Author Topic: Brexit  (Read 44512 times)

former player

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Re: Brexit
« Reply #100 on: June 24, 2016, 05:24:00 PM »
Who knows the ultimate outcome of Brexit.   on the surface a mixed bag that on the whole is bad economically for the UK. 

Some minor impact to the US is likely, but really what is a 10% decline in a country we do less than 5% trade with?   Investment wise, the silver lining here is the Fed is likely to hold off interest rate hikes for a while longer given the uncertainty and the drag a strong dollar creates. 

It's also that uncertainty, specifically in the EU, that will lead to continued investment in the US over the intermediate term.   We continue to be not as strong as we'd like but more attractive (and safe) than many other places in the world.  Now if we could get some investment in infrastructure going...

The biggest risk here is this adds fuel to the fire of the far right, the Donald included.   I am hopeful we are not so stupid to take that path.

I don't think the UK will end up that poorly after everything shakes out.  They're a strong economy and while they shot themselves in the foot with this vote, they're recover.  The part that has me worried is if this leads to a mass exodus of countries from the EU and essentially destroys the current Eurozone.  France is ripe with anti-immigrant furor.  So is Germany.  If either of these countries decide to take their ball and go home, the whole EU collapses.  Then what?

Then they trade with each other in basically the same way but control their own currencies.... I feel like not much would change either way. (Other than everyone freaking out in the short term)

That's a very optimistic view.  Have you considered the reverse?  If the Eurozone collapses and take the Euro with it, then all countries would presumably revert back to their previous individual currencies.  Except that Italy, Greece, Portugal, and possibly Spain would find themselves with currency worth somewhere between 50 and 100% less than it was previously.  This would cause all of them to default on their debt payments almost immediately, and could easily cause the economies of these countries to collapse, plunging the world into a global recession.  Considering that world banks are already at basically 0% interest rates, they would be fighting this recession with one hand tied behind their back.  This would result in a prolonged recession and a rise of facist powers in many areas leading to WW3.

Now I'm not saying all that is going to happen, but there's basically little chance that things would just go on as normal if the Eurozone collapsed.  It would cause a *major* shock to the system and the poorer countries with already high debt load would almost certainly default with a much weakened currency.
If the Eurozone collapses, the best financial option would be for the Germans to exit the Euro and go back to a (stronger than Euros) Mark, leaving southern Europe with a weak Euro and their debt still in the same currency.  Sadly it would be politically impossible for the Germans to do this.

Eric

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Re: Brexit
« Reply #101 on: June 24, 2016, 05:33:38 PM »
If the Eurozone collapses, the best financial option would be for the Germans to exit the Euro and go back to a (stronger than Euros) Mark, leaving southern Europe with a weak Euro and their debt still in the same currency.  Sadly it would be politically impossible for the Germans to do this.

I basically just thought that about the UK leaving the EU.  I'm not sure you can rule anything out at this advanced stage.

Retire-Canada

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Re: Brexit
« Reply #102 on: June 24, 2016, 05:42:31 PM »
Worth a read if the Brexit interests you:

http://www.robfahey.co.uk/blog/brexit-stage-right-now/

Mr. Green

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Re: Brexit
« Reply #103 on: June 24, 2016, 05:58:24 PM »
If the Eurozone collapses, the best financial option would be for the Germans to exit the Euro and go back to a (stronger than Euros) Mark, leaving southern Europe with a weak Euro and their debt still in the same currency.  Sadly it would be politically impossible for the Germans to do this.

I basically just thought that about the UK leaving the EU.  I'm not sure you can rule anything out at this advanced stage.
Including the possibility of a re-vote due to the appearance that many Britons had no idea what they were voting for.

https://www.washingtonpost.com/news/the-switch/wp/2016/06/24/the-british-are-frantically-googling-what-the-eu-is-hours-after-voting-to-leave-it/

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Re: Brexit
« Reply #104 on: June 24, 2016, 06:03:19 PM »
Yes I would say that the UK exiting the EU is not a done deal at all. It's just the start of the process that may lead there.

