effect.
How long have you followed this method? Do you have dates for when it last signaled to get out and then when it next signaled to get back in?

rgs92
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Re: U.S. stocks in free fall

Post by rgs92 » Mon Dec 24, 2018 11:29 pm

It's an old 401K account that offers auto-rebalancing as a feature. (I wish Fidelity would do this...)

By the way, this downturn is a classic of example of people just tossing everything overboard regardless of its value just because it's a stock. I think I saw that every S&P sector was down. So almost by definition, it's irrational, just like a crazed market bubble is.

I mean, UTILITIES were down 1.83% today, while bonds were up. What sense does that make? Utilities as a group (very roughly) track bonds.
A divergence like that seems crazy to me.
Last edited by rgs92 on Mon Dec 24, 2018 11:37 pm, edited 4 times in total.

anoop
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Re: U.S. stocks in free fall

Post by anoop » Mon Dec 24, 2018 11:30 pm

letsgobobby wrote:
Mon Dec 24, 2018 10:26 pm
The Nikkei is down over 1000 points... 5%.
That's just catching up to 2 days of losses in the US markets, right?

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Mon Dec 24, 2018 11:47 pm

anoop wrote:
Mon Dec 24, 2018 11:23 pm
willthrill81 wrote:
Mon Dec 24, 2018 10:33 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:24 pm
willthrill81 wrote:
Mon Dec 24, 2018 10:15 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:10 pm
I clarified my response as it didn’t make sense - take another look..
As I said, I see no benefit in holding an asset that is not in an upward trend.
Upward trends are backward looking, not forward looking. :confused
The data suggests otherwise. Momentum is a real effect.
How long have you followed this method? Do you have dates for when it last signaled to get out and then when it next signaled to get back in?
I've only been following this method for about a year.

This method would have moved out of equities in Dec., 2007, back in for the one month of June, 2008, and back out of equities until May, 2009.
“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

fennewaldaj
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Re: U.S. stocks in free fall

Post by fennewaldaj » Tue Dec 25, 2018 12:37 am

columbia wrote:
Mon Dec 24, 2018 3:13 pm
AMZN is 34% off its all time high.

Seems like a good pick, for those who pick; not me.
AMZN is still expensive by any traditional valuation method (and this would be the case still if it decline another 50%).

MotoTrojan
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Re: U.S. stocks in free fall

Post by MotoTrojan » Tue Dec 25, 2018 1:52 am

rudeboy wrote:
Mon Dec 24, 2018 1:29 pm
Times like these, I like to remind myself of one of the most ornery statements about investing I have ever heard:

"If you can't stomach 50% declines in your investment, you will get the mediocre returns you deserve." -- Charlie Munger
New one for me. Thanks!

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randomizer
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Re: U.S. stocks in free fall

Post by randomizer » Tue Dec 25, 2018 4:45 am

Strangely relieved that I'm seeing (or going to see) my first bear market and I'm not even mildly distressed yet. If I was retired though I bet I would be.
87.5:12.5, EM tilt — HODL the course!

long_gamma
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Re: U.S. stocks in free fall

Post by long_gamma » Tue Dec 25, 2018 5:10 am

willthrill81 wrote:
Mon Dec 24, 2018 9:42 pm
long_gamma wrote:
Mon Dec 24, 2018 7:41 pm
willthrill81 wrote:
Mon Dec 24, 2018 7:21 pm
morsk wrote:
Mon Dec 24, 2018 7:14 pm
willthrill81 wrote:
Mon Dec 24, 2018 6:33 pm

Including the Nov., 2018, data, it is 3.92. November's UER was 3.7. Historically, this has been a strong indicator that we are not currently in a recession.
Can you please provide the link to where you pull the 12MMA unemployment rate from? Many thanks.
I calculate with Excel using the data from the BLS website. You can also download the data in Excel format from their site.
So it is basically October data, published in beginning of November. Do you think 12 MMA of data which is basically stale and revised is relevant in today's algo driven market? Atleast it is better to use some moving average of Initial jobless claim data which is released weekly
Yes, I do.
No, You are using unemployment rate, not Initial Jobless Claims, which is much more recent than unemployment rate (even though they are measuring different things, they are correlated).

https://www.dol.gov/ui/data.pdf

Data period surveyed for Unemployment rate was during October 8-12 for the recent data. During that time frame SPX was record high. It is almost 20% down before we even see the next data point.

