Stock Thread (27 Viewers)

[Warrior]

I'm avoiding short term gains at all cost except in a situation where there is a pretty catastrophic asset balance mix delta. As it turns out, most of the time a big equity/income mix comes with corresponding short term losses.  That's what makes this sort of magic.  

So just to be clear - you're selling everything every month, right? So you never experience any long-term gains. Every gain you have is short-term. At least that's what I gleaned from this "you basically want to sell your whole portfolio monthly as long as the gains are there no matter what"

 

[culdeus]

So just to be clear - you're selling everything every month, right? So you never experience any long-term gains. Every gain you have is short-term. At least that's what I gleaned from this "you basically want to sell your whole portfolio monthly as long as the gains are there no matter what"

Ok, to clarify this.  Once you get to the point where you are cycling a lot of stuff, you do need to keep an eye on ticker symbols.  While there are several SNP500 ETF out there not all of them are basically fee-less. And you need to be able to run back to the low fee ones ASAP.  Basically, I don't like leaving 10 shares of SCHF lying around because it doesn't match perfectly up, and I don't want to have to hold up lots to scrutiny on an audit so there will be some short term gains taken to clean that up.  It should amount to a rounding error.    

In 2017 things got so juiced that I basically had no losses but just scraps off bond funds.  (not complaining)  So I basically had everything go long term in June this year, and started taking those gains, and have been cycling those proceeds since.  Managed monthly or bi-weekly short of some crazy volatility it's doable. 

 

[Warrior]

Ok, to clarify this.  Once you get to the point where you are cycling a lot of stuff, you do need to keep an eye on ticker symbols.  While there are several SNP500 ETF out there not all of them are basically fee-less. And you need to be able to run back to the low fee ones ASAP.  Basically, I don't like leaving 10 shares of SCHF lying around because it doesn't match perfectly up, and I don't want to have to hold up lots to scrutiny on an audit so there will be some short term gains taken to clean that up.  It should amount to a rounding error.    

In 2017 things got so juiced that I basically had no losses but just scraps off bond funds.  (not complaining)  So I basically had everything go long term in June this year, and started taking those gains, and have been cycling those proceeds since.  Managed monthly or bi-weekly short of some crazy volatility it's doable. 

So even assuming that everything is fee-less, you're still taking somewhere around a 15% hit on your gains by doing this rather than letting them go long-term. I feel like I must be missing some context. Completely churning your entire portfolio every month would result in you taking an absolute bath long-term (assuming the market trends upwards), right? Harvesting tax losses can be smart...but aren't you saving pennies in comparison to what you'd be earning by letting your gains go un-sold long-term?

 

[culdeus]

So even assuming that everything is fee-less, you're still taking somewhere around a 15% hit on your gains by doing this rather than letting them go long-term. I feel like I must be missing some context. Completely churning your entire portfolio every month would result in you taking an absolute bath long-term (assuming the market trends upwards), right? Harvesting tax losses can be smart...but aren't you saving pennies in comparison to what you'd be earning by letting your gains go un-sold long-term?

To make this clear, I'm only taking extra short term gains in a situation where I have residual shares left.  I'm not piling up short term gains, and when possible I'm reconciling them or letting them go long.  Talking 3 figure gains to flush here and there on the next go-round.

I don't want to be in a situation where I'm in a buy-buy-sell-buy-sell-buy in a single ticker and doing this strategy.  I don't know if that's overly paranoid, but it is what it is.  

I'm careful about long term gains but I try to get those taken off the books at the 12 month point and keep an eye on any other implications of those.

 

[fantasycurse42]

Powell is going to walk back his hawkishness in an hour and we're prob going to rally. 

Trump/Xi will create a fake truce this weekend and provide the gas for a year end rally.

Good risk/reward for a 3-6 week horizon.

 

[fantasycurse42]

Powell is going to walk back his hawkishness in an hour and we're prob going to rally. 

Trump/Xi will create a fake truce this weekend and provide the gas for a year end rally.

Good risk/reward for a 3-6 week horizon.

