U.S. stocks in free fall

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
Rowan Oak
Posts: 556
Joined: Mon May 09, 2016 2:11 pm
Location: Yoknapatawpha

Re: U.S. stocks in free fall

Post by Rowan Oak » Mon Jan 21, 2019 12:03 pm

livesoft wrote:
Mon Jan 21, 2019 10:32 am
Houe wrote:
Mon Jan 21, 2019 10:30 am
With the market looking much better who here is thinking of getting back into the market? The crash in December was brutal. Scared many (including me).
1. I was never out of the market.
2. I rebalanced INTO equities in December.
3. Things are up so much, I hit a rebalancing band and have started to rebalance OUT of equities.

So my questions: Folks didn't really get out of the market in December, did they? Instead, they decided to buy low, right?
I did most of my tax loss harvesting and rebalanced on 12/24/18 and early on 12/26/18 (when the market was actually down that day). I had been reading many of livesoft's posts leading up to those days which really got me thinking about doing so. Other than that the timing was just dumb luck. I now need to rebalance again by selling equities to get back to my chosen asset allocation.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: U.S. stocks in free fall

Post by Earl Lemongrab » Mon Jan 21, 2019 1:06 pm

Houe wrote:
Mon Jan 21, 2019 10:30 am
With the market looking much better who here is thinking of getting back into the market? The crash in December was brutal. Scared many (including me).
If you think that was a crash or brutal, you really need to review history. Or your asset allocation. That was a blip.

User avatar
jfn111
Posts: 1131
Joined: Fri Nov 08, 2013 10:42 pm
Location: Minnesota

Re: U.S. stocks in free fall

Post by jfn111 » Mon Jan 21, 2019 1:47 pm

ImmigrantSaver wrote:
Mon Jan 21, 2019 10:15 am
jfn111 wrote:
Fri Jan 18, 2019 7:53 pm
I went 80% cash today at the close. It may be a brilliant move or... :oops:
I finally got my excess 401k proceeds distributed to me on Friday and immediately reinvested them lump sum. Expect the markets to tank on Tuesday! You are welcome! :sharebeer
LOL, I'm figuring a 200 point gain because of my move. :oops:

MotoTrojan
Posts: 9329
Joined: Wed Feb 01, 2017 8:39 pm

Re: U.S. stocks in free fall

Post by MotoTrojan » Mon Jan 21, 2019 2:51 pm

Earl Lemongrab wrote:
Mon Jan 21, 2019 1:06 pm
Houe wrote:
Mon Jan 21, 2019 10:30 am
With the market looking much better who here is thinking of getting back into the market? The crash in December was brutal. Scared many (including me).
If you think that was a crash or brutal, you really need to review history. Or your asset allocation. That was a blip.
+1

User avatar
TheTimeLord
Posts: 7286
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in free fall

Post by TheTimeLord » Mon Jan 21, 2019 3:51 pm

TheTimeLord wrote:
Mon Jan 21, 2019 9:57 am
ruralavalon wrote:
Mon Jan 21, 2019 9:54 am
dknightd wrote:
Sun Jan 20, 2019 8:13 pm
livesoft wrote:
Fri Jan 18, 2019 8:29 pm
You probably didn't notice that with my strategy I never have any dry powder. I am 100% invested all the time.
Even your "emergency" fund?
We are 100% invested all of the time, have no "emergency fund", and have just 2-3 months worth of expenses in a joint checking account.
Ok, I will bite, why do people not consider an Emergency Fund invested. I considered mine invested in conservative fixed income assets. Unless it in your mattress your money is likely invested in something.
Bump, because I am seriously curious about the answer.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: U.S. stocks in free fall

Post by Earl Lemongrab » Mon Jan 21, 2019 4:00 pm

TheTimeLord wrote:
Mon Jan 21, 2019 3:51 pm
Ok, I will bite, why do people not consider an Emergency Fund invested. I considered mine invested in conservative fixed income assets. Unless it in your mattress your money is likely invested in something.
I didn't consider it an investment. I excluded it from my asset allocation spreadsheet. Any cash above the designated amount was technically considered part of fixed-income, but it was really "designated for assignment" meaning it was supposed to be invested in something else.

User avatar
Crushtheturtle
Posts: 247
Joined: Sat Mar 15, 2014 10:29 pm
Location: SC

Re: U.S. stocks in free fall

Post by Crushtheturtle » Mon Jan 21, 2019 4:04 pm

TheTimeLord wrote:
Mon Jan 21, 2019 3:51 pm
Bump, because I am seriously curious about the answer.
Socratic question:

If an investment asset has an expected real return of zero, is it really an investment?


Reference (https://www.merriam-webster.com/dictionary/investment):
Investment noun (1)
in·​vest·​ment | \ in-ˈves(t)-mənt \
Definition of investment
: the outlay of money usually for income or profit : capital outlay

User avatar
TheTimeLord
Posts: 7286
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in free fall

Post by TheTimeLord » Mon Jan 21, 2019 4:10 pm

Crushtheturtle wrote:
Mon Jan 21, 2019 4:04 pm
TheTimeLord wrote:
Mon Jan 21, 2019 3:51 pm
Bump, because I am seriously curious about the answer.
Socratic question:

If an investment asset has an expected real return of zero, is it really an investment?


