Author Topic: flight to safety - coronavirus version  (Read 8738 times)

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #50 on: March 12, 2020, 09:02:13 PM »
Probably best to just sit on the sidelines in cash for the next 8-10 years, and reluctantly get back into the market after it increases 300% from its current valuation.  Every few months make a new thread about wanting to get back in the market, but you are afraid because it seemed overpriced the last time you made a thread, and it's increased since you made that previous thread, so you are just going to sit on the sideline and wait for that correction.  When that correction finally comes and you have to give up a fraction of the earnings gained from the last bull market (in reality you have no gains because you've been on the sidelines waiting for a correction since the last bear), then you get spooked and sell to lock in your losses and repeat the process.
great plan.
meanwhile, up 22% since exiting.

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #51 on: March 16, 2020, 02:13:56 PM »
i will fully admit, even being "ahead", it is nerve racking to try to guess when i will get back in. i have no metric, just feel. let's say DOW is at 12k and still plunging. would i feel compelled to get in, already having saved ~100% of my losses?

frugalnacho

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Re: flight to safety - coronavirus version
« Reply #52 on: March 16, 2020, 02:22:51 PM »
Probably best to just sit on the sidelines in cash for the next 8-10 years, and reluctantly get back into the market after it increases 300% from its current valuation.  Every few months make a new thread about wanting to get back in the market, but you are afraid because it seemed overpriced the last time you made a thread, and it's increased since you made that previous thread, so you are just going to sit on the sideline and wait for that correction.  When that correction finally comes and you have to give up a fraction of the earnings gained from the last bull market (in reality you have no gains because you've been on the sidelines waiting for a correction since the last bear), then you get spooked and sell to lock in your losses and repeat the process.
great plan.
meanwhile, up 22% since exiting.

I think it's a bit premature to start gloating.  The markets are swinging wildly in both directions, and seemingly at random.  If it was so easy to simply get out of the market before the crash and get back in at the bottom everyone would do it and there would be no premium associated with holding equities because there would be no risk.  I think you are playing with fire. 

frugalnacho

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Re: flight to safety - coronavirus version
« Reply #53 on: March 16, 2020, 02:28:27 PM »
i will fully admit, even being "ahead", it is nerve racking to try to guess when i will get back in. i have no metric, just feel. let's say DOW is at 12k and still plunging. would i feel compelled to get in, already having saved ~100% of my losses?

That is exactly how people get burned.  You think it's not the bottom, then bam the DOW shoots up.  You think surely it's a temporary and irrational bounce and you will hold off, then bam it shoots up again, and by the time you are confident you can get back in, it's too late.  In retrospect it's always easy, but in real time it's exceedingly difficult which is why it's so rarely pulled off. 

I feel very little anxiety because I know I own the same number of shares as I did last month (more actually), and while the value has dropped sharply, I'm confident it will rise again by the time I retire and I don't have to worry about when I get back in because I'm just riding it out.

BECABECA

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Re: flight to safety - coronavirus version
« Reply #54 on: March 16, 2020, 02:34:21 PM »
i will fully admit, even being "ahead", it is nerve racking to try to guess when i will get back in. i have no metric, just feel. let's say DOW is at 12k and still plunging. would i feel compelled to get in, already having saved ~100% of my losses?

If I was into gambling and had gotten out of my stocks around when you had, I would base my re-entry into the market on when the total cases of COVID-19 is no longer in exponential growth. I would be watching this site very closely for that:
https://www.worldometers.info/coronavirus/
(You can see for a little while we had come out of exponential growth around Feb. 18th when China started getting a handle on their outbreak and before Europe got overwhelmed).

An argument could be made that if my portfolio will be mostly US stock, then I should instead be basing re-entry on when the total US cases is no longer exponential. That’s the first graph on this page:
https://www.worldometers.info/coronavirus/country/us/

After that happens, I would bet that’ll be pretty near the market bottom and we will have some slow growth from there over the next year or so.

(Disclaimer: I don’t deviate from my IPS except with < 0.5% “play money” so I am still in my same mix of stocks vs bonds, and am only rebalancing when my asset allocation falls far enough outside of my target that the Out Of Annual Cycle Rebalancing criteria of my IPS have been reached.)

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #55 on: March 16, 2020, 03:26:18 PM »
i will fully admit, even being "ahead", it is nerve racking to try to guess when i will get back in. i have no metric, just feel. let's say DOW is at 12k and still plunging. would i feel compelled to get in, already having saved ~100% of my losses?

If I was into gambling and had gotten out of my stocks around when you had, I would base my re-entry into the market on when the total cases of COVID-19 is no longer in exponential growth. I would be watching this site very closely for that:
https://www.worldometers.info/coronavirus/
(You can see for a little while we had come out of exponential growth around Feb. 18th when China started getting a handle on their outbreak and before Europe got overwhelmed).

An argument could be made that if my portfolio will be mostly US stock, then I should instead be basing re-entry on when the total US cases is no longer exponential. That’s the first graph on this page:
https://www.worldometers.info/coronavirus/country/us/

After that happens, I would bet that’ll be pretty near the market bottom and we will have some slow growth from there over the next year or so.

(Disclaimer: I don’t deviate from my IPS except with < 0.5% “play money” so I am still in my same mix of stocks vs bonds, and am only rebalancing when my asset allocation falls far enough outside of my target that the Out Of Annual Cycle Rebalancing criteria of my IPS have been reached.)

thanks for the tip.
unfortunately, i would believe russia or north korea's numbers just about as much as the US at this point in time.

BECABECA

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Re: flight to safety - coronavirus version
« Reply #56 on: March 16, 2020, 05:21:07 PM »
thanks for the tip.
unfortunately, i would believe russia or north korea's numbers just about as much as the US at this point in time.

