Anyone else having panic attacks about the market?

[unclemick]

Hmmm - I consume both hamburgers and dividends - I always buy high and sell low - usually because by the time dividends stop rising or get cut - the news is out and Mr Market has lowered the price. The don't ever sell stocks and sometimes the dividends before cut on others make up for the laggards - most of the time.

Sometimes in a good year - the Norwegian widow lets me use extra dividends to get hamburgers with cheese.

Perhaps in another 6 or 7 years - I'll look at my speculative stocks like EGLE and STON - to see how the div.'s are doing.

heh heh heh - just and wild and crazy guy with my hobby stocks , :, , 8).

 

[brewer12345]

Or are you saying that the price can drop substantially without an underlying change in the inputs to your DCF model, just because of irrational/behavorial investors?

Exactly.

 

[Alex]

Reading this thread has made me very hungry for hamburgers.

 

[al_bundy]

Perhaps you have the wrong investment perspective then.

there are a lot of people who have made a lot of money by catching stocks only when they hit the 52 week highs or are very close to them. there was even a dancer in the 1960's who became a millionaire by making up his own model of buying stocks that hit the 52 week high

 

[Nords]

Reading this thread has made me very hungry for hamburgers.

Yeah, I called Buffett to apologize for subjecting him to this scrutiny, and he said that after the first $40B the analogy gets a lot easier to understand...

 

[cute fuzzy bunny]

I got it, and I havent even made it to the first billion.

Guess I'm a quick study.

Anyone got a mathematical regression test on frozen hamburgers? I'm pretty sure some of the ones over at my local sams club are getting towards at least 3 years.

Dont even get me started on the frozen cheesesteaks or the "ham and turkey sub kits!'. Was that ham and turkey thing really that complicated? Let alone the 'italian meatball sub kit!".

 

[sgeeeee]

When I was an undergraduate studying electrical engineering, I remember that many of the textbooks tried to teach circuits and electromagnetics by using analogies to problems involving weights and springs. I never had any difficulty understanding circuits or electromagnetics. I never had any difficulty solving weight and spring problems. But comparing circuits or waves to weights and springs drove me nuts. I hated the analogies.

I feel comfortable with my investment strategies. I like hamburgers. I don't see a need to compare them.

 

[wstu32]

i agree with citril
we will have bull markets and bear markets... make sure you are invested and diversified to weather it...

i am 42 nearly retired..i have 50% in equities and this helps me sleep at night...

i think others on this board have more in equities, but this is what does it for me.

if the market corrects 10%, it hurts but over the long term, equities outperforms...

we all hate to see any downturn, but it happens.... think long term or if you cant bear it (no pun intended) put a smaller amount in stocks

 

[Alex]

Yeah, I called Buffett to apologize for subjecting him to this scrutiny, and he said that after the first $40B the analogy gets a lot easier to understand...

Oh Nords, I understood the analolgy and I agree with it, wholeheartedly, it just made me think about Hamburgers.....hamburgers taste good..especially with cheese, lotsa cheddar cheese....and mustard....and onions...a little lettuce.....and bacon.......yeah BACON!!!!! .mmmmmmmm.
Now I'm hungry again!!

 

[clifp]

I just had hamburgers at the poker game last night. The good home cooked BBQ type, hum yummy beats the horrible nutrissytem diet food I was on or the crappy fast food style.

A couple of days ago Warren used a different analogy. He said if you go into a steak house and last week the steak was $12 and this week the steak dinner is on sale for $10 do you feel bad about eating steak last week or happy about the bargin? (Obviously steaks are cheaper in Omaha, and Buffett isn't a PETA member).

FWIW, when I first wake up in the morning and see the dow is down 200+ and the S&P is down 20, I am not a happy camper. However, when I start looking at quotes of companies that I wanted to buy and they are 5-10% cheaper than they were a few weeks earlier. I do get excited at the bargins. Now I've been investing in stocks for 25 years, and over the years I think my ability to deal with volitality has increased. Which is somewhat ironic because I am older and now retired and therefore financially in a worse position to recover from a market correction. However, after seeing the Oct 19, 1987 crash (dow down 568 points and 23%) and seeing what happen when I sold my Magellan fund at the end of the day. I will avoid panic selling.

 

[bssc]

I just sold a heavily appreciated stock Friday since there were takeover rumors and it was up 14% on Friday alone. Now I am going to reinvest the money and all the stocks that I have been following are on sale.

 

[audreyh1]

But comparing circuits or waves to weights and springs drove me nuts. I hated the analogies.

Yeah - that really drove me crazy too!

Audrey

 

[kcowan]

Tendered Shell Canada to Royal Dutch Shell for $45 on Friday, a 70% gain. Can't wait for the cash to go bargain-hunting...

 

[Running_Man]

Not really! -- If you had held a 50/50 portfoilo on the indexes and rebalanced after the crash of 1929, you would have been buying stocks at a deep discount. I ran FireCalc and with $1Mil invested in 1929, would have been over $1.15 MIllion about 5 years later! - That is the benefit of sticking to a plan and not 'going with your gut' or where your 'head' may be leading you to.

