Calm down. It will be back at an all time high soon. Don't be on the sidelines when the first successful vaccine is announced.
OT: Stock and Investment Talk
- Thread starter RU-05
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Temporary buying opportunity. Interest rates are the same and the feds continue to do what they do. Buy, buy, buy!
I don’t see it dropping too much further maybe 3,100-3,200. The FANG stock earnings are coming out tomorrow and probably expect a drop in prices since MSFT got hit after their earnings. Cramer has been saying the charts for FANG are oversold and bounce shortly.
However, if Trump loses and decides to do nothing with the stimulus then 2,800 or worse is possible.
i’m now in at 35% sold some like AMZN when it reached into the 3,400( Amazon back to 3,170) and many of the other techs reached within 5% of their high. I was down to 25% but starting added when those stocks started dropping again. I wish I had less in the market, very dangerous times.
I’m not buying anymore until the FANG earning come out tomorrow. Expect a final drop 1-2 days and then I might slowly buy some.
Trump might get pissed and no stimulus until January.
The more you try to time the market the more you lose. You need to be all in when the first successful vaccine is announced. Coming soon.
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As opposed to Pelosi being pissed and no stimulus before the election. You brought it up, not me.
You expecting a bump due to the market psychology of having a COVID vaccine?
Not so sure of that impact. Any vaccine has to be 65% effective. It's got to be made, distributed, and then administered to willing recipients. So many folks have indicated they would not get the shot/s. Not much public faith in the vaccine due to the political climate.
That said, I think the emergence of an effective therapeutic would be more market impacting, short-term.
But we have some longer-term issues to work through. Late 2021 or early 2022 for some semblance of normalcy.
After the crash last spring, many chicken littles were saying it would take years for the market to recover. It was back at all time highs within a few months (as I predicted). Relax. Enjoying the irrational buying opportunity and make some money!
If 20%, 30%, 40% of the US population is not engaged in consumer activity for fear of contracting the virus an economic recovery is impossible. The market is starting to and will continue reflect that fact. To paraphrase James Carville: it’s the virus, stupid.
You were wrong in the spring, you are wrong now. Market and economy will be fine. Calm down.
Dow October 28 2019: 27,090
Dow October 28 2020: 26,625
I can assure you I am better than negative return over the past year.
You keep telling us to "calm down." That reflects your mindset. As for me, I approach the market rationally. Without emotion. Anyway, equities are just too pricey. Perhaps it's due to so many chasing the promise of profits, with no alternatives. Perhaps it's the Robinhood effect, with so many new "traders" vs long-term experienced investors. I see tough times ahead: a 20%+ correction and then a recession of a year or so. A real recovery is a way off.
Lot of unknowns in this market, so trading is the best for me. Only buy when the stock is a quality grown stock, mainly tech stocks, that is down 10-20% from its high and start selling when it come close to its high.
More assets I have in cash in this environment, the easier it is for me to sleep.
More assets I have in cash in this environment, the easier it is for me to sleep.
If you were being rational you would know that equities are not too pricey in our new paradigm - zero interest rates and feds pumping. That's our reality. There is no other place to put money for good returns other than the market for the vast majority of people. This is a fact. Until this changes, any downs will be very temporary. Buy, buy, buy! Don't miss out.
$2.5T was pumped in to the economy with a measurable “chunk” propping companies (rightfully so) valued by the market. We still have the same amount (more?) of the US population disengaged from the consumer based economy and less stimulus.
Anyone ever invest in any sort of structured products? I invest/trade in single stock/mutual funds on my own generally but I have other investments at a wealth management bank where my FA brings me options of different structured products which suit my investment tolerance and I decide which ones to put money in or not. Generally it's been a pretty good way to get some yield or income if you like.
Most of the structured products I put money in usually have some downside protection anywhere from 20-50% depending on the stock or index and yields anywhere from 4-8% and both are usually based off the current volatility of the market/stock. Commodities products was the one place I lost money a couple times so I stay clear from that now and generally I'm conservative anyway so pretty much any of the products I invest in are based off large/mega cap stock or indices like the S&P.
Most of the structured products I put money in usually have some downside protection anywhere from 20-50% depending on the stock or index and yields anywhere from 4-8% and both are usually based off the current volatility of the market/stock. Commodities products was the one place I lost money a couple times so I stay clear from that now and generally I'm conservative anyway so pretty much any of the products I invest in are based off large/mega cap stock or indices like the S&P.
I tend to agree with your view, and consider proclamations to aggressively buy equities misguided, ill-informed or driven by other motives. That’s not to say investors should shun equities altogether, but the risks to prospective returns at these price levels are significant. The only way to justify current price levels is relative to other asset classes. if you convert the S&P’s current P/E of ~31x to an earnings yield of 3.2%, you are being paid a 2.60 percentage point premium over the 10 year Treasury To won stocks. Compared to history, that spread is somewhat reasonable and that, in essence, is the arguement advanced by those (and they don’t really understand that is basis for their stance) saying there is no place else to invest in liquid markets.
This begs several questions, in my view. First, is 3.2% with an option for growth a reasonable rate of return to expect from a risky asset class? Well, compared to riskless alternatives, it is in line with history on a relative basis, but does this level of return compensate for the risk of owning stocks? And is this prospective return worth the added risk? Should investors chase a historically meager 3.2% yield when they can buy, for example, a 30-year Treasury which yields 1.45% (not that the price of that bond is immune from volatility, either)? For me, it’s not a pound the table level of price and return, that’s for sure, even if the historical relationship between the earnings yield and Treasuries is somewhat in synch.
