Coronavirus and the market

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bovineplane
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Re: Coronavirus and the market

Post by bovineplane » Wed Mar 25, 2020 3:22 pm

Maybe, maybe not the right thread for this but the info might have an effect on the market. All below numbers taken from the CDC daily published information which I presume to be accurate. Plugged the info into a simple spreadsheet to calculate daily changes in new cases. CDC publishes daily at noon EST and stats are cut off 4pm EST day prior so one day lag. Have been tracking since the CDC started publishing info.

Last 4 days
Total cases New cases % change % case change
3/22 33404 8821 26.41% 35.88%
3/23 44183 10779 24.40% 32.27%
3/24 54453 10270 18.86% 23.24%
3/25 62852 8399 13.36% 15.42% (predicted based on MSN current stats 4PM EST)


Compared to last week
3/16 4226
3/17 7038 2812 39.95% 66.54%
3/18 10442 3404 32.60% 48.37%
3/19 15219 4777 31.39% 45.75%
3/20 18747 3528 18.82% 23.18%
3/21 24583 5836 23.74% 31.13%

If the trend continues, how long until the press does the same calculation and some good news from the trend helps the market? The trend for 4 days is increasing #s overall but a decrease in the rate of change. This despite increased testing. Similar results for % change in deaths although the numbers are harder to track daily. 3/23 was the highest so far for new cases.

For more further info - the stay at home orders went into effect first with Ca (3/19), Ill (3/20), NJ (3/21), NY (3/22), TX (3/23). 17 total states have similar orders in effect as of today. Incubation 3-14 days means effects should start happening with infection rates. The most populous states have these restrictions in place.

I am not market timing. I have posted before I continue my regular Monday purchases to 401k every week. I have made zero changes to AA or contribution amount to 401k/Roth. As I am in the medical field but not epidemiology I find the numbers interesting. The % change is decreasing steadily which may be the "flattening the curve" everyone has been talking about and hopefully good for the markets (and my 401k).

peskypesky
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Re: Coronavirus and the market

Post by peskypesky » Wed Mar 25, 2020 3:43 pm

seychellois_lib wrote:
Wed Mar 25, 2020 11:10 am
With regard to energy production. I am sitting in my living room watching windmills spinning in the hills near my home. It occured to me those windmills are going to spin without much babysitting. Understand there is some level of routine ops. and maint. but I wonder what that level is vs a typical power plant/peaker plant in terms of manhours per megawatt? Same with regard to solar. I hear a lot about overall cost per MW but not so much about the manpower required to maintain ops.

I wonder if we come out of this with a greater appreciation for alternative energy with respect to lower touch labor requirements? The logistics requirements also seem to be substantially lower given the fact I do not have to maintain a fuel supply chain which is pretty substantial: Ships, pipelines, refineries, mines, trains, etc.I understand we are not yet at a point where alternative power sources are reliable 24/7 , however does the current situation auger well for alternative power investment to include systems to improve 24/7 reliability (batteries, pumped hydoo, etc.)?
It doesn't matter one bit what WE think about alternative energy. The oil companies are in control.

Quincy62
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Re: Coronavirus and the market

Post by Quincy62 » Wed Mar 25, 2020 4:28 pm

bovineplane wrote:
Wed Mar 25, 2020 3:22 pm
Maybe, maybe not the right thread for this but the info might have an effect on the market. All below numbers taken from the CDC daily published information which I presume to be accurate. Plugged the info into a simple spreadsheet to calculate daily changes in new cases. CDC publishes daily at noon EST and stats are cut off 4pm EST day prior so one day lag. Have been tracking since the CDC started publishing info.

Last 4 days
Total cases New cases % change % case change
3/22 33404 8821 26.41% 35.88%
3/23 44183 10779 24.40% 32.27%
3/24 54453 10270 18.86% 23.24%
3/25 62852 8399 13.36% 15.42% (predicted based on MSN current stats 4PM EST)


Compared to last week
3/16 4226
3/17 7038 2812 39.95% 66.54%
3/18 10442 3404 32.60% 48.37%
3/19 15219 4777 31.39% 45.75%
3/20 18747 3528 18.82% 23.18%
3/21 24583 5836 23.74% 31.13%

If the trend continues, how long until the press does the same calculation and some good news from the trend helps the market? The trend for 4 days is increasing #s overall but a decrease in the rate of change. This despite increased testing. Similar results for % change in deaths although the numbers are harder to track daily. 3/23 was the highest so far for new cases.

For more further info - the stay at home orders went into effect first with Ca (3/19), Ill (3/20), NJ (3/21), NY (3/22), TX (3/23). 17 total states have similar orders in effect as of today. Incubation 3-14 days means effects should start happening with infection rates. The most populous states have these restrictions in place.

