U.S. stocks in freefall

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sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Thu May 03, 2018 2:40 pm

ReformedSpender wrote:
Thu May 03, 2018 12:47 pm
Overall agree but since when were buybacks a "good" thing? This is all too common these days imo.

Look at recent Apple news. One Hundred BILLION dollar buyback authorized. They couldn't think of one single thing to spend that money on to fuel further growth their business further?
I look at stock buybacks as kind of following a Hippocratic Oath for Companies. If they can't figure out something good to do with the money, at least don't cause harm by blowing it on something stupid.

One mega-corp I'm familiar with has a habit of selling for $30M what it bought a few years before for $300M... :oops:

Christine600
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Re: U.S. stocks in freefall

Post by Christine600 » Thu May 03, 2018 3:18 pm

rgs92 wrote:
Thu May 03, 2018 12:25 pm
Good things:
2. Good earnings.
True - but isn't a lot of that from the tax cuts and not from businesses actually doing their jobs better? Luck and not skill?

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Thu May 03, 2018 3:21 pm

Earl Lemongrab wrote:
Thu May 03, 2018 1:39 pm
sreynard wrote:
Thu May 03, 2018 10:58 am
Earl Lemongrab wrote:
Thu May 03, 2018 10:21 am
That's what I do all the time. Besides adjusting allocation, I use ETFs and prefer not to have fractional shares.
OK, that's a reason I didn't think of! My broker and Quicken keep track of those for me, so I've never concerned myself with them.
The reason that I don't want fractionals is that I move my assets around frequently for transfer bonuses. If you have fractional shares, those generally have to be sold. This complicates transfer and can add cost depending on the brokerage and policies.
Frequently? Wow, didn't think of that one either. They given enough to make it worth it? I think I've been at Schwab fat, dumb, and happy, for about 30 years. Now with Vanguard ETFs available, I see even less of a reason to make a change than ever. I've been tempted to move to Vanguard now and then, but haven't really seen a compelling reason to do so yet.

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Thu May 03, 2018 3:29 pm

Christine600 wrote:
Thu May 03, 2018 3:18 pm
rgs92 wrote:
Thu May 03, 2018 12:25 pm
Good things:
2. Good earnings.
True - but isn't a lot of that from the tax cuts and not from businesses actually doing their jobs better? Luck and not skill?
I believe projected earnings was quite high before the tax-bill, but it certainly gave it a boost.

Christine600
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Re: U.S. stocks in freefall

Post by Christine600 » Thu May 03, 2018 5:21 pm

MotoTrojan wrote:
Thu May 03, 2018 3:29 pm
Christine600 wrote:
Thu May 03, 2018 3:18 pm
rgs92 wrote:
Thu May 03, 2018 12:25 pm
Good things:
2. Good earnings.
True - but isn't a lot of that from the tax cuts and not from businesses actually doing their jobs better? Luck and not skill?
I believe projected earnings was quite high before the tax-bill, but it certainly gave it a boost.
I don't subscribe so I don't see their sources. But Wall Street Journal says in an article lead
More than half of the total profit growth in the first quarter stemmed from a decline in tax rates
A boost indeed!

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Portfolio7
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Re: U.S. stocks in freefall

Post by Portfolio7 » Thu May 03, 2018 9:06 pm

True - but isn't a lot of that from the tax cuts and not from businesses actually doing their jobs better? Luck and not skill?
More than half of the total profit growth in the first quarter stemmed from a decline in tax rates
A boost indeed!
In this case, I don't think it really matters that the tax benefit required no action by businesses. The tax benefit is permanent (until the next tax bill), which means more money will go to shareholders, which means each share is more valuable than it was before the tax bill. As for the other half of profit growth, the economy is strong. It seems to me that the question many are struggling with is whether the economy is overheating. I am on the side that says it's not, that we're working off a little extra market acceleration and will resume climbing later this year, keeping on for at least several more years yet. Others believe it's likely that we're close to the end of the business cycle and suspect we'll see a full correction this year or no later than next, if I am aggregating popular opinion correctly. There is a fair amount of data to support either conclusion, but none of the data is conclusive. One way or another, many things we don't understand will resolve themselves, and then we'll all interpret that differently too. :wink:
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Earl Lemongrab
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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Thu May 03, 2018 9:57 pm

sreynard wrote:
Thu May 03, 2018 3:21 pm
Earl Lemongrab wrote:
Thu May 03, 2018 1:39 pm
The reason that I don't want fractionals is that I move my assets around frequently for transfer bonuses. If you have fractional shares, those generally have to be sold. This complicates transfer and can add cost depending on the brokerage and policies.
Frequently? Wow, didn't think of that one either. They given enough to make it worth it? I think I've been at Schwab fat, dumb, and happy, for about 30 years. Now with Vanguard ETFs available, I see even less of a reason to make a change than ever. I've been tempted to move to Vanguard now and then, but haven't really seen a compelling reason to do so yet.
You can read all about it here: The Final, Definitive Thread on Brokerage Transfer Bonuses

