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Old 02-27-2020, 02:34 PM   #181
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I believe there is a big difference between looking at market gyrations or some absolute dollar value or quick climb and buying or selling based on that...and... looking at clear information available that markets are not reacting to but WILL effect profits and the economy....

The former is market timing
The latter is just sitting on your tail like a rube. Too scared to act? Or taking action based on real data others are ignoring in disbelief??

The data was there in 2007 that the party was over and foreclosures would end badly. No one wanted to hear it so most did not react to that data. Hence the market held on for months if not a year from when the data showed up.

In 2020 the data was there by early February that there would be an economic slowdown caused by all the covid19 shutdowns and restrictions. Yet the Market took weeks to react. No one wanted to believe what was clear to them if they were paying attention.

At this point everyone understands that the market and economy are pricing it in. So no use selling now.


My point? Donít be a lemming. THINK!
Only pulled the trigger a little last week, but too late now. So will take the ride down like I did in 2018 and hope for the best.
Side happiness that I got rid of Int'l exposure.
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Old 02-27-2020, 06:05 PM   #182
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Originally Posted by Fermion View Post
I bought 50 march 2020 $325 puts today for $3.3

I just have a feeling that we have not quite seen the full extent of the wu-flu and things could pull back a tad over the next week or two as cases pop up in the USA.

I am not looking to make a fortune here, but even a 5% pullback would make those puts go from $16,500 to about $50,000.
50 March 325 Puts worth $148,000 today. And with drop in the aftermarket could add about another 15K to that number on the projected open.
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Old 02-27-2020, 06:08 PM   #183
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I see a lot of parallels between the market action today and in both the run up to the dotcom crash and the financial crisis. There is a panic to buy regardless of price and the rally is heavily concentrated in relatively few sectors/names. The economic backdrop contains material risk that the FOMO buyers of equity seem to be ignoring. There is a novel risk (pandemic) that is hard to estimate the potential impact of, but equity markets don't care. This all makes me nervous.

Crank up those equity allocations if you choose, but make sure you really are prepared for a significant downdraft.
Very prescient post.............
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Old 02-27-2020, 06:37 PM   #184
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Very prescient post.............


+1
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Old 03-25-2020, 03:57 PM   #185
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Just for the record, the VIX set an all time high exceeding 85 on 3/20/20.

Fastest bear market in my lifetime - S&P 500 dropped over 20% in less than a month. Down 30% so fast it qualifies as a crash.

Sure looks like a bubble burst......
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Old 03-25-2020, 04:04 PM   #186
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... Sure looks like a bubble burst......
Just for grins, I'll ask the question that Gene Fama would probably ask: When the market recovers to January '20 levels will that be a bubble too?
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Old 03-25-2020, 06:31 PM   #187
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Just for the record, the VIX set an all time high exceeding 85 on 3/20/20.

Fastest bear market in my lifetime - S&P 500 dropped over 20% in less than a month. Down 30% so fast it qualifies as a crash.

Sure looks like a bubble burst......
Not to mention triggered THREE circuit breakers on the way down even after multiple rounds of stimulus!
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Old 03-25-2020, 06:31 PM   #188
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Just for the record, the VIX set an all time high exceeding 85 on 3/20/20.

Fastest bear market in my lifetime - S&P 500 dropped over 20% in less than a month. Down 30% so fast it qualifies as a crash.

Sure looks like a bubble burst......
Looks more like a Virus burst to me.
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Old 03-25-2020, 08:00 PM   #189
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Just for grins, I'll ask the question that Gene Fama would probably ask: When the market recovers to January '20 levels will that be a bubble too?
It may be a few years until the Dow gets back to 29K level. By that time, the earnings of corporations may be improved beyond the old level, and that makes the P/E lower than it was in Jan 20. No bubble then.
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Old 03-25-2020, 08:40 PM   #190
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Just for grins, I'll ask the question that Gene Fama would probably ask: When the market recovers to January '20 levels will that be a bubble too?
If it takes ten years it will probably be a screaming value.
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Old 03-25-2020, 08:47 PM   #191
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Originally Posted by BeachOrCity View Post
I believe there is a big difference between looking at market gyrations or some absolute dollar value or quick climb and buying or selling based on that...and... looking at clear information available that markets are not reacting to but WILL effect profits and the economy....

