U.S. stocks continue to soar!

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Robot Monster
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Re: U.S. stocks continue to soar!

Post by Robot Monster »

JoMoney wrote: Wed Sep 02, 2020 1:01 pm
Robot Monster wrote: Wed Sep 02, 2020 12:56 pm ...
I thought yields are down because it's a crowded trade? If everyone sold out, would that not cause yields to rise? (Unless...welll...have heard about "yield curve control"...hmm.)
Who's included in "everyone", would the Fed OMC "sell out" in this hypothetical scenario too?
Who would be the buyer of these bonds be that "everyone" is selling out to? Someone needs to hold them until they've matured.
What would the people who "sold out" be spending the cash they now hold on?
The yield on the 10yr Treasury was basically double in mid-March then it is today. This was due to all the selling, wasn't it? If everyone (who owned bonds) sold, wouldn't the same thing happen i.e. yields rise?

I don't know who they sold to...I guess people who demanded more yield. What did bond-sellers do with the cash? Probably kept it in cash?
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TheTimeLord
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Re: U.S. stocks continue to soar!

Post by TheTimeLord »

HomerJ wrote: Wed Sep 02, 2020 1:17 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:15 pm
McGilicutty wrote: Wed Sep 02, 2020 1:12 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:05 pm
McGilicutty wrote: Wed Sep 02, 2020 11:35 am

No, market should be about 128% higher based on my calculations.
What market are you talking about?
Stock market. Just playing around. :D I have no idea where the market should be at, but neither does anyone else.

I always find it funny when a bear wanders in here and tells us the market is going to crash. We just had a pretty big crash less than 6 months ago. Did the bear buy then? Probably not and they probably never will.
Just curious where 128% came from.
Somewhere where the sun doesn't shine, obviously... :)

Don't take anything in this thread seriously.
I prefer to take this thread seriously and treat posting to it in the same manner. Others can do as they choose of course.
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Stinky
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Re: U.S. stocks continue to soar!

Post by Stinky »

Forester wrote: Thu Aug 20, 2020 5:41 am Ominous double top formation... this thread won't see 170 pages for a very long time. Now that the ATH was breached the mania wears off and introspection begins. SPX 3,400 waits for another year (decade?).
This was posted August 20, 2020. Less than two weeks ago.

S&P has broken 3,400 (and 3,500).

“Soaring” thread has broken 170 pages.

Two predictions proven wrong. Just sayin’.
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Alaric
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Re: U.S. stocks continue to soar!

Post by Alaric »

McGilicutty wrote: Wed Sep 02, 2020 1:12 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:05 pm
McGilicutty wrote: Wed Sep 02, 2020 11:35 am
stocknoob4111 wrote: Wed Sep 02, 2020 10:51 am this is just bad news... market going up means those of us accumulating are buying at high prices and the big crash is just delayed. Does anyone really believe the current market level is actually legit?
No, market should be about 128% higher based on my calculations.
What market are you talking about?
Stock market. Just playing around. :D I have no idea where the market should be at, but neither does anyone else.

I always find it funny when a bear wanders in here and tells us the market is going to crash. We just had a pretty big crash less than 6 months ago. Did the bear buy then? Probably not and they probably never will.
Only because This Time It's Different.
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UpsetRaptor
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Re: U.S. stocks continue to soar!

Post by UpsetRaptor »

willthrill81 wrote: Tue Sep 01, 2020 10:05 pm
whodidntante wrote: Tue Sep 01, 2020 9:16 pm Go go gadget stonks! Can you imagine what the market would do if we had a good economy?
If the economy was good, interest rates would higher, which would exert downward pressure on stocks.

I wouldn't be surprised if a lot of the upward movement we've seen is due in no small part to interest rates being so low.
Agree with the premise of rates vis-a-vis equities, but there's also another, probably more important, prerequisite for rates to move higher: inflation. The current Fed is sending signals that it's not likely to raise rates until it actually sees the whites of inflation's eyes, regardless of how the economy's humming along.
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HomerJ
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Re: U.S. stocks continue to soar!

Post by HomerJ »

TheTimeLord wrote: Wed Sep 02, 2020 1:22 pm
HomerJ wrote: Wed Sep 02, 2020 1:17 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:15 pm
McGilicutty wrote: Wed Sep 02, 2020 1:12 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:05 pm

What market are you talking about?
Stock market. Just playing around. :D I have no idea where the market should be at, but neither does anyone else.

