Race from $2M to $4M...and Beyond!

[SwordGuy]

I'm sure most of us started with next to nothing and hard work with good decisions brought you here.

Most of us started on first base (born in Western democracy) or second base (born in middle class with not-awful parents in one of those countries), and most of us were lucky enough not to get some serious injury or debilitating disease that would have trashed all our hard work,   but otherwise, yes.

Yes we won the birth lottery, also my wife and I had good loving parents.  There we're many forked paths where the wrong turn as a dead end.  It could be luck, we rolled the dice and flipped the coin better than average.   It could be divine guidance.   Maybe the godess just doesn't like most people.

My comment is in no way disparaging to the many very good decisions the people on this FIRE process have made and are making.

I'm just pointing out that most of us didn't "start with next to nothing" and most of us were also lucky.

[Bateaux]

I'm sure most of us started with next to nothing and hard work with good decisions brought you here.

Most of us started on first base (born in Western democracy) or second base (born in middle class with not-awful parents in one of those countries), and most of us were lucky enough not to get some serious injury or debilitating disease that would have trashed all our hard work,   but otherwise, yes.

Yes we won the birth lottery, also my wife and I had good loving parents.  There we're many forked paths where the wrong turn as a dead end.  It could be luck, we rolled the dice and flipped the coin better than average.   It could be divine guidance.   Maybe the godess just doesn't like most people.

My comment is in no way disparaging to the many very good decisions the people on this FIRE process have made and are making.

I'm just pointing out that most of us didn't "start with next to nothing" and most of us were also lucky.

Certainly, we stepped on an escalator already in motion.  Luck helps.

[EscapeVelocity2020]

Certainly, we stepped on an escalator already in motion.  Luck helps.

Let's not forget, the S&P500 went from a low of 667-ish on March 5, 2009 to a high of 3394 Feb 18, 2020 - pretty easy to make money if you've been around for a while.  But hard work and savings didn't hurt either.  Just feeling very doubtful right now that the next decade will see a similar return on investment.

[Bateaux]

Certainly, we stepped on an escalator already in motion.  Luck helps.

Let's not forget, the S&P500 went from a low of 667-ish on March 5, 2009 to a high of 3394 Feb 18, 2020 - pretty easy to make money if you've been around for a while.  But hard work and savings didn't hurt either.  Just feeling very doubtful right now that the next decade will see a similar return on investment.

Yep.  That's exactly what I was referring to.  The escalator always goes up in time.  If you never get off you'll go higher, you just have to hang on through a few rough dips.  Survival of those dips is key.   Yesterday I dipped $5,000 turns out.  That's a total emergency fund for some who actually feel comfortable.  It's an annual salary in some countries.  It's a blip for us.  Not even a memory the next day.

[itchyfeet]

I am also somewhat surprised by my own financial recovery.

Whilst my NW is still a ways short of the Feb peak, we are now in positive territory in terms of NW growth for the YTD.

I was financially poorer at 31 December than I am today. This is difficult to fathom.

I continued to buy some shares in March, albeit less than I might have sans COVID, and am reaping the rewards of that. I also converted some USD denominated investments to AUD denominated investments, with the AUD recovering about 10% v the USD in recent weeks. Finally, AUst  property prices are yet to show any decline but this is bound to come.

[Bateaux]

I am also somewhat surprised by my own financial recovery.

Whilst my NW is still a ways short of the Feb peak, we are now in positive territory in terms of NW growth for the YTD.

I was financially poorer at 31 December than I am today. This is difficult to fathom.

I continued to buy some shares in March, albeit less than I might have sans COVID, and am reaping the rewards of that. I also converted some USD denominated investments to AUD denominated investments, with the AUD recovering about 10% v the USD in recent weeks. Finally, AUst  property prices are yet to show any decline but this is bound to come.

Same here Itchy. We're only down from the very top of the bubble.  I'm still above my personal long term trend and projection.

[SwordGuy]

At the moment, the S&P 500 is just down 0.55% from the champagne cork-popping highs of a year ago.

[EscapeVelocity2020]

GDP contracts a more than expected 4.8% for the first quarter, personal consumption dropped 7.8% (vs. 3.6% expected).  Consumers are 70% of the US economy and are facing an unprecedented spike in unemployment, so much so that they are not able to get enrolled in unemployment due to backlog...  and yet the S&P is currently up ~2.5%?  Based on the Fed (with already ZIRP and unlimited QE) having a meeting today?  Based on some positive news on Remdesivir? 

