Do you think Dow 18,000 was the bottom?

[razztazz]

Let’s see what happens when the apex of death hits, how will the market handle 100k dead, 200k? Will life return to the previous normal? And big question is what happens if there is a second wave or a mutation that that is worse than the current virus?

Many industries will recover and thrive, others not so much. I don’t think cruising will ever be the same for example.

Was just reading something like this on another forum. All those numbers, the sick, the dead, even how many potentially unemployed, (10,20,30%...) are calculable numbers. The stimulus money and other support payments. The market, supposedly, has all that priced in already, doesn't it? I'm not saying it does. I don't think the market is particularly "smart" or knowing. But that's the orthodoxy. They come... they see... they price it in. A case can be made for the bottom having already been hit.

 

[GravitySucks]

How come? Choices / priorities / limits.

In 2015, the state of NY determined that they needed 16,000 more ventilators (than the 2,000 they had) to be prepared for a pandemic. At a cost of $36K each, that was $576 million. Not a trivial sum. They decided to spend the money elsewhere, and instead created a set of rules for how to ration the ventilators they did have.

In hindsight, that looks like a poor decision. But, they do not have unlimited funds. If we were being hit with a different catastrophic event right now, for which ventilators were of no use, would people be criticizing them for wasting all that money on ventilators instead of what we REALLY needed?

Hey. This Forum is part of the Internet.
Stop making sense and being reasonable. That's what books are for.

 

[jldavid47]

If I am incorrect in my assumption at present I lose nothing and have plenty for retirement. My retirement plans do not include trying to become as wealthy as possible, they are to be conservative in my investments that allows me to live freely in my older years.

Ding, ding, ding! EXACTLY. Once you have enough to live on (plus a margin for error) you need to become almost fanatical in managing risk. If you determine you need $1 million (for example) and you have, say, $1.5 million then there is no point of trying for $2 million or $3 million unless you are greedy. At that point return OF capital becomes infinitely more important than return ON capital.



I'm following a similar strategy to you but I am also taking small shots to the downside with options. My portfolio was up about 1% in the first quarter which was just fine. Once I determined we had enough my strategy was constructed intentionally to underperform in a bull market and massively outperform in a bear market. People call that conservative. I call it prudent.


Bulls make money. Bears make money. Pigs get slaughtered.

 

[Clone]

I have always felt that the tiger in the bushes for retirement is inflation. That is one of the reasons that I have used for planning to delay SS to 70. I do not know how well the market is correlated to inflation (if at all). I believe we personally will be OK. What was a very comfortable retirement for some could become a bit snug if we embark on a few years of high inflation. I think the market will retest the lows, and am surprised that it has held up as well as it has this past few weeks.

 

[OldShooter]

I have always felt that the tiger in the bushes for retirement is inflation. That is one of the reasons that I have used for planning to delay SS to 70. I do not know how well the market is correlated to inflation (if at all). I believe we personally will be OK. What was a very comfortable retirement for some could become a bit snug if we embark on a few years of high inflation. ...

Yup. Big tiger. High impact, though one can argue about probabilities. That is why about 90% of our fixed income side is in TIPS. I view any difference between TIPS total return and a treasury bond's total return as a premium paid for inflation insurance. No different than the premium I pay for fire insurance on our houses.

 

[LRDave]

I have always felt that the tiger in the bushes for retirement is inflation. That is one of the reasons that I have used for planning to delay SS to 70. I do not know how well the market is correlated to inflation (if at all). I believe we personally will be OK. What was a very comfortable retirement for some could become a bit snug if we embark on a few years of high inflation. I think the market will retest the lows, and am surprised that it has held up as well as it has this past few weeks.

+1 to the bolded above.

For me, I have reflected on the pain of the last two months and considered how much worse it can get and thought: "Well this sucks, but I can see how our plan will get us through."

OTOH, I can imagine inflation only even as bad as the 70s and come up with even more dire scenarios. I have posted this before, but I remember as a child seeing the palpable fear in my middle-class parents eyes as we watched to nightly news. They were genuinely concerned that their two salaries weren't going to be able to keep up with the runaway prices they were seeing. I also remember my father telling me how thankful he was for his VA mortgage.

 

[targatom2019]

Dow future is up 600+ point tomorrow

 

[aja8888]

Dow future is up 600+ point tomorrow

Oil prices down 9% today on postponement of the OPEC meeting Monday......Woops!

 

[Cheesehead]

For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.

 

[Lawrencewendall]

Let's see:

- Large and increasing number of unemployed? Check.
- Police forces losing more and more officers to the virus/sick-outs? Check.
- General attitude of willingness to ignore theft and similar offences in large cities? Check
- Lots of people (including the bad ones) with too much time on their hands? Check.

Looks like we have all the ingredients for a crime spike.

Gun and ammo sales to law abiding citizens up-Check

 

[REWahoo]

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Ah, the "When do I get back in?" question, AKA "The Market Timers Lament."

Kidding aside, good luck in figuring this one out.

 

[Markola]

For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.

If I were you, I’d declare victory and get back in now but with a more conservative AA that let’s you sleep at night so that you won’t ever touch it again. Good luck.