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Re: Brexit
« Reply #105 on: June 24, 2016, 07:39:29 PM »

Including the possibility of a re-vote due to the appearance that many Britons had no idea what they were voting for.


I think that'd spark some civil unrest in England like we haven't seen in a VERY long time.

nobodyspecial

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Re: Brexit
« Reply #106 on: June 25, 2016, 11:25:49 AM »
If the Eurozone collapses, the best financial option would be for the Germans to exit the Euro and go back to a (stronger than Euros) Mark, leaving southern Europe with a weak Euro and their debt still in the same currency.  Sadly it would be politically impossible for the Germans to do this.
And would defeat the whole point of the Euro - which was to weaken the German currency so other countries could afford their exports.

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Re: Brexit
« Reply #107 on: June 25, 2016, 02:43:56 PM »
I just have to say what a breath of fresh air this forum is, what with everyone else in the financial world doing Chicken Little impressions. Even Vanguard has these article links prominently placed about how you shouldn't panic, it's going to be okay, just keep your head, don't react with emotion, etc.

Regarding market timing, I fall into the camp of keeping an eye out for sales. I'm not going to time the market in terms of selling investments -- once I'm in, I'm in -- but I absolutely saw yesterday as a big fire sale, and I treated it accordingly. Yeah, I know, DCA, etc., and it's not like I sit on piles of cash for months, waiting for that one advantageous moment. But when I have money ready to invest, I watch the trends, and I pounce when those green numbers turn red during a correction. And if that doesn't happen, I shrug and buy anyway eventually.

So I won't time the market to sell assets, but I will do a little timing to buy. For instance, I'm considering making my Roth contributions next week if the prices stay low. If they don't, I'll probably hold off or spread them out over time. So far, this strategy has done quite well for me.

And if I end up missing out on an even better sale, I don't sweat it. It's a long game, not worth getting fussed about.

capitalninja

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Re: Brexit
« Reply #108 on: June 25, 2016, 05:07:51 PM »
Agreed RedmondStash... I don't really consider taking advantage of dips in the market as "market timing". When equities go on sale, you're simply following one of the principles of value investing (Buy at a significant discount to intrinsic value to create a margin of safety).

The UK exported almost half a trillion dollars in products last year. McLaren, Land Rover, Rolls-Royce, and BP likely made just as many cars and pumped just as much oil yesterday as they did the day before. It's highly likely that they'll do the same for the foreseeable future.

It's important to always take a rational and objective look at what's happening and make your investing decisions from a informed decision vs. one of unfounded fear, uncertainty and doubt.

I see no reason why a sane investor would be upset about paying *less* for the opportunity to own companies representing their index of choice. VSS, VEA and other ETFs that track the developed international markets were down as much as 10% on Friday.  So if you bought on Friday you got up to a 10% discount. If the price goes lower, who cares? Just buy more at an even deeper discount.

When you're buy and hold index investor, cheaper prices are never a bad thing.

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Re: Brexit
« Reply #109 on: June 25, 2016, 09:00:41 PM »
When you're buy and hold index investor, cheaper prices are never a bad thing.

Yeah, that's pretty much how I feel about it. It may not make a big difference in the long run, but every little bit helps -- and anything that accelerates FI, even a little, is worthwhile.


ender

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Re: Brexit
« Reply #110 on: June 25, 2016, 09:05:23 PM »
When you're buy and hold index investor, cheaper prices are never a bad thing.

It depends greatly on where you are at in your journey as to what you want the prices of stocks to be. Many here are accumulating, where it matters more the shares per $ input.  Market drops of 10% a year for a while might not be horrible for accumulators, especially those earlier in their journey. Much less desirable to see a sustained 50-60% drop if you RE'ed earlier this year.

