Way to counter my post with hardcore facts, brilliant.
OT: Stock and Investment Talk
- Thread starter RU-05
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I have a few friends that went all cash in November 2020 because of the election results. Even with the current decline, they’ve missed out on a lot of upside. The current state of affairs isn’t good, thankfully I have time on my side.
Stock prices got wayyyyy out whack due to extremely favorable monetary policy, overly generous stimulus packages and government spending. This fostered crazy speculation in the stock market. So it’s on the fed, and the administrations. But, since inauguration, the S&P is only up 7% and the NASDAQ Composite is down about 1,000.
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The video card market has come back to earth the last month.
The $300 cards that were selling (if you could find one in stock) for 1k for months are now back to MSRP
Nvidia, AMD - all of them crashed to earth
Last time I saw that crypto was quiet for quite awhile
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I've kind of noticed that Crypto follows the tech trade. Let's see what it does this weekend, but in recent weekends it held stable, almost waiting to see what the Nasdaq does when the market opens on Monday.
I was this close to selling when it failed to reclaim 40K earlier this week. A couple hours later it was too late.
The week was so crazy, and Thursday so brutal, that I forgot that we were pretty much even for the week. Was thinking any puts sold would have been crushed, but with the market even plus the time decay it makes sense short termers would be up.
Still very much in the red but actually had some nice winners today. RGA up 7% on earnings. As did NRG.
Energy(SLG KMI BP) continues to do well, as do defense stocks(LMT and NOC up). I'm overweight each sector, but still not enough(especially when I have some high beta stocks on the tech side).
TELL was one of my energy plays which crashed off bad earnings earlier in the week, but this is a volatile, growthy, fwd looking, stock in the sector, so not totally unexpected.
Found this quote in a Ukraine story regarding defense spending looking fwd:
“This is pretty unprecedented, the amount of munitions that are being used right now,” the Pentagon’s acquisition chief, Bill LaPlante, told reporters Friday. He said the United States and Europe will be “reexamining our assumptions” about future levels of weapons production needed during peacetime to avoid being caught flat-footed, “where all of a sudden we find our production lines need to be boosted up.”
Energy(SLG KMI BP) continues to do well, as do defense stocks(LMT and NOC up). I'm overweight each sector, but still not enough(especially when I have some high beta stocks on the tech side).
TELL was one of my energy plays which crashed off bad earnings earlier in the week, but this is a volatile, growthy, fwd looking, stock in the sector, so not totally unexpected.
Found this quote in a Ukraine story regarding defense spending looking fwd:
“This is pretty unprecedented, the amount of munitions that are being used right now,” the Pentagon’s acquisition chief, Bill LaPlante, told reporters Friday. He said the United States and Europe will be “reexamining our assumptions” about future levels of weapons production needed during peacetime to avoid being caught flat-footed, “where all of a sudden we find our production lines need to be boosted up.”
The belief in crypto IMO is based on the u underlying technology rather than on the coins. Stable coins and blowchain(tokenization) will be the game changers in this space.
the value of Bitcoin is based on scarcity—21mm cap in coins—many of those already gone from existence so it’s actually a reduced number.
there was a crazy stay at SALT where something like 60-70% of ownership in active Bitcoin is just being held while the other 30-40% was actively traded.
the value of Bitcoin is based on scarcity—21mm cap in coins—many of those already gone from existence so it’s actually a reduced number.
there was a crazy stay at SALT where something like 60-70% of ownership in active Bitcoin is just being held while the other 30-40% was actively traded.
Do you have to time it? Is it based on computer reads?
Like how do you know when to buy and sell the TQQQ? I can see buying it just prior to Powell press conference, but knowing to sell it before the close that same day seems much less clear.
Just like with all option trades, you do need to not only get the direction correct, but also the time frame. This is one of the reasons, it can be immensely profitable. In terms of getting it correct, this takes experience and good understanding of the greeks of option trading. I would suggest that you go into an options trade with a well defined target. Stay disciplined. Too often I have heard you say that you expect the trade to always keep going up. That is a young trader's mistake.
Perhaps the best "trade" is to buy and hold. You can't predict teenager-like emotions investors are experiencing now. Buy you high conviction stocks, sectors, indexes and position yourself for the turning of the tide.
That's the right play.
"Perhaps" you say? Buying and holding (and diversifying and indexing) is definitely the key to success.
Appears many posters on this thread are more "traders" than "investors." It's fun to follow along. Words such as "play" are dead giveaways. Nothing at all wrong with the trader approach, of course, even the day trader approach. But you may find it's more of a phase, looking back.
