Top is in

[Radagast]

If stocks only ever went up then soon they'd have the same return as FDIC savings accounts, which would be good for people who already owned them years before but bad for people just starting the trip to financial independence. Crops don't grow very fast without rain. If you can't handle the rain get out of the farming business.

[JAYSLOL]

I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

This is true, but they are also related.  Has a large stock market drop ever ocurred in the absence of economic trouble or a recession?  Although the poster I responded to merely hoped for a 10% drop, I’ve seen MMM users express hope for another 2008 style downturn.

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

OK. For me, a 50% decline would be really nice over the next couple years. That's just how it is.

So when is it ok to hope to profit from another’s misfortune?  Trying to figure out why it seems meaner to hope for declines than to hope for increases, kinda like getting dirty looks at the craps table for “do not pass” bets

For some people rain is good, for other people rain is bad. The rain a farmer hopes for is misfortune for other people but the farmer still wants rain. I can't control the rain, but for me right now rain is better than sun, so I hope for rain. I also don't want rain every day forever, or for the climate to shift and bring neverending torrents. But assuming that the future will be mostly sunny with rain about two days in five, like it has been in the past, then for me right now rain is good and that's what I want. That's just how it is.

Ok then I hope a wizard forces you to withdraw all your wealth in cash and then a trogdor burns it to the ground since it will increase the value of my wealth very slightly.

This sequence of events would be best for me, although devastating to you, but it’s fine for me to wish this on you because I’m practicing being a good capitalist

Burn'n all the peasants..

[JAYSLOL]

I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say I’m tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us it’s not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance

Market moves are good for you (selling) in direct proportion to how bad they are for me (buying). I'll stop cheering crashes if you stop cheering gains! Note, I am cheering for market declines, not broad economic declines.

When did I cheer market gains?  I do think it’s reasonable for me to be happy to achieve a 4% WR, since that’s pretty much what we are all hoping to do here. 

I think it’s false equivalence to view market gains as losses on your part. The stock market is not a zero sum game.  You are better off accumulating in an up market that continues to go up after retirement than a down market that continues to go down (eg japan scenario)

Actually, market gains are likely just as bad for me as they are good for you.  I'm just starting out, and a relatively sudden 25% increase in stock prices are likely to set me back many months if not a year or 2 for FI, as they certainly signal weaker returns on every dollar I invest in the meantime.  If you had to go back to work for a year because the market dropped that much you'd make a big deal out of it, but an extra year of work would be my reality if markets jumped 25% and then grew at a reduced rate with no correction.  I'm not dancing or celebrating the decline, just acknowledging that it's not the worst thing for some of us. 

[MrDelane]

As a random reminder - lest anyone out there be reading this thread and thinking 'oh wow, Thorstach was right'

Yesterday my stache dropped around 30K.

Since Thorstach originally called the 'top' in April '17, my stache has gained over 150K (not counting contributions, only gains).

Don't focus on the pot holes - focus on the road.

[MrGreen]

I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

This is true, but they are also related.  Has a large stock market drop ever ocurred in the absence of economic trouble or a recession?  Although the poster I responded to merely hoped for a 10% drop, I’ve seen MMM users express hope for another 2008 style downturn.

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

OK. For me, a 50% decline would be really nice over the next couple years. That's just how it is.

Be careful what you wish for. It would only have taken a few different policy decisions letting big companies in multiple sectors fail to bring the whole thing down. That 50% drop could have been 90% or more. You're not recovering from that one.

[JAYSLOL]

As a random reminder - lest anyone out there be reading this thread and thinking 'oh wow, Thorstach was right'

Yesterday my stache dropped around 30K.

Since Thorstach originally called the 'top' in April '17, my stache has gained over 150K (not counting contributions, only gains).

Don't focus on the pot holes - focus on the road.

Don't worry, I doubt anyone that's followed this thread could possibly think that.  Congrats on those numbers btw, I only wish I was "loosing" way more over the last week

[BTDretire]

I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

This is true, but they are also related.  Has a large stock market drop ever ocurred in the absence of economic trouble or a recession?  Although the poster I responded to merely hoped for a 10% drop, I’ve seen MMM users express hope for another 2008 style downturn.