Cheaper prices are never a bad thing, so long as the price reverts when you need to sell.

effigy98

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Re: Brexit
« Reply #111 on: June 25, 2016, 10:46:19 PM »
ahhh... golden butterfly wraps me in a warm, golden blanket, with butterfly kisses, and pretty colors. I have limited risk tolerance and this is the first time I have seen it in action with my own money... LOVE IT, thank you Tyler!

capitalninja

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Re: Brexit
« Reply #112 on: June 26, 2016, 07:08:39 AM »
When you're buy and hold index investor, cheaper prices are never a bad thing.

It depends greatly on where you are at in your journey as to what you want the prices of stocks to be. Many here are accumulating, where it matters more the shares per $ input.  Market drops of 10% a year for a while might not be horrible for accumulators, especially those earlier in their journey. Much less desirable to see a sustained 50-60% drop if you RE'ed earlier this year.

Cheaper prices are never a bad thing, so long as the price reverts when you need to sell.

First off, when was the last time there was a "sustained" 50 - 60% drop in the market?

Second, if you RE'ed earlier this year and you didn't factor market volatility into whether you would have enough to stay "retired" then you jumped ship too soon. While a 10 - 20 downturn would certainly be unpleasant at that stage in your investing life, it should not be threatening to you livelihood.  Again, if it is, you retired earlier than you should have.

3rd, I'm not structuring my portfolio where I have to sell off portions of it to cover living expenses. The goal is for the dividend income to more than cover normal living expenses. Granted, some black swan event could emerge that could force me to sell some of it, but that's to be an anomaly; not a core aspect of the investment plan.
« Last Edit: June 26, 2016, 07:11:29 AM by capitalninja »

wienerdog

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Re: Brexit
« Reply #113 on: June 26, 2016, 07:46:54 AM »
ahhh... golden butterfly wraps me in a warm, golden blanket, with butterfly kisses, and pretty colors. I have limited risk tolerance and this is the first time I have seen it in action with my own money... LOVE IT, thank you Tyler!

LOL you better start your own thread.

Livewell

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Re: Brexit
« Reply #114 on: June 26, 2016, 09:01:32 AM »
From one of the investment blogs I read:
 
"That's the critical question: Does Brexit represent a Lehman moment or LTCM moment for investors? In the former case, investors should de-risk portfolios and sell equities down to a minimum weighting in order to avoid severe losses. In the latter, investors have been handed a golden opportunity to buy stocks, Blink and the correction will be gone."

I'm thinking it's a blink of a week or two, with a return to upward momentum once everyone realizes things are still ok and the fed will hold off on rates in 2016.  This is not Lehman. 

nobodyspecial

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Re: Brexit
« Reply #115 on: June 26, 2016, 09:10:55 AM »
That's the nice thing about markets.
While half the country is thinking - we won, now what?
The other half is thinking - how could this have happened we're doomed!
And a bunch of politicians are thinking - how can I use this to get myself promoted

A lot of clever people in the markets are all thinking - how can we make money out of this?
As long as you are on their side - ie. you own index funds - you are going to come out ahead eventually.


Indexer

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Re: Brexit
« Reply #116 on: June 26, 2016, 09:48:55 AM »
Worth a read if the Brexit interests you:

http://www.robfahey.co.uk/blog/brexit-stage-right-now/

Thank you for posting this. There was a ton of good information in there I didn't know about. I recommend everyone read this.

I'm not too worried about all of this. Britain has their own currency, their own central bank, and their own debt. They were always a quasi member of the UK. They participate in votes and they participate in the single market trade agreement. That trade agreement is great for trade, but it also requires free migration and may of the EU's regulations. Now Britain needs to negotiate new trade agreements.

The part I haven't seen anyone post I feel is very important... this isn't happening tomorrow. They potentially have 2 years to figure this out. That is plenty of time to negotiate new trade agreements.

My view: Treat this like the UK and EU are re-negotiating trade agreements. That is all we have 'right now.' The UK will probably end up having a relationship with the EU like Switzerland has. A worse case scenario would be if other countries leave. Some other countries can't really leave unless they want to collapse their economies, Greece, Portugal, Spain, and Italy come to mind. Now if Germany left... then I'll start to worry.

nobodyspecial

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Re: Brexit
« Reply #117 on: June 26, 2016, 12:31:49 PM »
I think this is the most likely outcome.

