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Old 04-15-2020, 05:33 PM   #241
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I am also concerned about inflation. Here is a link on the causes of inflation during the 1970's which I found interesting:

https://www.investopedia.com/article...-inflation.asp

In a nutshell, High oil prices and loose money caused the 1970's inflation.

We now have low oil prices which is anti-inflationary. We have loose money and high national debt which is inflationary.

...
Cheap oil is not anti-inflationary when few people are driving/flying to make use of the cheap prices.
Mean while food prices have skyrocketed. Black market price (Venezuelans would call it the real price) of pancake mix is $28/box. A month ago it was $6. What is available is rationed (milk, eggs, bread, soap) meanwhile farmers are dumping milk and plowing produce because they can't find a way to get it to market. Sounds like scripts of the PBS documentaries of the Great Depression.

Opportunists are demanding their companies shutdown for 3 weeks (paid leave of course) for cleaning and a 30% raise (depending on local starting points) for them to come back to work + employer provided PPE.

So yeah. inflation is going to be a ____.
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Old 04-15-2020, 10:42 PM   #242
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Not necessarily. In 2007 we got out of the market in early November when the Dow was at 13,600, and sat on the sidelines until January of 2009 when we got back in at 7850. When we moved to a Treasury fund in November of 2007, never did we imagine that we'd be sitting on the sidelines for 14 months. And while we didn't get at the very top, we were pretty close, and the Dow bottomed around 6,600 in early March and then bounced back to the high 7,000 later that month. That was the whoosh to the bottom and the snap back. We missed a 42% drop in the market in our portfolio which was invested very aggressively at that time.

As I've said earlier, we were very aggressive through the end of 2019, but moved into VBIAX in January because we felt like the market was overvalued. We didn't want to be greedy. We saw an almost 30% return in 2019 alone, like many of you here likely did as well.

We followed the virus news very closely and grew increasingly concerned. Missed the top, but got out at 27,080 and moved into VMFXX. And we will stay on the sidelines again, for I fear, quite some time. But this is completely about capital preservation now for us.

My wife is in contact with many other service businesses and ICs trying to apply for PPP and expanded benefits for ICs through State unemployment. It's a joke...they're lightyears behind where those of us in the 21st century operate. This money is not getting to the people and businesses who need it fast enough. Not even close.

Our "bet" is that this is going to be a deep and long recession. Turn off CNBC....it's a game show right now, other than the big thinkers they typically have on before the market opens. This is a moment to read The Economist and The Financial Times. And everything I'm seeing there is that we are *in* for it. And the way that our markets are behaving here are completely devoid of any reality. Trading on a hope and a prayer at this point.

If we're wrong, and this whole pandemic event has been overblown, there has still been an incredible amount of destruction to the economy. And we have no idea just how much destruction has been done just yet. But if we're right, this market will not only re-test the lows, but go below those levels.

We just continue to ask ourselves, if the market was down 20% in late 2018 due to tariff concerns, Brexit concerns and Fed interest rate policy concerns....should it be trading *just* 20% down now? With everything that has happened and with a sea of uncertainty ahead? With unemployment clearly over 25 million people already when you factor in the backlog of "pending" UI and PPP applications. Does everyone think those jobs are all going to be waiting for those people when we "open up" the USA again? Are you kidding me?

Anyway, in no set of circumstances does that make any sense to us. Even with the stimulus that is being thrown at the problem, it's not enough to offset the capital destruction that has already happened. And oh....the whole rest of the world is worse off than we are. And we kind of do business with them too.

Again, if we're wrong, and we're all back to work soon, that would be great. And unemployment numbers drop like a rock as everyone goes back to those re-opened businesses that hired them, jobs at the ready....unemployment back down to 3.5%. If the ballparks and theme parks are full and the restaurants are packed due to pent-up demand, then I'm wrong. If planes are flying as full as they used to be and cruise ships are heading out packed to the gills like before...then I was wrong, and the economy will soar back to life and we'll have that "V" recovery that this market is clearly betting on.