Haha, fair point. You could go off the deaths graph instead, those are probably more accurate, although it looks like they were a lagging indicator by about a week.

MustacheAndaHalf

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Re: flight to safety - coronavirus version
« Reply #57 on: March 16, 2020, 10:09:01 PM »
Probably best to just sit on the sidelines in cash for the next 8-10 years, and reluctantly get back into the market after it increases 300% from its current valuation.
great plan.
meanwhile, up 22% since exiting.
I think it's a bit premature to start gloating.  The markets are swinging wildly in both directions, and seemingly at random.
I really liked your earlier quote, but I want to take issue with "seemingly at random".

Monday, March 9, U.S. stocks were hit both by COVID-19 spreading in the U.S., and an oil price war.
Tuesday, the market digested the oil price situation, and oil stocks recovered - and the market regained most of it's loss (but not the COVID-19 part)
Friday, March 13, U.S. stocks anticipated good news from President Trump, rising +4% before he spoke, and ultimately finished +9% after he declared a national emergency.
Monday, March 16, the market reacted to the Fed, which (1) held their meeting early, (2) dropped rates by -1.00% and (3) began quantitative easing.  The markets interpreted this as emergency measures only deployed in situations like the 2008 financial crisis... and dropped into free fall.  U.S. stocks almost stabilized around -9%, but then President Trump opened his mouth, sending markets dropping further, to finish around -11.5%.

I still like the joke about sitting out 8-10 years to miss all the stock market gains, but I disagree that the market is moving randomly.  The amount of volatility has me wondering if the market will care when the U.S. hits 10,000 cases, but I guess we'll see either Friday (Mar 20) or Monday (Mar 23).

frugalnacho

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Re: flight to safety - coronavirus version
« Reply #58 on: March 17, 2020, 11:44:44 AM »
Probably best to just sit on the sidelines in cash for the next 8-10 years, and reluctantly get back into the market after it increases 300% from its current valuation.
great plan.
meanwhile, up 22% since exiting.
I think it's a bit premature to start gloating.  The markets are swinging wildly in both directions, and seemingly at random.
I really liked your earlier quote, but I want to take issue with "seemingly at random".

Monday, March 9, U.S. stocks were hit both by COVID-19 spreading in the U.S., and an oil price war.
Tuesday, the market digested the oil price situation, and oil stocks recovered - and the market regained most of it's loss (but not the COVID-19 part)
Friday, March 13, U.S. stocks anticipated good news from President Trump, rising +4% before he spoke, and ultimately finished +9% after he declared a national emergency.
Monday, March 16, the market reacted to the Fed, which (1) held their meeting early, (2) dropped rates by -1.00% and (3) began quantitative easing.  The markets interpreted this as emergency measures only deployed in situations like the 2008 financial crisis... and dropped into free fall.  U.S. stocks almost stabilized around -9%, but then President Trump opened his mouth, sending markets dropping further, to finish around -11.5%.

I still like the joke about sitting out 8-10 years to miss all the stock market gains, but I disagree that the market is moving randomly.  The amount of volatility has me wondering if the market will care when the U.S. hits 10,000 cases, but I guess we'll see either Friday (Mar 20) or Monday (Mar 23).

It's easy to ascribe reasons to the movements in retrospect as you have done.  Although I imagine many of your justifications could just as easily be completely reversed.  For example Trump has a press conference and declares a national emergency and prices soar +9% in record time.  You talk in retrospect as if this was obvious.  The next day Trump "opens his mouth" which sends the market dropping.  He's doing a damn press conference daily, and the market is swinging wildly up and down.

MustacheAndaHalf

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Re: flight to safety - coronavirus version
« Reply #59 on: March 17, 2020, 11:28:26 PM »
I probably won't convince you, but I at least want to correct "in retrospect".  I saw events in real time, as they happened.

I saw oil stocks crash over -30% March 9, and then partially recover about +30% (0.7 x 1.3 = .91, partial recovery) the next day on March 10.  That's how I measured Saudi-Russian price war.

The day President Trump announced a state of emergency, U.S. stocks were already up +4%.  his press conference took place during the last half hour of trading, and U.S. stocks then moved +5% higher.  I would say the market assigned a probability to what Trump would say, and you could debate that.  But stocks going up an additional +5% after he declared a state of emergency, and markets closed very soon afterwards, makes a very strong correlation.  Especially since COVID-19 is the most significant thing for markets.

Since stock markets are closed most of the time, many events can go into the opening bell of the stock market.  But the futures market trades constantly, unless it hits -5% and halts trading.  So there's a way to detect how events impact markets in real time, and that establishes a much stronger correlation between events and market impact.

nemesis

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Re: flight to safety - coronavirus version
« Reply #60 on: March 18, 2020, 12:32:47 AM »
not sure what the jump back in signal will be, but my sense is that it's not coming any time soon. this is 2008 all over again, if not worse. the world, under today's level of globalization, has never seen anything like this. the disruption to supply/demand will be unprecedented.
I have a feeling this will not age well.

Modern medicine has never been more advanced at analyzing viruses like this and the world is mobilizing all its resources to find a treatment / cure / vaccine because the stakes are too high.

Government stimulus that is unprecedented even back to WWII when people were actively killing destroying countries and killing millions.

People are far more informed today than ever, and information is enabling people and governments to react faster than ever to the data, to save lives, improve the economy, and improve our critical response.

Humans are far more robust than most people give us credit for.  This virus is nothing compared to the Spanish flu of 1918, or the black plaque.  People are more used to technical /business / lifestyle disruption (for good or bad) than ever in the past.  We are far more equipped to deal with this than at any time in history.

I think folks like you will end up on the wrong end of the betting table when this is all settled.