I always find it funny when a bear wanders in here and tells us the market is going to crash. We just had a pretty big crash less than 6 months ago. Did the bear buy then? Probably not and they probably never will.
Just curious where 128% came from.
Somewhere where the sun doesn't shine, obviously... :)

Don't take anything in this thread seriously.
I prefer to take this thread seriously and treat posting to it in the same manner. Others can do as they choose of course.
This thread is mostly non-Boglehead silliness, and should not be taken seriously. We're mostly not day-traders here and although people have fun watching the market every day (or even futures the night before!), very few of us make any changes to our portfolio based on posts in THIS thread.

You can choose to take it seriously, but you WILL see otherwise serious posters saying stuff like "128% gains for sure from here!" or "The Fed will never let this market crash again" and not actually mean it.

So be careful when reading this thread. It's really not very actionable. Nobody knows what's going to happen next. No one can predict day-to-day movements. Nobody can even explain PAST movements very well (like why yesterday was up). But this thread lets people blow off steam...

(all the above is just my opinion... I could be completely wrong, and maybe the vast majority of posts are serious about "Backing up the truck")
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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mrspock
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Re: U.S. stocks continue to soar!

Post by mrspock »

Wow, breathtaking day. I transferred some cash to my checking to pay the IRS today and I thought it didn't go through....it was just Mr. Market handing me back the money lol.

Hoping this holds up to close, would be a sweet day. Hedgefundie Adventurers are also making out like bandits today, huge correlated TMF/UPRO day.

:moneybag :moneybag :moneybag
lostdog
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Re: U.S. stocks continue to soar!

Post by lostdog »

HomerJ wrote: Wed Sep 02, 2020 2:09 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:22 pm
HomerJ wrote: Wed Sep 02, 2020 1:17 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:15 pm
McGilicutty wrote: Wed Sep 02, 2020 1:12 pm

Stock market. Just playing around. :D I have no idea where the market should be at, but neither does anyone else.

I always find it funny when a bear wanders in here and tells us the market is going to crash. We just had a pretty big crash less than 6 months ago. Did the bear buy then? Probably not and they probably never will.
Just curious where 128% came from.
Somewhere where the sun doesn't shine, obviously... :)

Don't take anything in this thread seriously.
I prefer to take this thread seriously and treat posting to it in the same manner. Others can do as they choose of course.

This thread is mostly non-Boglehead silliness, and should not be taken seriously. We're mostly not day-traders here and although people have fun watching the market every day (or even futures the night before!), very few of us make any changes to our portfolio based on posts in THIS thread.


You can choose to take it seriously, but you WILL see otherwise serious posters saying stuff like "128% gains for sure from here!" or "The Fed will never let this market crash again" and not actually mean it.

So be careful when reading this thread. It's really not very actionable. Nobody knows what's going to happen next. No one can predict day-to-day movements. Nobody can even explain PAST movements very well (like why yesterday was up). But this thread lets people blow off steam...

(all the above is just my opinion... I could be completely wrong, and maybe the vast majority of posts are serious about "Backing up the truck")
+1 This. All fun here. Most of us don't take action.
Xrayman69
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Re: U.S. stocks continue to soar!

Post by Xrayman69 »

VIX is also rising over the past 2 days. ?????
lostdog
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Re: U.S. stocks continue to soar!

Post by lostdog »

Melt up at the end today?
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dogagility
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Re: U.S. stocks continue to soar!

Post by dogagility »

HomerJ wrote: Wed Sep 02, 2020 1:17 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:15 pm
McGilicutty wrote: Wed Sep 02, 2020 1:12 pm
TheTimeLord wrote: Wed Sep 02, 2020 1:05 pm
McGilicutty wrote: Wed Sep 02, 2020 11:35 am

No, market should be about 128% higher based on my calculations.
What market are you talking about?
Stock market. Just playing around. :D I have no idea where the market should be at, but neither does anyone else.

I always find it funny when a bear wanders in here and tells us the market is going to crash. We just had a pretty big crash less than 6 months ago. Did the bear buy then? Probably not and they probably never will.
Just curious where 128% came from.
Somewhere where the sun doesn't shine, obviously... :)

Don't take anything in this thread seriously.
Wait, what... I was making investment decisions based upon this thread...
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
A_Bond
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Re: U.S. stocks continue to soar!