Reference (https://www.merriam-webster.com/dictionary/investment):
Investment noun (1)
in·​vest·​ment | \ in-ˈves(t)-mənt \
Definition of investment
: the outlay of money usually for income or profit : capital outlay
Observation, whether I have a real return or not the IRS is going to tax me on the return receive. Also, how does interest from say a money market account that pays interest not fit the definition above. Are stocks only investments in years they have positive real returns?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

User avatar
ruralavalon
Posts: 17744
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: U.S. stocks in free fall

Post by ruralavalon » Mon Jan 21, 2019 4:15 pm

TheTimeLord wrote:
Mon Jan 21, 2019 3:51 pm
TheTimeLord wrote:
Mon Jan 21, 2019 9:57 am
ruralavalon wrote:
Mon Jan 21, 2019 9:54 am
dknightd wrote:
Sun Jan 20, 2019 8:13 pm
livesoft wrote:
Fri Jan 18, 2019 8:29 pm
You probably didn't notice that with my strategy I never have any dry powder. I am 100% invested all the time.
Even your "emergency" fund?
We are 100% invested all of the time, have no "emergency fund", and have just 2-3 months worth of expenses in a joint checking account.
Ok, I will bite, why do people not consider an Emergency Fund invested. I considered mine invested in conservative fixed income assets. Unless it in your mattress your money is likely invested in something.
Bump, because I am seriously curious about the answer.
Not long ago cash in a savings account, short-term CDs, or money market fund was almost guaranteed to give a negative real return net of inflation and taxes. So I would not count that as an investment.

Now yields on those vehicles may be high enough that they can reasonably be expected to give a positive real return, so I think it is now okay to consider that invested as part of the fixed income ("bond") allocation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
Crushtheturtle
Posts: 247
Joined: Sat Mar 15, 2014 10:29 pm
Location: SC

Re: U.S. stocks in free fall

Post by Crushtheturtle » Mon Jan 21, 2019 4:24 pm

Sigh.
Last edited by Crushtheturtle on Mon Jan 21, 2019 7:00 pm, edited 1 time in total.

User avatar
LadyGeek
Site Admin
Posts: 61238
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: U.S. stocks in free fall

Post by LadyGeek » Mon Jan 21, 2019 4:45 pm

Please stay on-topic, which is about the U.S. stock market.

Determining if an Emergency fund is part of your fixed income portfolio should be discussed in a different 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.

ImmigrantSaver
Posts: 321
Joined: Tue Nov 22, 2016 6:24 pm

Re: U.S. stocks in free fall

Post by ImmigrantSaver » Tue Jan 22, 2019 10:42 am

jfn111 wrote:
Mon Jan 21, 2019 1:47 pm
ImmigrantSaver wrote:
Mon Jan 21, 2019 10:15 am
jfn111 wrote:
Fri Jan 18, 2019 7:53 pm
I went 80% cash today at the close. It may be a brilliant move or... :oops:
I finally got my excess 401k proceeds distributed to me on Friday and immediately reinvested them lump sum. Expect the markets to tank on Tuesday! You are welcome! :sharebeer
LOL, I'm figuring a 200 point gain because of my move. :oops:
Looks like I was right :wink:

Sometimes I think I should maybe listen to my intuition (that this time told me to wait till Tuesday to reinvest). Oh well it could have gone either way, and now there is a potential for TLH

User avatar
jfn111
Posts: 1131
Joined: Fri Nov 08, 2013 10:42 pm
Location: Minnesota

Re: U.S. stocks in free fall

Post by jfn111 » Tue Jan 22, 2019 10:49 am

ImmigrantSaver wrote:
Tue Jan 22, 2019 10:42 am
jfn111 wrote:
Mon Jan 21, 2019 1:47 pm
ImmigrantSaver wrote:
Mon Jan 21, 2019 10:15 am
jfn111 wrote:
Fri Jan 18, 2019 7:53 pm
I went 80% cash today at the close. It may be a brilliant move or... :oops:
I finally got my excess 401k proceeds distributed to me on Friday and immediately reinvested them lump sum. Expect the markets to tank on Tuesday! You are welcome! :sharebeer
LOL, I'm figuring a 200 point gain because of my move. :oops:
Looks like I was right :wink:

Sometimes I think I should maybe listen to my intuition (that this time told me to wait till Tuesday to reinvest). Oh well it could have gone either way, and now there is a potential for TLH
I don't get to excited about the market until about 2:55 CST. There is so many last minute ups and downs that the daily trend seems to fall apart often.

Houe
Posts: 129
Joined: Wed Jun 29, 2016 9:04 am

Re: U.S. stocks in free fall

Post by Houe » Tue Jan 22, 2019 1:14 pm

Here we go again. Market tanking.