I have read philosophical economics blog before. Market structure has changed in the algo driven market, where algo's immediately sell or buy for every damn information hits the wire. Reaction function is much shorter in this information age.
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

minimalistmarc
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Re: U.S. stocks in free fall

Post by minimalistmarc » Tue Dec 25, 2018 6:05 am

Devilsfan118 wrote:
Mon Dec 24, 2018 1:46 pm
I'm going to sound very condescending here - but days like today remind me how how skittish and, frankly, foolish most personal investors seem to be

Very surprised at the nervousness that is obvious on this forum.

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oldcomputerguy
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Re: U.S. stocks in free fall

Post by oldcomputerguy » Tue Dec 25, 2018 6:28 am

willthrill81 wrote:
Mon Dec 24, 2018 5:54 pm
uberme wrote:
Mon Dec 24, 2018 5:50 pm
I could see this causing a recession... when people feel less wealthy they cut spending back. I wonder how many people are seeing their company stock shares nose diving (tech companies)
It would be unusual indeed for a stock market decline to cause a recession. It's usually the other way around.
One factor that might make that true in this case is the rising percentage of the US population that is in retirement. If the market declines, so does the value of their retirement nest egg, and it follows that they will feel less inclined to spend on discretionary items, which could cause an economic slowdown.

Or maybe not. I never claimed to be an economist. :?:
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

tmcc
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Re: U.S. stocks in free fall

Post by tmcc » Tue Dec 25, 2018 7:15 am

willthrill81 wrote:
Mon Dec 24, 2018 10:33 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:24 pm
willthrill81 wrote:
Mon Dec 24, 2018 10:15 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:10 pm
I clarified my response as it didn’t make sense - take another look..
As I said, I see no benefit in holding an asset that is not in an upward trend.
Upward trends are backward looking, not forward looking. :confused
The data suggests otherwise. Momentum is a real effect.
I like your system. It is pretty reasonable but i think it has a major weakness due to underlying accuracy and timeliness issues in BLS data. I'm sure you considered this and it boils down to tolerable risk.

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Re: U.S. stocks in free fall

Post by Call_Me_Op » Tue Dec 25, 2018 7:15 am

minimalistmarc wrote:
Tue Dec 25, 2018 6:05 am
Devilsfan118 wrote:
Mon Dec 24, 2018 1:46 pm
I'm going to sound very condescending here - but days like today remind me how how skittish and, frankly, foolish most personal investors seem to be

Very surprised at the nervousness that is obvious on this forum.
That should not be surprising. After all, investors are human beings. And many have "lost" a non-insignificant fraction of a net worth built-up over decades - in a measly 2 months.
Last edited by Call_Me_Op on Tue Dec 25, 2018 7:22 am, edited 1 time in total.
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columbia
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Re: U.S. stocks in free fall

Post by columbia » Tue Dec 25, 2018 7:21 am

Nikkei down 5%.

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Re: U.S. stocks in free fall

Post by Call_Me_Op » Tue Dec 25, 2018 7:22 am

columbia wrote:
Tue Dec 25, 2018 7:21 am
Nikkei down 5%.
Point?
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

columbia
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Re: U.S. stocks in free fall

Post by columbia » Tue Dec 25, 2018 8:03 am

Once you feel the point of the javelin...it’s too late.