Hello Captain Obvious.

 

[fantasycurse42]

Early next week, after the truce between Trump/Xi, I'll be lightening the load across all my accounts and taking on a much larger cash position. 

That'll be the pop you want to take your profits, IMO. 

 

[stbugs]

Early next week, after the truce between Trump/Xi, I'll be lightening the load across all my accounts and taking on a much larger cash position. 

That'll be the pop you want to take your profits, IMO. 

I’m down for that. I could have made a damn killing if it weren’t for a business trip. I knew I should have sold the day SQ was announcing and there was a large run up and I would have bought back in below 60 and 1500 for Amazon. That was a nice top. Got through security and didn’t have a chance. Lesson learned, go with gut.

 

[Capella]

Powell is going to walk back his hawkishness in an hour and we're prob going to rally. 

Trump/Xi will create a fake truce this weekend and provide the gas for a year end rally.

Good risk/reward for a 3-6 week horizon.

Good call here. 

 

[fantasycurse42]

Vix has hardly budged and indexes are up 2%, interesting. 

 

[pecorino]

Hello Captain Obvious.

I actually don’t think Powell’s comments were so obvious. FC did make a good call. If I’m the Fed chairman and a buffoon of a president is going to overstep and call into question my informed judgment, I’d be more likely to be hawkish just to spite him. Powell is a better man than I am, and also I’m not so sure being hawkish is wrong at this juncture. 

 

[Aaron Rudnicki]

pretty nice little Wednesday for AMZN and NFLX

 

[Capella]

Glad to get some of this damn money back, across the board  

 

[Capella]

Still holding on to COBCF for some dumb reason though. That thing just continues to get dunked on. 

 

[stbugs]

Glad to get some of this damn money back, across the board  

Yep. I think I’m down under 4% on the October purchases (was up 4% the day I thought about selling). I was down 20% at the nadir, which sucked balls. The moves the past few days have been pretty nice. If I get back to even, I may bail for a bit since I still have a lot of AMZN that I can’t sell yet.

 

[culdeus]

Still holding on to COBCF for some dumb reason though. That thing just continues to get dunked on. 

Think they regret adding block chain to the name yet?

 

[Capella]

Think they regret adding block chain to the name yet?

 

[skycriesmary]

Still holding on to COBCF for some dumb reason though. That thing just continues to get dunked on. 

Oh, probably not as bad as CBLLF. I should have sold that turd months ago.

 

[Sand]

Just averaged down at $1450.  Now just forget about that one for a few years.

And with today's action I'm now up $3 on my AMZN lot.  

On a bad note I didn't know the Fed was speaking today.  I wanted to flip a couple items out and the one I wanted to flip into went bonkers today before I could do anything.  Damn work keeping me from making trades.

 

[Sand]

Noob question: I have money sitting in an account that is not yet invested....just rolled over. Should I go ahead and invest now with market down or should I wait for it to drop further?

Mathematically it's slightly better to throw it all in at once.  Psychologically it's a lot easier to buy in in chunks.  Personally I'd go with the latter every time.

 

[Aaron Rudnicki]

http://www2.philly.com/philly/business/john-bogle-vanguard-wsj-index-funds-blackrock-state-street-fidelity-20181129.html

 

[fantasycurse42]

Waiting for this huge rally next week (assuming good news out of G20), start trimming positions and moving more and more to cash. 

To me, the most important indicators are lining up for a sell (yield curve & corporate debt to GDP) - you look at them and compare to every major selloff we've had in the last 30 years, they're giving the signal to sell. Whether 6 months, 12 months, or 24 months, carnage is going to be coming. 

IMO, the volatility we've seen in 2018 is everyone knowing the bloodbath isn't too far away, so they hit the panic sell and try to get out of the way, but when the real flood hits, the opportunities and bounces will be few and far between. 