DB2
Posts: 876
Joined: Thu Jan 17, 2019 10:07 pm

Re: U.S. stocks in free fall

Post by DB2 » Tue Jan 22, 2019 1:24 pm

Houe wrote:
Tue Jan 22, 2019 1:14 pm
Here we go again. Market tanking.
I think China's slowdown (worse quarterly GDP growth since 1990!) and IMF says it sees a global slowdown. The markets may get worse depending on corporate earnings this week and upcoming government data which hasn't been released yet.

LiterallyIronic
Posts: 1446
Joined: Sat Dec 05, 2015 10:36 am

Re: U.S. stocks in free fall

Post by LiterallyIronic » Tue Jan 22, 2019 1:27 pm

Houe wrote:
Tue Jan 22, 2019 1:14 pm
Here we go again. Market tanking.
Good. My 401k rollover landed at Vanguard today and, as one might expect, initially was placed in a money market account. I put in an order to switch it from that to the Target Retirement Fund 2045 about an hour ago, so if the market can stay down until that transaction goes through, that'd be great.

bmritz
Posts: 36
Joined: Sun Nov 29, 2015 2:59 am

Re: U.S. stocks in free fall

Post by bmritz » Sun Jan 27, 2019 3:44 pm

gilgamesh wrote:
Sat Dec 22, 2018 8:04 am
bmritz wrote:
Sat Dec 22, 2018 6:00 am
gilgamesh wrote:
Sat Dec 22, 2018 3:13 am
I am starting to realize I may be tempted not to ‘stay the course’ if the markets continue to slide significantly...so far it’s been easy, as it’s not significant, but say if S&P 500 is down 30% from its all-time high I may be tempted to change my AA.

I’m about 9 years from retirement and at around 30% in bonds...if USA stocks decline by 30% I’m thinking of going 25% bonds, and 20% bond at a 35% market decline and go down to 15% bonds if it declines by 40%. There on , I’ll stay there...

I don’t think I could resist the stock market sale, if it declines by 30%...heck! Even 20% will be mighty tempting...

Besides my 30% bond allocation was assuming a 50% stock decline...if stocks are already down 30%, it’s unlikely (not impossible) to go another 50%, So why stay at 30%? I should have thought about this before, but it makes a lot of sense now...
I don't get this one.

Take the rule of thumb for a 50% stock decline. If you rebalance to keep your 70/30 allocation at those -30%, -35% & -40% decline points you'll end up with a 37% max drawdown (assuming bonds return 0%). Your "new IPS" takes that 37% up to 40%.

Why did you choose 70/30 over 80/20 in the first place? Is it because -37% max draw down was a better fit for you than -40%?

Those numbers aren't so far apart from each other, but what is the gain? Assuming you take the same AA adjustments on the way back up (if stocks do eventually reach their previous peak), you end up with less money than if you just adjusted to 70/30 at each rebalance point.

Stay. The. Course.
Thank you...I do not know how to calculate max drawdown or it’s significance...so I’ll have to take your word for it.

But, now that you’ve mentioned it. Intuitively it makes sense that just rebalancing will be almost the same.

What if, I go to 15% bonds if markets decline 30%, 0% bonds if markets decline to 40%....back to 15% when markets reach back to 20% of previous high, and 30% bonds if it ever reaches the previous max?
(I’m not saying I’ll do it, just want to know the math...thanks!)
A little late, but here is the spreadsheet I put together to calculate that. You can change your hypothetical stock allocation in column A to model returns of dynamic AA adjustments.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

User avatar
gilgamesh
Posts: 1593
Joined: Sun Jan 10, 2016 9:29 am

Re: U.S. stocks in free fall

Post by gilgamesh » Sun Jan 27, 2019 4:53 pm

bmritz wrote:
Sun Jan 27, 2019 3:44 pm
gilgamesh wrote:
Sat Dec 22, 2018 8:04 am
bmritz wrote:
Sat Dec 22, 2018 6:00 am
gilgamesh wrote:
Sat Dec 22, 2018 3:13 am
I am starting to realize I may be tempted not to ‘stay the course’ if the markets continue to slide significantly...so far it’s been easy, as it’s not significant, but say if S&P 500 is down 30% from its all-time high I may be tempted to change my AA.

I’m about 9 years from retirement and at around 30% in bonds...if USA stocks decline by 30% I’m thinking of going 25% bonds, and 20% bond at a 35% market decline and go down to 15% bonds if it declines by 40%. There on , I’ll stay there...

I don’t think I could resist the stock market sale, if it declines by 30%...heck! Even 20% will be mighty tempting...

Besides my 30% bond allocation was assuming a 50% stock decline...if stocks are already down 30%, it’s unlikely (not impossible) to go another 50%, So why stay at 30%? I should have thought about this before, but it makes a lot of sense now...
I don't get this one.

Take the rule of thumb for a 50% stock decline. If you rebalance to keep your 70/30 allocation at those -30%, -35% & -40% decline points you'll end up with a 37% max drawdown (assuming bonds return 0%). Your "new IPS" takes that 37% up to 40%.

