Don't Noonan
Footballguy
Definately a disconnect between sentiment and fundamentals. I am buying a lot of VTI today
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Stock Thread (46 Viewers)
- Thread starter St. Louis Bob
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proteus126
Footballguy
IMO we are somewhere near "fair value" on the S&P 500, from an earnings and growth perspective in a generally accomodative environment. Still over-valued in the context of a pessimistic market. Anything under 2000 is "buy" to me. But if that support is breached hold out for S&P 1500!
Watching the President panic over a stock pullback is both hilarious and alarming - alarming because he seems scared and this shouldn't scare him. I don't think he has much intestinal fortitude. All hat no cowboy.
Agreed. If we really are entering a bear market, capitulation happens after a year or two. Not 3 months.
James Daulton
Footballguy
Is the market just taking into account higher capital cost combined with lower future growth? Q4 GDP will almost certainly be less than 3% and the 2019 outlook is consistently under 3%. The sugar rush of the tax cuts are gone and fully baked in. Now the Fed is increasing the cost of capital with no offset.
Don't Noonan
Footballguy
fantasycurse42
Footballguy Jr.
https://www.cnbc.com/2018/12/24/market-panic-enters-late-stages-jim-paulsen-says.html?recirc=taboolainternal
The poll on the bottom of this page gives me pause and makes me think we’re a long way from a bottom. Apparently almost 2/3 of investors as of the first 6k to cast their votes see a rosy 2019.
The poll on the bottom of this page gives me pause and makes me think we’re a long way from a bottom. Apparently almost 2/3 of investors as of the first 6k to cast their votes see a rosy 2019.
fantasycurse42
Footballguy Jr.
Valuations meant nothing on the way up, so when I hear people saying they matter on the way down, I have to pose this question, why do they matter now?
proteus126
Footballguy
They don't. Multiples expand and contract all the time.
In the long run, however, I can "believe" in a current price of 2400 on the S&P. I can't believe in 2900. Looking back in 20 years, I suspect that on a semi-log plot 2400 will have looked correct for 2018. No shame in having bought at that price then, eh?
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caustic
Footballguy
Nasdaq: 6,507; already under that by 200 pts
S&P: 2,352; getting uncomfortably close
DJIA: 21,562; little ways to go yet
fantasycurse42
Footballguy Jr.
Sure, but in the same way they overshot to 2950 based your fair value, the same can happen on an undershoot.
I agree with Humpback in the sense that I still see no real panic and everyone is ready to step in and buy.
In thinking more about it, I think some of those buyers need to step in and get hurt first too before we do actually see a bottom.
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proteus126
Footballguy
Shula-holic
Footballguy
I have cash on the sideline. I may deploy some along the way down here and there but I have no idea where this could run to. I'd rather see a bottom put in and then pay a little more buying on the way back. The problem is determining when that is. I remember in 2008 the bottom never seemed to come.
fantasycurse42
Footballguy Jr.
After a 10 year bull market, there has to be an actual real reason for a bear market to come. If it is really a bear market, why and what happens?
We’ve discussed the obvious, rates/liquidity. What we haven’t discussed is the effect. That’s the million dollar question, and the answer to that question could adjust forecasts of “fair value”.
We’ve discussed the obvious, rates/liquidity. What we haven’t discussed is the effect. That’s the million dollar question, and the answer to that question could adjust forecasts of “fair value”.
proteus126
Footballguy
Good luck! Tough to do.
You could just lower your standards, and invest it in tranches over time.
proteus126
Footballguy
Anyone else feel like this is just a stern value-based correction, exacerbated by a volatile President?
If so, a 20% cut might be the end of it.
No one knows where this could run to, but this gets back to the question I was asking Siff earlier. These moves have been so violent that in order to break this pattern of lower highs and lower lows, we'd need the S&P to rally above the previous high of ~2760, which is over 15% higher from here. So, you can either try to catch the falling knife, or be "safer" and wait to buy until we break this trend, which mean missing out on at least 15% of the next "rally". Of course, even if/when we break this trend it doesn't mean it's going to hold, it could be a false breakout.
fantasycurse42
Footballguy Jr.
Absolutely in my consideration set, but lately I’ve pondered something is out there and I haven’t connected the dots yet.
proteus126
Footballguy
Shula-holic
Footballguy
This is probably what I'll end up mostly doing if we keep heading lower. I missed out on some equity exposure over the past 10 years being market conservative due to stuff going on growing a business. I've ran the numbers on average costs along the way I'd need to be at to basically enter at the positions I missed in the past. As those opportunities come I may take some to erase the equity allocation gap of where I am versus where I should be.
fantasycurse42
Footballguy Jr.
While it is possible that there is no “real” risk out there, the behavior of the markets for 11 months straight are starting to make me think there could be.
