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: 663
Joined: Mon May 09, 2016 2:11 pm
Location: Yoknapatawpha

Re: U.S. stocks in free fall

Post by Rowan Oak »

flyingaway wrote: Mon Sep 21, 2020 12:37 pm What is the main reason for today's market drop?
I know the exact reason:
On the commodities trading floor, the Dukes committed their holdings to buying frozen concentrated orange juice futures contracts; other traders followed their lead, inflating the price. Valentine and Winthorpe short sell frozen concentrated orange juice futures contracts at the inflated price. Following the broadcast of the actual crop report and its prediction of a normal harvest, the price of orange juice futures plummets. Valentine and Winthorpe buy futures at the lower price from everyone except the Dukes, to fulfill the contracts they sold short earlier, turning an immense profit.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger
rockstar
Posts: 752
Joined: Mon Feb 03, 2020 6:51 pm

Re: U.S. stocks in free fall

Post by rockstar »

AerialWombat wrote: Mon Sep 21, 2020 5:28 pm S&P500 is more or less back to where it was in early January. Will this be a... lost year? :|
We're in the middle of a pandemic/recession. You'd think it would go down, right? The fact that it's been up for a good portion of the year is pretty irrational. It's why I shifted from VOO to QQQ in March. I figured a great proportion of the companies in QQQ would make earnings versus what's in VOO. Sure, there's some overlap, but I can't see how travel and energy and clothing retail could make any money in this environment. Of course, the multiples for the stocks making up QQQ blow the mind too. And bond yields are ridiculous. If I really try, I could convince myself to go to cash.
UpperNwGuy
Posts: 4117
Joined: Sun Oct 08, 2017 7:16 pm

Re: U.S. stocks in free fall

Post by UpperNwGuy »

rockstar wrote: Mon Sep 21, 2020 7:57 pm
AerialWombat wrote: Mon Sep 21, 2020 5:28 pm S&P500 is more or less back to where it was in early January. Will this be a... lost year? :|
We're in the middle of a pandemic/recession. You'd think it would go down, right? The fact that it's been up for a good portion of the year is pretty irrational. It's why I shifted from VOO to QQQ in March. I figured a great proportion of the companies in QQQ would make earnings versus what's in VOO. Sure, there's some overlap, but I can't see how travel and energy and clothing retail could make any money in this environment. Of course, the multiples for the stocks making up QQQ blow the mind too. And bond yields are ridiculous. If I really try, I could convince myself to go to cash.
So who is winning, QQQ or VOO?
User avatar
Stef
Posts: 1144
Joined: Thu Oct 10, 2019 10:13 am

Re: U.S. stocks in free fall

Post by Stef »

rascott wrote: Mon Sep 21, 2020 2:40 pm Good for you getting out before getting too deep. FF says themselves the value premium may well be gone ... they just don't know. That's not very reassuring. I'm already long into it, so just have to wait upon the inevitable rebound. But I'll be tossing in the towel for good once it occurs.
If you can't tell if there is a premium in a 30 year period due to it being too small with too much statistical noise, it not only begs the question if it's still there but if it's significant enough to even care about. I think not, that's why I simplified my portfolio.
newyorker
Posts: 172
Joined: Sun May 17, 2020 7:59 am

Re: U.S. stocks in free fall

Post by newyorker »

Anyone care to guess the bottom of this dip (yeah i know bogleheads taboo... but still)
RayKeynes
Posts: 253
Joined: Mon Nov 11, 2019 2:14 am

Re: U.S. stocks in free fall

Post by RayKeynes »

newyorker wrote: Tue Sep 22, 2020 1:15 am Anyone care to guess the bottom of this dip (yeah i know bogleheads taboo... but still)
anything from 3'000 to 3'230 (which we already hit).
Alchemist
Posts: 561
Joined: Sat Aug 30, 2014 6:35 am

Re: U.S. stocks in free fall

Post by Alchemist »

AerialWombat wrote: Mon Sep 21, 2020 5:28 pm S&P500 is more or less back to where it was in early January. Will this be a... lost year? :|
Considering the state of the economy it would be a little weird if it wasn't a negative year for the S&p 500. What I think the recent downturn is a response to is the market re-adjusting expectations. The new all time high's were hit when there was widespread hope of a vaccine in October and additional stimulus from Congress.

Hopes for further stimulus this year is dead, prospects for more stimulus next year will depend on the outcome of the election. Hope for an approved vaccine by year end is beginning to erode. Thus the market is 're-pricing' itself for a non-stimulus/non-vaccine 2020. What is the right price for that outcome?