Bacchus01
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Re: U.S. stocks in free fall

Post by Bacchus01 » Tue Dec 25, 2018 8:24 am

passiveTiger wrote:
Mon Dec 24, 2018 5:07 pm
Bacchus01 wrote:
Mon Dec 24, 2018 4:50 pm
passiveTiger wrote:
Mon Dec 24, 2018 4:28 pm
imareal1 wrote:
Mon Dec 24, 2018 3:17 pm
Doom&Gloom wrote:
Mon Dec 24, 2018 2:50 pm


+1

History certainly implies that prices will go back up, but the market does not issue guaranteed refunds like Costco. I am afraid that many newer investors have gotten used to to quick recoveries to former levels from all the dips they have experienced. This one has been deeper and more prolonged, and it is evident from posts on BH that some have been a bit unnerved already.

Good luck to all!
As a new investor who believes the market will recover but cannot dispute this point, I don't see why we need to be reminded of this. Like yeah, the market may never recover from this point on, but do you really think that is a realistic possibility worth mentioning?

And to say this one has been deeper and more prolonged, I think that's simply unnecessary fear mongering.
Japan is still waiting to return to December 1989 stock prices. Japan was so wrecked by overinflated real estate and other assets that it is now going extinct. Literally.

https://www.npr.org/2018/12/21/67910354 ... id-decline

People talk long-term, staying the course, etc., but can you stomach the risk of being 33% down after almost 30 years?
Japan is some bigger macro issues. No population growth. No immigration. No natural resources. No natural trade advantage.
Every country has its issues. You left out that their debt situation is now even worse than ours, although we do our best to make it worse each day.

But we do have similarities. For example, replace absent population with absent qualified workers.

We have immigration, but it’s not sufficient to provide what we need, despite trying to be selectively targeted about it.

We are truly blessed with natural resources.

I don’t know about the “trade advantage” thing. If we have one, it doesn’t make itself known.

https://www.marketwatch.com/amp/story/g ... B25E1938B1
I don’t necessarily disagree with anything you wrote. But I think japan’s debt is a result of those macroeconomic variables.

As for the US, we have an enormous trade advantage. As the largest consumer in the world, this gives us an advantage.

grettman
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Re: U.S. stocks in free fall

Post by grettman » Tue Dec 25, 2018 8:56 am

Call_Me_Op wrote:
Tue Dec 25, 2018 7:15 am
minimalistmarc wrote:
Tue Dec 25, 2018 6:05 am
Devilsfan118 wrote:
Mon Dec 24, 2018 1:46 pm
I'm going to sound very condescending here - but days like today remind me how how skittish and, frankly, foolish most personal investors seem to be

Very surprised at the nervousness that is obvious on this forum.
That should not be surprising. After all, investors are human beings. And many have "lost" a non-insignificant fraction of a net worth built-up over decades - in a measly 2 months.
And as human beings, they knew that they were investing at risk... Since we haven't had a major drop in around ten years some people forgot that they could face SIGNIFICANT drops in their NW. Especially the people who never faced an event like 2008 and the early 2000s. Some of them posted on the threads "How much are you up YTD" and "Post your NW here".... They bragged and bragged and boasted about how they decided to invest instead of paying down debt because "money is cheap".

...well now Mr. Market wants some of that value back.... and it has them very very scared.

This comment is about some ...not all... investors. I think a vast majority are going about their business and enjoying life and haven't paid much attention to this other than the fact Mr. Market is throwing another tantrum.

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CULater
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Re: U.S. stocks in free fall

Post by CULater » Tue Dec 25, 2018 9:06 am

DOW futures down 700. Could be an ugly Boxing Day.
On the internet, nobody knows you're a dog.

long_gamma
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Re: U.S. stocks in free fall

Post by long_gamma » Tue Dec 25, 2018 9:15 am

CULater wrote:
Tue Dec 25, 2018 9:06 am
DOW futures down 700. Could be an ugly Boxing Day.
What you are seeing is yesterday's close. Globex market is closed now. Opens at 6:00 PM EST
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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CULater
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Re: U.S. stocks in free fall

Post by CULater » Tue Dec 25, 2018 9:21 am

long_gamma wrote:
Tue Dec 25, 2018 9:15 am
CULater wrote:
Tue Dec 25, 2018 9:06 am
DOW futures down 700. Could be an ugly Boxing Day.
What you are seeing is yesterday's close. Globex market is closed now. Opens at 6:00 PM EST
Ah, thanks. Now I feel better -- at least for awhile.
On the internet, nobody knows you're a dog.

lostdog
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Re: U.S. stocks in free fall

Post by lostdog » Tue Dec 25, 2018 9:40 am

Are there actually people on this board that are having severe anxiety about this and losing sleep?

