The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Cache_Stash on March 12, 2020, 02:00:22 PM
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The bottom is in! Mortgage your house, leverage yourself to the hilt and buy, buy buy!
(In memorial to the Top is in Thread, R.I.P.)
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You're no @thorstach
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I thank god for that.
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Now this is a thread I can get on board with.
We had business retirement funds from last year that needed to be invested -- due to needing to maintain business liquidity, we cant invest it until usually around March-May of each year. Welp, 75 K of it is going in today. Another 75 K will be DCA'd in over the next 3 months in even increments.
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
Yes, but obviously a new thread is needed since the last one was wrong ;)
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
Yes, but obviously a new thread is needed since the last one was wrong ;)
And this one will be wrong, as well. Just like the Top is in thread.
The OP is an idiot.
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I'm rooting for the OP
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I'm rooting for the OP
Thank you. So am I. lol
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Now this is a thread I can get on board with.
We had business retirement funds from last year that needed to be invested -- due to needing to maintain business liquidity, we cant invest it until usually around March-May of each year. Welp, 75 K of it is going in today. Another 75 K will be DCA'd in over the next 3 months in even increments.
That's pretty sweet isn't it? Love when the world aligns with fulfilling needs.
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You're no @thorstach
And you're no Desalination plant.
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Bottom? Wait for it...
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Futures down, bottom is in tomorrow?
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Futures down, bottom is in tomorrow?
sad face. in all seriousness, i wouldnt be surprised if the bottom is 40-50% down from the top. That said, I'll buy as much as I can right now while maintaining a 1-year EF just in case. The hard part about buying during these times is people's incomes are also at risk, so the tendency is to also maintain a cash cushion. I'll feel a lot more confident about income stability if we see virus numbers show any sign of slowing.
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Futures down, bottom is in tomorrow?
sad face. in all seriousness, i wouldnt be surprised if the bottom is 40-50% down from the top. That said, I'll buy as much as I can right now while maintaining a 1-year EF just in case. The hard part about buying during these times is people's incomes are also at risk, so the tendency is to also maintain a cash cushion. I'll feel a lot more confident about income stability if we see virus numbers show any sign of slowing.
Once the virus numbers show peaking/slowing, it'll be too late! Stocks will have already gone up (probably). Meh, I obviously really don't know, but just look at your IPS and stay the course!
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Once the virus numbers show peaking/slowing, it'll be too late! Stocks will have already gone up (probably). Meh, I obviously really don't know, but just look at your IPS and stay the course!
Oh thats for sure, though I'd be surprised if they recoop everything just on that type of news. I'm okay with missing out on the "bottom" if I'm feeling better about income security before I invest a chunk of my 1-year EF. As soon as things are looking clear, I'll probably go back to a 6 month EF. In times like these, I sleep better with a more beefed up EF.
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It's interesting watching people lose their pessimistic and optimistic minds - it makes me question my plan a bit, but I'm sticking with 10,000 U.S. cases before I buy back in. The U.S. hit 1,000 cases on Tuesday (Mar 10). In both Italy and South Korea, a week after 1,000 cases they hit 5,000 cases. The market hitting it's low point before the virus doesn't make sense to me, so I'm waiting.
Bottom is not in, yet.
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It's interesting watching people lose their pessimistic and optimistic minds - it makes me question my plan a bit, but I'm sticking with 10,000 U.S. cases before I buy back in. The U.S. hit 1,000 cases on Tuesday (Mar 10). In both Italy and South Korea, a week after 1,000 cases they hit 5,000 cases. The market hitting it's low point before the virus doesn't make sense to me, so I'm waiting.
Bottom is not in, yet.
Interesting. Why 10 K? This will likely reach several hundred thousand cases, in fact scientists are projecting as much as 70% of the country. Do you think the market hasn't already priced this in? Keep in mind it's already pricing in all outcomes that seem likely.
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It's interesting watching people lose their pessimistic and optimistic minds - it makes me question my plan a bit, but I'm sticking with 10,000 U.S. cases before I buy back in. The U.S. hit 1,000 cases on Tuesday (Mar 10). In both Italy and South Korea, a week after 1,000 cases they hit 5,000 cases. The market hitting it's low point before the virus doesn't make sense to me, so I'm waiting.
Bottom is not in, yet.
Interesting. Why 10 K? This will likely reach several hundred thousand cases. Do you think the market hasn't already priced this in? Keep in mind it's already pricing in all outcomes that seem likely.
When will the top be in on the number of active cases?
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When will the top be in on the number of active cases?
Thats a good question. The hard part about this is that we don't even have any idea how much penetration there is due to such a relatively low number of tests especially in the US. Then once we beef up tests, the data will be very hard to analyze -- how much is exponential growth versus existing cases that were slow to be identified? This is an important distinction to make so that we can properly model projections. Data scientists are going to have their work cut out.
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When will the top be in on the number of active cases?
Thats a good question. The hard part about this is that we don't even have any idea how much penetration there is due to such a relatively low number of tests especially in the US. Then once we beef up tests, the data will be very hard to analyze -- how much is exponential growth versus existing cases that have finally be identified? Data scientists are going to have their work cut out.
So you're saying no one knows when the top will be in?
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So you're saying no one knows when the top will be in?
haha yesir. At least with good data we could have a reasonable projection.
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It's interesting watching people lose their pessimistic and optimistic minds - it makes me question my plan a bit, but I'm sticking with 10,000 U.S. cases before I buy back in ...
Interesting. Why 10 K? This will likely reach several hundred thousand cases, in fact scientists are projecting as much as 70% of the country.
Other than Angela Merkel, I haven't heard an authority suggest millions infected. If you've got a reputable source for that, I'll read about it.
China has virtually halted the virus at 80k cases, and they started their response by silencing the doctors who sounded the first alarms. South Korea had under +3% growth in COVID-19 cases, so they might be containing it as well. Further outbreaks are possible, but it looks like countries can contain COVID-19 well before it hits even 1 million cases.
In another thread, I saw China's situation and predicted 10,000 cases several days in advance. The media then reported 10,000 cases, and markets reacted with panic. So I predicted one panic in advance. For the U.S., I decided to put a chunk of my portfolio on the line, so I acted with a bit less information and a bit earlier (at 213 cases according to WHO data). I still feel that 10,000 U.S. cases will cause a market reaction, so I'm waiting for that panic.
Italy shut down the entire country, except for food and pharmacies. China shut down a province that has more people than Italy. Now Germany, France and Spain have outbreaks spreading rapidly. The U.S. is close behind. I don't see how they could allow millions of infections - more likely, portions of those countries will be shut down, causing further economic impact to contain the virus. I think that's what markets have priced in - the current probability that countries with outbreaks shut down parts of their economies.
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Other than Angela Merkel, I haven't heard an authority suggest millions infected. If you've got a reputable source for that, I'll read about it.
I really strongly encourage everyone to listen to this entire interview. Michael Osterholm is an internationally recognized top expert in infectious disease epidemiology. This is an extremely informative interview.
If you start in about 1:40 he gets into projected numbers they expect. Actually it's best to just start at the beginning of the interview.
https://www.youtube.com/watch?v=E3URhJx0NSw&feature=share&fbclid=IwAR0Ph-PFuksljDK58AFWdmm6vBOT20w4T17ryDXh8Gf6B3Zm5mexEoCc5oU
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by the way, China slowed it down due to full lock down, we're not close to that..... yet.
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
Yes, but obviously a new thread is needed since the last one was wrong ;)
And this one will be wrong, as well. Just like the Top is in thread.
The OP is an idiot.
@Cache_Stash The OP could not possibly be an idiot, the OP used to work at the same SemiBigCorp as I did :-)
... or did I just contradict myself ?
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Futures down, bottom is in tomorrow?
futures reversed!
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I really strongly encourage everyone to listen to this entire interview. Michael Osterholm is an internationally recognized top expert in infectious disease epidemiology.
Michael Osterholm is the first person I've heard who is more pessimistic than me about when COVID-19 will end - and he's the expert in infectious disease. Others can also search for "COVID-19 Rogan" and find that interview on YouTube.
I'm going to have to re-evaluate the time frame of my experiment.
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
Yes, but obviously a new thread is needed since the last one was wrong ;)
And this one will be wrong, as well. Just like the Top is in thread.
The OP is an idiot.
@Cache_Stash The OP could not possibly be an idiot, the OP used to work at the same SemiBigCorp as I did :-)
... or did I just contradict myself ?
Hey Mark! How are things for you? Market is having a psychotic moment, isn't it?
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
Yes, but obviously a new thread is needed since the last one was wrong ;)
And this one will be wrong, as well. Just like the Top is in thread.
The OP is an idiot.
@Cache_Stash The OP could not possibly be an idiot, the OP used to work at the same SemiBigCorp as I did :-)
... or did I just contradict myself ?
Hey Mark! How are things for you? Market is having a psychotic moment, isn't it?
I'm doing as fine as one could hope, given that I'm essentially 100% equites.
I pulled 6 months of expenses out in January, so I'm just sitting tight.
As in introvert retiree, my lifestyle has not changed a bit. I'll admit to a hint of hypochondria, but not as bad as some.
Psychotic market? Maybe, but mostly a relief from the tension of THE TOP IS IN.
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This thread already exists? https://forum.mrmoneymustache.com/investor-alley/bottom-is-in/
Yes, but obviously a new thread is needed since the last one was wrong ;)
And this one will be wrong, as well. Just like the Top is in thread.
The OP is an idiot.
@Cache_Stash The OP could not possibly be an idiot, the OP used to work at the same SemiBigCorp as I did :-)
... or did I just contradict myself ?
Hey Mark! How are things for you? Market is having a psychotic moment, isn't it?
I'm doing as fine as one could hope, given that I'm essentially 100% equites.
I pulled 6 months of expenses out in January, so I'm just sitting tight.
As in introvert retiree, my lifestyle has not changed a bit. I'll admit to a hint of hypochondria, but not as bad as some.
Psychotic market? Maybe, but mostly a relief from the tension of THE TOP IS IN.
Yeah - I hear that. After 10 or more years of expansion (which is a record) a good correction is healthy for the market. I exposes those that are swimming naked and shakes out companies that have been up to no good. lol
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I'm running an experiment where I predict 10,000 U.S. cases of COVID-19 will trigger a local low point... so I guess I should predict a "bottom is in"?
Currently 2.4k cases, so 7.6k cases to go... not at the bottom yet.
"almost there... stay on target..."
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So is the bottom in? The Top on? The inside out?
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Fear is gone, VIX down - bottom is in
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The markets open at 9 am EST, so I'll use that as my clock: it's 2:45 am in New York, Thursday, March 19.
I'm predicting a market bottom in advance, today or tomorrow (Mar 19-20).
Yesterday markets fell in a panic, and sometimes the day after that, markets rebound a bit. But U.S. cases will pass 10,000 today before the market opens, which could generate additional headlines and market panic.
I originally predicted "10,000 U.S. cases roughly Friday" in several threads. I'm off by a day, which actually changes my view. I know it sounds like an over-reaction, to go from more pessimistic than almost everyone (esp the markets) and suddenly flip to more optimistic than everyone (definitely vs the markets).
I think increased testing is already translating into higher counts of COVID-19 in the U.S. That's reinforced by the person leading the effort at more testing saying that's what is happening. The claim is that older testing was wildly profitable... I mean only handled 10/day. New testing platforms can supposedly handle millions a day (each or together, not sure). Massive testing changes a situation like Italy's into one more like Korea's.
Thurs/Fri markets will panic and reach a bottom. Over the weekend, people will start to realize more testing has resulted in catching more cases. They'll start to count how many rooms are needed for quarantine, and how much hospital space is needed for patients - things people can count with some certainty. The uncertainty can be completely removed by massive testing, which then removes uncertainty from markets.
So, we'll see... In advance, I'm predicting Thurs/Friday will be the market bottom (March 19-20).
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European stocks seem to be ahead of US stocks by a few days, and seem to have found support around the current price while the US was still sliding. Hopefully that may be a sign that we’re very close to or perhaps already past a bottom.
I’m hoping we are. The real-world stress is real enough with the changes we are having to go through and uncertainty over our jobs, without the additional weight of financial loss.
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I'm buying but I think the bottom has a long way to go.
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Although certainly I should be hassled in the event I'm wrong, it's also worth pointing out stocks are very low right now, making it a decent time to buy - even if we haven't hit the bottom.
I believe markets hit bottom when uncertainty turns to certainty. If it's known how many will quarantine, how many will be in hospitals, how many will not survive... and known which companies will be saved, if people get paid time off, making health care affordable during the crisis... if all that is known, the rest is just adding it up. Once it becomes a math problem, I'm sure the smartest guys at M.I.T. will do better than I will - and they probably joined the investment community to make lots of money. They'll calculate the damage, buy/sell according to that, and then wait. Things will stabilize.
Last week I sold at the market open.. then each time the market went up. This week, I'm buying whenever the market takes a sharp drop. I was ~60% stocks this past weekend, and I'm back up to 71% stocks now. I'm deciding how high a percentage of equities to hold during the worst of the crisis....
I'm picking Thursday / Friday as the time of maximum uncertainty... and since I'm saying it in a thread called "Bottom is in!".... well, Bottom is in!
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China for the first time reported zero new cases overnight so that along with the stimulus package I would hope would find us at least a temporary bottom. My best guess is were getting close to that but I would like to see a little settling in the market first as opposed to these whipsaw large sell off, rebounds. So like @MustacheAndaHalf Later this week or early next BUT i think temporary bottom.
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Exactly my thinking - but could it be already happening?
This morning futures predicted no change in market values, which was puzzling. Markets went a tiny amount lower, and then a tiny amount higher. The market was calmer for the first 2 hours of trading than I've seen it in days.
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Exactly my thinking - but could it be already happening?
This morning futures predicted no change in market values, which was puzzling. Markets went a tiny amount lower, and then a tiny amount higher. The market was calmer for the first 2 hours of trading than I've seen it in days.
yeah with about an hour left in trading if things dont whipsaw one way or another I would think its the first day of normalcy and somewhat healthy for a trading day. Also with news of 3,000 new cases in the USA overnight.
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Blew past 10k cases like it was standing still. I did some very rough estimates on cases on a specific day based on % of new cases each day. For the most part I estimated 15-20% rate of new cases/day
e.g.
23-Mar 38k
27-Mar 100k
1- April 380k
Is this possible, yep. Likely? Who the hell knows.
The question is...will there be more panic if were pushing 100k cases next Friday?
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I've been guessing bottom will be ~15k Dow but I'm buying back in stages.
I moved around $300k to VBTLX. Said to myself I would buy back around 20k Dow.
VBTLX has been cliff diving too. Just a lot less severe than Indexes.
I moved $20k on Mon and $25K on Wed. I'm guessing Friday will be a cliff diving day.
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Not only am I saying "Bottom is in", I increased my stock allocation yesterday, when the markets were strangely calm.
Lots of people are distracted by things that won't impact the virus. People ask about vaccines and treatments, even though previous epidemics didn't end that way. So I'm ignoring things that might be clouding people's view of what's going on. I'm watching what happens with testing.
The CDC doesn't show up to date information. But if you compare 2 weeks ago to 1 week ago, testing went up by about 3x. That's great, but the virus was busy multiplying at 5x. So by itself, that won't contain the virus unless social isolation starts to have an impact (like when the city of Wu Han shut down, and people stopped infecting others).
The government's response to COVID-19 is being headed up by Dr Birx, who is very qualified. I've heard her talk on at least two occasions this week, telling people testing was increasing. She said increased testing would result in more cases being detected, and asks people not to panic. She mentioned things will probably catch up by Sunday.
Here's the tricky part - I worked backwards with what her numbers imply. She mentioned that 10% of people had COVID-19, and 90% of people had some other illness. Do you see what's interesting about her observation? She has the latest information, and is broadcasting it for everyone to hear. So if I can pick up more information than others, I can invest better. Or confirm my theory that the bottom is in.
Currently there are about 3k or 4k new cases a day. So trusting Dr Birx's data implies 30,000 or 40,000 tests are performed per day right now, which is about 7x more than about a week ago (slightly less). And she's previously said we might be able to do millions/day, while she also keeps referring to Sunday as the time when testing will be ramped up.
So here's the strongest confirmation I have for calling the bottom: Dr Birx's public address, stating orders of magnitude jumps in testing. That will remove uncertainty and fear, and calm the markets, when it occurs. If I'm right, next week will be too late, and the stock market will start to rebound.
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Agreed. I've put all extra $ into the market and have shifted some bond fund $ into stock funds (re-balancing/market timing...whatever). If bottom is indeed in, great. If not, it will still prove to be a solid move given that I won't be touching those funds for at least 10 years from now.