Said differently, an investor can choose to assume higher risk in exchange for a subpar absolute but historically in-line relative return, or they can choose to allocate less to the riskier asset class at these levels and accept a lower, and presumably more assured, prospective return. I think both choices are reasonable to make, but underlying both is the reality that future returns at these levels are going to be very low relative to historical performance for some time. And it’s that reality which makes it questionable to pound the table and view each relatively immaterial decline from these high levels as some terrific buying opportunity. This isn’t March or April.
In the Great Recession and I believe in almost all other recession/ depression, there was a second drop in the stock market about a year later.
Actually with the Great Depression there was a 3rd drop. While there is never a single cause, Smoot-Hawley was a significant contributor to the 2nd and the Post-'36 election tax hikes a significant contributor to the 3rd.
+1
Massive 3rd drop, practically eliminated any benefit of the New Deal. It took WWII to end the Great Depression.
That’s a fairly broad topic but many/most structured products are complex and lack the transparency of traditional mutual funds or ETFs. The attached from Morrison and Foerster contains a lot of good information. I’d give particular attention to the SEC materials and bulletins. To each his own, but I wouldn’t invest in one unless I fully understood everything in the prospectus including risks and costs. Frankly, even then I probably wouldn’t. There are costs for features such as downside protection (such as caps on upside potential gains).
U.S. Structured Products Materials | Morrison Foerster
The U.S. structured products market continues to grow and develop. This growth has been accompanied by increased regulatory scrutiny. Given that structured products may take various forms, and structured products may be issued as securities or in the form of bank deposits, there is no single...
www.mofo.com
If there is no "other" good place to put money, you imply equities are that singular good place, in the current climate. I cannot agree. Going overweighted to treasuries (and cash) is sound, now, until there is a good and rational place and time to re-vector those $. But that's me.
Few points on recent posts...
1 - A vaccine will definately result in a ST market jump. That doesn't imply the jump is rationale given the points raised earlier, but markets aren't always rationale.
2 - Frida, as always, nails it. Perhaps my favorite aspect of his informed, logical, and rationale posts is how it illustrates with absolutely clarity how uninformed many of our other posters are (eg the trolls).
3 - Id be very cautious with Gilead. There's lots of pressure on their HIV/HPC franchise (ironic given they literally cured the disease in latter example) and just so much uncertainty with Remdesivir. They may do well in current quarter, but as early as next quarter the threat of vaccines will be real, AND, the engineered mABs which will be far effective therapeutic option are likely to be approved. Both of these will seriously cannibalizesrb future remdesivor sales and it's a product that don't have another purpose.
4 - on last point, I'd closely watch or go long with Regeneron...
1 - A vaccine will definately result in a ST market jump. That doesn't imply the jump is rationale given the points raised earlier, but markets aren't always rationale.
2 - Frida, as always, nails it. Perhaps my favorite aspect of his informed, logical, and rationale posts is how it illustrates with absolutely clarity how uninformed many of our other posters are (eg the trolls).
3 - Id be very cautious with Gilead. There's lots of pressure on their HIV/HPC franchise (ironic given they literally cured the disease in latter example) and just so much uncertainty with Remdesivir. They may do well in current quarter, but as early as next quarter the threat of vaccines will be real, AND, the engineered mABs which will be far effective therapeutic option are likely to be approved. Both of these will seriously cannibalizesrb future remdesivor sales and it's a product that don't have another purpose.
4 - on last point, I'd closely watch or go long with Regeneron...
By the way, where's that blowhard that would always pump / promote CYDY as being the solution to COVID? The drug with $9B in revenues next year? LULZ
Not really sure how your first sentence implies fiscal stimulus doesn’t work...and then say that WWII, which was fiscal stimulus, is the reason we got out of the Great Depression. I thought they taught economics at business school?
To say WWII was a fiscal stimulus is about as massive an understatement as I've seen around here. The New Deal took the unemployment rate from 24.9% in 1933 to 16.9% in 1936. By 1938 it had gone back to 19%. WWII started and 9.9% rate in 1941 (with war industries already selling/lend-leasing to the UK and the draft reinstated) to1.2% in 1944 and 1.9% in 1945. Even by 1948 it was still only 4.0%, though you can probably say the Cold War was partially responsible for keeping it low.
Agree with you on GILD and REGN just released trial data that their antibody therapy reduces risk of medical visits by 57% of recently diagnosed patients....up 3% after hours.
I'll share, but this is not a recommendation.... Percentages shared here apply equally to IRA and non-IRA accts. Real estate is not included.
Equities (25%): select dividend stocks and, well, BRK-B, EM funds and ETFs, a few foreign equities, and some S&P shorting
Bonds (50%): assorted Treasuries and EE bonds
Cash (25%): too much for normal conditions but ok for now
My general approach is: 70% equities, 25% bonds, 5% cash.
Is that % of people completely removed from consumer activity, or have they moved to a more digital form of consumer activity.
Wow, Ford crushes it:
www.cnbc.com
Ford blows away earnings expectations as consumers buy up trucks during pandemic
Ford blew away Wall Street expectations as well as the company's forecast earnings for the third quarter on stronger-than-expected demand during the coronavirus pandemic.
Beat me to it. Too many strong earning reports this quarter for the market to collapse in my very humble opinion.Wow, Ford crushes it:
Ford blows away earnings expectations as consumers buy up trucks during pandemic
Ford blew away Wall Street expectations as well as the company's forecast earnings for the third quarter on stronger-than-expected demand during the coronavirus pandemic.
We knew volatility was going to be a thing, and I think that is what we are seeing.
