Author Topic: Race from $2M to $4M...and Beyond!  (Read 536436 times)

desk_jockey

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Re: Race from $2M to $4M...and Beyond!
« Reply #3050 on: May 20, 2020, 11:24:30 PM »

- SNIP -

I just flat out don’t understand the market.  Seems that people expect the government to bail-out everyone before any situation gets to bad.  It certainly appears to be happening.  That may keep markets too expensive for a while.  I guess that will work for a time… until it doesn’t.  And then there will be hell to pay.

Will there be hell to pay?  Haven't we already had a big "correction?"

So - Government sends people money for a bit.  What do they do with it?  Mostly spend it.  This keeps the demand for goods and services up and keeps the stock prices up.  Mostly win - win for a little while.  (Trickle Up Economics)

After the little bit, no more government money.  Virus fear dies down.  People go back to work.  They make money.  Mostly spend it.  This maintains the demand for goods and services. This keeps stock prices up as the companies have real value.  Mostly win-win for longer time until business cycle dumps on people again.

Stock prices may stay down for a bit, but maybe it's better if their price is based on real value rather than speculation.

The comment was not about the government sending people money.  The stimulus checks and far more importantly the extra money for unemployment are needed. But these are a very small fraction of the recent government stimulus. 

My comment was directed at the great part of the stimulus that went to propping-up companies. Again. This time we were exceptionally quick to give money into companies.   It might be worth noting that Buffett and Munger aren’t buying, presumably because they can’t find deals of value.   In previous financial crises corporations have come to them hat-in-hand (e.g. GE in 2008).  This time around there seems to be less need of that, as the government stepped in before market forces were in full effect.

Have we had a big correction?   A blip correction is more like it.   Down 10% two months after an all-time peak is hardly a big correction.

At this point, I’m speculating out loud as to whether we’re seeing a fundamental change in the playing field.   Has the market or the coverage of it become so important that the federal elected officials feel they can’t let wide-spread bad things happen?   Will they now rush in with lower interest rates and massive corporate economic assistance every time there is a problem?  Are they worried that a small drop in stock prices might mean they won’t get reelected? 

I’m wondering if we are in a cycle in which there is limited downside risk because the government is standing by to print money to solve any corporate market problem.  That will work for a while. 10 years, 15 years, or 40 years…  If this is what is happening, eventually we will reach a point where the same solution won’t be able to fix the next economic problem.  At that time there will be hell to pay.

That said, I'll stand by my previous comment:  I just flat out don’t understand [this] market.
« Last Edit: May 20, 2020, 11:28:10 PM by desk_jockey »

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3051 on: May 21, 2020, 06:52:23 AM »

- SNIP -

The comment was not about the government sending people money.  The stimulus checks and far more importantly the extra money for unemployment are needed. But these are a very small fraction of the recent government stimulus. 

My comment was directed at the great part of the stimulus that went to propping-up companies. Again. This time we were exceptionally quick to give money into companies.   It might be worth noting that Buffett and Munger aren’t buying, presumably because they can’t find deals of value.   In previous financial crises corporations have come to them hat-in-hand (e.g. GE in 2008).  This time around there seems to be less need of that, as the government stepped in before market forces were in full effect.



Oh heck, that's even more basic.

"Ya dance with the one that brung ya."

It's a very commonly known fact that it costs a bit of money to get into the Washington thing.  Who pays that money?  It comes from different places.  A chunk of it is paid by American enterprise, businesses.  American businesses don't just throw money away.  They have really smart people who know all about investing money.  (Just like you guys.)  When they invest that money, they expect a return.

When businesses hire a young person out of college, they have an investment in that person.  They are grooming that person to be successful in their organization.  They recognize people that can become one of their own.

When businesses contribute to an aspiring politician, they have an investment in that person.  Their lobbyists help that person to successfully represent them.  They help elect one of their own.

So,......the good news for all these businesses is that sometimes a small investment really pays off.  As you noted, the stock prices stayed up.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3052 on: May 21, 2020, 07:51:58 AM »

- SNIP -

I just flat out don’t understand the market.  Seems that people expect the government to bail-out everyone before any situation gets to bad.  It certainly appears to be happening.  That may keep markets too expensive for a while.  I guess that will work for a time… until it doesn’t.  And then there will be hell to pay.

Will there be hell to pay?  Haven't we already had a big "correction?"

So - Government sends people money for a bit.  What do they do with it?  Mostly spend it.  This keeps the demand for goods and services up and keeps the stock prices up.  Mostly win - win for a little while.  (Trickle Up Economics)

After the little bit, no more government money.  Virus fear dies down.  People go back to work.  They make money.  Mostly spend it.  This maintains the demand for goods and services. This keeps stock prices up as the companies have real value.  Mostly win-win for longer time until business cycle dumps on people again.

Stock prices may stay down for a bit, but maybe it's better if their price is based on real value rather than speculation.