Post by A_Bond »

What a day! :sharebeer
buy. hold. repeat.
columbia
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Re: U.S. stocks continue to soar!

Post by columbia »

dogagility wrote: Wed Sep 02, 2020 2:20 pm
Wait, what... I was making investment decisions based upon this thread...
The real play is to be amused by RobotMonster's vexing over his international funds. :wink:
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dogagility
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Re: U.S. stocks continue to soar!

Post by dogagility »

columbia wrote: Wed Sep 02, 2020 2:25 pm
dogagility wrote: Wed Sep 02, 2020 2:20 pm
Wait, what... I was making investment decisions based upon this thread...
The real play is to be amused by RobotMonster's vexing over his international funds. :wink:
Touche!
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Snuffycuts99
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Re: U.S. stocks continue to soar!

Post by Snuffycuts99 »

About a half hour left in the trading day and this is a serious melt up. Dow may end up 500 points today. Wow!
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dogagility
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Re: U.S. stocks continue to soar!

Post by dogagility »

A_Bond wrote: Wed Sep 02, 2020 2:24 pm What a day! :sharebeer
Up well over 1%! :sharebeer
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simplesimon
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Re: U.S. stocks continue to soar!

Post by simplesimon »

I've been taking a few grand off the table here and there - not much in the grand scheme of things but it feels like I'm doing the right thing and selling high.
Hyperchicken
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Re: U.S. stocks continue to soar!

Post by Hyperchicken »

Soaring intensifies. DOW 29,000 reached. S&P 3,600 in sight.
Last edited by Hyperchicken on Wed Sep 02, 2020 2:31 pm, edited 1 time in total.
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mrspock
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Re: U.S. stocks continue to soar!

Post by mrspock »

Snuffycuts99 wrote: Wed Sep 02, 2020 2:26 pm About a half hour left in the trading day and this is a serious melt up. Dow may end up 500 points today. Wow!
Now that you mention it.... it's been quite a while (I think?) since we had a solid 500pt day. They do happen every now and then, so I suppose we are due. We got to these lofty heights with mostly 0.1%-0.5% days. More interesting is this is a pretty light "news" day.
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Stinky
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Re: U.S. stocks continue to soar!

Post by Stinky »

lostdog wrote: Wed Sep 02, 2020 2:14 pm Melt up at the end today?
It’s a day-long melt-up!
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sailaway
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Re: U.S. stocks continue to soar!

Post by sailaway »

Stinky wrote: Wed Sep 02, 2020 2:30 pm
lostdog wrote: Wed Sep 02, 2020 2:14 pm Melt up at the end today?
It’s a day-long melt-up!
The run up to the melt up.
lostdog
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Re: U.S. stocks continue to soar!

Post by lostdog »

Stinky wrote: Wed Sep 02, 2020 2:30 pm
lostdog wrote: Wed Sep 02, 2020 2:14 pm Melt up at the end today?
It’s a day-long melt-up!
We need forestor to make more predictions.
minimalistmarc
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Re: U.S. stocks continue to soar!

Post by minimalistmarc »

Mmm I love the smell of melting equities!
minimalistmarc
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Re: U.S. stocks continue to soar!

Post by minimalistmarc »

lostdog wrote: Wed Sep 02, 2020 2:32 pm
Stinky wrote: Wed Sep 02, 2020 2:30 pm
lostdog wrote: Wed Sep 02, 2020 2:14 pm Melt up at the end today?
It’s a day-long melt-up!
We need forestor to make more predictions.
Changed my IPS. Just says “do the opposite of what forrestor is predicting”
rchmx1
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Re: U.S. stocks continue to soar!

Post by rchmx1 »

mrspock wrote: Wed Sep 02, 2020 2:11 pm Wow, breathtaking day. I transferred some cash to my checking to pay the IRS today and I thought it didn't go through....it was just Mr. Market handing me back the money lol.

Hoping this holds up to close, would be a sweet day. Hedgefundie Adventurers are also making out like bandits today, huge correlated TMF/UPRO day.

:moneybag :moneybag :moneybag
Also can't wait to see what PSLDX closes at today. Up 1.75% yesterday, unless things majorly drop off in these last 20 minutes, gonna be another tasty increase today as well. :moneybag
atdharris
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Re: U.S. stocks continue to soar!

Post by atdharris »

What an incredible market
Triple digit golfer
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Re: U.S. stocks continue to soar!