We'll know in 2-3 months and see how we're doing with our testing efforts. And we'll see how the consumer behaves. If things start looking really good, then we'll happily jump back into the market into VBIAX, when it feels like it's trading on reality and not on what appears to me right now to be a fantasy.
Amen to this....CA is not looking to see large gatherings until 2021:

https://www.latimes.com/california/s...-2021-garcetti
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Old 04-16-2020, 04:15 PM   #243
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can we say good bye to DOW 18K now.
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Old 04-16-2020, 04:17 PM   #244
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can we say good bye to DOW 18K now.
Sure...for today at least, since the market is closed. Canít speak for tomorrow.
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Old 04-16-2020, 04:24 PM   #245
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Sure...for today at least, since the market is closed. Canít speak for tomorrow.
future is up over 700+ last 45 minutes.
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Old 04-16-2020, 04:27 PM   #246
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Amen to this....CA is not looking to see large gatherings until 2021:

https://www.latimes.com/california/s...-2021-garcetti
I hope they open the boat ramp soon in SoCal...
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Old 04-16-2020, 04:30 PM   #247
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future is up over 700+ last 45 minutes.
Because a small sample study on a drug with nasty potential side effects that aren't uncommon showed some promising results. So what?
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Old 04-16-2020, 04:45 PM   #248
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Because a small sample study on a drug with nasty potential side effects that aren't uncommon showed some promising results. So what?
don't know where you got your news but Remdesivir looks very promising after the trial so yes, you can say good buy to DOW 18K and welcome DOW 30K by year end.
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Old 04-16-2020, 04:53 PM   #249
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It means you can say good buy to DOW 18K and welcome DOW 30K by year end.
You find that valuation reasonable given that we may still be in an ugly recession with high unemployment by then?
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Old 04-16-2020, 04:57 PM   #250
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Because a small sample study on a drug with nasty potential side effects that aren't uncommon showed some promising results. So what?

I can think of something. The stock market is whatever the people who operate it think it should be. All the supposedly ugly numbers concerning huge unemployment and collapse of revenues are starting to hit and have been foreseeable for weeks now. But up she goes! And the futures are up too. Yes, I know: "Stay tuned". "Sucker's rally" etc etc. But it supposedly forecasts things in the future. So we must be getting better, right? And btw, killing people is not a factor in calculating PE ratios or anything else. That happens all the time.
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Old 04-16-2020, 04:59 PM   #251
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You find that valuation reasonable given that we may still be in an ugly recession with high unemployment by then?
Markets already looked to 4th quarter and unemployment is now old news.
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Old 04-16-2020, 05:04 PM   #252
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Markets already looked to 4th quarter and unemployment is now old news.
If any of the ugliness ever got priced in, you might have a point. But it hasn't been. Ah well. Good luck.
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Old 04-16-2020, 05:21 PM   #253
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If any of the ugliness ever got priced in, you might have a point. But it hasn't been. Ah well. Good luck.
I agree too. Perhaps in the past it was more often.
From another standpoint, are the expected economics of the USA by Dec 2020 better than the actual economics (in hindsight but that shouldn't matter to Mr. Market) were in June 2019?
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Old 04-16-2020, 05:25 PM   #254
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Because a small sample study on a drug with nasty potential side effects that aren't uncommon showed some promising results. So what?
What are you talking about?

The reopening plan was released to the press, and then to the public.
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Old 04-16-2020, 05:28 PM   #255
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I agree too. Perhaps in the past it was more often.
From another standpoint, are the expected economics of the USA by Dec 2020 better than the actual economics (in hindsight but that shouldn't matter to Mr. Market) were in June 2019?
I thought valuations were extended at s and p 3300 even without a pandemic and severe recession.
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Old 04-16-2020, 05:35 PM   #256
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I thought valuations were extended at s and p 3300 even without a pandemic and severe recession.
Agree again.
So just using the last 2 bear market (2000,2008) scenarios where there were 2 bear market rallies and 3 downward movements before the general upward forward movement, are we going to say that "This time is different"?
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Old 04-16-2020, 05:40 PM   #257
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Agree again.
So just using the last 2 bear market (2000,2008) scenarios where there were 2 bear market rallies and 3 downward movements before the general upward forward movement, are we going to say that "This time is different"?
I am in capital conservation mode, so I am not going to say that. I also have the luxury of having been short on the way down. If this time really is different and I buy back in at 330 I just go back to where I was except 20 percent wealthier. I am guessing I will be offered significantly cheaper prices this summer.
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Old 04-16-2020, 05:41 PM   #258
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What are you talking about?

The reopening plan was released to the press, and then to the public.
The Gilead drug appears to be the reason for the surge in futures.

https://www.cnbc.com/2020/04/16/sp-5...ronavirus.html
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Old 04-16-2020, 05:43 PM   #259
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The Gilead drug appears to be the reason for the surge in futures.

https://www.cnbc.com/2020/04/16/sp-5...ronavirus.html
and Boeing reopening plus economy back to business opening announcement.
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Old 04-16-2020, 06:01 PM   #260
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future is up over 700+ last 45 minutes.
This market is a “perfect orgy of speculation”. It looks like the perfect time for a "day trader". Reminds me of the Y2K era. The stock market is not the economy and the FED knows we have serious problems (unless you view them as political) so I'm sitting back and waiting until things settle down. Too old to take a lot of risk and it looks risky to me.
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