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Old 09-09-2020, 12:29 PM   #121
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Because it's never after merely a few down days. There's always more to it. That's whats implied in the discussion.

I guess my point is corrections of 5,10, or even 15% are very normal in bull markets. There's really not "more to it". People grasp for a "reason" for these sharp swings, when in reality it could be a multitude of things, but things like "its because the PE" or "the election" are short term mindsets that shouldn't be cause for a change in long term investment strategy.



If you're a trader that's one thing, but if one is truly an investor tuning down the noise associated with quick drops is usually key to maintaining discipline. But that isn’t the natural response, especially among financial commentators in this 24/7 news media world.
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Old 09-09-2020, 01:58 PM   #122
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I think of the market like I think of a wristwatch. The watch tells us that it's always buy and hold time, but nobody has the slightest idea how the watch works.
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Old 09-09-2020, 02:43 PM   #123
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The market is positive right now... Buy Buy Buy!!!
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Old 09-09-2020, 03:05 PM   #124
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The market is positive right now... Buy Buy Buy!!!
Dropped in the last hour. Woodward?
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Old 09-09-2020, 03:07 PM   #125
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dropped in the last hour. Woodward?
noooooooooooooo!!!!!!!!!!!

Bitcoin?
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Old 09-09-2020, 03:48 PM   #126
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Invested in Toilet paper companies since covid 19, lost my ass off, on the positive side no more toilet paper for me.
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Old 09-09-2020, 03:52 PM   #127
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Invested in Toilet paper companies since covid 19, lost my ass off, on the positive side no more toilet paper for me.
Invest in PPE?
Sell from garage?
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Old 09-09-2020, 06:18 PM   #128
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Because nobody can predict the future, the answer is have an AA and stick with it.
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Old 09-10-2020, 08:38 AM   #129
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Looks like a few of you have not been following/considering the collective wisdom of the members here that have a good deal of experience in investing.


Cheers!
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Old 09-10-2020, 01:31 PM   #130
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Looks like a few of you have not been following/considering the collective wisdom of the members here that have a good deal of experience in investing.
Relax and enjoy a laugh. It'll help you live a longer and healthier life.
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Old 09-10-2020, 03:39 PM   #131
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Old 09-10-2020, 05:26 PM   #132
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Old 09-10-2020, 06:58 PM   #133
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I am very risk-averse in this market and focused on asset preservation; but I'm glad we've been able to make some good profits without risking sizable portions of our portfolio to keep up with inflation. I've been dollar-cost-averaging into BRK-B since July and raising my open stop orders slowly as the share price increases to lock in profits. It's a nice way to indirectly own a great portfolio that has so far been less volatile than the shares they own.
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Old 09-10-2020, 07:24 PM   #134
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"Keep to the Code." Jack Sparrow

(Have a plan and stick with it. Ko'olau)
Sunk cost argument? Sorry couldn't resist. Plans are only good as long as the conditions the plan was designed to meet remain in effect. Not saying B&H is no longer valid but the reality is we can't know that they are. Life on the street these days speaks more to, as some others have mentioned, capital preservation, abnormalities in the system, and other contortions. Enough to have less confidence than usual "how we've always done it."

But I am not one with a $5 mil 401k like some here. If I were I could take up real gambling. Seems like the only time one can truly say fuggetaboudit is when you have huge amounts of money or no money to lose.
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Old 09-10-2020, 08:44 PM   #135
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No one wants to leave the party until just before the cops show up.

Yup. I'll claim 45 years, though not all of them with the smartest investment tactics. But yes, stay the course.
Great Saying, love it. I'm at 42 years (first stock I bought was in 1978, Warner Lambert I think).