None of this makes any common sense.  I have no idea how people can be buying at this point.  The stock market is completely unhinged from reality - even if a vaccine came out at 2pm today, I don't think earnings would return to 2019 levels for years.  Unemployment certainly won't spring back to 3 - 4% by the end of 2020. 

Still have my automatic 401k investments, but that's all the risk I have stomach for.  As a true Mustachian, I hate the feeling that I'm overpaying for something that is bound to lose value.

[Bateaux]

GDP contracts a more than expected 4.8% for the first quarter, personal consumption dropped 7.8% (vs. 3.6% expected).  Consumers are 70% of the US economy and are facing an unprecedented spike in unemployment, so much so that they are not able to get enrolled in unemployment due to backlog...  and yet the S&P is currently up ~2.5%?  Based on the Fed (with already ZIRP and unlimited QE) having a meeting today?  Based on some positive news on Remdesivir? 

None of this makes any common sense.  I have no idea how people can be buying at this point.  The stock market is completely unhinged from reality - even if a vaccine came out at 2pm today, I don't think earnings would return to 2019 levels for years.  Unemployment certainly won't spring back to 3 - 4% by the end of 2020. 

Still have my automatic 401k investments, but that's all the risk I have stomach for.  As a true Mustachian, I hate the feeling that I'm overpaying for something that is bound to lose value.

I'm on the verge of selling everything in stock today.

[Dancin'Dog]

GDP contracts a more than expected 4.8% for the first quarter, personal consumption dropped 7.8% (vs. 3.6% expected).  Consumers are 70% of the US economy and are facing an unprecedented spike in unemployment, so much so that they are not able to get enrolled in unemployment due to backlog...  and yet the S&P is currently up ~2.5%?  Based on the Fed (with already ZIRP and unlimited QE) having a meeting today?  Based on some positive news on Remdesivir? 

None of this makes any common sense.  I have no idea how people can be buying at this point.  The stock market is completely unhinged from reality - even if a vaccine came out at 2pm today, I don't think earnings would return to 2019 levels for years.  Unemployment certainly won't spring back to 3 - 4% by the end of 2020. 

Still have my automatic 401k investments, but that's all the risk I have stomach for.  As a true Mustachian, I hate the feeling that I'm overpaying for something that is bound to lose value.

I'm on the verge of selling everything in stock today.

That's probably the right move because I've been considering buying...  ;)


My TDG shares are up over 10% today so I think it's time to sell off about 1/2 of it, but if it continues up another 10% tomorrow I'll regret it.  I've come to realize missing out is much easier to swallow than losing.  Sort'a like running away from a fight is a lot better than getting your butt kicked! 

[Exflyboy]

Hah.. If I sold everything in equities the tax bill would be brutal and I'd have to pay all my healthcare subsidies back... so mmm no I don't think I will.

Its tempting though in my tax advantaged accounts.

[savingstldad]

I won't be selling anything until I FIRE. 

I get the feeling you guys like to buy and sell in an attempt to time the market, which goes against most of the advice this community supports.  Are you just kidding about selling it all, or do you subscribe to trying to time the market and buy/sell based on that?

[Much Fishing to Do]

I definitely know I am bad at predicting whats next so will stick to my AA.  But I think this is definitely an opportunity for some of those who have discovered their AA is a bit too high risk for them to sleep at night (so anyone who didn't have enough in in 2000 and 2008 to be tested) to move to lower risk allocations now without too much pain given this is pretty much where we were 6 months ago.

[Bateaux]

I won't be selling anything until I FIRE. 

I get the feeling you guys like to buy and sell in an attempt to time the market, which goes against most of the advice this community supports.  Are you just kidding about selling it all, or do you subscribe to trying to time the market and buy/sell based on that?

. There are no rules for where we are.  Capitalism has been suspended and replaced with the Fed balance sheet.   The FOMO upward risk is getting very small.  The downward risk is huge.  If you believe that this recession is only about the pandemic and that it's rainbows and unicorns after stay invested.  I had the same fears last year.  Probably won't sell it all but I could drop to 20 or 25 percent stock.

[Dancin'Dog]

I won't be selling anything until I FIRE. 

I get the feeling you guys like to buy and sell in an attempt to time the market, which goes against most of the advice this community supports.  Are you just kidding about selling it all, or do you subscribe to trying to time the market and buy/sell based on that?

Personally, I'm new to buying individual stocks and realized that I'd made a mistake after buying it.  It's up now, so I'm reversing course.  I'd originally planned to hold it long term. 