What it is? No idea, but I can’t be dismissive and say this will bounce right back.
GoBirds
Footballguy
I think being this close we have to check the 20% box and mark the end of the bull market. It makes sense as the market has been pumped with steroids for years. I bet we get past 20% by year end then I’m going to look at averaging in over time. I’m 20 years from retirement, buying at these levels look a lot better than what I was buying at 3 months ago.
proteus126
Footballguy
FYI - I did make a modest adjustment this AM after all. I added 2% to equities (mostly small cap - I have been a little low there for a while) and sold 2% from bond funds. That got me back to my nominal asset allocation. It seemed like a good time to make the move.
I'll do it again if the S&P breaks sharply lower and gets to the 2000-2100 range. Otherwise, I'm happy with things.
[edited to add: the move takes effect at the end of the day - so here's hoping for a washout!!!]
I'll do it again if the S&P breaks sharply lower and gets to the 2000-2100 range. Otherwise, I'm happy with things.
[edited to add: the move takes effect at the end of the day - so here's hoping for a washout!!!]
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Different world. With the auto-buying and instant news stuff happens much faster. Look at the swings we’ve had. I’ve watched the market for many, many years and the % swings on daily basis have been amazing. Yes, we’ve had crashes before (I was in high school in 1987), but the last few weeks seem to have been 1 month+ % moves every day. All that with no real reason. I understand the risks but it’s like we built a bear market because people said it migh happen. It’s interesting to watch because it’s like people assume it has to be like 2007-2009 even though we certainly aren’t going through that now.
I’m still at 87% cash ignoring my wife’s and my 401ks that are smaller and DCAing every month at these lower prices anyway. I just hope we get close to finding the bottom so we can shove in at a good time. I’m not ready yet.
Shula-holic
Footballguy
2100 is an area I’d put a little more to work as well. It seems way off and may not happen but who knows.
Shula-holic
Footballguy
2100 is an area I’d put a little more to work as well. It seems way off and may not happen but who knows.
Said people in 2007, said people in 2001, said by people 30 other times in history since 1900. The average bear market lasts 367 days, conventional anecdotal wisdom is they last 15~18 months. The last one was about 17 months. Maybe the electronic trading and instant information exacerbates the moves up and down, I'd buy that. Has it changed people and their psychology? Naw.
That said, IDK what's going to happen, maybe this is just the next in another of 120-ish corrections that have occurred over that same time frame. Maybe the correction size definition needs to be refined and that would fit into your different world scenario.
fantasycurse42
Footballguy Jr.
This idiot was just in the Atlantic Center in Downtown Brooklyn. Had to cut through Target to get to Best Buy.
Based on my experience, I’m a buyer of TGT and a seller of Best Buy & Macy’s.
Very happy I didn’t need anything in Target, the line had to be 500, maybe even 700 feet long.
Based on my experience, I’m a buyer of TGT and a seller of Best Buy & Macy’s.
Very happy I didn’t need anything in Target, the line had to be 500, maybe even 700 feet long.
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cosjobs
Footballguy
Santa rally strong, but only for the TVIX positions.
With congress out and no budget deal until at least the 27th, I'll be playing it hard again Wed and Thur morning, at least. Much buying every little dip and selling every nice gain. I've made more in the last three and a half weeks than any other 3.5 wk. stretch in my life.
With congress out and no budget deal until at least the 27th, I'll be playing it hard again Wed and Thur morning, at least. Much buying every little dip and selling every nice gain. I've made more in the last three and a half weeks than any other 3.5 wk. stretch in my life.
cosjobs
Footballguy
I took a position in Costco. I do not understand how they aren't printing money this season. Their lines were about 1500-2000 feet long.
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Sand
Footballguy
So a couple good articles on the statistics of the markets, specifically with drawdowns like we've seen. We're currently in the middle of the 9th worst quarterly drawdown in the last century.
This details what has happened in domestic markets following this type of selloff.
This article details the same with emerging markets.
No telling what the markets are going to do, but the odds are stacked in our favor. Merry Christmas, all.
This details what has happened in domestic markets following this type of selloff.
This article details the same with emerging markets.
No telling what the markets are going to do, but the odds are stacked in our favor. Merry Christmas, all.
cosjobs
Footballguy
Capella
Footballguy
skycriesmary
Climbing up the Walls
If your losing 25k on these daily moves, you've made high six figures over the last few years on the way up...
Sand
Footballguy
Or he dumped a crapload into the market in September...If your losing 25k on these daily moves, you've made high six figures over the last few years on the way up...
fantasycurse42
Footballguy Jr.
Merry Xmas mother####ers!!
Weird thought here, and someone give me the explanation for why this wouldn’t work...