I've been there, to some extent. Got to know some high flyers and masters of the universe, some pros and some not. Researching, strategizing, looking for insider insights, the edge, moving in and out of positions. Staggering gains, and losses.
It can be consuming/addictive, providing gambling-like highs and lows. Once typically an approach of younger guys, likely in their late 20s to early 40s. But I think the gaming mentality and the emergence of Robinhood and such have lowered the entry portal. May even have shortened the exit portal, but that's to be seen.
After a fashion, though, (a few decades?) you've learned to adapt and take another approach, a somewhat more conservative, longer-term approach, as an investor. You've made some $, saved some $, you have a sound plan for retirement, a core long-term-based portfolio and once there, you are at ease. You've transitioned. Yet you still likely set aside a small percentage for short-term trades, with house money, for fun.
It's all good. I enjoy this thread. Especially T2K. ;)
"Perhaps" is a polite word since I am replying to a trader. 😁
True short-term investing is WAY too much work and I will never have that time. Buy and hold has worked for us since 2005 (when we really started retirement investing).....through 2008/2009, 2018, and 2020. And I'm sure it is the right strategy now.
Even the leveraged ETFs in my fun account are longer plays! LOL. For our main retirement accounts, I have literally made one change in the past 6 months. Moving from VTV to DODGX in our Fidelity IRA rollover (which is our second biggest account). Otherwise, just keep our funds/etfs in the appropriate allocation ranges and adding extra money to our E-Trade brokerage account.
Very well put. Since so many in this thread may be newer to investing, I’m pasting in a rather long excerpt fro the Berkshire Hathaway 1987 annual letter to shareholders (Bolded text to emphasize done by me).Note that emotional excess is not confined to fear - euphoria is the other side of the pendulum:
Whenever Charlie and I buy common stocks for Berkshire's
insurance companies (leaving aside arbitrage purchases, discussed
later) we approach the transaction as if we were buying into a
private business. We look at the economic prospects of the
business, the people in charge of running it, and the price we
must pay. We do not have in mind any time or price for sale.
Indeed, we are willing to hold a stock indefinitely so long as we
expect the business to increase in intrinsic value at a
satisfactory rate. When investing, we view ourselves as business
analysts - not as market analysts, not as macroeconomic analysts,
and not even as security analysts.
Our approach makes an active trading market useful, since it
periodically presents us with mouth-watering opportunities. But
by no means is it essential: a prolonged suspension of trading in
the securities we hold would not bother us any more than does the
lack of daily quotations on World Book or Fechheimer.
Eventually, our economic fate will be determined by the economic
fate of the business we own, whether our ownership is partial or
total.
Ben Graham, my friend and teacher, long ago described the
mental attitude toward market fluctuations that I believe to be
most conducive to investment success. He said that you should
imagine market quotations as coming from a remarkably
accommodating fellow named Mr. Market who is your partner in a
private business. Without fail, Mr. Market appears daily and
names a price at which he will either buy your interest or sell
you his.
Even though the business that the two of you own may have
economic characteristics that are stable, Mr. Market's quotations
will be anything but. For, sad to say, the poor fellow has
incurable emotional problems. At times he feels euphoric and can
see only the favorable factors affecting the business. When in
that mood, he names a very high buy-sell price because he fears
that you will snap up his interest and rob him of imminent gains.
At other times he is depressed and can see nothing but trouble
ahead for both the business and the world. On these occasions he
will name a very low price, since he is terrified that you will
unload your interest on him.
Mr. Market has another endearing characteristic: He doesn't
mind being ignored. If his quotation is uninteresting to you
today, he will be back with a new one tomorrow. Transactions are
strictly at your option. Under these conditions, the more manic-
depressive his behavior, the better for you.
But, like Cinderella at the ball, you must heed one warning
or everything will turn into pumpkins and mice: Mr. Market is
there to serve you, not to guide you. It is his pocketbook, not
his wisdom, that you will find useful. If he shows up some day
in a particularly foolish mood, you are free to either ignore him
or to take advantage of him, but it will be disastrous if you
fall under his influence. Indeed, if you aren't certain that you
understand and can value your business far better than Mr.
Market, you don't belong in the game. As they say in poker, "If
you've been in the game 30 minutes and you don't know who the
patsy is, you're the patsy."