No idea! But probably not new all time high's.

I'll just keep buying every month like I always do.
case_of_ennui
Posts: 33
Joined: Mon Aug 17, 2020 5:07 pm

Re: U.S. stocks in free fall

Post by case_of_ennui »

Good week to have a 401k contribution scheduled!
atdharris
Posts: 624
Joined: Wed Jan 02, 2019 3:18 pm

Re: U.S. stocks in free fall

Post by atdharris »

Alchemist wrote: Tue Sep 22, 2020 3:55 am
AerialWombat wrote: Mon Sep 21, 2020 5:28 pm S&P500 is more or less back to where it was in early January. Will this be a... lost year? :|
Considering the state of the economy it would be a little weird if it wasn't a negative year for the S&p 500. What I think the recent downturn is a response to is the market re-adjusting expectations. The new all time high's were hit when there was widespread hope of a vaccine in October and additional stimulus from Congress.

Hopes for further stimulus this year is dead, prospects for more stimulus next year will depend on the outcome of the election. Hope for an approved vaccine by year end is beginning to erode. Thus the market is 're-pricing' itself for a non-stimulus/non-vaccine 2020. What is the right price for that outcome?

No idea! But probably not new all time high's.

I'll just keep buying every month like I always do.
This likely explains why we're trading down. I'm still heavy in tech because I don't think much changes between now and early 2021. We're still going to be heavily reliant on digital.
User avatar
abuss368
Posts: 21611
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: U.S. stocks in free fall

Post by abuss368 »

It is official once again: I backed my truck up yesterday!
John C. Bogle: “Simplicity is the master key to financial success."
Robot Monster
Posts: 1529
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: U.S. stocks in free fall

Post by Robot Monster »

CBO Downgrades Long-Term Projections of Economic Growth
Agency says U.S. GDP growth will average 1.6% over next 30 years, vs. 1.9% projected in 2019
Growth averaged 2.5% from 1990 to 2019.
Source
"Happiness comes from being connected in the right ways to: other people, your work, something larger than yourself."
User avatar
LadyGeek
Site Admin
Posts: 66393
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: U.S. stocks in free fall

Post by LadyGeek »

This is a "no politics" forum. I removed an off-topic post regarding the election. As a reminder, see: Politics and Religion
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
  • Common religious expressions such as sending your prayers to an ailing member.
  • Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
  • Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
  • Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
Additionally, a few posts are discussing the coronavirus. The main intent of the post must be on-topic, which is the stock market. See: Please read before posting on coronavirus/COVID-19
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.
User avatar
LadyGeek
Site Admin
Posts: 66393
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: U.S. stocks in free fall

Post by LadyGeek »

I removed an interchange discussing coronavirus vaccine availability. (Posts after my last post (and a few before that) have been removed.) The discussion was derailed. See: Please read before posting on coronavirus/COVID-19

Please stay on-topic, which is the US market (declining).
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.
User avatar
Cheez-It Guy
Posts: 1101
Joined: Sun Mar 03, 2019 4:20 pm

Re: U.S. stocks in free fall

Post by Cheez-It Guy »

Escapevelocity wrote: Mon Sep 21, 2020 10:43 am
Cheez-It Guy wrote: Mon Sep 21, 2020 10:16 am Good. Automatic investment hits this afternoon.
It's always nice when it hits after a big down day and not before it. I have a larger contribution to 401k pending on my annual bonus this week. Wouldn't mind seeing it hit today, but likely not until later this week or early next.
It's especially nice when followed by a big up day.
User avatar
jason2459
Posts: 612
Joined: Wed May 06, 2020 7:59 pm

Re: U.S. stocks in free fall

Post by jason2459 »

Cheez-It Guy wrote: Tue Sep 22, 2020 2:42 pm
Escapevelocity wrote: Mon Sep 21, 2020 10:43 am
Cheez-It Guy wrote: Mon Sep 21, 2020 10:16 am Good. Automatic investment hits this afternoon.
It's always nice when it hits after a big down day and not before it. I have a larger contribution to 401k pending on my annual bonus this week. Wouldn't mind seeing it hit today, but likely not until later this week or early next.
It's especially nice when followed by a big up day.
Oh just wait. If today was better I'm sure my contributions would have went in today but they haven't so we should have another really good day ahead of us this week before my 401k contributions hit then the market will break back down
Robot Monster
Posts: 1529
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: U.S. stocks in free fall

Post by Robot Monster »

Anyone else notice that Exxon almost has a 10% dividend yield?