Why did you choose 70/30 over 80/20 in the first place? Is it because -37% max draw down was a better fit for you than -40%?

Those numbers aren't so far apart from each other, but what is the gain? Assuming you take the same AA adjustments on the way back up (if stocks do eventually reach their previous peak), you end up with less money than if you just adjusted to 70/30 at each rebalance point.

Stay. The. Course.
Thank you...I do not know how to calculate max drawdown or it’s significance...so I’ll have to take your word for it.

But, now that you’ve mentioned it. Intuitively it makes sense that just rebalancing will be almost the same.

What if, I go to 15% bonds if markets decline 30%, 0% bonds if markets decline to 40%....back to 15% when markets reach back to 20% of previous high, and 30% bonds if it ever reaches the previous max?
(I’m not saying I’ll do it, just want to know the math...thanks!)
A little late, but here is the spreadsheet I put together to calculate that. You can change your hypothetical stock allocation in column A to model returns of dynamic AA adjustments.

https://docs.google.com/spreadsheets/d/ ... sp=sharing
Thanks

User avatar
AnalogKid22
Posts: 343
Joined: Wed May 18, 2016 8:26 pm
Location: Babylon, but I'd love to spend a night in Zion

Re: U.S. stocks in free fall

Post by AnalogKid22 » Sun Jan 27, 2019 10:39 pm

Major earnings reports from Facebook, Microsoft, Amazon, and Apple this week: https://www.cnbc.com/2019/01/25/apple-m ... ings-.html

User avatar
willthrill81
Posts: 17440
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: U.S. stocks in free fall

Post by willthrill81 » Sun Jan 27, 2019 11:11 pm

AnalogKid22 wrote:
Sun Jan 27, 2019 10:39 pm
Major earnings reports from Facebook, Microsoft, Amazon, and Apple this week: https://www.cnbc.com/2019/01/25/apple-m ... ings-.html
I'm going to go out on a limb and say that earnings will be a 'disappointment' and the market will go down a bit. But what do I know? :confused
“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

User avatar
AnalogKid22
Posts: 343
Joined: Wed May 18, 2016 8:26 pm
Location: Babylon, but I'd love to spend a night in Zion

Re: U.S. stocks in free fall

Post by AnalogKid22 » Sun Jan 27, 2019 11:35 pm

willthrill81 wrote:
Sun Jan 27, 2019 11:11 pm
AnalogKid22 wrote:
Sun Jan 27, 2019 10:39 pm
Major earnings reports from Facebook, Microsoft, Amazon, and Apple this week: https://www.cnbc.com/2019/01/25/apple-m ... ings-.html
I'm going to go out on a limb and say that earnings will be a 'disappointment' and the market will go down a bit. But what do I know? :confused
Apple and Facebook have been under scrutiny, but Amazon will reflect XMas sales and MS has been killing it.

AlphaLess
Posts: 2247
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: U.S. stocks in free fall

Post by AlphaLess » Mon Jan 28, 2019 12:22 am

Crushtheturtle wrote:
Mon Jan 21, 2019 4:04 pm
TheTimeLord wrote:
Mon Jan 21, 2019 3:51 pm
Bump, because I am seriously curious about the answer.
Socratic question:

If an investment asset has an expected real return of zero, is it really an investment?


Reference (https://www.merriam-webster.com/dictionary/investment):
Investment noun (1)
in·​vest·​ment | \ in-ˈves(t)-mənt \
Definition of investment
: the outlay of money usually for income or profit : capital outlay
Socratic questions back to you:
- what is 'real return'?
- what is 'expected return'?
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.

AlphaLess
Posts: 2247
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: U.S. stocks in free fall

Post by AlphaLess » Mon Jan 28, 2019 12:23 am

willthrill81 wrote:
Sun Jan 27, 2019 11:11 pm
AnalogKid22 wrote:
Sun Jan 27, 2019 10:39 pm
Major earnings reports from Facebook, Microsoft, Amazon, and Apple this week: https://www.cnbc.com/2019/01/25/apple-m ... ings-.html
I'm going to go out on a limb and say that earnings will be a 'disappointment' and the market will go down a bit. But what do I know? :confused
I think earnings have been better than expected.

I guess it depends on what your expectation was.
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.

ohai
Posts: 1327
Joined: Wed Dec 27, 2017 2:10 pm

Re: U.S. stocks in free fall

Post by ohai » Mon Jan 28, 2019 12:59 am

AAPL - released ominous guidance at the beginning of the year. Its stock price probably reflects some pretty negative assumptions. I think Apple will have some issues going forward, but my prediction is mild positive to boring earning announcement this time.

In any case, any development in China trade talks this week will have a large impact on stock prices.

User avatar
Crushtheturtle
Posts: 247
Joined: Sat Mar 15, 2014 10:29 pm
Location: SC

Re: U.S. stocks in free fall

Post by Crushtheturtle » Mon Jan 28, 2019 7:11 am

AlphaLess wrote:
Mon Jan 28, 2019 12:22 am

Socratic questions back to you:
- what is 'real return'?
- what is 'expected return'?
I believe:
Real return = rate of return after accounting for the devaluing effect of inflation.
Expected return = rate of return in the future, assuming the asset performs as it has in the past.

