The stock market

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Rene said:
the actions of suddenly purchasing or selling large amounts of equity can lead market players to guess that the buyer or seller is privy to information others do not have / do not recognize the significance of / cannot obtain.
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Well, when it comes to taking cues from "insider" stock activity, while there can be many reasons why an insider may choose to sell securities, but there is only one reason that they buy...
 
Not mentioned yet is the effect all this will have on the dollars value against other currencies.
 
Llewtrah381 said:
A fever is a nonspecific sign for a whole bunch of illnesses. A cold can cause one to the same degree as pneumonia or as lymphoma (a cancer). Heck - even exercising hard or being out in the heat will raise the temperature. But it’s a sign - not a cause or a diagnosis.

The market is a sign. It can go down or up for a whole lot of reasons. The tech bubble was different than the 2008 crash or the Covid effect. The drop now is a sign.

I suspect most of us on this forum can weather the cycle (let’s face it - planes are expensive and typically discretionary). But the impact on the cost of goods almost across the board and the impact on employment across the world, including here, is going to be profound and is not fully predictable, I don’t think. Couple that with other shakeups, such as NATO support and a list of others, and the world is literally being changed top to bottom.

Kinda interesting reading the posts here. I wonder how this thread would have played out had the exact same things happened a year ago.
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I find the employment situation conflicting...I just got a call from a local aerospace company asking if I was interested - principal software developer, only 2-3 days in the office (about 15-20min drive from home) and what I really like doing (at a non-trivial 6 figure income). I'm dithering because I like teaching college, I like being my own boss (for the most part), and going off on tangents on various topics. Example - today we're doing what I call the "Crash Course in AI and it Aint All ChatGPT". Can't do that when I'm working for someone else.

Six months would pay for the new COM & CDI, new cabinets and counter tops in the kitchen and a remodel the upstairs bathroom without having to touch savings. Plus put a goodly chunk into savings.

12 months would pay for the above and the GFC500 in the cherokee - or is that overkill? Plus even more into savings.

I'm dithering. Since I teach evenings, wouldn't have to give that up.
 
murphey said:
I find the employment situation conflicting...I just got a call from a local aerospace company asking if I was interested - principal software developer, only 2-3 days in the office (about 15-20min drive from home) and what I really like doing (at a non-trivial 6 figure income). I'm dithering because I like teaching college, I like being my own boss (for the most part), and going off on tangents on various topics. Example - today we're doing what I call the "Crash Course in AI and it Aint All ChatGPT". Can't do that when I'm working for someone else.

Six months would pay for the new COM & CDI, new cabinets and counter tops in the kitchen and a remodel the upstairs bathroom without having to touch savings. Plus put a goodly chunk into savings.

I'm dithering. Since I teach evenings, wouldn't have to give that up.
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Often companies like it when an employee teaches
 
eman1200 said:
who's buying what right now?
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I'm not buying anything, right now, other than spreading normal monthly retirement contributions across the same ol' ETFs as before. When it went to ****e in 2020, we bought land, cheap, from older people more worried about the stock market. I don't know if they wanted money to pump into the depressed market, or to buy food and cover expenses. I may do the same this time.
 
murphey said:
I find the employment situation conflicting...I just got a call from a local aerospace company asking if I was interested - principal software developer, only 2-3 days in the office (about 15-20min drive from home) and what I really like doing (at a non-trivial 6 figure income). I'm dithering because I like teaching college, I like being my own boss (for the most part), and going off on tangents on various topics. Example - today we're doing what I call the "Crash Course in AI and it Aint All ChatGPT". Can't do that when I'm working for someone else.

Six months would pay for the new COM & CDI, new cabinets and counter tops in the kitchen and a remodel the upstairs bathroom without having to touch savings. Plus put a goodly chunk into savings.

12 months would pay for the above and the GFC500 in the cherokee - or is that overkill? Plus even more into savings.

I'm dithering. Since I teach evenings, wouldn't have to give that up.
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Work both jobs, for as long as you can (provided the second doesn’t reduce the performance of your primary). Continue to live as you are now and save the entire second income in silver, gold, or agricultural land until the craziness ends.
 