I am not at all but just curious about the different emotions people are willing to share when losses like this occur.
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corn18
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Re: U.S. stocks in free fall

Post by corn18 » Tue Dec 25, 2018 9:47 am

YEEEEHAAW!

Image
Don't do something, just stand there!

columbia
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Re: U.S. stocks in free fall

Post by columbia » Tue Dec 25, 2018 9:49 am

At least we can look forward to posts saying the bull market started in 2018, not 2009. ;)

amitb00
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Re: U.S. stocks in free fall

Post by amitb00 » Tue Dec 25, 2018 9:50 am

Any guess as to when will be the day when all three major indices will be green, even if by one point? Will it be in Dec?
On that note, when are we going to see bottom? Will that be first half of 2019? Even if market goes down 30% more to be 50% overall down and it drops on an average of 5% a week, in 6 weeks that is mid Feb, we should be at the bottom or very near bottom.

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Re: U.S. stocks in free fall

Post by ofcmetz » Tue Dec 25, 2018 10:06 am

columbia wrote:
Tue Dec 25, 2018 7:21 am
Nikkei down 5%.
Don't they know that it's Christmas?
Never underestimate the power of the force of low cost index funds.

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ofcmetz
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Re: U.S. stocks in free fall

Post by ofcmetz » Tue Dec 25, 2018 10:11 am

Call_Me_Op wrote:
Tue Dec 25, 2018 7:15 am
minimalistmarc wrote:
Tue Dec 25, 2018 6:05 am
Devilsfan118 wrote:
Mon Dec 24, 2018 1:46 pm
I'm going to sound very condescending here - but days like today remind me how how skittish and, frankly, foolish most personal investors seem to be

Very surprised at the nervousness that is obvious on this forum.
That should not be surprising. After all, investors are human beings. And many have "lost" a non-insignificant fraction of a net worth built-up over decades - in a measly 2 months.
Correct, we are humans and we also know that there is no guarantee that the market will go right back up next year or over the next five years. I feel like my behavior (not selling and staying the course) can be rational even when my feelings (scared that I may never see this money again) may not be.
Never underestimate the power of the force of low cost index funds.

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TheTimeLord
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Re: U.S. stocks in free fall

Post by TheTimeLord » Tue Dec 25, 2018 10:24 am

rgs92 wrote:
Mon Dec 24, 2018 11:29 pm
It's an old 401K account that offers auto-rebalancing as a feature. (I wish Fidelity would do this...)

By the way, this downturn is a classic of example of people just tossing everything overboard regardless of its value just because it's a stock. I think I saw that every S&P sector was down. So almost by definition, it's irrational, just like a crazed market bubble is.

I mean, UTILITIES were down 1.83% today, while bonds were up. What sense does that make? Utilities as a group (very roughly) track bonds.
A divergence like that seems crazy to me.
1) Definition of selling by passive/index investors
2) IMHO, safe haven stocks like utilities are and have been an overcrowded trade
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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Tue Dec 25, 2018 10:47 am

tmcc wrote:
Tue Dec 25, 2018 7:15 am
willthrill81 wrote:
Mon Dec 24, 2018 10:33 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:24 pm
willthrill81 wrote:
Mon Dec 24, 2018 10:15 pm
letsgobobby wrote:
Mon Dec 24, 2018 10:10 pm
I clarified my response as it didn’t make sense - take another look..
As I said, I see no benefit in holding an asset that is not in an upward trend.
Upward trends are backward looking, not forward looking. :confused
The data suggests otherwise. Momentum is a real effect.
I like your system. It is pretty reasonable but i think it has a major weakness due to underlying accuracy and timeliness issues in BLS data. I'm sure you considered this and it boils down to tolerable risk.
Nothing is perfect. We do the best we can with what we have.
“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

oysterboy
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Re: U.S. stocks in free fall

