Chart of the Day

[copyright1997reloaded]

Hmm. If you look at the data here:

https://home.treasury.gov/resource-...reasury_yield_curve&field_tdr_date_value=2022

It shows the 3/10 initially inverting in the middle of June and being persistently inverted since the middle of July. I'm not sure why there is a difference.

3 month, not the 3 year.

 

[jldavid47]

3 month, not the 3 year.

Oh, jeez. Reading is a skill...

 

[Running_Man]

This is what investing in long term bonds at low interest rats gets you. Down 77% from December 2021 to July 2022@16 . Down another 75% from July @16 to 4 last week. But as many say you should always stay 100% invested becaue if you would have sold you would have missed 2 50% rallies and a 100% rally between December 2021 and last week, three of the largest bond rallies of all time for a sovereign debt and more than an average bond investor would make in a decade. Somehow despite those great gains down 93% total.

 

[copyright1997reloaded]

This is what investing in long term bonds at low interest rats gets you. Down 77% from December 2021 to July 2022@16 . Down another 75% from July @16 to 4 last week. But as many say you should always stay 100% invested becaue if you would have sold you would have missed 2 50% rallies and a 100% rally between December 2021 and last week, three of the largest bond rallies of all time for a sovereign debt and more than an average bond investor would make in a decade. Somehow despite those great gains down 93% total.

In the same vein - 25+ year treasury zero's ETF:
http://tos.mx/EPBmip1. Nav is down -47.29% YTD, now has an estimated 4.37% YTM.

Now, if one thinks the rate run up is over, this would be a leveraged kind of play.

(This does bring back memories as I looked one time at buying strips (zeros) way back in the 80's when they were at 9% YTM or so. The big hassle was phantom income (I didn't have much of a tax-sheltered way of buying them).)

 

[kgtest]

20 worst vs 20 best trading days - re market timing

Found this interesting, in terms of market timing... the 20 best vs 20worst trading days tend to cluster around each other. Meaning you likely will be too late if you are slow on the trigger when timing when to get out and back in again.

It's interesting that basically half of them happened in up years vs down years.

 

[Lsbcal]

Found this interesting, in terms of market timing... the 20 best vs 20worst trading days tend to cluster around each other. Meaning you likely will be too late if you are slow on the trigger when timing when to get out and back in again.

It's interesting that basically half of them happened in up years vs down years.
...

I don't think your conclusion is right. Bear markets can consist of a mix of extreme moves but they can also have a preponderance of mildly down days. For instance, suppose down days of -1% outnumber days of +1% by 20 over a period of 100 days. You get a roughly a -20% decline which seems to be the preferred definition of a bear market.

I don't think there is any proof one can present for all market timing to be bad and also no proof that market timing will work.

 

[kgtest]

I don't think your conclusion is right. Bear markets can consist of a mix of extreme moves but they can also have a preponderance of mildly down days. For instance, suppose down days of -1% outnumber days of +1% by 20 over a period of 100 days. You get a roughly a -20% decline which seems to be the preferred definition of a bear market.

I don't think there is any proof one can present for all market timing to be bad and also no proof that market timing will work.

True. Maybe one could know that if there was a big up day in a bear market then likely it could be followed by a big down day. Whether that serves the investor well I don't know. And its still unpredictable. It is just interesting that the big up and down days were close to each other as this chart shows was really my point. Not sure how to digest it into an investment strategy per se, but interesting nonetheless.

 

[Markola]

A potential market timer would also need to factor in trading fees, taxes, lost sleep and therapist’s invoices.

 

[Running_Man]

True. Maybe one could know that if there was a big up day in a bear market then likely it could be followed by a big down day. Whether that serves the investor well I don't know. And its still unpredictable. It is just interesting that the big up and down days were close to each other as this chart shows was really my point. Not sure how to digest it into an investment strategy per se, but interesting nonetheless.

It is far more likely that a big down day will be followed soon by a big up day, than a big up day will be followed by a down day. Saying first of all since the trend of the stock market is up anyway, a big down day in the market is better for your odds to time on a buy than a move up is to time on a down day.

A buyer also has history in their favor since stocks have always hit new highs that they are guaranteed practically in the future to be ahead on their investment, which you get for a discount on a down day, which someone shorting can never say. So if you are going to time, time betting on the upside not the downside.

 

[Running_Man]

This year is a bit of an outlier for 10 year treasuries.

 

[Sunset]

This year is a bit of an outlier for 10 year treasuries.

Don't know why, but your image does not show for me in your post.

I didn't know it was there, until I quoted you to ask what you meant, and saw a URL, which I opened in a new tab.

 

[target2019]

Don't know why, but your image does not show for me in your post.

I didn't know it was there, until I quoted you to ask what you meant, and saw a URL, which I opened in a new tab.

The URL is like pbs.twimg.com/media/Fgej3jeXgAA5Qn6?format=jpg&name=900x900 so your borowser or an extension is blocking the rendering or download, is my first guess.

 

[kgtest]

Layoffs on the rise. It's what happens when interest rates rise.

 

[kgtest]

It is far more likely that a big down day will be followed soon by a big up day, than a big up day will be followed by a down day. Saying first of all since the trend of the stock market is up anyway, a big down day in the market is better for your odds to time on a buy than a move up is to time on a down day.