Travis

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Re: flight to safety - coronavirus version
« Reply #61 on: March 18, 2020, 01:04:43 AM »
not sure what the jump back in signal will be, but my sense is that it's not coming any time soon. this is 2008 all over again, if not worse. the world, under today's level of globalization, has never seen anything like this. the disruption to supply/demand will be unprecedented.
I have a feeling this will not age well.

Modern medicine has never been more advanced at analyzing viruses like this and the world is mobilizing all its resources to find a treatment / cure / vaccine because the stakes are too high.

Government stimulus that is unprecedented even back to WWII when people were actively killing destroying countries and killing millions.

People are far more informed today than ever, and information is enabling people and governments to react faster than ever to the data, to save lives, improve the economy, and improve our critical response.

Humans are far more robust than most people give us credit for.  This virus is nothing compared to the Spanish flu of 1918, or the black plaque.  People are more used to technical /business / lifestyle disruption (for good or bad) than ever in the past.  We are far more equipped to deal with this than at any time in history.

I think folks like you will end up on the wrong end of the betting table when this is all settled.

I think the next month or so is going to be rough world wide, but we'll adjust and figure out a new normal and a middle ground that isn't doom and gloom and isn't reckless either.  We've been under these travel and living restrictions in Korea for a month. The Korean government has been down this road before, but my military leadership never had to deal with something like this. The first few days of restrictions suuuuucked.  Traffic was backed up for hours. Nobody knew what exactly our travel and entertainment limits were going to be, and some people were given multiple answers on whether or not they were allowed to come to work.  None of the restrictions have changed since the day those things were implemented, but we found better ways of doing business and it has become part of the routine now.  The garrison commander (basically the mayor of our military base) and his staff learned from their mistakes and address us daily on the latest updates and changes.  I'm sure the various governments in the US will sort it out eventually.

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #62 on: March 18, 2020, 01:05:30 AM »
I think folks like you will end up on the wrong end of the betting table when this is all settled.

in fairness, i could go all back in tomorrow and be ahead of the 95% of folks like you on this forum that have stayed fully in their equities. so there's that.

nemesis

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Re: flight to safety - coronavirus version
« Reply #63 on: March 18, 2020, 01:26:05 AM »
I think folks like you will end up on the wrong end of the betting table when this is all settled.

in fairness, i could go all back in tomorrow and be ahead of the 95% of folks like you on this forum that have stayed fully in their equities. so there's that.
You think?  It could drop even more when you go back in tomorrow, and then when you decide to pull out again, lose out because the market spikes up because of some other stimulus / good news...  buy high, sell low.

You think market timing is that simple?  You have more money than Warren Buffet who does zero market timing?  If it truly is that simple, why don't you go and show the rest of us plebs how it's done?

Come back to this thread and post when you're a billionaire and let's talk.  I find the smugness a bit unimpressive.
« Last Edit: March 18, 2020, 01:33:22 AM by nemesis »

MustacheAndaHalf

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Re: flight to safety - coronavirus version
« Reply #64 on: March 18, 2020, 05:01:20 AM »
Modern medicine has never been more advanced at analyzing viruses like this and the world is mobilizing all its resources to find a treatment / cure / vaccine because the stakes are too high. ...
I agree you shouldn't time the markets if you expect a vaccine soon.  But that emotional plea doesn't match the data.  Look back at the SARS outbreak.  In the 18 years since then, there's still no vaccine.

Or to quote the National Health Service (UK):
"There's currently no cure for SARS, but research to find a vaccine is ongoing."
...
"Page last reviewed: 24 October 2019"
https://www.nhs.uk/conditions/sars/

habanero

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Re: flight to safety - coronavirus version
« Reply #65 on: March 18, 2020, 06:00:33 AM »
Today - albeit just one day, the only safe place is pretty much cash. Government bonds are getting hammered, some players prob need cash and also the massive stimulus packages being announced worldwide will have to be funded somehow and interest on those will have to be paid from a smaller tax base as shops close and people get laid off for unknown time.

It's just one day so Im not claiming a paradigm shift or anything, but it is very seldom you see all asset classes loosing value at the same time.

nemesis

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Re: flight to safety - coronavirus version
« Reply #66 on: March 18, 2020, 09:53:44 AM »
Modern medicine has never been more advanced at analyzing viruses like this and the world is mobilizing all its resources to find a treatment / cure / vaccine because the stakes are too high. ...
I agree you shouldn't time the markets if you expect a vaccine soon.  But that emotional plea doesn't match the data.  Look back at the SARS outbreak.  In the 18 years since then, there's still no vaccine.

Or to quote the National Health Service (UK):
"There's currently no cure for SARS, but research to find a vaccine is ongoing."
...
"Page last reviewed: 24 October 2019"
https://www.nhs.uk/conditions/sars/
Wow, context is SO important here.  What you just stated, on the surface, is accurate, but for all intents and purposes is plain dead wrong.   https://www.nbcnews.com/health/health-care/scientists-were-close-coronavirus-vaccine-years-ago-then-money-dried-n1150091

There is no vaccine for SARS because there was no funding, no will to fight it, because SARS went away on its own.

Today the picture is completely different. 

Mustachians are usually some of the smartest people I read online.  I'm shocked that I'm still reading misinformation like what you've posted here.

nemesis

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Re: flight to safety - coronavirus version
« Reply #67 on: March 18, 2020, 09:56:47 AM »
Today - albeit just one day, the only safe place is pretty much cash. Government bonds are getting hammered, some players prob need cash and also the massive stimulus packages being announced worldwide will have to be funded somehow and interest on those will have to be paid from a smaller tax base as shops close and people get laid off for unknown time.