I know it's not a US stock, but since we're talking crazy div yields, HSBC, at a 20-something year low for its stock, almost has a 14% div yield.
"Happiness comes from being connected in the right ways to: other people, your work, something larger than yourself."
rchmx1
Posts: 113
Joined: Sat Oct 26, 2019 6:38 pm

Re: U.S. stocks in free fall

Post by rchmx1 »

jason2459 wrote: Tue Sep 22, 2020 3:24 pm Oh just wait. If today was better I'm sure my contributions would have went in today but they haven't so we should have another really good day ahead of us this week before my 401k contributions hit then the market will break back down
Thanks in advance for taking one for the team. :sharebeer
atdharris
Posts: 624
Joined: Wed Jan 02, 2019 3:18 pm

Re: U.S. stocks in free fall

Post by atdharris »

Another day, another drop when even LTTs are down
Robot Monster
Posts: 1529
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: U.S. stocks in free fall

Post by Robot Monster »

Stocks dropped amid warnings from Federal Reserve officials on the need for more stimulus to lift the world’s largest economy from a coronavirus-induced recession. The dollar climbed...Fed Chairman Jerome Powell reiterated that there’s a long way to go for the economic rebound, which will likely require more support...
Source
"Happiness comes from being connected in the right ways to: other people, your work, something larger than yourself."
User avatar
Brianmcg321
Posts: 981
Joined: Mon Jul 15, 2019 8:23 am

Re: U.S. stocks in free fall

Post by Brianmcg321 »

Rowan Oak wrote: Mon Sep 21, 2020 7:20 pm
flyingaway wrote: Mon Sep 21, 2020 12:37 pm What is the main reason for today's market drop?
I know the exact reason:
On the commodities trading floor, the Dukes committed their holdings to buying frozen concentrated orange juice futures contracts; other traders followed their lead, inflating the price. Valentine and Winthorpe short sell frozen concentrated orange juice futures contracts at the inflated price. Following the broadcast of the actual crop report and its prediction of a normal harvest, the price of orange juice futures plummets. Valentine and Winthorpe buy futures at the lower price from everyone except the Dukes, to fulfill the contracts they sold short earlier, turning an immense profit.
Those Dukes. They should have stuck to VTSAX.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
dvvader
Posts: 79
Joined: Fri Nov 22, 2019 7:07 pm

Re: U.S. stocks in free fall

Post by dvvader »

Down more than 1% and only 3 new posts in this thread today?! Bogleheads are slacking!
sailaway
Posts: 2223
Joined: Fri May 12, 2017 1:11 pm

Re: U.S. stocks in free fall

Post by sailaway »

dvvader wrote: Wed Sep 23, 2020 1:11 pm Down more than 1% and only 3 new posts in this thread today?! Bogleheads are slacking!
Sometimes, you just sit back and enjoy the ride.
atdharris
Posts: 624
Joined: Wed Jan 02, 2019 3:18 pm

Re: U.S. stocks in free fall

Post by atdharris »

Everything is down. Treasuries, gold, equities, munis. Tough time.
User avatar
Cheez-It Guy
Posts: 1101
Joined: Sun Mar 03, 2019 4:20 pm

Re: U.S. stocks in free fall

Post by Cheez-It Guy »

jason2459 wrote: Tue Sep 22, 2020 3:24 pm Oh just wait. If today was better I'm sure my contributions would have went in today but they haven't so we should have another really good day ahead of us this week before my 401k contributions hit then the market will break back down
You lied to me! :x
User avatar
jason2459
Posts: 612
Joined: Wed May 06, 2020 7:59 pm

Re: U.S. stocks in free fall

Post by jason2459 »

Cheez-It Guy wrote: Wed Sep 23, 2020 1:38 pm
jason2459 wrote: Tue Sep 22, 2020 3:24 pm Oh just wait. If today was better I'm sure my contributions would have went in today but they haven't so we should have another really good day ahead of us this week before my 401k contributions hit then the market will break back down
You lied to me! :x
Unfortunately I didn't. I looked this morning and my 401k contributions went in sometime after midnight as they still didn't show up the last time I checked last night. :(
User avatar
MortgageOnBlack
Posts: 403
Joined: Sun Feb 05, 2012 8:50 pm

Re: U.S. stocks in free fall

Post by MortgageOnBlack »

Market down 2% now...
rocketsrule
Posts: 65
Joined: Wed Jul 10, 2019 1:32 pm

Re: U.S. stocks in free fall

Post by rocketsrule »

not sure what to do with dry powder. Continue ITOT contribution?
lostdog
Posts: 3174
Joined: Thu Feb 04, 2016 2:15 pm

Re: U.S. stocks in free fall

Post by lostdog »

rocketsrule wrote: Wed Sep 23, 2020 2:17 pm not sure what to do with dry powder. Continue ITOT contribution?
Your planned scheduled ones? Yes.