I generally net a few thousand per year. Depends on what's available for bonuses and how much I have free to transfer.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

lostdog
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Re: U.S. stocks in freefall

Post by lostdog » Fri May 04, 2018 1:28 pm

Warren Buffet can really move a market, that's for sure.
Hear the clock ticking? That’s your life flying by while you listen to market pundits and watch stock prices fluctuate. -Humble Dollar

letsgobobby
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Re: U.S. stocks in freefall

Post by letsgobobby » Fri May 04, 2018 2:04 pm

Bad luck, that. Yesterday mid day I decided it was time to continue the value averaging process of a lump sum that gets me fully invested by 2020. Didn't have time to pull the trigger so did it last night, by mutual fund rather than ETF. I'm paying 3% more than I would have about 24 hours ago.
Last edited by letsgobobby on Fri May 04, 2018 10:44 pm, edited 1 time in total.

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ReformedSpender
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Re: U.S. stocks in freefall

Post by ReformedSpender » Fri May 04, 2018 2:29 pm

letsgobobby wrote:
Fri May 04, 2018 2:04 pm
Bad luck, that. Yesterday mid day I decided it was time to continue the value averaging process of a lump sum that gets me fully invested by 2020. Didn't have time to pull the trigger so did it last night, by mutual fund rather than WTFE. I'm paying 3% more than I would have about 24 hours ago.
While you may be considering it 'bad luck' now, a difference of 3% could mean little 2, 5, or 10+ years.

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

GoldenFinch
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Re: U.S. stocks in freefall

Post by GoldenFinch » Fri May 04, 2018 7:34 pm

letsgobobby wrote:
Fri May 04, 2018 2:04 pm
Bad luck, that. Yesterday mid day I decided it was time to continue the value averaging process of a lump sum that gets me fully invested by 2020. Didn't have time to pull the trigger so did it last night, by mutual fund rather than WTFE. I'm paying 3% more than I would have about 24 hours ago.
What’s a WTFE?

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ReformedSpender
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Re: U.S. stocks in freefall

Post by ReformedSpender » Tue May 15, 2018 1:03 pm

Seems most have gotten over their volatility jitters. S&P, DOW and NAS all down over 1%, 10 yr bond up nearly 3% today.

Yet not a peep in here. Kudos!

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

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JoMoney
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Re: U.S. stocks in freefall

Post by JoMoney » Tue May 15, 2018 1:12 pm

It's been looking like a "range-bound" market, maybe it will have to reach a new high or break through the low for the year, or even the month, before people will get excited.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Zigma
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Re: U.S. stocks in freefall

Post by Zigma » Tue May 15, 2018 1:19 pm

ReformedSpender wrote:
Tue May 15, 2018 1:03 pm
Seems most have gotten over their volatility jitters. S&P, DOW and NAS all down over 1%, 10 yr bond up nearly 3% today.

Yet not a peep in here. Kudos!

:beer
Good indicator (not a peep in here) of how people are feeling. I actually logged-in just to check...and...nope.

:sharebeer
Keep moving on higher ground.

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DanMahowny
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Re: U.S. stocks in freefall

Post by DanMahowny » 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.
Funding secured

robertmcd
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Re: U.S. stocks in freefall

Post by robertmcd » Tue May 15, 2018 1:26 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.
Have you bought long term treasuries yet?

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Earl Lemongrab
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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Tue May 15, 2018 1:31 pm

robertmcd wrote:
Tue May 15, 2018 1:26 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.
Have you bought long term treasuries yet?
Ha, that's the loser way. Short the market. Margin loans to short.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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DanMahowny
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Re: U.S. stocks in freefall

Post by DanMahowny » Tue May 15, 2018 1:33 pm

robertmcd wrote:
Tue May 15, 2018 1:26 pm
Have you bought long term treasuries yet?
Nope. I do own a substantial amount of short treasuries tho.