Btw, since buying the TDG stock I discovered a site, Obermatt.com, that makes it very easy to evaluate stocks and build a portfolio.  I realize index funds are the smart & safe way to invest in equities, but I have always wanted to learn to invest in stocks too.  A couple of days ago I chose 19 stocks (one stock cost over my $1000 limit) and bought approximately $1000 worth of each.  It's small money & spread out among a variety of sectors.  So far my portfolio has beat the market by 2-3%, so I'm excited.   

[itchyfeet]

I definitely know I am bad at predicting whats next so will stick to my AA.  But I think this is definitely an opportunity for some of those who have discovered their AA is a bit too high risk for them to sleep at night (so anyone who didn't have enough in in 2000 and 2008 to be tested) to move to lower risk allocations now without too much pain given this is pretty much where we were 6 months ago.

This is a fair point.

Back in Feb when stocks dropped their first 10% I considered selling a good chunk of stocks, expecting the market to drop more. But I was too lazy and scared of all of the face punches I would receive for trying to time the market if I got it wrong. So I rode it to the bottom and then back to here. I even bought $50K more stocks near the bottom.

Again, I ask myself the question. The market seems over priced. Maybe I should sell.... and again I conclude that I will just let the assets ride, and at the next dip I will buy in even more.

I am hesitant to buy right now unless there is a nice dip, or some very positive signs of people getting back to work. Maybe I have been reading to much shock press, but I struggle to believe we are out of the woods on this.

My boss seems to think so. He is making it mandatory for the local management team to return to the office even though we have not peaked on cases yet in the UAE (every day is a new record), and even though the govt guidance says we should only return to the office if it is essential. Me being in the office is certainly not essential and very debatable whether it is any better than me working from home. We are only allowed to have 30% of the staff back in the office, but my boss wants senior management a part of that 30%.

I am pushing back quite hard on my boss’ demands (FU money attitude maybe), but I feel he is being unnecessarily reckless. Maybe this will end up damaging our working relationship for good, as I don’t intend complying with his directive.... and surprisingly, given the situation, I am on my own. My fellow peers are all agreeing to get back to the office, no fuss. I really just can’t understand. I’ll let you know next Monday whether I cave in, or stick to my guns. Maybe there will be a big drop in new cases in the next 4 days and I’ll relax my stance.... even then I still think working anywhere but at home, unless it’s necessary, is a bit silly at this time. Maybe some of you can help me empathise better with my boss.

[tooqk4u22]

So I rebalanced as the  markets went down and now they are up a bit since and I will be rolling out of that money as long as the market doesn't crash down by the end of the day.   No tax hit bc as the markets fell I also did a bunch of tax loss harvesting so that will offset the new gains.   The selling will basically get me back to my AA +/- so its not like I am selling everything, but Per my post below from a week ago I just don't understand these levels given the hit to the economy now and into the foreseeable future, I see that I am not alone in that feeling. 

I guess people that can spend will probably go back to it but ignoring the millions of people that will remain unemployed or in a precarious financial position how does it go back to normal anytime soon if social distancing will still be the priority. i.e. a restaurant or movie theater can't just create space to keep people separated, that will be a lot of empty seats. 

I guess the main caveat is "Don't fight the fed"

As for the markets, I clearly don't understand and don't time, just stick to my AA which is conservative.  But markets were definitely stretched going into this year for sure.  I felt before the QE/Rate cuts in 2019 that SP500 at 2900 was the high point of being fairly valued bc earnings didn't grow so I am really struggling to understand how it being at 2750-2850 now is appropriate, I mean I like it higher than lower, but I just don't get it.  Below is what I think of SP500 - $2600 or less is where I think it should be right now and honestly $2300 didn't and still doesn't seem crazy to me.    Not much I will do with it but I use it as a guide post.   

SP500 earnings  with 20PE IMO appropriate
2016...……………………………………………………………...$101...………………..$2020
2017...……………………………………………………………...$115...………………..$2300
2018 (tax cut, no growth otherwise)...……………$136...………………..$2720
2019 (no growth)...………………………………………….$140...………………..$2800
2020 (original est)…………………………………………...$162...………………..$3240
2020 (revised) ????………..doesn't matter, pe will be really high
2021???? (20% drop from 2020 est)………………$129...…………………$2592

[Bateaux]

I won't be selling anything until I FIRE. 

I get the feeling you guys like to buy and sell in an attempt to time the market, which goes against most of the advice this community supports.  Are you just kidding about selling it all, or do you subscribe to trying to time the market and buy/sell based on that?