The comment was not about the government sending people money.  The stimulus checks and far more importantly the extra money for unemployment are needed. But these are a very small fraction of the recent government stimulus. 

My comment was directed at the great part of the stimulus that went to propping-up companies. Again. This time we were exceptionally quick to give money into companies.   It might be worth noting that Buffett and Munger aren’t buying, presumably because they can’t find deals of value.   In previous financial crises corporations have come to them hat-in-hand (e.g. GE in 2008).  This time around there seems to be less need of that, as the government stepped in before market forces were in full effect.

Have we had a big correction?   A blip correction is more like it.   Down 10% two months after an all-time peak is hardly a big correction.

At this point, I’m speculating out loud as to whether we’re seeing a fundamental change in the playing field.   Has the market or the coverage of it become so important that the federal elected officials feel they can’t let wide-spread bad things happen?   Will they now rush in with lower interest rates and massive corporate economic assistance every time there is a problem?  Are they worried that a small drop in stock prices might mean they won’t get reelected? 

I’m wondering if we are in a cycle in which there is limited downside risk because the government is standing by to print money to solve any corporate market problem.  That will work for a while. 10 years, 15 years, or 40 years…  If this is what is happening, eventually we will reach a point where the same solution won’t be able to fix the next economic problem.  At that time there will be hell to pay.

That said, I'll stand by my previous comment:  I just flat out don’t understand [this] market.

I share your frustration.   Eventually companies have to make real money for stock values to hold up.  There will be a huge number of small business failures within the next year.  They live paycheck to paycheck like a lot of American workers.   Loans and grants can only bridge the gap so long.  New businesses will see opportunity in that void however so it's not all gloom and doom.  The stock market also runs on future expectations.  But in that future you have to let the deadwood fall.  A rotting limb only adds stress to the tree, it would rather grow a new healthy limb from a fresh bud.
« Last Edit: May 21, 2020, 10:35:41 AM by Bateaux »

GreenEggs

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Re: Race from $2M to $4M...and Beyond!
« Reply #3053 on: May 21, 2020, 08:32:24 AM »
I'm torn about where to be too.


On the one hand it appears that we are in, or on the brink of, a depression.  There's been a hefty bounce, which will most certainly reverse course and head back into a deeper crash soon. 


I captured some loses and bought a bit (about 20% of my portfolio) of VFIAX and am back up about 20% now.  I think it might be time to liquidate and go all cash. 


But, I'm also thinking about investing in actively managed sector funds.  ARKG is up YTD 46%, and the other ARK funds look interesting too.  I'm just not sure passive broad based index funds make sense right now.  I see a lot of bankruptcies and struggling stocks ahead & feel that they'll need to be actively discarded, which a passive index fund can't do. 
There are a number of individual value stocks to choose from, but I'm not savvy enough to choose them nor know when to buy & sell them. 


What percentages are you guys in equities & what type of funds/ETFs are you in?  What are your thoughts about active vs passive now?


« Last Edit: May 21, 2020, 09:17:57 PM by GreenEggs »

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3054 on: May 21, 2020, 08:43:42 AM »
What percentages are you guys in equities & what type of funds/ETFs are you in?  What are your thoughts about active vs passive now?

My thoughts are that I'm phenomenally ignorant about which companies are going to thrive and which are going to fail.    And that by the time I figure that out (assuming I actually could do such a thing), the smart and informed money would have already done the right thing, leaving me arriving after the party is over.   

In other words, I'm smart enough to understand my limitations and that I'm not going to be making good investments, I'll be gambling instead.   Gambling is a great way to turn a large fortune into a small one.

My solution to the above was to have multiple different income streams and not be fully dependent on any one of them.

We have rental home income, sharecropped farm income, social security and stocks/bond income.     Stocks/bonds are for long term growth for our mentally handicapped daughter's needs after we've died.   The other three provide most of the income we need, within a couple of years, they'll cover all our expenses.

I really don't have to care much about where the market is.   If it's up I might sell and buy some good real estate, or just have a good time with the proceeds.  If it's down, I'll only sell the bare minimum necessary.    Right now we're at less than a 2% SWR, when we sell our old house we'll drop back to 1%, and when we pay off the new house in about 2 years we'll be at 0%.   In 3 years when I go on Medicare, we should be at -1% SWR.

ysette9

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Re: Race from $2M to $4M...and Beyond!
« Reply #3055 on: May 21, 2020, 09:51:50 AM »
@Bateaux
"Laissez les bons temps rouler"

Dat's what I'm talking about chéri
That’s « éclatons- nous! » or « amusons-nous! » for anyone who needed that translated into French.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3056 on: May 21, 2020, 06:32:15 PM »
I’ll tell you, the only things that seems to help me when the market is being bat___ crazy is cash and diversification. And VTSAX doesn’t scratch the itch.
I just flat out don’t understand the market.  Seems that people expect the government to bail-out everyone before any situation gets to bad.  It certainly appears to be happening.  That may keep markets too expensive for a while.  I guess that will work for a time… until it doesn’t.  And then there will be hell to pay.