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Personally, I believe the market with all the uncontrolled and unregulated algorithmic trading, is completely unnatural. I look at P/E ratios and Tesla, just to name one example had a P/E ratio of 1,200. IMHO anything above 50 is risky. If you put it into perspective the market capitalization for Tesla was equal to all other automobile manufacturers combined which is, of course, ridiculous.
I won't argue with your general theme (market may be quite bubble-licous), nor do I own TSLA, but I can still remember when this young no-profit company called Amazon was worth as much as Barnes and Noble and Borders combined. I thought that was C-R-A-Z-Y. Now. Borders is no longer and Amazon is well...much larger. I am just thankful I wasn't foolish enough to try to short it. Similarly, I remember when NetFlix (NFLX) became worth more than Blockbuster....

p.s. I doubt I will ever score big on a company like this (high flyer, no earnings, people just buying on revenue growth) as I am unable to make myself 'buy up' on these sort of things. Where I have made nice change is on things like Apple (bought @ $18 share when they had $13/share in cash), Marriott, Honeywell, Edwards, Abbott Labs, Analog Devices (via Linear Technology), Styker and so on. All of these had (at the time at least) reasonable PE ratios.

p.p.s. I managed to lose money in both Facebook and NetFlix.
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Old 09-10-2020, 09:59 PM   #136
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I've had this idea in my head that says "what else are you going to invest in?" I keep coming back to the issue of the investable market - stocks, bonds, and cash (money markets, CDs, bank accounts, etc.). I compare stocks to bonds or cash, which earn nothing or less after inflation.

So I finally spent a little time researching and came across the "Fed Model" which describes my thoughts. Originally proposed by Ed Yardeni, it looks at the yield of stocks versus bonds. Basically the E/P (earnings yield) versus bond yield (the 10-year is IMO the most relevant). It turns out that, as I expected, stocks are a screaming buy versus bonds based on earnings yield versus bond yield.

https://www.yardeni.com/pub/valuationfed.pdf

The S&P500 trailing P/E of ~29 (E/P of ~3.5%) is high in historical stock market terms, but it is not high compared to the alternative of ten year bonds at ~0.7%. Yardeni uses the forward earnings yield for S&P500 which is ~4.5%, if you believe forward earnings estimates, which makes the comparison even more favorable for equities.

So while the future nominal returns of equities might be lower than past returns, between low interest rates and low inflation they might not be overpriced. Or maybe they are
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Old 09-10-2020, 11:38 PM   #137
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My taxable account is 100% in etf VYM. The P/E on it is around 18 or so. It is high, but not crazy high. I consider a P/E of around 15-16 to be "normal".

A 20% decline would put it at 14.4 P/E. A 30% decline would put it at a 12.6 P/E.
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Old 09-11-2020, 04:53 AM   #138
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Quote:
Originally Posted by razztazz View Post
Sunk cost argument? Sorry couldn't resist. Plans are only good as long as the conditions the plan was designed to meet remain in effect. Not saying B&H is no longer valid but the reality is we can't know that they are. Life on the street these days speaks more to, as some others have mentioned, capital preservation, abnormalities in the system, and other contortions. Enough to have less confidence than usual "how we've always done it."

But I am not one with a $5 mil 401k like some here. If I were I could take up real gambling. Seems like the only time one can truly say fuggetaboudit is when you have huge amounts of money or no money to lose.
I agree that NO plan always works. I set mine up more to "survive" most somewhat-foreseeable events than to "make my fortune so I could ER." I could have had the $5MM 401(K) had I been more aggressive. It was much more important to me to know - short of truly unforeseen events - that I would never have to go back to w*rk.

Heh, heh, I loved the 'sunk cost' reference!
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Old 09-11-2020, 06:46 AM   #139
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My taxable account is 100% in etf VYM. The P/E on it is around 18 or so. It is high, but not crazy high. I consider a P/E of around 15-16 to be "normal".

A 20% decline would put it at 14.4 P/E. A 30% decline would put it at a 12.6 P/E.

I don't want to get into a debate about this, just making a statement about my personal opinion. Investing for dividend income only gives me a lot of piece of mind. If I didn't invest this way I would not be comfortable with 100% stocks. I'd probably have half in bonds or something.

My dividend income has gone up this year, so far.
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Old 09-11-2020, 08:13 AM   #140
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I agree that NO plan always works. I set mine up more to "survive" most somewhat-foreseeable events than to "make my fortune so I could ER." I could have had the $5MM 401(K) had I been more aggressive. It was much more important to me to know - short of truly unforeseen events - that I would never have to go back to w*rk.

Heh, heh, I loved the 'sunk cost' reference!

Actually this is the way I've been playing it all these years. Even way back when I really was buy & hold, I wasn't doing it to maximize the end results. I was just trying to acquire "enough."
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