. There are no rules for where we are.  Capitalism has been suspended and replaced with the Fed balance sheet.   The FOMO upward risk is getting very small.  The downward risk is huge.  If you believe that this recession is only about the pandemic and that it's rainbows and unicorns after stay invested.  I had the same fears last year.  Probably won't sell it all but I could drop to 20 or 25 percent stock.

I didn't do any selling today.  Probably will come to regret that.  I'll see where we are Friday. 

[EscapeVelocity2020]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

[pecunia]

All this money in which you guys have accumulated has given you luxury.  Now I'm not talking a yacht or a private Lear Jet.  You have the luxury of time.  You can sit back and wait.

Is this thing going to last forever?  Remember forever is a very long time.  I think not.

Were we talking recession before this Chinese bat virus?  You bet we were.  Were you ready for it then?  Maybe.

People are still what they were.  They want new cars.  They need food.  They want to make a good life for themselves.  The economic system will adapt to their needs and the economy will grow.  I guarantee it.

It won't happen overnight, but it will happen.  In the meantime, invest wisely and enjoy the luxury.

[Bateaux]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

Exactly what I'm feeling.  All common sense is gone.

[SwordGuy]

I definitely know I am bad at predicting whats next so will stick to my AA.  But I think this is definitely an opportunity for some of those who have discovered their AA is a bit too high risk for them to sleep at night (so anyone who didn't have enough in in 2000 and 2008 to be tested) to move to lower risk allocations now without too much pain given this is pretty much where we were 6 months ago.

This is a fair point.

Back in Feb when stocks dropped their first 10% I considered selling a good chunk of stocks, expecting the market to drop more. But I was too lazy and scared of all of the face punches I would receive for trying to time the market if I got it wrong. So I rode it to the bottom and then back to here. I even bought $50K more stocks near the bottom.

Again, I ask myself the question. The market seems over priced. Maybe I should sell.... and again I conclude that I will just let the assets ride, and at the next dip I will buy in even more.

I am hesitant to buy right now unless there is a nice dip, or some very positive signs of people getting back to work. Maybe I have been reading to much shock press, but I struggle to believe we are out of the woods on this.

My boss seems to think so. He is making it mandatory for the local management team to return to the office even though we have not peaked on cases yet in the UAE (every day is a new record), and even though the govt guidance says we should only return to the office if it is essential. Me being in the office is certainly not essential and very debatable whether it is any better than me working from home. We are only allowed to have 30% of the staff back in the office, but my boss wants senior management a part of that 30%.

I am pushing back quite hard on my boss’ demands (FU money attitude maybe), but I feel he is being unnecessarily reckless. Maybe this will end up damaging our working relationship for good, as I don’t intend complying with his directive.... and surprisingly, given the situation, I am on my own. My fellow peers are all agreeing to get back to the office, no fuss. I really just can’t understand. I’ll let you know next Monday whether I cave in, or stick to my guns. Maybe there will be a big drop in new cases in the next 4 days and I’ll relax my stance.... even then I still think working anywhere but at home, unless it’s necessary, is a bit silly at this time. Maybe some of you can help me empathise better with my boss.

When the US government meets, like when the President and VP go to the combined Congress, certain key people in management are not allowed to attend.   They are "Designated Survivors".  If everyone else dies from some catastrophic event, there are still people in positions of authority to carry on.

Maybe you can sell yourself as the "Designated Survivor".    Tell your boss you understand you won't earn as many brownie points by not being in the office, but you're willing to take that disadvantage for the team, so in the unhappy event they all get sick, he'll still look good because the office will still be functional.

Let me know if it works...

[EscapeVelocity2020]

....
People are still what they were.  They want new cars.  They need food.  They want to make a good life for themselves.  The economic system will adapt to their needs and the economy will grow.  I guarantee it.
...

It seems like, when people earn their money, they buy things like cars, food, vacations, etc.  When the government hands them money, they aren't quite so smart - https://www.houstonchronicle.com/news/houston-texas/texas/article/Fulfilling-warnings-lottery-sales-surge-as-COVID-15219652.php

On Tuesday afternoon, the Texas Lottery released what appeared to be great news: sales of instant scratch-off tickets, by far its largest source of revenue, had surged from the previous week, jumping to $112 million dollars.

The leap came after a month of plunging sales, presumably due to the sputtering pandemic economy, in which revenues had dropped compared to the same periods in 2019. The April 18 weekly figures, by comparison, outpaced the same week in 2019 by more than $15 million - a 16 percent jump.

To some, however, the precise timing of the dramatic revenue jump in the midst of a crashing economy signaled terrible news — that instead of spending their government relief checks on food, utilities and rent, Texans appeared to be using their personal stimulus payments of up to $1,200 on state-sponsored gaming.