It's just one day so Im not claiming a paradigm shift or anything, but it is very seldom you see all asset classes loosing value at the same time.
The only safe place is to have 6-12 months of emergency funds, and toss the rest into the stock market or real estate, grab some popcorn, and enjoy the ride.

You don't invest for the next 3-6 months, you invest for the next 10-30 years.

These stock market movements up and down mean nothing to me.  In fact I am thrilled to see such movement, it means the marketplace is working as it should and things will resolve in the medium to long time frame I need it to.

No one has beat the stock market over long periods of time...absolutely no one.

I don't understand the panic and pandemonium here.
« Last Edit: March 18, 2020, 09:59:14 AM by nemesis »

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #68 on: March 18, 2020, 10:51:09 AM »
I think folks like you will end up on the wrong end of the betting table when this is all settled.

in fairness, i could go all back in tomorrow and be ahead of the 95% of folks like you on this forum that have stayed fully in their equities. so there's that.
You think?  It could drop even more when you go back in tomorrow, and then when you decide to pull out again, lose out because the market spikes up because of some other stimulus / good news...  buy high, sell low.

You think market timing is that simple?  You have more money than Warren Buffet who does zero market timing?  If it truly is that simple, why don't you go and show the rest of us plebs how it's done?

Come back to this thread and post when you're a billionaire and let's talk.  I find the smugness a bit unimpressive.
to clarify where my 'smugness' comes from, please refer to your initial response to me where you say "folks like you". you might as well just say "you people".

and so we're clear, when i reenter the market, i will be back in for the long haul. it was clear to me that this was going to be a SHTF moment. i got out with some of my stache at DOW = 26000, so as of right now, i've saved 24% in losses. other stache was taken out at 23000, so a loss savings of 14%.

i will not become a billionaire. when i hit 3.5% SWR, i will retire.

i am not trying to be smug. some, on here, basically said to put my money where my mouth is. so i did. and i will document however things turn out.

nemesis

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Re: flight to safety - coronavirus version
« Reply #69 on: March 18, 2020, 10:55:49 AM »

to clarify where my 'smugness' comes from, please refer to your initial response to me where you say "folks like you". you might as well just say "you people".

and so we're clear, when i reenter the market, i will be back in for the long haul. it was clear to me that this was going to be a SHTF moment. i got out with some of my stache at DOW = 26000, so as of right now, i've saved 24% in losses. other stache was taken out at 23000, so a loss savings of 14%.

i will not become a billionaire. when i hit 3.5% SWR, i will retire.

i am not trying to be smug. some, on here, basically said to put my money where my mouth is. so i did. and i will document however things turn out.
And yet you seem so convinced that you timed it perfectly.  You may get lucky timing once or twice.  What's to prevent you from gambling more than once if/when you should get lucky?

That's the gambler's dilemma.  You might win once or twice due to some lucky stroke, but then you keep wondering - what if I can keep doing it, winning more and more?  And then bam, it becomes an addiction and you lose it all.

Chances are you'll end up no better than most of us who stayed in the market and went about our business.  People get burned when trying to time the market...that is a fact.

Things are not so obvious even when you think they are.

I'm not convinced you will end up better than should you have left things alone.  Only a parallel universe with different options will one truly know.  However, it is a known fact that timing the market usually leads to a worse outcome, not better.

Also, you claim to have saved 24% in losses. When do you go back in?  What if some other schmuck stays out and claims in a few months they saved 80% in losses?  Do you lose compared to schmuck #2?

And what are the chances you or schmuck #2 will have tested the bottom of the market and timed it perfectly to get back in and profit all the way back?  What if you get back in, the market swings up, then drastically falls again even more, and you are down more than 24%?  Do you panic and sell?

I don't think you truly understand what you are doing and thinking far too simplistically.  Far smarter people than you or I have gotten badly burned trying to do this. I wish you the best but I'm glad I'm not in your shoes.
« Last Edit: March 18, 2020, 11:00:03 AM by nemesis »

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #70 on: March 18, 2020, 11:07:09 AM »

to clarify where my 'smugness' comes from, please refer to your initial response to me where you say "folks like you". you might as well just say "you people".

and so we're clear, when i reenter the market, i will be back in for the long haul. it was clear to me that this was going to be a SHTF moment. i got out with some of my stache at DOW = 26000, so as of right now, i've saved 24% in losses. other stache was taken out at 23000, so a loss savings of 14%.

i will not become a billionaire. when i hit 3.5% SWR, i will retire.

i am not trying to be smug. some, on here, basically said to put my money where my mouth is. so i did. and i will document however things turn out.
And yet you seem so convinced that you timed it perfectly.  You may get lucky timing once or twice.  What's to prevent you from gambling more than once if/when you should get lucky?

That's the gambler's dilemma.  You might win once or twice due to some lucky stroke, but then you keep wondering - what if I can keep doing it, winning more and more?  And then bam, it becomes an addiction and you lose it all.

Chances are you'll end up no better than most of us who stayed in the market and went about our business.  People get burned when trying to time the market...that is a fact.

Things are not so obvious even when you think they are.

I'm not convinced you will end up better than should you have left things alone.  Only a parallel universe with different options will one truly know.  However, it is a known fact that timing the market usually leads to a worse outcome, not better.

Also, you claim to have saved 24% in losses. When do you go back in?  What if some other schmuck stays out and claims in a few months they saved 80% in losses?  Do you lose compared to schmuck #2?

And what are the chances you or schmuck #2 will have tested the bottom of the market and timed it perfectly to get back in and profit all the way back?  What if you get back in, the market swings up, then drastically falls again even more, and you are down more than 24%?  Do you panic and sell?