I am not market timing. I have posted before I continue my regular Monday purchases to 401k every week. I have made zero changes to AA or contribution amount to 401k/Roth. As I am in the medical field but not epidemiology I find the numbers interesting. The % change is decreasing steadily which may be the "flattening the curve" everyone has been talking about and hopefully good for the markets (and my 401k).
I think the earlier figures (3/16 thru 3/18) are crude and not that reliable to project trends from. What is more relevant, IMO,is the exponential growth rate of the new cases. Much of the data I've looked at is showing they double every 3 days are so.That is ~26% daily growth rate.Plugging those accumulated new cases on a semi-log scale is showing an upward straight line slope with no real noticeable change. That is what has to start showing a downward bend. The John Hopkins web page use to show that graph in the right bottom corner as a choice between a linear scale and a semi log scale. For some reason they dropped the semi log scale option.

https://www.arcgis.com/apps/opsdashboar ... 7b48e9ecf6
Last edited by Quincy62 on Wed Mar 25, 2020 5:07 pm, edited 1 time in total.

seychellois_lib
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Re: Coronavirus and the market

Post by seychellois_lib » Wed Mar 25, 2020 4:45 pm

peskypesky wrote:
Wed Mar 25, 2020 3:43 pm
seychellois_lib wrote:
Wed Mar 25, 2020 11:10 am
With regard to energy production. I am sitting in my living room watching windmills spinning in the hills near my home. It occured to me those windmills are going to spin without much babysitting. Understand there is some level of routine ops. and maint. but I wonder what that level is vs a typical power plant/peaker plant in terms of manhours per megawatt? Same with regard to solar. I hear a lot about overall cost per MW but not so much about the manpower required to maintain ops.

I wonder if we come out of this with a greater appreciation for alternative energy with respect to lower touch labor requirements? The logistics requirements also seem to be substantially lower given the fact I do not have to maintain a fuel supply chain which is pretty substantial: Ships, pipelines, refineries, mines, trains, etc.I understand we are not yet at a point where alternative power sources are reliable 24/7 , however does the current situation auger well for alternative power investment to include systems to improve 24/7 reliability (batteries, pumped hydoo, etc.)?
It doesn't matter one bit what WE think about alternative energy. The oil companies are in control.
If that were true one has to wonder what oil is doing at $30 per BBL? Though I suppose suicide is one way to exert control.

I do agree sovereign nations are currently attempting to control price in order to reduce/eliminate US production. Allowing them to do so would be a grave strategic mistake IMO.

I say this as an advocate of alternative energy and think Covid19 may present some opportunities for growth of alternatives not so much because it is cheaper or environmentally friendly ,but it appears solar and wind and, eventually, storage are less people and supply chain intensive than fossil fuels. At least I believe this to be the case, but have no data to back that up . I was hoping someone who has knowledge in this area would respond.

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Ketawa
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Re: Coronavirus and the market

Post by Ketawa » Wed Mar 25, 2020 11:15 pm

Mako wrote:
Wed Mar 25, 2020 12:49 pm
I'm curious where the G fund rate goes too, but also because that is the loan rate. I'd have to at least consider taking a $50k loan at <1%. I imagine I can find better use for that money.
Off topic for this thread, but the loan interest rate itself isn't that important. It's not like cheap leverage you can take to invest. The principal is like moving money from one of your pockets to another. The loan interest is like extra non-deductible contributions to a Traditional IRA if the loan comes from a 100% Traditional TSP; it has the same tax treatment. Compared to the alternative of taxable investing, paying that loan interest is not ideal, but it's not the worst thing in the world. I made a generalized framework for comparing a TSP loan to a fixed income/loan paydown alternative and described it in this post: Re: Loans from 401k -- back door investing? Overall, the loan interest rate isn't very important.

To me, the main concern is if Treasury rates stay that low and the extra yield is worth the effort, then I might want to have my fixed income allocation in an alternative to the G Fund with similar risk, like CDs. That might involve eating the $50 loan fee if I can't pull together enough money in taxable already. I won't bother with the F Fund.

bck63
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Re: Coronavirus and the market

Post by bck63 » Thu Mar 26, 2020 6:16 am

Weekly unemployment numbers come out this morning. Should be interesting.

Seasonal
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Re: Coronavirus and the market

Post by Seasonal » Thu Mar 26, 2020 7:10 am

Fed Chairman: The first order of business will be to get the spread of the virus under control and then we’ll resume economic activity.

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Stef
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Re: Coronavirus and the market

Post by Stef » Thu Mar 26, 2020 7:25 am

bck63 wrote:
Thu Mar 26, 2020 6:16 am
Weekly unemployment numbers come out this morning. Should be interesting.
5 minutes to go. Is there a liveticker?

