Coronavirus - Financial, Health and Other impacts II

[Fermion]

... as the 14-page thread teeters dramatically on the edge of closure ...

Yeah, I won't pursue that line of thought any more except to say that as a investor, my money will go toward risky things only if they have a chance of large profit, otherwise I am just going to invest in consumer goods or something bland and stable.

 

[Fermion]

This is an interesting one:

"WASHINGTON, March 4 (Reuters) - The U.S. Securities and Exchange Commission said on Wednesday that it would provide conditional regulatory relief from disclosure requirements for public companies affected by coronavirus.

The watchdog said companies, hit by the impact of the outbreak of the flu-like respiratory disease, now have an additional 45 days to file certain disclosure reports related to coronavirus risks, among other things. (Reporting by Katanga Johnson Editing by Paul Simao)"


So insiders get an additional 45 days to sell if the company is getting hit hard by the virus impact.

 

[target2019]

Before the thread gets closed due to unrestrained political comments, I'd like to add that the lines were clear at BJs in the afternoon.

Unfortunately they were out of Guatamalan Roast, so I had to settle for a bag of SB French Roast Beans.

 

[target2019]

This quote is from the article above and expresses my concern with the rate cut:

I'm with you on that thought. Where does it all go when they find themselves at zero in a sustained crisis?

 

[2177V]

Here is a post from another thread that I decided to post here to educate people on treasuires:


Pop Quiz: How do you make money during a bear market? Answer: Treasury Bonds

Here are the past performances of VFIAX (S&P500) and VUSUX (LT Treasury Bonds) from https://investor.vanguard.com/home

Year: 2007 2008 2009

VFIAX 5.49% -37% 26.46%

VUSUX 9.81% 24.03% -12.92%

2007-2008 involves the “flight to quality”. Here is a link that explains this market event.

https://www.thebalance.com/what-is-t...quality-416873

In 2009, VUSUX lost 12.92% because investors left treasuries and went back into equities.

Last Summer 2019, I re-allocated from a 60/40 portfolio to 100% treasuries because recession talks were in the air, the yield curve inverted, I became bearish, I never believed that a bull market will last forever, and Jeffrey Gundlach stated that 2019 should be an asset preservation year.

If I get similar numbers as 2008, each $100K increment of treasuries can potentially grow to $124K while average investor’s $100K increment of S&P500 falls to $63K. My portfolio can grow even more if I reallocate back to equities again before the recovery. I fully understood the “flight to quality” and how treasuries work.

While we are not in a bear market yet....I like the position that I am in. YTD performance of VFIAX is -6.74% while VUSUX is +15.31% so the flight to quality has begun.

 

[Fermion]

I didn't quite get all of that about the treasury bonds but is the general idea that you can make money if you time the market drop and rebound correctly?

 

[mpeirce]

I'm with you on that thought. Where does it all go when they find themselves at zero in a sustained crisis?

They come up with other ideas. Maybe effective, maybe not.

Isn't that what QE was last time around...

 

[Chuckanut]

I'm with you on that thought. Where does it all go when they find themselves at zero in a sustained crisis?

Negative interest rates. Other countries already do it.

https://www.bloomberg.com/news/arti...egative-rates-and-now-it-can-t-find-a-way-out

Europe’s unconventional experiment with negative interest rates to spur economic growth and inflation is looking like a trap.
Five years into what was supposed to have been a temporary shot in the arm for the euro area, the European Central Bank still hasn’t achieved its goals and may be about to push rates even lower. Japan, Switzerland, Sweden and Denmark have also stepped over the zero bound, once seen as the lower limit for monetary policy.

 

[ziggy29]

They come up with other ideas. Maybe effective, maybe not.

Isn't that what QE was last time around...

That's the more official way to put it. I just call it what it is, "The War on Savers".

 

[2177V]

I didn't quite get all of that about the treasury bonds but is the general idea that you can make money if you time the market drop and rebound correctly?

The general idea is that treasury bonds are the only asset class that rises in value during a bear market while most of other asset classes decline. Here is another link:

https://obliviousinvestor.com/what-happens-to-bonds-in-a-stock-market-crash/

If you are pulling out of the market because you feel it is too risky to have equities and corporate bonds, then treasuries are the way to go. Cash does not make much money and gold can be risky.

I was answering the pop quiz question: How do you make money during a bear market?

If we do go into a bear market, I will be one of the few investors in this forum who will be making money. I already made 15% YTD returns from VUSUX as of today while most investors saw a decline. I am hoping to make more on VUSUX by the end of 2020. If the S&P500 has declined significantly at the end of 2020, then it is only natural for me to cash out of VUSUX and go into S&P500 again.