1929 - (89% decline): The Wall Street Crash of 1929 led to a massive decline in the Dow Jones Industrial Average (DJIA), which fell approximately 89% from its peak in September 1929 to its low in July 1932. This was the most severe market crash in U.S. history and marked the onset of the Great Depression

1974 (48% decline): During the bear market triggered by the 1973-74 oil crisis, the S&P 500 dropped approximately 48% between January 1973 and December 1974. This period was marked by stagflation—high inflation combined with economic stagnation—and geopolitical uncertainty.

1987 (23% decline): On October 19, 1987, known as Black Monday, the DJIA plunged by 22.6% in a single day. While this was a dramatic one-day drop, it did not represent a long-term decline of similar magnitude to other crashes. The market recovered relatively quickly compared to other periods

2002 (49% decline): Following the dot-com bubble burst and compounded by events like the September 11 attacks and corporate scandals (e.g., Enron), the S&P 500 fell roughly 49% from its peak in March 2000 to its trough in October 2002

2009 (57% decline): During the Global Financial Crisis, the S&P 500 declined by about 57% from its peak in October 2007 to its low in March 2009. This crash was driven by a collapse in housing prices and widespread financial instability

2020 (34% decline): The COVID-19 pandemic caused a rapid market crash in early 2020, with the S&P 500 falling approximately 34% from February to March. However, this was followed by an equally rapid recovery due to massive fiscal and monetary stimulus

And yet the market always rights itself and soldiers on...
 
Ed Haywood said:
If you want to worry about a REAL financial crisis, consider the effect of war with China. A lot of people in the US government feel that is inevitable in the next 5 years, based on very obvious Chinese preparations for an invasion of Taiwan. You can't hide amphibious assault barges.
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Ed Haywood said:
People I know inside the Defense and Intel communities consider the odds at greater than 50/50. Many billions of dollars are being spent by both sides to prepare for it. As I mentioned, you cannot hide invasion preparations in the age of satellites. The Chinese are quite clearly building an amphibious fleet capable of taking Taiwan. This kind of capability is very specialized and not much use for anything else, so it is a fairly strong indicator of intent. The question is whether they will actually fight, or use that capability as leverage for a negotiated reunification.

IMO the big hole in their plan is the threat of shore-based missiles and drones. It is entirely possible that a Chinese invasion fleet would fail to reach Taiwan's shores.

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In 60 years this whole situation might be seen as the lit match falling into the powder keg moment that kicks off a chain of events that causes that war.
 
Mahneuvers said:
Buffet has always advised against timing the market and has recommended never betting against the US economy. I thought it strange him selling throughout last year and now sitting on 300B in cash. Seems he wasn't taking is own advice but, once again, is looking prescient.
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I think he actually was taking his own advice. He could have hung onto Apple in hopes of riding the crest a little longer, trying to time the market to maximize the profit from selling. Instead he identified (correctly) that AAPL, like so many others, was overvalued and was due for a correction, one way or another. I suspect he'll miss the absolute bottom when and if he starts buying back in, too, if he thinks it's undervalued.
 
I bought 2 kilos of my favorite Canadian black tea before they jack prices or remove the free shipping bonus :D

The rest of my dry powder is sat waiting on "deals". Don't see many yet. When my neighbor starts panic-selling one of his 8 or 9 exotic cars, I'll pay attention. Otherwise we're just slightly de-frothing.
 
schmookeeg said:
When my neighbor starts panic-selling one of his 8 or 9 exotic cars, I'll pay attention. Otherwise we're just slightly de-frothing.
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I am absolutely not above paying cents on the dollar for boats, motorcycles, cars and other toys when people need to sell because they over extended themselves during better economic times. Use them and sell for a profit when times get better... or don't sell, whatever.
 
Today I decided a 24% drop in the S&P was a good enough reason to rebalance our portfolio of low cost ETF's. That's right, I'm a market timer now, baby!

