Dow over 28,000!

[Lsbcal]

Selling another 1% today to rebalance to 60% stocks.

 

[street]

And I just sit on my hands and buy/hold and never rebalance. Lol I seem to do better doing nothing.

 

[NW-Bound]

"Sometimes you win, sometimes you lose"

And the above applies whether you buy/hold, or trade.

 

[Andre1969]

When you feel greed coming up strong inside you, that's when you get yourself in trouble. Been through this so many times, but you still wonder if this time will be different. Up, up, and away...

I think with me it's not greed, but perhaps a bit of that "deer in the headlights" paralysis. I've learned awhile back that when I try to anticipate the market, I often end up screwing myself, and often just buying and holding is the best thing to do.

Plus, with every new high I hit, I start getting used to it, and instead of feeling like I'm at some lofty goal, it just starts feeling "normal".


Back in October, I remember seeing this slightly used Impala at a local dealership, and thought about buying it. I was at a new high, then, and thought maybe I'll treat myself. But, the more I thought about it, I was like, do I really NEED it?

Since then though, I've seen enough appreciation that I could buy that Impala, pay off half the mortgage, and still be at that October 2019 level. But, then I start thinking, I don't really NEED a new(er) car. And even if I pay off half the mortgage, my monthly payment doesn't go down unless I refinance, that money could be better served working for me, etc.

I have a feeling that "Blow that Dough" is going to be a hard concept for me to follow when I do retire.

 

[street]

NW-Bound >>> true! A gamble in what ever you do.

 

[NW-Bound]

I think with me it's not greed, but perhaps a bit of that "deer in the headlights" paralysis...

Well, maybe it's not greed for me either, but a desire to see that I can reasonably interpret what's going on in the world. Are dotcoms really going to own the world? Do home prices go up and up forever? Is the coronavirus going to hurt world economy really bad?

But the problem is that even if your prognostication proves correct in the end, getting gain from a maneuver requires the timing to be right. And that is awfully hard, hence buy/hold has merits.

NW-Bound >>> true! A gamble in what ever you do.

People who are conservative say that being in the market is a gamble, even if a passive one where buy/hold indexing is simply piggyback on other traders who make the decision for you.

I think it's a good gamble, because historical results show that you are ahead with stocks. I certainly have been. But, but, but will it be different this time? That's the perennial question. Look at Japan, blah blah blah...

It makes life interesting.

 

[street]

Tech stocks are going through the roof. NASDAQ has more tech stocks, and it keeps setting new high. The S&P also does, but to a lesser level. The Dow 30 does not have as much tech composition, hence it lags.

Buy, buy, buy! The more you buy, the more you win.

I would of thought that tech stocks would be hurting now with what is happening in China with the Coronavirus epidemic?? It must be boosting it up instead?

 

[Pellice]

I couldn't agree more. Speaking more generally, this reminds me of the way that some folk are fond of the saying, "Things happen for a reason". It can be a comforting thought when we're in the thick of things, but I don't quite agree with it. I think that often, things just happen, and we attempt to find the reason, or some kind of pattern in such events.

It might sound like a cynical way of looking at the world but, to me, it is realistic. I like to face situations upfront, as they present themselves, and make the best of them, regardless of the reason they happened.

I think that things happen for a reason, but, lacking omniscience, we humans don't always (or even frequently) know the reason. I admit, that sort of thinking does lead me to attempt to find the reason. Maybe it's more pragmatic (rather than realistic) to not look for the reason. But then, aren't we thrown back pretty much on the "higher power" theory that, well, something ELSE is at work and we might as well not try?

The exception - an enormous one - may be human behavior, which is of course what is being discussed here. Greed? Fear? Lust? Or Goodness? Mercy? Love?

 

[Andre1969]

I would of thought that tech stocks would be hurting now with what is happening in China with the Coronavirus epidemic?? It must be boosting it up instead?

Apple (AAPL) did get smacked down a bit in late January, and it seemed like a bit of a big deal at the time, but I just looked it up, and it fell from maybe $320 to $308. In early Feb it bounced back to around $327, but then quickly got knocked back down to around $307. But I think it turns out the Coronavirus wasn't going to affect them as bad as they thought, so it recovered.

