As I said above, value plays become non-value very quickly, then what? The what normally is back to tech. The big winners over the past 2 months have been financial and energy. Seriously, are these really long term plays? Or even moderate term?
OT: Stock and Investment Talk
- Thread starter RU-05
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Great buying opportunity for the FUD-less investors out there. Enjoy!
I’d advise against adhering to strategy labels and look to how the manager assesses investments relative to what a business is objectively worth.
Of course it will. Look at, for example, Microsoft. It peaked in 2000 and then collapsed. A very real, profitable and growing business, it came back and eclipsed its 2000 high. In 2014. So, yeah, of course it will happen.
That's the beauty of funds/etfs. Those cherry-picked examples become meaningful in aggerate. :)
Exactly. Funny thing, though. You could substitute “NASDAQ” for Microsoft above, and change the levels from $37 to 4,600, but leave the dates the same. Same story. So, yeah, it will rise again.
Yeah.....Nasdaq isn't a fund or etf. Perhaps you should look up some funds during that time period that crushed it. I've mentioned them numerous times in this thread.
The NASDAQ is an index consisting of lots of businesses, but most significantly the growth businesses you crave, And as an adherent to passive strategies, that’s where you should look. Seems you’ve become like Mae West though. “ I used to be a Snow White...,but I drifted.” Funds? Who, exactly, is cherry picking?
It's amusing how you constantly cherry pick. You select the biggest doom and gloom time period. The biggest doom and gloom option. And of course, you never assume dollar cost averaging. No, no. You need to paint the worst possible scenario.
Don't know why you make such extreme posts.
Extreme? Because he's not wearing rose colored glasses? Have you heard of Nouriel Roubini?
@Frida's Boss , @mdk01: Having been active in the market since right before the 1987 crash (btw, got lucky that October when I bought gold options literally a week before the crash), I think there is a middle position between your points and @T2Kplus20. There's no doubt there will be a correction/bear at some point (not predicting when but my guess is within the next 12 months) covering all sectors, not just a rotation. However you can maneuver during exuberant markets by taking bits and pieces off your profitable positions until you are essentially playing with house money while concomitantly building up cash to re-enter the market at more appropriate valuations. What those valuations are, is up for debate since there really is a technological revolution that we are in the early innings, similar to the industrial revolution over 100 years ago. We should be open to the possibilities while not losing perspective that the market (just like the house in a casino) always wins and you can't fight its direction.
Easy to say that right now. So you knew more than the Wall Street "analysts" who have access to tons of information and speak with mgmt regularly? There were significant widespread doubts about whether Tesla could deliver and profitably produce enough vehicles to get to a valuation anywhere close to what it is today. Of course there was fear of losing money on this name. The purchase (bail out) of Solar City was viewed very negatively at the time. But you knew better. Good for you wise man.
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Cherry pick implies selecting something regardless of other variables or context to make a point, and I am certainly not doing that. Rather, I’ve pointed to two periods of market history that are relevant to compare to today; the late 90s tech bubble, and the mid 60s to early 80s Treasury bear market. The selection of the first period should be obvious, but to drive home the point: the tech sector, including the NASDAQ index, collapsed. Some of the businesses included in that index were obvious fads in retrospect, but others (such as MSFT) were among the highest quality companies on the planet. And they grew. Of course, that didn’t equate to good shareholder returns over a 14 year period. The point being that a bad purchase price can materially impair returns for a long time despite strong business performance. Yes, dollar cost averaging would change that performance, but other posters have recently dissuaded people from doing so in favor of large, one time purchases when resources are available.
The second time period also demonstrates that economic and business performance can’t overcome a valuation extreme. And that pertains to rates. Higher rates pull down the value of risk assets, and particularly those that are reliant upon growth and cash flows in the distant future. The increase in Treasury yields from historic lows to still quite low levels has had an impact on stocks like TSLA. An increase in yields to historic averages, let alone anything resembling the late 70s, would lead to a major pullback. And we are at a historic low point in rates. So this time period, and the effects on markets, is particularly relevant.
So both examples were selected because conditions today mirror conditions at those times. They were not cherry picked,
There are many posters and readers of this thread who seem to be new to stocks. Providing a viewpoint that is based in a sober assessment of today against comparable historic periods is needed to provide a contrast to the incessant “buy buy buy” mantra offered when the market falls by an inconsequential 2%. By no means are my views a recommendation, of course, merely a discussion and food for thought. Granted, walking into a raging party and letting attendees who are liberally partaking in consumption to tell them of the risks and dangers of such action is not likely to make one popular in that crowd. But being a good investor isn’t about popularity.
On this point I'll disagree with you. It can be done prudently. I've done it and I'm not in the financial business, just ingrained myself to not be greedy.
Have you compared your returns to a regular contribution to an index fund? Not asking for the results of such a comparison to be disclosed. If you’re on the winning side, then congrats. You are an outlier, because the overwhelming majority will not be on the winning side of that comparison. And those who are almost certainly would have a more lucrative career running a fund. The problem is many think they will be, but the data shows pretty conclusively that they won’t be over any meaningful timeframe.