Post by oysterboy » Tue Dec 25, 2018 10:59 am

Scooter57 wrote:
Mon Dec 24, 2018 11:18 am
JoMoney wrote:
Mon Dec 24, 2018 10:30 am
Operating earnings estimates for 2019 are $172.76 for the S&P 500.
At the current $2,385 price that's a P/E of 13.8
Merry Christmas :D
Analysts' estimate a year hence are pretty much worthless. Track the change in analysts' estimates for a single blue chip stock each week between the beginning and end of a quarter and you'll see how much they change in just a quarter, usually in a downward direction. The estimate for the S&P as a whole is just the total of analysts' estimates for the individual components of the index. The one year I tracked the S&P 500 estimates from the beginning of the year to the end the beginning of the year estimates were around 4% and the final number came in just over 0%.

Analysts who make negative predictions for companies don't get the kind of access to the company's brass that the kind ones do. Don't forget, too, that many of the analysts who make projections are employed by companies that profit from putting together new stock or bond issues for these companies they report on. The Chinese Wall is very porous. I have personally observed several instances over the past year in an industry I follow closely for business reasons where a company that was desperate to raise money attracted analysts who made positive estimates of the company's growth just before the company issued large blocks of stock and warrants, with the help of the company that employed the analysts.
Absolutely true. Even for the objective analysts, and for the companies themselves, estimating 12-months forward earnings is highly speculative.

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Re: U.S. stocks in free fall

Post by ruralavalon » Tue Dec 25, 2018 11:08 am

randomizer wrote:
Tue Dec 25, 2018 4:45 am
Strangely relieved that I'm seeing (or going to see) my first bear market and I'm not even mildly distressed yet. If I was retired though I bet I would be.
With a good plan and experience in investing, you will probably do better when retired than you expect.

I am retired, feeling disappointed but not even mildly distressed yet.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: U.S. stocks in free fall

Post by letsgobobby » Tue Dec 25, 2018 11:10 am

Deleted
Last edited by letsgobobby on Mon Apr 22, 2019 2:26 am, edited 1 time in total.

quantAndHold
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Re: U.S. stocks in free fall

Post by quantAndHold » Tue Dec 25, 2018 11:34 am

fennewaldaj wrote:
Tue Dec 25, 2018 12:37 am
columbia wrote:
Mon Dec 24, 2018 3:13 pm
AMZN is 34% off its all time high.

Seems like a good pick, for those who pick; not me.
AMZN is still expensive by any traditional valuation method (and this would be the case still if it decline another 50%).
Traditional valuation measures and Amazon don’t mix. Since Amazon spends all its free cash flow building the company, it skews the traditional measures to make Amazon seem unprofitable, which is not the case in reality.

That doesn’t mean that I think AMZN is priced well or poorly. It’s too complicated for me to figure out either way.

tmcc
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Re: U.S. stocks in free fall

Post by tmcc » Tue Dec 25, 2018 11:36 am

quantAndHold wrote:
Tue Dec 25, 2018 11:34 am
fennewaldaj wrote:
Tue Dec 25, 2018 12:37 am
columbia wrote:
Mon Dec 24, 2018 3:13 pm
AMZN is 34% off its all time high.

Seems like a good pick, for those who pick; not me.
AMZN is still expensive by any traditional valuation method (and this would be the case still if it decline another 50%).
Traditional valuation measures and Amazon don’t mix. [...]
"This time it's different" 8-)

quantAndHold
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Re: U.S. stocks in free fall

Post by quantAndHold » Tue Dec 25, 2018 11:38 am

tmcc wrote:
Tue Dec 25, 2018 11:36 am
quantAndHold wrote:
Tue Dec 25, 2018 11:34 am
fennewaldaj wrote:
Tue Dec 25, 2018 12:37 am
columbia wrote:
Mon Dec 24, 2018 3:13 pm
AMZN is 34% off its all time high.