Within the next 24-36 months, my money says the DJIA will hit 18k, S&P will hit a level under 2k, maybe 1750ish, and the Nasdaq drops under 5k. The risk is more to the downside than upside over the next few years, IMO. Furthermore, all the debt that has been binged on in the last decade is starting to hit maturity in 2019, 2020, 2021. While they binged on it when rates were nothing, refinancing that debt in 2019, 2020, 2021 is going to be MUCH more expensive. You might want to look at companies that aren't cash rich to short and wait for buying opportunities in those that binged bc the money was free and didn't actually need it. Real risks are coming to fruition, and I'll take this rally induced by a slightly less hawkish Fed and Trump/XI truce, as my opportunity to add cash to coffers. 

 

[proteus126]

Waiting for this huge rally next week (assuming good news out of G20), start trimming positions and moving more and more to cash. 

To me, the most important indicators are lining up for a sell (yield curve & corporate debt to GDP) - you look at them and compare to every major selloff we've had in the last 30 years, they're giving the signal to sell. Whether 6 months, 12 months, or 24 months, carnage is going to be coming. 

IMO, the volatility we've seen in 2018 is everyone knowing the bloodbath isn't too far away, so they hit the panic sell and try to get out of the way, but when the real flood hits, the opportunities and bounces will be few and far between. 

Within the next 24-36 months, my money says the DJIA will hit 18k, S&P will hit a level under 2k, maybe 1750ish, and the Nasdaq drops under 5k. The risk is more to the downside than upside over the next few years, IMO. Furthermore, all the debt that has been binged on in the last decade is starting to hit maturity in 2019, 2020, 2021. While they binged on it when rates were nothing, refinancing that debt in 2019, 2020, 2021 is going to be MUCH more expensive. You might want to look at companies that aren't cash rich to short and wait for buying opportunities in those that binged bc the money was free and didn't actually need it. Real risks are coming to fruition, and I'll take this rally induced by a slightly less hawkish Fed and Trump/XI truce, as my opportunity to add cash to coffers. 

And then what?  IOW, where will the indices be 6-12 months after hitting your bottoms?  Interested in your thought process.

 

[fantasycurse42]

And then what?  IOW, where will the indices be 6-12 months after hitting your bottoms?  Interested in your thought process.

They'll obviously move higher at some point, but I have two major concerns heading into our next slowdown:

1) Historically, the Fed needs 500 points to fight a recession, they won't have close to that. 

2) How much debt can we issue to get ourselves out of debt problems? I honestly get the sense that debt is meaningless, I mean in reality it isn't, but it is starting to feel that way.

I'm not a doom and gloomer that America is going under, and I think the trajectory over the next 50 years continues higher, but we've spent the last decade mortgaging some of the future, I'm shocked that some people don't see that, it will need to be paid back. 

My plan is simple: 

When peak to 20% decline hits, I'm in for 1/3 of cash I have on the sidelines, the other 2/3 go in on regular scheduled buys (evenly) over the corresponding 18 months. Think that gives me my best buy/hold strategy for the next cycle. 

 

[proteus126]

How would you plan to handle a generally sideways movement of the indices over your 24-36 month timeframe, should that occur?  That would bring valuations down to a more palatable level without giving you the buying opportunity for your big 1/3 chunk, and in that case I'm not sure when you would initiate your gradual re-entry of your other 2/3 chunk.  I'm guessing you plan to reassess every so often.

Additionally, is it possible that you could achieve a similarly useful mix of upside and wealth preservation, without the risks and without having to "be right", by going to a 30/70 stock/bond allocation now, rebalance when more than 5% out of whack, and shifting your target allocation by 10% a year?  e.g. 30/70 now, 40/60 a year from now, etc, 60/40 at the end of your 36 month window?  It would reduce your risk of sitting on cash for a crash that never comes, while protecting you, allowing you sell winners and buy losers, and also give you increasing market exposure as we work through our current debt, trade and political issues (or not).

 

[stbugs]

Waiting for this huge rally next week (assuming good news out of G20), start trimming positions and moving more and more to cash. 

To me, the most important indicators are lining up for a sell (yield curve & corporate debt to GDP) - you look at them and compare to every major selloff we've had in the last 30 years, they're giving the signal to sell. Whether 6 months, 12 months, or 24 months, carnage is going to be coming. 

