Author Topic: The DOW is running like a chicken with it's head cut off.  (Read 3514 times)

Wrenchturner

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Re: The DOW is running like a chicken with it's head cut off.
« Reply #50 on: April 20, 2020, 10:38:25 AM »
The market has two completely separate parts - Tech and non-Tech.

I have a $300k+ position in INTC and AAPL. These are from 10+ years ago, from small initial positions that just grew several hundred % over time.  Primarily due to these two - my overall portfolio is only down 8% from the peak as of today morning.

(I no longer bet on single stocks, never purchased one after 2014).

The tech names will hardly be impacted by the current consumer slowdown. A little bit - sure. But that will be temporary.

This is very different from other parts of the SP500 landscape. They are facing completely different fundamentals for many years to come - perhaps permanently.

Mixing these two parts together is misleading and confusing.

Good points here; thanks.

Snip

Also good points.

hodedofome

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Re: The DOW is running like a chicken with it's head cut off.
« Reply #51 on: April 20, 2020, 12:54:56 PM »
The market has two completely separate parts - Tech and non-Tech.

I have a $300k+ position in INTC and AAPL. These are from 10+ years ago, from small initial positions that just grew several hundred % over time.  Primarily due to these two - my overall portfolio is only down 8% from the peak as of today morning.

(I no longer bet on single stocks, never purchased one after 2014).

The tech names will hardly be impacted by the current consumer slowdown. A little bit - sure. But that will be temporary.

This is very different from other parts of the SP500 landscape. They are facing completely different fundamentals for many years to come - perhaps permanently.

Mixing these two parts together is misleading and confusing.

This is why I DO buy individual stocks. My accounts are all tech stocks (AAPL, AMZN, NFLX, SHOP, RNG, GOOGL, WORK, ZM, DOCU, BILL, AVLR, MSFT). My trading account is now breakeven for the year, and my IRA is up 5% on the year. The indexes have a bunch of junk (oil and gas, financial, real estate) who don't have nearly the margins of these software as a service stocks, and will not perform nearly as well over time.

ctuser1

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Re: The DOW is running like a chicken with it's head cut off.
« Reply #52 on: April 20, 2020, 01:24:12 PM »
The market has two completely separate parts - Tech and non-Tech.

I have a $300k+ position in INTC and AAPL. These are from 10+ years ago, from small initial positions that just grew several hundred % over time.  Primarily due to these two - my overall portfolio is only down 8% from the peak as of today morning.

(I no longer bet on single stocks, never purchased one after 2014).

The tech names will hardly be impacted by the current consumer slowdown. A little bit - sure. But that will be temporary.

This is very different from other parts of the SP500 landscape. They are facing completely different fundamentals for many years to come - perhaps permanently.

Mixing these two parts together is misleading and confusing.

This is why I DO buy individual stocks. My accounts are all tech stocks (AAPL, AMZN, NFLX, SHOP, RNG, GOOGL, WORK, ZM, DOCU, BILL, AVLR, MSFT). My trading account is now breakeven for the year, and my IRA is up 5% on the year. The indexes have a bunch of junk (oil and gas, financial, real estate) who don't have nearly the margins of these software as a service stocks, and will not perform nearly as well over time.

This is really going off topic.

I have found it is very difficult to "predict" which sector will come out the winner for the long term. XOM looked just as much a "winner" back in 2009-2010 timeframe as AAPL does today. I know because I have a $6000 XOM position seating in my brokerage account back from those days. I kinda/sorta know that biotech related stocks, and some pharma will benefit from the spending boom in all things immunology that is under way. I don't yet know which individual stocks.

In fact, I once coded up High Frequency Trading routines for a hedge fund way back (before the great recession). What I found is that your basic strategies (e.g. momentum following with a hint of manual controls thrown in) work great - till more people start doing it and the market adapts to make that unworkable. This feedback loop makes *any* strategy a losing one in the long term - unless you can constantly bank on inventing one winning strategy after another - ad-infinitum.

Your tech positions look great for today's crisis. Your returns, however, will be predicated on whether they will look great for tomorrow's crisis, and there is no magic wand for that.
 
I *still* look for "sure shot" stocks (e.g. what AAPL looked like right after Mr. Market pummeled it after Jobs died), and will invest some money in them if/when I find them. But I don't use that as my dominant strategy any more for reasons outlined above. I haven't found any such sure-shots after 2014.
« Last Edit: April 20, 2020, 01:27:17 PM by ctuser1 »

VaCPA

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Re: The DOW is running like a chicken with it's head cut off.
« Reply #53 on: April 20, 2020, 03:34:10 PM »
The market is still way down from where it was before this happened.
If S&P 500 is "way down" at -10.5% YTD now, what do you call March 23 at -31% YTD?

In the past 4 weeks, the S&P 500 gained +29% (Mar 23 $204.27  vs  Apr 17 $263.61).
I would say the market was way way down at 3/23. Not even sure the point of your post. My point seemed clear enough.
When you say "way", it can mean -15.5% (way way down) or it can mean -10.5% (way down), which seems hard to figure out compared to just posting the actual year to date loss of -10.5%.
I'm assuming you're basically trying to hit a certain post count per day to nitpick semantics like that. Why don't you substitute 'way down' in your mind for whatever wording bothers you less

J Boogie

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Re: The DOW is running like a chicken with it's head cut off.
« Reply #54 on: April 20, 2020, 03:49:40 PM »
In fact, I once coded up High Frequency Trading routines for a hedge fund way back (before the great recession). What I found is that your basic strategies (e.g. momentum following with a hint of manual controls thrown in) work great - till more people start doing it and the market adapts to make that unworkable. This feedback loop makes *any* strategy a losing one in the long term - unless you can constantly bank on inventing one winning strategy after another - ad-infinitum.

Your tech positions look great for today's crisis. Your returns, however, will be predicated on whether they will look great for tomorrow's crisis, and there is no magic wand for that.
 
I *still* look for "sure shot" stocks (e.g. what AAPL looked like right after Mr. Market pummeled it after Jobs died), and will invest some money in them if/when I find them. But I don't use that as my dominant strategy any more for reasons outlined above. I haven't found any such sure-shots after 2014.

I think the benefit of picking a large group of high conviction individual stocks as noted isn't so much to develop some novel trading strategy but simply to leave companies/industries in decline off your balance sheet. We might not know what companies look GREAT for tomorrow's crises, but it's not hard to figure out what companies look, to use a current phrase, "non-essential" during the next decade. Being part of the S&P means a company in decline is likely to have quite a few rungs to drop before it ends up in the Russel.

And without transaction fees, it's not too hard to build an index fund of a hundred or so companies throughout various industries that stand a better than average chance of being relevant and profitable a decade from now.