I'm mostly avoiding long treasuries because I'm not expecting deflation.
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robertmcd
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Re: U.S. stocks in freefall

Post by robertmcd » Tue May 15, 2018 1:47 pm

At your age if I had won the game I would be sitting in mostly cash and physical gold too though.

At my age of 24, I am trying to avoid being left behind even more in this asset price inflation insanity. I would rather bet with the "house" aka the Fed, and if I get slaughtered by rising long term interest rates, I will be in an even better mood as I watch asset prices get decimated and my earned income regain some buying power.

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Tue May 15, 2018 1:54 pm

Such confident predictions we see today, from both young and, old. It's simply amazing :shock: .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Tue May 15, 2018 2:48 pm

ReformedSpender wrote:
Tue May 15, 2018 1:03 pm
Seems most have gotten over their volatility jitters. S&P, DOW and NAS all down over 1%, 10 yr bond up nearly 3% today.

Yet not a peep in here. Kudos!

:beer
Nope! The end is nigh! Dumped all my stock today. Heading for the hills....

Independent George
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Re: U.S. stocks in freefall

Post by Independent George » Tue May 15, 2018 3:38 pm

During the great crash of '08-'09, my primary worry wasn't my portfolio, but my income. The same is true today - I don't much care about the paper value of my assets (including my condo), but I would be lying if I said I'm not tempted to put more into cash and less into my 401(k) because of worries about job loss. I have an emergency fund, but... I've become rather attached to having that emergency fund, and dread the possibility of tapping into it. Volatility makes me worry about my future income stream.

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Tue May 15, 2018 4:26 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.
Some will wait and see you put all your windfall and/or cash into the market. Then, DOW will plunges to 5,000 and stay there for the next decade. That'd be fun.

retiringwhen
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Re: U.S. stocks in freefall

Post by retiringwhen » Tue May 15, 2018 4:36 pm

thangngo wrote:
Tue May 15, 2018 4:26 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.
Some will wait and see you put all your windfall and/or cash into the market. Then, DOW will plunges to 5,000 and stay there for the next decade. That'd be fun.
my family put a large windfall into the market in the past year and it has been a nail biter due to the large moves. i was used to putting $2,000 a month in the market for decades, DCA is a nerve smoother, windfalls with several lumpsums are nerve fraying. But, I am playing the odds that the market goes up over the long term.... sigh.

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue May 15, 2018 4:40 pm

thangngo wrote:
Tue May 15, 2018 4:26 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.
Some will wait and see you put all your windfall and/or cash into the market. Then, DOW will plunges to 5,000 and stay there for the next decade. That'd be fun.
I'm glad to hear that somebody's crystal ball is working. Mine's been in the shop for quite a while, and they don't return my calls.
“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

marcopolo
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Re: U.S. stocks in freefall

Post by marcopolo » 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?

I have no idea where the market will go, so i don't place bets either way.
You could be right, so what are you doing based on your seeming certainty? Buying put options?
Once in a while you get shown the light, in the strangest of places if you look at it right.

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DanMahowny
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Re: U.S. stocks in freefall

Post by DanMahowny » 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"
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MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Tue May 15, 2018 5:21 pm

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"
What’s your IPS say to do at DOW 16,000? 20,000?

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DanMahowny
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Re: U.S. stocks in freefall

Post by DanMahowny » Tue May 15, 2018 5:37 pm

Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
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nedsaid
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Re: U.S. stocks in freefall

Post by nedsaid » Tue May 15, 2018 5:48 pm

DanMahowny wrote:
Tue May 15, 2018 5:37 pm
Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
While I think that a good dose of contrarian thinking is a good thing, individual investors can overdo it. The crowd can be "wrong" and yet the markets can keep going up. Just doing the opposite of the crowd often does not work. I think contrarian thinking works best when the market gets to emotional extremes, that is markets get too optimistic or too pessimistic.

Right now, I just don't see excessive optimism out there. The market correction we have experienced is good evidence of that, markets still have not returned to all-time highs. There is some caution out there. Thus, I wouldn't put a "sell" signal on the market. Hope having all that cash works out for you.
A fool and his money are good for business.

marcopolo
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Re: U.S. stocks in freefall

Post by marcopolo » Tue May 15, 2018 5:59 pm

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"
That seems kind of halfhearted. If you are convinced the DOW will be at 16000 in 12 months or less, why not short it, or at least buy some puts (will limit losses in case you are wrong) to profit from this knowledge.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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DanMahowny
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Re: U.S. stocks in freefall