The worst case may have been in 1966, when you did not have a big plunge, had high inflation. It looks like it took about 18 years to get to $1.15 Million.

I believe the worst case was 1929. Of course one of the problems in 1929 of being 50/50 or 60/40, as is the "conservative" approach now, is that many sources of the "fixed portion" went bankrupt in the 1930's. That is why Treasury bills in the 30's paid negative interest rates. And how is it possible to have 1.15 in 5 years when the returns of the DJIA - which was less than the general market - were:

1929 -17.20%
1930 -33.80%
1931 -52.70%
1932 -23.10%
1933 66.70%

My calculations show if you were lucky enough to only need $40,000 per year in 1929 from your portfolio and kept that distribution without adjustment you would have made it 24 years (1952) before running out of money. That is assuming 3% return on the fixed portion which would have been incredibly difficult in those days. A 1% return and you run out in 1949. The fortitude it would have taken in 1933 to rebalance again after 4 straight years of those declines and all the unemployment would be an impressive feat. Still not too bad and shows the power of a 4% withdrawl considering the market was down in 8 of the 13 years between Jan 1 1929 and Dec 31 1941.

1929 -17.20%
1930 -33.80%
1931 -52.70%
1932 -23.10%
1933 66.70%
1934 4.10%
1935 38.50%
1936 24.80%
1937 -32.80%
1938 28.10%
1939 -2.90%
1940 -12.70%
1941 -15.40%

If you retired early at 55 in 1929 and were sitting there on Dec 31, 1941 with a portfolio valued of 76% lower, you'd be one worried 68 year old.

 

[bright eyed]

i first started putting into my 403b in 2001, after the 99/00 bust and i saw negative returns for a while, but it goes away - you just have to hold tight - i tried not to look too often, and when i did, just real quick! but now i pay more attention and given that early experience, things look great, even though i have taken a dip lately, i don't care much. i'm young and consider it a plus for me since i can buy more with my $...

 

[wabmester]

And how is it possible to have 1.15 in 5 years when the returns of the DJIA - which was less than the general market - were:

1929 -17.20%
1930 -33.80%
1931 -52.70%
1932 -23.10%
1933 66.70%

The magic of dividends, perhaps? By 1932, the dividend yield was an amazing 13%! I would have been selling the furniture back then to invest in the market. Well, except for that fact that I probably wouldn't have had a job, and I'd be worried about the US becoming a socialist republic.... But it sure sounds good in theory.

 

[REWahoo]

The Dow is up almost 4% from it's drop two weeks ago. The roller coaster is climbing up the next hill. Are those of you who stained your shorts and sold about ready to buy again?

 

[brewer12345]

The Dow is up almost 4% from it's drop two weeks ago. The roller coaster is climbing up the next hill. Are those of you who stained your shorts and sold about ready to buy again?

Nope. I was "helping" all those with the stains by buying their stuff on the cheap over the last few weeks.

"O Oysters, come and walk with us!"
The Walrus did beseech.
"A pleasant walk, a pleasant talk,
Along the briny beach:
We cannot do with more than four,
To give a hand to each."

 

[wabmester]

The Dow is up almost 4% from it's drop two weeks ago. The roller coaster is climbing up the next hill. Are those of you who stained your shorts and sold about ready to buy again?

The "insurance" I bought a couple days ago is almost worthless now, which is a good thing for my portfolio. I'm still uneasy, especially after a rally on the fed saying basically "hmm, inflation is going up and the economy is slowing down." I'm paralyzed, which isn't a bad thing.

 

[semtex]

as said before, market always beats me. I am buying back today.

 

[Eagle43]

The Dow is up almost 4% from it's drop two weeks ago. The roller coaster is climbing up the next hill. Are those of you who stained your shorts and sold about ready to buy again?

I didn't stain no stinkin shorts. I just sat there; didn't flush anything.
I am a professional when it comes to doing nothing.

 

[Brat]

I held tight through the flush. This is a distribution week for me so distributed and sold 1.25x that sum out of my largest holding.

Funny, hesitant to sell in the flush, hesitant to sell in fill. Must kept my resolve to have x years distributions in cash/cd/bonds.

 

[unclemick]

Holy smoking electrons - bet those computers at Vanguard rebalancing my Target Retirement are just humming away.

The Norwegian widder will probably be mad - cause it will drop her current yield in the second decimal place a tad.

There is a ying and yang to all of this.

heh heh heh heh

 

[kat]

I didn't have any panic attacks or flutters until today, when my portfolio total got within 0.4% of a long desired goal.

The good days play with me more.

 

[martyb]

I never flinched....I mighta twitched just a teeny bit, but I didn't touch the controls. If I hadn't found this board awhile back, I most likely would have been hopping around, trying to "cut my losses"! :