IMO, the volatility we've seen in 2018 is everyone knowing the bloodbath isn't too far away, so they hit the panic sell and try to get out of the way, but when the real flood hits, the opportunities and bounces will be few and far between. 

Within the next 24-36 months, my money says the DJIA will hit 18k, S&P will hit a level under 2k, maybe 1750ish, and the Nasdaq drops under 5k. The risk is more to the downside than upside over the next few years, IMO. Furthermore, all the debt that has been binged on in the last decade is starting to hit maturity in 2019, 2020, 2021. While they binged on it when rates were nothing, refinancing that debt in 2019, 2020, 2021 is going to be MUCH more expensive. You might want to look at companies that aren't cash rich to short and wait for buying opportunities in those that binged bc the money was free and didn't actually need it. Real risks are coming to fruition, and I'll take this rally induced by a slightly less hawkish Fed and Trump/XI truce, as my opportunity to add cash to coffers. 

Great ####### call. Based on premarket I’m up on all my AMZN positions and close to break even on SQ. If I had timed it a bit better, I would have been very happy. Seemed to be a day soon buying or day late selling.

Wondering if the open will be the best or if we’ll get a few day rally. 

 

[Capella]

Thought the Dow and the SP would have more of a bounce than this. 

 

[culdeus]

Thought the Dow and the SP would have more of a bounce than this. 

From reading around this sounds like it's a token towards consumer space, and more to do with farm stuff.  The real headwinds on steel and thing are still there and should prove to be a drag long term.

 

[culdeus]

looking at wynn stock.  Man that thing has been a freaking roller coaster.  Went from 240 to 60 back to 180 down to 80 back to 120.  Up 10% today leading everything, wow.  

 

[lod001]

They'll obviously move higher at some point, but I have two major concerns heading into our next slowdown:

1) Historically, the Fed needs 500 points to fight a recession, they won't have close to that. 

2) How much debt can we issue to get ourselves out of debt problems? I honestly get the sense that debt is meaningless, I mean in reality it isn't, but it is starting to feel that way.

I'm not a doom and gloomer that America is going under, and I think the trajectory over the next 50 years continues higher, but we've spent the last decade mortgaging some of the future, I'm shocked that some people don't see that, it will need to be paid back. 

My plan is simple: 

When peak to 20% decline hits, I'm in for 1/3 of cash I have on the sidelines, the other 2/3 go in on regular scheduled buys (evenly) over the corresponding 18 months. Think that gives me my best buy/hold strategy for the next cycle. 

Pretty accurate assessment from what I am reading. They believe it should only take about S&P 2100 for everyone to again hate the market, buying the top and selling low, then vowing never again. Seems we are going there folks. But after they give up, we are rallying above 3000. This is in the next few years. They say this rally needs a dip in order to top 2900. if no dip, then peak is 2850 max.

 

[stbugs]

Welp, sold my AMZN in my IRA. Up $7k in a little over a month of a ridiculous roller coaster. Wasn’t all that long ago (8 days) when it was $340 per share lower. Was down a lot then, glad to be net positive. Still in SQ for a smaller chunk. Still got a lot of AMZN vesting so wanted to take some risk off the table. Feels good even if it goes up some more. 

 

[fantasycurse42]

I’m going back to the calls I was making 4-6 months ago, as they are now coming to fruition... Yield curve, and now others are taking notice as it is the headline article on CNBC. 

You’re getting an extra 12.5 basis points on the 10 year over the 2 year right now, it has flattened. Don’t listen to the talking heads, don’t buy in to the this time is different talk, the yield curve is the most accurate recession indicator since WWII & the bond market is usually much smarter than the equity market. When it does invert, just be aware that a recession is highly highly probable within 6-18 months (average being about 5 quarters, so 12-15 months), and start planning accordingly.