Post by DanMahowny » Tue May 15, 2018 7:09 pm

marcopolo wrote:
Tue May 15, 2018 5:59 pm
That seems kind of halfhearted. If you are convinced the DOW will be at 16000 in 12 months or less, why not short it, or at least buy some puts (will limit losses in case you are wrong) to profit from this knowledge.
So I have to do it your way? Sorry man.
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marcopolo
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Re: U.S. stocks in freefall

Post by marcopolo » Tue May 15, 2018 7:25 pm

DanMahowny wrote:
Tue May 15, 2018 7:09 pm
marcopolo wrote:
Tue May 15, 2018 5:59 pm
That seems kind of halfhearted. If you are convinced the DOW will be at 16000 in 12 months or less, why not short it, or at least buy some puts (will limit losses in case you are wrong) to profit from this knowledge.
So I have to do it your way? Sorry man.
No man. I didn't suggest what you should do. I was just asking why someone who is so certain they know what the market will do over the next year wouldn't do more to profit from it.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: U.S. stocks in freefall

Post by bgf » Tue May 15, 2018 9:39 pm

DanMahowny wrote:
Tue May 15, 2018 5:37 pm
Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
Enough money to retire at 42 and then market beating returns over the past 11 years? Hmm. Why are you messing with oil? A wealthy person speculating in oil? Sounds backwards.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Tue May 15, 2018 11:19 pm

nedsaid wrote:
Tue May 15, 2018 5:48 pm
DanMahowny wrote:
Tue May 15, 2018 5:37 pm
Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
While I think that a good dose of contrarian thinking is a good thing, individual investors can overdo it. The crowd can be "wrong" and yet the markets can keep going up. Just doing the opposite of the crowd often does not work. I think contrarian thinking works best when the market gets to emotional extremes, that is markets get too optimistic or too pessimistic.

Right now, I just don't see excessive optimism out there. The market correction we have experienced is good evidence of that, markets still have not returned to all-time highs. There is some caution out there. Thus, I wouldn't put a "sell" signal on the market. Hope having all that cash works out for you.
With 70 to 80% of his portfolio in cash and equivalents, sounds more like he doesn't invest his money for a living. :wink:

Actually, it's a really hard way to get rich, but a decent way to stay rich. Some of the rich I've known have been similarly ultra-conservative. If you're only spending 0.4% of your portfolio, it probably doesn't matter what you do, you're going to be just fine. I don't really recall any of them being very good at investing, but they are so cautious they never loose any of the money they do have. That's as long as they stay the course, and don't keep jumping between different "strategies"....

Never heard of someone that ultra-conservative spending time on an investing website before though.... I'm wondering why Dan would care if stocks are in freefall or not though? :confused But then, rich people often do crazy things I don't understand.... :P

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Tue May 15, 2018 11:35 pm

bgf wrote:
Tue May 15, 2018 9:39 pm
DanMahowny wrote:
Tue May 15, 2018 5:37 pm
Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
Enough money to retire at 42 and then market beating returns over the past 11 years? Hmm. Why are you messing with oil? A wealthy person speculating in oil? Sounds backwards.
Well, T. Boone Pickens does. Of course, he may be a lot better off if he just put all of his money into an S&P 500 index fund.... But the rich often do rather odd things for a variety of strange reasons.... :)

Mr. Pickens probably cares a lot about the current price of oil, but I'm not so sure he is concerned about U.S. stocks being in freefall or not though. :wink:

JustinR
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Re: U.S. stocks in freefall

Post by JustinR » Tue May 15, 2018 11:54 pm

DanMahowny wrote:
Tue May 15, 2018 5:37 pm
Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
...Isn't the conventional wisdom that the market is going to go down? So, the same as what you think.

Example: viewtopic.php?f=1&t=249092

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Wed May 16, 2018 12:43 am

JustinR wrote:
Tue May 15, 2018 11:54 pm
DanMahowny wrote:
Tue May 15, 2018 5:37 pm
Sorry man. I don't think that way.

About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
...Isn't the conventional wisdom that the market is going to go down? So, the same as what you think.

Example: viewtopic.php?f=1&t=249092
Huge difference between that thread and a bear market (let alone DOW 16K).

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Mon May 21, 2018 1:20 pm

DanMahowny wrote:
Tue May 15, 2018 5:37 pm
About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
Just buy and hold... You're timing the market and using "I don't follow the crowd" as justification.

A few conventional wisdoms:
- Buy and hold.
- Don't follow the crowd: be greedy when others are fearful, be afraid when others are greedy.
- Keep cost low.
- And don't time the market.