Bottom line, people don't do well on unemployment.

[itchyfeet]

And just like that the ASX is up almost another 3% today.

But... Australia is very close to total eradication of coronavirus so maybe this will give consumers a boost of confidence as they get back to their lives...

[Taran Wanderer]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

Exactly what I'm feeling.  All common sense is gone.

I cashed out about 25% of our total market holdings before the market dropped.  The writing on the wall was just way too clear about where the market was heading.  Then I watched the market tumble down and wished I had sold it all.  I've watched this insanely optimistic surge as prices rebound.  I couldn't stand it anymore and sold another 50+% today, so that now we are about 80% allocated to cash.  New contributions are still going into the market, but I want a lot of dry powder when the market realizes the full consequences of the pandemic.

The market behavior is completely irrational.  I don't care if the Fed is flooding the stagnating economy with cash.  The disease has been spreading even with the lockdowns and restrictions.  This re-opening is going to wake a lot of people up to the consequences of the disease as more people get infected and die.  Huge portions of the economy will not be the same for years - restaurants, travel, sports and entertainment, casinos - anything that requires a bunch of people to gather in one place.  The market was objectively overvalued before the coronavirus crash.  It's closer to fairly valued now if Covid-19 wasn't present.  With Covid-19 still spreading and the U.S. and global economic consequences not yet being felt, I'm convinced we're in a for very bumpy ride.  I just made a seven figure bet on this, so I hope I'm right...

[Bateaux]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

Exactly what I'm feeling.  All common sense is gone.

I cashed out about 25% of our total market holdings before the market dropped.  The writing on the wall was just way too clear about where the market was heading.  Then I watched the market tumble down and wished I had sold it all.  I've watched this insanely optimistic surge as prices rebound.  I couldn't stand it anymore and sold another 50+% today, so that now we are about 80% allocated to cash.  New contributions are still going into the market, but I want a lot of dry powder when the market realizes the full consequences of the pandemic.

The market behavior is completely irrational.  I don't care if the Fed is flooding the stagnating economy with cash.  The disease has been spreading even with the lockdowns and restrictions.  This re-opening is going to wake a lot of people up to the consequences of the disease as more people get infected and die.  Huge portions of the economy will not be the same for years - restaurants, travel, sports and entertainment, casinos - anything that requires a bunch of people to gather in one place.  The market was objectively overvalued before the coronavirus crash.  It's closer to fairly valued now if Covid-19 wasn't present.  With Covid-19 still spreading and the U.S. and global economic consequences not yet being felt, I'm convinced we're in a for very bumpy ride.  I just made a seven figure bet on this, so I hope I'm right...

Very much in agreement.  I made a huge move to position for eventual FIRE back in February.   Previously I was well overweight in stock.  I highly considered moving more to safety yesterday with the irrational rally amongst horrible economic reports.  I feel even without the virus we are looking at a bleak economy for a long time. 

[Bateaux]

Checking Mint we're at 2.3M and accounts are now under ten percent from FIRE goal, need about 200K.  A little over a week ago I needed 250K and at the market top I needed about 100K.  This is crazy in the current economy.   It's possible we'll hit our FIRE goalm of 2.5M in 2020 and people will lack food in the US simultaneously.  What a bizarre world we've entered and the growing distance between the have and have nots.

[soccerluvof4]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

Exactly what I'm feeling.  All common sense is gone.

I cashed out about 25% of our total market holdings before the market dropped.  The writing on the wall was just way too clear about where the market was heading.  Then I watched the market tumble down and wished I had sold it all.  I've watched this insanely optimistic surge as prices rebound.  I couldn't stand it anymore and sold another 50+% today, so that now we are about 80% allocated to cash.  New contributions are still going into the market, but I want a lot of dry powder when the market realizes the full consequences of the pandemic.

The market behavior is completely irrational.  I don't care if the Fed is flooding the stagnating economy with cash.  The disease has been spreading even with the lockdowns and restrictions.  This re-opening is going to wake a lot of people up to the consequences of the disease as more people get infected and die.  Huge portions of the economy will not be the same for years - restaurants, travel, sports and entertainment, casinos - anything that requires a bunch of people to gather in one place.  The market was objectively overvalued before the coronavirus crash.  It's closer to fairly valued now if Covid-19 wasn't present.  With Covid-19 still spreading and the U.S. and global economic consequences not yet being felt, I'm convinced we're in a for very bumpy ride.  I just made a seven figure bet on this, so I hope I'm right...

