“Only when the tide goes out do you discover who’s been swimming naked.” - Warren Bu

[audreyh1]

* the last number I saw was about 2,200 confirmed case nationally. Use a 10X factor to guess at latent cases gives you 22,000/320,000,000 or 0.007% aka one in 15,000. And this is a high side risk number because the cases are clustered in areas far from us.

The cases that you know about are clustered in areas far from you.

 

[audreyh1]

Isn't this how Bernie Madoff got caught out? It isn't just about your personal AA but about the rot at the bottom of the piers.
I wonder if it would make him happy or sad to hear about a bigger thief then himself before he dies.

Huh? No, he was operating a pyramid scheme - that’s a little different from using leverage or having high corporate debt that is publicly disclosed.

 

[donheff]

I don't get your point either. I've been ~ 75/25, and a few on this forum are higher, one or two or so at 100%. I don't recall any of them being condescending about it at all. They all seemed well aware of the risks, it's a path they chose, I don't even recall any of them trying to 'sell' anyone on the idea.

My feeling is it is the opposite. Some people with low or zero stock exposure get pretty condescending, telling the stock holders how they are taking so much risk (you'll need to sell stocks in a downturn! ), when historically, a 100/0 portfolio has had far better succes than a 0/100 portfolio.

-ERD50

+1 I had already been in the process of raising my AA from 60/40 to 70/30 (DW and I are getting older and are changing the AA to better fit our kids' profiles). We have exchanged from bonds to equitoes during this downturn. When (if it turns around the ride up will kick us past 70 and we will eventually rebalance back. I don't fell naked at all.

Swimming naked strikes me as being highly leveraged and/or, for pedestrians like us, being 100% in equities and needing a cash flow from your portfolio. That doesn't sound like many people who post around here.

 

[OldShooter]

The cases that you know about are clustered in areas far from you.

You don't think a 10x fudge factor is enough ?

 

[OldShooter]

+1 I had already been in the process of raising my AA from 60/40 to 70/30 (DW and I are getting older and are changing the AA to better fit our kids' profiles). We have exchanged from bonds to equitoes during this downturn. When (if it turns around the ride up will kick us past 70 and we will eventually rebalance back. I don't fell naked at all.

Swimming naked strikes me as being highly leveraged and/or, for pedestrians like us, being 100% in equities and needing a cash flow from your portfolio. That doesn't sound like many people who post around here.

+2 This is almost exactly us, except we went to 75/25.

 

[RetireBy90]

I’m over 90% equities, or I was a couple weeks ago. I’m waiting for the S&P to drop below 2400 before going all in. But I’m still toiling for megacorps, so I’m determined to make the volatility work for me.

Not swimming naked; my bum is still covered by my salary.

Almost same situation for us in 2007/2008. We held fast and found a foreclosed home we got for about $160K less than previous sale. Then we sold our old home and got another distress sale for rental property which is paid for and generating another retirement check each month. Based on the experience in 2007-2009, we are looking for distressed stocks to put some cash to work while not violating AA too much.

 

[CyclingInvestor]

61, retired 13 years, 100% dividend growth stocks since 1993, no pension, SS starting in a few months.

I do not feel any stress over this (nor in 2008-09 nor 2000-03). My portfolio value has been pummelled 30% or so the last few weeks, but I view that like a video game score - cool to get new highs, but of no real consequence.

Dividend flow (and its future growth) is what is important to me, and this is much less volatile than market price (at least it has been for me). This flow has increased every year for decades (average 7-8%), in spite of 3 individual dividend cuts (GGP, KMI, GE), and with minimal effort (some years no trading at all).

I do not condescend to those with other approaches, everyone should do whatever lets them sleep at night. I am just trying to show one approach which has worked for me.

 

[Markola]

61, retired 13 years, 100% dividend growth stocks since 1993, no pension, SS starting in a few months.



I do not feel any stress over this (nor in 2008-09 nor 2000-03). My portfolio value has been pummelled 30% or so the last few weeks, but I view that like a video game score - cool to get new highs, but of no real consequence.



Dividend flow (and its future growth) is what is important to me, and this is much less volatile than market price. This flow has increased every year for decades (average 7-8%), in spite of 3 individual dividend cuts (GGP, KMI, GE), and with minimal effort (some years no trading at all).



I do not condescend to those with other approaches, everyone should do whatever lets them sleep at night. I am just trying to show one approach which has worked for me.

Cool. There are many roads to Rome. It’s all about having a strategy one understands and can sleep with and then sticking to it through the full economic cycles.

 

[DCdave]

I’m over 90% equities, or I was a couple weeks ago. I’m waiting for the S&P to drop below 2400 before going all in. But I’m still toiling for megacorps, so I’m determined to make the volatility work for me.

Not swimming naked; my bum is still covered by my salary.

Daily price actions are a guessing game, to say the least, but I won’t be surprised if you get your 2399 S&P buy on Monday. We are heading into a closing everything but healthcare and grocery store scenario which I would think will lead to some market panic. I bought a little VTI at 128 on Thursday but am pretty confident that was a premature buy.

 

[oscar1]

In WSJ today under the Intelligent Investor section, an artivale quotes psychologist Daniel Kahneman Saying one of the keys to investing is having “a well-calibrated sense of your future regret.”

 

[RetireBy90]

In WSJ today under the Intelligent Investor section, an artivale quotes psychologist Daniel Kahneman Saying one of the keys to investing is having “a well-calibrated sense of your future regret.”