Ben's Mr. Market allegory may seem out-of-date in today's
investment world, in which most professionals and academicians
talk of efficient markets, dynamic hedging and betas. Their
interest in such matters is understandable, since techniques
shrouded in mystery clearly have value to the purveyor of
investment advice. After all, what witch doctor has ever
achieved fame and fortune by simply advising "Take two aspirins"?
The value of market esoterica to the consumer of investment
advice is a different story. In my opinion, investment success
will not be produced by arcane formulae, computer programs or
signals flashed by the price behavior of stocks and markets.
Rather an investor will succeed by coupling good business
judgment with an ability to insulate his thoughts and behavior
from the super-contagious emotions that swirl about the
marketplace. In my own efforts to stay insulated, I have found
it highly useful to keep Ben's Mr. Market concept firmly in mind.
Following Ben's teachings, Charlie and I let our marketable
equities tell us by their operating results - not by their daily,
or even yearly, price quotations - whether our investments are
successful. The market may ignore business success for a while,
but eventually will confirm it. As Ben said: "In the short run,
the market is a voting machine but in the long run it is a
weighing machine." The speed at which a business's success is
recognized, furthermore, is not that important as long as the
company's intrinsic value is increasing at a satisfactory rate.
In fact, delayed recognition can be an advantage: It may give us
the chance to buy more of a good thing at a bargain price.
Chairman's Letter - 1987
www.berkshirehathaway.com
Great current breakdown of the market. Very good read with charts for all 11 sectors. Important takeaway:
Flight to safety pushes defensive sectors too high while leaving growth stocks attractively priced.
www.morningstar.com
Flight to safety pushes defensive sectors too high while leaving growth stocks attractively priced.
2022 Selloff Has Left the U.S. Stock Market Undervalued
Flight to safety pushes defensive sectors too high while leaving growth stocks attractively priced.
I’m approaching 70’s and base on some financial models my asset allocation should be approximately 30% stocks. I normally keep around 20-70% in the stocks market of which I presently have about 20% and will increase to a higher percentage when the market hit 3,600-3,800. People shouldn’t adjust to market conditions like higher interest rates? T2K said that people should have gotten out of bonds due to the rise in interest rate, isn‘t that timing the bonds? I‘m very conservative and normally don’t trade unless I have a 75-80% odd of winning In a trade.
I adhere to all of Buffett beliefs but if we all invested like Buffett many on this board would never invested in any Tech stocks or most stocks in the last 2-3 years because they were overvalued. Buffett had a boat load of cash in 2008 and also the last few years because he couldn’t find stocks that weren’t overvalued. It so happen to be at the same time when other people thought the market was overvalued and reduced their exposure. Same results difference wording.
All of the stocks I currently hold are on the Morningstar list as undervalued wide moat.
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dave, just an observation. You’re market activity does not coincide with principles articulated by Buffett. Not a criticism, but I don’t see any overlap in your activity with what he advises. Again, not a criticism. Just an observation.
I also don’t think there is anything in his principles that prevents someone who has sufficient knowledge of technology and how it will evolve from investing in tech. Buffett states that he lacks such knowledge, so he generally avoids the sector. It falls outside of his circle of competence. Other investors may have tech firmly inside their circle. I can recall two investments he made that are tech related. First was IBM. A complete miss, and he sold. Second is Apple. His comfort with Apple isn’t so much tech related as it is the stickiness of consumers with Apple products. He’s also said one of his biggest errors of omission was failing to buy google when he understood the power of its moat and hold on advertising dollars driven by search.
Timing is guessing. Bonds going down was a mathematical certainty. LOL!
You are definitely too conservative, which I hope is due to your age. Otherwise, you really missed out for decades and decades.
Big props to Morningstar. Great tool for investing.
Nice post about Buffet. I have heard him say this about tech numerous times. Actually, I think he talked about it once again last week (or two week ago) during the recent annual meeting.
My sister and I had about the same asset balance in 2008 but I moved to cash before the crash and moved back in after the crash. She kept her 401k balance the same and kept contributing to her plan until she retire last year. I retired in January 2010 and didn’t contribute any more to my assets. We now have about the same asset balance amount.
Fun follow-up to this reply! I tracked our financials from 2005 (when we got married) to 2011 in a spreadsheet.....until we moved over to Mint.
Looking back at our retirement savings in 2008, we are now 100x of that amount. 😁
Not sure I follow how your question/s relates to my post. But for someone in retirement, your specific financial plan is dependent on your needs i.e what income you need to draw, what you may need to leave to family, charities, your heath, your bucket list, etc. Do you follow the old 4% rule? Or adjust for inflation? Etc.