Fiveslide said:
I am absolutely not above paying cents on the dollar for boats, motorcycles, cars and other toys when people need to sell because they over extended themselves during better economic times. Use them and sell for a profit when times get better... or don't sell, whatever.
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A friend did just that with a 54' Sportfish during the COVID crash. Cruised with it from NY to Florida on the Intracoastal, played with it in the Gulf Stream for six months, then tired of it and sold it for a hefty profit.
 
catmandu said:
A friend did just that with a 54' Sportfish during the COVID crash. Cruised with it from NY to Florida on the Intracoastal, played with it in the Gulf Stream for six months, then tired of it and sold it for a hefty profit.
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Even at cents on the dollar, I don’t have that kind of purchasing power. I've done it several times, but not at that level, lol. I still have my pontoon boat I purchased at a steal during covid.

I'm definitely keeping eyes out for a 38ish foot sailboat to put in a cheap slip on any of the nearby military base marinas. Maybe even a trawler like in my avatar. Something older that has at least been maintained until the market tanked.
 
Fiveslide said:
I am absolutely not above paying cents on the dollar for boats, motorcycles, cars and other toys when people need to sell because they over extended themselves during better economic times. Use them and sell for a profit when times get better... or don't sell, whatever.
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Be careful, you might fall into the spot where I am now. I have had a philosophy for the last 25 years years of three main principles. 1 zero debt, never borrow (exceptions can be made for sure fire profit generators, but never for depreciating assets or consumer use) 2 never buy depreciating assets (no new cars, I’d rather drive a classic that gets worth more each year as an example) 3 never sell those assets that are increasing in value over time. Now I’m running out of storage space. (But I’ve got one heck of a collection of 5 figure valued things I get to use and enjoy on occasion that are worth more now than the equivalent dollar value if I had put the same money i payed for them in the Dow.
 
It’s not where the market is going, it’s where the economy is going. Fuel is short term cheap, goods are short term expensive.
 
Dana said:
About a month an a half ago I looked at the craziness in politics and moved my entire portfolio, which had been in stocks and target date mutual funds, into a cash equivalent fund. Low interest rate but guaranteed. First wise financial decision I ever made. I'm going to retire in about a month, the market's not gonna bounce back that soon, and need to protect my savings while I structure them for retirement income.
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I did much the same with the COVID downturn in 2020. I was planning to retire later that year and all my analysis had given me a minimum 401k figure that I would need to retire. I didn't want to let my funds drop below that, so when they got within about 15% of that value I moved everything into a guaranteed income fund. A couple of months later the market started to recover and I moved everything back in. Our 401k at work allowed me to make a dozen or so moves a year without cost or penalty, so there was really no good reason not to do the moves.

It worked okay. I retired with the 401k well above my minimum figure, and it's grown robustly since.

Over the last couple of years my financial planner and I have moved enough into CDs and MM funds with decent yields (~5%) to ride out several years of recession, which I don't think will be necessary but it's comforting. The market will recover, and my guess is that it'll be a matter of half a year or so, not multiple years.

But we shall see.....
 
Flatiowa said:
Be careful, you might fall into the spot where I am now. I have had a philosophy for the last 25 years years of three main principles. 1 zero debt, never borrow (exceptions can be made for sure fire profit generators, but never for depreciating assets or consumer use) 2 never buy depreciating assets (no new cars, I’d rather drive a classic that gets worth more each year as an example) 3 never sell those assets that are increasing in value over time. Now I’m running out of storage space. (But I’ve got one heck of a collection of 5 figure valued things I get to use and enjoy on occasion that are worth more now than the equivalent dollar value if I had put the same money i payed for them in the Dow.
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I don't do zero debt. I usually keep at least one small loan open to keep up credit appearances. I don't have a mortgage in my name, mortgage for this house in my wifes name, property in my name is paid for. I'll finance little things that I don't really need to finance to keep credit score high. Like, I have my $8k daily driver car financed for 2 years because my bank has a minimum payment of $250 a month for auto loans. But, the actual interest I'm paying over that two years is $800, total. It's worth it to me, in case I need to make a move on an asset and need credit.
 