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

OK. For me, a 50% decline would be really nice over the next couple years. That's just how it is.

Hey that's a great idea, /s/
I'm down $104,000 already and it looks like today is another down day.

[Turkey Leg]

In a week, we'll get our last paychecks ever. Stache is down over $110k since the end of January. So what? Top is in, or bottom is in...bring it on, because we are still FIREing.

[FrugalFisherman10]

In a week, we'll get our last paychecks ever. Stache is down over $110k since the end of January. So what? Top is in, or bottom is in...bring it on, because we are still FIREing.

Damn, this is somehow awesome to me.

That your stomach is that strong I guess.

My whole stache is only a little over $110k, so it's understandably hard for me to picture myself that unwavering right before FIRE. Nicely done, and congrats!

[CrankAddict]

Not necessarily.  A rational early retiree might try to position themselves at the efficient frontier of an AA such as to maximize the historical SWR over his projected life span.  For example, I'm 48 and I use a 40 year planning horizon.  From what I can tell, the AA that maximizes the historical SWR is approximately 90/10.  So that is my investment allocation.

It is also true, however, that the drops of the last two days are not that big of a deal for people in my situation, especially since I am at about a 2% net WR.  Look at it this way:  If the market has dropped 10% so far(*), that means I went from a 2/100 = 2% WR to a 2/90 = 2.22% WR.

Note that a traditional retiree (say aged 65) might have a more conservative portfolio for any number of reasons:  They're less able and probably less willing to return to the workforce.  They may be less likely or less able to do side gigs.  They may have more expensive health insurance and/or health expenses than an early retiree.  And they might be more conservative because that was the more common teaching up until the past decade or so.

(*) I don't know exactly, but it's somewhere in that ballpark.

I could be completely wrong here, but aren't there 2 totally different "40 year windows"?  The first one is you are 25 and plan to retire at 65 so you have 40 years of saving (and not using) ahead of you.  This I often see starting off with a 90/10 allocation.  But if you are actually retired and now looking at doing 40 years of consumption, with no significant new investment, that same 90/10 seems quite a bit more aggressive.   A traditionally-aged retiree should benefit from cheaper healthcare as they will qualify for medicare.  Their home should be paid off.  Shouldn't have a bunch of kids in daycare or college.  Everything I've read suggests the change in AA at retirement age isn't to handle increased costs it's to deal with no additional income and greatly reduced ability to absorb massive losses in your stache.

This is in no way directed at you, but some of the other posters on here claiming to be retired seem like they are more accurately just on sabbatical provided the markets stay strong.  Hell, I was ready to retire this year.  All I needed was bitcoin to keep doing 10% a day, but alas, I'm back in the workforce now lol.

[Davids]

In a week, we'll get our last paychecks ever. Stache is down over $110k since the end of January. So what? Top is in, or bottom is in...bring it on, because we are still FIREing.

To be in a position where your stache dropped over $100K in this short time frame and not be concerned since you FIREing soon anyways must feel awesome. Congrats!!

[ZiziPB]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

Now please can we go back to discussing the top being in? 

[J Boogie]

I think it's time for me to finally stop dragging my heels and increase my 401k contributions up from the measly 8%.

I know, shame on me. I guess I've just been waiting for a drop like this. Double shame on me for being a low key market timer.

[Mississippi Mudstache]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

I have a few bucks worth of money idling in money market accounts, because the ETF share prices were too high to use up all of my spare cash. I tried to log on this morning to get the rest of those bucks to work, but can't log on to Fidelity after 45 minutes of trying. Frustrating.

[Aegishjalmur]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

I have a few bucks worth of money idling in money market accounts, because the ETF share prices were too high to use up all of my spare cash. I tried to log on this morning to get the rest of those bucks to work, but can't log on to Fidelity after 45 minutes of trying. Frustrating.

Was it due to people pulling out of the market or because of people who still need to get their 2017 contributions in or who had been holding cash out waiting for a dip now trying to buy in? Or a perfect storm of both?