To keep the thread on track: How about that recent stock market performance, huh? Looks like it might go down today.

User avatar
c.coyle
Posts: 183
Joined: Thu Aug 03, 2017 5:10 pm
Location: Eastern Pa.

Re: U.S. stocks in free fall

Post by c.coyle » Mon Jan 28, 2019 7:18 am

A big example of the dangers of panic selling at the bottom and missing a big recovery:

OPS's $771 million pension shortfall a product of 'mind-boggling' mistakes

https://www.omaha.com/news/education/pr ... b44a9.html
VTSAX - 50%, VBTLX - 50%

veggivet
Posts: 780
Joined: Sun Jan 25, 2015 1:07 pm
Location: New England

Re: U.S. stocks in free fall

Post by veggivet » Mon Jan 28, 2019 9:27 am

RBD potential today...futures indicate a drop of 250 at the open. I think that may be the high of the day.
If you watch your pennies, your dollars will take care of themselves.

User avatar
AnalogKid22
Posts: 343
Joined: Wed May 18, 2016 8:26 pm
Location: Babylon, but I'd love to spend a night in Zion

Re: U.S. stocks in free fall

Post by AnalogKid22 » Mon Jan 28, 2019 10:34 am

ohai wrote:
Mon Jan 28, 2019 12:59 am
AAPL - released ominous guidance at the beginning of the year. Its stock price probably reflects some pretty negative assumptions. I think Apple will have some issues going forward, but my prediction is mild positive to boring earning announcement this time.

In any case, any development in China trade talks this week will have a large impact on stock prices.
This could be a wild week for sure. Large percentage of DOW companies reporting this week, including most of FAANG, more China trade talks, and another employment report.

H-Town
Posts: 2593
Joined: Sun Feb 26, 2017 2:08 pm

Re: U.S. stocks in free fall

Post by H-Town » Mon Jan 28, 2019 12:27 pm

And then it begins...

User avatar
J G Bankerton
Posts: 1792
Joined: Thu Sep 14, 2017 3:30 pm

Re: U.S. stocks in free fall

Post by J G Bankerton » Mon Jan 28, 2019 12:37 pm

CAT is the leading indicator the algorithm's are acting on.
It appears a CAT can be a cannery in a coal mine.

User avatar
willthrill81
Posts: 17440
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: U.S. stocks in free fall

Post by willthrill81 » Mon Jan 28, 2019 1:43 pm

FWIW,
The Conference Board Leading Economic Index® (LEI)for theU.S. declined 0.1 percent in December to 111.7 (2016 = 100), following a 0.2 percent increase in November, and a 0.3 percent decline in October.

“The US LEI declined slightly in December and the recent moderation in the LEI suggests that the US economic growth rate may slow down this year,” said Ataman Ozyildirim, Director of Economic Research at The Conference Board. “While the effects of the government shutdown are not yet reflected here, the LEI suggests that the economy could decelerate towards 2 percent growth by the end of 2019.”
https://www.conference-board.org/data/b ... .cfm?cid=1

I don't act on the Conference Board LEI, but some do. Historically, they've been fairly accurate.
“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

Independent George
Posts: 680
Joined: Wed Feb 17, 2016 12:13 pm
Location: Chicago, IL, USA

Re: U.S. stocks in free fall

Post by Independent George » Mon Jan 28, 2019 6:12 pm

c.coyle wrote:
Mon Jan 28, 2019 7:18 am
A big example of the dangers of panic selling at the bottom and missing a big recovery:

OPS's $771 million pension shortfall a product of 'mind-boggling' mistakes

https://www.omaha.com/news/education/pr ... b44a9.html
It wasn't just the panic selling at the market bottom. It was the attempt to escape the volatility of stocks buy investing in alternatives, which any Boglehead would have facepalmed at. This was not a matter of hindsight, as hinted at in the article, but people buying things which they clearly neither understood nor had any inclination to learn about.
As OSERS chose a dozen new alternatives between 2009 and 2013, meetings minutes and records make no mention of consultants being hired to conduct due diligence or of presenting such reports. When asked to produce due diligence reports for five specific investments, OSERS officials said they had none.

Records aside, the best evidence of the lack of due diligence can be found in simply looking at which firms got the business. By all appearances, Smith merely picked investments offered up by firms OSERS was already doing business with.

Of the 16 new alternatives, 12 were with firms OSERS invested in already. Another was affiliated with First National Bank of Omaha, the employer of one of the OSERS trustees.

At least three of the new investments were so unproven, they offered OSERS a special ownership interest as incentive to become one of the first to take the risk.

User avatar
AnalogKid22
Posts: 343
Joined: Wed May 18, 2016 8:26 pm
Location: Babylon, but I'd love to spend a night in Zion

Re: U.S. stocks in free fall

Post by AnalogKid22 » Mon Jan 28, 2019 11:09 pm

Apple reporting tomorrow, though they’ve already stated that iPhones sales were way below target. Possibly a large drop tomorrow.