Seems like a good pick, for those who pick; not me.
AMZN is still expensive by any traditional valuation method (and this would be the case still if it decline another 50%).
Traditional valuation measures and Amazon don’t mix. [...]
"This time it's different" 8-)
It seems to have worked out pretty well for AMZN investors over the past 21 years. I wouldn’t count them out yet.

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Re: U.S. stocks in free fall

Post by Whakamole » Tue Dec 25, 2018 11:39 am

corn18 wrote:
Tue Dec 25, 2018 9:47 am
YEEEEHAAW!

Image
Nice date to pick. I'm not sure how this chart is actionable. It's almost more like trivia.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Tue Dec 25, 2018 11:43 am

tmcc wrote:
Tue Dec 25, 2018 11:36 am
quantAndHold wrote:
Tue Dec 25, 2018 11:34 am
fennewaldaj wrote:
Tue Dec 25, 2018 12:37 am
columbia wrote:
Mon Dec 24, 2018 3:13 pm
AMZN is 34% off its all time high.

Seems like a good pick, for those who pick; not me.
AMZN is still expensive by any traditional valuation method (and this would be the case still if it decline another 50%).
Traditional valuation measures and Amazon don’t mix. [...]
"This time it's different" 8-)
You beat me to it!

Considering that they've been around for 20 years, it's pretty incredible for a company of their size to have such pitiful profitability (as defined by the accounting standards that everyone else is judged by).
“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

Michael Alden
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Re: U.S. stocks in free fall

Post by Michael Alden » Tue Dec 25, 2018 11:55 am

randomizer wrote:
Tue Dec 25, 2018 4:45 am
Strangely relieved that I'm seeing (or going to see) my first bear market and I'm not even mildly distressed yet. If I was retired though I bet I would be.
I'm mostly retired and yes, I'm distressed. I work around 15-20 days a year, which brings me in around 15K, taking the other 40K or so from investments. I'm not taking SSI for another 5 years. Last time things went south in 2009, my uncle told me, sell, sell, sell everything. I slowly got back in but I'm sure I lost a couple hundred grand at least by not sitting tight. I don't want to make that mistake again but also I don't want to see all of my retirement money disappear. I don't have a pension so whatever I got is what I got.

quantAndHold
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Re: U.S. stocks in free fall

Post by quantAndHold » Tue Dec 25, 2018 12:04 pm

willthrill81 wrote:
Tue Dec 25, 2018 11:43 am
tmcc wrote:
Tue Dec 25, 2018 11:36 am
quantAndHold wrote:
Tue Dec 25, 2018 11:34 am
fennewaldaj wrote:
Tue Dec 25, 2018 12:37 am
columbia wrote:
Mon Dec 24, 2018 3:13 pm
AMZN is 34% off its all time high.

Seems like a good pick, for those who pick; not me.
AMZN is still expensive by any traditional valuation method (and this would be the case still if it decline another 50%).
Traditional valuation measures and Amazon don’t mix. [...]
"This time it's different" 8-)
You beat me to it!

Considering that they've been around for 20 years, it's pretty incredible for a company of their size to have such pitiful profitability (as defined by the accounting standards that everyone else is judged by).
I’m less worried about Amazon’s pitiful profitability, since clearly they have to be making money hand over fist from existing operations to be able to fund the massive growth they’ve had so far. The hundreds of thousands of employees, the office buildings, fulfillment centers, data centers, power plants, airplanes, etc, are not some sort of shell game. They’re real assets, paid for with money from operations.

Going forward, I would be more worried about the fact that economically, they’re already the size of a small country. A few more years of compounded growth at past rates would make them the size of a large country. Which seems unlikely.

aqan
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Re: U.S. stocks in free fall

Post by aqan » Tue Dec 25, 2018 12:21 pm

CULater wrote:
Tue Dec 25, 2018 9:06 am
DOW futures down 700. Could be an ugly Boxing Day.
this is how the rumors start.