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ResearchMed
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Re: Coronavirus and the market

Post by ResearchMed » Thu Mar 26, 2020 7:33 am

3.283 MILLION initial jobless claims, per CNBC.

Alas, just about what was expected.

RM
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Stef
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Re: Coronavirus and the market

Post by Stef » Thu Mar 26, 2020 7:34 am


columbia
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Re: Coronavirus and the market

Post by columbia » Thu Mar 26, 2020 7:38 am

Stef wrote:
Thu Mar 26, 2020 7:34 am
https://www.cnbc.com/2020/03/26/weekly- ... laims.html

SP500 futures not moving, why?
Hubris in spades.
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Stinky
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Re: Coronavirus and the market

Post by Stinky » Thu Mar 26, 2020 8:00 am

Stef wrote:
Thu Mar 26, 2020 7:34 am
https://www.cnbc.com/2020/03/26/weekly- ... laims.html

SP500 futures not moving, why?
Mr Market kind of expected a number like this.

Already baked into the price.
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watchnerd
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Re: Coronavirus and the market

Post by watchnerd » Thu Mar 26, 2020 10:11 am

Stef wrote:
Thu Mar 26, 2020 7:34 am
https://www.cnbc.com/2020/03/26/weekly- ... laims.html

SP500 futures not moving, why?
It wasn't worse than expected.
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GaryA505
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Re: Coronavirus and the market

Post by GaryA505 » Thu Mar 26, 2020 11:37 am

Forgive my if this question was already asked in this thread, but I just couldn't read all 71 pages!

Coming out of this dip, might we expect better performance from large cap stocks than small cap stocks, due to more failures of small businesses?

This is just a though I had yesterday.

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Ketawa
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Re: Coronavirus and the market

Post by Ketawa » Thu Mar 26, 2020 11:53 am

GaryA505 wrote:
Thu Mar 26, 2020 11:37 am
Forgive my if this question was already asked in this thread, but I just couldn't read all 71 pages!

Coming out of this dip, might we expect better performance from large cap stocks than small cap stocks, due to more failures of small businesses?

This is just a though I had yesterday.
It sounds like you think small caps are riskier than large caps. Many would agree, including me. The market prices for risk, so they would have higher expected returns already, but greater risk of failing to meet those expected returns.

wolf359
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Re: Coronavirus and the market

Post by wolf359 » Thu Mar 26, 2020 11:57 am

GaryA505 wrote:
Thu Mar 26, 2020 11:37 am
Forgive my if this question was already asked in this thread, but I just couldn't read all 71 pages!

Coming out of this dip, might we expect better performance from large cap stocks than small cap stocks, due to more failures of small businesses?

This is just a though I had yesterday.
I believe that you'll get better performance from small cap stocks for exactly the reason you cited.

First, a clarification/misunderstanding. Small businesses are not small caps. Most small businesses are not publicly traded. There is no official definition of a small cap, and so that definition varies between brokerages and funds. Generally, a small cap is defined as a business with a capitalization between $300 million and $2 billion. A company with $2 billion in outstanding stock is probably not what you're thinking of when you picture a local small business.

Small caps have fewer resources and less market share than the large caps. This makes them riskier, and thus they fall in price more during recessions. They also have less exposure to international markets (in general).

However, you didn't ask about survival. You asked about performance. At this point, the prices have already dropped. Small caps are priced for a recession. It's quite possible for small caps to fall further, and to even go out of business. However, that greater risk comes with greater reward. If you buy the small cap index, you're more likely to get better performance because they've fallen so much. They have further to rise. People are sticking to large caps because they're safer, meaning their prices are higher and they have less room to move up.

Caveat: I have no crystal ball. I can't predict the future. I am just pointing out that risk and reward are intertwined. People will not take risks unless they're rewarded for it. The nature of risk means that the choice may not pan out (meaning the reward doesn't always show up.) But if you're seeking better performance, it's more likely to come from the small caps. The most likely recovery/survival (decent performance) is more likely to come from the large caps.

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watchnerd
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Re: Coronavirus and the market

Post by watchnerd » Thu Mar 26, 2020 12:10 pm

GaryA505 wrote:
Thu Mar 26, 2020 11:37 am
Forgive my if this question was already asked in this thread, but I just couldn't read all 71 pages!

Coming out of this dip, might we expect better performance from large cap stocks than small cap stocks, due to more failures of small businesses?

This is just a though I had yesterday.
When I think of "small businesses", I don't usually think of publicly traded companies.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

GaryA505
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Re: Coronavirus and the market

Post by GaryA505 » Thu Mar 26, 2020 12:11 pm

Thanks for the great responses!

columbia
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Re: Coronavirus and the market

Post by columbia » Thu Mar 26, 2020 12:15 pm

watchnerd wrote:
Thu Mar 26, 2020 12:10 pm
GaryA505 wrote:
Thu Mar 26, 2020 11:37 am
Forgive my if this question was already asked in this thread, but I just couldn't read all 71 pages!