Post by Triple digit golfer »

This is getting ridiculous. Maybe my wife is right when she doesn't get at all excited and says that it's just numbers on a screen until we cash out.
lostdog
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Re: U.S. stocks continue to soar!

Post by lostdog »

Triple digit golfer wrote: Wed Sep 02, 2020 2:43 pm This is getting ridiculous. Maybe my wife is right when she doesn't get at all excited and says that it's just numbers on a screen until we cash out.
Let's enjoy while we can. :moneybag

I'll take this over this past March.

Remember this is why you held tight in March.
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AnalogKid22
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Re: U.S. stocks continue to soar!

Post by AnalogKid22 »

Wow...
manatee2005
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Re: U.S. stocks continue to soar!

Post by manatee2005 »

Nasdaq 12000! Yipee ki yay!
Livelife2fullest
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Re: U.S. stocks continue to soar!

Post by Livelife2fullest »

Wowza, soaring today with no thanks to AAPL & TSLA. Will the S&P break 3,600 this week (or today)? :shock:
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InvestorNewb
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Re: U.S. stocks continue to soar!

Post by InvestorNewb »

This is why the patient investors get rewarded. We don't sell at inopportune times. :sharebeer
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adave
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Re: U.S. stocks continue to soar!

Post by adave »

Yeah it is instructive to go back and read the doom and gloom posts from March.... you'd definitely question if this is the Boglehead forum or not!
lostdog
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Re: U.S. stocks continue to soar!

Post by lostdog »

adave wrote: Wed Sep 02, 2020 3:00 pm Yeah it is instructive to go back and read the doom and gloom posts from March.... you'd definitely question if this is the Boglehead forum or not!
There was the "Calm" thread that made a huge difference during that rough time.
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mrspock
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Re: U.S. stocks continue to soar!

Post by mrspock »

Triple digit golfer wrote: Wed Sep 02, 2020 2:43 pm This is getting ridiculous. Maybe my wife is right when she doesn't get at all excited and says that it's just numbers on a screen until we cash out.
She's going to really get herself into a pickle when she reads that Boglehead believe in holding their investments till the grave...and even then, having their heirs collect the step up in cost basis, and continue holding. In other words, there is no "cash out" day -- not even when you die, if your heirs play their cards right.

At some point the gains should be considered "real". I actually consider them real the precise day they hit a new high, as that's statistically when I could retire and have a high confidence of collecting my 3.5-4% SWR retirement per the value on that. It can go up and down from there, but statistically....I'm in better and better shape as each new high is achieved.
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jason2459
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Post by jason2459 »

This will be interesting. CDC announces that they are pushing to be ready for a vaccine by November 1st. Speculation begin...
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TSquare
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Re: U.S. stocks continue to soar!

Post by TSquare »

My truck is ready. Let's goooooooooooooo!
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Steve Reading
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Re: U.S. stocks continue to soar!

Post by Steve Reading »

Ok, I'm no forecaster or anything. But for months I've been pointing out that the equity risk premium is quite large by historical standards. I did it in this thread a couple of weeks ago:

viewtopic.php?p=5436924#p5436924

I honestly don't understand posters like DanMahoney, Forester, RayKeynes, 000, etc calling stocks overvalued and a bubble. Or the posters constantly itching to rebalance into bonds, like nedsaid, HalfMillionaire, flyingaway, etc. Ex:
viewtopic.php?p=5461958#p5461958

Stocks are risky of course, they always could drop. But at least now they seem to offer a better return for that assumed risk. At least it appears like that to me.
Robot Monster wrote: Wed Sep 02, 2020 12:21 pm
adave wrote: Wed Sep 02, 2020 11:59 am While I agree the economy is fragile right now, interest rates are zero which makes sitting on cash a money loser and makes bonds unattractive. Fundamentally, until this changes and rates start to go up (which could be years) stocks will continue to melt up. Tough to be a bear right now and fight the Fed
Shouldn't TINA be fully priced in, at this point? If not, how long does it take TINA to be priced in?
Maybe but maybe not. A rate drop from 1.5% to 0% should theoretically re-price stocks by about +60% (given a P/E of 25). That's just crude math but it's just to get the order of magnitude right. Now, we're getting close to that from March, so I'd say TINA and low rates are finally mostly priced in. But they weren't for months as you saw. Of course, we're close to where we were in March and rates are much lower so that's why I think there's still some uncertainty from the economy holding back stocks. If the economy fully recovered and rates were kept where they are, I think stocks would have to go up substantially more.