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Anyone buying now gets -30% off the price of stocks from 4 weeks ago, and -27% since the start of the year. That's decent, even if more volatility is ahead.
Further evidence I called it right (sorry I'm being repetitive... I'm still stunned I make this call Wednesday)... someone working at the White House named "Mark" was interviewed by CNBC, and stated testing had gone up 10x per week, and not the 3x to 7x jump I calculated. It's also possible some aspects of the chain are 10x, while needed supplies like cheek swabs might not be keeping up. The current belief is that 100,000 tests are on the horizon.
People on CNBC and Bloomberg TV are starting to speculate about a bottom. That and being tired of this volatile week - I think they will be refreshed over the weekend, and change perspectives. We'll see...
I normally consider Jim Kramer merely humor value - but years and years ago he did run a hedge fund. He says maybe there's a bottom, but nobody has any money to buy stocks. I thought it was an amusing way to put it!
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No need to guess on the number of tests per day. Here it is: https://covidtracking.com/us-daily/
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The market's been steady all day today and boom at 3pm, it started cliff diving. Strange.
I have nothing to do but to watch the market all day long. LOL
I'm tempted to throw in $10k or $20k if it keeps free falling before 4pm.
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(https://i.imgflip.com/3te2uh.jpg)
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Mind didn't. My 401k goes into bonds to keep my 80/20 ratio happening... and bonds went up :(
On the plus side, I don't see how the market could fall another point. Bottom is in!
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Anyone buying now gets -30% off the price of stocks from 4 weeks ago, and -27% since the start of the year. That's decent, even if more volatility is ahead.
Further evidence I called it right (sorry I'm being repetitive... I'm still stunned I make this call Wednesday)
Did the market bomb right after you posted that? Jinxed it. I think it'll take more than a day or two of stability before we declare market has bottomed.
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I don't think the bottom is in.
This is just the first week of a soft lock down.
It will get worst in 2-3 weeks. We might see bottom when we really start seeing businesses shutting down, unemployment, etc....
Until we see the Coronavirus cases flatten out, the panic will continue.
Still sticking to my 15k Dow target.
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I reckon bottom is still a bit off...im gambling 50% drop over all....I thin usa has some way to go yet.
once covid develops in USA things will get work...its about 2 weeks behind
Baz
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S+P closed at 2304. If my math is correct, that’s 31% drop from the high and we’re about 3 weeks into this.
Bear markets haven’t turned around in 3 weeks in the past. Or even hit bottom. I reckon the Bottom Is In! But just for this week.
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I posted the following on a week ag, feels like a year ago. Still in the 75% range at 32% down but getting close to that 40% down range where my 20% probability was set. I am now thinking that 50% has a greater probability, I just don't see how that can't happen. This will not turnaround without some visibility to the spread, leveling and treatment of the virus.
This. There are absolutely 100's of thousands if not millions more people here and globally that have or have had the virus but can't or haven't or won't be tested (no kits, not severe enough symptoms) and while this is perfectly logical the irrational will continue to win out as the numbers increase dramatically over the next 30 days.
My probabilities for the next 30-90 days:
Get back to correction territory (10% off highs) - 2%
Range bound between Dec 2018 Lows and 20% off highs - 75%
down another 10% from high - 20%
Hit 50% down from highs - 3%
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read today that dalio estimated the size of any useful stimulus program at $1.5-2trillion.
think the current proposed figure is in the realm of $850 billion?...will it re-inflate the market or only give a temporary lift....WINTER IS COMING (GoT).
Once covid gets into USA properly we will see how far down this goes.....Buffet hasn't budged yet....
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I don't think the bottom is in.
This is just the first week of a soft lock down.
It will get worst in 2-3 weeks. We might see bottom when we really start seeing businesses shutting down, unemployment, etc....
Until we see the Coronavirus cases flatten out, the panic will continue.
Still sticking to my 15k Dow target.
I agree that the bottom is still not in. I don't think the stimulate packages alone can save it. The monster here is the Coronavirus. I wish US government puts more attention on how to slow down and test the virus.
Still, I am hedging that the market can go up or down so I put in some order for VTI right before the closing of the market. Next week will be very interesting.
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I posted the following on a week ag, feels like a year ago. Still in the 75% range at 32% down but getting close to that 40% down range where my 20% probability was set. I am now thinking that 50% has a greater probability, I just don't see how that can't happen.
You never know, and that’s why I haven’t sold my equities. That said, my prediction of the total drop was 30-40% and on reflection I think I was being optimistic. I haven’t seen a real depression before (although I personally think the GFC qualifies). So this will be very different from what I’ve experienced. One thing I do know is that once a bear market is in place, it typically takes several weeks to hit bottom.
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No need to guess on the number of tests per day. Here it is: https://covidtracking.com/us-daily/
The virus more than doubles every 72 hours. I predicted (not here), that we would be at 10k by Friday, today we are at 19,469. By the 23rd we will be at 38,938 and by next Friday the 27th: 77,876.
https://www.worldometers.info/coronavirus/country/us/
Not to mention the purposeful listing of meds and companies today at the WH press conference, the Pump and Dump is in. Watch next week, possibly a big rise then a big crash. The healthcare system will have a surge and are ill prepared.
Trust me, Chloroquine is NOT approved by the FDA, and will NOT be used.
Have heard from a DC lawyer who looked over McConnell's bill, and he says that the cash payments to people will mostly be a "Tax credit." They are basing it on 2018 tax returns (Income from 2017.) People had higher income in 2017 and most dropped from 2017 -2020.
Goldman Sachs predict the report will show 2.25 million Americans filed for their first week of unemployment benefits this week — eight times the number of people who filed last week and the highest level on record. That estimate is based on news reports of an unprecedented surge in layoffs early in the week. 800 filed in one day yesterday.
Trump laid off 160 workers in DC
51 in NYC
unknown number at Trump Vegas
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From my earlier post in this thread:
The markets open at 9 am EST, so I'll use that as my clock: it's 2:45 am in New York, Thursday, March 19.
I'm predicting a market bottom in advance, today or tomorrow (Mar 19-20).
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So, we'll see... In advance, I'm predicting Thurs/Friday will be the market bottom (March 19-20).
Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
It's likely unemployment and rising virus numbers will cause more drops, and prove me wrong. I believe testing will ultimately be the way through the panic and uncertainty, but markets will probably figure that out more slowly.
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I don't think the bottom is in.
This is just the first week of a soft lock down.
It will get worst in 2-3 weeks. We might see bottom when we really start seeing businesses shutting down, unemployment, etc....
Until we see the Coronavirus cases flatten out, the panic will continue.
Still sticking to my 15k Dow target.
Agreed, I was wrong - the market will go lower.
For example, businesses are shutting their doors and unemployment is heading sharply higher. Congress has the ability to deal with that, but I can't predict how well they'll do. It's an election year, which makes me hopeful. So a drop from negative events, until Congress addresses them - can't predict it.
COVID-19 testing will become more widespread in the U.S., and reduce community spread. But that takes time to happen, and time for the markets to recognize it. I forgot to consider what other people know about the virus. Unemployment will hit sooner and easier than a vague idea like testing slowing down the spread of the virus.
So I'm probably wrong about Friday being the bottom. I'm still happy I bought in at a big discount!
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Is the bottom in? I'm waiting at the moment and have a very large cash position that I've waited for a pull back to invest. I might be greedy waiting and could pay the price but there are too many variables such as bonds price, inverted yield curve, resession fears, small businesses are closing and skyrocketing unemployment. What happens if Democrats get in the office and tax rates change, all pe ratios change and another market correction. Dow 15000 is very real.
1. Buy some periodically
2. Wait for the negative news on markets to slow, such as new GDP, employment
Thoughts?
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Is the bottom in? I'm waiting at the moment and have a very large cash position that I've waited for a pull back to invest. I might be greedy waiting and could pay the price but there are too many variables such as bonds price, inverted yield curve, resession fears, small businesses are closing and skyrocketing unemployment. What happens if Democrats get in the office and tax rates change, all pe ratios change and another market correction. Dow 15000 is very real.
1. Buy some periodically
2. Wait for the negative news on markets to slow, such as new GDP, employment
Thoughts?
IMHO, we're not at the bottom. And won't be for awhile. I posted a graphic a week or so ago that showed the number of days on average from the start of a bear market to the bottom. It isn't a matter of 1-2 weeks. A large part of the US and other industrialized countries economies are being shut down and layoffs are coming down fast and hard. It's difficult to predict how markets will react: they're often counterintuitive and irrational.
The orthodoxy here is that you put it all in at once and you don't attempt to market timing. Well, if I had followed the orthodoxy, I'd be royally screwed about now. I was slowly DCAing back into the market when this hit, and I ended up having relatively low equities exposure as a result. I got hit, but not slammed. I view that more as luck than anything. And also an expensive reminder to stick to my own counsel.
I won't give advice, but will tell you my subject-to-change plans. I think we're probably in for a depression. A brief one, but technically a depression nonetheless. I don't expect a V shaped recovery, but more of a U. I viewed the CAPE as being at nosebleed levels, which was at the root of my reluctance to have anything to do with US equities. I believe that US equities (as measured by SP 500) will be somewhere near reasonably priced at a CAPE of around 20. We were at a CAPE of just under 22 as of Friday. That implies about another 10% drop before I'm all that interested. Due to the very strong dollar, I think that US market will still be relatively pricey. That also implies that international markets are cheap. So, I plan to start DCAing about when the CAPE for the SP 500 hits around 20. Most exposure will be developed international, with US exposure weighted towards small cap. Very limited exposure to SP 500, but some small amount for diversification. I haven't figured out whether I tie DCA to a specific number. I.e. CAPE or SP 500 at a lower number means a higher percentage allocation, but I suppose I will try to do it more or less mathematically. In the end, I expect to have a relatively robust allocation to equities by 2021.
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what about looking at this another way....?
yes, covid roughly doubles every 3/4 days. so hypothetically lets assume the market really tanks when 50% of USA are infected Covid....but when would that roughly be from now? (when it gets to that point, there is no guarantee that the stimulus package will be sufficient for any meaningful market re-inflation)
so, USA population is 300million (ish). If 80%ish get covid thats 240million people. so how long would it take from now for 50% to become infected? i.e. 120 million people.
Also, consider that within 3/4 weeks of that mass infection, the same element of the population will then be immune (minus loses)...assuming no virus mutation.
So how long to 50% infection from now .i.e 120 million people.
baz
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what about looking at this another way....?
yes, covid roughly doubles every 3/4 days. so hypothetically lets assume the market really tanks when 50% of USA are infected Covid....but when would that roughly be from now? (when it gets to that point, there is no guarantee that the stimulus package will be sufficient for any meaningful market re-inflation)
so, USA population is 300million (ish). If 80%ish get covid thats 240million people. so how long would it take from now for 50% to become infected? i.e. 120 million people.
Also, consider that within 3/4 weeks of that mass infection, the same element of the population will then be immune (minus loses)...assuming no virus mutation.
So how long to 50% infection from now .i.e 120 million people.
baz
Something to consider - our test rate is increasing dramatically as well.
Covid could already be much significantly more widespread in the USA than we realize and we are just finding it via testing.
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well, im UK based and we are only testing those that turn up at hospitals in bad condition. Those with mild to moderate conditions stay at home (and spread it) without any tests..
the question is, since the usa market is the largest, at what percentage of infection does it tank? 50%? 75%?
its hard to know...at a guess when it reaches 50% is reasonable to buy in
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Is the bottom in? I'm waiting at the moment and have a very large cash position that I've waited for a pull back to invest. I might be greedy waiting and could pay the price but there are too many variables such as bonds price, inverted yield curve, resession fears, small businesses are closing and skyrocketing unemployment. What happens if Democrats get in the office and tax rates change, all pe ratios change and another market correction. Dow 15000 is very real.
1. Buy some periodically
2. Wait for the negative news on markets to slow, such as new GDP, employment
Thoughts?
IMHO, we're not at the bottom. And won't be for awhile. I posted a graphic a week or so ago that showed the number of days on average from the start of a bear market to the bottom. It isn't a matter of 1-2 weeks. A large part of the US and other industrialized countries economies are being shut down and layoffs are coming down fast and hard. It's difficult to predict how markets will react: they're often counterintuitive and irrational.
The orthodoxy here is that you put it all in at once and you don't attempt to market timing. Well, if I had followed the orthodoxy, I'd be royally screwed about now. I was slowly DCAing back into the market when this hit, and I ended up having relatively low equities exposure as a result. I got hit, but not slammed. I view that more as luck than anything. And also an expensive reminder to stick to my own counsel.
I won't give advice, but will tell you my subject-to-change plans. I think we're probably in for a depression. A brief one, but technically a depression nonetheless. I don't expect a V shaped recovery, but more of a U. I viewed the CAPE as being at nosebleed levels, which was at the root of my reluctance to have anything to do with US equities. I believe that US equities (as measured by SP 500) will be somewhere near reasonably priced at a CAPE of around 20. We were at a CAPE of just under 22 as of Friday. That implies about another 10% drop before I'm all that interested. Due to the very strong dollar, I think that US market will still be relatively pricey. That also implies that international markets are cheap. So, I plan to start DCAing about when the CAPE for the SP 500 hits around 20. Most exposure will be developed international, with US exposure weighted towards small cap. Very limited exposure to SP 500, but some small amount for diversification. I haven't figured out whether I tie DCA to a specific number. I.e. CAPE or SP 500 at a lower number means a higher percentage allocation, but I suppose I will try to do it more or less mathematically. In the end, I expect to have a relatively robust allocation to equities by 2021.
I agree it takes more than a few weeks for a bear market to run its course. But the speed of this bear market has been unprecedented, so I do think it will all play out a lot faster than past bears have.
Maybe we aren't anywhere near a bottom, but the market does not go straight down just as it does not go straight up. I would at least expect a good bounce before a further selloff and the final bottom (A-B-C pattern). I can see a scenario where that takes another 6 months to play out, so there would be some significant duration to the bear market.
European indices where events seems to be slightly ahead of the US are quite a bit off their lows and don't seem to want to go lower, at least for the time being.
Also, make no mistake that the fortunes of the stock market will be a massive factor in the Presidential election. Trump would regularly brag about the market as it was reaching new highs (remember him saying "it should be 10,000 points higher!") It has become a political asset or liability depending on its level. Rightly or wrongly, the Fed will be under tremendous pressure to reinflate asset prices before the election.
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I agree it takes more than a few weeks for a bear market to run its course. But the speed of this bear market has been unprecedented, so I do think it will all play out a lot faster than past bears have.
Maybe we aren't anywhere near a bottom, but the market does not go straight down just as it does not go straight up. I would at least expect a good bounce before a further selloff and the final bottom (A-B-C pattern). I can see a scenario where that takes another 6 months to play out, so there would be some significant duration to the bear market.
European indices where events seems to be slightly ahead of the US are quite a bit off their lows and don't seem to want to go lower, at least for the time being.
Also, make no mistake that the fortunes of the stock market will be a massive factor in the Presidential election. Trump would regularly brag about the market as it was reaching new highs (remember him saying "it should be 10,000 points higher!") It has become a political asset or liability depending on its level. Rightly or wrongly, the Fed will be under tremendous pressure to reinflate asset prices before the election.
Yeah, I do believe that this bear will be faster than most. I took a look at the FTSE 100 and if my math is right, the current CAPE is somewhere around 11.4. Wow. That's very good deal in my book. And that doesn't include the exchange rate impact. I still think it'll drop some more as an unreasonable number of people end up with COVID in the UK* and things shut down. I expect that I'll be on a shopping mission here within a couple of weeks.
I suspect the reason why the European indices haven't gone done much further is that they started at a lower point. The US market still has a ways to go. Comparatively speaking, I think the US is not so good a deal. I agree that the Fed will goose the market as much as it can.
*(blasted politicians will be the death of us all.)
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I posted the following on a week ag, feels like a year ago. Still in the 75% range at 32% down but getting close to that 40% down range where my 20% probability was set. I am now thinking that 50% has a greater probability, I just don't see how that can't happen.
You never know, and that’s why I haven’t sold my equities. That said, my prediction of the total drop was 30-40% and on reflection I think I was being optimistic. I haven’t seen a real depression before (although I personally think the GFC qualifies). So this will be very different from what I’ve experienced. One thing I do know is that once a bear market is in place, it typically takes several weeks to hit bottom.
this why I like the mmm forum.
mkt dropped faster than the great depression, recession predictions from serious people like bank of America. even if a vaccine is announced tomorrow, the economic fallout is just beginning and people here are still holding. some that rode it down in 2008 did not get back to even for over 5 years and that was on the back of QE1, 2 and 3; wonder how long it will be this time.