User avatar
CyclingDuo
Posts: 2946
Joined: Fri Jan 06, 2017 9:07 am

Re: U.S. stocks in free fall

Post by CyclingDuo » Mon Jan 28, 2019 11:20 pm

c.coyle wrote:
Mon Jan 28, 2019 7:18 am
A big example of the dangers of panic selling at the bottom and missing a big recovery:

OPS's $771 million pension shortfall a product of 'mind-boggling' mistakes

https://www.omaha.com/news/education/pr ... b44a9.html
That was an interesting read. I'll be interested to read all of the follow ups from the reporter with details of what happened in terms of how "in bed" OSERS was with Atlantic. In the video with the reporter, sounds like the former Executive Director and Board Members are not taking blame for their actions. Hmmm....

It reminded me of the demise of New York City Opera when the board panic sold off the endowment fund near the lows in 2008. Granted, there were other fiscal issues to the entire story, but the panic selling sure helped seal the eventual bankruptcy.

A fundamental premise of successful investing is “sell high, buy low.” So what explains the New York City Opera board’s decision to do the opposite?

In what appears to have been panic selling, the City Opera board sold all the equities in the opera’s endowment and moved to cash in October 2008, as the stock market was plunging to new lows, and stayed in cash during 2009, as the market recovered and surged upward. The opera recorded an eye-popping $9.5 million investment loss for fiscal year 2008, ending in June 2009.


https://www.nytimes.com/2013/10/12/busi ... opera.html
"Everywhere is within walking distance if you have the time." ~ Steven Wright

User avatar
c.coyle
Posts: 183
Joined: Thu Aug 03, 2017 5:10 pm
Location: Eastern Pa.

Re: U.S. stocks in free fall

Post by c.coyle » Tue Jan 29, 2019 8:56 am

Independent George wrote:
Mon Jan 28, 2019 6:12 pm

It wasn't just the panic selling at the market bottom. It was the attempt to escape the volatility of stocks buy investing in alternatives, which any Boglehead would have facepalmed at. This was not a matter of hindsight, as hinted at in the article, but people buying things which they clearly neither understood nor had any inclination to learn about . . .
Correct. I posted that primarily because of the recent market decline and some of the nervous posts here.
VTSAX - 50%, VBTLX - 50%

Halicar
Posts: 251
Joined: Tue Oct 31, 2017 8:41 am
Location: Midwest

Re: U.S. stocks in free fall

Post by Halicar » Wed Jan 30, 2019 11:14 am

AnalogKid22 wrote:
Mon Jan 28, 2019 11:09 pm
Apple reporting tomorrow, though they’ve already stated that iPhones sales were way below target. Possibly a large drop tomorrow.
One of my favorite things about this thread is that it demonstrates over and over again how futile it is to try to predict market movements even a day in advance.

User avatar
TheTimeLord
Posts: 7286
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in free fall

Post by TheTimeLord » Wed Jan 30, 2019 11:19 am

Halicar wrote:
Wed Jan 30, 2019 11:14 am
AnalogKid22 wrote:
Mon Jan 28, 2019 11:09 pm
Apple reporting tomorrow, though they’ve already stated that iPhones sales were way below target. Possibly a large drop tomorrow.
One of my favorite things about this thread is that it demonstrates over and over again how futile it is to try to predict market movements even a day in advance.
Or that people misunderstand the mechanics of the markets especially in relation to the pricing of individual stocks. All the more reason the vast majority of people should buy low costs mutual funds that contain a broadly diversified portfolio of stocks.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

User avatar
AnalogKid22
Posts: 343
Joined: Wed May 18, 2016 8:26 pm
Location: Babylon, but I'd love to spend a night in Zion

Re: U.S. stocks in free fall

Post by AnalogKid22 » Wed Jan 30, 2019 12:33 pm

Halicar wrote:
Wed Jan 30, 2019 11:14 am
AnalogKid22 wrote:
Mon Jan 28, 2019 11:09 pm
Apple reporting tomorrow, though they’ve already stated that iPhones sales were way below target. Possibly a large drop tomorrow.
One of my favorite things about this thread is that it demonstrates over and over again how futile it is to try to predict market movements even a day in advance.
Indeed. Did anyone sell or buy on the dip: https://www.cnbc.com/2019/01/30/investo ... y-now.html

User avatar
oriol
Posts: 25
Joined: Tue Mar 06, 2018 6:08 pm

Re: U.S. stocks in free fall

Post by oriol » Wed Jan 30, 2019 12:41 pm

Halicar wrote:
Wed Jan 30, 2019 11:14 am
AnalogKid22 wrote:
Mon Jan 28, 2019 11:09 pm
Apple reporting tomorrow, though they’ve already stated that iPhones sales were way below target. Possibly a large drop tomorrow.
One of my favorite things about this thread is that it demonstrates over and over again how futile it is to try to predict market movements even a day in advance.
In all fairness, he did say "possibly" :D
willthrill81 wrote:
Mon Jan 28, 2019 1:43 pm
I don't act on the Conference Board LEI, but some do. Historically, they've been fairly accurate.
Are you still in, Will? SPX << 10 mo MA, however the yield curve & UNRATE are still looking good.