Another poster had a good analysis. PE ratios have been increasing over time. Maybe the market has so discounted risk that say a 4% rate of return for US stocks is just the best we’re gonna get. And prices reflect that. If so, I can make peace with that. I’ll stick to cash, foreign stocks, and other stuff and others can go for those pocket change returns with my best wishes.

That or the markets are just plain bat___ crazy.  Or both.

JoJoP

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Re: Race from $2M to $4M...and Beyond!
« Reply #3057 on: May 22, 2020, 04:26:46 PM »
@Bateaux those cruises are floating germ beds. They were that way pre-covid.   No way no how would I want to go on one now.  But since you're going to do it no matter what we say, I'm glad you're going in the heat of summer to a warm destination.   The ports and beaches will be quiet if tourism is still down.

 I think I'm brave enough to go to the airport soon, and go to a hotel, but not in a big rush to book anything.  A drive trip is coming up.  I want to go find some investment property.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3058 on: May 22, 2020, 06:55:05 PM »
@Bateaux those cruises are floating germ beds. They were that way pre-covid.   No way no how would I want to go on one now.  But since you're going to do it no matter what we say, I'm glad you're going in the heat of summer to a warm destination.   The ports and beaches will be quiet if tourism is still down.

 I think I'm brave enough to go to the airport soon, and go to a hotel, but not in a big rush to book anything.  A drive trip is coming up.  I want to go find some investment property.

The Cruise isn't till November.  Many cruises will take place prior to then.  So many test cases.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #3059 on: May 23, 2020, 05:39:18 AM »
@Bateaux I have had Covid and am, presumably, well stocked with antibodies and yet I will not ever set foot on a cruise ship.

Quite apart from the disease angle, there is also the concern that mechanical failures are quite common. See this or this or this

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3060 on: May 23, 2020, 07:54:40 AM »
@Bateaux those cruises are floating germ beds. They were that way pre-covid.   No way no how would I want to go on one now.  But since you're going to do it no matter what we say, I'm glad you're going in the heat of summer to a warm destination.   The ports and beaches will be quiet if tourism is still down.

 I think I'm brave enough to go to the airport soon, and go to a hotel, but not in a big rush to book anything.  A drive trip is coming up.  I want to go find some investment property.

The Cruise isn't till November.  Many cruises will take place prior to then.  So many test cases.

@Bateaux is Cajun.  So he comes from a culture that sees swamps as heaven on earth and where alligator is just another phrase meaning "lunch is served."  That also means a lifelong diet of boudin, cracklins, crayfish, and jambalaya. Heart-clogging fare that would kill most of us if we ate it all the time. So a cruise probably isn't going to do him in. Cruises sure aren't my thing but hey, life was meant to be lived. 

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3061 on: May 23, 2020, 08:10:09 AM »
@Bateaux those cruises are floating germ beds. They were that way pre-covid.   No way no how would I want to go on one now.  But since you're going to do it no matter what we say, I'm glad you're going in the heat of summer to a warm destination.   The ports and beaches will be quiet if tourism is still down.

 I think I'm brave enough to go to the airport soon, and go to a hotel, but not in a big rush to book anything.  A drive trip is coming up.  I want to go find some investment property.


The Cruise isn't till November.  Many cruises will take place prior to then.  So many test cases.

@Bateaux is Cajun.  So he comes from a culture that sees swamps as heaven on earth and where alligator is just another phrase meaning "lunch is served."  That also means a lifelong diet of boudin, cracklins, crayfish, and jambalaya. Heart-clogging fare that would kill most of us if we ate it all the time. So a cruise probably isn't going to do him in. Cruises sure aren't my thing but hey, life was meant to be lived.

Was the past-tense verb in that last phrase intentional? :)

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3062 on: May 23, 2020, 09:13:41 AM »
@Bateaux those cruises are floating germ beds. They were that way pre-covid.   No way no how would I want to go on one now.  But since you're going to do it no matter what we say, I'm glad you're going in the heat of summer to a warm destination.   The ports and beaches will be quiet if tourism is still down.

 I think I'm brave enough to go to the airport soon, and go to a hotel, but not in a big rush to book anything.  A drive trip is coming up.  I want to go find some investment property.


The Cruise isn't till November.  Many cruises will take place prior to then.  So many test cases.

@Bateaux is Cajun.  So he comes from a culture that sees swamps as heaven on earth and where alligator is just another phrase meaning "lunch is served."  That also means a lifelong diet of boudin, cracklins, crayfish, and jambalaya. Heart-clogging fare that would kill most of us if we ate it all the time. So a cruise probably isn't going to do him in. Cruises sure aren't my thing but hey, life was meant to be lived.

Was the past-tense verb in that last phrase intentional? :)

No. But I love double entendres so all the better!