The UK government, civil-service and presumptive new leader are all fundamentally pro-europe, whatever their political rhetoric.  Now that few right wing back benchers have been satisfied by "winning" the government don't have any incentive for a big battle with Europe.
   
80% of the UK's "trade" with europe is financial services - it is unlikely that the conservatives are going to risk that by introducing trade barriers to regenerate Britain's coal mines or ship building. It's also easy for financial services to side-step any change in regulations by simply opening a subsidiary in Dublin or Luxemburg so barriers are pretty much irrelevant.

There might be Eu governments that want to punish Britain, Pour Encourager Les Autres, but the damage that a panicked London financial center would cause to the Euro economies is a bigger consideration.
   
In American terms: Cameron and Boris hate each other personally about the same as Obama/Clinton. But politically they are as close.
This isn't like Trump negotiating with Mexico, it's more like a Clinton presidency finishing up a China trade deal from an Obama presidency. 
« Last Edit: June 26, 2016, 12:48:58 PM by nobodyspecial »

MacGyverIt

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Re: Brexit
« Reply #118 on: June 26, 2016, 04:33:27 PM »
When you're buy and hold index investor, cheaper prices are never a bad thing.

Yeah, that's pretty much how I feel about it. It may not make a big difference in the long run, but every little bit helps -- and anything that accelerates FI, even a little, is worthwhile.

+1 -- I contribute fully to my IRA and 401k and when I have some spare change, I'll put in a Limit order on my favorite Vanguard ETFs when it is a red light, all-hands-on-deck sale (in other words, maybe once a year or longer). If it doesn't go through, I'll determine what the best alternatives are for my Little Green Employees. Other than this more than yearly event, my investments are very fire-and-forget.

EDIT: maybe once a year or *longer*

Can't imagine Germany will make a Gerxit (Deutchxit?) move as along as Merkel is in charge but the potential for anti-E.U. sentiment to manifest in votes in Spain, France and Ireland/Scotland are quite possible.
« Last Edit: June 27, 2016, 03:20:21 PM by MacGyverIt »

nobodyspecial

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Re: Brexit
« Reply #119 on: June 26, 2016, 05:54:02 PM »
Can't imagine Germany will make a Gerxit (Deutchxit?) move as along as Merkel is in charge
Germany probably needs the Eu least of all.
As long as it can set up a German free trade zone with Austria, Poland, bits of Eastern Europe and the baltic states it has all the cheap labour and local markets it needs. Ironically Britain would probably support this.

 
Quote
but the potential for anti-E.U. sentiment to manifest in votes in Spain, France and Ireland/Scotland are quite possible.
France has always been pro-Europe but anti pretty much all the other members. The ideal Eu is a France only Eu.
But since the French state, French industry and a bunch of pan-European companies (like Airbus) are basically indistinguishable  it's hard for them to leave.

Scotland and Ireland, like most small countries with a powerful neighbor are pro-Eu. Their populations have pretty much decided that everything is fault of English politicians (in the case of Scotland) or Irish politicians (in the case of Ireland) rather than foreigners.
« Last Edit: June 26, 2016, 07:23:49 PM by nobodyspecial »

flyersman

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Re: Brexit
« Reply #120 on: June 26, 2016, 06:46:21 PM »
So I want to dollar cost avg some investments over the next few days here and continue to purchase FSTVX. Now is there a disadvantage to placing limit order for a similar ETF over the mutual over the next few days? Never purchased an etf

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Re: Brexit
« Reply #121 on: June 26, 2016, 09:07:55 PM »
That's the nice thing about markets.
While half the country is thinking - we won, now what?
The other half is thinking - how could this have happened we're doomed!
And a bunch of politicians are thinking - how can I use this to get myself promoted

A lot of clever people in the markets are all thinking - how can we make money out of this?
As long as you are on their side - ie. you own index funds - you are going to come out ahead eventually.