Ed Haywood said:
It is still not clear whether the tariff announcements that triggered recent market moves are settled policy or a very aggressive negotiating tactic.
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I don't think that's necessarily an exclusive-or, but to me it looks like an aggressive negotiating tactic. Especially since so many countries are lining up to negotiate and being welcomed.

BTW, it's not enough to just look at the import/export situation in terms of dollars. We have to also consider the types of goods. China is no longer able to feed its own people and today imports about a third of its food. In part, this is because they've ruined much of their land and water with ecological damage from dirty methods of harvesting and processing rare earths and other minerals, and from unclean manufacturing processes.

The US, on the other hand, is a net exporter of food, and about 21% of our ag exports go to China. The US is more than capable of feeding its own people. We also sell them a lot of pharmaceuticals. On the whole, what China gets from the US is more life-essential than what the US gets from China.

In a trade war, the US can do without the latest iPhone or flatscreen for a lot longer than China can go without food. They certainly know this, and that has a lot to do with why China has been working to gain a strong foothold in South America. They desperately need to develop alternative food supplies.

The US has a winning hand here, but it must be played very carefully or we will indeed be in a war. A half-starved animal will gratefully accept food but will become insanely vicious when cornered.

We live in interesting times.....
 
A lot of talk about the tariffs, no mention of the duty fees on each imported small good rolling up to $150/package coming means those cheap direct shipped items off Amazon, Walmart.com etc will no longer exist.
 
midlifeflyer said:
Hang in there. I'm pretty sure the real plan is a to purposely depress stock prices so that certain people I won't mention will buy low and make a killing when it recovers.
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So, Warren Buffet is behind it all. That's why Berkshire Hathaway has been sitting on so much cash for the last year! ;-)
 
kaiser said:
Stock Market <> Economy

This is all just repricing.

What will have a bigger impact is the supposed Ft Knox audit and rumors of moving back onto gold standard (and gold going to a bazillion)
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It's not repricing which is what happens during the normal ebb and flow of the business cycle. The market is predicting a global recession. I actually think it has under-reacted.
 
The market is anticlimactic, I expect more selling.

Then again the tariff convictions are 1 random tweet away from being repealed with an abrupt U-Turn, as is common with this admin.

That said, I've been short selling homebuilders and RKT. The rest is cash until there's clarity. I'll happily miss 5-10% rebound if it means I'm not on the chopping block for the next doubling of tariffs.

I can't be long in this environment. I'm totally OK missing out on any ephemeral dead-cat bounce rebounds. I want stable policy.

But who knows. I've been wrong many times before (totally missed crypto boat for instance). But I personally can't stand the idea of losing money on such an obviously horrible policy with such a predictable outcome.
 
ArrowFlyer86 said:
Then again the tariff convictions are 1 random tweet away from being repealed with an abrupt U-Turn
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I sincerely hope so, but I can’t help but think of the very wise words of my dad when I was a kid and being taught to shoot a rifle, “once you pull the trigger you can’t stop the bullet or call it back”
 
Seems like a whole lotta sunk-cost-fallacy going on here.

And I’m not taking about people’s financial investments…
 
Flatiowa said:
I sincerely hope so, but I can’t help but think of the very wise words of my dad when I was a kid and being taught to shoot a rifle, “once you pull the trigger you can’t stop the bullet or call it back”
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But a tariff is not a bullet. It can easily be cancelled or changed at any time.
 
But momentum of relationships can’t be, I think it is foolish to think that even if tomorrow morning all of them were canceled that global relations would return to as they were before. No leader of any country in the world worthy of being in their position would say “okay it’s back to normal now”. Every one of them would (or should) be doing everything in their power to limit the risk to their people if two weeks from now a random decision decides they should be put back in place again.
 
Ed Haywood said:
But a tariff is not a bullet. It can easily be cancelled or changed at any time.
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Somewhere I read it takes a while (years?) to legally undo some tariffs but I can’t find that now. For discussion purposes I won’t lean into that.