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I've followed the market since 1999 and I can categorically tell you that every time we put in a bear market bottom, it never felt like that was going to be the point the market started to recover, and most participants and observers were of the opinion that the market had further to fall.
Of course, this has to be the case - the market bottoms are forged at the point of maximum pessimism where nearly everyone is convinced that it will only fall further, otherwise it would have already bottomed!
As I said numerous times, I don't know if we are near a bottom, but I have no doubt that the day we put in a bottom probably won't feel like that will be the day the fightback has begun.. it will feel to nearly everyone that the market can only keep going down. Right now a fairly popular question doing the rounds is "how much further can we fall?" People are only looking down.
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I suppose one simply but effective solution is to just dollar point from now on over the next few months and pepper the dip. Lets face it, prices are acceptably low now and timing the actual bottom is impossible...as it always it.
Im happy to buy small but regularly from here on and avoid aiming for perfection. In ten years time I suppose it wont make any difference whether I bought at -25% or -35%.....However, it would be satisfying to call the bottom. I think the bottom will be when 50%+ ish of USA is infected....panic will really start then?
Based on todays USA infected population of 26,668 and a rough doubling every 3ish days, I calculate the following (assuming no containment and vaccine):
infected days from now
26,668 1-3
53,336 6
106,672 9
213,344 12
426,688 15
853,376 18
1,706,752 21
3,413,504 24
6,827,008 27
13,654,016 30
27,308,032 33
54,616,064 36
109,232,128 39
218,464,256 42
436,928,512 45
so in theory USA 300mill population could, and I stress could before someone attacks me, be fully infected somewhere after days 42 ish?...based on current trends. Assume a c. 1% loss of population once hospitals get swamped.
Let me know what others think of projection.
Barry
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Yes. You won't catch the absolute bottom, and neither should you try.
The person obsessed with buying right at the bottom is also the person who is going to take their 40% rebound profits after a 2 month rally. I'm looking to ride the next bull market for 400%, even if that takes another 10-15 years.
The overwhelmingly important thing is simply to have a plan to accumulate as much as you can throughout this crisis and then stick to it.
I've bought heavily into this crash with all the cash I was willing to put in, so I'm low on ammo now if it goes lower, but I absolutely do not regret the purchases I have recently made. That is what it was there for; to buy at what I consider a discount, not to try to pick the bottom. From here on my buying will mostly be my monthly pension contributions, and if stocks remain beaten down for the next year it doesn't change my plan one iota.
I do have 1yr of emergency cash, but that is what it says on the tin, and given that most of our employment prospects do not look that promising right now I'm happy to sit on it.
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Same as that...I'm still working but keep a years cash as prudent reserve.
Tempted to use it but wont. Self employed and felt 2008 badly ...once bitten twice shy...
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Based on todays USA infected population of 26,668 and a rough doubling every 3ish days, I calculate the following (assuming no containment and vaccine):
...
13,654,016 30
Countries have been infected longer than 30 days, and none of them hit 13 million cases. I view this more like weather forecasting, where using recent data to predict a week's worth of cases might be fruitful. That way when growth rates change, predictions reflect the changes. Let me show that with WHO data taken 30 days apart, using Feb 20 and Mar 21.
https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200220-sitrep-31-covid-19.pdf?sfvrsn=dfd11d24_2
https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200321-sitrep-61-covid-19.pdf?sfvrsn=6aa18912_2
China went from 75k to 81k cases, which is not exponential growth.
Korea went from 100 to 8800, which looks exponential, until seeing they had 6.3k cases halfway through.
Italy went from 3 to 47k cases.
U.S. went from 15 to 15k cases.
In each country, cases represent positive test results. Without testing, the numbers stay artificially low. When testing is adequate, the virus looks like it's moving much faster - because testing catches up. The starting numbers in Italy and the U.S. are severe under counts that reflect a lack of testing at the time.
Which brings me to the bottom... isn't in. To me, increased cases in the U.S. reflect accuracy - a higher rate of testing removes uncertainty about who is infected. But the numbers will scare most people, and news stories based on old data will reinforce that fear.
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Based on todays USA infected population of 26,668 and a rough doubling every 3ish days, I calculate the following (assuming no containment and vaccine):
...
13,654,016 30
Countries have been infected longer than 30 days, and none of them hit 13 million cases. I view this more like weather forecasting, where using recent data to predict a week's worth of cases might be fruitful. That way when growth rates change, predictions reflect the changes. Let me show that with WHO data taken 30 days apart, using Feb 20 and Mar 21.
https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200220-sitrep-31-covid-19.pdf?sfvrsn=dfd11d24_2
https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200321-sitrep-61-covid-19.pdf?sfvrsn=6aa18912_2
China went from 75k to 81k cases, which is not exponential growth.
Korea went from 100 to 8800, which looks exponential, until seeing they had 6.3k cases halfway through.
Italy went from 3 to 47k cases.
U.S. went from 15 to 15k cases.
In each country, cases represent positive test results. Without testing, the numbers stay artificially low. When testing is adequate, the virus looks like it's moving much faster - because testing catches up. The starting numbers in Italy and the U.S. are severe under counts that reflect a lack of testing at the time.
Which brings me to the bottom... isn't in. To me, increased cases in the U.S. reflect accuracy - a higher rate of testing removes uncertainty about who is infected. But the numbers will scare most people, and news stories based on old data will reinforce that fear.
cool...hope your right....but doubt it
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Yes. You won't catch the absolute bottom, and neither should you try.
The person obsessed with buying right at the bottom is also the person who is going to take their 40% rebound profits after a 2 month rally. I'm looking to ride the next bull market for 400%, even if that takes another 10-15 years.
The overwhelmingly important thing is simply to have a plan to accumulate as much as you can throughout this crisis and then stick to it.
I've bought heavily into this crash with all the cash I was willing to put in, so I'm low on ammo now if it goes lower, but I absolutely do not regret the purchases I have recently made. That is what it was there for; to buy at what I consider a discount, not to try to pick the bottom. From here on my buying will mostly be my monthly pension contributions, and if stocks remain beaten down for the next year it doesn't change my plan one iota.
I do have 1yr of emergency cash, but that is what it says on the tin, and given that most of our employment prospects do not look that promising right now I'm happy to sit on it.
I haven’t started using my dry powder yet. I was and am low equities exposure. Patience is difficult But necessary. I’m going to set up some limit orders shortly. Probably as a step function.
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Get ready for a huge drop tomorrow.
The Dow is already down to 18k during after hours.
The Dem won't pass off on the stimulus bill. If this bill doesn't get pass soon, it will get really ugly this week.
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Is the bottom in? I'm waiting at the moment and have a very large cash position that I've waited for a pull back to invest. I might be greedy waiting and could pay the price but there are too many variables such as bonds price, inverted yield curve, resession fears, small businesses are closing and skyrocketing unemployment. What happens if Democrats get in the office and tax rates change, all pe ratios change and another market correction. Dow 15000 is very real.
1. Buy some periodically
2. Wait for the negative news on markets to slow, such as new GDP, employment
Thoughts?
IMHO, we're not at the bottom. And won't be for awhile. I posted a graphic a week or so ago that showed the number of days on average from the start of a bear market to the bottom. It isn't a matter of 1-2 weeks. A large part of the US and other industrialized countries economies are being shut down and layoffs are coming down fast and hard. It's difficult to predict how markets will react: they're often counterintuitive and irrational.
The orthodoxy here is that you put it all in at once and you don't attempt to market timing. Well, if I had followed the orthodoxy, I'd be royally screwed about now. I was slowly DCAing back into the market when this hit, and I ended up having relatively low equities exposure as a result. I got hit, but not slammed. I view that more as luck than anything. And also an expensive reminder to stick to my own counsel.
I won't give advice, but will tell you my subject-to-change plans. I think we're probably in for a depression. A brief one, but technically a depression nonetheless. I don't expect a V shaped recovery, but more of a U. I viewed the CAPE as being at nosebleed levels, which was at the root of my reluctance to have anything to do with US equities. I believe that US equities (as measured by SP 500) will be somewhere near reasonably priced at a CAPE of around 20. We were at a CAPE of just under 22 as of Friday. That implies about another 10% drop before I'm all that interested. Due to the very strong dollar, I think that US market will still be relatively pricey. That also implies that international markets are cheap. So, I plan to start DCAing about when the CAPE for the SP 500 hits around 20. Most exposure will be developed international, with US exposure weighted towards small cap. Very limited exposure to SP 500, but some small amount for diversification. I haven't figured out whether I tie DCA to a specific number. I.e. CAPE or SP 500 at a lower number means a higher percentage allocation, but I suppose I will try to do it more or less mathematically. In the end, I expect to have a relatively robust allocation to equities by 2021.
I agree it takes more than a few weeks for a bear market to run its course. But the speed of this bear market has been unprecedented, so I do think it will all play out a lot faster than past bears have.
Maybe we aren't anywhere near a bottom, but the market does not go straight down just as it does not go straight up. I would at least expect a good bounce before a further selloff and the final bottom (A-B-C pattern). I can see a scenario where that takes another 6 months to play out, so there would be some significant duration to the bear market.
European indices where events seems to be slightly ahead of the US are quite a bit off their lows and don't seem to want to go lower, at least for the time being.
Also, make no mistake that the fortunes of the stock market will be a massive factor in the Presidential election. Trump would regularly brag about the market as it was reaching new highs (remember him saying "it should be 10,000 points higher!") It has become a political asset or liability depending on its level. Rightly or wrongly, the Fed will be under tremendous pressure to reinflate asset prices before the election.
European indices also started from around 30% lower P/E ratios than the U.S. On a positive note, unless there are some late updates to the data, almost all major European countries lowered their daily number of infections today. Perhaps a sign that quarantine efforts are working? It'll be interesting to see how the European markets respond.
As far as a bottom - I invested a solid sum on Wednesday but am still holding a majority of my cash on hand.
In the spirit of the thread, my guess: Market tanks 7-8% tomorrow putting the SP500 at about 38-39% down. Congress will get it together and pass a stimulus deal, which gains back tomorrow's losses and maybe a little more over the next week.
At the end of the 15-day quarantine, we announce another 15-days, and that sends us to new lows. Maybe 45% by the time this is all over with?
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The market's been steady all day today and boom at 3pm, it started cliff diving. Strange.
I have nothing to do but to watch the market all day long. LOL
I'm tempted to throw in $10k or $20k if it keeps free falling before 4pm.
DId anything happen at that time? It was probably when Trumbo decided to have a press conference.
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The market's been steady all day today and boom at 3pm, it started cliff diving. Strange.
I have nothing to do but to watch the market all day long. LOL
I'm tempted to throw in $10k or $20k if it keeps free falling before 4pm.
DId anything happen at that time? It was probably when Trumbo decided to have a press conference.
The Dem rejected a 2nd vote on the stimulus bill today.
I'm trying to stay the course and stick to what I said I do and buy back in stages.
The Dow dropped another modest 600 points hanging around 18,500 so I decided to transfer $35k over some Index funds. Trying hard not to be so greedy.and wait if it will ever drop to 15k
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This is starting to feel a bit like capitulation! Horseshoes, hand grenades, and this bottom...we're close enough for this little piggy to shove more chips in. Good luck to us all and #washyourhands!
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Yes. You won't catch the absolute bottom, and neither should you try.
...
I do have 1yr of emergency cash, but that is what it says on the tin, and given that most of our employment prospects do not look that promising right now I'm happy to sit on it.
I haven’t started using my dry powder yet. I was and am low equities exposure. Patience is difficult But necessary. I’m going to set up some limit orders shortly. Probably as a step function.
I'm using up dry powder, but keeping lots of emergency fund in cash for rent/food.
Does dry powder include emergency cash, like vand mentioned?
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The Top Is In... but equally, so too is the bottom.
No, really... it might just be.
VIX has been retreating from its highs, indicating that the panic is slowly retreating even as we fell to marginal new lows, and the technical indicators show the downside momentum was fading.
People waiting for Dow15k to dump their money in might not get that chance.
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a ways to go. SP 1860 area.
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The Top Is In... but equally, so too is the bottom.
No, really... it might just be.
VIX has been retreating from its highs, indicating that the panic is slowly retreating even as we fell to marginal new lows, and the technical indicators show the downside momentum was fading.
People waiting for Dow15k to dump their money in might not get that chance.
YUP !!!
I've been guessing 15k Dow but I know I can't time the market.
Holding true to myself and buy back in stages.
Glad to put some back yesterday. Market is up big time today. Stimulus bill is about to get pass.
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Trust me, Chloroquine is NOT approved by the FDA, and will NOT be used.
https://www.youtube.com/watch?v=7h9UXkDaI5A
Today is the start to the end. The next load comes by the end of this month from Israel. If you are worried increase your intake of quercertin and zinc. The mask is a sign of fear and fear does nothing for the immune system but weaken it. Be smart not fearful. Fear is exactly what the media thrives on because it drives their business and if you're listening to the media then you are living in ignorance but that is is exactly what they want. Any doctor can prescribe off label. Be smart don't take fish tank crap. You can't fix stupid no matter how hard you try.
Getting zinc inside the cell is the name of the game. The immune system knows exactly what to do at exactly the right time but sometimes it just needs a little help to slow things down especially if you're not 100%. Don't let the media make you less than 100%.
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The VIX has been crashing for several days now, and was only a few points away from the October 2008 high. Of course the market continued to drop for many stocks (as well as the entire market) for the next 4 months after that, but many of the strongest stocks which would lead the market for the next decade (AAPL, AMZN, NFLX etc) did in fact bottom in October/November 2008.
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+11.37% on the Dow. Now that's what I call a rally!
The bears might just be exhausted, for now at least.
Think my Dow 18k "stand in the line" "line in the sand" call is looking pretty good right now.
Those expecting Dow 15k.. that needs a 28% fall from here.. I wouldn't be at all sure that we're going to get it. We may have seen the point of maximum pessimism.
PS Any chance we can get this thread merged with the other similar one?
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The markets open at 9 am EST, so I'll use that as my clock: it's 2:45 am in New York, Thursday, March 19.
I'm predicting a market bottom in advance, today or tomorrow (Mar 19-20).
...
So, we'll see... In advance, I'm predicting Thurs/Friday will be the market bottom (March 19-20).
Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
It's likely unemployment and rising virus numbers will cause more drops, and prove me wrong. I believe testing will ultimately be the way through the panic and uncertainty, but markets will probably figure that out more slowly.
The stock market is up +8% since I called a bottom on March 20.
For those tracking airline stocks, Boeing is up +67% (from $95.01 to $158.73 at Wednesday's close).
Congress passed a bill providing aid to companies struggling during the COVID-19 crisis, and aid was specifically mentioned for the airline industry.
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Remember that the markets are a future discounting mechanism (https://forum.mrmoneymustache.com/investor-alley/at-what-level-of-market-drop-would-you-invest-'extraordinary'-funds/msg2584023/#msg2584023)
They will recover as soon as they see a potential end to the crisis, not wait for that crisis end to play out.
And that looks like it could already have started to happen, based on the leveling off in the rate of growth of the virus: https://alephblog.com/2020/03/25/an-optimistic-assessment-of-covid-19/
While observers are looking at the change in the headline numbers (first derivative), the market is working on the rate of change of those numbers (2nd derivative).
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Remember that the markets are a future discounting mechanism (https://forum.mrmoneymustache.com/investor-alley/at-what-level-of-market-drop-would-you-invest-'extraordinary'-funds/msg2584023/#msg2584023)
They will recover as soon as they see a potential end to the crisis, not wait for that crisis end to play out.
And that looks like it could already have started to happen, based on the leveling off in the rate of growth of the virus: https://alephblog.com/2020/03/25/an-optimistic-assessment-of-covid-19/
While observers are looking at the change in the headline numbers (first derivative), the market is working on the rate of change of those numbers (2nd derivative).
Markets started seeing it on March 24. Bottom is in!
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Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
Markets are up +10.2% (Friday's close) since I called the market bottom. For me, I was calling the end of the panic in the market. Panic should be a low point for the market, and a good time to buy. But not always the lowest point... so far, it's holding.
After the stock market closed for the weekend, Congress and the President signed the CARES Act into law, which is a $2.2 trillion relief package. The largest relief bill in history finally passed, which markets couldn't predict with certainty. Markets will probably open higher on Monday.
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IMO the late selloff was because Trump invoked the Defense Protection Act to basically bully GM into being his bitch. Disgusting behaviour from a sitting president, and an action that would make any true socialist proud. He knows his presidency is on the line, and investors are right to be very wary of buying into companies when there is a heightened risk that they will be forced to do the bidding of a madman.
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@Joe Schmo called it on March 16. I mean, not the bottom, 100k cases on March 27. He was SPOT on.