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oldcomputerguy
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Re: U.S. stocks in free fall

Post by oldcomputerguy » Tue Dec 25, 2018 12:24 pm

amitb00 wrote:
Tue Dec 25, 2018 9:50 am
Any guess as to when will be the day when all three major indices will be green, even if by one point? Will it be in Dec?
On that note, when are we going to see bottom? Will that be first half of 2019? Even if market goes down 30% more to be 50% overall down and it drops on an average of 5% a week, in 6 weeks that is mid Feb, we should be at the bottom or very near bottom.
Nobody knows. It’ll happen when it happens. It’s useless to guess.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

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J G Bankerton
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Re: U.S. stocks in free fall

Post by J G Bankerton » Tue Dec 25, 2018 12:45 pm

Bitcoin futures are up $300; S&P futures are down. That's all I need to know. :mrgreen: :beer

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gilgamesh
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Re: U.S. stocks in free fall

Post by gilgamesh » Tue Dec 25, 2018 12:59 pm

willthrill81 wrote:
Sat Dec 22, 2018 4:49 pm
gilgamesh wrote:
Sat Dec 22, 2018 1:58 pm
willthrill81 wrote:
Sat Dec 22, 2018 1:00 pm
JoMoney wrote:
Sat Dec 22, 2018 12:21 pm
J G Bankerton wrote:
Sat Dec 22, 2018 12:09 pm
They have quarter end and month end. They don't show December in ether. December was OMG.
Forward PE on the S&P 500 is 15.09
:thumbsup :D
Hey! Any comments on increasing stock exposures after a significant stock decline? I don’t know wether you read my recent posts here...I’m asking as you do some sort of AA finagling.

It’s unlikeky for a market to crash, say 50% after a 30% crash, as compared to a 50% crash from its all time high. Also, after a 30% and worse crash, stocks could be ascribed as being “on sale” in the long term perspective.

Then why not increase risk and buy more stocks after a significant decline like 30%?...yes! It can continue to slide, but in the long term it will recover to some degree - otherwise this whole concept of ‘investing” is doomed.
Historically, a 50% market decline after a 30% decline (the latter of which we haven't yet experienced, only about 20%), would be a 65% overall decline, something that's only happened once in the U.S.: the Great Depression. So to the extent that you believe that the future will resemble the past, yes, a 50% decline is less likely to happen after a 30% decline than from the market highs.

Would this have been a good means to do some tactical asset allocation in the past? I don't know as I haven't seen any data on it. More importantly, would it be a good strategy going forward? I really don't know.

AlohaJoe referred to this general issue in a thread earlier in the year, and there was some other discussion about it worth reading as well.
Thank you, I was away and I couldn’t reply.

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LadyGeek
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Re: U.S. stocks in free fall

Post by LadyGeek » Tue Dec 25, 2018 12:59 pm

If anyone is considering a change in their holdings due to the recent market drop, please see this thread: Wow, Behaviorial Finance is Real

New investors are encouraged to read that thread.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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gilgamesh
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Re: U.S. stocks in free fall

Post by gilgamesh » Tue Dec 25, 2018 1:06 pm

hoops777 wrote:
Sat Dec 22, 2018 3:36 pm
gilgamesh wrote:
Sat Dec 22, 2018 3:09 pm
J G Bankerton wrote:
Sat Dec 22, 2018 2:36 pm
gilgamesh wrote:
Sat Dec 22, 2018 2:28 pm
Is anybody claiming it’s equally likely for total stock market to decline 50% from the high as it is for it to slide another 50% after a 30% slide?
No one knows what tomorrow will bring
Then when does one ever retire? If one can’t even make reasonable predictions...4%SWR, 3%, 1%, who knows tomorrow? May be 0.01% SWR
You can retire by using common sense.If you have enough in assets to live comfortably on risk free or very low risk then you are golden.If you need the stock market to perform well in order to retire,good luck.I like Bernstein’s philosophy about quit playing when you have won the game,but unfortunately very few people have the means to do that at a high level.
Like everything else in life,if you do not have a lot of money you have to adjust the best you can.As much as you want to believe 100 pct in Santa Claus,there is no guarantee that the market will act the way you want or expect.
My retirement planning is indeed based off of floor concept ...my essential income will all be covered by TIPS and SS with no reliance on stocks. Only my side portfolio for discretionary expenses rely on stocks...I will do this as my human capital is zero.