Image

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Mon May 21, 2018 1:27 pm

thangngo wrote:
Mon May 21, 2018 1:20 pm
DanMahowny wrote:
Tue May 15, 2018 5:37 pm
About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
Just buy and hold... You're timing the market and using "I don't follow the crowd" as justification.

A few conventional wisdoms:
- Buy and hold.
- Don't follow the crowd: be greedy when others are fearful, be afraid when others are greedy.
- Keep cost low.
- And don't time the market.

Image
Your 2nd conventional wisdom is essentially identical to what Dan said, no? I invest every free dollar the day it’s available. That saying may help me not to panic when the market is low, or to justify continuing to invest, but at the root it is suggesting you market time.

Jags4186
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Re: U.S. stocks in freefall

Post by Jags4186 » Mon May 21, 2018 2:19 pm

MotoTrojan wrote:
Mon May 21, 2018 1:27 pm
thangngo wrote:
Mon May 21, 2018 1:20 pm
DanMahowny wrote:
Tue May 15, 2018 5:37 pm
About the only thing I do consistently is NOT follow the crowd. Been doing it all my life. Retired from work at 42 in 2007. I invest my money for a living.

Basically, I study conventional wisdom, then reject it. It's a great way to get rich.
Just buy and hold... You're timing the market and using "I don't follow the crowd" as justification.

A few conventional wisdoms:
- Buy and hold.
- Don't follow the crowd: be greedy when others are fearful, be afraid when others are greedy.
- Keep cost low.
- And don't time the market.

Image
Your 2nd conventional wisdom is essentially identical to what Dan said, no? I invest every free dollar the day it’s available. That saying may help me not to panic when the market is low, or to justify continuing to invest, but at the root it is suggesting you market time.
I don’t take it that way. For a buy and hold investor both can be true:

When the market is going up you are rebalancing to your predetermined asset allocation. If, for example, your AA is 60/40 you don’t let it mushroom to 80/20. This is being “afraid when others are greedy”.

When the market is down you have the opposite, you are rebalancing from bonds into stocks and still contributing new money into your portfolio every pay check. You are being “greedy when others are fearful”.

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Mon May 21, 2018 2:25 pm

Jags4186 wrote:
Mon May 21, 2018 2:19 pm


I don’t take it that way. For a buy and hold investor both can be true:

When the market is going up you are rebalancing to your predetermined asset allocation. If, for example, your AA is 60/40 you don’t let it mushroom to 80/20. This is being “afraid when others are greedy”.

When the market is down you have the opposite, you are rebalancing from bonds into stocks and still contributing new money into your portfolio every pay check. You are being “greedy when others are fearful”.
That is a reasonable understanding. I would add that the person who the quote is attributed to is a well known (albeit extremely successful) market-timer, who is currently sitting on $B's in cash.

Jags4186
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Re: U.S. stocks in freefall

Post by Jags4186 » Mon May 21, 2018 2:32 pm

MotoTrojan wrote:
Mon May 21, 2018 2:25 pm
Jags4186 wrote:
Mon May 21, 2018 2:19 pm


I don’t take it that way. For a buy and hold investor both can be true:

When the market is going up you are rebalancing to your predetermined asset allocation. If, for example, your AA is 60/40 you don’t let it mushroom to 80/20. This is being “afraid when others are greedy”.

When the market is down you have the opposite, you are rebalancing from bonds into stocks and still contributing new money into your portfolio every pay check. You are being “greedy when others are fearful”.
That is a reasonable understanding. I would add that the person who the quote is attributed to is a well known (albeit extremely successful) market-timer, who is currently sitting on $B's in cash.
I wouldn’t call Warren Buffet a market timer. He’s a value investor.

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Mon May 21, 2018 5:48 pm

Jags4186 wrote:
Mon May 21, 2018 2:32 pm
MotoTrojan wrote:
Mon May 21, 2018 2:25 pm
Jags4186 wrote:
Mon May 21, 2018 2:19 pm


I don’t take it that way. For a buy and hold investor both can be true:

When the market is going up you are rebalancing to your predetermined asset allocation. If, for example, your AA is 60/40 you don’t let it mushroom to 80/20. This is being “afraid when others are greedy”.

When the market is down you have the opposite, you are rebalancing from bonds into stocks and still contributing new money into your portfolio every pay check. You are being “greedy when others are fearful”.
That is a reasonable understanding. I would add that the person who the quote is attributed to is a well known (albeit extremely successful) market-timer, who is currently sitting on $B's in cash.
I wouldn’t call Warren Buffet a market timer. He’s a value investor.
That's true, Buffett's ideal holding period for an investment is reported to be "forever".