My best guess is the bottom is not in. I think at the least we go back to the bottom that occurred on the 23rd, and possible even a little more (maybe worst case SPX ~1800-1900). Why? I think we are only seeing the first effects of this disaster on the economy and the next set is a tsunami.
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IMO the late selloff was because Trump invoked the Defense Protection Act to basically bully GM into being his bitch. Disgusting behaviour from a sitting president, and an action that would make any true socialist proud. He knows his presidency is on the line, and investors are right to be very wary of buying into companies when there is a heightened risk that they will be forced to do the bidding of a madman.
I'm no fan of Trump but he really can't win. He moves slowly on the whole pandemic and gets killed for it(rightfully), then he actually does something right for once and gets called a 'madman'. There's a reason China was able to curb their outbreak so quickly, and it wasn't because they sat back and hoped free markets would do the right thing. I'm not sure how this affects the stock market, outside of GM. These volatile jumps and drops are knee jerk reactions to every development right now.
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I think with all the earnings, jo reports, and car sale data coming in next week, it’ll be the true test to whether we’re at the bottom. If we can handle next weeks storm without more significant drops, and the coronavirus curve seems to flatten, the market will again start to rebound.
If the market continues to crash next week and the coronavirus situation doesn’t seem to improve - who knows how long until the rebound will begin...
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I think with all the earnings, jo reports, and car sale data coming in next week, it’ll be the true test to whether we’re at the bottom. If we can handle next weeks storm without more significant drops, and the coronavirus curve seems to flatten, the market will again start to rebound.
If the market continues to crash next week and the coronavirus situation doesn’t seem to improve - who knows how long until the rebound will begin...
my friend, i live in northern Ireland on the border with republic of Ireland. I can assure you the USA covid situation will not improve over the coming weeksin usa. there is a low fatality rate until the hospitals reach capacity, then even moderate cases can become fatal though lack of being able to get even minimal care. I completely underestimated it myself. its not the severity of the illness, its the pace of infection that causes hospital services to become over run...
USA is in for a major ride...do not underestimate the coming death toll
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Do any of you track the japaneese Nikkei 225? it's trading is a day ahead of us essentially. Thursday was there down ady faolowing the rally of the week. Friday was up significantly again.
Is this a good inicator of what we will see in our Market?
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Is the bottom in? I'm waiting at the moment and have a very large cash position that I've waited for a pull back to invest. I might be greedy waiting and could pay the price but there are too many variables such as bonds price, inverted yield curve, resession fears, small businesses are closing and skyrocketing unemployment. What happens if Democrats get in the office and tax rates change, all pe ratios change and another market correction. Dow 15000 is very real.
1. Buy some periodically
2. Wait for the negative news on markets to slow, such as new GDP, employment
Thoughts?
IMHO, we're not at the bottom. And won't be for awhile. I posted a graphic a week or so ago that showed the number of days on average from the start of a bear market to the bottom. It isn't a matter of 1-2 weeks. A large part of the US and other industrialized countries economies are being shut down and layoffs are coming down fast and hard. It's difficult to predict how markets will react: they're often counterintuitive and irrational.
The orthodoxy here is that you put it all in at once and you don't attempt to market timing. Well, if I had followed the orthodoxy, I'd be royally screwed about now. I was slowly DCAing back into the market when this hit, and I ended up having relatively low equities exposure as a result. I got hit, but not slammed. I view that more as luck than anything. And also an expensive reminder to stick to my own counsel.
I won't give advice, but will tell you my subject-to-change plans. I think we're probably in for a depression. A brief one, but technically a depression nonetheless. I don't expect a V shaped recovery, but more of a U. I viewed the CAPE as being at nosebleed levels, which was at the root of my reluctance to have anything to do with US equities. I believe that US equities (as measured by SP 500) will be somewhere near reasonably priced at a CAPE of around 20. We were at a CAPE of just under 22 as of Friday. That implies about another 10% drop before I'm all that interested. Due to the very strong dollar, I think that US market will still be relatively pricey. That also implies that international markets are cheap. So, I plan to start DCAing about when the CAPE for the SP 500 hits around 20. Most exposure will be developed international, with US exposure weighted towards small cap. Very limited exposure to SP 500, but some small amount for diversification. I haven't figured out whether I tie DCA to a specific number. I.e. CAPE or SP 500 at a lower number means a higher percentage allocation, but I suppose I will try to do it more or less mathematically. In the end, I expect to have a relatively robust allocation to equities by 2021.
The problem is that this isn't a bear market. This is a reaction to the potential of a recession (depression for those of you that have a negative bent). No one knows how long this will last. Positive information will feed market rallies and negative will feed market sell offs. That's typical. But because of the unknown, this may end with a sharp V within a few months or it may take a U over a few years. The government funding of stemming the tide on the economy being killed off gives a reprieve and can be considered stimulative to the economy in the short term or only a stop gap in the long term. This is all dependent on what we find out about the virus over the next few weeks to few months. Take a guess is all this is about. So trying to model it to the past is mostly a fools errand.
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@Joe Schmo called it on March 16. I mean, not the bottom, 100k cases on March 27. He was SPOT on.
Not bad for a biologist and an armchair statistician. I have an excel sheet that I update with new cases and the rate of increase in % and projections based on a stead 10/15/20% daily increase.
.
.
.
I have no such thing for the market a lot more complications in that there data...namely "delayed mortality"
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As of 5pm PST there were 15 states with a 25% or greater increase in new cases vs total cases:
MA
KY
DE
KS
MD
MI
IA
FL
NJ
HI
TN
ME
IN
UT
MO
**@24%
PA
OH
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joe you aint seen nothing yet. I studied epidemiology in undergrad and have totally under estimated effect this will have, and subsequently on economy. I dont think we are anywhere near the bottom and gonna have a stab at -40%+
the main issue only starts when hospitals become over run, then even moderate cases can become fatal....heres a very rough/basic calculation of potential spread in USA, based on infection doubling every 4 days (its actually 3 so the following is an underestimate). as you will see, actual figures for today 29th march are above that shown on third row (i.e 106,672 vs current 124000). Entire USA is after 42 days ish?
infected day date
26,668 1 21/03/2020
53,336 6 25/03/2020
106,672 9 29/03/2020
213,344 12 02/04/2020
426,688 15 06/04/2020
853,376 18 10/04/2020
1,706,752 21 14/04/2020
3,413,504 24 18/04/2020
6,827,008 27 22/04/2020
13,654,016 30 26/04/2020
27,308,032 33 30/04/2020
54,616,064 36 04/05/2020
109,232,128 39 08/05/2020
218,464,256 42 12/05/2020
436,928,512 45 16/05/2020
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Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
Markets are up +10.2% (Friday's close) since I called the market bottom. For me, I was calling the end of the panic in the market. Panic should be a low point for the market, and a good time to buy. But not always the lowest point... so far, it's holding.
After the stock market closed for the weekend, Congress and the President signed the CARES Act into law, which is a $2.2 trillion relief package. The largest relief bill in history finally passed, which markets couldn't predict with certainty. Markets will probably open higher on Monday.
Given where we are today 21,600.00 and compared to where the market was priced in Dec 2018 ,aren't stocks over valued given the economic impact of the coming months?
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joe you aint seen nothing yet. I studied epidemiology in undergrad and have totally under estimated effect this will have, and subsequently on economy. I dont think we are anywhere near the bottom and gonna have a stab at -40%+
the main issue only starts when hospitals become over run, then even moderate cases can become fatal....heres a very rough/basic calculation of potential spread in USA, based on infection doubling every 4 days (its actually 3 so the following is an underestimate). as you will see, actual figures for today 29th march are above that shown on third row (i.e 106,672 vs current 124000). Entire USA is after 42 days ish?
infected day date
26,668 1 21/03/2020
53,336 6 25/03/2020
106,672 9 29/03/2020
213,344 12 02/04/2020
426,688 15 06/04/2020
853,376 18 10/04/2020
1,706,752 21 14/04/2020
3,413,504 24 18/04/2020
6,827,008 27 22/04/2020
13,654,016 30 26/04/2020
27,308,032 33 30/04/2020
54,616,064 36 04/05/2020
109,232,128 39 08/05/2020
218,464,256 42 12/05/2020
436,928,512 45 16/05/2020
Nope. Doesn’t work like that. Infections follow a logistic curve function. Once the rate of change slows you are past the peak and the rate will keep flattening.
For example, today Spain reported 5% new active cases, well down from their 20% rate of change a week ago. They are over the worst.
Calculus, not arithmetics holds the answer.
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joe you aint seen nothing yet. I studied epidemiology in undergrad and have totally under estimated effect this will have, and subsequently on economy. I dont think we are anywhere near the bottom and gonna have a stab at -40%+
the main issue only starts when hospitals become over run, then even moderate cases can become fatal....heres a very rough/basic calculation of potential spread in USA, based on infection doubling every 4 days (its actually 3 so the following is an underestimate). as you will see, actual figures for today 29th march are above that shown on third row (i.e 106,672 vs current 124000). Entire USA is after 42 days ish?
infected day date
26,668 1 21/03/2020
53,336 6 25/03/2020
106,672 9 29/03/2020
213,344 12 02/04/2020
426,688 15 06/04/2020
853,376 18 10/04/2020
1,706,752 21 14/04/2020
3,413,504 24 18/04/2020
6,827,008 27 22/04/2020
13,654,016 30 26/04/2020
27,308,032 33 30/04/2020
54,616,064 36 04/05/2020
109,232,128 39 08/05/2020
218,464,256 42 12/05/2020
436,928,512 45 16/05/2020
Nope. Doesn’t work like that. Infections follow a logistic curve function. Once the rate of change slows you are past the peak and the rate will keep flattening.
For example, today Spain reported 5% new active cases, well down from their 20% rate of change a week ago. They are over the worst.
Calculus, not arithmetics holds the answer.
as I said, very rough. anyone wanna through up an accurate curve? the panic peak will be near the market bottom
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joe you aint seen nothing yet. I studied epidemiology in undergrad and have totally under estimated effect this will have, and subsequently on economy. I dont think we are anywhere near the bottom and gonna have a stab at -40%+
the main issue only starts when hospitals become over run, then even moderate cases can become fatal....heres a very rough/basic calculation of potential spread in USA, based on infection doubling every 4 days (its actually 3 so the following is an underestimate). as you will see, actual figures for today 29th march are above that shown on third row (i.e 106,672 vs current 124000). Entire USA is after 42 days ish?
infected day date
26,668 1 21/03/2020
53,336 6 25/03/2020
106,672 9 29/03/2020
213,344 12 02/04/2020
426,688 15 06/04/2020
853,376 18 10/04/2020
1,706,752 21 14/04/2020
3,413,504 24 18/04/2020
6,827,008 27 22/04/2020
13,654,016 30 26/04/2020
27,308,032 33 30/04/2020
54,616,064 36 04/05/2020
109,232,128 39 08/05/2020
218,464,256 42 12/05/2020
436,928,512 45 16/05/2020
Nope. Doesn’t work like that. Infections follow a logistic curve function. Once the rate of change slows you are past the peak and the rate will keep flattening.
For example, today Spain reported 5% new active cases, well down from their 20% rate of change a week ago. They are over the worst.
Calculus, not arithmetics holds the answer.
I think you may be correct, however Italy maybe a better example to use. They are expeirencing a wave pattern after an intial peak and as a result new cass are again on the rise.
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When I sold some equities to time the market 3 weeks ago, I had specific predictions 1-2 weeks out for when I would buy back in. I made a plan, watched predictions come true, and bought near the recent market bottom.
I would encourage others who time the market to have a plan based on specific predictions. When your predictions fail, understand why, and consider ending the plan to time the market.
For example, many people have predicted that much higher infection rates will cause markets to correct. U.S. has 145k cases after being at 99k Friday. Today President Trump agreed with medical experts on his team that U.S. deaths could be in the 100k to 200k range, with millions infected. Markets reacted by rising +2.4%. To me, that seems like a failure of the prediction. Cases go up, predicted cases go up... and markets go up.
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joe you aint seen nothing yet. I studied epidemiology in undergrad and have totally under estimated effect this will have, and subsequently on economy. I dont think we are anywhere near the bottom and gonna have a stab at -40%+
the main issue only starts when hospitals become over run, then even moderate cases can become fatal....heres a very rough/basic calculation of potential spread in USA, based on infection doubling every 4 days (its actually 3 so the following is an underestimate). as you will see, actual figures for today 29th march are above that shown on third row (i.e 106,672 vs current 124000). Entire USA is after 42 days ish?
infected day date
26,668 1 21/03/2020
53,336 6 25/03/2020
106,672 9 29/03/2020
213,344 12 02/04/2020
426,688 15 06/04/2020
853,376 18 10/04/2020
1,706,752 21 14/04/2020
3,413,504 24 18/04/2020
6,827,008 27 22/04/2020
13,654,016 30 26/04/2020
27,308,032 33 30/04/2020
54,616,064 36 04/05/2020
109,232,128 39 08/05/2020
218,464,256 42 12/05/2020
436,928,512 45 16/05/2020
Nope. Doesn’t work like that. Infections follow a logistic curve function. Once the rate of change slows you are past the peak and the rate will keep flattening.
For example, today Spain reported 5% new active cases, well down from their 20% rate of change a week ago. They are over the worst.
Calculus, not arithmetics holds the answer.
I think you may be correct, however Italy maybe a better example to use. They are expeirencing a wave pattern after an intial peak and as a result new cass are again on the rise.
Latest numbers from Italy are very good as their lockdown measures are really beginning to feed through to the bottom line.
Rate of growth of new cases has fallen from around 18% to 4%
Number of daily new cases has almost halved from peak.
All the major European countries are now over the worst and on some part of the flattening trajectory.
UK & US conversely are looking like they still in the exponential phase, but by the end of this week we should also see their numbers begin to flatten off.
As I said, while the headlines are focussing on the now, the market has moved to price at least the end of the first wave of this pandemic which can clearly be projected. We'll see if it has fully priced in the economic damage and long term changes that will inevitably arise as a result, but by the wisdom of the crowds the market is much wiser than any individual.
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When I sold some equities to time the market 3 weeks ago, I had specific predictions 1-2 weeks out for when I would buy back in. I made a plan, watched predictions come true, and bought near the recent market bottom.
I would encourage others who time the market to have a plan based on specific predictions. When your predictions fail, understand why, and consider ending the plan to time the market.
For example, many people have predicted that much higher infection rates will cause markets to correct. U.S. has 145k cases after being at 99k Friday. Today President Trump agreed with medical experts on his team that U.S. deaths could be in the 100k to 200k range, with millions infected. Markets reacted by rising +2.4%. To me, that seems like a failure of the prediction. Cases go up, predicted cases go up... and markets go up.
So you are saying Top Isn't In? Please translate.
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When I sold some equities to time the market 3 weeks ago, I had specific predictions 1-2 weeks out for when I would buy back in. I made a plan, watched predictions come true, and bought near the recent market bottom.
I would encourage others who time the market to have a plan based on specific predictions. When your predictions fail, understand why, and consider ending the plan to time the market.
For example, many people have predicted that much higher infection rates will cause markets to correct. U.S. has 145k cases after being at 99k Friday. Today President Trump agreed with medical experts on his team that U.S. deaths could be in the 100k to 200k range, with millions infected. Markets reacted by rising +2.4%. To me, that seems like a failure of the prediction. Cases go up, predicted cases go up... and markets go up.
To me, that looks like more evidence that the market likes the feeling of certainty even if it proves to be an illusion. A "believable" estimate of the death toll is much better than complete wishful thinking at the top and wildly pessimistic speculation by the talking heads. Also 99k -> 145k in three days is not doubling despite testing a lot more people which could be taken as good news.
I've been following your predictions with interest and hope you keep sharing them.
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UK has just announced (30/3/2020) that covid in london alone is 2 to 4 weeks from peak...but who would invest in ftse anyway....
USA will be some time behind uk....
odd times
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What have the bears got left?
The trajectory of the virus is now pretty clear and the end is in sight, even if it a little ways away. The market has priced it in. Sorry, permabears, but looking at the daily numbers now it's about as uesful as yesterday's newspaper as far as the market cares.
There seems to be a lot of money waiting for the market to hit a particular price before buying.. eg S&P 2000 & Dow 15k seem common targets..which is why it probably won't ever see those prices. Can't have everyone outwitting the market and getting rich now, can we?
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There seems to be a lot of money waiting for the market to hit a particular price before buying.. eg S&P 2000 & Dow 15k seem common targets..which is why it probably won't ever see those prices. Can't have everyone outwitting the market and getting rich now, can we?
Shorten that a little and it could be a great "Don't try and time the market" bumper sticker :)
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The trajectory of the virus is now pretty clear and the end is in sight, even if it a little ways away. The market has priced it in. Sorry, permabears, but looking at the daily numbers now it's about as uesful as yesterday's newspaper as far as the market cares.