[Clean Shaven]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

Now please can we go back to discussing the top being in?

My Facebook page is full of friends freaking out - some complaining they didn't pull out in time, others saying they thorstach-ed themselves out of the market years ago in expectation of this eventual drop - and now proclaim themselves brilliant prognosticators.

Pulling a thorstach in 2013 or 2016 or whatever just guaranteed them avoiding market gains.  But they just don't think of it that way.

[ZiziPB]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

I have a few bucks worth of money idling in money market accounts, because the ETF share prices were too high to use up all of my spare cash. I tried to log on this morning to get the rest of those bucks to work, but can't log on to Fidelity after 45 minutes of trying. Frustrating.

Was it due to people pulling out of the market or because of people who still need to get their 2017 contributions in or who had been holding cash out waiting for a dip now trying to buy in? Or a perfect storm of both?

Well, for every seller there is a buyer :-)

[Mississippi Mudstache]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

Now please can we go back to discussing the top being in?

My Facebook page is full of friends freaking out - some complaining they didn't pull out in time, others saying they thorstach-ed themselves out of the market years ago in expectation of this eventual drop - and now proclaim themselves brilliant prognosticators.

Your Facebook friends are a lot different than mine. I don't think I've ever had a friend post a reference to the stock market (or bitcoin, or bonds, or gold) on Facebook.

[Cabaka]

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

You would think that, wouldn't you, but I'm not seeing it.  Just because it SHOULD work that way doesn't mean it IS working that way right now.

Was there some bad economic news?  The stock market is down over 6% in three trading days, but for what?  Was there a jobs report, a missed earnings call, a credit default, a change in unemployment?  Has our faith in the market been shaken by some horrible event, like an attack on a financial center?  Was there some news I missed?  Because the economy seems just as strong today as it did last week. 

I think it's just as likely this is a blip, caused by random market noise amplifed by electronic traders.  Maybe concentrated crypto gains were cashing out and pumping up the stock index, then the influx stopped when cryptos bailed.  Maybe the bond issuance after the tax law really did motivate people to rebalance.  Maybe it's just rebalancing season for some big institutional investors who can move the market by themselves.  Whatever the trigger, some chartist voodoo geek wrote an algorithm or 2000 that's trying to time the fluxes, and it thought it saw a pattern and it went all in.  We've seen flash crashes before.  These days, the index price isn't really set by human decisions on the minute to minute scale, and arguable not on the day to day scale.  It's a robot eat robot world out there.

This doesn't mean the price will rebound tomorrow.  We've been at unusually high P/E ratios for a while now, without any good explanation as to why, so maybe we were unnaturally frothy and now we're rebounding to long term averages.  In which case, good!  Maybe there's a terrorist attack imminent that only the well connected know about, and they're moving into gold and K iodide tablets before the bombs start to fly.  In which case, oh shit! 

I don't claim to know the future, but I can still read the news of the past week and I'm not seeing any defensible logical trigger for 6.6% of the US economy to evaporate over a weekend.  I don't think the economy actually shrunk by 6.6% and I don't think future earnings shrunk by 6.6%.  I think people are just skittish. 

Me, I'll be buying the dip every Tuesday and Thursday just like I always do.  I'm riding this DCA train all the way to the bottom, baby.

actually, there was news that set this sell off, off.

it was both a rising in rates and the fed taking 30 billion out of the market that set this off. it wasn't apparent initially; but that was it. sure, it was extremely overbought; but that's what set it off.

it's too soon to see if this is anything more than a correction but continuing to raise rates and extracting liquidity isn't going to be received well. you are more than welcome to keep dollar cost averaging in the face of that if you wish.

[dude]

I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

This is true, but they are also related.  Has a large stock market drop ever ocurred in the absence of economic trouble or a recession?  Although the poster I responded to merely hoped for a 10% drop, I’ve seen MMM users express hope for another 2008 style downturn.

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

OK. For me, a 50% decline would be really nice over the next couple years. That's just how it is.