Very much in agreement.  I made a huge move to position for eventual FIRE back in February.   Previously I was well overweight in stock.  I highly considered moving more to safety yesterday with the irrational rally amongst horrible economic reports.  I feel even without the virus we are looking at a bleak economy for a long time.

I've gone round and round on this myself and have just come to the conclusion that The Fed can absorb the influx of $ its pumping into the economy because its the new norm and its a world wide problem.  PE's you can throw out the window. There really is nowhere else to put your money so I am holding more cash and in the camp that when the talking heads decide what earnings should be and there not that the markets will struggle BUT in 3-5 years will be much higher than we were. Only time will tell though....We have two Elephants in the room and the second one being oil. Love or hate oil is not the problem as much as its part in the economy and GDP. Need to work through this . But i also feel this Pandemic and these times are going to offer up new opportunities and shifts in the way we do things which will bring jobs back to take care of supply chains and just new technology etc.. that will propel us forward. Maybe i am being to optimistic but I still believe in out country. If we could stop the bickering that would really help things though!

[Bateaux]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

Exactly what I'm feeling.  All common sense is gone.

I cashed out about 25% of our total market holdings before the market dropped.  The writing on the wall was just way too clear about where the market was heading.  Then I watched the market tumble down and wished I had sold it all.  I've watched this insanely optimistic surge as prices rebound.  I couldn't stand it anymore and sold another 50+% today, so that now we are about 80% allocated to cash.  New contributions are still going into the market, but I want a lot of dry powder when the market realizes the full consequences of the pandemic.

The market behavior is completely irrational.  I don't care if the Fed is flooding the stagnating economy with cash.  The disease has been spreading even with the lockdowns and restrictions.  This re-opening is going to wake a lot of people up to the consequences of the disease as more people get infected and die.  Huge portions of the economy will not be the same for years - restaurants, travel, sports and entertainment, casinos - anything that requires a bunch of people to gather in one place.  The market was objectively overvalued before the coronavirus crash.  It's closer to fairly valued now if Covid-19 wasn't present.  With Covid-19 still spreading and the U.S. and global economic consequences not yet being felt, I'm convinced we're in a for very bumpy ride.  I just made a seven figure bet on this, so I hope I'm right...

Very much in agreement.  I made a huge move to position for eventual FIRE back in February.   Previously I was well overweight in stock.  I highly considered moving more to safety yesterday with the irrational rally amongst horrible economic reports.  I feel even without the virus we are looking at a bleak economy for a long time.

I've gone round and round on this myself and have just come to the conclusion that The Fed can absorb the influx of $ its pumping into the economy because its the new norm and its a world wide problem.  PE's you can throw out the window. There really is nowhere else to put your money so I am holding more cash and in the camp that when the talking heads decide what earnings should be and there not that the markets will struggle BUT in 3-5 years will be much higher than we were. Only time will tell though....We have two Elephants in the room and the second one being oil. Love or hate oil is not the problem as much as its part in the economy and GDP. Need to work through this . But i also feel this Pandemic and these times are going to offer up new opportunities and shifts in the way we do things which will bring jobs back to take care of supply chains and just new technology etc.. that will propel us forward. Maybe i am being to optimistic but I still believe in out country. If we could stop the bickering that would really help things though!

Love your optimism.  In time it does work out.  Don't let the bickering get you down.  I don't want people in total agreement.  I only learn when people voice other options.  Love all you guys.   Best of luck investing and stay healthy.

[SwordGuy]

This is why I'm glad we have 4 different sources of income (social security, rented farmland, rental houses and stocks/bonds) and don't require the stocks/bonds for normal living expenses.

[Dicey]

Checking Mint we're at 2.3M and accounts are now under ten percent from FIRE goal, need about 200K.  A little over a week ago I needed 250K and at the market top I needed about 100K.  This is crazy in the current economy.   It's possible we'll hit our FIRE goalm of 2.5M in 2020 and people will lack food in the US simultaneously.  What a bizarre world we've entered and the growing distance between the have and have nots.

Let's be honest here: you want that extra bit of cash. You do not need it. Just a bit of tough love from your fan, Dicey.

[Bateaux]

Checking Mint we're at 2.3M and accounts are now under ten percent from FIRE goal, need about 200K.  A little over a week ago I needed 250K and at the market top I needed about 100K.  This is crazy in the current economy.   It's possible we'll hit our FIRE goalm of 2.5M in 2020 and people will lack food in the US simultaneously.  What a bizarre world we've entered and the growing distance between the have and have nots.