Amazon (AMZN) took off big time in late January, I think because it better than anticipated earnings. It was around $1870, but quickly shot over $2000, and is now around $2170

Facebook (FB) took a hit in late January, dropping from around $223 to maybe $202? I'm just eyeballing the chart, not looking at actual numbers. It's recovered pretty well,to around $218 as I'm typing this.

Google (GOOGL) got knocked from around $1480, down to maybe $1435, but now it's up around $1527.

Netflix (NFLX) seemed unfazed by the Coronavirus scare. There was no late-January drop. It entered February around $348/sh, and is now around $387.

Visa (V) took a slight drop, from maybe $207 to $198. But it's now around $213.

At least, those are the tech stocks I have individual shares of. I don't really think of Visa as a tech stock, but it is listed on NASDAQ, so I included it here.

One of the biggest losers I have is Las Vegas Sands (LVS), which does casinos and such. It was up around $74, but got kicked down to around $62 at the bottom, although it's around $68 now.

I also have some Shell (RDS.B) that took a whack. From around $62/sh down to around $50-51. But, I bought it long enough ago that I'm not really down that much. Plus, the second I sold it to try harvesting a tax loss, it would probably shoot back up

 

[NW-Bound]

I would of thought that tech stocks would be hurting now with what is happening in China with the Coronavirus epidemic?? It must be boosting it up instead?

I have been scratching my head over this. Surely, energy stocks have been hammered hard, because China's demand for oil is down. But why tech stocks are up? Why the market thinks tech stocks are impervious to the potential economic slow down as happening with oil?

Maybe investors have to put money somewhere, and they think tech is the safest place to be, or rather the ones hurt the least. I dunno.

If I knew, I would be so rich, I would be busy blowing dough, I would not have time to post here.

 

[audreyh1]

I would of thought that tech stocks would be hurting now with what is happening in China with the Coronavirus epidemic?? It must be boosting it up instead?

That’s a major disconnect, IMO, but you never know how it is going to resolve.

Sell-offs on bad news last a day and then recover. But that doesn’t mean it’s going to continue that way indefinitely.

 

[NW-Bound]

Well, then if we had guts we would sell these high-flying invincible stocks short.

No guts, no glory.


PS. I did the more chicken way. I sold covered calls on my tech shares. I did it too soon, and set the strike prices too low they already bought mucho of my shares. I am running a bit low on tech shares now, and need to "ration" my future covered calls, lest I have no tech stocks left.

 

[Lawrencewendall]

I would of thought that tech stocks would be hurting now with what is happening in China with the Coronavirus epidemic?? It must be boosting it up instead?

Read an article today that said the big names (Apple, Microsoft and Google are MAJOR players in the data center Real Estate Investment Trusts (REIT) field. Think cloud computing and storage. Data Center REITs have been on a tear which may explain their teflon coating to the virus. Dunno.

 

[copyright1997reloaded]

I've also been selling some in the last couple weeks. Sold about 50K worth of stuff (tax deferred equity funds) over the last couple weeks to get the equity allocation down a bit (between 62% to 63% equities). This is a bit conservative because I do have a decent non-cola'd pension (which I don't include in the equity/fixed calculation).

 

[USGrant1962]

Tech stocks are going through the roof. NASDAQ has more tech stocks, and it keeps setting new high. The S&P also does, but to a lesser level. The Dow 30 does not have as much tech composition, hence it lags.

Buy, buy, buy! The more you buy, the more you win.

I ran across an article the other day that shows the real tech bubble leading to the 2000 top, the current NASDAQ run up is not even close. The 5 years leading up to 2000 peak the NASDAQ had 57% annualized returns. Current NASDAQ has 17.6% annualized returns. Frothy, but nothing like 2000.

https://ritholtz.com/2020/02/are-we-in-a-tech-bubble/

 

[UnrealizedPotential]

I ran across an article the other day that shows the real tech bubble leading to the 2000 top, the current NASDAQ run up is not even close. The 5 years leading up to 2000 peak the NASDAQ had 57% annualized returns. Current NASDAQ has 17.6% annualized returns. Frothy, but nothing like 2000.

https://ritholtz.com/2020/02/are-we-in-a-tech-bubble/

Not only that, but late 1999 the forward PE of the Nasdaq 100 was over 100. I previously said the Nasdaq 100 PE was 30, but it's actually 24. It's the Russell 2000 that has a current forward PE of 30.