That's some quality confidence, which I would like to share, but alas, I don't believe the current prices on U.S. markets accurately reflect the situation to come. Reasonable minds can disagree. I'll revisit this thread in 3 months.
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vand - I thought Italy's testing failed to keep up, in which case the number who passed away might be more reliable than the number of cases. It still supports your view. Dividing each day's toll by the prior day's toll, I arrive at: 11.9%, 9.7%, 7.6%.
Alternatepriorities - I would paraphrase your idea as "markets prefer certainty to reality". You don't mention what signals shift you (partly?) into cash, and when to buy equities again. One of the market impacts is job losses and bankruptcies, both of which were greatly softened by the CARES Act (the relief bill). If your thesis can't predict Congress blunting the market impact, it might predict illnesses correctly but fail to track market performance.
wienerdog - I'm trying to warn other March market timers they might be in trouble. My own prediction was a bottom Mar 19-20 (-33% off peak), based on testing catching COVID-19 cases and expecting Congress to provide relief. Both of those came true, and Congress continues to work on relief efforts for the economy. Although the actual bottom so far was one day after my prediction (Mar 23, a Monday, -35%), I'm waiting to see if I was one day early off the market bottom.
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I had planned to wait a few days before mentioning here what Alternatepriorities pointed out - the curve seems to be bending. Since I can't use data from two weeks ago, when testing caught up, I don't have enough data to make a prediction yet - but I'm optimistic about what I see.
When I started my market timing, there was a huge gap between experts and the markets. President Trump wanted COVID-19 to disappear, and experts talked about millions of people infected. Now that gap has closed, with everyone agreeing to "flatten the curve", which refers to exponential growth. Almost every government takes it seriously, and is trying to preserve life, and preserve economies (unemployment does correlate with suicide rates, so it's not entirely callous to lump those together). I no longer see an opportunity in predicting exponential growth in cases, which is why I'm 100% equities.
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vand - I thought Italy's testing failed to keep up, in which case the number who passed away might be more reliable than the number of cases. It still supports your view. Dividing each day's toll by the prior day's toll, I arrive at: 11.9%, 9.7%, 7.6%.
Deaths are a very lagging indicator, for very obvious reasons. They're like unemployment figures as a proxy for the trend of the economy.
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The trajectory of the virus is now pretty clear and the end is in sight, even if it a little ways away. The market has priced it in. Sorry, permabears, but looking at the daily numbers now it's about as uesful as yesterday's newspaper as far as the market cares.
That's some quality confidence, which I would like to share, but alas, I don't believe the current prices on U.S. markets accurately reflect the situation to come. Reasonable minds can disagree. I'll revisit this thread in 3 months.
If we can close above about 2660 on the SP500 then we will have broken the primary downtrend and my confidence will further increase. The chances are pretty good given upside momentum and also that the Nasdaq has already taken out its equivilent level but we shall see what plays out over the rest of the week.
Anecdotally, I work for a firm that produces risk analysis software. On 20th March we got a firmwide memo from the MD basically explaining that the software was falling short because the models underlying it have never seen this level of volatility before without any counter-rally. He also assured us that if our models were failing, then everyone else's were also failing. Fat tails, black swans etc etc.
When everyone is flying blind then you can be sure that there is a very decent level of fear in the market, and I knew that when I saw this, we would be close to at least a short term bottom.
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when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
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when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
-
when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
What you're describing is hindsight. Not some market specific phenomenon. Obviously, the markets move fast and by the time you're sure we've hit a high or low we're already past it. We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months. I read an article yesterday that the USPS might have to close by June. I don't believe our gov't would let that happen, but it's just an illustration that the economic impacts of this will be a slow burn. I think the economy not reaching new lows over the summer is going to be dependent on the 4th round of stimulus coming to fruition that's already being discussed.
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What happens when the social distancing and economy shutdown measures now in place are lifted and we "go back to normal"?
The virus will start spreading again at an alarming rate, and more shutdowns/measures will again be needed. As long as we don't have a vaccine (which does not seem to be here anytime soon) we are going to have restrictive measures on businesses/people to curb the spread until everyone has gotten it and healed. If cases are only ~150K now in the US, that leaves a lot of people that still need to get the virus and heal before we're through. Epidemiology experts say we are basically fucked for the next few months up to possibly a year (flattening the curve has this effect) as several waves of the virus hit.
These measures are going to have a very significant impact on the economy. It's been barely more than two weeks and the impact on the economy is like nothing we've seen before. Unemployment rates are going way higher than initially projected, and are now projected to go in the 15%-30% range. Business revenue is 0$ for many of them right now (restaurants, bars, anywhere really is closed). Expecting anything less than a very severe recession is unrealistic.
SP500 is overvalued right now - it's only back to 2017 values, and we have no visibility yet on what the impact will be on company earnings/dividends. I'm sure it will be a lot worse than whatever "expectations" are at the moment. I'm not so pretentious as to try market timing, I'll just keep using a nice DCA strategy.
Stay safe
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when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
What you're describing is hindsight. Not some market specific phenomenon. Obviously, the markets move fast and by the time you're sure we've hit a high or low we're already past it. We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months. I read an article yesterday that the USPS might have to close by June. I don't believe our gov't would let that happen, but it's just an illustration that the economic impacts of this will be a slow burn. I think the economy not reaching new lows over the summer is going to be dependent on the 4th round of stimulus coming to fruition that's already being discussed.
There is a lot of uncertainty at the moment with a wide range of possible outcomes. When that is the case, investment horizons get flattened out, and investors are not willing to pay as much today for tomorrow's less certain cashflows. This is all entirely logical.
However, as the bulls were often keen to remind us on the way up, the market is not the economy. The economy may slide in the coming months but that doesn't mean the stock market is going to follow it lock-step. The market has already anticipated a lot of bad data in the short term. Only if that bad data continues into the long term then it will drag the market lower. Of course, I use "short" and "long" term without solid definitions... that is for each market participant to determine for themselves.
-
when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
What you're describing is hindsight. Not some market specific phenomenon. Obviously, the markets move fast and by the time you're sure we've hit a high or low we're already past it. We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months. I read an article yesterday that the USPS might have to close by June. I don't believe our gov't would let that happen, but it's just an illustration that the economic impacts of this will be a slow burn. I think the economy not reaching new lows over the summer is going to be dependent on the 4th round of stimulus coming to fruition that's already being discussed.
There is a lot of uncertainty at the moment with a wide range of possible outcomes. When that is the case, investment horizons get flattened out, and investors are not willing to pay as much today for tomorrow's less certain cashflows. This is all entirely logical.
However, as the bulls were often keen to remind us on the way up, the market is not the economy. The economy may slide in the coming months but that doesn't mean the stock market is going to follow it lock-step. The market has already anticipated a lot of bad data in the short term. Only if that bad data continues into the long term then it will drag the market lower. Of course, I use "short" and "long" term without solid definitions... that is for each market participant to determine for themselves.
How do you know exactly what S&P 2600 is baking in, and that it's already accounting for an economic shitshow this summer? You somehow know that S&P 2600 is the appropriate level for the curbstomping the virus is going to give our economy this summer? The market doesn't move lockstep with the economy because the stock market is a game, driven by traders all over the world. I actually think there's a ton of uncertainty still, with the virus and the ensuing impacts on the economy even once it's contained. How that uncertainty manifests itself the rest of the year, I have no idea but I'm also pretty sure nobody else does. Like I said in my previous post, I think what the gov't does will have a substantial impact.
-
when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
Not much tbh...your too hostile so can't be bothered
All the best 😉
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States are starting to issue the 'stay-at-home' orders. Within the last 2 days MD, VA and DC all did it. It's not a full on lockdown, but it does further hit businesses, forcing even more to close. Businesses are taking an absolute beating right now and it's not ending anytime soon. I think Virginia's proclamation goes into June. I know how this will affect the economy and markets but it seems like we won't really know the true damage for awhile.
-
when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
What you're describing is hindsight. Not some market specific phenomenon. Obviously, the markets move fast and by the time you're sure we've hit a high or low we're already past it. We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months. I read an article yesterday that the USPS might have to close by June. I don't believe our gov't would let that happen, but it's just an illustration that the economic impacts of this will be a slow burn. I think the economy not reaching new lows over the summer is going to be dependent on the 4th round of stimulus coming to fruition that's already being discussed.
There is a lot of uncertainty at the moment with a wide range of possible outcomes. When that is the case, investment horizons get flattened out, and investors are not willing to pay as much today for tomorrow's less certain cashflows. This is all entirely logical.
However, as the bulls were often keen to remind us on the way up, the market is not the economy. The economy may slide in the coming months but that doesn't mean the stock market is going to follow it lock-step. The market has already anticipated a lot of bad data in the short term. Only if that bad data continues into the long term then it will drag the market lower. Of course, I use "short" and "long" term without solid definitions... that is for each market participant to determine for themselves.
How do you know exactly what S&P 2600 is baking in, and that it's already accounting for an economic shitshow this summer? You somehow know that S&P 2600 is the appropriate level for the curbstomping the virus is going to give our economy this summer? The market doesn't move lockstep with the economy because the stock market is a game, driven by traders all over the world. I actually think there's a ton of uncertainty still, with the virus and the ensuing impacts on the economy even once it's contained. How that uncertainty manifests itself the rest of the year, I have no idea but I'm also pretty sure nobody else does. Like I said in my previous post, I think what the gov't does will have a substantial impact.
Simple answer is that I don't know, and neither does anyone else.
But my own experiences of the market tell me that when everyone is gnashing their teeth and feeling anxious about their rapidly decreasing net worth as I have sensed on the forum over the last 3 weeks then that is usually a pretty good time to be buying.
Do I detect in the tone of your writing that you're someone with cash on the sides who has missed out on the 20% move since the bottom and hoping, praying that you'll get another bite at the cherry?? Couldn't be, could it?!
-
when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
What you're describing is hindsight. Not some market specific phenomenon. Obviously, the markets move fast and by the time you're sure we've hit a high or low we're already past it. We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months. I read an article yesterday that the USPS might have to close by June. I don't believe our gov't would let that happen, but it's just an illustration that the economic impacts of this will be a slow burn. I think the economy not reaching new lows over the summer is going to be dependent on the 4th round of stimulus coming to fruition that's already being discussed.
There is a lot of uncertainty at the moment with a wide range of possible outcomes. When that is the case, investment horizons get flattened out, and investors are not willing to pay as much today for tomorrow's less certain cashflows. This is all entirely logical.
However, as the bulls were often keen to remind us on the way up, the market is not the economy. The economy may slide in the coming months but that doesn't mean the stock market is going to follow it lock-step. The market has already anticipated a lot of bad data in the short term. Only if that bad data continues into the long term then it will drag the market lower. Of course, I use "short" and "long" term without solid definitions... that is for each market participant to determine for themselves.
How do you know exactly what S&P 2600 is baking in, and that it's already accounting for an economic shitshow this summer? You somehow know that S&P 2600 is the appropriate level for the curbstomping the virus is going to give our economy this summer? The market doesn't move lockstep with the economy because the stock market is a game, driven by traders all over the world. I actually think there's a ton of uncertainty still, with the virus and the ensuing impacts on the economy even once it's contained. How that uncertainty manifests itself the rest of the year, I have no idea but I'm also pretty sure nobody else does. Like I said in my previous post, I think what the gov't does will have a substantial impact.
Simple answer is that I don't know, and neither does anyone else.
You don't say?
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when USA production grinds to a relative halt, wont this drinve sp500 lower?
baz
Do you read anything I write?
I repeat: The market is a future discounting mechanism
that means it anticipates the shape of the future, it doesn't react to it in real-time. What do you think the market has been doing for the last 5 weeks except pricing in a big economic shitshow?
What you're describing is hindsight. Not some market specific phenomenon. Obviously, the markets move fast and by the time you're sure we've hit a high or low we're already past it. We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months. I read an article yesterday that the USPS might have to close by June. I don't believe our gov't would let that happen, but it's just an illustration that the economic impacts of this will be a slow burn. I think the economy not reaching new lows over the summer is going to be dependent on the 4th round of stimulus coming to fruition that's already being discussed.
There is a lot of uncertainty at the moment with a wide range of possible outcomes. When that is the case, investment horizons get flattened out, and investors are not willing to pay as much today for tomorrow's less certain cashflows. This is all entirely logical.
However, as the bulls were often keen to remind us on the way up, the market is not the economy. The economy may slide in the coming months but that doesn't mean the stock market is going to follow it lock-step. The market has already anticipated a lot of bad data in the short term. Only if that bad data continues into the long term then it will drag the market lower. Of course, I use "short" and "long" term without solid definitions... that is for each market participant to determine for themselves.
How do you know exactly what S&P 2600 is baking in, and that it's already accounting for an economic shitshow this summer? You somehow know that S&P 2600 is the appropriate level for the curbstomping the virus is going to give our economy this summer? The market doesn't move lockstep with the economy because the stock market is a game, driven by traders all over the world. I actually think there's a ton of uncertainty still, with the virus and the ensuing impacts on the economy even once it's contained. How that uncertainty manifests itself the rest of the year, I have no idea but I'm also pretty sure nobody else does. Like I said in my previous post, I think what the gov't does will have a substantial impact.
Simple answer is that I don't know, and neither does anyone else.
You don't say?
Great. I don't even know what we're arguing about tbh.
You seem to be suggesting that the market requires a GDP print better than -4.567% next quarter to exceed expectations and therefore go up.
I'm saying that numbers matter much less than sentiment, which is (still) very depressed and likely to further improve, thereby pulling stocks up with them.
Fundamentals and sentiment sing from the same songsheet only occassionally.
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"you seem to be implying market GDP blah blah -4.5% blah" cmon man, I'm not throwing out any detailed predictions and you know it. I believe that's what they call a strawman argument
I don't know if we're actually arguing about anything, but there seems to be chest thumping from some people about the market already cratering and having baked in all the bad stuff coming this year. I'm stating I don't know if that's true. You admitted as much in your last post, so yeah not sure what the back & forth is about.
And to answer one of your accusations, no I'm not sitting on a pile of money I'm waiting to invest and am rooting for the market to fail and thus letting it bias my posts. What I'm doing is already on record in another thread. Nothing, my existing investments and allocations haven't changed. I do have my annual backdoor Roth contribution which I was considering putting in soon with the market sputtering, although I do think I'll wait it out a few months and see what happens. I think there's lots more downside right now than upside.
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Alternatepriorities - I would paraphrase your idea as "markets prefer certainty to reality". You don't mention what signals shift you (partly?) into cash, and when to buy equities again. One of the market impacts is job losses and bankruptcies, both of which were greatly softened by the CARES Act (the relief bill). If your thesis can't predict Congress blunting the market impact, it might predict illnesses correctly but fail to track market performance.
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I had planned to wait a few days before mentioning here what Alternatepriorities pointed out - the curve seems to be bending. Since I can't use data from two weeks ago, when testing caught up, I don't have enough data to make a prediction yet - but I'm optimistic about what I see.
When I started my market timing, there was a huge gap between experts and the markets. President Trump wanted COVID-19 to disappear, and experts talked about millions of people infected. Now that gap has closed, with everyone agreeing to "flatten the curve", which refers to exponential growth. Almost every government takes it seriously, and is trying to preserve life, and preserve economies (unemployment does correlate with suicide rates, so it's not entirely callous to lump those together). I no longer see an opportunity in predicting exponential growth in cases, which is why I'm 100% equities.
I am also 100% equities, but that hasn't changed in several years. So far my market predictions have been a mixed bag at best with a couple of good purchase making up for several bad ones. The majority of my investments are split 70/30 between the US and international equity indexes. I have a small but growing pile of cash for recent earnings that I could invest now but could also pad our emergency fund...
I was in general overly optimistic about this whole thing. The virus is bad, maybe even a little worse than I thought it would be, but fear that has gone viral and is much worse than I anticipated. It's spreading faster than the virus and doing at least as much damage (BBC reported this morning that at least 24 million less people will escape poverty ($5.5/day) in 2020 because of this).
Knowing I can't predict the fear and when it will reverse makes me hesitant to predict the market, but you've done well at it, so I read with interest.
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I have it on good authority that the worst of this will be done by Passover.
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VUSA london down almost 5% on open....that a purchase marker for me...
awful hardship ahead for USA in coming weeks.
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Do most people here believe, like I do, that the U.S. stock market is an "efficient market"?
when USA production grinds to a relative halt, wont this drinve sp500 lower?
If that is already known, no. If it's new information, yes.
We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months.