Let's be honest here: you want that extra bit of cash. You do not need it. Just a bit of tough love from your fan, Dicey.

I'm going to stop at 2.5 or was it 3.0??   No, no.  It's 2.5 I've got stuff to do.

[EscapeVelocity2020]

I've gone round and round on this myself and have just come to the conclusion that The Fed can absorb the influx of $ its pumping into the economy because its the new norm and its a world wide problem.  PE's you can throw out the window. There really is nowhere else to put your money so I am holding more cash and in the camp that when the talking heads decide what earnings should be and there not that the markets will struggle BUT in 3-5 years will be much higher than we were. Only time will tell though....We have two Elephants in the room and the second one being oil. Love or hate oil is not the problem as much as its part in the economy and GDP. Need to work through this . But i also feel this Pandemic and these times are going to offer up new opportunities and shifts in the way we do things which will bring jobs back to take care of supply chains and just new technology etc.. that will propel us forward. Maybe i am being to optimistic but I still believe in out country. If we could stop the bickering that would really help things though!

I won't keep beating the 'this is crazy' drum, but really had to get that off my chest yesterday as the market index soared (from an already high level) on historically bad news (and some unrealistic expectations about the country re-opening in May).  It was driving me bonkers and really making me want to sell, even though I'm at a comfortable AA.  As long as we don't churn as this thing works its way through, the folks in this thread should be in better shape than 90% of the US - just depending on how many lucky Mustachian-types keep their jobs and stay the course - depending on how long this drags out and how deeply the markets correct. 

[soccerluvof4]

I've gone round and round on this myself and have just come to the conclusion that The Fed can absorb the influx of $ its pumping into the economy because its the new norm and its a world wide problem.  PE's you can throw out the window. There really is nowhere else to put your money so I am holding more cash and in the camp that when the talking heads decide what earnings should be and there not that the markets will struggle BUT in 3-5 years will be much higher than we were. Only time will tell though....We have two Elephants in the room and the second one being oil. Love or hate oil is not the problem as much as its part in the economy and GDP. Need to work through this . But i also feel this Pandemic and these times are going to offer up new opportunities and shifts in the way we do things which will bring jobs back to take care of supply chains and just new technology etc.. that will propel us forward. Maybe i am being to optimistic but I still believe in out country. If we could stop the bickering that would really help things though!

I won't keep beating the 'this is crazy' drum, but really had to get that off my chest yesterday as the market index soared (from an already high level) on historically bad news (and some unrealistic expectations about the country re-opening in May).  It was driving me bonkers and really making me want to sell, even though I'm at a comfortable AA.  As long as we don't churn as this thing works its way through, the folks in this thread should be in better shape than 90% of the US - just depending on how many lucky Mustachian-types keep their jobs and stay the course - depending on how long this drags out and how deeply the markets correct.

Agreed!

[tooqk4u22]

It really is a crazy situation to be in, one where an investor can't win.  If you want to get out, then you're missing out on what the Fed promises to be a free-for all buffet lunch for the market.  The Fed clearly said today that economic activity is too low, businesses need to be kept alive, and Congress has to get more money out to consumers. 

But if you stay invested, you know you are holding assets that are being propped up by issuing debt.  The government may be able to issue a lot of debt for a long time, but what if they can't?  It is common sense that EPS expansion can't go on forever - investors ultimately want to own companies that increase earnings over time.  In the US, the earnings come from consumers (or exports) and that's all gone in an unprecedented way.  No one has any idea what earnings will be or how long it will take for things to return to 'normal'.  In the meantime, many businesses will simply be unable to make money, but still have to service debt, pay rents, pay employees...

So, do you hold your bets for a few more days/weeks/months, thinking there's probably another few trillion coming from the Fed and Congress or do you rationalize that you're already pretty lucky to be able to sell stuff at inflated prices and sit out the roller coaster ride?

If only bonds or real estate offered a viable alternative!  I'm sure there will be lots of great opportunities to buy stuff at reasonable prices at some point, I just hope I'm patient enough not to blow myself up in the meantime.  I really have no idea what a reasonable S&P500 level is until we get some idea of earnings, so if it falls, how do you know when it has hit the floor?

Yeah, but look at my table - we didn't have EPS expansion in 2019 and 2018 EPS growth was solely attributed to the tax reform/cuts.   And that was before all this, so multiple expansion happened, got overvalued, then this.   It makes no sense.   

[itchyfeet]

Ok.... slowly I am getting more convinced to get off my ass and sell something.