I don't think you truly understand what you are doing and thinking far too simplistically.  Far smarter people than you or I have gotten badly burned trying to do this. I wish you the best but I'm glad I'm not in your shoes.
you sound angry. i'm sorry.
please understand that i will no longer engage in dialogue with you. i'm probably not smart enough anyway, being a schmuck and all...

nemesis

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Re: flight to safety - coronavirus version
« Reply #71 on: March 18, 2020, 11:15:09 AM »

you sound angry. i'm sorry.
please understand that i will no longer engage in dialogue with you. i'm probably not smart enough anyway, being a schmuck and all...
I'm sorry you can't debate with facts instead of acting like you found some secret sauce to getting rich.  You think you are smarter than the system, when it has beaten most of the gamers (aka gamblers) time and time again over the long run.

Good luck retreating to your safe space with your illusions.

Chuck

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Re: flight to safety - coronavirus version
« Reply #72 on: March 18, 2020, 11:29:44 AM »
I liquidated all of my non-tax deferred holdings on March 4th. It was by far one of the best financial decisions of my life.

I'll get back in the day they announce a vaccine. This is going to get much worse.

nemesis

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Re: flight to safety - coronavirus version
« Reply #73 on: March 18, 2020, 11:31:04 AM »
I liquidated all of my non-tax deferred holdings on March 4th. It was by far one of the best financial decisions of my life.

I'll get back in the day they announce a vaccine. This is going to get much worse.
I wish you the best of luck.

Another market timer who thinks they can game the system. 

The illusion of safety in cash is just that, an illusion.  You are not taking into account the greater risk you are creating by increasing the variables in your system should your guesses be wrong. 

If a cure / vaccine is announced, markets could spike so heavily you may not be able to get back in time to gain anything. Or it could be a long slow recovery and you may stay on the sidelines with your doubts losing out on all the gains over that time.
« Last Edit: March 18, 2020, 11:33:12 AM by nemesis »

Chuck

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Re: flight to safety - coronavirus version
« Reply #74 on: March 18, 2020, 11:38:01 AM »
I liquidated all of my non-tax deferred holdings on March 4th. It was by far one of the best financial decisions of my life.

I'll get back in the day they announce a vaccine. This is going to get much worse.
I wish you the best of luck.

Another market timer who thinks they can game the system. 

The illusion of safety in cash is just that, an illusion.  You are not taking into account the greater risk you are creating by increasing the variables in your system should your guesses be wrong. 

If a cure / vaccine is announced, markets could spike so heavily you may not be able to get back in time to gain anything. Or it could be a long slow recovery and you may stay on the sidelines with your doubts losing out on all the gains over that time.

That is all possible. However, I think it is much more likely, given what is known about the disease so far, that getting out before millions die will prove to my financial advantage.

Nothing is certain, and there is risk in every financial decision. So far though, I'm up six figures.

habanero

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Re: flight to safety - coronavirus version
« Reply #75 on: March 18, 2020, 12:35:39 PM »
unfortunately, i would believe russia or north korea's numbers just about as much as the US at this point in time.

And with good reason. Russia has conducted way more tests than the US on a population less than half the size and with much, much less international travel passing through or visiting. North Korea does not publish any numbers, as one would expect. But they are prob low as its borderline impossible to enter or leave the country.

nemesis

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Re: flight to safety - coronavirus version
« Reply #76 on: March 18, 2020, 12:41:33 PM »


That is all possible. However, I think it is much more likely, given what is known about the disease so far, that getting out before millions die will prove to my financial advantage.

Nothing is certain, and there is risk in every financial decision. So far though, I'm up six figures.
*shrug* millions will die with or without coronavirus.  Society adapts, markets recover, it's what happens.

I'm not sure what you mean you are up six figures.  Do you plan to never invest in the market again with the money you've taken out? If so, congrats, you've made over six figures relative to your initial principal?

Or do you mean you've made six figures relative to what the market is at this moment?  If so, enjoy your illusion.  It should shoot up sky high and you could be down seven figures relative to those of us who stayed in.

habanero

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Re: flight to safety - coronavirus version
« Reply #77 on: March 18, 2020, 01:04:47 PM »
Fwiw I have done the math on our national data. Pretty much regardless of age group the probability of dying from corona infection is roughly the same as the probability of dying from something else any given year. And the last thing is repeated year after year after year. The average age of people dying is high - in Italy it's around 80 years. 99% of those who died had one or more medical conditions. And as harsh as it might sound, a fair number of these would be highly likely to die from something else this year.

TheShinyHorse

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Re: flight to safety - coronavirus version
« Reply #78 on: March 18, 2020, 03:43:37 PM »
Obviously the virus is very serious but I think we will be in a much better position in a couple of months. We've already discovered a couple of drugs that will provide help for a lot of the severe cases (chloroquine etc). Several vaccines are already being tested, but those will probably only be available next year. A LOT of very smart people are working on this.

The next 1 to 4 months are gonna suck because in most of the world (especially USA and Europe it seems) new infections will be hard to keep under control and the medical system will be tested hard.
I don't expect a sharp V-recovery tbh, I think the measures required will hurt the economy (and people's optimism to buy stocks) too much... Still, I will probably buy back over the coming months. Timing the exact top/bottom is impossible, I was lucky that I was pretty close to the top, I don't want to jinx it... I do admit that this is a bit stressful.

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #79 on: March 18, 2020, 03:56:56 PM »
reposting from another site:
Let’s run the math on those numbers. 273,000 hospitalizations and 12,649 deaths out of 60,800,000 cases is a hospitalization rate of 0.4% and a death rate of 0.02%. COVID-19 has a hospitalization rate of at least 5% (over 50x as severe), and a death rate that is probably somewhere between 0.4% and 2.9% (20x to 145x as severe).

