The Inevitable 10% Correction

[RetireBy90]

Quote:

Originally Posted by dallas27 So did we have a correction? I think it dropped something like 9.8%. (I'm sure someone is about to correct me by <0.2%) Technically no, but emotionally yes?

I heard this discussion on CNBC a couple times recently. One talking head answered that we had to get the full 10%, that if you start rounding up you must also include previous declines of close to 10% and then look at what happened then. After a correction is done, the market should either turn into a down market for few years, or return to test the highs.

The other impact of a correction is shaking faith in the market, which takes some excess out of the market, making investors more careful. Not sure we accomplished this either.

That said, I think we are still at high valuations. Never got below average PEs and certainly no where near fair priced by the Schiller 10 year look back method.

Not sure what you call it, and certainly not sure what it means for the market in the near future.

[NW-Bound]

Quote:

Originally Posted by ejman Interesting because I don't think I would be doing anything differently with $5M (if my math is right) as opposed to what I'm doing now. Heck am not sure even 10 times that amount would be much different but maybe it's just lack of imagination on my part...

I believe 0.0001X of Buffett's fortune would be $6.8M, unless he got hurt bad by the current correction. But I do not think so, as I also hold BRK and it has been gaining during the correction.

How would I live differently with $6.8M? Not a drastic change, but I could be wandering around Provence for example, or driving from one distiller to another in Cognac, comparing their brew.

Or I could be up in a village in Northern Italy, inquiring in some cafe about the availability of donkey stew, as it is common there.

[nash031]

Quote:

Originally Posted by RetireBy90 I heard this discussion on CNBC a couple times recently. One talking head answered that we had to get the full 10%, that if you start rounding up you must also include previous declines of close to 10% and then look at what happened then. After a correction is done, the market should either turn into a down market for few years, or return to test the highs. The other impact of a correction is shaking faith in the market, which takes some excess out of the market, making investors more careful. Not sure we accomplished this either. That said, I think we are still at high valuations. Never got below average PEs and certainly no where near fair priced by the Schiller 10 year look back method. Not sure what you call it, and certainly not sure what it means for the market in the near future.

It is against my investing religion to care, but I don't see how it can accurately be termed a "correction" when it occurred over a two-week period and the fall in prices wasn't matched by any new earnings information. In other words, the P/E mentioned changed for two weeks and is right back to where it was. Not much of a correction, if you ask me. IMO, a correction would result in a longer lasting adjustmust of P/E.

In any event, it's all just a starting point for the next bull. Or bear. Or stagnation.

[explanade]

Pigeons are a delicacy up there too.

Plenty of pasta and good wine though and you can get the specialties from Parma, Modena and Bologna too.

You don't really need $6.8 million though to spend time up there, unless you want to buy a lakeside villa, in which case you need about 10 times that.

[NW-Bound]

Quote:

Originally Posted by explanade You don't really need $6.8 million though to spend time up there, unless you want to buy a lakeside villa, in which case you need about 10 times that.

After what I spent on work on my homes this year, I really need more money to go searching for that donkey stew. And indeed, one needs the minimal of 0.001X Buffett's NW to even think of getting a residence near Lake Como.

When we were in Switzerland, took the train for a day trip down to the border with Italy, but ran out of time, did not get very far, and I settled for pizza instead. No donkey stew that time.

[ejman]

Quote:

Originally Posted by NW-Bound I believe 0.0001X of Buffett's fortune would be $6.8M, unless he got hurt bad by the current correction. But I do not think so, as I also hold BRK and it has been gaining during the correction. How would I live differently with $6.8M? Not a drastic change, but I could be wandering around Provence for example, or driving from one distiller to another in Cognac, comparing their brew. Or I could be up in a village in Northern Italy, inquiring in some cafe about the availability of donkey stew, as it is common there.

I'm sure you are right, I was just using round numbers for illustration purposes only. I think I would hire a chauffeur for the driving around Cognac part. I admit that really sounds like fun. Donkey stew? Dunno I've never had any but we had a donkey at our ranch a few years back. Cookie was the name. Ornery was the MO.

[NW-Bound]

Pigeons would be like doves, which I think would taste like quails.

Donkey would be like horse meat, I think, which I have not had either. Same as with horses, donkeys are not raised for meat, and only used as food when they are put down for age. Meat could be tough, hence the stew. Need to point that out to appease animal lovers.

PS. I read that the donkey in Northern Italy is actually brought up from Sicily. So, I would also need to go there to investigate. See what whims money allows one to do?

[dallas27]

I think things could be learned if buffet set a personal goal to spend all his money before his death. very interesting to see what choices he would make.

wouldn't it be interesting if we were only allowed to pass on a certain amount of wealth, otherwise it went to some central charity/betterment organization.

[Options]

Re The "Inevitable" 10% Correction:

"For every investor who beats the market in a given year, there is another whose lost by the same amount.

There are two types of investors when it comes to predicting next year's stock market: 1) those who don't know and 2) those who don't know they don't know.

Often the right answer is knowing you don't know.

The only thing associated with the market's daily ups and downs that is predictable is the pontification of analysts who attempt to explain the often unexplainable.