That asset allocation formula/model of subtracting your age from 100 to determine the % of assets in bonds vs equities? A general guideline, yes. But not for everyone. If you're 71, you should have 71% of your assets in bonds and 29% in equities? Might work for some but not for others.
Me? At that age, I'd be more aligned with 70% equities and 30% bonds per my income needs and estate needs. As you age, though, as you may have found, you tend to not spend as much as when you were younger. So you may choose to redeploy some of those $, put them back to "work," gift them, or whatever.
Then there's the retirement "reality" pattern many consider when planning:. "go go" phase (60 to 70); "slow go" phase (70 to 80); "no go" phase (80 to 90).
And, yes, you might rebalance once or so a year to maintain your target mix. Jack Bogle would say "no" to rebalancing. And he did ok.
Speaking of Bogle, the "Three Fund Portfolio" as endorsed by many Bogleheads, meets the needs of many who seek diversification and simplicity (my wife). A total US equities fund, a total ex-US equities fund, ad a total bond fund.
Me? I'm a bit more complex, diversified, flexible, and "hands on." And I do also factor in my wife's holdings.
All that said, Dave, do what you believe works for you, and meets your needs and comfort level.
How do you like Mint?? I tried it a long time ago but found excel to be much easier and more flexible to look at future cash flows for budgeting purposes
We like using Mint, but we only use it for the net worth/asset tracking feature (not budgeting). We have a ton of accounts for both savings and retirement. Everything is easy to link up, including home value which can be done manually or via Zillow.
Definitely recommended.
You at 70% stocks at the age of 71? That sounds crazy. Aren't you 110% cash right now?
LOL!
It's a guideline, an example of supporting an asset allocation beyond what was traditionally practiced as the norm.
No. I'm not there, both in age nor in asset allocation. Me? Now? Yes, heavy on cash, much more so now than in late '21.
Took profits from equities. Even sold off less than expected performers. Moved into some defensive assets. Went into commodities (ETFs) late last year and added some early this year. Took profits over last month or so, though, as they ran up big and quickly. I did also more recently enter into new energy and high-inflation benefitting positions (both funds and individual equities) as part of that change.
While I may work toward 70% equities, it would only be when valuations become sound and healthy, and in select segments, in best-in-class, and perhaps overweight in dividend performers. And expand in some index funds such as small cap value, international w/EM, etc. Fixed income/bonds would be pretty much evenly split between nominal bonds and TIPS, whether that's 30% or a higher %.
All that said, I can see a time down the road a bit when I transition to a much simpler, less active approach. That would be for estate "neatness" purposes.
Thanks for this..makes sense for looking at net worth. I just do that and budgeting/tracking all in excel. Would rather do it in a more automated way.
Again just trying to plan for the future based on conservative compound interest(3-4%) and contributions to the pool. My projections have me returning anywhere after 60 with $7mm+ which should be more than enough to live off of but who knows
My expectations (or perhaps better put hopes) were for the market to stay volatile but hold a line, collect the premium while the underlying assets go up and down. Unfortunately those assets have gone mostly down, no lines have been held.
So collecting that premium has worked to an extent. What hasn't worked much at all is buying calls off a bad day looking for a bounce.
MSN
www.msn.com
We've talked about Micron pretty recently. Motley Fool gives it a big thumbs up.
Great growth and super cheap. Doesn't quite make sense to this inexperienced investor but I guess the thinking is they'd be more susceptible to what looks like a pending worldwide economic slowdown, or the much talked about over supply of chips?
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I'm still a long hold on NVDA and SOXX. I have been thinking about adding MRVL to my stock portfolio. Also, like AMD and Micron. Seriously, the entire sector is buy, buy, buy.
MU is my third largest position now. It’s cheap compared to peers and is due for a run.
Futures are schizophrenic, so gotta wait for the opening. Planning to buy across the board tomorrow with my E-Trade account (normally would have bought on Friday, but had a school event to attend).
I still have a good amount of cash in my fun account. Will add to my leveraged ETFs if investors continue to be stupid and scared.
Understandable. It was a calculated bet that AMD would follow recent ER trading patterns, which it did. And, if it hadn't, I was more-than-fine collecting the premium and being assigned AMD stock at its current valuation. BTW: The majority of my retirement is held in a Vanguard managed account...which, while pragmatic, is not nearly as much fun to discuss.
CNBC analyst mentioned that BTC will probably go back to pre covid price $7k. Did Buffett forecast the price of Bitcoin? I would think its more leveraged than stocks.
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