YHD

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Re: Race from $2M to $4M...and Beyond!
« Reply #3063 on: May 23, 2020, 11:08:46 AM »
Market be crazy.

We're investing in artisan pot pies and $8/pound Michigan cherries.  I want to be ready when eggs are currency again.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3064 on: May 23, 2020, 04:54:32 PM »
Anybody else sensing that the whole market is going to crash soon?

I pulled another $100k out of stocks (mostly) and bonds last week so now have roughly $200k in cash. With a reduced spend cus to be honest there is nothing to spend money on right now that could be 20 years of living in cash assuming the renters stick around or we take our pensions at some point.

Clearly this is way too much to have sitting in cash but I'm just not sure where else to put it right now.

Maybe I should go out and buy his and her Corvettes..:)

oldladystache

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Re: Race from $2M to $4M...and Beyond!
« Reply #3065 on: May 23, 2020, 05:09:00 PM »
Anybody else sensing that the whole market is going to crash soon?

I pulled another $100k out of stocks (mostly) and bonds last week so now have roughly $200k in cash. With a reduced spend cus to be honest there is nothing to spend money on right now that could be 20 years of living in cash assuming the renters stick around or we take our pensions at some point.

Clearly this is way too much to have sitting in cash but I'm just not sure where else to put it right now.

Maybe I should go out and buy his and her Corvettes..:)

I'm in kinda the same situation. I have over 300k waiting. And my neighbors are talking about selling their beautiful old Corvette. Does a 75 year old woman need a Corvette? I don't think so.

tooqk4u22

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Re: Race from $2M to $4M...and Beyond!
« Reply #3066 on: May 23, 2020, 05:20:44 PM »
Anybody else sensing that the whole market is going to crash soon?

I pulled another $100k out of stocks (mostly) and bonds last week so now have roughly $200k in cash. With a reduced spend cus to be honest there is nothing to spend money on right now that could be 20 years of living in cash assuming the renters stick around or we take our pensions at some point.

Clearly this is way too much to have sitting in cash but I'm just not sure where else to put it right now.

Maybe I should go out and buy his and her Corvettes..:)

I don't know about a crash but market is definitely range bound with 2950 break point upward.  It doesn't feel right to me.  So I will stick to my view that I posted previously quoted below.  I rebalanced when SP500 2939, market went down after that but not enough to do anything. But I do have a conservative AA - equity glidepath.   I wouldn't mind my equities allocation being higher but I can't justify it now. 

It wouldn't surprise me one bit that we see a jump in cases that re-spins the fear and market drops.   Oh wait, Moderna had positive indications from 8 of 45 vaccine trial subjects...nevermind that there is no discussion on the other 37 or that 8 doesn't even qualify as a meaningful statistical sample.  Oh yeah, the head of the White house corona task force was named, the data of the 8 subjects came out days later, the stock went up 4x and the guy is now as $10mil of Moderna stock.   Not bad, insider info and corruption is great. 

Forget all that, and go with "Don't fight the fed!"

So I rebalanced as the  markets went down and now they are up a bit since and I will be rolling out of that money as long as the market doesn't crash down by the end of the day.   No tax hit bc as the markets fell I also did a bunch of tax loss harvesting so that will offset the new gains.   The selling will basically get me back to my AA +/- so its not like I am selling everything, but Per my post below from a week ago I just don't understand these levels given the hit to the economy now and into the foreseeable future, I see that I am not alone in that feeling. 

I guess people that can spend will probably go back to it but ignoring the millions of people that will remain unemployed or in a precarious financial position how does it go back to normal anytime soon if social distancing will still be the priority. i.e. a restaurant or movie theater can't just create space to keep people separated, that will be a lot of empty seats. 

I guess the main caveat is "Don't fight the fed"

As for the markets, I clearly don't understand and don't time, just stick to my AA which is conservative.  But markets were definitely stretched going into this year for sure.  I felt before the QE/Rate cuts in 2019 that SP500 at 2900 was the high point of being fairly valued bc earnings didn't grow so I am really struggling to understand how it being at 2750-2850 now is appropriate, I mean I like it higher than lower, but I just don't get it.  Below is what I think of SP500 - $2600 or less is where I think it should be right now and honestly $2300 didn't and still doesn't seem crazy to me.    Not much I will do with it but I use it as a guide post.   

SP500 earnings  with 20PE IMO appropriate
2016...……………………………………………………………...$101...………………..$2020
2017...……………………………………………………………...$115...………………..$2300
2018 (tax cut, no growth otherwise)...……………$136...………………..$2720
2019 (no growth)...………………………………………….$140...………………..$2800
2020 (original est)…………………………………………...$162...………………..$3240
2020 (revised) ????………..doesn't matter, pe will be really high
2021???? (20% drop from 2020 est)………………$129...…………………$2592

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3067 on: May 23, 2020, 06:07:47 PM »
Anybody else sensing that the whole market is going to crash soon?