And if you're a CNBC host/analyst you're thinking "How can I stretch the doom and gloom talk all the way through a 24-hour cycle?  It was a fairly boring day for us at the office and we turned the tv to that channel for entertainment and light discussion.  Eventually we just muted it since it was obvious the hosts ran out of things to say by lunchtime.

Kaspian

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Re: Brexit
« Reply #122 on: June 26, 2016, 10:02:35 PM »
And if you're a CNBC host/analyst you're thinking "How can I stretch the doom and gloom talk all the way through a 24-hour cycle?  It was a fairly boring day for us at the office and we turned the tv to that channel for entertainment and light discussion.  Eventually we just muted it since it was obvious the hosts ran out of things to say by lunchtime.

Holy crap, I'll say!!  They're all having a field day.  Even BBC has been "How can we keep the fear and outrage machine going as long as possible?  How can we make the Leave people look more like stupid, racist peasants?  How can we make the Remain group look like even bigger wealthy, elitist snobs?"  They're pushing all the buttons they can in the news--desperately hoping for some sort of riots or civil war.  :(

Sjalabais

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Re: Brexit
« Reply #123 on: June 27, 2016, 08:54:44 AM »
I see RBS is down 40% or so, and a lot of other financial institutions, otherwise solid, are a steal right now. London will probably lose out to Frankfurt now as a center of finance, but British banks are not so dependent on Britain alone...or are they? It's a huge gamble to invest now, but one with a potentially interesting gain at the end of the tunnel.

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Re: Brexit
« Reply #124 on: June 27, 2016, 09:25:42 AM »
Euro bank stocks are killer value right now.
Between share price going down AND pound/euro taking a nose-dive. Double treat!
HSBC, biggest British bank, is yielding 8.3%.
SAN, biggest Spanish bank, is yielding 5.7%
DB, biggest German bank, cancelled dividend but trading at .28 price/book - incredible value. Buy a buck for 28cents! that's how it's done! Even assuming the assets are not marked properly, there is no way it's off so much to imply that kind of discount.

These guys have an implicit 'put' via their respective Central Banks and are (as close as comes to) risk-free.

flyersman

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Re: Brexit
« Reply #125 on: June 27, 2016, 09:26:31 AM »
I see RBS is down 40% or so, and a lot of other financial institutions, otherwise solid, are a steal right now. London will probably lose out to Frankfurt now as a center of finance, but British banks are not so dependent on Britain alone...or are they? It's a huge gamble to invest now, but one with a potentially interesting gain at the end of the tunnel.

When you say financial institutions a steal, are you talking about certain funds?

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Re: Brexit
« Reply #126 on: June 27, 2016, 09:48:27 AM »
Euro bank stocks are killer value right now.
Between share price going down AND pound/euro taking a nose-dive. Double treat!
HSBC, biggest British bank, is yielding 8.3%.
SAN, biggest Spanish bank, is yielding 5.7%
DB, biggest German bank, cancelled dividend but trading at .28 price/book - incredible value. Buy a buck for 28cents! that's how it's done! Even assuming the assets are not marked properly, there is no way it's off so much to imply that kind of discount.

These guys have an implicit 'put' via their respective Central Banks and are (as close as comes to) risk-free.

If they are so cheap and have essentially an almost government guarantee, why hasn't the smart money already bid the prices back up by buying tons of amazingly cheap shares?

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Re: Brexit
« Reply #127 on: June 27, 2016, 10:03:31 AM »

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Re: Brexit
« Reply #128 on: June 27, 2016, 10:12:25 AM »
Euro bank stocks are killer value right now.
Between share price going down AND pound/euro taking a nose-dive. Double treat!
HSBC, biggest British bank, is yielding 8.3%.
SAN, biggest Spanish bank, is yielding 5.7%
DB, biggest German bank, cancelled dividend but trading at .28 price/book - incredible value. Buy a buck for 28cents! that's how it's done! Even assuming the assets are not marked properly, there is no way it's off so much to imply that kind of discount.