All known information is priced in. Future events have their probability and impact priced in, which can change as new information arrives. Once something happens, if it matches predictions, nothing changes. All of this assumes efficient markets.
By priced in, I mean high speed computers parse even the obscure news feeds, generate stock orders, and race to be the first high-frequency trader to profit on new information.
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You're stating the obvious and talking to people like they don't understand how the stock market works. This summer will be an interesting time. The virus is not close to being contained yet, although our country is finally getting it and taking the necessary precautions that hopefully will get us there. And the economy has taken hits that I don't think are even known yet. The market is probably pricing in an outcome somewhere in the middle right? Kind of like when I'm taking a complete guess at how something will happen and I pick in the middle of the extremes.
I've seen people(not sure if it was you or not) claim that there's certainty now and the market had found it's bottom after Trump discussed opening by Easter. Then days later he goes on tv walking that back and projecting lots of deaths. There is no certainty right now and the markets are just trying to figure it out as we go along.
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Do most people here believe, like I do, that the U.S. stock market is an "efficient market"?
when USA production grinds to a relative halt, wont this drinve sp500 lower?
If that is already known, no. If it's new information, yes.
We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months.
All known information is priced in. Future events have their probability and impact priced in, which can change as new information arrives. Once something happens, if it matches predictions, nothing changes. All of this assumes efficient markets.
By priced in, I mean high speed computers parse even the obscure news feeds, generate stock orders, and race to be the first high-frequency trader to profit on new information.
cool, thanks.
i suppose the only real unknown now is the scale of USA death toll. 240,000?.....I'd suspect more. what of the idea that the market is going to re-inflate afterwards..... can that be guaranteed with proposed QE?
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I've been guessing Dow at 15k but it looks like the market is much less volatile than the past 2 weeks.
Even thought we might be heading into the worst 2-3 weeks economic wise, the market might not react as much.
2nd day in a row market is down, I might move some back equities before today's end.
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You're stating the obvious and talking to people like they don't understand how the stock market works. This summer will be an interesting time. The virus is not close to being contained yet, although our country is finally getting it and taking the necessary precautions that hopefully will get us there. And the economy has taken hits that I don't think are even known yet. The market is probably pricing in an outcome somewhere in the middle right? Kind of like when I'm taking a complete guess at how something will happen and I pick in the middle of the extremes.
I've seen people(not sure if it was you or not) claim that there's certainty now and the market had found it's bottom after Trump discussed opening by Easter. Then days later he goes on tv walking that back and projecting lots of deaths. There is no certainty right now and the markets are just trying to figure it out as we go along.
I actually share a lot of your sentiments. I feel like the worst is yet to come in the next 2-4 weeks.
But the market seems to be less volatile(as in the downward spiral like weeks before). We might never see the reaction of a 1500-2000 point drop ever again.
I will probably go back all in way before the Dow 15k I predicted and end my market timing scheme.
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why haven't Berkshire bought yet?
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Do we know that they haven't? I was under the impression that they were only required to report that information quarterly?
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Do we know that they haven't? I was under the impression that they were only required to report that information quarterly?
very good point. I assumed it would be to bit to keep quiet.....
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Do most people here believe, like I do, that the U.S. stock market is an "efficient market"?
Sure, over the long term.
You don’t think emotion plays a part in short term movements? There’s liquidity needs also.
The market is down about 5% today. Is it pricing in new information? I don’t think so.
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Do most people here believe, like I do, that the U.S. stock market is an "efficient market"?
Sure, over the long term.
You don’t think emotion plays a part in short term movements? There’s liquidity needs also.
The market is down about 5% today. Is it pricing in new information? I don’t think so.
My guess? Monday it seemed like trump was being more realistic about the whole thing and the numbers weren't as bad as people had priced in. Yesterday and today the numbers got worse breaking the illusion that Monday's news was realistic... That's the new information you asked about.
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The market pretty decisively failed the test at 2640 yesterday, so the bears remain in control. Accordingly, I'm less optimistic that I was at the start of the week and think that a retest of the bottom could be on the cards in short order. We need to close above about 2620 for the bulls to have something to cling to.
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what impact do you foresee if 250,000+ people die in USA over next months guys? social upheaval, mass unemployment, social unrest.....
Are we fooling ourselves that this just corrects and bounces back up in a few months?
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I don't know what will happen. I would say that the closest we have experienced was the 1918 pandemic. I don't remember lasting social upheaval, mass unemployment, or social unrest in my history class.
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what impact do you foresee if 250,000+ people die in USA over next months guys? social upheaval, mass unemployment, social unrest.....
Are we fooling ourselves that this just corrects and bounces back up in a few months?
Sorry but we are not seeing 250K+ death "over next months".
If we reach 200K by the end of the year, I'd still be shocked.
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what impact do you foresee if 250,000+ people die in USA over next months guys? social upheaval, mass unemployment, social unrest.....
Are we fooling ourselves that this just corrects and bounces back up in a few months?
Sorry but we are not seeing 250K+ death "over next months".
If we reach 200K by the end of the year, I'd still be shocked.
that will be good then, figures quoted ranging from 100k to 240k, over 2mill without mitigation reported.
hopefully it will be lower end.
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Do most people here believe, like I do, that the U.S. stock market is an "efficient market"?
Sure, over the long term.
You don’t think emotion plays a part in short term movements? There’s liquidity needs also.
The market is down about 5% today. Is it pricing in new information? I don’t think so.
Looking at Yahoo Finance data, most of the drop happened when markets were closed. Wednesday's open was -3.7% lower than Tuesday's close, suggesting not all of the -4.6% drop happened Wednesday. During market hours, there was only a -1% drop from the opening price.
When I hear about a -5% drop on no news, I want to learn why. I want to test the thesis - even looking for mistakes in my own ideas. Predictions are either borne out by data, or shown false. To me, an untested prediction lacks feedback.
I'm not tracking news and markets closely now that I'm just waiting. But peeking at the U.S. news section on Google News, there's plenty of bad news - some significant. There's a chance Washington DC could be paralyzed by COVID-19, some new estimates of unemployment are higher than the last record-breaking numbers, and the leader of the Senate feels a 4th relief bill should be dropped. President Trump discussed the oil price war with Putin, and that first attempt at diplomacy went nowhere. Finally, there's an absence of news contradicting the estimates of 100k-200k Americans dying over the course of COVID-19 (plus Fauci saying it will return in the fall), so that may still be sinking in (revising prior, lower estimates as it becomes more accepted).
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You're stating the obvious and talking to people like they don't understand how the stock market works. This summer will be an interesting time. The virus is not close to being contained yet, although our country is finally getting it and taking the necessary precautions that hopefully will get us there. And the economy has taken hits that I don't think are even known yet. The market is probably pricing in an outcome somewhere in the middle right? Kind of like when I'm taking a complete guess at how something will happen and I pick in the middle of the extremes.
I've seen people(not sure if it was you or not) claim that there's certainty now and the market had found it's bottom after Trump discussed opening by Easter. Then days later he goes on tv walking that back and projecting lots of deaths. There is no certainty right now and the markets are just trying to figure it out as we go along.
I actually share a lot of your sentiments. I feel like the worst is yet to come in the next 2-4 weeks.
But the market seems to be less volatile(as in the downward spiral like weeks before). We might never see the reaction of a 1500-2000 point drop ever again.
I will probably go back all in way before the Dow 15k I predicted and end my market timing scheme.
Yeah, I don't think it's going to 15k but the next month or two will be interesting. I think there's far more downside than upside right now. I think we were primed for a pullback anyways with this unprecedented bull market run and then got hit with this virus and economic shutdown. It's not apocalypse now but it's going to hurt, at least in the short term.
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what impact do you foresee if 250,000+ people die in USA over next months guys? social upheaval, mass unemployment, social unrest.....
Are we fooling ourselves that this just corrects and bounces back up in a few months?
The problem with this sort of thinking is that not only are you speculating on a future outcome which is unknown, but also on the market's reaction to that scenario, which is doubly unknown. It's mystic meg stuff.
250k covid-19 deaths sounds terrible, but the reality is also that the natural death rate is about 1%, so >3m people will have naturally died over the course of the year anyway. Perspective is needed. Covid-19 is not going to be the end of the world, the end of capitalism, or anything approaching it.
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We don't know if the markets are adequately pricing everything in right now, because nobody is quite sure what's going to happen the next few months.
All known information is priced in. Future events have their probability and impact priced in, which can change as new information arrives.
You're stating the obvious and talking to people like they don't understand how the stock market works.
You claim there's uncertainty over things being priced in, and I contradicted you, and said everything known is priced in. I disagree with your view, because I think markets are efficient. Efficient markets price in all available information. If things change, markets adjust to new information and price it in. You claim there's uncertainty, I claim there isn't.
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Do most people here believe, like I do, that the U.S. stock market is an "efficient market"?
Sure, over the long term.
You don’t think emotion plays a part in short term movements? There’s liquidity needs also.
The market is down about 5% today. Is it pricing in new information? I don’t think so.
Looking at Yahoo Finance data, most of the drop happened when markets were closed. Wednesday's open was -3.7% lower than Tuesday's close, suggesting not all of the -4.6% drop happened Wednesday. During market hours, there was only a -1% drop from the opening price.
When I hear about a -5% drop on no news, I want to learn why. I want to test the thesis - even looking for mistakes in my own ideas. Predictions are either borne out by data, or shown false. To me, an untested prediction lacks feedback.
I'm not tracking news and markets closely now that I'm just waiting. But peeking at the U.S. news section on Google News, there's plenty of bad news - some significant. There's a chance Washington DC could be paralyzed by COVID-19, some new estimates of unemployment are higher than the last record-breaking numbers, and the leader of the Senate feels a 4th relief bill should be dropped. President Trump discussed the oil price war with Putin, and that first attempt at diplomacy went nowhere. Finally, there's an absence of news contradicting the estimates of 100k-200k Americans dying over the course of COVID-19 (plus Fauci saying it will return in the fall), so that may still be sinking in (revising prior, lower estimates as it becomes more accepted).
Thanks MustacheAndaHalf.
am I reading this correct, you are expecting another dip?
baz
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I'm not tracking news and markets closely now that I'm just waiting.
Thanks MustacheAndaHalf.
am I reading this correct, you are expecting another dip?
baz
I only peeked at the news in response to AdrianC's post. When I had a chunk of my portfolio outside the market, I diligently paid attention to the news and how my predictions were doing. Now that I'm 100% equities, I'm just taking whatever the market dishes out between now and recovery.
Earlier, I predicted headlines. Recently, everyone knows "flatten the curve" with a diagram of exponential growth being flattened. People overlay Italy or China onto U.S. data. To me, markets both understand exponential growth and are no longer panicking. I don't have the advantage, so I'm back to watching efficient markets incorporate information.
You can replicate my earlier method: divide the total number of cases by the previous total. Typically it's a day apart, and you include all prior cases. You wind up with a number near +50%, near +30%, or 10-20% range. The closer the growth factor is to 0%, the closer the outbreak is to being over. I'll run an example:
Sun 139,061... Mon 160,530... Tues 184,770... Wed 210,770...
Mon growth: 160530 / 139061 = 15%
Tue growth: 184770/160530 = 15%
Wed growth: 210770/184770 = 14%
Note NY dominates this data: 84k of 184k cases are in New York, almost half. So that can mask smaller outbreaks that are growing fast. But once NY halts COVID-19 growth, that frees up significant resources to be used against those smaller outbreaks.
That doesn't reveal by itself if markets will be up or down the next few days, but it shows there's a trend of defeating COVID-19's spread using social distancing and increased testing (the U.S. has performed more than 1.1 million COVID-19 tests so far). My 100% equities position probably biases me, but at least you can check the data and use the approach that helped me previously. Just be warned that everyone has some version of it now, and mine is probably primitive by comparison.
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Market is tumbling today.
If it goes below Wed close, might have to buy in a little more.
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Today is my day to buy more up or down. Fingers crossed for down!
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Today is my day to buy more up or down. Fingers crossed for down!
Down for sure just depending on how much.
It usually take a drastic change in the last 30 mins before closing.
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Blah, it didn't drop as much as I was hoping for but I still move $10k from MM to VTSAX.
Still a big discount for me.
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what impact do you foresee if 250,000+ people die in USA over next months guys? social upheaval, mass unemployment, social unrest.....
Are we fooling ourselves that this just corrects and bounces back up in a few months?
I honestly think that the market recovery will be inversely related to how many people die in the short term.
The "best case" for the market is that everyone in the country gets this about the same time, tons of people die, but then the entire country is either dead/immune. That mitigates the economic impact significantly and scopes the impact fairly clearly.
What will be bad for the market is if the uncertainty/economic shutdown continues for months or even a year or more. This will have a lot longer term economic impact as well.
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I'm not sure that I agree with ender, because more people dying means more supply and demand destruction.
With that said, I expect the bottom (and market recovery) to come while stuff still looks bad.
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Jerome Adams, the surgeon general, on Sunday:
“The next week is going to be our Pearl Harbor moment,”
“It’s going to be our 9/11 moment. It’s going to be the hardest moment for many Americans in their entire lives, and we really need to understand that if we want to flatten that curve and get through to the other side, everyone needs to do their part.”
In pre-market SPY (S&P500) is up 3.95%
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I'm not sure that I agree with ender, because more people dying means more supply and demand destruction.
With that said, I expect the bottom (and market recovery) to come while stuff still looks bad.
Keep in mind that even though younger people are dying, overwhelmingly it's older people still that are actually dying from corona.
Given the industry shortages in healthcare/elder care anyways, long term this could actually be a net positive economically (plus people inheriting are more likely to spend than their parents, I suspect).
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Market started today up by 1000 pts. Very surprising.
Its all the billionaires that's gobbling up the stocks.
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Keep in mind that even though younger people are dying, overwhelmingly it's older people still that are actually dying from corona.
Given the industry shortages in healthcare/elder care anyways, long term this could actually be a net positive economically (plus people inheriting are more likely to spend than their parents, I suspect).
You wrote what I was thinking, or at least what I was thinking the market was thinking. The market is going up because medium to long-term economics are good.
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The market pretty decisively failed the test at 2640 yesterday, so the bears remain in control. Accordingly, I'm less optimistic that I was at the start of the week and think that a retest of the bottom could be on the cards in short order. We need to close above about 2620 for the bulls to have something to cling to.
The bulls are threatening to take control back today. If we can close above 2590 then the S&P will have broken through the main downtrend.
(https://i.postimg.cc/XJj4sSSR/Capture.png)
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This weekend, I noticed Saturday growth in new cases was lower but still +12.4% from the prior day. But on Sunday, new cases dropped dramatically with just +8.7% growth. In my experience, the media doesn't pay attention to the math - just exciting raw numbers. When the growth rate drops by 1/3rd, it causes the raw number of new cases to go down from the previous day. The media will see +33.8k cases Saturday, but only +26.6k cases Sunday. I've started hearing the media notice it, now. Europe also has a declining death rate, suggesting they're through the worst of it.
Because sometimes hospitals report data in a lumpy manner, with fewer Sunday and more Monday, there might be higher numbers Monday than the media / markets expect. The situation in New York is still grim as they approach peak ventilator usage - so there could be bad news in some isolated times or places.
But overall, it looks like Europe and the U.S. will not see millions infected and 6 months of lock down. So markets are reacting to that - and there's a long way to go. The economy needs to be slowly restarted in a way that avoids more outbreaks, and there's lots of room for stocks to go up slowly as that unfolds.
VTI's peak was $171.32 on Feb 19, and 80% of that is $137.06. Anything below that is a bear market, any move above it exits the bear market. Which means from here ($130.57), if markets go up +5% the bear market is over (technically).
US stocks have gone up +17.2% since March 23. So far, my call of the market bottom was very close (Friday Mar 20 vs Monday Mar 23). It's looking more and more likely it will hold.
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I've been buying back little here and there when I see the market dropping but when I see a huge gain like today I took the gains and sold them off.
I moved $15k to VTSAX on Wed and $10k again on Friday. I was guessing the market will drop again on oil news but i was totally wrong about that. I was going to dump a bunch more to VTSAX. So I moved the entire $25k back to MM. Took the realized gain of ~$1800.
Usually when the market takes a huge jump like today, it can't sustain it the next day.
Still betting the market will take a big tumble when people realized how bad our economy is in another 2-3 weeks .
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Wow market was up big all morning. Kinda regret selling yesterday but somehow it ended in the red.
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Between Friday's market close and Monday's market close VTI went up +7%. To me, that represented the drop in U.S. cases - and hints of diplomacy on the oil price war. The sooner a recovery, the less likely the worst case scenarios get.
This week Wuhan, China is ending it's lock down. Europe's death rate is dropping. The growth rate on U.S. cases is low and stable - but the media will see it as an increase in raw number of cases. Any day, that growth rate could collapse and send new cases to new lows. I haven't picked at the state by state data too closely, so there may be more surprises there.