Coming out of this dip, might we expect better performance from large cap stocks than small cap stocks, due to more failures of small businesses?

This is just a though I had yesterday.
When I think of "small businesses", I don't usually think of publicly traded companies.
It would be (perversely?) interesting to know if small cap (particularly SCV) companies exhibited an outsized failure rate in 2009.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Coronavirus and the market

Post by LadyGeek » Thu Mar 26, 2020 12:53 pm

Several coronavirus posts have been removed. To keep this thread on-track, the main intent of the post must be related to the market.
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Re: Coronavirus and the market

Post by bayview » Thu Mar 26, 2020 3:02 pm

Ketawa wrote:
Wed Mar 25, 2020 11:15 pm
Mako wrote:
Wed Mar 25, 2020 12:49 pm
I'm curious where the G fund rate goes too, but also because that is the loan rate. I'd have to at least consider taking a $50k loan at <1%. I imagine I can find better use for that money.
Off topic for this thread, but the loan interest rate itself isn't that important. It's not like cheap leverage you can take to invest. The principal is like moving money from one of your pockets to another. The loan interest is like extra non-deductible contributions to a Traditional IRA if the loan comes from a 100% Traditional TSP; it has the same tax treatment. Compared to the alternative of taxable investing, paying that loan interest is not ideal, but it's not the worst thing in the world. I made a generalized framework for comparing a TSP loan to a fixed income/loan paydown alternative and described it in this post: Re: Loans from 401k -- back door investing? Overall, the loan interest rate isn't very important.

To me, the main concern is if Treasury rates stay that low and the extra yield is worth the effort, then I might want to have my fixed income allocation in an alternative to the G Fund with similar risk, like CDs. That might involve eating the $50 loan fee if I can't pull together enough money in taxable already. I won't bother with the F Fund.
My guess is that the loan rate was cited as it is frequently considered a proxy for predicted G fund return, as there is no SEC 7-day yield figure.

I found last year that it wasn’t a terribly good predictor, although I didn’t track it on paper, etc. In other words, more of a feeling on my part. :P
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

TheoLeo
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Re: Coronavirus and the market

Post by TheoLeo » Thu Mar 26, 2020 3:52 pm

On the 9th of March I dipped my toes in the market for the first time, thinking this corona-dip is maybe a good bargain. Today I sold at a 10 % loss. Initially, for me at least, it was hard to guess if this virus is controllable and how deadly it really is. France is now asking the German military to help transport critically ill patients to less affected areas of the country. This is all very far from a bad flu season. This virus clearly is too deadly to let it run its course so we can go on with our lives in 2-3 months. We will be on and off lockdown until there is a vaccine (which won´t be available in 2020).

Bringing it back to topic: I think that the market is mispriced and will correct hard several times this year. And the reason is normalcy bias.

"Normalcy bias, or normality bias, is a tendency for people to believe that things will function in the future the way they normally have functioned in the past and therefore to underestimate both the likelihood of a disaster and its possible effects. This may result in situations where people fail to adequately prepare themselves for disasters, and on a larger scale, the failure of governments to include the populace in its disaster preparations. About 70% of people reportedly display normalcy bias during a disaster"

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Re: Coronavirus and the market

Post by Kevin M » Thu Mar 26, 2020 6:31 pm

wolf359 wrote:
Thu Mar 26, 2020 11:57 am
GaryA505 wrote:
Thu Mar 26, 2020 11:37 am
Forgive my if this question was already asked in this thread, but I just couldn't read all 71 pages!

Coming out of this dip, might we expect better performance from large cap stocks than small cap stocks, due to more failures of small businesses?

This is just a though I had yesterday.
I believe that you'll get better performance from small cap stocks for exactly the reason you cited.

First, a clarification/misunderstanding. Small businesses are not small caps. Most small businesses are not publicly traded. There is no official definition of a small cap, and so that definition varies between brokerages and funds. Generally, a small cap is defined as a business with a capitalization between $300 million and $2 billion. A company with $2 billion in outstanding stock is probably not what you're thinking of when you picture a local small business.

Small caps have fewer resources and less market share than the large caps. This makes them riskier, and thus they fall in price more during recessions. They also have less exposure to international markets (in general).

However, you didn't ask about survival. You asked about performance. At this point, the prices have already dropped. Small caps are priced for a recession. It's quite possible for small caps to fall further, and to even go out of business. However, that greater risk comes with greater reward. If you buy the small cap index, you're more likely to get better performance because they've fallen so much. They have further to rise. People are sticking to large caps because they're safer, meaning their prices are higher and they have less room to move up.