Your emergency fund? No.

Dry powder for dips? Yes but hopefully you're not trying to catch a falling knife.
anoop
Posts: 1760
Joined: Tue Mar 04, 2014 1:33 am

Re: U.S. stocks in free fall

Post by anoop »

is this a good entry point?
User avatar
Stinky
Posts: 5556
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: U.S. stocks in free fall

Post by Stinky »

dvvader wrote: Wed Sep 23, 2020 1:11 pm Down more than 1% and only 3 new posts in this thread today?! Bogleheads are slacking!
We’re all in stunned silence. :oops:
It's a GREAT day to be alive - Travis Tritt
User avatar
jason2459
Posts: 612
Joined: Wed May 06, 2020 7:59 pm

Re: U.S. stocks in free fall

Post by jason2459 »

anoop wrote: Wed Sep 23, 2020 2:27 pm is this a good entry point?
Everyday is a good day to start.
EnjoyIt
Posts: 4725
Joined: Sun Dec 29, 2013 8:06 pm

Re: U.S. stocks in free fall

Post by EnjoyIt »

This cat bounces like a super ball.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
lostdog
Posts: 3174
Joined: Thu Feb 04, 2016 2:15 pm

Re: U.S. stocks in free fall

Post by lostdog »

I think VTSAX declares a dividend today also.
index245
Posts: 129
Joined: Wed Feb 12, 2020 9:28 pm

Re: U.S. stocks in free fall

Post by index245 »

anoop wrote: Wed Sep 23, 2020 2:27 pm is this a good entry point?
If I knew the answer to questions like this, I'd be a lot wealthier than I am....
User avatar
jason2459
Posts: 612
Joined: Wed May 06, 2020 7:59 pm

Re: U.S. stocks in free fall

Post by jason2459 »

EnjoyIt wrote: Wed Sep 23, 2020 2:38 pm This cat bounces like a super ball.
Which letter are we forming now?
User avatar
Stef
Posts: 1144
Joined: Thu Oct 10, 2019 10:13 am

Re: U.S. stocks in free fall

Post by Stef »

Guys, it's my fault and I am deeply sorry. I bought QQQ on margin last week :greedy
Robot Monster
Posts: 1529
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: U.S. stocks in free fall

Post by Robot Monster »

EnjoyIt wrote: Wed Sep 23, 2020 2:38 pm This cat bounces like a super ball.
Anyone else remember the book 101 Uses for a Dead Cat?
"Happiness comes from being connected in the right ways to: other people, your work, something larger than yourself."
case_of_ennui
Posts: 33
Joined: Mon Aug 17, 2020 5:07 pm

Re: U.S. stocks in free fall

Post by case_of_ennui »

lostdog wrote: Wed Sep 23, 2020 2:38 pm I think VTSAX declares a dividend today also.
Indeed today is the record date

https://personal.vanguard.com/pdf/DIVDAT_092020.pdf
vwgrrc
Posts: 101
Joined: Mon Jul 18, 2016 5:35 pm

Re: U.S. stocks in free fall

Post by vwgrrc »

Only back to Christmas 2019, no big deal :oops:
atdharris
Posts: 624
Joined: Wed Jan 02, 2019 3:18 pm

Re: U.S. stocks in free fall

Post by atdharris »

This has been an interesting drop on little to no news. I suppose the markets were being propped up largely by government stimulus that has now run out.
Day9
Posts: 992
Joined: Mon Jun 11, 2012 6:22 pm

Re: U.S. stocks in free fall

Post by Day9 »

atdharris wrote: Wed Sep 23, 2020 3:01 pm This has been an interesting drop on little to no news. I suppose the markets were being propped up largely by government stimulus that has now run out.
I have a feeling that part of a high valuation/low interest rate environment is that such gyrations are the new normal.
I'm just a fan of the person I got my user name from
Robot Monster
Posts: 1529
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: U.S. stocks in free fall

Post by Robot Monster »