These guys have an implicit 'put' via their respective Central Banks and are (as close as comes to) risk-free.

If they are so cheap and have essentially an almost government guarantee, why hasn't the smart money already bid the prices back up by buying tons of amazingly cheap shares?

Because they are worried about other factors.  See this series on Deutsche Bank, for example.  http://marketrealist.com/2016/02/investors-nervous-deutsche-banks-solvency/

Aphalite

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Re: Brexit
« Reply #129 on: June 27, 2016, 11:06:27 AM »
If they are so cheap and have essentially an almost government guarantee, why hasn't the smart money already bid the prices back up by buying tons of amazingly cheap shares?

I see this happening all the time (referring to the poster you were quoting), but it doesn't strike me as very intelligent to assume that just because something has gone down in price, that it's become a bargain. What does the market know? You either believe in EMT, and think that there's nothing that can be arbitraged, or you don't believe in EMT, in which case you should have your own estimate of intrinsic value, and shouldn't be guided by any signals in the movement of price anyways (unless, of course, it hits your intrinsic estimate). It really seems like a lot of the posters in this thread have swung a bit too far the other way from the normal hysteria in selling if prices drop. Just because prices drop doesn't mean you should sell, but it also doesn't mean you should mindlessly buy either, especially when it comes to individual securities. Mean reversion happens a lot of the time, but not all of the time

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Re: Brexit
« Reply #130 on: June 27, 2016, 11:25:39 AM »
I wish I had an infusion of cash coming right now to throw more into the market. I'm consoled by the fact that my target AA has me putting the weekly transfers into VTIAX.

forummm

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Re: Brexit
« Reply #131 on: June 27, 2016, 11:27:51 AM »
If they are so cheap and have essentially an almost government guarantee, why hasn't the smart money already bid the prices back up by buying tons of amazingly cheap shares?

I see this happening all the time (referring to the poster you were quoting), but it doesn't strike me as very intelligent to assume that just because something has gone down in price, that it's become a bargain. What does the market know? You either believe in EMT, and think that there's nothing that can be arbitraged, or you don't believe in EMT, in which case you should have your own estimate of intrinsic value, and shouldn't be guided by any signals in the movement of price anyways (unless, of course, it hits your intrinsic estimate). It really seems like a lot of the posters in this thread have swung a bit too far the other way from the normal hysteria in selling if prices drop. Just because prices drop doesn't mean you should sell, but it also doesn't mean you should mindlessly buy either, especially when it comes to individual securities. Mean reversion happens a lot of the time, but not all of the time

Yeah. I think markets are both rational and irrational. And they can be both at the same time. And that the smaller the company, the more likely the market is to be irrational. But if the market is irrational about a stock now, it's also likely that it will continue to be irrational about that stock later. You could be totally right about a stock, but not be able to make money off of your accurate analysis because the market continues to be wrong--and maybe even becomes more wrong and causes you to lose money.

I think any rational person should just keep shoveling money into globally diversified index funds every time they get their paycheck. Eventually you'll have enough to retire comfortably, regardless of whether stock A or stock B is under or over valued.

nobodyspecial

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Re: Brexit
« Reply #132 on: June 27, 2016, 11:30:21 AM »
Efficient markets have a timescale.
What is an efficient market price for a high frequency trading algorithm controlled by a trader who  has a weekly trade target is different from a good price for a buy and hold investor looking for dividends in a 40year retirement.

acroy

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Re: Brexit
« Reply #133 on: June 27, 2016, 12:20:14 PM »
......... But if the market is irrational about a stock now, it's also likely that it will continue to be irrational about that stock later. You could be totally right about a stock, but not be able to make money off of your accurate analysis because the market continues to be wrong--and maybe even becomes more wrong and causes you to lose money.

I think any rational person should just keep shoveling money into globally diversified index funds every time they get their paycheck. Eventually you'll have enough to retire comfortably, regardless of whether stock A or stock B is under or over valued.
Bogle et al agrees with you
Benjamin Graham, Buffet, etc disagree
All the above are smarter than me....