 

[donheff]

Cheesehead, if you think the pandemic is going to reduce the US to New Orleans following Katrina you should sit tight for the long haul, On the other hand, so far crime is down, the food supply chain is holding up, and police are minutes away on empty roads. If that holds up maybe we will bounce back when the market judges we are at a peak of the virus and are will get back to work soon. The problem is there is no way to know for sure what is going to happen. I live in close proximity to neighborhoods the doom and gloom folks think are going to rise up in anarchy. It didn't happen during the crack epidemic, it didn't in the housing crisis, and I don't expect it to happen now. If we run out of food all bets are off.

 

[Freedom56]

Listen to corporate business leaders who have a track record of managing their business. This is from Jamie Dimon of JP Morgan Chase (one of the handful of non-zombie banks from the 2008/2009 era).

"JAMIE DIMON WARNS: We’re getting a ‘bad recession’ plus ‘financial stress’ like the 2008 crisis"

"In his annual shareholders letter, Dimon also warned that the bank may have to consider suspending its dividend if the economy reaches “extremely adverse” conditions."


https://www.cnbc.com/2020/04/06/jam...-says-us-can-emerge-from-crisis-stronger.html

 

[cooch96]

Gun and ammo sales to law abiding citizens up-Check

This has surprised me a little bit. I figured supply would outpace demand, causing prices to drop, as suddenly unemployed folks with hefty arsenals start unwinding those assets for needed cash. That just doesn’t seem to be the case, at least not for the items I’m looking for.

 

[RenoJay]

I have been mostly out of the market since 2018 with the plan to come back in at what I consider “fair value.” I didn’t buy at Dow 18,000 and in my gut I don’t think it was the low. Investors still strike me as too excited to jump back in. My belief is that sustainable bottoms happen when you pretty much can’t find anyone who thinks the low has been set. Time will tell. If I’m wrong, I still think this’ll be a flat decade from current price levels.

 

[aja8888]

For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.

Hey Cheesehead, I'm in your position but I am a bit older (76 1/2), and have been moving to cash from my portfolio since last year, and now at 90% cash. I am waiting for a time to start feeding back into SCHB a chunk at a time. NO WAY am I going to risk more than 20% of the nestegg to equities at this point as I feel the real "hurt" has not been priced into the market yet. The current 90% is in a big CD ladder and municipal bonds (fund). There is also 3 years of working capital in cash to cover day to day expenses beyond SS income. (No pensions here, no debt either)

Now I don't know when this future "hurt" will show up, but with new high unemployment, lost business revenues (and profits), people's spending attitude changes, etc, it may make sense to wait and see for another quarter before committing more to equities. Remember, it's widely known that the current administration wants to keep the "bubble" inflated until after the elections in November, and that bubble has lost some serious air right now.

We may have 10 years less to live, and with DW's ailments, she may have much less. We are taking the rest of this "trip" a bit on the conservative side as we want to leave a bit behind for the kids.

I hope this helps your thought process.

 

[targatom2019]

Good bye DOW 18,000.

 

[Dtail]

Hey Cheesehead, I'm in your position but I am a bit older (76 1/2), and have been moving to cash from my portfolio since last year, and now at 90% cash. I am waiting for a time to start feeding back into SCHB a chunk at a time. NO WAY am I going to risk more than 20% of the nestegg to equities at this point as I feel the real "hurt" has not been priced into the market yet. The current 90% is in a big CD ladder and municipal bonds (fund). There is also 3 years of working capital in cash to cover day to day expenses beyond SS income. (No pensions here, no debt either)

Now I don't know when this future "hurt" will show up, but with new high unemployment, lost business revenues (and profits), people's spending attitude changes, etc, it may make sense to wait and see for another quarter before committing more to equities. Remember, it's widely known that the current administration wants to keep the "bubble" inflated until after the elections in November, and that bubble has lost some serious air right now.

We may have 10 years less to live, and with DW's ailments, she may have much less. We are taking the rest of this "trip" a bit on the conservative side as we want to leave a bit behind for the kids.

I hope this helps your thought process.

Bolded by me - Been saying this in various ways in other posts. If this turns out to be the case, then can one say if there is another low breach, that it won't happen until Nov and even will it then depending on the election results.

 

[jollystomper]

Good bye DOW 18,000.

Not so fast...

 

[WyomingLife]

For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.

When "a bottom is agreed on," will somebody kindly let me know?

Asking for a friend ....

 

[Asabino]

I can't remember who the analyst was but he said " just like your face, don't touch it".

 

[REWahoo]

When "a bottom is agreed on," will somebody kindly let me know?

History says that agreement won't come until a few months after it happens - too late to be of much use to those hoping to "get in at the bottom."

But since this time is different, we may know the bottom immediately - especially if it is around 0.

 

[UnrealizedPotential]

Tops and bottoms in the stock market do not announce themselves. Only in hindsight can we recognize them for what they were. But many investors still try . My approach has been to not try and guess where the bottom is or was or will be, but instead to just buy when I think there is value. Every investor will have to determine what value is for them.

 

[NW-Bound]

... My approach has been to not try and guess where the bottom is or was or will be, but instead to just buy when I think there is value. Every investor will have to determine what value is for them.

+1

With the market down only about 20% from its top, it's hardly a bargain considering that it was overvalued then, and the economy is going to take a big hit with many industries in tatters.

I am still more than 50% in stock, and feel no impetus to buy more.