Left to our own devices, we'll find patterns for everything. This phenomenon is known as data mining."

- Alan Roth in How a Second Grader Beats Wall Street

Overconfidence. Beware.

[rodi]

Quote:

Originally Posted by NW-Bound Pigeons would be like doves, which I think would taste like quails. Donkey would be like horse meat, I think, which I have not had either. Same as with horses, donkeys are not raised for meat, and only used as food when they are put down for age. Meat could be tough, hence the stew. Need to point that out to appease animal lovers. PS. I read that the donkey in Northern Italy is actually brought up from Sicily. So, I would also need to go there to investigate. See what whims money allows one to do?

While investigating in Sicily - if you're on the west coast, (Palermo to Agrigento) - make sure you try couscous con pesce. One of my favorite dishes every. And every place makes it a little bit different.

If I had the fraction of Buffet $$ you guys are talking about I'd probably be wandering around Europe having flown there business class. That's the one splurge I can't quite bring myself to make. I have "front of the plane" envy.

[redduck]

Quote:

Originally Posted by NW-Bound I wouldn't dream of doing something like Buffett did. Where was he when he was your age? What he has now, if I have 0.001X of that, I would be very happy and most likely be doing something else rather than chatting here.... P.S. Umm... Make it 0.0001X Buffett's net worth, and I would be outta here.

I thought Warren Buffett was an active member of this forum. Isn't he one of those members suffering from the OMY syndrome and is always worrying the FIRECalc numbers are not to be trusted?

[explanade]

Quote:

Originally Posted by NW-Bound After what I spent on work on my homes this year, I really need more money to go searching for that donkey stew. And indeed, one needs the minimal of 0.001X Buffett's NW to even think of getting a residence near Lake Como. When we were in Switzerland, took the train for a day trip down to the border with Italy, but ran out of time, did not get very far, and I settled for pizza instead. No donkey stew that time.

I remember seeing one House Hunters International where one of the choices was an apartment on one of the towns on the lake. It wasn't like Villa Balbianello (Home | Villa del Balbianello, Lenno (Como) | Le Dimore del FAI) which is right on the lake, maybe doesn't have much of a water view but not a far walk from getting to the lake.

Or another one where the choices were all on Lake Garda, which I understand isn't dotted with as many luxurious villas but still beautiful:

Looking for Love and Leisure on Lake Garda : House Hunters International : Home & Garden Television

[haha]

Quote:

Originally Posted by NW-Bound Pigeons would be like doves, which I think would taste like quails. Guessing is fun, but can be false.

Quail is white meat, pigeon and dove dark meat, breast and all. Duck is also dark meat. Powerful and continued long distance flying = dark meat. Fast jump to a new hiding place, white meat.

Ha

[StickInTheMud]

A little late to the game on this thread, but I was looking through my portfolio and realized that my biggest position of the year was a purchase of the VINFX (Vanguard 500 Index) at the close price on 10/15.

Not to brag, but I called the bottom on that one.

As of close today, I'm up 6.45% after fees on that position in two weeks.

[brewer12345]

Quote:

Originally Posted by NW-Bound Pigeons would be like doves, which I think would taste like quails. Donkey would be like horse meat, I think, which I have not had either. Same as with horses, donkeys are not raised for meat, and only used as food when they are put down for age. Meat could be tough, hence the stew. Need to point that out to appease animal lovers. PS. I read that the donkey in Northern Italy is actually brought up from Sicily. So, I would also need to go there to investigate. See what whims money allows one to do?

As Ha said, dove is very dark meat, almost like the very leanest grass-fed beef there ever was. Tasty.

Skip the donkey stew. Come visit and I will serve you some squirrel for nothing.

Squirrel and rabbit gumbo is on the menu for this weekend...

[NW-Bound]

I have a lot of mourning doves around the low-desert home, and a friend has said they are good eat. I can easily bag a few, but the thought of having to clean them deters me, and it does not look like there's much meat.

Hey, thanks for the offer. If I accept, I will no longer be the recluse that I am, so allow me to mull it over.

[brewer12345]

When it comes to cleaning game, youtube is your friend. Doves are pretty easy, especially if you breast them (2 minutes a dove). I usually pluck them and leave them whole, which takes a little longer. At this time of year, all we have around are the invasive Eurasian doves, which can be about the size of a crow. Good eating, though.

[NW-Bound]

Forget to say my wife might file for divorce if I got those doves, particularly the pairs of doves that built a nest in the shrub.

[brewer12345]

Quote:

Originally Posted by NW-Bound Forget to say my wife might file for divorce if I got those doves, particularly the pairs of doves that built a nest in the shrub.

Ah the things we do for love. I have been forbidden from even looking closely at the many squirrels that frequent our backyard. I also end up cleaning game in the field to avoid offending certain peoples' sensibilities. This has the advantage of keeping the mess out of the house, but when the sun went down 45 minutes ago, the temperature has dropped 20 degrees in that time, your fingers are getting stiff with the cold and you just heard a pack of coyotes start howling over the next ridge, the disadvantages suddenly seem clear.

[steelyman]

I've been alerted there is a coyote running around my new home. Can you do anything to discourage them? Or do I have to be Road Runner and let him eat me?