The former is market timing
The latter is just sitting on your tail like a rube. Too scared to act? Or taking action based on real data others are ignoring in disbelief??

The data was there in 2007 that the party was over and foreclosures would end badly. No one wanted to hear it so most did not react to that data. Hence the market held on for months if not a year from when the data showed up.

In 2020 the data was there by early February that there would be an economic slowdown caused by all the covid19 shutdowns and restrictions. Yet the Market took weeks to react. No one wanted to believe what was clear to them if they were paying attention.

At this point everyone understands that the market and economy are pricing it in. So no use selling now.

My point? Donít be a lemming. THINK!
Yes!

Efficient Market Hypothesis does have its merits, but taken to the extreme it looks silly, doesn't it?
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Old 03-26-2020, 03:24 AM   #192
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Not to mention triggered THREE circuit breakers on the way down even after multiple rounds of stimulus!
There was definitely hot air coming out fast, lol!
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Old 03-26-2020, 03:26 AM   #193
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It may be a few years until the Dow gets back to 29K level. By that time, the earnings of corporations may be improved beyond the old level, and that makes the P/E lower than it was in Jan 20. No bubble then.
Yes, of course - seemed obvious. Didn’t even understand the point of the question. Thanks for answering.

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If it takes ten years it will probably be a screaming value.
Same.
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Old 03-26-2020, 03:34 AM   #194
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Yes!

Efficient Market Hypothesis does have its merits, but taken to the extreme it looks silly, doesn't it?
One of my peeves! We have already lived through so many historical examples of when it breaks down. This series of experiences is a particularly good one. How do people forget these experiences?
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Old 03-26-2020, 05:06 AM   #195
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I recall in Bernstein's writings/books....can't remember if it was the 4 pillars of investing or somewhere else, a couple of things he said I never forgot.

"....are stocks risky? you have no idea"
" remember, from time to time the stock market comes completely off the rails"

How true these statements are.
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Old 03-26-2020, 05:15 AM   #196
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I recall in Bernstein's writings/books....can't remember if it was the 4 pillars of investing or somewhere else, a couple of things he said I never forgot.

"....are stocks risky? you have no idea"
" remember, from time to time the stock market comes completely off the rails"

How true these statements are.
Not to mention the credit markets also, from time to time, come off the rails.

If Bernstein was recently still advising retiring clients to be super conservative, he might have saved a few clients compared to what he saw his clients do in 2008/2009.
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Old 03-26-2020, 05:31 AM   #197
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Not to mention the credit markets also, from time to time, come off the rails.

If Bernstein was recently still advising retiring clients to be super conservative, he might have saved a few clients compared to what he saw his clients do in 2008/2009.

He did change his tune quite a bit after 08/09. His advise is much more conservative now in the spend down phase.
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Old 03-26-2020, 07:12 AM   #198
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He did change his tune quite a bit after 08/09. His advise is much more conservative now in the spend down phase.
He discovered what many of his clients would actually do instead during a nasty stock market crash, so he had to change his advice.
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Old 03-26-2020, 07:18 AM   #199
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He discovered what many of his clients would actually do instead during a nasty stock market crash, so he had to change his advice.
Interesting. I have followed Bernstein in recent years, but did not know what he was saying back in 2007-2009. Would love to re-read what he wrote before 2H 2008.
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Old 03-26-2020, 07:35 AM   #200
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Interesting. I have followed Bernstein in recent years, but did not know what he was saying back in 2007-2009. Would love to re-read what he wrote before 2H 2008.

Bernstein wrote this piece for Millennials back in 2014. Read the third paragraph from the end.....that's a very conservative approach. I don't have an example to cite prior to 08/09.

https://www.etf.com/docs/IfYouCan.pdf
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