A buyer also has history in their favor since stocks have always hit new highs that they are guaranteed practically in the future to be ahead on their investment, which you get for a discount on a down day, which someone shorting can never say. So if you are going to time, time betting on the upside not the downside.

Personally, I love buying the dip! Makes me feel like I am winning. Who doesn't like a deal

 

[marko]

Layoffs on the rise. It's what happens when interest rates rise.

View attachment 44056

Well, that is the desired effect isn’t it? Next step, people slow their spending and inflation starts to cool.

 

[NW-Bound]

Personally, I love buying the dip! Makes me feel like I am winning. Who doesn't like a deal

Unless your bag of cash is bottomless, it's better to space out the stock buying lest you run out of cash and more deals come along.

And speaking of cash, even Musk, the richest man on earth, has been selling Tesla shares to the tune of $4 billion even as Tesla stock is in a dive. He is running low of cash.

 

[kgtest]

Well, that is the desired effect isn’t it? Next step, people slow their spending and inflation starts to cool.

Absolutely. The levers are working. Once the layoff news hits, fear comes around and people stop spending. Although I wouldn't know it based on the activity in our little downtown recently. Nowhere to park as people shop, shop, shop their hearts out for the holidays.

Something's gotta give.

 

[kgtest]

Unless your bag of cash is bottomless, it's better to space out the stock buying lest you run out of cash and more deals come along.

And speaking of cash, even Musk, the richest man on earth, has been selling Tesla shares to the tune of $4 billion even as Tesla stock is in a dive. He is running low of cash.

Good point. I keep thinking, can it go lower? I am currently down 30% in my equities portfolio, and was down as much as 33% earlier. If you bought the dip at 30% earlier in the year instead of waiting, you get the added benefit of collecting more dividends over the duration, instead of letting the cash sit on the sideline.

I have never really tried to time the markets since I know its not viable, but I do buy dips and when its low when I have cash. I am still working and accumulating so I have had some opportunities, but it really amounts to just buying into the markets every single week averaging out over time.

 

[plex]

Layoffs on the rise. It's what happens when interest rates rise.

View attachment 44056

Q4 is already looking to be above 60K, with most of the big QQQ's reports 10K+ cuts. Should finally see a bottoming out of the unemployment curve end of this year, with sharp rises each quarter in 2023. One of my indicators for a recession bottoming is this rate getting near the average for recessions.

 

[Lsbcal]

A method that has a very good past history is the SP500 below it's moving average and unemployment going above it's 12 month moving average. So that is contrary to what some are saying that rising unemployment would be good. Of course, it could be different this time.

If modeling this were easy ... well you know.

 

[target2019]

A method that has a very good past history is the SP500 below it's moving average and unemployment going above it's 12 month moving average. So that is contrary to what some are saying that rising unemployment would be good. Of course, it could be different this time.

If modeling this were easy ... well you know.

I think confusion arises from what is meant by "good", and whether we want a good stock market or good economic data or maybe both?

Here is FRED data - 4 month moving average seasonally adjusted - for unemployment claims:

4-Week Moving Average of Initial Claims (IC4WSA)
https://fred.stlouisfed.org/series/IC4WSA

Short term the market whines at rate increases. But as they cut fat, unemployment rises, and the company bottom line improves, NAVs will eventually go up. For us the rising NAVs make us feel better, but as more people around you suffer...

 

[Lsbcal]

Well I want a great stock market and low unemployment. I am really rooting for both To clarify my last comments, if I am going to reduce equities it would be those 2 criteria: SP500 below moving average and unemployment above moving average.

I wonder if we cannot have both a good stock market *and* low unemployment. When we have very low unemployment we can get better at automation which improves productivity. With low unemployment workers have opportunities to get more training on a job that might well be more fulfilling i.e. employers do not go out and look for "walk on water" types but rather have to settle for cutting the worker some slack to properly get up to speed.

 

[marko]

When we have very low unemployment we can get better at automation which improves productivity.

I worry that automation will lead to higher unemployment. In many areas it already has.

I'm amazed that the likes of McDonald's hasn't already figured it out.

 

[Lsbcal]

I worry that automation will lead to higher unemployment. In many areas it already has.

I'm amazed that the likes of McDonald's hasn't already figured it out.

I guess people have debated about that one for ages. My first thought is that workers are going to move on and if opportunities are abundant then they will get help moving up the skills ladder. In the end they could be happier too. It's a competitive world whether we like it or not. And believe me, I wish we could all be happy and prosperous.

 

[copyright1997reloaded]

I guess people have debated about that one for ages. My first thought is that workers are going to move on and if opportunities are abundant then they will get help moving up the skills ladder. In the end they could be happier too. It's a competitive world whether we like it or not. And believe me, I wish we could all be happy and prosperous.

e.g. "Kurt Vonnegut’s first novel spins the chilling tale of engineer Paul Proteus, who must find a way to live in a world dominated by a supercomputer and run completely by machines. "
https://www.amazon.com/Player-Piano-Novel-Kurt-Vonnegut/dp/0385333781