So when is it ok to hope to profit from another’s misfortune?  Trying to figure out why it seems meaner to hope for declines than to hope for increases, kinda like getting dirty looks at the craps table for “do not pass” bets

There's a pretty good argument that the market is indeed a zero sum game pitting retirees against savers:

https://earlyretirementnow.com/2017/05/17/the-ultimate-guide-to-safe-withdrawal-rates-part-14-sequence-of-return-risk/

Because the sequence of returns impact is flipped -- i.e., negative returns that are very bad early in retirement are very good early in the accumulation phase.

So I wouldn't take the cheerleading for savers for a market downturn personally. It's the nature of the beast, and in any case, the 4% Rule was designed to cover you for this eventuality. If you're spooked, drop to 3% and there's a near guarantee you'll be fine.  Might mean tightening the belt a little bit (unless you did one of the "lean FIRE" deals) or finding some part-time work. The labor market hasn't been better for workers in 20+ years.

[Clean Shaven]

Fidelity's home page crashed this morning.  Seriously?  If you can't stomach a 4% drop, you have no business to be in the market.

Now please can we go back to discussing the top being in?

My Facebook page is full of friends freaking out - some complaining they didn't pull out in time, others saying they thorstach-ed themselves out of the market years ago in expectation of this eventual drop - and now proclaim themselves brilliant prognosticators.

Your Facebook friends are a lot different than mine. I don't think I've ever had a friend post a reference to the stock market (or bitcoin, or bonds, or gold) on Facebook.

Well, my Facebook page has a lot more posts about skiing and dogs than financial stuff, but it's mixed in there...

[TexasRunner]

I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

This is true, but they are also related.  Has a large stock market drop ever ocurred in the absence of economic trouble or a recession?  Although the poster I responded to merely hoped for a 10% drop, I’ve seen MMM users express hope for another 2008 style downturn.

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

OK. For me, a 50% decline would be really nice over the next couple years. That's just how it is.

So when is it ok to hope to profit from another’s misfortune?  Trying to figure out why it seems meaner to hope for declines than to hope for increases, kinda like getting dirty looks at the craps table for “do not pass” bets

... I also would love a 2008 right about now.

:)

Oh, and bottom and top are both in.  Stocks shall remain flat-right forever.  Hope you bought assets that pay good dividends, because thats all your getting now.

[caracarn]

Favorite quote of the morning, Peter Kenny, an independent market strategist and founder of Kenny's Commentary. "It was a massive reversal: Nearly 1,000 points on the Dow is mind-bending."

David Kotok, co-founder of Cumberland Advisors, called it a "wild rollercoaster ride." He said that when Dow futures plunged 1,000 points overnight, it amounted to "climactic panic selling" that could signal a bottom for the market.

Top is in resulting in climactic panic selling.

[Mississippi Mudstache]

... I also would love a 2008 right about now.

:)

That's such a terrible sentiment. Can't those of us in accumulation mode just hope for a Black Monday, when a 23% drop in stock prices didn't correspond to massive recession, widespread layoffs, plummeting home values, and skyrocketing unemployment? Another recession is coming - that much is certain - but I don't understand how anyone could possibly wish another 2008-style "Great Recession" upon their fellow Americans in the name of asset accumulation. Fuck that.

[Wintergreen78]

I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say I’m tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us it’s not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance

https://m.youtube.com/watch?v=AjPau5QYtYs

[TexasRunner]

... I also would love a 2008 right about now.

:)

That's such a terrible sentiment. Can't those of us in accumulation mode just hope for a Black Monday, when a 23% drop in stock prices didn't correspond to massive recession, widespread layoffs, plummeting home values, and skyrocketing unemployment? Another recession is coming - that much is certain - but I don't understand how anyone could possibly wish another 2008-style "Great Recession" upon their fellow Americans in the name of asset accumulation. Fuck that.

Many companies were fat and un-profitable, housing values were ridiculously over-inflated and many people were spending every dollar they made on crap they didn't need...  All of those things needed to be fixed.


IMO it all got screwed up when Bush started the bailouts and Obama supersized them. 