"Yes Mr Market is irrational....But he can stay irrational longer than a wise investor can stay solvent"

Personally,
I shovel Bogle-style 75% of my investments
25%  value-based Graham-style investments

Graham style has earned almost 2x as much, but is 100x as much work.

Jack

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Re: Brexit
« Reply #134 on: June 27, 2016, 02:03:51 PM »
Despite everybody telling me to pay off my 0%-interest loan, I couldn't resist and went ahead and bought $3K of VEURX. I did so in my wife's IRA, so she's maxed for the year ahead of schedule (instead of putting ~$100/week into VTSAX as she had been doing). I'll buy another $3k next week* to max my IRA if the markets keep dropping.

(* Actually I'd buy VTSAX or VTIAX in my IRA, then exchange an equal amount of VTSAX->VEURX in hers to get closer to the $10k for conversion to admiral shares, but that's just details.)

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Re: Brexit
« Reply #135 on: June 27, 2016, 02:59:10 PM »
I was en route to buy an old car as a hobby, but my mustache says use the money to make more money. What's the cheapest way into HSBC or DB stocks?

frugledoc

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Re: Brexit
« Reply #136 on: June 27, 2016, 03:02:06 PM »
Euro bank stocks are killer value right now.
Between share price going down AND pound/euro taking a nose-dive. Double treat!
HSBC, biggest British bank, is yielding 8.3%.
SAN, biggest Spanish bank, is yielding 5.7%
DB, biggest German bank, cancelled dividend but trading at .28 price/book - incredible value. Buy a buck for 28cents! that's how it's done! Even assuming the assets are not marked properly, there is no way it's off so much to imply that kind of discount.

These guys have an %'put' via their respective Central Banks and are (as close as comes to) risk-free.

haha obviously you weren't investing in the stock market crash of 2008. Many bank shares tanked 90% +  They made it out alive.  It's your money but don't fool yourself that it is risk free.

Aphalite

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Re: Brexit
« Reply #137 on: June 27, 2016, 03:06:35 PM »
I was en route to buy an old car as a hobby, but my mustache says use the money to make more money. What's the cheapest way into HSBC or DB stocks?

I'd really advise against buying stocks where the underlying earnings/cash flow have been decreasing year over year for the past decade

The car will be much more enjoyable, imo

FIPurpose

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Re: Brexit
« Reply #138 on: June 27, 2016, 03:08:29 PM »
It's been difficult for me to filter all the information out there. There are so many competing theories. Is Brexit good or bad long-term? Will Britain come out stronger than before? Is globalization good/bad.

Thankfully I don't live in Britain, and I don't have to make that decision. Oddly enough my confusion on the subject hasn't made me anxious, but I'm also not looking to time my purchase into this dip. I had several coworkers on Friday decide they wanted to buy-in because there was for sure going to be a bounce back today (Monday). I told a younger guy who is just looking into investing for the first time that he shouldn't be trying to catch a falling knife. My peace of mind over the past couple of days has made me comfortable with current diversification, and I don't feel the need to be timing any specific purchase.

FireLane

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Re: Brexit
« Reply #139 on: June 27, 2016, 05:48:30 PM »
The U.S. markets are down for the year as of today. I don't try to time the market, but I'm hoping they stay negative until I get paid later this week. It'll make my next transfer into my Vanguard account go a little further. :)

MoonShadow

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Re: Brexit
« Reply #140 on: June 27, 2016, 06:26:35 PM »
I dropped another $45Kinto the S&P500 fund today.  Thanks for spooking the nervous nellies, Brexit voters!

capitalninja

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Re: Brexit
« Reply #141 on: June 27, 2016, 07:03:37 PM »
I dropped another $45Kinto the S&P500 fund today.  Thanks for spooking the nervous nellies, Brexit voters!