I pulled another $100k out of stocks (mostly) and bonds last week so now have roughly $200k in cash. With a reduced spend cus to be honest there is nothing to spend money on right now that could be 20 years of living in cash assuming the renters stick around or we take our pensions at some point.

Clearly this is way too much to have sitting in cash but I'm just not sure where else to put it right now.

Maybe I should go out and buy his and her Corvettes..:)

I’ve been expecting a crash for awhile. Doesn’t mean it’s going to happen. The CAPE yield right now is less than 3%. That’s not enough to bother with in my view given a consumer based economy with 20% unemployment. I’ll pay off the mortgage first, thanks. Lots of folks just buying in and I wish them the best. It’s not for me.

Only $200k cash? Really? You probably need to up your game.


Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3068 on: May 23, 2020, 08:18:49 PM »
Anybody else sensing that the whole market is going to crash soon?

I pulled another $100k out of stocks (mostly) and bonds last week so now have roughly $200k in cash. With a reduced spend cus to be honest there is nothing to spend money on right now that could be 20 years of living in cash assuming the renters stick around or we take our pensions at some point.

Clearly this is way too much to have sitting in cash but I'm just not sure where else to put it right now.

Maybe I should go out and buy his and her Corvettes..:)

I’ve been expecting a crash for awhile. Doesn’t mean it’s going to happen. The CAPE yield right now is less than 3%. That’s not enough to bother with in my view given a consumer based economy with 20% unemployment. I’ll pay off the mortgage first, thanks. Lots of folks just buying in and I wish them the best. It’s not for me.

Only $200k cash? Really? You probably need to up your game.

I was itchy to move more money out of stocks this week.  But, I was spending most of my time planning my luxury cruise.   No I haven't booked it yet.  Anyway, I think the market will drop bigly again.  We're priced for perfection and there is just too much wrong that won't soon be fixed.

GreenEggs

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Re: Race from $2M to $4M...and Beyond!
« Reply #3069 on: May 23, 2020, 09:48:12 PM »
I sold everything yesterday.  Had some in an S&P 500 index & a couple stocks.   The individual stocks made me nervous & I'm not sure the broad index is such a good choice either.   


I recently discovered ARK funds, which invests in disruptive technologies.  I'm considering trying them after we see which way the overall market decides to go.  (ARKW is their main fund & ARKG is the one that's doing best this year.)









SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3070 on: May 23, 2020, 11:06:26 PM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.



Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3071 on: May 23, 2020, 11:56:54 PM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

We fear the coming bear market and recession.  In 2018 we had a correction bailed out by the Fed.  This Spring we had a rapid correction followed by massive Fed stimulus.  That temporarily has proped up the market.  But where are we now?  Interest rates globally are going negative.  No more rate cut boosts are left.  Massive tax cuts were already issued during the bull market.  Can we dare issue further tax cuts while ammasing such huge debts?  More bankruptcies and more job losses are coming.  The peak of job losses will likely reach 50 million.   Eventually the bleak economy will impact the stock market.  Will we see 50 or 60 percent losses that threaten our retirement for a decade or more?  Yes, you mention FDIC.  Bank failures may come.  Those of us holding Bond funds could see big losses if interest rates do rise.   A young person with a good job may be able to take that kind of risk.  Most of us in this thread cannot.

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #3072 on: May 24, 2020, 01:39:47 AM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.
If it's any consolation, I'm not doing anything.

However, there is a case to be made that once you have ENOUGH, it's okay to move out of equities and take a preservation of capitol stance. i.e. you've won the game, why keep playing? I'm not sure if that's the case for everyone here who has admitted to selling.

It is not our long-term plan, therefore it's business as usual at our house. Ho-hum.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #3073 on: May 24, 2020, 04:01:25 AM »
I'm with @SwordGuy and @Dicey on this. I haven't done anything except to increase my monthly post-tax SP500 index purchase by 50%. And I don't plan to do anything else.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3074 on: May 24, 2020, 07:13:52 AM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

Who's panicked?  I'm not 100% certain, but I think my family and I have pretty much won this game.  Absent some exceptionally stupid moves or a comet strike, I don't see us being forced to live in our cars or to take up dumpster diving.   

This is not the craziest market I've ever seen.  That honor was taken by the Dotcom bubble. But this is in the running for the second craziest.  Low risk premiums in the teeth of very obvious economic problems don't give me much reason for wanting to own US equities.  Nerve or not.  Truth be told, I'd much rather be heavier US equity exposure*.  But I can't reconcile what I see in the way of expected returns with that. I like risk, but I expect to be paid for it.  A less than 3% CAPE yield for the SP 5+495 just ain't cutting it. Even paying off my mortgage looks better than that. 

*(I'm slowly increasing international equities exposure.)       