To understand why the people who have a deep understanding of epidemiology are worried about COVID-19 and why governments are taking drastic action such as prohibiting large events and closing schools for six weeks or more, let’s compare COVID-19 to the typical flu using the numbers provided here.

COVID-19 has at least 5x the hospitalization rate:
• flu: 1%
• COVID-19: 5%+

COVID-19 has 4x to 29x the death rate:
• flu: 0.1%
• COVID-19: 0.4%-2.9%

COVID-19 has 1.5x to 2.3x the transmission rate:
• flu: 1.3
• COVID-19: 2-3

And you don’t just get to pick one of these numbers and say “oh it’s only twice as bad as the flu.” These factors build on each other. COVID-19 has the potential to be far worse than the typical flu or any other disease we have seen in the past 100 years, as evidenced by the healthcare collapse we are already seeing in places like Italy.

The difficult thing about this crisis is that almost nobody alive today has ever experienced anything like this before. The last time anything similar happened was the 1918 Spanish flu. As humans we often try to make sense of new experiences by comparing them to things we have gone through before, but that strategy fails with COVID-19.

I think this is why we’re seeing intelligent people say foolish things like “what’s the big deal, it’s just like the flu!” They have no other experience to compare to, so they grab the closest match. Unfortunately this is an inadequate analogy that leads to bad conclusions.

PDXTabs

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Re: flight to safety - coronavirus version
« Reply #80 on: March 18, 2020, 04:12:13 PM »
To put it another way: 475 people died in Italy yesterday, a country of 60 million people. The same rate would be 2589 people in the USA, a country of 327 million people. That's almost a 9/11, in one day. How many more days will they have like that? We'll see.
« Last Edit: March 18, 2020, 04:14:52 PM by PDXTabs »

PDXTabs

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Re: flight to safety - coronavirus version
« Reply #81 on: March 18, 2020, 04:16:37 PM »
But they are prob low as its borderline impossible to enter or leave the country.

Not if you are Chinese. There is actual trade between North Korea and China. In fact a lot of refugees end up in bad situations trying to get from North Korea to South Korea via China.

American GenX

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Re: flight to safety - coronavirus version
« Reply #82 on: March 18, 2020, 05:17:12 PM »

I haven't flown anywhere, but I'll probably rebalance one of these days as my AA is out of whack.  I think the market is still heading down from here, so I'm in no hurry.  We're not quite down to the S&P 500 close on Dec 24, 2018.

ender

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Re: flight to safety - coronavirus version
« Reply #83 on: March 18, 2020, 09:02:29 PM »
To put it another way: 475 people died in Italy yesterday, a country of 60 million people. The same rate would be 2589 people in the USA, a country of 327 million people. That's almost a 9/11, in one day. How many more days will they have like that? We'll see.

If that's the "peak" of this, which of course no one knows, that number represents about 1/3 of the total deaths the USA experiences on a daily basis normally.


PDXTabs

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Re: flight to safety - coronavirus version
« Reply #84 on: March 19, 2020, 10:19:38 AM »
To put it another way: 475 people died in Italy yesterday, a country of 60 million people. The same rate would be 2589 people in the USA, a country of 327 million people. That's almost a 9/11, in one day. How many more days will they have like that? We'll see.

If that's the "peak" of this, which of course no one knows, that number represents about 1/3 of the total deaths the USA experiences on a daily basis normally.

That was my argument on an internet forum during September of 2001. It did not stop the markets from crashing, people from losing their jobs, and congress from coming to the "rescue."

Kronsey

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Re: flight to safety - coronavirus version
« Reply #85 on: March 19, 2020, 11:10:19 AM »
No offense to OP or any of the market timers out there, but this thread is a perfect example of why I believe 95%+ of the general population needs a fee-only, fiduciary financial advisor. I used to support the DIY mantra, but this panic happens every single time a recession happens. William Bernstein even changed his thinking on the issue after observing how irrational human beings really are.

The OP and others may indeed be right. Things may be "different" this time. And if they are so different that the world ceases to continue as we've known it for the past 150 ish years, then going to cash (or bonds or any other "safe" investment) will not have been any better of a move than staying ride or die with VTI.

I do hope OP continues to post his results. What I've found though, is that many of the market timers love to post when they are right but go silent when things don't turn out quite as well. I've prepared enough tax returns from market timers to conclude that the research is indeed correct. If Ivy league MBAs can't beat the market over the long haul, then neither can your average Joe.

MustacheAndaHalf

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Re: flight to safety - coronavirus version
« Reply #86 on: March 19, 2020, 02:35:22 PM »
Modern medicine has never been more advanced at analyzing viruses like this and the world is mobilizing all its resources to find a treatment / cure / vaccine because the stakes are too high. ...
I agree you shouldn't time the markets if you expect a vaccine soon.  But that emotional plea doesn't match the data.  Look back at the SARS outbreak.  In the 18 years since then, there's still no vaccine.

Or to quote the National Health Service (UK):
"There's currently no cure for SARS, but research to find a vaccine is ongoing."
...
"Page last reviewed: 24 October 2019"
https://www.nhs.uk/conditions/sars/
Wow, context is SO important here.  What you just stated, on the surface, is accurate, but for all intents and purposes is plain dead wrong.   https://www.nbcnews.com/health/health-care/scientists-were-close-coronavirus-vaccine-years-ago-then-money-dried-n1150091

There is no vaccine for SARS because there was no funding, no will to fight it, because SARS went away on its own.

Today the picture is completely different. 

Mustachians are usually some of the smartest people I read online.  I'm shocked that I'm still reading misinformation like what you've posted here.
It's obnoxious of you to start insulting me.  Just concede the argument before you call people not "the smartest".  But If you want to get reported to the mods and banned, insulting people will get you there.

