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Old 04-08-2020, 05:06 PM   #141
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I backed off from 45% stock to 20-25% when the market bounced back up in the past week. While it locks in a 20+% loss, we were failing the "sleep at night" test.
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Old 04-08-2020, 06:06 PM   #142
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I sleep well at night because I have not looked at my balances! In it for the long haul. ��
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Old 04-08-2020, 07:15 PM   #143
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I think we’ve bounced from the bottom. Having said that, next week will be the big week. Suppose to be the time to determine if we have flattened the curve for C19. I got lucky and sold at the first two big drops. I was up and didn’t want to get greedy. Sold all.

Around 19k, I started buying At 40 percent now and will buy a chunk at the next couple of drops. I think we’re passed the “rough” patch.
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Old 04-08-2020, 07:48 PM   #144
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I sleep well at night because I have not looked at my balances! In it for the long haul. ��


Hereís to reading breathless posts while not lifting one pinky. 🥂
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Old 04-09-2020, 05:03 AM   #145
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Some estimate of the future effects of the virus are priced in. How accurate those estimates are will determine the direction of the market.
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Old 04-09-2020, 05:23 AM   #146
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Always interesting to hear that the market is forward looking and has the negative news priced in.
Where was Mr. Market in early Feb 2020 in terms of pricing in the upcoming virus situation in America?
I just don't believe the market has the true effects priced in on the upcoming economic effects of the virus, vs. more concentrating on the virus itself.
Hopefully I am wrong.
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Old 04-09-2020, 05:57 AM   #147
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Where was Mr. Market in early Feb 2020 in terms of pricing in the upcoming virus situation in America?
Highsight being perfectly 20/20, I don't think people thought it would travel outside China and/or would have such a devastating impact on the economy and at such speed. The initial drop came late Feb when people in Italy and WA started getting this virus. Reflecting SARS or MERS, the market adjusted slightly.

I don't think anybody could have guessed at that time that there would be such a lockdown throughout the world. IMHO, ultimately that was the black swan -- not the disease but the actions taken by the government to shut down all non-essential businesses.

That's why I dont think we're going to retest the lows because I think the market has already priced in huge unemployment, significant drop in GDP, between 100-200k deaths. The three factors that could retest lows are: 1) no treatment / vaccine, 2) hyperinflation, 3) related to #1, mutation of the virus with a higher death rate. Everything else is generally within the perimeters of the volatility to date.
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Old 04-09-2020, 06:34 AM   #148
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If it's priced in massive unemployment and system-wide large scale reduction in business operation the market should be going downer and downer. Those things don't make markets go up.


This notion of pricing-in is as ephemeral and variable as a feather in the wind. There's always a by-the-way and a Yeah, but... in there to make it seem plausible.
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Old 04-09-2020, 06:46 AM   #149
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Okay so let's take this situation with forward thinking concept.
The market returns to 3300 S&P in a few months.
Now let's compare the 3300 market in mid Feb with a 3300 June market let's say.
If the market is truly forward looking, can anyone say that the forward looking 6 month concept in June (Dec 2020) is expected to have all the economic damage corrected and go back to the Feb levels to justify the same price as what was back in Feb?

ETA -what we are basically saying is that it doesn't matter how much bad news there is, as long as the bad news was expected.
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Old 04-09-2020, 06:48 AM   #150
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This notion of pricing-in is as ephemeral
If that is the case, how do you account for the large drop in the stock market when the retrospective unemployment rate was still 3.4% and the number of deaths was still under 100 in mid march?

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The market returns to 3300 S&P in a few months.
I think 3300 in a few months is a stretch. I dont think anybody thinks society will get back to where we were anytime soon. I think the majority think we will slowly return to normal over the next year or 18 months. If however a vaccine is approved and had the scale to give everybody in the world the vaccine in a month or two, this could happen.
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Old 04-09-2020, 06:55 AM   #151
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Always interesting to hear that the market is forward looking and has the negative news priced in.
Where was Mr. Market in early Feb 2020 in terms of pricing in the upcoming virus situation in America?
I just don't believe the market has the true effects priced in on the upcoming economic effects of the virus, vs. more concentrating on the virus itself.
Hopefully I am wrong.
Hmmmm, I agree with you to a large extent. The market peak was Feb. 19th, and didn't really crash until Feb. 28th. But, I think that for most of February, the market was just watching and listening to most of the U.S. saying, "We have this under control." And with only 15 cases on Feb. 15th, the market probably erred on the side of trusting that we did. Then, reality set in.

That said, I think there will be another drop after we get through the next level of denial. One, COVID-19 is not going away easily. Two, the economy has been severely damaged. Three, recovery will be painfully slow, given the combination of both one and two.

But I am wrong 51% of the time
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Old 04-09-2020, 07:00 AM   #152
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Old 04-09-2020, 07:06 AM   #153
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Hmmmm, I agree with you to a large extent. The market peak was Feb. 19th, and didn't really crash until Feb. 28th. But, I think that for most of February, the market was just watching and listening to most of the U.S. saying, "We have this under control." And with only 15 cases on Feb. 15th, the market probably erred on the side of trusting that we did. Then, reality set in.

That said, I think there will be another drop after we get through the next level of denial. One, COVID-19 is not going away easily. Two, the economy has been severely damaged. Three, recovery will be painfully slow, given the combination of both one and two.