If I had it my way, we would have dumped trillions into infrastructure (Instead of Too-Big-To-Fail) and actually held those who made the shitty "AAA" rated bonds (and the raters) responsible.

If people didn't learn that your job is not guaranteed from the 2008 fiasco, ... tough luck?

[OurTown]

I don't "cheer" for a downturn, but as a matter of fact it would not matter if I cheered or not.  The market will do whatever it does.  The real question is, do I buy in at 2,600 (-10%) or 2,300 (-20%)?  Or both?

[Mississippi Mudstache]

... I also would love a 2008 right about now.

:)

That's such a terrible sentiment. Can't those of us in accumulation mode just hope for a Black Monday, when a 23% drop in stock prices didn't correspond to massive recession, widespread layoffs, plummeting home values, and skyrocketing unemployment? Another recession is coming - that much is certain - but I don't understand how anyone could possibly wish another 2008-style "Great Recession" upon their fellow Americans in the name of asset accumulation. Fuck that.

Many companies were fat and un-profitable, housing values were ridiculously over-inflated and many people were spending every dollar they made on crap they didn't need...  All of those things needed to be fixed.


IMO it all got screwed up when Bush started the bailouts and Obama supersized them. 

If I had it my way, we would have dumped trillions into infrastructure (Instead of Too-Big-To-Fail) and actually held those who made the shitty "AAA" rated bonds (and the raters) responsible.

If people didn't learn that your job is not guaranteed from the 2008 fiasco, ... tough luck?

Your opinion is not worth the paper it's written on. You think the problem was the bailouts? News flash: the bailouts were a response to the crisis, not a cause of it. You think that re-building roads, while failing to stabilize the financial sector, would have made the crisis less severe? You correctly stated that home values were ridiculously inflated (which is related to the cause of the crisis). What asset, owned by millions of Americans, do you hope is ridiculously inflated now, such that it would precipitate a worldwide recession when the bubble pops? We don't even have the space to drop bond rates enough to stabilize a crisis on the scale of the 2008 recession. Are you hoping for negative bond rates for the next decade? Trillions more in national debt that you can pass on to your grandchildren?

[TexasRunner]

... I also would love a 2008 right about now.

:)

That's such a terrible sentiment. Can't those of us in accumulation mode just hope for a Black Monday, when a 23% drop in stock prices didn't correspond to massive recession, widespread layoffs, plummeting home values, and skyrocketing unemployment? Another recession is coming - that much is certain - but I don't understand how anyone could possibly wish another 2008-style "Great Recession" upon their fellow Americans in the name of asset accumulation. Fuck that.

Many companies were fat and un-profitable, housing values were ridiculously over-inflated and many people were spending every dollar they made on crap they didn't need...  All of those things needed to be fixed.


IMO it all got screwed up when Bush started the bailouts and Obama supersized them. 

If I had it my way, we would have dumped trillions into infrastructure (Instead of Too-Big-To-Fail) and actually held those who made the shitty "AAA" rated bonds (and the raters) responsible.

If people didn't learn that your job is not guaranteed from the 2008 fiasco, ... tough luck?

Your opinion is not worth the paper it's written on. You think the problem was the bailouts? News flash: the bailouts were a response to the crisis, not a cause of it. You correctly stated that home values were ridiculously inflated (which is related to the cause of the crisis). What asset, owned by millions of Americans, do you hope is ridiculously inflated now, such that it would precipitate a worldwide recession when the bubble pops? We don't even have the space to drop bond rates enough to stabilize a crisis on the scale of the 2008 recession. Are you hoping for negative bond rates for the next decade? Trillions more in national debt that you can pass on to your grandchildren?

Ya, I never stated I felt the bailouts were the cause of the crash.  I did, however, state that I wished those federal funds had been put towards something tangible, like upgraded infrastructure, and I did state that I wished the inflated institutions would have been allowed to falter or fail.

Either way, its obvious I struck a nerve so I hope we *don't* have a 2008.

Feel better now?