When human capital is high and retirement time is flexible, it’s stunning almost all here are not wanting to rely on past stock performances, where as after retirement they are willing to do just that...this is absolutely backwards...

herpfinance
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Re: U.S. stocks in free fall

Post by herpfinance » Tue Dec 25, 2018 1:39 pm

While I'm not overly excited about the decline, it does provide those of us who are accmulating the option to buy more at a discount relative to where we were earlier this year. From a behavioral point of view, it gives you the feeling of at least being able to take some kind of action by redirecting your contributions to equities and bringing your AA closer to its target, even though those contributions may not be all that large in relation to your portfolio.

Of course, the market could very well decline much further from here. Nobody really knows. However, there is one thing that I know with a high degree of certainty, and that is not to engage in market timing.
"The intelligent investor is a realist who sells to optimists and buys from pessimists" - Benjamin Graham

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J G Bankerton
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Re: U.S. stocks in free fall

Post by J G Bankerton » Tue Dec 25, 2018 1:48 pm

Whakamole wrote:
Tue Dec 25, 2018 11:39 am
date to pick. I'm not sure how this chart is actionable. It's almost more like trivia.
The algorithms are set to pounce with a flurry of high speed trades as soon as the line is crossed.
You have been warned.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Tue Dec 25, 2018 2:20 pm

J G Bankerton wrote:
Tue Dec 25, 2018 1:48 pm
Whakamole wrote:
Tue Dec 25, 2018 11:39 am
date to pick. I'm not sure how this chart is actionable. It's almost more like trivia.
The algorithms are set to pounce with a flurry of high speed trades as soon as the line is crossed.
I have no doubt that that is part of the reason for the recent declines.
“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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gilgamesh
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Re: U.S. stocks in free f

Post by gilgamesh » Tue Dec 25, 2018 2:21 pm

herpfinance wrote:
Tue Dec 25, 2018 1:39 pm
While I'm not overly excited about the decline, it does provide those of us who are accmulating the option to buy more at a discount relative to where we were earlier this year. From a behavioral point of view, it gives you the feeling of at least being able to take some kind of action by redirecting your contributions to equities and bringing your AA closer to its target, even though those contributions may not be all that large in relation to your portfolio.

Of course, the market could very well decline much further from here. Nobody really knows. However, there is one thing that I know with a high degree of certainty, and that is not to engage in market timing.
Markets could (probably would) decline further...but it doesn’t matter to your “buying more at a discount” if each parameter involved is defined.

The trinity study which came up with the initial 4% SWR relied on the assumption, a future retirees first 30 year of retirement cannot be worse than any past 30 year periods.

Now, if we can setup some reasonable parameters for the worst decline possible and the longest it’ll take to recover...I don’t know what that number is, but something like a 60% decline and lasting 8 years to recover to 90% of previous max should be very reasonable as it’s much worse than it has ever happened...But it could even be 50% decline lasting 5 years to recover to 90% (that hasn’t happened either)...I’m seeking a reasonable figure.

Whatever it is, there is a deflection point, based on past performances, where increasing stock exposure will be ideal.

It doesn’t matter if the price continues to drop, as long as it recovers to a certain limit (say 90%), within a certain period.

Stocks reach an all time high of $100 and then start to decline, You buy additional stocks than the initial AA at $70, it declines to $50. The stocks recover to $90, your additional purchase at $70 still made money (stocks going down to $50, in the mean time, had no impact).

Just thinking out loud...
Last edited by gilgamesh on Tue Dec 25, 2018 2:24 pm, edited 1 time in total.

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