Functionally, it will take a LONG time to undo them, I bet, especially with the continued back and forth. Companies optimized their profitability based on pre-tariff realities. We don’t have a lot of tee shirt and ball cap manufacturers here because it makes more economic sense to get those done elsewhere. Add tariffs and the dynamics change dramatically and overnight. Now it becomes more economical to produce stuff here (the whole objective of the tariffs) but that can’t happen overnight. If a company honors the threat and invests time and money building new factories and logistics here for a tariff-based reality (or anticipating one) and the tariffs then go away, suddenly they’re very inefficient. I think that uncertainty is what’s driving a lot of the market drop. And I don’t think it would all go away if we wake up tomorrow and he says “just kidding” - because he says he isn’t and because he hasn’t actually undone any of them, effectively
 
Llewtrah381 said:
because he hasn’t actually undone any of them, effectively
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He hasn't actually done any of them, effectively. CBP issued a 51 day phase in for goods currently in transit. Which means not a dime gets collected until late May. Plenty of time for a mad scramble by 70+ countries looking to get a better rate.

The whole thing is either bat**** crazy, or completely brilliant. Which one, I have no idea.
 
Ed Haywood said:
But a tariff is not a bullet. It can easily be cancelled or changed at any time.
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The destruction of American soft power cannot be. Almost everyone alive in the US now has only known the post-WWII era world order where the US has been the dominant world super power, both economically and militarily. We have largely shaped the world to our desires by acting as the military protector and economic arbitrator. Having this power comes at the cost of supporting other nations. If you want them to support themselves militarily or be a trade isolationist, that’s a position one can hold, but I don’t think most Americans appreciate what a world without hard and soft American power will look like for them. We are so used to being able to swing our big d*** around and getting what we want that I think a lot of Americans just assume that’s an inherent part of the nature of the world where in reality it is the result of all these costs we have shouldered in exchange for this power. The consequences of this rapid disassembly of American hegemony will shock a lot of people, I think his voters most of all.
 
Flatiowa said:
Where is it going to go? I’m very bearish, I think it will keep dropping for some time (occasional rallies), but if or when more inflationary pressure starts hitting the bottom line budget of working america the easiest way for them to come up with some more money to cover the bills is stop their 401k contributions, and a lot less money will be going into the markets. Add in the baby boomer generation starting to cash out their 401ks, companies quarterly reports more likely than not showing reduced profits, and potentially increased numbers of people in the public and private sector loosing their jobs and cashing out.. I see falling prices until atleast fall of 2025. Any thoughts?
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How accurate have your market feelings and thoughts been? Should they be acted upon?

SSDD
 
Llewtrah381 said:
Somewhere I read it takes a while (years?) to legally undo some tariffs but I can’t find that now. For discussion purposes I won’t lean into that
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Let’s go with your other point. Trust takes years to create but only minutes to destroy.
 
I really needed a pick me up this morning but instead I’m reading about possible war with China! I’m team America but I’m not entirely confident that 300 million mostly fat and old Americans can take on a billion plus. Can we at least schedule it outside of football season? Anyway, who is buying our treasuries? How do we continue to print money if they bomb our printing press? Did we build medical supply factories? Rx factories?

After seeing the lack of planning in canning federal employees, I’m not confident about this possible conflict.
 
Ed Haywood said:
The whole thing is either bat**** crazy, or completely brilliant. Which one, I have no idea.
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This really needs to be seen in a much fuller context. One which includes pictures of key military leaders who served our country with distinction being taken down and security details for key people being removed - all people he hand-picked. And while there’s no question fellow NATO members should pay more, that alliance is being materially and psychologically shredded. And DOGE cuts being literally represented by a chainsaw.

I’ve never seen a more transactional leader. Most of “us” make the mistake of self-reference with regard to values and can’t fully grasp this. And while we’ve probably all doubled down on a mistake we’ve made from time to time, that’s the hard-wired norm here regardless of consequences.

In that context, I’m personally not optimistic
 
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