I prefer to call it asset re-allocation to avoid risk and the second re-allocation to accept risk but more rewards at a later time.

 

[Fermion]

Right, but don't you have to time those buys of the treasury bonds to make any real money? And if you know how to time the market like that, wouldn't you make more money by buying and selling the market?

 

[Fermion]

If we do go into a bear market, I will be one of the few investors in this forum who will be making money. I already made 15% YTD returns from VUSUX as of today while most investors saw a decline. I am hoping to make more on VUSUX by the end of 2020. If the S&P500 has declined significantly at the end of 2020, then it is only natural for me to cash out of VUSUX and go into S&P500 again.

Well, don't lump me in with "most investors". This is our taxable account that I manage. Note the quite low volatility too.

 

[davebarnes]

It is only going to get worse

As we walk around Milano, I can tell you that financial impact is devastating to all sizes of B2C businesses.

All the museums are closed.
Shops are seeing one tourist a day instead of a hundred.
Every queue we have been in has zero people ahead of us.

Get ready for this type of panic impact in the USA.

 

[NW-Bound]

Well, don't lump me in with "most investors". This is our taxable account that I manage. Note the quite low volatility too.

^^^ Dang!

For a self-proclaimed market timer, my performance YTD is just like that of most typical investors. Nothing to write home about.

 

[LRDave]

As we walk around Milano, I can tell you that financial impact is devastating to all sizes of B2C businesses.

All the museums are closed.
Shops are seeing one tourist a day instead of a hundred.
Every queue we have been in has zero people ahead of us.

Get ready for this type of panic impact in the USA.

Thanks for the "feet-on-the-ground" reporting! I was wondering how your trip is going and hope you make the best of it and also make it home safely with no fuss!

 

[Sunset]

As we walk around Milano, I can tell you that financial impact is devastating to all sizes of B2C businesses.

All the museums are closed.
Shops are seeing one tourist a day instead of a hundred.
Every queue we have been in has zero people ahead of us.

Get ready for this type of panic impact in the USA.

Good to know.... Sounds kind of nice without the crowds.

Pictures would be nice

 

[2177V]

Right, but don't you have to time those buys of the treasury bonds to make any real money? And if you know how to time the market like that, wouldn't you make more money by buying and selling the market?

Nope.... I do not play that game of buying and selling the market although I used to buy on the dips when I was young.

Since I am retired, my only objective is to avoid the bear markets.

If you avoid just one or two bear markets, it can make a HUGE difference in your portfolio.

Avoiding the bear market was fairly easy. When the yield curve inverted, I started to pay attention. The yield curve inversion did not trigger my re-allocation but caused me to do some deeper research. At the end of my research, I became bearish. The final straw is when Jeffrey Gundlach stated that 2019 should be a asset preservation year. That is exactly what I did.

People should ask themselves the following question: Do you believe that a bull market will last forever?

 

[NW-Bound]

Good to know.... Sounds kind of nice without the crowds.

Pictures would be nice

Lack of the crowd is nice. But having no places opened to visit is not so nice.

 

[MuirWannabe]

As we walk around Milano, I can tell you that financial impact is devastating to all sizes of B2C businesses.



All the museums are closed.

Shops are seeing one tourist a day instead of a hundred.

Every queue we have been in has zero people ahead of us.



Get ready for this type of panic impact in the USA.

I’ll piggy back on this. And can report that here in Antarctica there are also no lines or queues to be seen. Very few people out and about. Good news is everything is open except where ice is beginning to close areas. The penguins, seals, whales, and albatross don’t seem at all concerned about the virus or the market. No masks on the critters or the cruisers. So far so good!

 

[Fermion]

I’ll piggy back on this. And can report that here in Antarctica there are also no lines or queues to be seen. Very few people out and about. Good news is everything is open except where ice is beginning to close areas. The penguins, seals, whales, and albatross don’t seem at all concerned about the virus or the market. No masks on the critters or the cruisers. So far so good!

Are you legit in Antarctica? If so, consider me jealous.

 

[MuirWannabe]

Are you legit in Antarctica? If so, consider me jealous.

Same trip Braumeister did a couple months ago. Incredible adventure so far. Just watched maybe 50 humpbacks swim by as I sit in a observation deck bar looking at amazing scenery and sip a bourbon. Life is rough. This place is magical.

And thanks to Braumeister for clueing us in!

 

[braumeister]

Yep. I told you it was the trip of a lifetime and it truly is.

 

[Fermion]

They look kind of grumpy...like they couldn't agree on a SWR or something.

 

[braumeister]

Rockhopper penguin and albatross. More fun to watch than you can imagine.

 

[NW-Bound]

They look kind of grumpy...like they couldn't agree on a SWR or something.

No, they don't agree on which stock broker to use.