 

GreenEggs

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Re: Race from $2M to $4M...and Beyond!
« Reply #3075 on: May 24, 2020, 08:13:17 AM »
Although money is money, everyone's situation is unique.


I received the bulk of my liquid assets in 2018.  Using a start date of Jan 2018 til Apr 2020 with portfoliovisualizer VTSAX hasn't held up so well.  From what I can gather, it's over-diversified and the laggers reduce the gains of the winners.  I think there will be a lot more laggers coming out of this current mess.  The winners tend to outperform & keep getting farther ahead of the pack.  VTSAX is behind VOO, and VOO is behind VUG, which is behind VGT.  If you plug those into portfolioviz you have to go back a very long time for VTSAX to even get ahead of VOO/SPY.


We just experienced a large correction, and an even larger one is quite likely.  It's given me the opportunity to examine the potential rebound of various funds & stocks as they have bounced or haven't bounced.  I have decided to reposition myself.  I agree that part of this was an emotional decision, but I have also spent a lot of time reading & studying investing and market info.  I'm not telling anyone to follow my actions, but just letting others that have chosen to change course know that they aren't alone. 


This is similar to taking a long trip.  We've driven through a major storm and some of us have decided to take a pit stop and check out the situation before moving on down the road.  I'm just grabbing a coffee, a snack, checking the load, checking the weather report, and taking a look at the map.  It's not a race, and I don't mind if some folks get ahead of me. 






« Last Edit: May 24, 2020, 07:35:38 PM by GreenEggs »

oldladystache

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Re: Race from $2M to $4M...and Beyond!
« Reply #3076 on: May 24, 2020, 08:20:25 AM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I haven't lost my nerve. I have more than I will ever need. Having won the game I'm backing off a bit.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3077 on: May 24, 2020, 08:53:03 AM »
I'm not planning to sell all stock exposure.  Maybe get down to 25 or 30 percent.   Following MMM doesn't require us to keep our money at risk when we have won the game.  We can pick up our chips and cash out.  I plan to always have at least 500K at risk. That's no small amount.  That represents 20 to 25 percent for us.  Are we giving up the opportunity to make 5 million or 10 million from our portfolios?  Maybe.   Most of us won't spend our 2 million.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #3078 on: May 24, 2020, 10:24:43 AM »
...
I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.
...

Pretty sure we are all in different places on our journey.  As others have said, once you've won the game, you don't need to be 100% equities for their 30 year out-performance.  What am I going to do with another million that I can't already do, other than leave a bigger number behind?  I know I can ER comfortably now, but maybe that would be stressful if we had a correction AND I lost my job.  So yeah, I'm more conservatively invested right now just in case there is a sequence return issue created that I could have avoided. 

I'm hoping to get exciting opportunities again at some point - good prices on real estate, better valuations on company future earnings (CAPE ratio), etc. - but I'm not feeling the distressed sales yet and so yeah, I'm defensively invested with lots of cash and stable value.  It's one of my favorite things about FI, being comfortable with having 'enough' that I can wait if I don't like what is being offered.  And if I'm wrong, no my portfolio won't get 'killed', it'll just bump along at a lower growth rate.  Hasn't bothered me for about 2 years now (I did my selling in the fall of 2018 at S&P 2800), so I don't think it will bother me more now that the real economy is much worse and valuations are the same or higher. 

Bottom line for me, I'm doing what I think is best, not just throwing my FI in to harm's way because it'll outperform in the long run.  Life is looking a little iffy in the short run.

With that said, anyone else notice that groceries are getting more expensive?  We paid $7 for 4 burgers!  Probably not a bad thing we are used to restaurant spending, cutting back on that isn't saving as much as it used to.

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3079 on: May 24, 2020, 12:04:19 PM »
Hard times ahead after the virus thing is over?  Some say - not hardly.  Here's a Forbes article:

https://www.forbes.com/sites/richkarlgaard/2020/04/06/five-bold-predictions-for-the-post-covid-19-world/#1981dd897def

He predicts inflation. 

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3080 on: May 24, 2020, 12:50:45 PM »
With that said, anyone else notice that groceries are getting more expensive?  We paid $7 for 4 burgers!  Probably not a bad thing we are used to restaurant spending, cutting back on that isn't saving as much as it used to.

And ……….. that would be why having so much in cash can be costly...   because inflation can eat you alive.   Businesses will need to charge more because they are taking a productivity hit and an expenses hit. 

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #3081 on: May 24, 2020, 01:17:00 PM »
With that said, anyone else notice that groceries are getting more expensive?  We paid $7 for 4 burgers!  Probably not a bad thing we are used to restaurant spending, cutting back on that isn't saving as much as it used to.