Success is when preparation and opportunity meet. I’ve spent the last decade reading and studying the market as much as a non-professional could, I think I’m prepared to handle most markets moving forward until retirement. I’ll caveat with the next recession being tricky, and that goes back to central banks being very poorly positioned for it. While I think they’ll get us out of it, looking on a much longer horizon of 10-20 years, the end of the next cycle (not this current cycle) I feel will finally bring us to the real debt crisis, and that’s where preparation will be key.

There certainly could be another 10, maybe even 15% (although I doubt we see the high end of that range in this cycle), but I think chasing it could lead to some serious losses.  Valuations are already stretched, what happens when stretched valuations meet a recession? While we’ve consolidated from somewhere around P/E of 18 in January to around 15.5-16ish now, we’re still above historicals, you have to think a recession brings us to the 10-12 P/E range, that’ll be the buying opportunity (if you’re just looking for a 4-5 year buy & hold strategy) in 2020 or 2021, imo. 

 

[fantasycurse42]

Also, while my risk exposure at that point will be small, I do have a few companies I think will make for 10-1 payouts if timed fairly accurately. 

I’m looking at Shopzilla as one that will get hit very hard.

Total exposure to SMBs & a very generous valuation. I might lay out a small dollar amount with some severe downside puts and risk a total loss chasing a huge payout. That one is near the top of my list for a recession homerun when the times come, I wouldn’t get in front of it yet at this time. 

Need to put together a recession carnage puts list, but I won’t be risking more than 3-5% of total portfolio chasing them.

 

[pecorino]

Need to put together a recession carnage puts list, but I won’t be risking more than 3-5% of total portfolio chasing them.

I like this idea. If you don’t mind going public with it, a new thread for just this kind of talk may be fruitful. I’d visit and contribute. I know nothing about Shopzilla, though—can you expound on that?

 

[fantasycurse42]

I like this idea. If you don’t mind going public with it, a new thread for just this kind of talk may be fruitful. I’d visit and contribute. I know nothing about Shopzilla, though—can you expound on that?

It would take pages to fully describe their business model in depth, but simply put, they help retailers (a lot of SMBs) sell their merchandise through affiliate networks & ecomm.

Bottom line, their clients are as exposed to a recession as any company and their valuation is already very friendly.

I wouldn’t step in front of them now though, this is one of those stocks that can gain 25% on any signs of optimism.

 

[stbugs]

It would take pages to fully describe their business model in depth, but simply put, they help retailers (a lot of SMBs) sell their merchandise through affiliate networks & ecomm.

Bottom line, their clients are as exposed to a recession as any company and their valuation is already very friendly.

I wouldn’t step in front of them now though, this is one of those stocks that can gain 25% on any signs of optimism.

I can’t google anything on their stock. Are they owned by someone? I see something back in 2011 with Symphony but nothing else. You aren’t talking about Shopify are you? They’ve actually held up well from the October/November swoon.

 

[Warrior]

Any chance that all the market timers in this thread don't get beaten by a low cost index fund over the next decade? I'm seeing a lot of the "the market is going down, then I'm going to buy at the low and get back in" comments that never work out.

 

[kevzilla]

Any chance that all the market timers in this thread don't get beaten by a low cost index fund over the next decade?

Chances are above zero. Not a lot, though.

The old man and I have been fully lapped by the S&P over the last eight years, and we've had a few doubles and a triple.  

 

[Rattle and Hum]

Anyone holding a Death-Cross Watch party?

 

[fantasycurse42]

I can’t google anything on their stock. Are they owned by someone? I see something back in 2011 with Symphony but nothing else. You aren’t talking about Shopify are you? They’ve actually held up well from the October/November swoon.

Symbol is SHOP.

 

[stbugs]

Symbol is SHOP.

That’s Shopify not Shopzilla. 

 

[stbugs]

Welp, sold my AMZN in my IRA. Up $7k in a little over a month of a ridiculous roller coaster. Wasn’t all that long ago (8 days) when it was $340 per share lower. Was down a lot then, glad to be net positive. Still in SQ for a smaller chunk. Still got a lot of AMZN vesting so wanted to take some risk off the table. Feels good even if it goes up some more. 

