Please! Make it stop! (Stock market crash)

This is noise on the signal. Try to ignore it. Things will be bumpy for a while.
 
Does someone know how to calculate or estimate what amount of the stock market volume comes from a baseline of steady buyers from set-it-and-forget it payroll 401k investors? At any given time, on days when there are less interested sellers, prices can only go up due to supply-demand imbalances from steady buying. Maybe it’s not even in the noise or a blip on a graph, I just don’t know, but it’s a theory that I’ve wondered about this past couple months.
 
We sure are getting quickly into politics/racial profiling here.
I am firmly of the belief that Wall Street couldn’t care less about some minor (in the grand scheme of things) local insurrection when compared to COVID/China/unemployment/deficit/ upcoming election/etc.
I think the only thing that’s buoyed up the markets (irrationally IMHO) of late is day traders reacting to movement rather than value. Bears are circling the Street.
 
The algorithms are chasing millennial day traders. Seriously, it seems everyone believes in MMT and an omnipotent Fed. The stock market is seriously overvalued;1999 all over again.
 
^^^^^
Thanks for clarification.....I guess.

I’ll only say in reply that the Economy is not Wall St, and Wall St is not the Economy and this thread was (is?) a discussion of our equity values.
 
What I have been largely unable to guess is which companies are actually going to take in the revenue which were previously undervalued.
Anyone have ideas on how to find such gems?

Tim

Sent from my HD1907 using Tapatalk
 
Per MC vote this thread is being reopened after a significant amount of thread cleanup, and warnings have been issued. As always political spin-zone topics are NOT permitted to be discussed. This thread has been remarkably good for 8 pages and we'd like to see it continue that way.
 
Mtns2Skies said:
Per MC vote this thread is being reopened after a significant amount of thread cleanup, and warnings have been issued. As always political spin-zone topics are NOT permitted to be discussed. This thread has been remarkably good for 8 pages and we'd like to see it continue that way.
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Thanks.
 
ebetancourt said:
The algorithms are chasing millennial day traders. Seriously, it seems everyone believes in MMT and an omnipotent Fed. The stock market is seriously overvalued;1999 all over again.
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It's only overvalued if more people believe it's overvalued than undervalued.

Regardless, lessons learned, don't try to time it, just get in and go. I know people that are still sitting on the sidelines waiting for the DOW to hit 10k.
 
Brad Z said:
That's ultimately the correct answer, and also the reason I haven't touched my retirement investments during all of this.
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Depends.

My wealth advisor harvested some capital losses by selling at the right time and putting the money into alternatives. From an overall portfolio standpoint, the value remains the same (we're now reinvested in the original securities since the wash-rule date has passed) but I have some losses I can use in the future when we rebalance the portfolio.

I am a fan of dollar-cost-averaging, and it does work well in most circumstances.
 
wsuffa said:
Depends.

My wealth advisor harvested some capital losses by selling at the right time and putting the money into alternatives. From an overall portfolio standpoint, the value remains the same (we're now reinvested in the original securities since the wash-rule date has passed) but I have some losses I can use in the future when we rebalance the portfolio.

I am a fan of dollar-cost-averaging, and it does work well in most circumstances.
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Almost the same here. Harvested some losses, and re-invested in other market funds. Although past the wash rule now, we decided against re-balancing back because I was willing to accept more short term risk (I am 10-15 years from retirement).

Tim
 
Timing, or not timing, depends largely on your time horizon. Those who remained invested in 1929 watched down to an 80% or so loss in 1932. They broken even in 1945 as I understand it. I've never invested in a "market" so I've never timed it. I have sold some stocks and bought others in different industries, and am currently light on "traditional" equities. Since my time horizon is relatively short, I'm not as concerned with the US dollar as I would be if I was in 30s or 40s. If I was, I would be terrified.
 
The market swings have been pretty wild the past couple of weeks, and after some in-depth analysis I think I understand why.

It seems that although helium sales were up, goose feathers were down. Fluorescent tube sales were dimmed in light trading. Knives were up sharply, while pencils lost a few points. Hiking equipment was trailing. Elevator stocks rose, but escalators continued their slow decline. Barbell weights were up in heavy trading. Mining equipment hit rock bottom, and diapers remained unchanged. The market for raisins dried up and balloon prices were inflated, while toilet paper touched a new bottom.
 