The source of my data was UK's National Health Service (NHS), which you are claiming is "misinformation".  I think that speaks for itself.

The SARS outbreak was 18 years ago.  To correct that "misinformation" of mine, you post a source...
"Now they needed money to begin testing it in humans.... But this was 2016."
A vaccine is dangerous and useless if it's never been tested in humans.
Is your point that a cure was not found for 14 years, instead of the 18 years I mentioned?

Here's another one, MERS, a corona virus that struck in 2012:
"MERS-CoV is the acronym for Middle East Respiratory Syndrome Coronavirus, the virus that causes MERS"
"Currently, there is no vaccine available to protect against MERS."
https://www.cdc.gov/coronavirus/mers/faq.html

The available information shows epidemics usually do not end with a vaccine.
And if you can't reply in a civil manner, I will report you to the mods.

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #87 on: March 26, 2020, 10:38:59 AM »
i will fully admit, the recent run up in the stock market has me a little nervous about locking in losses. i have some room to go on the DOW at 26k mark, but the DOW at 23k mark is getting close.

i personally think the recent run up is premature. give me another week of an additional 3M rise in unemployment claims and that should tamper things back down, i suspect.

FIREin2018

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Re: flight to safety - coronavirus version
« Reply #88 on: March 26, 2020, 03:05:52 PM »
i will fully admit, the recent run up in the stock market has me a little nervous about locking in losses. i have some room to go on the DOW at 26k mark, but the DOW at 23k mark is getting close.

i personally think the recent run up is premature. give me another week of an additional 3M rise in unemployment claims and that should tamper things back down, i suspect.
dow closed at 22.5k.
first time in a LONG time that the dow was climbed 3 days in a row.
and what a climb.
from 18.3k to 22.5k in 3 days.

is this the march back up to dow 26k?
or slide back to dow 18.3k?

frugalnacho

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Re: flight to safety - coronavirus version
« Reply #89 on: March 26, 2020, 09:16:47 PM »
first time in a LONG time that the dow was climbed 3 days in a row.

is this the march back up to dow 26k?
or slide back to dow 18.3k?


BicycleB

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Re: flight to safety - coronavirus version
« Reply #90 on: March 26, 2020, 09:32:39 PM »
i will fully admit, the recent run up in the stock market has me a little nervous about locking in losses. i have some room to go on the DOW at 26k mark, but the DOW at 23k mark is getting close.

i personally think the recent run up is premature. give me another week of an additional 3M rise in unemployment claims and that should tamper things back down, i suspect.

I definitely respect that you made your call, took your action, and have been following through with your real time thoughts and actions. Curious to see what happens.

Jack0Life

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Re: flight to safety - coronavirus version
« Reply #91 on: March 26, 2020, 11:30:04 PM »
i will fully admit, the recent run up in the stock market has me a little nervous about locking in losses. i have some room to go on the DOW at 26k mark, but the DOW at 23k mark is getting close.

i personally think the recent run up is premature. give me another week of an additional 3M rise in unemployment claims and that should tamper things back down, i suspect.

I read the entire thread. Kudos to you for the intuition.
It feel to me that the angriest of people at "market timers" are the ones that are taking huge loss and are pissed off.
The coronovirus is a unique one in a lifetime situation that if you paid attention, you could have guess the market was going to tank.
I mean look at China as an example. They closed the entire city. Don't you think that would have huge economic impacts. As much visitors as the US gets, were we immune to the Virus ??
On the day of 9/11. If you decided on that day to reallocate all your investments, is that "market timing".

To answer your question, we are in for some rough times ahead. There's zero chances that the market will make a run up while the entire country is in chaos.

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #92 on: April 01, 2020, 12:17:45 PM »
i'm thinking to move funds from VTSAX and/or vanguard 2045 target retirement funds to a "less volatile" fund like i moved funds to VBTLX or VMMXX. what downsides are there to bond funds and money market funds in this current flight to safety moment?
i'm reposting my original post to seek more input on this specific item. initially, during the big selloff in the markets (early to mid march), all assets were dropping (stocks, bonds, gold, etc) at the same time. it seems like bonds are now behaving more normally as a hedge to stocks.

as this recession/depression becomes more obvious, what risks are there to bond funds (like VBTLX) or money market funds (like VMMXX).

i'm a bear right now, and don't want to argue that part of the equation please.

MustacheAndaHalf

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Re: flight to safety - coronavirus version
« Reply #93 on: April 03, 2020, 12:05:27 PM »
You're right that some bonds - long-term ones - dropped with equities.  But short-term government bonds were still safe.  I mistakenly bought long-term bonds during the start of the panic, and only beat the market by a few percent (and mostly from luck).  Picking long-term bonds during a panic was a bad mistake on my part.

Then I got revenge which might interest you: Panic pushed yields from 0.99% to 1.77%, and I bought close to those levels on March 20.  I profited well over the next 7 days with ZROZ, selling on March 27.

Right now 30 year treasuries yield 1.26%, while the Fed rate is 0%.  Will people pay 0.03% per year, for a minimum 0.90% yield on the 30 year?  Or will it be 0.02%/year, for a roughly 0.60% yield?  Each of those 0.30% steps, if they occur, could mean +8% for ZROZ.  Let's say that's +12% potential.

Equities fell -23% year to date.  If they take a year or two to recover, that's still a potential upside of +30% from here (77 -> 100).  And historically, stocks recover.  So the equity upside looks both greater and more certain to me, than the bond profits.