Caveat: I have no crystal ball. I can't predict the future. I am just pointing out that risk and reward are intertwined. People will not take risks unless they're rewarded for it. The nature of risk means that the choice may not pan out (meaning the reward doesn't always show up.) But if you're seeking better performance, it's more likely to come from the small caps. The most likely recovery/survival (decent performance) is more likely to come from the large caps.
Just looking at Vanguard funds, small-cap value (VBR) is about 34% below its 52-week high, but almost 25% above its 52-week low. Compare to S&P 500 (VOO), which is about 23% below its 52-week high and not quite 20% above its 52-week low.

Image

So small cap fell much more, but has come back a little more from the lows.

Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

Call_Me_Op
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Re: Coronavirus and the market

Post by Call_Me_Op » Thu Mar 26, 2020 6:31 pm

TheoLeo wrote:
Thu Mar 26, 2020 3:52 pm
On the 9th of March I dipped my toes in the market for the first time, thinking this corona-dip is maybe a good bargain. Today I sold at a 10 % loss. Initially, for me at least, it was hard to guess if this virus is controllable and how deadly it really is.
That's not the way to invest - to read the news and speculate on how the market will respond based upon your interpretation of it. What has worked for people is to carefully decide on a plan and then stick with it.

Fidelity did a study some time ago and found that the accounts that performed best.......were the ones that had been abandoned.
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Re: Coronavirus and the market

Post by oneleaf » Thu Mar 26, 2020 7:54 pm

Call_Me_Op wrote:
Thu Mar 26, 2020 6:31 pm
That's not the way to invest - to read the news and speculate on how the market will respond based upon your interpretation of it.
This x1000. This forum has turned into a joke during this bear market. The prevalence of people speculating all day long about the news and unemployment figures and virus, etc. is making it extremely toxic for new investors, because it's so easy for new investors to think this is how you are supposed to invest. IT'S NOT.

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Re: Coronavirus and the market

Post by anoop » Thu Mar 26, 2020 8:13 pm

I think the job is done. Record fiscal and monetary stimulus to keep the market humming along for at least the next decade with appropriate transfer of wealth. Possibly Dow 40K by November. The coronavirus news will rapidly melt away--should see signs of this almost immediately.

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Re: Coronavirus and the market

Post by watchnerd » Thu Mar 26, 2020 8:22 pm

anoop wrote:
Thu Mar 26, 2020 8:13 pm
I think the job is done. Record fiscal and monetary stimulus to keep the market humming along for at least the next decade with appropriate transfer of wealth. Possibly Dow 40K by November. The coronavirus news will rapidly melt away--should see signs of this almost immediately.

LOL
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Re: Coronavirus and the market

Post by calmaniac » Thu Mar 26, 2020 8:49 pm

TheoLeo wrote:
Thu Mar 26, 2020 3:52 pm
On the 9th of March I dipped my toes in the market for the first time, thinking this corona-dip is maybe a good bargain. Today I sold at a 10 % loss. [SNIP]

Bringing it back to topic: I think that the market is mispriced and will correct hard several times this year. And the reason is normalcy bias. [SNIP]
Stunning. TheoLeo, given the above, I think you would greatly benefit from reading some good investing books here or here before you do anything else with your money.

I hate to knock the management, but I don't love the Bogleheads books. I would first read If You Can, by William Bernstein. Follow it up with The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between - by William Bernstein. Check out the Bogleheads Wiki. Keep reading books.

Maybe check back with the BH forum after this insanity dies down, as right now there is a lot of churn. This is an amazing place to learn, but you need the fundamentals before you can take advantage of the BH forum.

The Coronavirus and the market thread is not the place to learn about the fundamentals of investing.
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The coming recession

Post by calmaniac » Thu Mar 26, 2020 8:54 pm

anoop wrote:
Thu Mar 26, 2020 8:13 pm
I think the job is done. Record fiscal and monetary stimulus to keep the market humming along for at least the next decade with appropriate transfer of wealth. Possibly Dow 40K by November. The coronavirus news will rapidly melt away--should see signs of this almost immediately.
LOL2
62 yo, ≈3y til retire. AA 70/30: 30% S&P, 16% value, 14% intl, 10% EM, 30% short/int govt bonds. Fed pension now = 60% of expenses. Take SS @age 70 --> pension+SS = 100% of expenses. Life is good

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Re: Coronavirus and the market

Post by Ketawa » Thu Mar 26, 2020 8:56 pm

bayview wrote:
Thu Mar 26, 2020 3:02 pm
My guess is that the loan rate was cited as it is frequently considered a proxy for predicted G fund return, as there is no SEC 7-day yield figure.