And ……….. that would be why having so much in cash can be costly...   because inflation can eat you alive.   Businesses will need to charge more because they are taking a productivity hit and an expenses hit.
I don’t think this is typical inflation though, and I have plenty of short term belt tightening I’m willing to do to preserve cash.  I plan to invest my cash if I see an opportunity, but I don’t think companies will be increasing earnings (as typically happens during inflation) anytime soon.

markbike528CBX

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Re: Race from $2M to $4M...and Beyond!
« Reply #3082 on: May 24, 2020, 01:32:26 PM »
The whining on this thread, of all threads, is pathetic.  I'm with @SwordGuy  and @Dicey.   

Go  see the people actually having balls and FIREing  THIS year , like NOW in the 2020 FIRE Cohort Thread.
I'm not implying that _I_ would FIRE now, my balls are small.

I think ?someone? had a quote, in their sig line, from Sol to the effect that, "We got here doing certain things,  we will continue doing them."

Edit:  removed username that I though had the Sol quote I can't find it.   Are sig lines searched in the forum search engine?
Found a similar quote from sol  "We're not looking to time the market now, and we got here by not looking to time the market over the past decade."
https://forum.mrmoneymustache.com/welcome-to-the-forum/the-best-post-i-saw-today-on-the-mr-money-mustache-forums-was/msg2368199/#msg2368199
« Last Edit: May 24, 2020, 01:56:51 PM by markbike528CBX »

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3083 on: May 24, 2020, 02:09:12 PM »


With that said, anyone else notice that groceries are getting more expensive?  We paid $7 for 4 burgers!  Probably not a bad thing we are used to restaurant spending, cutting back on that isn't saving as much as it used to.

Yup.  Paid $5.99 a pound for hamburger today.  One of my neighbors keeps on telling me that squirrel is pretty good. The other white meat.  Anybody ever try it?   

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #3084 on: May 24, 2020, 02:10:54 PM »
The whining on this thread, of all threads, is pathetic.  I'm with @SwordGuy  and @Dicey.   

Go  see the people actually having balls and FIREing  THIS year , like NOW in the 2020 FIRE Cohort Thread.
I'm not implying that _I_ would FIRE now, my balls are small.

I think ?someone? had a quote, in their sig line, from Sol to the effect that, "We got here doing certain things,  we will continue doing them."

Edit:  removed username that I though had the Sol quote I can't find it.   Are sig lines searched in the forum search engine?
Found a similar quote from sol  "We're not looking to time the market now, and we got here by not looking to time the market over the past decade."
https://forum.mrmoneymustache.com/welcome-to-the-forum/the-best-post-i-saw-today-on-the-mr-money-mustache-forums-was/msg2368199/#msg2368199
.

To each their own, we are all expressing our feelings and opinions.  You have yours, I have mine - but I have not experienced any whining - so please show me an example, unless you are responding to my post.  I am still very comfortable with my life, despite your talk of me (since I'm in the whiner camp) having small testicles :)

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3085 on: May 24, 2020, 02:12:46 PM »
With that said, anyone else notice that groceries are getting more expensive?  We paid $7 for 4 burgers!  Probably not a bad thing we are used to restaurant spending, cutting back on that isn't saving as much as it used to.

And ……….. that would be why having so much in cash can be costly...   because inflation can eat you alive.   Businesses will need to charge more because they are taking a productivity hit and an expenses hit.

Not having cash can be very costly as well.  Lost investment opportunities because you've blown your cash elsewhere. There aren't a lot of opportunities right now, but that should change.   

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3086 on: May 24, 2020, 02:21:15 PM »
The whining on this thread, of all threads, is pathetic.  I'm with @SwordGuy  and @Dicey.   

Go  see the people actually having balls and FIREing  THIS year , like NOW in the 2020 FIRE Cohort Thread.
I'm not implying that _I_ would FIRE now, my balls are small.

I think ?someone? had a quote, in their sig line, from Sol to the effect that, "We got here doing certain things,  we will continue doing them."

Edit:  removed username that I though had the Sol quote I can't find it.   Are sig lines searched in the forum search engine?
Found a similar quote from sol  "We're not looking to time the market now, and we got here by not looking to time the market over the past decade."
https://forum.mrmoneymustache.com/welcome-to-the-forum/the-best-post-i-saw-today-on-the-mr-money-mustache-forums-was/msg2368199/#msg2368199
.

It seems to me that the folks on this topic are pretty well positioned to take or leave stocks as they see fit.  They're also well positioned to ignore what's fashionable in investment circles and march to their own drummer. 

It's really kind of interesting when you compare this topic to the race from $1 mil to $2 mil with folks posting the latest incremental change to their net worth.  Maybe I've missed it, but the folks on this thread don't seem bother much.

As for whining, I am whining.  About the outrageous cost of hamburger.  And bananas.  They went up 10 cents a pound! It's thievery I tell you.