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My portfolio is almost all managed by 3 different firms. I manage/invest/trade in 1 account and have significantly outperformed the other 3 firms (which are all performing very well, not unhappy with their performance nor their stated objectives). That is over a 12 year period, just at the nadir of the financial crisis. Now if all my accounts were managed the way I am managing my "play" money, I'd be nervous and sleep restlessly. That's not to say that I'm gambling but am comfortable using my style for this account, a bit higher risk with higher reward. None of it is haphazard. I do my due diligence, I join in some momentum plays, some high dividend plays, some value, some ETF's, some crypto and their associated companies, some new issues, etc. I don't short and I don't buy or sell options.
ARK's monthly webinar starts at 1:30pm. Should be fun! 😁
ark-invest.com
mARKet Update Webinars by ARK Invest
Watch ARK's monthly webinar series, featuring Cathie Wood, with our latest innovation research, market developments, and a Q&A.
ark-invest.com
That’s great, and I’m sure you realize that the performance of your discretionary account is likely not replicable by the vast majority of people. And that’s the point.
I didn't know any more than anyone else, but I was listening and realized Mr Musk is a once in a generation genius. Elon literally told the world (twice) his plan for Tesla Motors.
Secret Master Plan
Master Plan Part Deux
He may be a little ambitious with his timelines, but his teams get it done whether it's SpaceX, Tesla, Boring Co, or Neuralink. Words of wisdom... Don't bet against Elon.
You're probably right. My point was that it is possible if people are willing to do the work and not get too greedy. I retired last July so most of my portfolio's performance was when I worked fulltime (as a physician). I say that not to blow my own horn but to emphasize that properly managed, it can be done. I am assuming there are a lot of young/newish investors in this thread. I made a lot of mistakes in the market when I was younger. That has surely helped me as time passed. The one mantra I had when I was a riskier investor/speculator was that if I lost my total investment, would it change my lifestyle. The answer was always no.
Elon generates a lot of real-time news and pops, but his vision is long-term. TSLA and his other ventures are long plays.
I had a BIL who would constantly torment us with his great investment returns. He'd say to me, you have a NYU MBA, why can't you beat my returns? Why buy mutual funds, I'm beating them every year? They looked at paying cash for a Spring Lake beach house with some of the gains. Turns out he had a huge position in one stock that was outperforming year after year. Tech crash hit, he got absolutely crushed. Haven't heard him mention the stock market in a decade.
Big news from Disney today:
www.cnbc.com
Disney+ tops 100 million subscribers just 16 months after launch
Disney+ has surpassed 100 million subscribers in just 16 months since its launch, Disney CEO Bob Chapek revealed Tuesday.
Gotta be well balanced. I surely lean more tech/innovation than the norm, but the foundation of our portfolio are indexes and time-tested funds. I would say 10%'ish of our allocations are focused on innovation/emerging tech (ARKK, SOXX, IDRV, etc.).
FYI - From ARK's webinar today. Tesla is 3 years ahead of all other EV manufacturers (based on production, range, size of batteries, and speed of charging). Also, CW/ARK will drop a new TSLA price target in 2 week.
I wasn't clear about that. My sister talked him out of buying the house. The funds remained in the market right up until the crash (Lucent).
My friend's father went to work for AT&T right out of high school. After various spin-offs and 30 years or so of work, he wound up working for Lucent. Guy never had a high salary but worked hard and saved. Had over a $million in company stock when it all came crashing down. A large percentage of his net worth. Had to keep working for another decade.
"In a short ten years, Lucent crashed from being the profitable sole-source AT&T R&D subsidiary to a failing independent company. Employees were shed by the thousands, dropping from 106,000 to fewer than 35,000. Over 70,000 American jobs disappeared from the company."
I was at 280 Park at the time Bear collapsed. Felt really bad for the lower paid (relatively) guys who were strongly encouraged to hold company stock in their retirement accounts by sr mgmt. They worked long hours and built a secure retirement only to have it all fall apart quickly. And then you had protestors outside their offices angry that the govt bailed them out. That could have gotten violent really quickly.
It was a BS practice back in the day to dissuade people from selling company stock. Good portion of my bonus is in synthetic stock. The good news is that it’s only used to calculate the actual payout. I don’t get the option to hold the stock.
I sold a chunk of stock (not Bear) a couple days after it vested many years ago. First everyone got mad at me, then they were jealous when the stock kept trading lower. Guys were telling me the chairman was watching my trades. I just laughed and told them he probably wanted to sell his too.
Amazing how cultish these places can get. LOL.
That's not just true for investment houses. There's an unwritten rule for many Fortune 500 companies about holding onto company stock acquired through option exercises or RSUs. Rarely is it you can't sell any, but there is a certain threshold you are expected to retain.
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