I found last year that it wasn’t a terribly good predictor, although I didn’t track it on paper, etc. In other words, more of a feeling on my part. :P
The G Fund rate is exactly equal to the loan rate. I have confirmed this many times. The new loan rate is published early each month on this page, and that is the rate for the G Fund that month: https://www.tsp.gov/whatsnew/Content/currentLimitsAndRates.html

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Re: Coronavirus and the market

Post by bayview » Thu Mar 26, 2020 9:00 pm

Ketawa wrote:
Thu Mar 26, 2020 8:56 pm
bayview wrote:
Thu Mar 26, 2020 3:02 pm
My guess is that the loan rate was cited as it is frequently considered a proxy for predicted G fund return, as there is no SEC 7-day yield figure.

I found last year that it wasn’t a terribly good predictor, although I didn’t track it on paper, etc. In other words, more of a feeling on my part. :P
The G Fund rate is exactly equal to the loan rate. I have confirmed this many times. The new loan rate is published early each month on this page, and that is the rate for the G Fund that month: https://www.tsp.gov/whatsnew/Content/currentLimitsAndRates.html
Thanks. I expect that my feeling that it wasn’t a good predictor was a result of the downward changes during the year. (Or at least I remembered the downward more than the upward.)
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

bandit510
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Re: Coronavirus and the market

Post by bandit510 » Thu Mar 26, 2020 9:09 pm

Maybe not the right thread for this question, but here it goes. Quick overview because someone will ask... I’m in my early 30s w/ 100% stocks, essentially 50/50 US/International. I am perfectly fine leaving it that way. While I am 100% comfortable with my buy and hold strategy, I know I don’t know everything and therefore I ask a lot of questions and seek others input. I’ve maxed out my 401k already for the year so I cannot dollar cost average into any of the volatility (except for whatever dividends are paid). With the recent move back up, why should I or shouldn’t I consider reallocating to 80/20 or 70/30 (or another allocation) equity/short term bonds and then reallocate in 5% (or another %) increments back to 100% equity?

Any other ideas on how I might be able to take advantage of some of this volatility inside or outside my 401k?

Thanks for the thoughtful responses.

MoneyMarathon
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Re: Coronavirus and the market

Post by MoneyMarathon » Thu Mar 26, 2020 9:17 pm

willthrill81 wrote:
Tue Mar 24, 2020 10:55 am
The current spike makes very little sense to me.
The mother of all short squeezes. The junkier the stock, the bigger it bounced.

Also, 2200 for the S&P 500 was pretty tantalizing for those waiting to get out of cash and go long. FOMO if a V-shaped recovery.

peskypesky
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Re: Coronavirus and the market

Post by peskypesky » Fri Mar 27, 2020 7:13 am

Boris Johnson tests positive.
On top of all the other bad news, I think we are headed for a drop. As I predicted.

MnD
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Re: Coronavirus and the market

Post by MnD » Fri Mar 27, 2020 8:29 am

Ascenia (Ann Taylor, LOFT, Dressbarn, Lane Bryant, Catherines and Justice) "temporarily" closes all 2800 stores and furloughs 100% of sales associates.
https://www.streetinsider.com/Corporate ... 66460.html

This is a prime example of a zombie company of which their are many in the US after a decades of economic expansion.
Note this report on Ascenia from November 21, 2019. The company was a worsening debt and declining sales disaster in a booming economy.
https://www.retaildive.com/news/ascena- ... sp/567814/

Ascena has been rapidly downsizing this year as it tries to manage shrinking sales. The sales declines have turned its debt pile — a legacy of its acquisition binge in the mall-based apparel space — into a major burden. In recent years, sales at the conglomerate have been tepid or declining, losses are widening, and the company has turned over executives.​ S&P analysts view Ascena's capital structure, which includes $1.3 billion in long-term debt, as "unsustainable" and expect the company to generate negative cash flow over the next year.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

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tadamsmar
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Re: Coronavirus and the market

Post by tadamsmar » Fri Mar 27, 2020 8:43 am

bandit510 wrote:
Thu Mar 26, 2020 9:09 pm
Maybe not the right thread for this question, but here it goes. Quick overview because someone will ask... I’m in my early 30s w/ 100% stocks, essentially 50/50 US/International. I am perfectly fine leaving it that way. While I am 100% comfortable with my buy and hold strategy, I know I don’t know everything and therefore I ask a lot of questions and seek others input. I’ve maxed out my 401k already for the year so I cannot dollar cost average into any of the volatility (except for whatever dividends are paid). With the recent move back up, why should I or shouldn’t I consider reallocating to 80/20 or 70/30 (or another allocation) equity/short term bonds and then reallocate in 5% (or another %) increments back to 100% equity?

Any other ideas on how I might be able to take advantage of some of this volatility inside or outside my 401k?

Thanks for the thoughtful responses.
I would not try to take advantage of the volatility.

Take advantage of reflecting your psychology. You are not talking like you are 100% comfortable with your buy and hold strategy. Know yourself.