But I am wrong 51% of the time
The timing of various announcements appears to also coincide to blunt the bad news being announced at that time.
Overall, there is an all out effort to maintain the markets in this election year.
All this debt accumulation will have what effect down the road?
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Old 04-09-2020, 08:31 AM   #154
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Always interesting to hear that the market is forward looking and has the negative news priced in.
Where was Mr. Market in early Feb 2020 in terms of pricing in the upcoming virus situation in America?
I just don't believe the market has the true effects priced in on the upcoming economic effects of the virus, vs. more concentrating on the virus itself.
Hopefully I am wrong.
The market is scenario crunching machine that is always pricing on a risk-adjusted basis. It's never actually priced right but is always feeding in new information. There are lots of scary, black swan-ish things that go swimming by and market moves to-and-fro in response. It never prices a black swan all the way until an event happens. Nor should it. Individual investors price those things in fully or not at all, and make a killing or get fleeced in a response. And in making those decisions, they tug the market towards a collective pricing of the future.

Your belief that the market hasn't fully priced in the economic drag is reflected in your investing decisions, which provide their own small tug on the markets prices.

in February there was a still a decent chance that the virus would be contained and there was lots of other good news to go around. So the market discounted lots of scenarios simultaneously and arrived at a price for the future. One particularly grim scenario manifested itself and the market adjusted its price based on new info.

Right now the market is digesting two conflicting views (among so many other factors). Armageddon looks less likely, but not impossible, so we're off those lows. V shaped recovery appears possible, but not likely. So we have some enthusiasm.

More information to come.

If Europe stumbles as it tries to come out of this, down we go. If Europe comes out gracefully, up we go. Also New York. And then there is new Chinese city in lockdown. And a US election. And the world is awash in debt. And bond yields are negative in some places.
And the dollar is strengthening...and...and...and...so many things to price in!
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Old 04-09-2020, 08:45 AM   #155
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Okay so let's take this situation with forward thinking concept.
The market returns to 3300 S&P in a few months.
Now let's compare the 3300 market in mid Feb with a 3300 June market let's say.
If the market is truly forward looking, can anyone say that the forward looking 6 month concept in June (Dec 2020) is expected to have all the economic damage corrected and go back to the Feb levels to justify the same price as what was back in Feb?

ETA -what we are basically saying is that it doesn't matter how much bad news there is, as long as the bad news was expected.
People can ask themselves one question:

At 2780 S&P 500 is there more downside or upside possibility in the next year?

For me the risk is losses at these price points. Where that flips to risk is missing out on gains is different for everyone I suppose.....but I would think few informed investors would think the current price point today has much upside in the next year.
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Old 04-09-2020, 08:53 AM   #156
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For me the risk is losses at these price points. Where that flips to risk is missing out on gains is different for everyone I suppose.....but I would think few informed investors would think the current price point today has much upside in the next year.
I agree with you, unless there is a treatment or vaccine breakthrough. I think, given the run, the market is starting to price in a treatment sooner than later -- and I'm sure a few have a preview of the clinical trials going on. I think the market is already starting to price in more fiscal stimulus. Oil cuts are already priced in now..
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Old 04-09-2020, 09:21 AM   #157
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People can ask themselves one question:

At 2780 S&P 500 is there more downside or upside possibility in the next year?

For me the risk is losses at these price points. Where that flips to risk is missing out on gains is different for everyone I suppose.....but I would think few informed investors would think the current price point today has much upside in the next year.
I don't have a one year horizon.

You may be right that there's more downside, but if you get out, and it goes up, when do you decide to finally get back in? You may be even more convinced it has to go down and stay out of the market even longer, which might put you at risk of getting back in even higher.

I don't have that risk if I just stay invested. I may be missing out on some gains by not getting out now and back in at a lower price, but if things go well I don't have to worry about when to get back in, because I've stayed in. I only lose if the market stays low until I finally need to sell for living expenses. I feel like trying to squeeze a few more % gains this year puts my long term plan more at risk than just holding to my AA.
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Old 04-09-2020, 09:41 AM   #158
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Overall, there is an all out effort to maintain the markets in this election year.
All this debt accumulation will have what effect down the road?
I think you nailed it. Can we can financially engineer our way out of this? That is the real question and it will be quite telling for a lot of future issues.
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Old 04-09-2020, 09:44 AM   #159
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I don't have a one year horizon.

You may be right that there's more downside, but if you get out, and it goes up, when do you decide to finally get back in? You may be even more convinced it has to go down and stay out of the market even longer, which might put you at risk of getting back in even higher.

I don't have that risk if I just stay invested. I may be missing out on some gains by not getting out now and back in at a lower price, but if things go well I don't have to worry about when to get back in, because I've stayed in. I only lose if the market stays low until I finally need to sell for living expenses. I feel like trying to squeeze a few more % gains this year puts my long term plan more at risk than just holding to my AA.

You missed out on a lot of bargains in the fixed income market. Many of the corporate notes I picked up during the big sell-off at bargain prices are up 22-30% plus interest as of this morning. I will be selling some of those positions soon and wait for the next sell-off. Those stupid bond funds that were selling debt at 75 to 85 cents on the dollar three weeks ago are busy buying them back over par. They have done this countless number of times and as long as the sheep continue to buy these corporate bond ETFs and funds and do their silly re-balancing dance with their, equity funds, I will continue to add to my wealth.
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Old 04-09-2020, 09:55 AM   #160
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All this debt accumulation will have what effect down the road?
Adding huge additional Debt to already swollen Feds balance sheet of over $3 trillions means only one thing: there will be far greater inflation at some point.
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