That is not to say we couldn't have a correction, we certainly could, however the bull market could also continue for a long time .

 

[FREE866]

I ran across an article the other day that shows the real tech bubble leading to the 2000 top, the current NASDAQ run up is not even close. The 5 years leading up to 2000 peak the NASDAQ had 57% annualized returns. Current NASDAQ has 17.6% annualized returns. Frothy, but nothing like 2000.

https://ritholtz.com/2020/02/are-we-in-a-tech-bubble/

avg bull market sees stocks up ~21% annualized. This has been a very long drawn out bull riddled with worry and at times really uneasy chapters--2011, 2015, 2018......
we are far from euphoria....

 

[NW-Bound]

No, it's nowhere like in 2000. I would sell a lot more if that were the case. I do not fear a crash, but expect a correction coming any time even without this virus scare. I just find it perplexing that tech stocks seem even virus proof so far.

 

[audreyh1]

2007 was no where near 1999 either, but we saw an even worse market crash!

 

[NW-Bound]

2007 was no where near 1999 either, but we saw an even worse market crash!

For the S&P, yes.

But for the Nasdaq which was totally foamy, it lost more than 70% of its value in 2000. Again, the P/E then was totally ridiculous. So many billion-dollar stocks had no E.

That was the time when Mark Cuban sold broadcast.com to Yahoo for $5.7 billion. Broadcast.com had 570,000 subscribers. Many Youtubers now have more subscribers than that. Crazy time. And I did not know to short anything. Sir Templeton did.

 

[USGrant1962]

2007 was no where near 1999 either, but we saw an even worse market crash!

Yea, but that recession was caused by the subprime mortgage crisis and housing bubble - stock valuations were not really a driving factor, just collateral damage. Sure, some other part of the economy could blow up and cause a stock market crash, but that wouldn't necessarily have any relation to the current bull or valuations. A year or two ago some thought that the bitcoin crash would take down the stock market.

 

[audreyh1]

Yea, but that recession was caused by the subprime mortgage crisis and housing bubble - stock valuations were not really a driving factor, just collateral damage. Sure, some other part of the economy could blow up and cause a stock market crash, but that wouldn't necessarily have any relation to the current bull or valuations. A year or two ago some thought that the bitcoin crash would take down the stock market.

Recessions are normally caused by economic events, not market valuations. The markets can ignore underlying economic conditions for a long time until they get bad enough to scare investors. Or financial funny business is hidden for a long time until a bunch of trades blow up - this occurs repeatedly, witness the 2015 oil crash which caught so many big investors leaning the wrong way. The recession in 2000 was also caused by economic events - oil prices went up strongly and the Fed was raising interest rates at the same time which often ends a business cycle.

My point above was that saying market valuation “is not as bad as 1999” doesn’t preclude a severe market crash or major correction.

 

[Time2]

For the S&P, yes.

But for the Nasdaq which was totally foamy, it lost more than 70% of its value in 2000.

I was getting an investment newsletter at that time, On Feb 11, 2000 the author sent out a 'special alert' and said, sell all equities. I did. Mar 17, 2000 the Nasdaq peaked and 5 months later it was down 70%.

He was a hero for a while, but when 2008 came around, he missed it entirely.

 

[footenote]

Reading early rumors (and they may be nothing more than that) of runs on defaulting banks in China this morning. If it's happening, news would be suppressed on official Chinese news media, of course.

 

[NW-Bound]

When the economy is paralyzed, people staying home and not working for a month now, one would expect that many businesses and private citizens are running out of cash.

Imagine what happens here in the US if 50 or 100 million people suddenly stop getting paychecks. Pandemonium ensues. Not everyone has the means like early retirees here, with lots of money stashed up.