Good man.

k9

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Re: Brexit
« Reply #142 on: June 28, 2016, 02:48:23 AM »
markets are both rational and irrational. And they can be both at the same time. And that the smaller the company, the more likely the market is to be irrational. But if the market is irrational about a stock now, it's also likely that it will continue to be irrational about that stock later. You could be totally right about a stock, but not be able to make money off of your accurate analysis because the market continues to be wrong--and maybe even becomes more wrong and causes you to lose money.
That's because you think "total return".

Value investing 101 : if a company provides me with 7% dividends each year, the market can be wrong as long as he wants. The wronger the better, actually, because that means, next time I invest, dividends will be around 8%. Oh, of course, you could be wrong, the company could cut its dividends. Now you lost your capital *and* your cash cow.

MsRichLife

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Re: Brexit
« Reply #143 on: June 28, 2016, 02:55:26 AM »
ahhh... golden butterfly wraps me in a warm, golden blanket, with butterfly kisses, and pretty colors. I have limited risk tolerance and this is the first time I have seen it in action with my own money... LOVE IT, thank you Tyler!

Agreed. With 4 months to FIRE and knowing I have low tolerance for risk (thanks to '08), I have been progressively moving my funds towards the Golden Butterfly portfolio. So far it's been doing well to keep volatility down.

VaCPA

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Re: Brexit
« Reply #144 on: June 28, 2016, 06:51:03 AM »
I took out a $40k 401k loan a few weeks ago for a house downpayment so we would have 20%. I will be able to pay it back in a month or two when our current house sells. It's complete dumb luck if it actually benefits me but I'm hoping I can get the money back in while the market is still way down.

Dee18

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Re: Brexit
« Reply #145 on: June 28, 2016, 08:03:41 AM »
Retire-Canada
Thanks for the link! The one thing that I think Rob Fahey failed to acknowledge was the extent to which technology is changing the employment landscape.  People who long for the days when a person with little education could work on an assembly line and make a wage to support a family comfortably are going to continue to be disappointed. 

CorpRaider

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Re: Brexit
« Reply #146 on: June 28, 2016, 12:50:30 PM »
Yeah, probably.  But people will figure out stuff to do like walking dogs, or picking up poop, or doggie daycare or working at a spa or cleaning people's windows, or becoming a chef or a nurse...you know; more services.

MoonShadow

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Re: Brexit
« Reply #147 on: June 28, 2016, 07:06:15 PM »
ahhh... golden butterfly wraps me in a warm, golden blanket, with butterfly kisses, and pretty colors. I have limited risk tolerance and this is the first time I have seen it in action with my own money... LOVE IT, thank you Tyler!

Agreed. With 4 months to FIRE and knowing I have low tolerance for risk (thanks to '08), I have been progressively moving my funds towards the Golden Butterfly portfolio. So far it's been doing well to keep volatility down.

And what is a Golden Butterfly portfolio?

Radagast

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Re: Brexit
« Reply #148 on: June 28, 2016, 07:49:54 PM »
I opened my first taxable account with Vanguard and invested the fund minimums into each of US, other developed markets, and emerging markets funds on Monday. So pretty good timing there. I decided to dollar cost average the rest of the initial investment in over the course of a week or two, remains to be seen if that was a dumb idea.

And what is a Golden Butterfly portfolio?
It is MMM-forum member Tyler's custom blend of 80% Permanent Portfolio, 20% US Small Cap Value.

Radagast

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Re: Brexit
« Reply #149 on: June 28, 2016, 07:55:52 PM »
Euro bank stocks are killer value right now.
Between share price going down AND pound/euro taking a nose-dive. Double treat!
HSBC, biggest British bank, is yielding 8.3%.
SAN, biggest Spanish bank, is yielding 5.7%
DB, biggest German bank, cancelled dividend but trading at .28 price/book - incredible value. Buy a buck for 28cents! that's how it's done! Even assuming the assets are not marked properly, there is no way it's off so much to imply that kind of discount.

These guys have an implicit 'put' via their respective Central Banks and are (as close as comes to) risk-free.
Wow, that is pretty compelling. I added HSBC, SAN, and DB to my list of imaginary purchases (which thus far only had two entries in its two year life span).