Day9 wrote: Wed Sep 23, 2020 3:12 pm
atdharris wrote: Wed Sep 23, 2020 3:01 pm This has been an interesting drop on little to no news. I suppose the markets were being propped up largely by government stimulus that has now run out.
I have a feeling that part of a high valuation/low interest rate environment is that such gyrations are the new normal.
Indeed. I posted this yesterday in the soaring thread, but it bears repeating:
“We think equities will move higher over the medium term, thanks to the likely development of a successful vaccine, an end to election uncertainty, the passage of new U.S. fiscal stimulus, and continued extraordinary global monetary support,” wrote Mark Haefele, chief investment officer of global wealth management at UBS Group AG. “However, the path to ‘more normal’ is likely to be bumpy,” he said, adding that “we therefore expect volatility to persist over the balance of the year.”
Source

How this is actionable: don't let volatility, i.e. scary down days, throw you off your game.
"Happiness comes from being connected in the right ways to: other people, your work, something larger than yourself."
User avatar
MortgageOnBlack
Posts: 403
Joined: Sun Feb 05, 2012 8:50 pm

Re: U.S. stocks in free fall

Post by MortgageOnBlack »

in other news, I planted grass seed in my "Front Dirt" last Wednesday and it's starting to grow. I'll probably market time on my first mow. :mrgreen:
newyorker
Posts: 172
Joined: Sun May 17, 2020 7:59 am

Re: U.S. stocks in free fall

Post by newyorker »

Today was a bloodbath
User avatar
AnalogKid22
Posts: 393
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 »

newyorker wrote: Wed Sep 23, 2020 3:39 pm Today was a bloodbath
2-3%? How so?
sailaway
Posts: 2223
Joined: Fri May 12, 2017 1:11 pm

Re: U.S. stocks in free fall

Post by sailaway »

newyorker wrote: Wed Sep 23, 2020 3:39 pm Today was a bloodbath
It's not a bloodbath until the stoppers kick in!

Until then, it's just a scratch.
MotoTrojan
Posts: 10659
Joined: Wed Feb 01, 2017 8:39 pm

Re: U.S. stocks in free fall

Post by MotoTrojan »

AnalogKid22 wrote: Wed Sep 23, 2020 3:41 pm
newyorker wrote: Wed Sep 23, 2020 3:39 pm Today was a bloodbath
2-3%? How so?
Maybe a NKLA investor.
anoop
Posts: 1760
Joined: Tue Mar 04, 2014 1:33 am

Re: U.S. stocks in free fall

Post by anoop »

newyorker wrote: Wed Sep 23, 2020 3:39 pm Today was a bloodbath
https://youtu.be/XfRf8Pt2QTs?t=189
vwgrrc
Posts: 101
Joined: Mon Jul 18, 2016 5:35 pm

Re: U.S. stocks in free fall

Post by vwgrrc »

Robot Monster wrote: Wed Sep 23, 2020 3:15 pm
Day9 wrote: Wed Sep 23, 2020 3:12 pm
atdharris wrote: Wed Sep 23, 2020 3:01 pm This has been an interesting drop on little to no news. I suppose the markets were being propped up largely by government stimulus that has now run out.
I have a feeling that part of a high valuation/low interest rate environment is that such gyrations are the new normal.
Indeed. I posted this yesterday in the soaring thread, but it bears repeating:
“We think equities will move higher over the medium term, thanks to the likely development of a successful vaccine, an end to election uncertainty, the passage of new U.S. fiscal stimulus, and continued extraordinary global monetary support,” wrote Mark Haefele, chief investment officer of global wealth management at UBS Group AG. “However, the path to ‘more normal’ is likely to be bumpy,” he said, adding that “we therefore expect volatility to persist over the balance of the year.”
Source

How this is actionable: don't let volatility, i.e. scary down days, throw you off your game.
And buy every dip? :sharebeer
absolute zero
Posts: 505
Joined: Thu Dec 29, 2016 4:59 pm

Re: U.S. stocks in free fall

Post by absolute zero »

Robot Monster wrote: Tue Sep 22, 2020 3:56 pm Anyone else notice that Exxon almost has a 10% dividend yield?

I know it's not a US stock, but since we're talking crazy div yields, HSBC, at a 20-something year low for its stock, almost has a 14% div yield.
What blows my mind is that while other O&G companies are reducing their dividend in order to ease their heavily negative free cash flows, XOM is *so* committed to their dividend that they are actively trying to sell assets (in a weak/down market) in order to be able to maintain the dividend.

That level of obsession with dividends (which are of course just one piece of total return) is bizarre to me. I'm not a stock picker, but if I was then I wouldn't be a fan of XOM.
Post Reply