Read that articles and was impressed with the calm logic. It comforted me as I have stayed invested through several market disasters and had no regrets.

 

[Lawrence of Suburbia]

As long as my monthly dividends don't drop much, I've got at least a beach towel around my midsection.

Income from my multi-asset fund is everything. I'm not close to being a millionaire, but as long as my basic bills get paid, I'm okay.

 

[Gumby]

The dot com bomb in 2000 cured me of my prior 100% equity position. I have generally wandered between 60/40 and 70/30 since then.

As far as advising others, my view is that it's your money. Do what you want with it.

 

[RobbieB]

I offer no advice nor take any advice. I'll figure it out myself.

 

[Markola]

Here’s my first candidate for getting caught skinny dipping: Boeing. (With appreciation to Freedom56, who posted this article on another string.)


https://www.zerohedge.com/markets/b...stock-downgraded-bbb-seeks-short-term-bailout

 

[Markola]

Companies that have been indulging executives for years in massive stock buy backs rather than investing in products and growing businesses are not going to get a lot of love from me and, I hope, Congress.

 

[GravitySucks]

Maybe we should have had more discussions on how many companies can last two weeks without income than how many people can't come up with $400 or are living paycheck to paycheck.
Just read an article claiming Airlines spent 90% of their free cash on stock buybacks. Not going to write my Congress Critter to ask him to fast track their bailout.

Companies that have been indulging executives for years in massive stock buy backs rather than investing in products and growing businesses are not going to get a lot of love from me and, I hope, Congress.

 

[Markola]

Congress should definitely forbid stock buy backs and executive bonuses and other selfish shenanigans on any aid they give, like they should have done on the Wall Street bailouts in ‘08 and ‘09.

 

[Masquernom]

Unintended consequences. During the Clinton administration, concern had risen about excess executive pay (cash). Tax policy was changed to make it more painful for companies to pay big salaries to executives. The consequence was that executive pay changed to become more stock oriented. It was sold at the time as aligning salary with company performance. Many of you probably heard the same thing at your megacorp jobs. Along with other factors, this led to even more incentive to prop up a companies short term stock price instead of the long term health of the company.

As they say, no good deed ever goes unpunished.

 

[OldShooter]

Congress should definitely forbid stock buy backs and executive bonuses and other selfish shenanigans on any aid they give, like they should have done on the Wall Street bailouts in ‘08 and ‘09.

H.L. Mencken: “For every complex problem, there is a solution that is simple, neat and wrong.”

1) If a company feels it cannot invest its extra cash as productively as its shareholders might be able to, then it should give the cash to the shareholders. (Is BRK there now?)

2) Stock buybacks are the most tax efficient way to distribute the money. I won't recap the arguments here.

3) The problem with buybacks is, as you imply, they also benefit management that holds options.
​

So the problem is not the buybacks, it is the options. There are other problems with options, too, like asymmetry. Management benefits when the stock goes up and isn't really hurt when the stock goes down. This rewards risk-taking.

I have no answer to this, but I don't think the buybacks themselves are the problem.

 

[Markola]

And here come the airlines to the trough. (Thanks, ownyourfuture)


https://wolfstreet.com/2020/03/17/a...taxpayer-fed-bailouts-for-these-shareholders/

Masqurnon, this article indicates that Reagan’s SEC changed the rule for stock buybacks. The blame is bipartisan.

 

[Markola]

Airlines spent 96% of their cash flow over the last decade on stock buy backs.

https://www.businessinsider.com/air...share-buyback-debate-trump-economy-aoc-2020-3

 

[foxfirev5]

Airlines spent 96% of their cash flow over the last decade on stock buy backs!

https://www.businessinsider.com/air...share-buyback-debate-trump-economy-aoc-2020-3

I would gladly forgoe my ecredits with Delta (considerable $) to punish those clowns for their bogus employee bonuses and buyback bonuses. But that's just the way I am. Old school but not a fool.

 

[pb4uski]

H.L. Mencken: “For every complex problem, there is a solution that is simple, neat and wrong.”

1) If a company feels it cannot invest its extra cash as productively as its shareholders might be able to, then it should give the cash to the shareholders. (Is BRK there now?)

2) Stock buybacks are the most tax efficient way to distribute the money. I won't recap the arguments here.

3) The problem with buybacks is, as you imply, they also benefit management that holds options.
​

So the problem is not the buybacks, it is the options. There are other problems with options, too, like asymmetry. Management benefits when the stock goes up and isn't really hurt when the stock goes down. This rewards risk-taking.

I have no answer to this, but I don't think the buybacks themselves are the problem.

It's like playing whack-a-mole.

 

[Masquernom]

And here come the airlines to the trough. (Thanks, ownyourfuture)


https://wolfstreet.com/2020/03/17/a...taxpayer-fed-bailouts-for-these-shareholders/

Masqurnon, this article indicates that Reagan’s SEC changed the rule for stock buybacks. The blame is bipartisan.

Not trying to blame the Clinton administration for anything. They were just trying to rein in what was then considered excessive executive salaries in cash. A noble effort. It just led to the unintended consequence of executive pay moving heavily to stock.

I'm sure I'm in the minority on this forum, but I feel unregulated capitalism is somewhat dangerous. It's a tough problem, especially with global competition. Even if I had all the answers, nobody would listen to me anyway.