Mr. Green

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Re: Race from $2M to $4M...and Beyond!
« Reply #3087 on: May 24, 2020, 03:30:02 PM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.
When the panic based selling happens, that's when the buy and hold investor makes their money. Ask anyone who "lost their shirt" in the 2008 recession and they'll tell you a story about how they sold. For us, having won the game includes the returns generated by staying invested. If we sold low now because we anticipated a crash that never happened and missed a subsequent run up it might be a good way to turn that win into a loss.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3088 on: May 24, 2020, 04:04:35 PM »
In February I  was very aggressively in stocks.  Luckily my company has a plant in China and the owner is a former US ambassador to China.  In January we started getting company emails preparing us for the coming pandemic.  I took advantage of that information and moved to a position where about 2/3 of our accounts are protected.  Now I'm thinking of getting a little bit more conservative.   Like I'd mentioned leave about 20 to 25 percent in play. We are going to drop again in coming months.  My company now is warning of lackluster sales and low capacity usage going forward.  Like the market, these global conglomerates look months and years out.  The recovery is going to be slow.  Many companies are going bankrupt.   The way business is conducted globally has changed.  I've got too many fun things planned to loose it at the end. 

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3089 on: May 24, 2020, 04:15:18 PM »

- SNIP -

Go  see the people actually having balls and FIREing  THIS year , like NOW in the 2020 FIRE Cohort Thread.
I'm not implying that _I_ would FIRE now, my balls are small.

- SNIP -


Yeh!  Them people are sumthin'!

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3090 on: May 24, 2020, 05:24:05 PM »
Hard times ahead after the virus thing is over?  Some say - not hardly.  Here's a Forbes article:

https://www.forbes.com/sites/richkarlgaard/2020/04/06/five-bold-predictions-for-the-post-covid-19-world/#1981dd897def

He predicts inflation.

Maybe. I wouldn’t bet supper on it. Japan hasn’t been able to maintain inflation for years now and their debt to GDP is twice that of the US.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3091 on: May 24, 2020, 05:58:22 PM »
Drowning my sorrows in a CROWDED bayou bar.  Listening to live music with big ole Margaritas.  Not a mask in site.  Life is good!

YHD

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Re: Race from $2M to $4M...and Beyond!
« Reply #3092 on: May 24, 2020, 06:37:03 PM »
I’m in poultry futures.  As good as anything.  I can at least eat my losses

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3093 on: May 24, 2020, 06:38:47 PM »
I’m in poultry futures.  As good as anything.  I can at least eat my losses

I would suggest investing in pork belly futures instead.  That way, no matter what happens, you'll be bringing home the bacon!

markbike528CBX

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Re: Race from $2M to $4M...and Beyond!
« Reply #3094 on: May 24, 2020, 06:48:02 PM »


With that said, anyone else notice that groceries are getting more expensive?  We paid $7 for 4 burgers!  Probably not a bad thing we are used to restaurant spending, cutting back on that isn't saving as much as it used to.

Yup.  Paid $5.99 a pound for hamburger today.  One of my neighbors keeps on telling me that squirrel is pretty good. The other white meat.  Anybody ever try it?   
Yes, more like chicken thigh.....     See https://forum.mrmoneymustache.com/welcome-to-the-forum/mustachian-people-problems-(just-for-fun)/msg2595029/#msg2595029       and subsequent posts.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3095 on: May 24, 2020, 07:19:03 PM »
Second bug Magarutta or is it Margarita.  Anyway, I'm about done.  Told the wife to get whatever surgery and shit she needs quick.  I'm ready to do stupid shit the rest of my life.  30 plus years of being responsible is enough!  Putting my hardhat on the gotdamned mantle.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3096 on: May 24, 2020, 07:45:23 PM »
Drowning my sorrows in a CROWDED bayou bar.  Listening to live music with big ole Margaritas.  Not a mask in site.  Life is good!

Sounds like fun. Reckless and insane, but fun. Hopefully they pour ‘em strong.


Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3097 on: May 24, 2020, 08:00:17 PM »
Drowning my sorrows in a CROWDED bayou bar.  Listening to live music with big ole Margaritas.  Not a mask in site.  Life is good!

Sounds like fun. Reckless and insane, but fun. Hopefully they pour ‘em strong.

Building my immunity for the Cruise.

GreenEggs

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Re: Race from $2M to $4M...and Beyond!
« Reply #3098 on: May 24, 2020, 08:19:42 PM »
Bateaux,


You're our Big Balls member!! 

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3099 on: May 24, 2020, 08:26:05 PM »
So you guys did give me some things to chew on.

I currently sit at about 75/15/10 (stocks/bond funds/cash) I am tempted to take some more off the table and I might go 70/15/15.

Why not 50/15/35..??

I could but then again I think.. Wait a minute.. OK yeah I've won the game but then the 2008 deal was a 4 year ish event. The Great Depression was a 7.5 year event (counting deflation).

Assuming this is the same as the GD.. 7 years or so really is not a long time to wait so why not continue to play the game?

Heck, with pensions and SS we don't even need a stash at all!

In other words it really doesn't matter what I do honestly... With the caveat that more $$ is always better than less$$.

Hmm...