Markets have lags. My theory is that plenty of people are happy to sell as the market rises due to anchoring bias and thinking in nominal terms (money illusion). So the market always has some downward pressure as it gets to new heights.

Timing markets with fundamentals doesn't work well in the short term but I'm of the thought that it works in the medium to long term. Eventually, stocks catch up (or down!) to fundamentals.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Steve Reading
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Re: U.S. stocks continue to soar!

Post by Steve Reading »

tiburblium wrote: Wed Sep 02, 2020 7:44 am I do feel like I'm missing out by only being 100% invested in equities, congrats to those who have been using leverage during this run up
Cheers mate. Leverage is easy cruising when stocks do this well. It certainly was more challenging back in March when I watched my net worth plummet by about 60% haha.

I think most posters who bump this thread don't actually use any leverage though (except for the poster using call options).
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Re: U.S. stocks continue to soar!

Post by gonefishing01 »

mrspock wrote: Wed Sep 02, 2020 2:11 pm Wow, breathtaking day. I transferred some cash to my checking to pay the IRS today and I thought it didn't go through....it was just Mr. Market handing me back the money lol.

Hoping this holds up to close, would be a sweet day. Hedgefundie Adventurers are also making out like bandits today, huge correlated TMF/UPRO day.

:moneybag :moneybag :moneybag
I paid our property taxes for the year this week, and after today it’s like it never happened. Soaring. :moneybag :moneybag :moneybag
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Re: U.S. stocks continue to soar!

Post by lostdog »

mrspock wrote: Wed Sep 02, 2020 3:17 pm
Triple digit golfer wrote: Wed Sep 02, 2020 2:43 pm This is getting ridiculous. Maybe my wife is right when she doesn't get at all excited and says that it's just numbers on a screen until we cash out.
She's going to really get herself into a pickle when she reads that Boglehead believe in holding their investments till the grave...and even then, having their heirs collect the step up in cost basis, and continue holding. In other words, there is no "cash out" day -- not even when you die, if your heirs play their cards right.

At some point the gains should be considered "real". I actually consider them real the precise day they hit a new high, as that's statistically when I could retire and have a high confidence of collecting my 3.5-4% SWR retirement per the value on that. It can go up and down from there, but statistically....I'm in better and better shape as each new high is achieved.
Great point of view. I've never thought of it this way and I agree.
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mrspock
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Re: U.S. stocks continue to soar!

Post by mrspock »

Steve Reading wrote: Wed Sep 02, 2020 3:39 pm
tiburblium wrote: Wed Sep 02, 2020 7:44 am I do feel like I'm missing out by only being 100% invested in equities, congrats to those who have been using leverage during this run up
Cheers mate. Leverage is easy cruising when stocks do this well. It certainly was more challenging back in March when I watched my net worth plummet by about 60% haha.

I think most posters who bump this thread don't actually use any leverage though (except for the poster using call options).
+1, to be clear those of us using TMF/UPRO mix is very tiny portion of our portfolio -- typically <=5% of portfolio. I can't bring myself to buy individual stocks ever, so this is my version of a YOLO type bet, which is of course still indexing based :D .
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Re: U.S. stocks continue to soar!

Post by sailaway »

mrspock wrote: Wed Sep 02, 2020 4:18 pm
Steve Reading wrote: Wed Sep 02, 2020 3:39 pm
tiburblium wrote: Wed Sep 02, 2020 7:44 am I do feel like I'm missing out by only being 100% invested in equities, congrats to those who have been using leverage during this run up
Cheers mate. Leverage is easy cruising when stocks do this well. It certainly was more challenging back in March when I watched my net worth plummet by about 60% haha.

I think most posters who bump this thread don't actually use any leverage though (except for the poster using call options).
+1, to be clear those of us using TMF/UPRO mix is very tiny portion of our portfolio -- typically <=5% of portfolio. I can't bring myself to buy individual stocks ever, so this is my version of a YOLO type bet, which is of course still indexing based :D .
No leverage here, I don't even have a mortgage. I'm just here for entertainment purposes.
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willthrill81
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Re: U.S. stocks continue to soar!