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ebetancourt said:
Timing, or not timing, depends largely on your time horizon. Those who remained invested in 1929 watched down to an 80% or so loss in 1932. They broken even in 1945 as I understand it. I've never invested in a "market" so I've never timed it. I have sold some stocks and bought others in different industries, and am currently light on "traditional" equities. Since my time horizon is relatively short, I'm not as concerned with the US dollar as I would be if I was in 30s or 40s. If I was, I would be terrified.
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If not in US equities, what you recommend for a someone in their mid-twenties? Investment real estate? I keep hearing doomsday scenarios with our debt, hyperinflation, and our dollar. I’m thinking long term but it’s hard to ignore all the naysayers.
 
austin757 said:
If not in US equities, what you recommend for a someone in their mid-twenties? Investment real estate? I keep hearing doomsday scenarios with our debt, hyperinflation, and our dollar. I’m thinking long term but it’s hard to ignore all the naysayers.
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Not giving advice, but I had a gold dealer outline much the same reasons why investing in stocks was insane with the Dow at record levels.

That was early in the 1980’s. I think the Dow was flirting with 1,000.

One might say, “It’s different this time”. I think it’s healthy to assume, “It’s never different this time.” Unless it is.

And needless to say, toilet paper is sure to touch new bottoms.
 
austin757 said:
If not in US equities, what you recommend for a someone in their mid-twenties? Investment real estate? I keep hearing doomsday scenarios with our debt, hyperinflation, and our dollar. I’m thinking long term but it’s hard to ignore all the naysayers.
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I have no idea what tomorrow holds. I personally am not panicked, and don't have any answers, except diversify, diversify, diversify. A little of this and little of that. An interesting bit of history from one of my paid subscriptions is that when five ounces of gold buys the Dow you should buy stocks. When it's a lot higher (currently about 14) than that, buy some gold. He has the charts to prove that over more than one hundred years. Again, it depends on your time horizon. When people talk about this is better than that by X over the last y years, always look at the interim drawdowns.

Over a long period of time real estate has been a better payoff than stocks. At your age today, I would be looking around the world as well as the US for real estate when you can afford it. I am particularly interested, in no particular order, in Ireland, Portugal, Panama and Uruguay and intend to visit one at a time when the virus lockdown ends. Considering the grand experiment being conducted by our central bank, I would not have 100% of my wealth in any one thing, and that includes the US Dollar. FWIW I think the grand experiment will last awhile, then blow up. Inevitable is not the same as imminent though, and you can lose a lot of wealth betting on sure things that don't follow your calendar.

Gold is not an investment, it is a currency hedge. It is something you own to protect your wealth. The rest of the world's central banks have been slowly increasing the percentage of their reserves into gold:
https://www.gold.org/goldhub/data/monthly-central-bank-statistics
 
austin757 said:
If not in US equities, what you recommend for a someone in their mid-twenties? Investment real estate? I keep hearing doomsday scenarios with our debt, hyperinflation, and our dollar. I’m thinking long term but it’s hard to ignore all the naysayers.
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It took me a long time to come to the realization, but now I firmly believe the WORST thing you can do is pay ANY attention to the naysayers on any of the naysayers on the TV, or Radio or in newspapers, and now the internet experts. Their one and only goal is to attract viewers. Keep a diversified portfolio and don't fiddle with it too much and (IMNSHO) you will do fine. I learned this the hard way over many years and once I took it to heart, I stopped making a lot of the bad mistakes I had made over the years.
 
austin757 said:
If not in US equities, what you recommend for a someone in their mid-twenties? Investment real estate? I keep hearing doomsday scenarios with our debt, hyperinflation, and our dollar. I’m thinking long term but it’s hard to ignore all the naysayers.
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It turns out I do have a recommendation after all. Read some of Ray Dalio's work, a lot of it is free at principles.com. If the name doesn't ring a bell, he started Bridgewater, the largest hedge fund in the world and made himself a billionaire in the process. If you have an IOS device download the Principles app free at the AppStore.

