COVID-19 -based going to cash jitters?

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NW-Bound said:
If you don't "time" something as bad as the coronavirus, then what will you time? ....
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Even though I do think this virus has the potential to hurt the market, that doesn't mean I can successfully time it, so I (probably - never say never) will not try. If my AA gets way out of whack, as it did near the bottom of the 2008 decline, I'll re-balance.

If the general sentiment is that it's going to get worse, then isn't the market already reflecting that? Maybe not, but how would I know? It just seems like a paradox to me - I must be expecting things to be worse than expected? Whose expectations are right?

I don't play games where I don't understand the rules.

-ERD50
 
Also, the evening news was on in the background last night. The announcer says the drop has "given back all the year's gains".

That caught my attention, then I realized he was referring to "this year's gains" (2020 YTD), no a year's gains" (Trailing Twelve Months).

:facepalm: That's less than two months! How many times in history have there been no gains at all, nothing to "give back" at all, over an 8 week period? Probably pretty common.

Weird measure, but it sounds so bad.


ETA: Had to look. S&P up over 16% in the past year. As of yesterday, 2020 YTD total return was positive marginally for S&P, including divs.

-ERD50
 
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Yes, market timing is not easy. Even when the consensus is that a decline will happen, the execution has to be timed right to beat buy/hold.

About the market drop of YTD, we have to ask if the world economy prospect looks better or worse compared to Dec of 2019, back when few of us knew about a place in China called Wuhan. I do think that it does look worse now than back then.

But then, the market has been known to be detached from reality, and can be higher or lower than a reasonable estimate. And that's why we have market bubble and burst.

Again, it's not easy. Hence, I never go all the way, one way or the other. A bit more, a bit less, that's all I am willing to do.
 
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Dumb luck or genius, I rebalanced two weeks ago ! I'm going with dumb luck.
 
ERD50 said:
If the general sentiment is that it's going to get worse, then isn't the market already reflecting that? Maybe not, but how would I know? It just seems like a paradox to me - I must be expecting things to be worse than expected? Whose expectations are right?
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Forgot to respond to the above.

Until the decline of the last few days, the market did not act scared at all. We talked about that here. What made it so invincible?

Now, it finally acts scared. Good! :)

PS. In order to buy, I need to see CEOs crying uncle, and cutting their earnings projections. Then, I will know that the market valuation has factored in the bad things.
 
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How did you do with her? Did you get what you wanted? ;)


PS. Come to think of it, I do sound like that girl. The market will not be able to seduce me, to lure me in. I am not easy to get. ;)
 
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ERD50, I get what you’re saying and would usually agree with you.

I believe markets are irrational in the short-term. The problem is, how do you use that for
your benefit?

Usually a fool’s errand, but I think this case is a lot easier to spot. And I don’t need to be perfect in my timing, just good enough.

Once the quarantines end and people can get back to work, I’ll go back to buying equities.
 
NW-Bound said:
PS. In order to buy, I need to see CEOs crying uncle, and cutting their earnings projections. Then, I will know that the market valuation has factored in the bad things.
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Yep.
 
W2R said:
Nothing? I know for a fact that my portfolio does better overall if I just leave it alone and let the market work through these dips and valleys. Meanwhile I'll just go play video games instead, and wait this out.

It does look like we may be at the start of a big crash right now, with the market dropping even further today. But timing the market is like going to the casino and putting all one's money on red or on black at the roulette wheel. Sometimes it works, but all too often it doesn't. I'd rather just sit tight.
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Sounds right to me, applicable to casinos, the market or the race track. These sorts of discussions remind me of a tune called “Fugue For Tinhorns” from the musical Guys and Dolls:

https://youtu.be/BAIlVCStp3c
 
REWahoo said:
You sound just like a girl I dated in high school...
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I'm literally [emoji23]. Who says pandemics can't be fun? Screenshot_20200225-144128_Google.jpeg
 
NW-Bound said:
How did you do with her? Did you get what you wanted? ;)


PS. Come to think of it, I do sound like that girl. The market will not be able to seduce me, to lure me in. I am not easy to get. ;)
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Hopefully he didn't get a different type of virus from her......
 
All I know is if we have another 15 days like the last two I'll finally be able to get the money back into the market that I got out in 2008. I knew my time would come. And maybe Apple will get back down to my buy point of $89. Woo hoo! Bring it on!
 
brewer12345 said:
I have never prayed at the church of the True Indexer.
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Well is it possibly different this time in terms of that there "appears" to be a specific event causing this drop which "could" be known as to when it ends - meaning a vaccine of sorts.
This was not the case in 200 or 2008.

Nevertheless, just played off now 6% to Treasuries last week while still keeping in my bands.
This is new to me in terms of really following it, but didn't do anything in Dec 18, so no more reductions in equities for me.
 
May 15, 2020 SPY $250 puts are still only about $1.30 right now.

Now I am not saying at all that these will pay off, but they could be considered a little bit of insurance.

The way I see it, either this thing blows over or it is very serious. On the very serious side of things (3% to 5% mortality rate, cities on lockdown), I would not be surprised at all to see SPY trading for $200 by May.

200 of those puts would cost you $26,000 but would be worth $1,000,000 (or a bit more) if things get serious.

Of course if things are that serious, then you probably have a 5% chance of dying and not even seeing the money.
 
Fermion said:
Of course if things are that serious, then you probably have a 5% chance of dying and not even seeing the money.
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Depends on your age. If you are 80+, the risk is a lot higher than 5%. But then, old people do not "time" the market. Even without the virus, they do not have much "time in the market" either.

But as I recall, you are not even 60 yet. The risk from the virus is lower for you. Plenty of time to enjoy your loot. Trade away!
 
So far 59 confirmed COVID-19 cases in U.S. Also this flu season, the 'regular' flu has hospitalized 280-500,000 and killed 16-41,000. Just in the U.S.

Perspective, people...
 
dixonge said:
So far 59 confirmed COVID-19 cases in U.S. Also this flu season, the 'regular' flu has hospitalized 280-500,000 and killed 16-41,000. Just in the U.S.

Perspective, people...
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COVID-19 hasn't started spreading through the community in the U.S. yet. It will be a lot worse than the regular flu when that happens. It's many times more fatal than the regular flu, plus there is no vaccine, a long incubation period, it can be spread even from those who are asymptomatic, and people don't build long term immunity to it, so you can be hit multiple times with it. It looks potentially and most likely pretty bad from my perspective - it's just a matter of time in this country.
 
dixonge said:
So far 59 confirmed COVID-19 cases in U.S...

Perspective, people...
Click to expand...

Currently, yes. And we all want or hope to keep it that way.

Germany Health Minister just sounded an alarm that Germany is facing an epidemic. Several Germans fell sick, and they didn't know how they got infected.

The minister said they lost the ability to track the virus infection. This to me means that they expect more cases to surface when the incubation period is over.

I don't believe that health officials all around the world are a bunch of chicken. And they would not want to scare their populace for nothing.
 
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