President Trump has a press conference scheduled for tomorrow (Thursday), and right now Congress is negotiating on a 4th relief package. That same day, Saudis and Russians plan to hold a meeting to say how their diplomacy is going. If either of those events hold good news, it could push markets higher.
Those who do not buy back in Wednesday are at the mercy of two significant positive events that may or may not happen on Thursday. For me, I'm back to seeing the market as efficient, and the historical evidence that markets tend to go up.
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I miss the days of waking up to market circuit breakers being activated.....
Let's make the markets great again!
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I`m staying up all night recently because of my schedule change. Looks like the traders are moving the pre-markets back and forth waiting on some news this morning.
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I`m staying up all night recently because of my schedule change. Looks like the traders are moving the pre-markets back and forth waiting on some news this morning.
@jojoguy, where can I find out how traders are moving the pre-markets? I can see post-market movement by searching VTI on google, but have been wondered about the pre-markets. Thanks a lot!
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"Strategist Jeff Saut says stock market bottom is in, predicts new S&P 500 record by year-end"
https://www.cnbc.com/2020/04/07/jeff-saut-says-market-bottom-in-sees-new-sp-500-record-in-2020.html
A talking head on CNBC said it, we're good to go!
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I`m staying up all night recently because of my schedule change. Looks like the traders are moving the pre-markets back and forth waiting on some news this morning.
@jojoguy, where can I find out how traders are moving the pre-markets? I can see post-market movement by searching VTI on google, but have been wondered about the pre-markets. Thanks a lot!
https://money.cnn.com/data/premarket/
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Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
VTI is now $139.36, or +21% since I called the bottom (one day early - bottom was Mar 23). For me, I called the moment panic would end and believed that would also be a stock market bottom. I also said I was probably wrong, as other events like unemployment could drive the market lower.
Unemployment hasn't really impacted markets. In normal times, people lose their jobs is a leading indicator of bad times ahead. Right now, it's clearly fallout from entire cities where nobody is out shopping. If someone is at home on lock down, they can work from home or be unemployed - they aren't going to the mall (I hope! social distancing can be the way to solve the epidemic, plus testing).
Yesterday stocks closed within 20% of their Feb 19 peak, meaning the bear market ended yesterday. So my predicted low point (-33%) was a day early from the actual low (-35%) of that bear market.
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Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
VTI is now $139.36, or +21% since I called the bottom (one day early - bottom was Mar 23). For me, I called the moment panic would end and believed that would also be a stock market bottom. I also said I was probably wrong, as other events like unemployment could drive the market lower.
Unemployment hasn't really impacted markets. In normal times, people lose their jobs is a leading indicator of bad times ahead. Right now, it's clearly fallout from entire cities where nobody is out shopping. If someone is at home on lock down, they can work from home or be unemployed - they aren't going to the mall (I hope! social distancing can be the way to solve the epidemic, plus testing).
Yesterday stocks closed within 20% of their Feb 19 peak, meaning the bear market ended yesterday. So my predicted low point (-33%) was a day early from the actual low (-35%) of that bear market.
Soooo....how much $$$ did you make from this prescient call?
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I`m staying up all night recently because of my schedule change. Looks like the traders are moving the pre-markets back and forth waiting on some news this morning.
@jojoguy, where can I find out how traders are moving the pre-markets? I can see post-market movement by searching VTI on google, but have been wondered about the pre-markets. Thanks a lot!
https://money.cnn.com/data/premarket/
Thanks a lot, @Jack0Life !
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Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
VTI is now $139.36, or +21% since I called the bottom (one day early - bottom was Mar 23). For me, I called the moment panic would end and believed that would also be a stock market bottom. I also said I was probably wrong, as other events like unemployment could drive the market lower.
Unemployment hasn't really impacted markets. In normal times, people lose their jobs is a leading indicator of bad times ahead. Right now, it's clearly fallout from entire cities where nobody is out shopping. If someone is at home on lock down, they can work from home or be unemployed - they aren't going to the mall (I hope! social distancing can be the way to solve the epidemic, plus testing).
Yesterday stocks closed within 20% of their Feb 19 peak, meaning the bear market ended yesterday. So my predicted low point (-33%) was a day early from the actual low (-35%) of that bear market.
Soooo....how much $$$ did you make from this prescient call?
In my experiment, you'll see I was 60-72% equities during the first week of market drops. And when calling the bottom, I went 100% equities. Still, I don't think trusting other people's numbers is a good idea.
In my posts on March 20 - did I really post there was a bottom? Once you've verified that, what was the price back then, and what is the price now? Instead of trusting me, trust Yahoo Finance's historical data for VTI:
https://finance.yahoo.com/quote/VTI/history?p=VTI
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Dalio makes for interesting reading....according to him we are all screwed.
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Is the market even really down anymore?
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Dalio makes for interesting reading....according to him we are all screwed.
He's interesting, but his view seems too high level, like when he talks about 50-75 year cycles. Even if that view is correct, it can't make predictions narrower than 25 years. I don't see how it lets him predict the current, extremely fast, bear market.
Is the market even really down anymore?
According to Yahoo Finance, etfdb and morningstar, US markets are down -14.4% YTD.
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Dalio makes for interesting reading....according to him we are all screwed.
He's interesting, but his view seems too high level, like when he talks about 50-75 year cycles. Even if that view is correct, it can't make predictions narrower than 25 years. I don't see how it lets him predict the current, extremely fast, bear market.
Still its hard to ignore that level of knowledge and expertise....its easy and comfortable to bin his view, but what if there is some merit in part of it. Im reading through is priniciple for nagitating big debt crises again.
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I only got $5500 of VTI at $110.... I should had put everything that I had but I thought it was going to go lower.
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I only got $5500 of VTI at $110.... I should had put everything that I had but I thought it was going to go lower.
It’s early days yet. You might get another crack at it.
Folks are getting way too optimistic.
A vaccine, if we ever get a vaccine, is 18 months or more out.
Flattening the curve is a very good thing. Then what?
We’re not back to normal any time soon, that’s for darn sure.
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I still think we will test 200 on the SPY.... I think the initial selloff was a flash flood overreaction but this latest rebound is potentially setting up a bull trap that would lead to retesting lows and then a break lower as things worsen. I don't see our economy recovering from this for another year or two. It's going to be an interesting ride and a great time to continue buying into the market and rebalancing your portfolios accordingly. In the end, anything can happen but I am very skeptical that the lows are behind us.
Fun time ahead :)
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market rebounding just due to the fact that its realizing covid 19 is not nearly as bad as initially thought and the economy should be able to reopen much sooner than expected. I mean the IFR has been adjusted from what was claimed to be 3% just a month ago to now 0.3-0.5%.
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market rebounding just due to the fact that its realizing covid 19 is not nearly as bad as initially thought and the economy should be able to reopen much sooner than expected. I mean the IFR has been adjusted from what was claimed to be 3% just a month ago to now 0.3-0.5%.
Optimism! Don't share this idea in the "Off Topic" thread, you'll get flamed.
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Dalio makes for interesting reading....according to him we are all screwed.
He's interesting, but his view seems too high level, like when he talks about 50-75 year cycles. Even if that view is correct, it can't make predictions narrower than 25 years. I don't see how it lets him predict the current, extremely fast, bear market.
Still its hard to ignore that level of knowledge and expertise....its easy and comfortable to bin his view, but what if there is some merit in part of it. Im reading through is priniciple for nagitating big debt crises again.
I don't plan on reading a book of his right now, but I would read an article or a 10-min piece of his interview.
He could be right that credit being cheap will lead to poor outcomes. But I'm trying to view this in terms of weeks, while he's looking in terms of years. So even if he's right, I'm not sure how far off that would be.
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Goldman says the bottom is in!
https://www.marketwatch.com/story/goldman-sachs-abandons-its-bearish-near-term-view-on-stocks-says-the-bottom-is-in-2020-04-13
And Goldman is never wrong.
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Goldman says the bottom is in!
You beat me to it! Why did I wait to post here? :) I find this April 13 prediction hilarious.
Where was Goldman on March 23, with markets -35% from the peak? Crickets...
https://finance.yahoo.com/quote/VTI/history?p=VTI
Comparing Monday's close of VTI ($137.70) to the bottom ($111.36), it's a +23.7% increase overall. So Goldman, with their billions of investment dollars and millions spent on stock research... they're calling a bottom now, with markets up +23.7% since March 23.
Hm, did I miss the part where they apologized for missing a roughly +24% gain?
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Goldman says the bottom is in!
You beat me to it! Why did I wait to post here? :) I find this April 13 prediction hilarious.
Where was Goldman on March 23, with markets -35% from the peak? Crickets...
https://finance.yahoo.com/quote/VTI/history?p=VTI
Comparing Monday's close of VTI ($137.70) to the bottom ($111.36), it's a +23.7% increase overall. So Goldman, with their billions of investment dollars and millions spent on stock research... they're calling a bottom now, with markets up +23.7% since March 23.
Hm, did I miss the part where they apologized for missing a roughly +24% gain?
Our own Thorstach has been a far more reliable bellwether.
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I only heard Thorstach cashed out, but nothing about buying back in. If you want a more accurate prediction, I'm going to have to "toot my own horn" here:
From my earlier post in this thread:
The markets open at 9 am EST, so I'll use that as my clock: it's 2:45 am in New York, Thursday, March 19.
I'm predicting a market bottom in advance, today or tomorrow (Mar 19-20).
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So, we'll see... In advance, I'm predicting Thurs/Friday will be the market bottom (March 19-20).
Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
It's likely unemployment and rising virus numbers will cause more drops, and prove me wrong. I believe testing will ultimately be the way through the panic and uncertainty, but markets will probably figure that out more slowly.
"more slowly" turned out to be one day, March 23, the actual market bottom.
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I only heard Thorstach cashed out, but nothing about buying back in. If you want a more accurate prediction, I'm going to have to "toot my own horn" here:
From my earlier post in this thread:
The markets open at 9 am EST, so I'll use that as my clock: it's 2:45 am in New York, Thursday, March 19.
I'm predicting a market bottom in advance, today or tomorrow (Mar 19-20).
...
So, we'll see... In advance, I'm predicting Thurs/Friday will be the market bottom (March 19-20).
Vanguard Total Stock Market ETF (VTI) closed at $115.19 on Friday, March 20. So per my earlier post, that's my prediction of the market bottom.
It's likely unemployment and rising virus numbers will cause more drops, and prove me wrong. I believe testing will ultimately be the way through the panic and uncertainty, but markets will probably figure that out more slowly.
"more slowly" turned out to be one day, March 23, the actual market bottom.
Assuming of course that what we're seeing isn't a bear rally. And that the bottom was in.
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You can go back and look at this chart for the past decade. It’s the % of S&P 500 stocks above their 200 day moving average. It doesn’t tell you where the exact bottom is, it can go to 0 and remain there for a while.
However, after it’s dropped below 15% and risen back above it, the indicator has given you a safe re-entry back in the market 4 out of 4 times. It’s back above 15% now.
I am heavy leveraged long this market. Using futures and tech stocks in my margin account and 3x Nasdaq ETFs in some of my retirement and kids college accounts.
https://www.tradingview.com/symbols/INDEX-S5TH/
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Bottom is in.. yours truly pretty much nailed it. The day before the bottom I wrote:
I've followed the market since 1999 and I can categorically tell you that every time we put in a bear market bottom, it never felt like that was going to be the point the market started to recover, and most participants and observers were of the opinion that the market had further to fall.
Of course, this has to be the case - the market bottoms are forged at the point of maximum pessimism where nearly everyone is convinced that it will only fall further, otherwise it would have already bottomed!
As I said numerous times, I don't know if we are near a bottom, but I have no doubt that the day we put in a bottom probably won't feel like that will be the day the fightback has begun.. it will feel to nearly everyone that the market can only keep going down. Right now a fairly popular question doing the rounds is "how much further can we fall?" People are only looking down.
and the day after the bottom I wrote:
The Top Is In... but equally, so too is the bottom.
No, really... it might just be.
VIX has been retreating from its highs, indicating that the panic is slowly retreating even as we fell to marginal new lows, and the technical indicators show the downside momentum was fading.
People waiting for Dow15k to dump their money in might not get that chance.
I didn't base this on number of infections, deaths, Fed announcements, unemployment figures or anything else.. I simply felt that sentiment had reached maximum pessimism and just about everyone was convinced that the market was going lower, which is the time that the market is most likely to make a fool of everyone trying to predict it.
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For those who ignored vand and my calls near the bottom, take a look at the current situation:
S&P 500 is -10.5% YTD, compared to -31% on March 23.
Since that bottom, the S&P 500 gained +28% according to Yahoo Finance.
I'm pessimistic in the short-term, since I think the market is overly optimistic about the time frame for important events from this last week. Some time in May/June/July I expect to flip back to optimistic.
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I'm pessimistic in the short-term, since I think the market is overly optimistic about the time frame for important events from this last week. Some time in May/June/July I expect to flip back to optimistic.
Do you mean that the market will flip back to pessimistic in May to July, since it's overly optimistic now?
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Going from 2200 to tagging the 2900 level on the S&P in 4 weeks is a very good bounce..
I agree with Mustacheanhalf that I think most of the easy gains are behind us, and further upside will run into increasing levels of resistance. It obviously can't keep bouncing 10% a week, and in my judgement the short term risk/reward is not nearly as good at this level, so I wouldn't be surprised if we head back lower over the next few weeks. We shall see.
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moneytaichi - Not exactly. Since experts are cautious about Remdesivir, and I predict governors putting up resistance to WH phase two guidelines, I'm pessimistic. Last week the market made gains, and was -10.5% YTD, which doesn't seem to reflect months ahead of lock down to prevent a deadly pandemic with no cure.
The longer I wait, the more likely a breakthrough makes the market recover - while I'm 25% cash. To mitigate that risk, I need to go 100% equities after the market's view reflects the length of the lock down, or after enough time passes that it's too risky to stay at 75% equities / 25% cash. The May/June/July is my limit on staying out of the market, rather than a prediction about specific events during those months.
Note that oil actually has multiple prices, one for the U.S. and one for the rest of the world, reflecting different types of oil. Right now U.S. contracts are ending, impacting U.S. oil prices. Next month, the same problem will occur in the rest of the world. So even if markets don't reflect a longer lock down that expected, there might be a "buy the dip" chance when oil prices drop (assuming no OPEC agreement to cut production enough).
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Now I am seeing why the oil markets are so risky. It is crazy that last year crude oil was $60 a barrel and now in negative prices.
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Looks like the market has the momentum to fall for a few days.
I was having anxiety the 2 previous weeks when the market was going up and I would move some back in and then out to take the realized gains. At one point I had all $300k on the sidelines and when the market went up, I had nightmares of missing out.
I've been moving back little at a time as not to miss out even though I truly think the market will drop a bit more.
I have $85k of $300k back in.
If it keeps dropping I'll keep moving $10k back so if it does drop to Dow 20k I should have half in, half out. At that point I might just push the rest back into the market so I can stop my timing. LOL.
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I have no idea how long the market will keep falling, but peak-to-trough for the SP500 is 2007/8 was 17 months.
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Looks like the market has the momentum to fall for a few days.
I was having anxiety the 2 previous weeks when the market was going up and I would move some back in and then out to take the realized gains. At one point I had all $300k on the sidelines and when the market went up, I had nightmares of missing out.
I've been moving back little at a time as not to miss out even though I truly think the market will drop a bit more.
I have $85k of $300k back in.
If it keeps dropping I'll keep moving $10k back so if it does drop to Dow 20k I should have half in, half out. At that point I might just push the rest back into the market so I can stop my timing. LOL.
I’ll give up timing. Really this time. Not like all the other times. LOL.
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Looks like the market has the momentum to fall for a few days.
I was having anxiety the 2 previous weeks when the market was going up and I would move some back in and then out to take the realized gains. At one point I had all $300k on the sidelines and when the market went up, I had nightmares of missing out.
I've been moving back little at a time as not to miss out even though I truly think the market will drop a bit more.
I have $85k of $300k back in.
If it keeps dropping I'll keep moving $10k back so if it does drop to Dow 20k I should have half in, half out. At that point I might just push the rest back into the market so I can stop my timing. LOL.
My big cash pile is sitting on the side too. I missed the buying opportunity at March 23 because I didn't have my investment rules and systems in place. Now I have put some Limited Order on VTI prices of $122 to $106. They may not be possible, but I am going to give a try.