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #94 on: April 03, 2020, 12:39:39 PM »
thanks for the inputs.

i don't think i'm looking to daytrade or anything like that. i just want to park my money (either short term bond or MM account) until i'm ready to dive back into equities. once we get to 20-30M unemployment claims, the market should be quite a bit lower. this is 1-2 weeks.

i just want to make sure that any risks to these bonds or MM are as minimal as possible since i need to keep funds in these retirement accts (roth, 401k)

MustacheAndaHalf

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Re: flight to safety - coronavirus version
« Reply #95 on: April 04, 2020, 03:45:21 AM »
For 1-2 weeks you could just leave your money in "cash" (a money market fund).  If you switch to the safety of Vanguard Short-Term Treasury Index Fund (VSBSX), it should be earning 0.23% per year, or 0.02% per month.  So at most, 0.01% interest in 2 weeks, which isn't much.

On March 31, Goldman Sacs predicted 26M jobless (16%), so markets already expect 20-30M jobless from at least one source.  When data is published that matches market predictions, nothing changes - there's no drop.
https://www.cnbc.com/2020/03/31/coronavirus-update-goldman-sees-15percent-jobless-rate-followed-by-record-rebound.html

Currently you plan to invest in 1-2 weeks when markets drop.  In your situation, I would want to make a contingency plan to follow in case markets do not drop.

Buffaloski Boris

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Re: flight to safety - coronavirus version
« Reply #96 on: April 04, 2020, 06:22:22 AM »
thanks for the inputs.

i don't think i'm looking to daytrade or anything like that. i just want to park my money (either short term bond or MM account) until i'm ready to dive back into equities. once we get to 20-30M unemployment claims, the market should be quite a bit lower. this is 1-2 weeks.

i just want to make sure that any risks to these bonds or MM are as minimal as possible since i need to keep funds in these retirement accts (roth, 401k)

IMHO, a good move.  Why take the risk bonds if that's not part of your overall plan?  I'm waiting for the equity markets to hit my entry point.  I can't say I was as prescient as you were, but I was mostly in cash when all this hit. I just couldn't wrap my head around the equity valuations.  So I didn't invest much at all in the US.  Overseas exposure was there, but relatively low. I've been handed some luck, and I want to make prudent use of it*. 

My read of the tea leaves, and it's no doubt worth exactly what you're paying for it, is that history shows that equity bear markets tend to drop fast, retrace, drop more, retrace a little less, drop still more, etc. over a period of months or years.  In 2008 the process took from about September to bottom out in winter/spring the following year. During the Great Depression, it took a few years before the bottom was hit.  Personally, I believe this cycle is going to run faster than past recessions/depressions, probably over a space of months.  I also think that that there is a heck of a lot of central bank generated money out there chasing not much in the way of returns.  So the equity markets will be more volatile going forward. Markets in the US seem to trend towards optimism and normalcy bias.  E.g. the assumption the country will be back and running in late May.  I don't see it happening myself and believe we're in the early stages of something in between the GFC and the Great Depression impact-wise. Unemployment claims next week and for the next 4-6 weeks are going to be downright horrible.  And small business failures will be coming fast and hard in about a month.

This whole thing sucks mightily. I hate it, and fear for my kids future.  You play the cards you're dealt. 

*(not only investments but personally)

waltworks

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Re: flight to safety - coronavirus version
« Reply #97 on: April 04, 2020, 09:16:52 AM »
thanks for the inputs.

i don't think i'm looking to daytrade or anything like that. i just want to park my money (either short term bond or MM account) until i'm ready to dive back into equities. once we get to 20-30M unemployment claims, the market should be quite a bit lower. this is 1-2 weeks.

Yeah, but that's what everyone thinks will happen. What evidence do you have that's not already priced in?

-W

kenmoremmm

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Re: flight to safety - coronavirus version
« Reply #98 on: April 08, 2020, 11:27:03 AM »
thanks for the inputs.

i don't think i'm looking to daytrade or anything like that. i just want to park my money (either short term bond or MM account) until i'm ready to dive back into equities. once we get to 20-30M unemployment claims, the market should be quite a bit lower. this is 1-2 weeks.

Yeah, but that's what everyone thinks will happen. What evidence do you have that's not already priced in?

-W
no evidence. and i'm not certain the market has it priced in. in either case, i will fully admit i'm sweating here a bit now that one of my accounts is close to being back to even.

i remember when the DOW was back at 18k+ and i thought of getting back in. but, my greed for the idea of hitting a homerun and "saving" another 10% loss got the better of me.

at this point in time, i'm going to hold until at least friday. if there's another big dip because 10M new people file for UE and stocks tank, i think i'll use that as my exit strategy.

i don't particularly enjoy checking stock prices every day and it has been more nerve wracking than i normally like with my automatic investments.

des999

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Re: flight to safety - coronavirus version
« Reply #99 on: April 08, 2020, 11:50:37 AM »
thanks for the inputs.

i don't think i'm looking to daytrade or anything like that. i just want to park my money (either short term bond or MM account) until i'm ready to dive back into equities. once we get to 20-30M unemployment claims, the market should be quite a bit lower. this is 1-2 weeks.

Yeah, but that's what everyone thinks will happen. What evidence do you have that's not already priced in?

-W
no evidence. and i'm not certain the market has it priced in. in either case, i will fully admit i'm sweating here a bit now that one of my accounts is close to being back to even.

i remember when the DOW was back at 18k+ and i thought of getting back in. but, my greed for the idea of hitting a homerun and "saving" another 10% loss got the better of me.

at this point in time, i'm going to hold until at least friday. if there's another big dip because 10M new people file for UE and stocks tank, i think i'll use that as my exit strategy.

i don't particularly enjoy checking stock prices every day and it has been more nerve wracking than i normally like with my automatic investments.

as people have said over and over, this is the hardest part of the market timing strategy.  It's hard enough to be right the first time (although many here said it was easy), but now you have to get it right again.  The market doesn't behave as you 'think' it should. 

good luck either way.