[dougules]

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

You would think that, wouldn't you, but I'm not seeing it.  Just because it SHOULD work that way doesn't mean it IS working that way right now.

Was there some bad economic news?  The stock market is down over 6% in three trading days, but for what?  Was there a jobs report, a missed earnings call, a credit default, a change in unemployment?  Has our faith in the market been shaken by some horrible event, like an attack on a financial center?  Was there some news I missed?  Because the economy seems just as strong today as it did last week. 

I think it's just as likely this is a blip, caused by random market noise amplifed by electronic traders.  Maybe concentrated crypto gains were cashing out and pumping up the stock index, then the influx stopped when cryptos bailed.  Maybe the bond issuance after the tax law really did motivate people to rebalance.  Maybe it's just rebalancing season for some big institutional investors who can move the market by themselves.  Whatever the trigger, some chartist voodoo geek wrote an algorithm or 2000 that's trying to time the fluxes, and it thought it saw a pattern and it went all in.  We've seen flash crashes before.  These days, the index price isn't really set by human decisions on the minute to minute scale, and arguable not on the day to day scale.  It's a robot eat robot world out there.

This doesn't mean the price will rebound tomorrow.  We've been at unusually high P/E ratios for a while now, without any good explanation as to why, so maybe we were unnaturally frothy and now we're rebounding to long term averages.  In which case, good!  Maybe there's a terrorist attack imminent that only the well connected know about, and they're moving into gold and K iodide tablets before the bombs start to fly.  In which case, oh shit! 

I don't claim to know the future, but I can still read the news of the past week and I'm not seeing any defensible logical trigger for 6.6% of the US economy to evaporate over a weekend.  I don't think the economy actually shrunk by 6.6% and I don't think future earnings shrunk by 6.6%.  I think people are just skittish. 

Me, I'll be buying the dip every Tuesday and Thursday just like I always do.  I'm riding this DCA train all the way to the bottom, baby.

actually, there was news that set this sell off, off.

it was both a rising in rates and the fed taking 30 billion out of the market that set this off. it wasn't apparent initially; but that was it. sure, it was extremely overbought; but that's what set it off.

it's too soon to see if this is anything more than a correction but continuing to raise rates and extracting liquidity isn't going to be received well. you are more than welcome to keep dollar cost averaging in the face of that if you wish.

This is the best possible news for us in the accumulation phase.  It's a sell-off that's based on good news.  The economy's is improving and interest rates may go up, making returns on other investments better.  Borrowed money may stop crowding mine out for stocks.  Workers may get some of the benefits of our economic growth.  I hope it continues.

[boarder42]

To be clear, I’m not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems

You would think that, wouldn't you, but I'm not seeing it.  Just because it SHOULD work that way doesn't mean it IS working that way right now.

Was there some bad economic news?  The stock market is down over 6% in three trading days, but for what?  Was there a jobs report, a missed earnings call, a credit default, a change in unemployment?  Has our faith in the market been shaken by some horrible event, like an attack on a financial center?  Was there some news I missed?  Because the economy seems just as strong today as it did last week. 

I think it's just as likely this is a blip, caused by random market noise amplifed by electronic traders.  Maybe concentrated crypto gains were cashing out and pumping up the stock index, then the influx stopped when cryptos bailed.  Maybe the bond issuance after the tax law really did motivate people to rebalance.  Maybe it's just rebalancing season for some big institutional investors who can move the market by themselves.  Whatever the trigger, some chartist voodoo geek wrote an algorithm or 2000 that's trying to time the fluxes, and it thought it saw a pattern and it went all in.  We've seen flash crashes before.  These days, the index price isn't really set by human decisions on the minute to minute scale, and arguable not on the day to day scale.  It's a robot eat robot world out there.

This doesn't mean the price will rebound tomorrow.  We've been at unusually high P/E ratios for a while now, without any good explanation as to why, so maybe we were unnaturally frothy and now we're rebounding to long term averages.  In which case, good!  Maybe there's a terrorist attack imminent that only the well connected know about, and they're moving into gold and K iodide tablets before the bombs start to fly.  In which case, oh shit! 