Also reflect on the actual goals of your saving and investing. Does changing your AA for a short period have any discernible impact on reaching your goals? If not, focus on this fact. But it is also perhaps the case that have a 70/30 AA going forward would also work for you and be easier for you to stick with.

epilnk
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Re: Coronavirus and the market

Post by epilnk » Fri Mar 27, 2020 11:10 am

I haven’t yet made my IRA contribution for 2019. Does anyone know if that deadline has been moved along with the tax filing date, or is it still April 15?

wolf359
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Re: Coronavirus and the market

Post by wolf359 » Fri Mar 27, 2020 11:20 am

epilnk wrote:
Fri Mar 27, 2020 11:10 am
I haven’t yet made my IRA contribution for 2019. Does anyone know if that deadline has been moved along with the tax filing date, or is it still April 15?
Forbes reported that the IRS clarified that that deadline moved as well. I didn't see it in a quick look on the IRS website, but you can look for it yourself. Source: https://www.forbes.com/sites/ashleaebel ... a160538084

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Kevin M
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Re: Coronavirus and the market

Post by Kevin M » Fri Mar 27, 2020 5:18 pm

epilnk wrote:
Fri Mar 27, 2020 11:10 am
I haven’t yet made my IRA contribution for 2019. Does anyone know if that deadline has been moved along with the tax filing date, or is it still April 15?
Answer from IRS.gov: https://www.irs.gov/newsroom/filing-and ... nd-answers
Q17. Does this relief provide me more time to contribute money to my IRA for 2019?

A17. Yes. Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020. For more details on IRA contributions, see Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

7eight9
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Re: Coronavirus and the market

Post by 7eight9 » Fri Mar 27, 2020 5:25 pm

Call_Me_Op wrote:
Thu Mar 26, 2020 6:31 pm
TheoLeo wrote:
Thu Mar 26, 2020 3:52 pm
On the 9th of March I dipped my toes in the market for the first time, thinking this corona-dip is maybe a good bargain. Today I sold at a 10 % loss. Initially, for me at least, it was hard to guess if this virus is controllable and how deadly it really is.
That's not the way to invest - to read the news and speculate on how the market will respond based upon your interpretation of it. What has worked for people is to carefully decide on a plan and then stick with it.

Fidelity did a study some time ago and found that the accounts that performed best.......were the ones that had been abandoned.
Jim O'Shaughnessy (who was on the Bloomberg program and brought up the alleged study) has come out and said that no such study exists.

1/That story was told to me by a former colleague which perhaps allowed me to lower my guard on it. When I went looking for it, I found nothing. Pure Urban Legend. Underlying the importance of seeing the source material. My passing it on in an interview gave it more life.
2/ And then that interview got picked up by multiple news sources. And on and on. Another reason to "trust, but verify."
https://twitter.com/jposhaughnessy/stat ... 3663925248
I guess it all could be much worse. | They could be warming up my hearse.

Seasonal
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Re: Coronavirus and the market

Post by Seasonal » Fri Mar 27, 2020 6:21 pm

7eight9 wrote:
Fri Mar 27, 2020 5:25 pm
Call_Me_Op wrote:
Thu Mar 26, 2020 6:31 pm
TheoLeo wrote:
Thu Mar 26, 2020 3:52 pm
On the 9th of March I dipped my toes in the market for the first time, thinking this corona-dip is maybe a good bargain. Today I sold at a 10 % loss. Initially, for me at least, it was hard to guess if this virus is controllable and how deadly it really is.
That's not the way to invest - to read the news and speculate on how the market will respond based upon your interpretation of it. What has worked for people is to carefully decide on a plan and then stick with it.

Fidelity did a study some time ago and found that the accounts that performed best.......were the ones that had been abandoned.
Jim O'Shaughnessy (who was on the Bloomberg program and brought up the alleged study) has come out and said that no such study exists.

1/That story was told to me by a former colleague which perhaps allowed me to lower my guard on it. When I went looking for it, I found nothing. Pure Urban Legend. Underlying the importance of seeing the source material. My passing it on in an interview gave it more life.
2/ And then that interview got picked up by multiple news sources. And on and on. Another reason to "trust, but verify."
https://twitter.com/jposhaughnessy/stat ... 3663925248
There was a study that showed that "the more active the retail investor, the less money they make". The author got anonymized data from a major retail broker. I can't immediately find the study, but see https://www.investopedia.com/articles/i ... d-them.asp

APX32
Posts: 64
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Re: Coronavirus and the market

Post by APX32 » Fri Mar 27, 2020 9:45 pm

peskypesky wrote:
Wed Mar 25, 2020 6:18 am
nps wrote:
Wed Mar 25, 2020 5:57 am
APX32 wrote:
Tue Mar 24, 2020 11:28 pm
To be honest, it’s not that hard to make money in this kind of environment if you have a play account.
That's an interesting concept. If it's not that hard to make money, why limit it to a play account?
He didn't say "a lot of money". Maybe he's just talking about a couple of dollars.
About $16k and change in a little over a week’s time. I’m absolutely not interested in risking any portion of my regular investments in this type of trading. I have a brokerage account with about $50-60k in it which I use for this. Any proceeds or profits are used to either further boost my EF or pay down debt (mortgage).

guyinlaw
Posts: 507
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Re: Coronavirus and the market

Post by guyinlaw » Fri Mar 27, 2020 9:52 pm

Bill Gates suggested that the earliest any part of US can be opened up is in Mid May. He said the peak will be in mid April..