Post by willthrill81 »

mrspock wrote: Wed Sep 02, 2020 4:18 pm
Steve Reading wrote: Wed Sep 02, 2020 3:39 pm
tiburblium wrote: Wed Sep 02, 2020 7:44 am I do feel like I'm missing out by only being 100% invested in equities, congrats to those who have been using leverage during this run up
Cheers mate. Leverage is easy cruising when stocks do this well. It certainly was more challenging back in March when I watched my net worth plummet by about 60% haha.

I think most posters who bump this thread don't actually use any leverage though (except for the poster using call options).
+1, to be clear those of us using TMF/UPRO mix is very tiny portion of our portfolio -- typically <=5% of portfolio. I can't bring myself to buy individual stocks ever, so this is my version of a YOLO type bet, which is of course still indexing based :D .
Well, I started with it being only about 4% of my portfolio, but it's grown to over 7% in the last 16 months. I was in FNGU instead of UPRO for August, and it grew about 75% in that one month. :shock: It was a little painful to hit the rebalance button at the end of the month, but I did.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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vitaflo
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Re: U.S. stocks continue to soar!

Post by vitaflo »

I'd feel better about the run up if SP500 PE wasn't sitting at almost 31. This is an expensive market.
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AnalogKid22
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Re: U.S. stocks continue to soar!

Post by AnalogKid22 »

adave wrote: Wed Sep 02, 2020 3:00 pm Yeah it is instructive to go back and read the doom and gloom posts from March.... you'd definitely question if this is the Boglehead forum or not!
I still hearken back to all the "stocks are overpriced" posts back in 2017. So many people bailing on stocks or sitting on the sidelines. Granted, stocks may very well/have been/continue to be overpriced as the value of the US dollar drops, but, it certainly hasn't stopped investors from buying.
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Re: U.S. stocks continue to soar!

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vitaflo wrote: Wed Sep 02, 2020 4:53 pm I'd feel better about the run up if SP500 PE wasn't sitting at almost 31. This is an expensive market.
Maybe. But what is the alternative? Do you plan to stay out of the market until the PE goes down to say 20? What if it doesn't but the market keeps going up?

Not trying to be snarky here, but genuinely curious to see how folks correlate investing with how the market is priced at a given point.
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AnalogKid22
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Re: U.S. stocks continue to soar!

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jay22 wrote: Wed Sep 02, 2020 5:00 pm
vitaflo wrote: Wed Sep 02, 2020 4:53 pm I'd feel better about the run up if SP500 PE wasn't sitting at almost 31. This is an expensive market.
Maybe. But what is the alternative? Do you plan to stay out of the market until the PE goes down to say 20? What if it doesn't but the market keeps going up?

Not trying to be snarky here, but genuinely curious to see how folks correlate investing with how the market is priced at a given point.
That's exactly right. If the general consensus is that the market is overpriced, why would anyone risk investing in it, particularly during a global pandemic and soaring unemployment? Coincidentally, on the same day the market just set new record highs American Airlines is on the brink of furloughing up to 19,000 workers. If investors weren't optimistic about America's potential to pull out of this current mess, they're placing rather large bets.
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Re: U.S. stocks continue to soar!

Post by adave »

I also believe that technology has a deflationary effect and currently we are in the midst of an economy led and being changed by technology. Thus, inflation is not going to show up for quite a while and the Fed will be able to keep rates low for a long time.... asset prices continue to melt up. Everyone wonders when inflation will show up but forget that technology is a powerful deflationary force in the economy.
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Re: U.S. stocks continue to soar!

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vitaflo wrote: Wed Sep 02, 2020 4:53 pm I'd feel better about the run up if SP500 PE wasn't sitting at almost 31. This is an expensive market.
Everything is relative though. Imagine if you could buy 20yr treasury bonds right now yielding 5 or 6%. Would you be willing to pay 31 times earnings for equities? Would your AA be what it is? Probably not, when you can lock in a solid 20 years worth of yield at 5-6% .... it's a no brainer. In fact it makes you wonder how easy retiring in the 80s & 90s must have been with yields that high on durations that long.

Contrast to now.... bonds of similar duration won't even get you inflation. Thus folks are willing to pay more for equities. This is why folks say "don't fight the fed", as long as they are holding down bond yields, money is going to be biased to equities, which will drive PEs higher. Given we've never actually seen a market where yields were this low, for all we know, PEs at 31 might be considered fair value, or even cheap .... it's hard to say, there's just nothing we have to directly compare this against.
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