I don't claim to know the future, but I can still read the news of the past week and I'm not seeing any defensible logical trigger for 6.6% of the US economy to evaporate over a weekend.  I don't think the economy actually shrunk by 6.6% and I don't think future earnings shrunk by 6.6%.  I think people are just skittish. 

Me, I'll be buying the dip every Tuesday and Thursday just like I always do.  I'm riding this DCA train all the way to the bottom, baby.

actually, there was news that set this sell off, off.

it was both a rising in rates and the fed taking 30 billion out of the market that set this off. it wasn't apparent initially; but that was it. sure, it was extremely overbought; but that's what set it off.

it's too soon to see if this is anything more than a correction but continuing to raise rates and extracting liquidity isn't going to be received well. you are more than welcome to keep dollar cost averaging in the face of that if you wish.

This is the best possible news for us in the accumulation phase.  It's a sell-off that's based on good news.  The economy's is improving and interest rates may go up, making returns on other investments better.  Borrowed money may stop crowding mine out for stocks.  Workers may get some of the benefits of our economic growth.  I hope it continues.

agreed - great news for accumulation - in my personal situation if the market dropped to a PE of 15 for the next 5-6 years and maintained that i'd be happy b/c i have ~1/3 of my stashe in private ESOP money that will be dumped into the general market once i FIRE.  so a sell off to a PE 15 followed by increases only as earnings go up would be perfect for my personal FIRE time frame.

[sol]

would be perfect for my personal FIRE time frame.

Even if the current dip does turn into a full blown recession, current and recent retirees shouldn't complain.  The past decade has been an absolute golden age for the aspiring early retiree.  It's hard to ask for a better run than I've seen during my working career.

[Mississippi Mudstache]

Either way, its obvious I struck a nerve so I hope we *don't* have a 2008.

Feel better now?

Eh, I was fine before. I just really hope that we never live through another recession on the level of 2008 again. It's not a good thing to wish for. The hardest-hit victims of such an event are not the people who are responsible for it. Now, a 2001-style stock market meltdown coupled with a mild recession? A Black Monday, when there wasn't even a recession to go along with the meltdown? That's a little bit different.

Perhaps I'm touchy because I was one of the people who was profoundly affected by the 2008 recession. I'm in a better position to weather that kind of storm now, but I graduated from college in Jan. 2008 and it was tough sailing for a few years there. I can't control what happens in the larger economy, but I can control what I hope for.

[Mr. Boh]

... I also would love a 2008 right about now.

:)

That's such a terrible sentiment. Can't those of us in accumulation mode just hope for a Black Monday, when a 23% drop in stock prices didn't correspond to massive recession, widespread layoffs, plummeting home values, and skyrocketing unemployment? Another recession is coming - that much is certain - but I don't understand how anyone could possibly wish another 2008-style "Great Recession" upon their fellow Americans in the name of asset accumulation. Fuck that.

Many companies were fat and un-profitable, housing values were ridiculously over-inflated and many people were spending every dollar they made on crap they didn't need...  All of those things needed to be fixed.


IMO it all got screwed up when Bush started the bailouts and Obama supersized them. 

If I had it my way, we would have dumped trillions into infrastructure (Instead of Too-Big-To-Fail) and actually held those who made the shitty "AAA" rated bonds (and the raters) responsible.

If people didn't learn that your job is not guaranteed from the 2008 fiasco, ... tough luck?

I'm guessing that you had little to no net worth in 2008-2009. I find it impossible to believe that anyone with investments who lived through that period would share that sentiment. It was scary as hell. Building some roads and airports was not going to contain the problem.

[TexasRunner]

I'm guessing that you had little to no net worth in 2008-2009. I find it impossible to believe that anyone with investments who lived through that period would share that sentiment. It was scary as hell. Building some roads and airports was not going to contain the problem.

This really has taken a fun thread sideways.
"Some roads and airports" is a strawman.

If anybody wants to talk about it elsewhere, point me to a thread.

Oh, and the mini-top is in.  If you didn't sell yesterday you are doomed to a life of single-ness, barren-ness and tooth decay.