Some other things from the interview.
- the influenza study sponsored by his foundation caught the first community transmission in Seattle area
- their work also helped simplify the drive thru testing by proving self administering nasal swabs to be effective.

An excellent interview with important information.

https://m.youtube.com/watch?v=A71lfXrQlxU


https://m.youtube.com/watch?v=iNLiUN0l7ws

wiredaces80
Posts: 15
Joined: Sat Mar 17, 2018 1:02 am

Re: Coronavirus and the market

Post by wiredaces80 » Fri Mar 27, 2020 10:07 pm

Coronavirus will be discussed for many, many years in statistics classes as an example of how sample bias can mislead and distort truth.

There are lies, damn lies, and statistics.

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willthrill81
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Location: USA

Re: Coronavirus and the market

Post by willthrill81 » Fri Mar 27, 2020 11:01 pm

I'm wondering whether others think that stocks are likely to go down significantly on Monday and the rest of next week. The rate of increases in global cases is still climbing, and deaths are increasing at a faster pace as well. Increased testing is surely part of the reason for increased cases, but so far it's merely indicating how widespread the virus truly is.

The market seemed overly optimistic this week between the CARES act and the mere mention of lockdowns being eased in a couple of weeks, which most experts now seem to view as a very bad idea. It's looking more like the lockdown will need to last for 4-6 more weeks in order to really slow down the virus, which is certainly the most humanitarian option. The economy will suffer greatly though, and I anticipate that the market may again test the lows we've already seen.
“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

guyinlaw
Posts: 507
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Re: Coronavirus and the market

Post by guyinlaw » Sat Mar 28, 2020 12:14 am

willthrill81 wrote:
Fri Mar 27, 2020 11:01 pm
I'm wondering whether others think that stocks are likely to go down significantly on Monday and the rest of next week. The rate of increases in global cases is still climbing, and deaths are increasing at a faster pace as well. Increased testing is surely part of the reason for increased cases, but so far it's merely indicating how widespread the virus truly is.

The market seemed overly optimistic this week between the CARES act and the mere mention of lockdowns being eased in a couple of weeks, which most experts now seem to view as a very bad idea. It's looking more like the lockdown will need to last for 4-6 more weeks in order to really slow down the virus, which is certainly the most humanitarian option. The economy will suffer greatly though, and I anticipate that the market may again test the lows we've already seen.
+1

Yesterday (3/27) US added 18,691 cases and NY alone added 7,285 cases..

Gov. Cuomo said that he believes that the peak for NY is 15 days away.. And other states like NJ, Michigan, Florida, Louisiana are behind, but hopefully wont be as severe as NY. But still will have to continue lock down beyond end of April.

In an unscientific poll on twitter for the bottom of SP500 came out like this..
85% said below 2200
64% said below 2000
19% said below 1700 <--- 50% drop from peak.

I agree with you and the majority..
====
This website run by Steve Ballmer's organization USAFacts has interesting info..

https://usafacts.org/visualizations/cor ... pread-map/

guyinlaw
Posts: 507
Joined: Wed Jul 03, 2019 9:54 am

Re: Coronavirus and the market

Post by guyinlaw » Sat Mar 28, 2020 12:51 am

Interesting comments by Mohamed El-Erian this morning
The duration and severity of the economic and financial natural disruptions are a function first and foremost of medical issues and in particular our collective confidence in three things.
1. That through testing and other means we can identify and contain the spread of the virus.
2. That we can treat the ill better.
3. That we can increase immunity.
Until we see progress on these three issues economic sudden stop will not be lifted. And I think we have to be very humble about our ability to predict what the world looks like in the immediate and in the post crisis landscape during and after a sudden stop .
regarding 3. Vaccine is 1-1.5 years away..
2. NY is very worrying, hope rest of the states are better..
1. With testing and social distancing starting late, NY look more and more like Italy.. California and Washington have done better. But we are not like Korea or Australia..

We will find out in next 30 days. Beyond that we have to expand and keep testing going through the summer, to avoid having outbreaks as people start returning to work..

https://www.bloomberg.com/news/videos/2 ... ward-video
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