Some good timing, some bad. Should have dumped when I was thinking of it early November at the mini-peak. Glad I dumped my Amazon and I should have SQ as well even down a little. Luckily the SQ position was 1/4 of the AMZN. Glad I at least was up on the AMZN purchase since I got in just before the slaughter (averaging down did it). 

 

[fantasycurse42]

That’s Shopify not Shopzilla. 

Brain fart, sorry.

 

[Capella]

Christ. Wtf is going on now. 

 

[fantasycurse42]

https://www.cnbc.com/2018/12/04/the-yield-curve-explained-and-how-it-became--wall-streets-barometer.html

Elementary article, but a good description for those not as familiar.

Think the fate of the economy (in the short term) will be decided on Friday. Powell is praying there isn’t wage pressure in the NFP that drops then. If there isn’t, he can continue to walk back hawkishness and try to fight the curve from inverting. If it comes in hot, he won’t have a choice and it’ll invert within a month.

If that happens, not to pat myself on the back (actually that is what I’m doing), I’ll have made a macro call earlier this year that every single overpaid top Wall St analyst got wrong. 

 

[fantasycurse42]

http://i.imgur.com/95P4KNm.jpg

Take a look at this too, NASDAQ futures... Anything stand out?

3x in the last 2 months, one lower high after the next. Fat lady is warming up and getting ready to sing. Hot NFP, curve inverts, recession will be looming. My money would say prob around late 2019 early 2020.

Havent figured it out yet, it def sounds idiotic & I’ve got theories, but I think looking back in 20 years, these tax cuts will go down as one of the biggest financial policy mistakes we’ve ever made. Would love that to be confirmed before Trump kicks the bucket.

 

[Capella]

I’m such a noob. I just don’t understand how amazon goes up 5% then down 4.5 the next day. That just seems insane to me. 

 

[stbugs]

I’m such a noob. I just don’t understand how amazon goes up 5% then down 4.5 the next day. That just seems insane to me. 

No idea. It’s been really crazy since October. Multi-percent days are just common now. I think it’s the programs and the fact that everything is so easy to trade now. One bit of news and stuff crashes or blows up. I wish I sold SQ yesterday but so glad I sold AMZN to feel more comfortable. I saved myself a $14k loss by selling at the end of yesterday and also armed myself with 75% cash in my largest account.

I still believe in Amazon, but it might be a little bit before we get back to our highs.

 

[Capella]

No idea. It’s been really crazy since October. Multi-percent days are just common now. I think it’s the programs and the fact that everything is so easy to trade now. One bit of news and stuff crashes or blows up. I wish I sold SQ yesterday but so glad I sold AMZN to feel more comfortable. I saved myself a $14k loss by selling at the end of yesterday and also armed myself with 75% cash in my largest account.

I still believe in Amazon, but it might be a little bit before we get back to our highs.

When has anything gone up 5% one day and then down 6 the very next day? With no major news. Just incredibly wild. 

 

[stbugs]

When has anything gone up 5% one day and then down 6 the very next day? With no major news. Just incredibly wild. 

It’s the entire market. It’s based on the Fed and then Trump and China and now inverted yields. The thing is that everything now moves what used to be 6 months or a year in one day. Being able to trade on an iPhone (I did yesterday) and instant availability of news makes this happen.

Honestly, this may be an easier way to do well by just riding things out or finding good companies that just get whacked because everything did. I’m just glad I at least got 75% out in my IRA yesterday. I’ve got another large taxable account that is all cash as well. 401ks, oh well it’s DCA anyway.

Hopefully, there’s a new bottom soon. Probably 4-5 days based on today’s move and then we’ll be at bottom. AMZN was at 2050 then in a few weeks low 1600s then in days at high 1700s. Then it plummeted to 1500s then back to high 1700s. Then back down to 1420 and then to 1770 yesterday and one day later 1660s.

That’s all since late October and it was over 2000 at the end of September. 6 different moves of around 15% up and down. 2 months with that many moves and the market overall has been jerking around plus or minus 10% in the same period.