We know there is a debt problem, it’s undeniable. Even at low rates now, the fear is rising & It has to be dealt with at some point or there will be chaos when it collapses.
Why can’t we keep rates low, while also being much more restrictive of new loans and refinancing? I understand that will be restrictive of growth for some time, but it will also soften the debt crisis blow, no?
You give corporations the opportunity to clear a lot of debt, and if they can’t do it without creating new debt, especially while at low rates, they’re doomed anyways. We’d basically be killing off the dead money, why can’t we just clear that bad debt, while giving all of them a chance to reduce it? The bad debt will either buckle sooner or later, let’s just get it done with sooner and move along.
Weird thought here, and someone give me the explanation for why this wouldn’t work...
We know there is a debt problem, it’s undeniable. Even at low rates now, the fear is rising & It has to be dealt with at some point or there will be chaos when it collapses.
Why can’t we keep rates low, while also being much more restrictive of new loans and refinancing? I understand that will be restrictive of growth for some time, but it will also soften the debt crisis blow, no?
You give corporations the opportunity to clear a lot of debt, and if they can’t do it without creating new debt, especially while at low rates, they’re doomed anyways. We’d basically be killing off the dead money, why can’t we just clear that bad debt, while giving all of them a chance to reduce it? The bad debt will either buckle sooner or later, let’s just get it done with sooner and move along.
cosjobs
Footballguy
Too much of a corporate gift. Wrap it around student debt forgiveness to balance it out to the other side of the bell curve
fantasycurse42
Footballguy Jr.
Corporations have been borrowing for next to nothing for a decade, this would be the opposite, you’d be tightening the noose around bad money and making it come due or collapse. You’d be cutting off the fountain of endless debt by being restrictive on loans. Pay or fold. You’re giving them the lifeline on low rates on the hope that they can pay, but you’re shutting the tap on more funds.
My whole point is simple, we know there is a corporate debt problem, it’s not a secret, and whether it comes down at the end of this cycle or the next cycle, it’s brewing. The answer to a debt problem isn’t more debt. I don’t even understand why I have to say the previous sentence, but these economists are apparently pretty ####### stupid.
While student debt is a problem, it isn’t the domino that tips and causes chaos. While squeezing corporate debt leverage out of the system probably restricts growth heavily for the next 5-10 years, it also makes the next 50-100 years much more prosperous, I’m trying to understand why that is incorrect.
GoBirds
Footballguy
I have no idea what I’m doing but would suggest waiting a little longer, market seems determined to get into bear territory on all indices.
proteus126
Footballguy
You gotta buy sometime.
Why not plan to buy some at the major resistance levels? We are at one now. There's one at S&P 2100 or so. Next one down is what, 1850 or so? We've got a nice discount going right now, so nibbling seems fine to me.
I assume you mean support, but I certainly don't think we're at major level now. 2100 I see, but that's another ~11% drop from here, which would wipe out another above average year of returns. Double that if we get to 1850.
People have been saying we have a nice discount going this entire 20%+ drop, until this mindset changes we will not be close to a bottom IMO.
proteus126
Footballguy
The fear level has risen sharply. Here, on the FIRE forums, in the Washington Post columns. Not existential panic yet, which dampens my buying enthusiasm, but it is there.
Monday had elements of capitulation in it, crushing sectors that are considered safer havens. We'll see how things hold the next few weeks.
Don't Noonan
Footballguy
Care to go record to how far you think the market falls? I don't remember you calling this drop a month ago but apparently after a 20% drop in the S&P 500 you think the market should go lower?
fantasycurse42
Footballguy Jr.
I’ve spent a lot of time thinking about this.
Ill consider it a buying opportunity when there aren’t many people left saying it is a buying opportunity.
Until we get there, you’ll see a lot of people buying the dips, only to watch the rallies get sold, imo.
Havent figured it out yet, but I’m starting to feel there is something more sinister lurking.
Simple thought process tells me you’ve had record buybacks at record high prices on borrowed funds, that can’t be good, right? If I’m a consumer using margin to buy stock and it tumbles, I know I’m looking out to a world of hurt, is this that much different? That’s only one of many problems I don’t see being discussed anywhere.
Ill consider it a buying opportunity when there aren’t many people left saying it is a buying opportunity.
Until we get there, you’ll see a lot of people buying the dips, only to watch the rallies get sold, imo.
Havent figured it out yet, but I’m starting to feel there is something more sinister lurking.
Simple thought process tells me you’ve had record buybacks at record high prices on borrowed funds, that can’t be good, right? If I’m a consumer using margin to buy stock and it tumbles, I know I’m looking out to a world of hurt, is this that much different? That’s only one of many problems I don’t see being discussed anywhere.