User avatar
willthrill81
Posts: 17440
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: U.S. stocks in free fall

Post by willthrill81 » Wed Jan 30, 2019 1:15 pm

oriol wrote:
Wed Jan 30, 2019 12:41 pm
willthrill81 wrote:
Mon Jan 28, 2019 1:43 pm
I don't act on the Conference Board LEI, but some do. Historically, they've been fairly accurate.
Are you still in, Will? SPX << 10 mo MA, however the yield curve & UNRATE are still looking good.
No, I moved out of stocks earlier this month. I wrote about it and my strategy in this thread.
“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

User avatar
J G Bankerton
Posts: 1792
Joined: Thu Sep 14, 2017 3:30 pm

Re: U.S. stocks in free fall

Post by J G Bankerton » Wed Feb 13, 2019 8:26 am

willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.

User avatar
TheTimeLord
Posts: 7286
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in free fall

Post by TheTimeLord » Wed Feb 13, 2019 10:43 am

J G Bankerton wrote:
Wed Feb 13, 2019 8:26 am
willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
Do you really need to post the same exact thing in 2 different threads. This is not a humble brag.
viewtopic.php?f=10&t=257573&start=550#p4379253
J G Bankerton wrote:
Wed Feb 13, 2019 8:31 am
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

H-Town
Posts: 2593
Joined: Sun Feb 26, 2017 2:08 pm

Re: U.S. stocks in free fall

Post by H-Town » Wed Feb 13, 2019 11:21 am

TheTimeLord wrote:
Wed Feb 13, 2019 10:43 am
J G Bankerton wrote:
Wed Feb 13, 2019 8:26 am
willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
Do you really need to post the same exact thing in 2 different threads. This is not a humble brag.
viewtopic.php?f=10&t=257573&start=550#p4379253
J G Bankerton wrote:
Wed Feb 13, 2019 8:31 am
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
LOL I don't know how he feels if he knows that he could have bought VTI at $50 price point years ago.

I guess you got to get excited about something, right?

User avatar
willthrill81
Posts: 17440
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: U.S. stocks in free fall

Post by willthrill81 » Wed Feb 13, 2019 11:24 am

H-Town wrote:
Wed Feb 13, 2019 11:21 am
TheTimeLord wrote:
Wed Feb 13, 2019 10:43 am
J G Bankerton wrote:
Wed Feb 13, 2019 8:26 am
willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
Do you really need to post the same exact thing in 2 different threads. This is not a humble brag.
viewtopic.php?f=10&t=257573&start=550#p4379253
J G Bankerton wrote:
Wed Feb 13, 2019 8:31 am
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
LOL I don't know how he feels if he knows that he could have bought VTI at $50 price point years ago.

I guess you got to get excited about something, right?
Not too many folks were excited on Dec. 26th, 2018.

I've learned not to get too worked up about the movements of the market, one way or the other.
“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

User avatar
TheTimeLord
Posts: 7286
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in free fall

Post by TheTimeLord » Wed Feb 13, 2019 11:28 am

willthrill81 wrote:
Wed Feb 13, 2019 11:24 am
H-Town wrote:
Wed Feb 13, 2019 11:21 am
TheTimeLord wrote:
Wed Feb 13, 2019 10:43 am
J G Bankerton wrote:
Wed Feb 13, 2019 8:26 am
willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
Do you really need to post the same exact thing in 2 different threads. This is not a humble brag.
viewtopic.php?f=10&t=257573&start=550#p4379253
J G Bankerton wrote:
Wed Feb 13, 2019 8:31 am
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
LOL I don't know how he feels if he knows that he could have bought VTI at $50 price point years ago.

I guess you got to get excited about something, right?
Not too many folks were excited on Dec. 26th, 2018.

I've learned not to get too worked up about the movements of the market, one way or the other.
Interestingly VTI was briefly cheaper on the 26th $119.35 than the low on the 24th $119.67.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

Admiral
Posts: 2847
Joined: Mon Oct 27, 2014 12:35 pm

Re: U.S. stocks in free fall

Post by Admiral » Wed Feb 13, 2019 11:53 am

H-Town wrote:
Wed Feb 13, 2019 11:21 am
TheTimeLord wrote:
Wed Feb 13, 2019 10:43 am
J G Bankerton wrote:
Wed Feb 13, 2019 8:26 am
willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
Do you really need to post the same exact thing in 2 different threads. This is not a humble brag.
viewtopic.php?f=10&t=257573&start=550#p4379253
J G Bankerton wrote:
Wed Feb 13, 2019 8:31 am
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
LOL I don't know how he feels if he knows that he could have bought VTI at $50 price point years ago.