Let me have another whiskey and I’ll think about it tomorrow...l

[soccerluvof4]

Yesterday after writing here i so wanted to take a bit off the table and increase my cash but shit I didnt. Oh well , would of been a small amount anyhow. Let it ride. No biggie. Sure i will be getting another opportunity to buy things on sale. Just dont feel the S&P should be over 2800 and that is my feeling of the Current top for now so feels lofty.

[2sk22]

With all this talk about cashing out, I got curious about my own cash position. So I just added up all of the cash we have stashed away in various savings and money market accounts - just discovered that it's over a million. I reckon that ought to be ok :-)

[Car Jack]

A million in cash?

Invest some of that, already!

[Exflyboy]

A million in cash?.. I'm wondering how think my wallet would be with all that..:)

[2sk22]

A million in cash?.. I'm wondering how think my wallet would be with all that..:)

Not much different from when it was lower - we just can't think of ways to spend the money :-)

We barely travel, my happiness comes from playing with my model trains. The main planned expenses
we have planned are some home renovation and college for the younger kid.

[2sk22]

A million in cash?

Invest some of that, already!

This cash is about 1/4th of our net worth - the rest is in stocks.

[Bateaux]

A million in cash?.. I'm wondering how think my wallet would be with all that..:)

You still have the F-250?  Fill the bed.  That's a metric ton.

[Exflyboy]

A million in cash?.. I'm wondering how think my wallet would be with all that..:)

You still have the F-250?  Fill the bed.  That's a metric ton.

Damn!.. Brings a new vision of a "shit-ton" of money..

Yes we still have our now 31 year old truck that we paid a whole $1400 for..:)

[Taran Wanderer]

We sold off a big chunk on Wednesday. Actually sold for a little higher than expected and made an extra $20,000. Now sitting on what I guess has been defined above as a shit-ton of money and thinking through our strategy for re-investing. I’ll let you know how this goes...

[Bateaux]

We sold off a big chunk on Wednesday. Actually sold for a little higher than expected and made an extra $20,000. Now sitting on what I guess has been defined above as a shit-ton of money and thinking through our strategy for re-investing. I’ll let you know how this goes...

I was ready to bail big on Wednesday.  I'm having some regret that I didn't now.  This bear cycle will run its course just like they all do in time.  I'd have been too low in stock exposure had I made that move.  If I had sold I'd have a lot more confidence in planning to FIRE soon.  If the huge drop comes that I fear is coming I'll just work longer.

[DavidAnnArbor]

I didn't sell any equities, and today I bought a little bit more.

Also, I'm going to be adding to the after tax portion of my individual 401k plan which I will roll over into the roth 401k account.

The government is doing the right thing in providing disaster relief, and in fact needs to do more to support states and local governments.

Investors are paying our federal government to hold their money, the real rate of return for inflation protected tips is something like -.05%

When capitalism fails the federal governments around the world need to step up and provide support to workers and families and local governments as well as insure that industries don't collapse and that financial markets don't seize up.

I'm so thankful that we have Jerome Powell as the Fed Reserve Chair, and that some of the crank choices Trump has had for the fed governors have not been allowed to be confirmed.

[Car Jack]

A million in cash?.. I'm wondering how think my wallet would be with all that..:)

Not much different from when it was lower - we just can't think of ways to spend the money :-)

We barely travel, my happiness comes from playing with my model trains. The main planned expenses
we have planned are some home renovation and college for the younger kid.

Now I get it.

My oldest has one more class next Thursday (online) and graduates.  Starts his job about a week later.  I calculate college costs in cars.  He's a mid level Lamborghini Huracan.  No....really.

[Much Fishing to Do]

A million in cash?.. I'm wondering how think my wallet would be with all that..:)

Not much different from when it was lower - we just can't think of ways to spend the money :-)

We barely travel, my happiness comes from playing with my model trains. The main planned expenses
we have planned are some home renovation and college for the younger kid.

Now I get it.

My oldest has one more class next Thursday (online) and graduates.  Starts his job about a week later.  I calculate college costs in cars.  He's a mid level Lamborghini Huracan.  No....really.

Heh, I thought $1M was ridiculous, but when you include the 529s for my 3 kids on top of my portfolio cash I guess not really...

[2sk22]

Now I get it.

My oldest has one more class next Thursday (online) and graduates.  Starts his job about a week later.  I calculate college costs in cars.  He's a mid level Lamborghini Huracan.  No....really.

Heh - that's right on the mark! Depending on which school she decides to go to, it could be anywhere between a Mercedes S class and a Rolls Royce Ghost :-)