I am still asking myself the same question when I pulled money out of stocks at the end of January: which scenario would I regret more - miss buying opportunities when the market drops, or take a chance with the understanding that the market may go up while I am waiting. Right now I am sticking with the second scenario, given the underlying dire economics do not support rising stock prices in a sustainable way. Once the pandemic is over, I will stop my timing too. LOL :) I miss my old days that I only check my networth once a month and do not care much how the market performs.
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Looks like the market has the momentum to fall for a few days.
I was having anxiety the 2 previous weeks when the market was going up and I would move some back in and then out to take the realized gains. At one point I had all $300k on the sidelines and when the market went up, I had nightmares of missing out.
I've been moving back little at a time as not to miss out even though I truly think the market will drop a bit more.
I have $85k of $300k back in.
If it keeps dropping I'll keep moving $10k back so if it does drop to Dow 20k I should have half in, half out. At that point I might just push the rest back into the market so I can stop my timing. LOL.
My big cash pile is sitting on the side too. I missed the buying opportunity at March 23 because I didn't have my investment rules and systems in place. Now I have put some Limited Order on VTI prices of $122 to $106. They may not be possible, but I am going to give a try.
I am still asking myself the same question when I pulled money out of stocks at the end of January: which scenario would I regret more - miss buying opportunities when the market drops, or take a chance with the understanding that the market may go up while I am waiting. Right now I am sticking with the second scenario, given the underlying dire economics do not support rising stock prices in a sustainable way. Once the pandemic is over, I will stop my timing too. LOL :) I miss my old days that I only check my networth once a month and do not care much how the market performs.
Those rules are important. I never hit my buy-in point back in March.
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Looks like the market has the momentum to fall for a few days.
I was having anxiety the 2 previous weeks when the market was going up and I would move some back in and then out to take the realized gains. At one point I had all $300k on the sidelines and when the market went up, I had nightmares of missing out.
I've been moving back little at a time as not to miss out even though I truly think the market will drop a bit more.
I have $85k of $300k back in.
If it keeps dropping I'll keep moving $10k back so if it does drop to Dow 20k I should have half in, half out. At that point I might just push the rest back into the market so I can stop my timing. LOL.
My big cash pile is sitting on the side too. I missed the buying opportunity at March 23 because I didn't have my investment rules and systems in place. Now I have put some Limited Order on VTI prices of $122 to $106. They may not be possible, but I am going to give a try.
I am still asking myself the same question when I pulled money out of stocks at the end of January: which scenario would I regret more - miss buying opportunities when the market drops, or take a chance with the understanding that the market may go up while I am waiting. Right now I am sticking with the second scenario, given the underlying dire economics do not support rising stock prices in a sustainable way. Once the pandemic is over, I will stop my timing too. LOL :) I miss my old days that I only check my networth once a month and do not care much how the market performs.
I think you're in the same boat as me.
I never bothered moving my portfolio around until I got lucky and pulled most of my money out on Feb 19th.
For a while I was being too greedy and too impatient.
Greedy as in I kept waiting for the market to bottom out..
Impatient as in I would get a bit of gains and then pull the money out again.
I had $35k back in at its lowest point @dow 18400 but the market went back up so much the next day and I took the gain. Should have just left it in.
I had $40k past Fri when the market went up a decent amount and I almost took the $1300 gain but I said to myself I can't go through the motion again if it went up again this Monday(it didn't. Should have sold LOL).
I can't go through the anxiety again. I'll just keep hedging my funds so I'll come out ahead no what what.
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Jack0Life, it's funny that we think too much alike :-) I bought some stocks at the lower prices in March and sold them in April (because I believe the current stock rebound is caused by unfounded optimism). My portfolio has 70% in cash/MM/bond and 30% in stocks now. My target AA is reverse: 30% in cash/MM/bond and 70% in stocks. Hopefully I can return to my target AA by the year end and then set-and-forget. As I am getting back to stocks, I will NOT sell them because it's too much a hassle to start all over again every time when I sell stocks ;-)
To counter my expectation, I am telling myself that every locked gains are extra until stocks are back to Feb. 19 level because I am not worse than holding unsold stocks. If stocks are back to Feb. 19 level or even in its 90% level, I have to seriously evaluate the situation, my strategy and trade-off.
Regardless, it's a valuable experience for me to go through. I remember I was so scared in 2008 that I didn't read any financial news for 2-3 years. I thought people who bought stocks then were nuts. Now I am one of the nuts :)
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Reading these posts is like watching a slow motion train wreck. I love it!
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Looks like the market has the momentum to fall for a few days.
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At that point I might just push the rest back into the market so I can stop my timing. LOL.
For me, when the market provides a surprise, I like to figure out what went wrong in my thinking. Yesterday oil contracts settled - anyone holding an oil futures contract when it expired had to take physical delivery of that oil. So you saw people willing to take a loss to avoid that scenario... looks like markets expected a bleak future that has seemed more optimistic today (VTI +2% as of noon EST).
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
You think you can figure out when the market is going to go down before it actually does. You also think that you can figure out when the market is going to go up before it actually does. You also think you can make the decisions correctly often enough to do better than just buying and holding.
Why do you think you are capable of doing this?
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
You think you can figure out when the market is going to go down before it actually does. You also think that you can figure out when the market is going to go up before it actually does. You also think you can make the decisions correctly often enough to do better than just buying and holding.
Why do you think you are capable of doing this?
LOL. Where's the hostility coming from ??
Please point me to where I said any of that ??
Most of us on this forum is speculating just like everyone else.
Did you not read that I've been hedging my buy backs ?? If I knew what the bottom was why wouldn't I just wait til the bottom to dump all my funds back in.
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
You think you can figure out when the market is going to go down before it actually does. You also think that you can figure out when the market is going to go up before it actually does. You also think you can make the decisions correctly often enough to do better than just buying and holding.
Why do you think you are capable of doing this?
LOL. Where's the hostility coming from ??
Please point me to where I said any of that ??
Most of us on this forum is speculating just like everyone else.
Did you not read that I've been hedging my buy backs ?? If I knew what the bottom was why wouldn't I just wait til the bottom to dump all my funds back in.
You’ve said you sold a big portion of your portfolio, then quickly bought, then sold, then bought. I’m guessing you sold because you thought the market would go down, then bought because you thought the market would go up. Is that not the case?
So, I’ll ask the question again, why do you think you can do that successfully?
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
You think you can figure out when the market is going to go down before it actually does. You also think that you can figure out when the market is going to go up before it actually does. You also think you can make the decisions correctly often enough to do better than just buying and holding.
Why do you think you are capable of doing this?
LOL. Where's the hostility coming from ??
Please point me to where I said any of that ??
Most of us on this forum is speculating just like everyone else.
Did you not read that I've been hedging my buy backs ?? If I knew what the bottom was why wouldn't I just wait til the bottom to dump all my funds back in.
You’ve said you sold a big portion of your portfolio, then quickly bought, then sold, then bought. I’m guessing you sold because you thought the market would go down, then bought because you thought the market would go up. Is that not the case?
So, I’ll ask the question again, why do you think you can do that successfully?
@Wintergree78, we all come from different financial background, investment philosophies, and personal history. Some of us like to be more active on investment on the amount that they feel comfortable or use it as a learning opportunity.
This thread is called "Bottom is in!", which calls for more active investors who want to exchange their views and actions. There is no needs to impose your philosophy on others, or even shame others. If I loss my shirts because of my investment decisions, it's no business for anyone else other than mine.
I have observed that FIRE community holds "passive" investment as the bible, whereas many of the preachers (i.e. FIRE bloggers) are actively buying stocks or reshaping their asset allocation right now. In a way, they are timing the market. Is that passive? I don't think so.
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Looks like the market has the momentum to fall for a few days.
I was having anxiety the 2 previous weeks when the market was going up and I would move some back in and then out to take the realized gains. At one point I had all $300k on the sidelines and when the market went up, I had nightmares of missing out.
I've been moving back little at a time as not to miss out even though I truly think the market will drop a bit more.
I have $85k of $300k back in.
If it keeps dropping I'll keep moving $10k back so if it does drop to Dow 20k I should have half in, half out. At that point I might just push the rest back into the market so I can stop my timing. LOL.
My big cash pile is sitting on the side too. I missed the buying opportunity at March 23 because I didn't have my investment rules and systems in place. Now I have put some Limited Order on VTI prices of $122 to $106. They may not be possible, but I am going to give a try.
I am still asking myself the same question when I pulled money out of stocks at the end of January: which scenario would I regret more - miss buying opportunities when the market drops, or take a chance with the understanding that the market may go up while I am waiting. Right now I am sticking with the second scenario, given the underlying dire economics do not support rising stock prices in a sustainable way. Once the pandemic is over, I will stop my timing too. LOL :) I miss my old days that I only check my networth once a month and do not care much how the market performs.
Those rules are important. I never hit my buy-in point back in March.
Is it because you set your LO too low?
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This thread is called "Bottom is in!", which calls for more active investors who want to exchange their views and actions.
I'm pretty sure this thread is not called "Bottom is in!" for that purpose. I'm pretty sure it's here to mock those views and actions, just as the Top is in thread is there to mock the same active investing viewpoint.
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
You think you can figure out when the market is going to go down before it actually does. You also think that you can figure out when the market is going to go up before it actually does. You also think you can make the decisions correctly often enough to do better than just buying and holding.
Why do you think you are capable of doing this?
LOL. Where's the hostility coming from ??
Please point me to where I said any of that ??
Most of us on this forum is speculating just like everyone else.
Did you not read that I've been hedging my buy backs ?? If I knew what the bottom was why wouldn't I just wait til the bottom to dump all my funds back in.
You’ve said you sold a big portion of your portfolio, then quickly bought, then sold, then bought. I’m guessing you sold because you thought the market would go down, then bought because you thought the market would go up. Is that not the case?
So, I’ll ask the question again, why do you think you can do that successfully?
Wow just wow. I suggest you read my reply again.
The reading comprehension must be off cause where did I say I can keep buying and selling successfully ??
Did I preach that I'm great at timing the market ?? NOPE. No where.
I even stated that I was too impatience and greedy which gave me anxiety so I decided to hedge to portfolio.
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I found it's amusing in the forum that some "passive" investors feel they are entitled to mock and shame people who want to do more active investment. What give them the rights to do so? Every one has rights to do what they want to do with THEIR money. We may not have the same investment philosophies (I have changed mine over the years based on my financial risk tolerance), but can we be respectful for each others and not play the bully game?
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I found it's amusing in the forum that some "passive" investors feel they are entitled to mock and shame people who want to do more active investment. What give them the rights to do so? Every one has rights to do what they want to do with THEIR money. We may not have the same investment philosophies (I have changed mine over the years based on my financial risk tolerance), but can we be respectful for each others and not play the bully game?
100% AGREED.
It seems to me the "passive" investors are jumping all over anyone who they think is "market timing".
Its like let people do with whatever they want with their money.
You're right about the risk tolerance. I'm pretty sound financially so yeah I can play around the market just a little bit.
Man, you should see the hostile responses i got from just posting "what stocks are you buying". Jeezzz
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I found it's amusing in the forum that some "passive" investors feel they are entitled to mock and shame people who want to do more active investment. What give them the rights to do so? Every one has rights to do what they want to do with THEIR money. We may not have the same investment philosophies (I have changed mine over the years based on my financial risk tolerance), but can we be respectful for each others and not play the bully game?
Yes, you have the right to do what you want with your money. No, I do not have to respect your decisions. You can choose to spend your money to hunt lions in Africa. I don't have to respect that. You can choose to spend it on a brand new gas guzzling car. You can choose it as fuel for your fireplace. These are all dumb decisions.
Just as I would mock someone who plays roulette and thinks they can pick the numbers, I will continue to mock the active individual investor. Why? Well, continuing with the roulette analogy, I suppose if you had a pretty sophisticated machine that could track down the physics of the ball, you could guess where it would land better than average. But, you don't have that. And worse, you're playing against people who have very sophisticated armies of machines and people that you are betting against.
There are many studies that show active individual investors, on average, fare much worse than their passive counterparts by buying high and selling low. So the sound advice that should be given on a personal finance forum should be to discourage people from practices that would result in poor financial outcomes.
Finally, the first post on this thread is:
The bottom is in! Mortgage your house, leverage yourself to the hilt and buy, buy buy!
(In memorial to the Top is in Thread, R.I.P.)
I don't think that's serious advice.
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Reading these posts is like watching a slow motion train wreck. I love it!
Care to elaborate ??
You think you can figure out when the market is going to go down before it actually does. You also think that you can figure out when the market is going to go up before it actually does. You also think you can make the decisions correctly often enough to do better than just buying and holding.
Why do you think you are capable of doing this?
LOL. Where's the hostility coming from ??
Please point me to where I said any of that ??
Most of us on this forum is speculating just like everyone else.
Did you not read that I've been hedging my buy backs ?? If I knew what the bottom was why wouldn't I just wait til the bottom to dump all my funds back in.
You’ve said you sold a big portion of your portfolio, then quickly bought, then sold, then bought. I’m guessing you sold because you thought the market would go down, then bought because you thought the market would go up. Is that not the case?
So, I’ll ask the question again, why do you think you can do that successfully?
Wow just wow. I suggest you read my reply again.
The reading comprehension must be off cause where did I say I can keep buying and selling successfully ??
Did I preach that I'm great at timing the market ?? NOPE. No where.
I even stated that I was too impatience and greedy which gave me anxiety so I decided to hedge to portfolio.
So what is your goal in all this? If you don’t think you can be successful, then why are you doing it?
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100% AGREED.
It seems to me the "passive" investors are jumping all over anyone who they think is "market timing".
Its like let people do with whatever they want with their money.
You're right about the risk tolerance. I'm pretty sound financially so yeah I can play around the market just a little bit.
Man, you should see the hostile responses i got from just posting "what stocks are you buying". Jeezzz
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Sounds like a sucka consumer comment to me. Same kind of thing that someone might say if I questioned their decision to buy a $430 pair of tennis shoes. The concept of 'playing' with money is really frivolous, in my opinion, and there are better things to do with one's time (and surplus finances, should they exist).
It's also not really the nature of this forum to throw opinions out there and then be offended when someone doesn't agree.
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Man, you should see the hostile responses i got from just posting "what stocks are you buying". Jeezzz
In that thread, you stated you "won't be replying anymore", but you just brought it up again, in another thread. One person was hostile. I think you counted my post among the "hostile responses" even though I complimented you. For those who want to see for themselves:
https://forum.mrmoneymustache.com/investor-alley/what-individual-stocks-are-you-guys-buyinglooking-to-buy/
I would point at the #2 point in the forum rules: "2. Attack an argument, not a person."
https://forum.mrmoneymustache.com/forum-information-faqs/forum-rules/
Criticism of market timing, even if people take it personally, doesn't make it a personal attack.
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Guys, is the bottom in or the top in? I'm confused.
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Guys, is the bottom in or the top in? I'm confused.
Middle is in
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the sideways market is in
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Both, for the time being.
The market is having a much harder time pushing through recent toppiness around Dow 24.5k and SP 2950, but doesn't look like it's wants to massively sell off either.
I do think it's looking more vulnerable to a short term downside now more than at any point since the bottom as it has basically been 9 weeks of relief rally, the daily cycle is now very old and we are due to being a new daily cycle lower sooner rather than later.
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We are up over 31% since March 23! I love sideways markets that go up 31% in 43 trading days.
At this rate the S&P 500 will more than double by the end of the year.
You can’t argue with my logic. I used math.
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Note each gain/loss is relative to the current stock price.
VTI from Jan 1 ($163) to Mar 31 ($111) lost -32%.
VTI from Mar 31 ($111) to now, May 22 ($149) gained +34%.
The net change from Jan 1 ($163) to now ($149) is a -9% loss.
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Note each gain/loss is relative to the current stock price.
VTI from Jan 1 ($163) to Mar 31 ($111) lost -32%.
VTI from Mar 31 ($111) to now, May 22 ($149) gained +34%.
The net change from Jan 1 ($163) to now ($149) is a -9% loss.
Or if you were putting $19,500 in your 401k over the first ten bi-monthly pay periods (last $1,950 dump into VTI would be today), you would be down 5%.
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Note each gain/loss is relative to the current stock price.
VTI from Jan 1 ($163) to Mar 31 ($111) lost -32%.
VTI from Mar 31 ($111) to now, May 22 ($149) gained +34%.
The net change from Jan 1 ($163) to now ($149) is a -9% loss.
Or if you were putting $19,500 in your 401k over the first ten bi-monthly pay periods (last $1,950 dump into VTI would be today), you would be down 5%.
Whats more important is you would own more units for the same money put in if you put it in during the 3-4 month period, I'm more interested in where the market will be in 2040, not Q2-2020.
Due to how my company works, you have to invest your 401k over the whole year to get the maximum matching, if you max out before the end of the year you miss some company match.