I guess you got to get excited about something, right?
Many of us were stocking up when it was $38 in 2009... :beer

User avatar
HomerJ
Posts: 14199
Joined: Fri Jun 06, 2008 12:50 pm

Re: U.S. stocks in free fall

Post by HomerJ » Wed Feb 13, 2019 11:57 am

chevca wrote:
Fri Jan 18, 2019 6:48 pm
Do we have the world's first successful market timer here on Bogleheads, in DanMahowny? :happy
Ugh, this is the LAST thread to make such a claim.

EVERY 6 months since this thread has started, someone has come on here and predicted a market crash coming soon.

Sooner or later, someone would be right.

Doesn't make them smart or wise. And since he didn't make the correct second call and buy at the bottom, his call was worthless to him.
The J stands for Jay

marcopolo
Posts: 2796
Joined: Sat Dec 03, 2016 10:22 am

Re: U.S. stocks in free fall

Post by marcopolo » Wed Feb 13, 2019 12:35 pm

HomerJ wrote:
Wed Feb 13, 2019 11:57 am
chevca wrote:
Fri Jan 18, 2019 6:48 pm
Do we have the world's first successful market timer here on Bogleheads, in DanMahowny? :happy
Ugh, this is the LAST thread to make such a claim.

EVERY 6 months since this thread has started, someone has come on here and predicted a market crash coming soon.

Sooner or later, someone would be right.

Doesn't make them smart or wise. And since he didn't make the correct second call and buy at the bottom, his call was worthless to him.
Seems a bit early to declare him right or wrong, but I would not bet on it.
He was predicting Dow 16,000 to happen pretty soon. Still possible, you never know.
marcopolo wrote:
Tue May 15, 2018 4:56 pm
DanMahowny wrote:
Tue May 15, 2018 1:21 pm
Things will get much more exciting around here when DOW plunges to 16,000 in the next 12-18 months.

We should all decide now how we'll react.
Just curious how long you have been predicting that, and is it always 12-18 months out, or have you been shorting the horizon as time passes.
For example, when you said Dow 16000 several months ago, was the time window 15-21 months back then?
And then:
DanMahowny wrote:
Tue May 15, 2018 5:01 pm
I started selling at the end of Oct 2017. Finished selling at the end of Jan 2018.

The only equities I own are in the Oil/Oil Services industry which represent somewhere between 20-30% of my portfolio. The rest is in cash, short-term treasuries, TIPs, and some gold.

This portfolio hit an all time high today; yet well prepared for tough times ahead.

**And I'll stop saying 12-18 months. Will revise to say "12 months or less"

So, "12 moths or less" from May 15, 2018. We only have 3 more months to see how his prediction pans out.
Got to give him credit for the courage of his convictions.
Once in a while you get shown the light, in the strangest of places if you look at it right.

User avatar
HomerJ
Posts: 14199
Joined: Fri Jun 06, 2008 12:50 pm

Re: U.S. stocks in free fall

Post by HomerJ » Wed Feb 13, 2019 12:35 pm

jfn111 wrote:
Fri Jan 18, 2019 7:53 pm
I went 80% cash today at the close. It may be a brilliant move or... :oops:
So the market is up about 5% since this move. In less than a month.

You may still be proven correct. The market could drop 20% from here. But if it keeps going up, how do you decide at what point to get back in the market? After it goes up another 10%, 15%, 20%? The odds of a crash would be even higher then, right?

What if it does drop 20% from here, do you buy back in then, or wait for it to drop further? What if you wait, and it heads back up 10%. Jump back in before it gets back to your original sell point? Or wait longer and see it was a dead-cat bounce? Maybe it will drop again.

Do you have a plan? Market-timing is hard. You have to make decision after decision after decision. Once you get back in, you'll have to keep paying attention so you can decide when to get out again.

Just going on hunches for your next dozen market-timing decisions is not likely to end well.
Last edited by HomerJ on Wed Feb 13, 2019 1:25 pm, edited 4 times in total.
The J stands for Jay

LiterallyIronic
Posts: 1446
Joined: Sat Dec 05, 2015 10:36 am

Re: U.S. stocks in free fall

Post by LiterallyIronic » Wed Feb 13, 2019 12:48 pm

Admiral wrote:
Wed Feb 13, 2019 11:53 am
H-Town wrote:
Wed Feb 13, 2019 11:21 am
TheTimeLord wrote:
Wed Feb 13, 2019 10:43 am
J G Bankerton wrote:
Wed Feb 13, 2019 8:26 am
willthrill81 wrote:
Wed Jan 30, 2019 1:15 pm
No, I moved out of stocks earlier this month.
Is it time to move back in?
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
Do you really need to post the same exact thing in 2 different threads. This is not a humble brag.
viewtopic.php?f=10&t=257573&start=550#p4379253
J G Bankerton wrote:
Wed Feb 13, 2019 8:31 am
J G Bankerton wrote:
Mon Dec 24, 2018 10:12 am
Bought VTI at $120.94. This makes me feel all tingly inside.
LOL I don't know how he feels if he knows that he could have bought VTI at $50 price point years ago.

I guess you got to get excited about something, right?
Many of us were stocking up when it was $38 in 2009... :beer
The rest of us were trying to find jobs. :(

Post Reply