[Clean Shaven]

Oh, and the mini-top is in.  If you didn't sell yesterday you are doomed to a life of single-ness, barren-ness and tooth decay.

If I'm single, I guess it won't matter that I'm barren and have no teeth.

[mustachian spin] I'll save a bundle on diapers, kid clothes, school activities, toothpaste, and floss! [/mustachian spin]

[sol]

Time to fess up, market timers.  Who has sold stocks this week in response to the market drop?

I mean besides thorstache, who presumably went 100% cash last April when he called the top the first time.

[NeonPegasus]

Time to fess up, market timers.  Who has sold stocks this week in response to the market drop?

I mean besides thorstache, who presumably went 100% cash last April when he called the top the first time.

Me, me, me!

Oh, wait. I didn't sell anything.

I actually bought some stuff for my kids' 529s. And I didn't look much at what the market was doing. I just had my plan and I executed it. How boring.

[talltexan]

I'm scheduled to rebalance this week (it's my birthday), and--frankly--I might just skip it. Just too volatile.

[DS]

Me, me, me!

Oh, wait. I didn't sell anything.

I actually bought some stuff for my kids' 529s. And I didn't look much at what the market was doing. I just had my plan and I executed it. How boring.

I just fell asleep.

[JAYSLOL]

Me!  I sold sold some stuff.  Well, not stocks, some old tools I don't use, some audio gear and a few odds and ends.  Put that money to good use buying stocks in my TFSA this morning.

[OurTown]

I'm looking to do a rebalance, but it has to be just the right time.  Hence, the difficulties of market timing.

[boarder42]

Really need vanguard to hurry up with their tax forms so I can get my overly large return back due to last minute opening of my vanguard charitable account. So I can dump that in

[nereo]

Me!  I sold sold some stuff.  Well, not stocks, some old tools I don't use, some audio gear and a few odds and ends.  Put that money to good use buying stocks in my TFSA this morning.

oh man, that was a mistake - my analysis clearly shows we are no where near the top for old tools. 

[DS]

[Clean Shaven]

Since the market is rocking and rolling today, does that mean....


Top is in?

[nereo]

Time to fess up, market timers.  Who has sold stocks this week in response to the market drop?

I mean besides thorstache, who presumably went 100% cash last April when he called the top the first time.

In my imagination, thorstach has been shorting the market since last April, and has been in a perpetual cash-squeeze.  Hey, it might explain the constant 'top is in' comments... s/he's trying to start a panic-selloff.

[JAYSLOL]

Me!  I sold sold some stuff.  Well, not stocks, some old tools I don't use, some audio gear and a few odds and ends.  Put that money to good use buying stocks in my TFSA this morning.

oh man, that was a mistake - my analysis clearly shows we are no where near the top for old tools.

Yeah, I know risky timing of the highly speculative market of old tools.  Consider me a rebel

[PathtoFIRE]

I neither bought nor sold. Paid at the end of this week (and therefore will be buying at the end of this week). Anyone else a little disappointed in the last hour rally? I mean I want the markets to go up forever and ever like the next guy, but barring that, I'd like to at least see a few pullbacks sprinkled about my accumulation phase that last more than just double digit hours. Well there's always tomorrow.

[anisotropy]

Time to fess up, market timers.  Who has sold stocks this week in response to the market drop?

I mean besides thorstache, who presumably went 100% cash last April when he called the top the first time.

I bought, as can be seen in my recent post. Did I just time the bottom? (fingers crossed)

My VIX plays are mostly a fluke; while I bought "protections" (HUV / VXX) as an extension of my thesis (vol to rise with market) in the latest sermon, I was not expecting a massive spike literally the day of, just as I was not expecting a 1000+ drop of Dow. Overall heavy losses even with multiple layers of hedges via asset allocation and tactical trades (VIX plays), although it's probably much less severe than most people.

Yay for me?

ps. you guys know if I actually timed (didn't even look, just bought lol) the bottom this time, and with my lucky VIX plays, you are not going to hear the end of it from now on when I preach the benefits of timing right?