At a minimum read chapter three of this book, but it's best to read what he has published of it so far, including the Introduction:

https://www.principles.com/the-changing-world-order/#chapter3
 
JOhnH said:
It took me a long time to come to the realization, but now I firmly believe the WORST thing you can do is pay ANY attention to the naysayers on any of the naysayers on the TV, or Radio or in newspapers, and now the internet experts. Their one and only goal is to attract viewers. Keep a diversified portfolio and don't fiddle with it too much and (IMNSHO) you will do fine. I learned this the hard way over many years and once I took it to heart, I stopped making a lot of the bad mistakes I had made over the years.
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Yep. I cruised right by the 2008 downturn and retired early, and am still in great shape now. Fiddling with your holdings too much is like picking scabs. The more you do it the more you bleed, and the longer it takes to get back to normal.
 
chemgeek said:
Yep. I cruised right by the 2008 downturn and retired early, and am still in great shape now. Fiddling with your holdings too much is like picking scabs. The more you do it the more you bleed, and the longer it takes to get back to normal.
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It's mostly a matter of perspective. Here's the S&P over the last 5 days:

upload_2020-7-8_16-29-33.png​

Lots of wild up & down, huh? Now look at those 5 days in the perspective of the year to date:

upload_2020-7-8_16-31-10.png​


Looks a lot less significant, right? Now take a look over the last 5 years:

upload_2020-7-8_16-32-35.png​
Those swings during the last few days are insignificant over the long haul. Take a deep breath, relax, and stay the course. Ignore the pundits and commentators; their job is to sell you their content and that's how they get paid. They have no stake in actually making you richer.
 
It still really depends on if one thinks there’s significant value being destroyed. Most businesses are still up and running, and some percentage aren’t but were replaced by alternatives.

So the destruction caused by the virus isn’t a massive percentage. It’s big but it’s not catastrophic.

And there’s interesting side things like our company at least seriously entertaining the idea of closing the office forever. Not great for the real estate investors but not bad for our bottom line.

Proving we didn’t need a building is likely a significant long term boost for us. Some additional costs to stick a few servers in a co-lo maybe and stuff like that, but ... we shall see. It’s still under discussion.

For those who do need physical locations, rents should drop considerably.

All sorts of moving targets right now. Many offsetting.

We’ve spent quite a bit of money in new tools for IT to properly handle all the remote management activities and additional needed security. Have awarded more software and service vendors contracts than we have needed in half a decade, just in the last month or so.

Many of those are annual recurring so those companies are loving it. They’re also pretty hard to get on the phone right now due to being slammed with orders.

We are kinda glad we got started quoting early. We got typical discounts. I suspect those are all not happening now. Full price, baby.

I managed to get a concession last month “if signed by the end of the month” that the sales guy said he had never seen his company do. A week after we signed, his phone is ringing off the hook for his product. And when we got the concession I was clear I didn’t really even need him to ask, we just weren’t going to go with their weird license scheme. He decided he wanted a commission last month I guess. Went to bat.

What we essentially got out of was a minimum number of licenses but we paid full price plus training mandatory for them. They keep the training staff busy, we have a low recurring if we don’t grow. If we grow they make their money next year and every year after.

We also hired some consultants. It’s difficult to interview right now. So we augment with known pros and they know it isn’t a forever gig but the money is still flowing. We get a temporary team member with guarantees of a certain number of hours focused on a long term project, their bottom line is boosted. Eventually we hire someone.

Granted there’s bad sectors. Transportation is getting its butt kicked. UALs lay-off announcement is ugly today. Up to 36,000. They’re squarely in that percentage of destructiveness that is going to hurt for a while. We saw our non-cargo DOT regulatory stuff fall off fairly hard in the biz that does stuff that touches that sector. Cargo never flinched.

Interesting times, but we’re as busy as ever, if not more.
 
A little more long-term perspective.

Back in 1985, I was newly enrolled in my company's 401k and ESOP plans and wouldn't be 100% vested for a few years. I separately opened a traditional IRA and contributed to it for a few years, and when I became fully vested in the company I switched to investing solely in the 401k. The upshot is that I haven't touched that IRA since, I think, about 1988.

I received my quarterly IRA statement this morning and it's recovered nicely from this year's hiccup and it's doing quite well, but that's not what I found the most interesting.

Today the IRA is split 67% Growth Fund of America and 33% Europacific Growth Fund. I find it interesting that when I opened this IRA 35 years ago, it was an even 50-50 split. I haven’t touched it since around 1988, just let it ride. So over that time, at least for these funds, US stocks have significantly outperformed internationals. Considering all the hiccups during those years, including a couple of wars, the dot com bubble, the 2008 recession, 9/11, Dem vs. Rep administrations, changing tax laws, etc., and all the international turmoil including the breakup of the Soviet Union, middle east wars, the rise of China, and on and on, the investments have grown and grown.

Seeing that takes some of the worry out of the short-term swings, at least for me.
 
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