I think that qualifies as buy and hold, or stay the course.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

david1082b
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Re: U.S. stocks in freefall

Post by david1082b » Mon May 21, 2018 6:13 pm

ruralavalon wrote:
Mon May 21, 2018 5:48 pm
Jags4186 wrote:
Mon May 21, 2018 2:32 pm
MotoTrojan wrote:
Mon May 21, 2018 2:25 pm
Jags4186 wrote:
Mon May 21, 2018 2:19 pm


I don’t take it that way. For a buy and hold investor both can be true:

When the market is going up you are rebalancing to your predetermined asset allocation. If, for example, your AA is 60/40 you don’t let it mushroom to 80/20. This is being “afraid when others are greedy”.

When the market is down you have the opposite, you are rebalancing from bonds into stocks and still contributing new money into your portfolio every pay check. You are being “greedy when others are fearful”.
That is a reasonable understanding. I would add that the person who the quote is attributed to is a well known (albeit extremely successful) market-timer, who is currently sitting on $B's in cash.
I wouldn’t call Warren Buffet a market timer. He’s a value investor.
That's true, Buffett's ideal holding period for an investment is reported to be "forever".

I think that qualifies as buy and hold, or stay the course.
I don't know how the leap was made from value investor to "buy and hold" or "stay the course". Surely value investors will dump an investment if they feel it doesn't fit in their portfolio anymore? IBM, JNJ, Tesco, PetroChina, all these positions have been abandoned by Berkshire Hathaway, as well as others I don't know about. They only hold what they hold.

"Stay the course" would imply buying and holding an asset allocation through thick and thin and ignoring valuations. Value investors are fine with abandoning something that doesn't seem to fit anymore and are fine with staying out of a market they deem too expensive.

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JoMoney
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Re: U.S. stocks in freefall

Post by JoMoney » Mon May 21, 2018 6:27 pm

I've heard Buffett clarify the "forever" holding period as being a thought process when determining what he buys, and not necessarily a literal sense. He want's to own things that grow in value regardless of finding someone else to sell it to. If the stock market closed down for 5 years he'd be just as happy owning the companies he purchased.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

dspencer
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Re: U.S. stocks in freefall

Post by dspencer » Tue May 22, 2018 9:10 am

Warren Buffett is a professional investor with a once-in-a-generation talent for his profession. It's hard for me to see the relevance of his professional investing strategy to ordinary people who don't have the time, talent, money, or inclination to do what he does. To the extent that he offers investing advice to ordinary people, it seems clear that he favors a passive, buy and hold, low cost index fund approach that is similar, albeit not identical, to the Bogle approach.

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Tue May 22, 2018 9:25 am

dspencer wrote:
Tue May 22, 2018 9:10 am
Warren Buffett is a professional investor with a once-in-a-generation talent for his profession. It's hard for me to see the relevance of his professional investing strategy to ordinary people who don't have the time, talent, money, or inclination to do what he does. To the extent that he offers investing advice to ordinary people, it seems clear that he favors a passive, buy and hold, low cost index fund approach that is similar, albeit not identical, to the Bogle approach.
Warren Buffett is a value investor apparently with a buy and hold (stay the course) philosophy, who has suggested Vanguard 500 Index Fund and short-term government bonds for the individual non-professional investor.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

aristotelian
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Re: U.S. stocks in freefall

Post by aristotelian » Tue May 22, 2018 9:54 am

dspencer wrote:
Tue May 22, 2018 9:10 am
Warren Buffett is a professional investor with a once-in-a-generation talent for his profession. It's hard for me to see the relevance of his professional investing strategy to ordinary people who don't have the time, talent, money, or inclination to do what he does. To the extent that he offers investing advice to ordinary people, it seems clear that he favors a passive, buy and hold, low cost index fund approach that is similar, albeit not identical, to the Bogle approach.
Buffett is a "genius" who has matched the S&P over a 10 year basis and underperformed on a 5 year basis. On a 15 year basis he has outperformed by all of 0.09%. That just shows how hard it is to be an investing genius. Unless you take a lot of risk, all your little decisions are going to end up approximating the S&P.

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Tue May 22, 2018 9:59 am

So back to the conviction of some bogleheads above to stay out of the market and pray for a big crash. Is S&P 500 rate of return not enough for you? Do you want more? How much more? And how do you plan to achieve higher return? With market timing?

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