Stocks tumble

[jebartle]

Yipsters!

[champion6]

Stay the course!

[Kahuna32162]

Aye Aye Captain.

[gatorbill1]

might be time to buy - waiting for Dow to go below 28,000

[manaboutown]

Nowadays about 75% of the trading is automated which can cause big price swings. Many years of ultra low interest rates have driven market capitalization very high so stocks prices are currently quite vulnerable to a "Black Swan" of some sort. Is the coronavirus the '''Black Swan''' event that blows up the US market? (https://www.smh.com.au/business/markets/is-the-coronavirus-the-black-swan-event-that-blows-up-the-us-market-20200224-p543qh.html)

[dewilson58]

Stay the course!




Exactly.


If you have some cash...................BUY.

[dennisgavin]

As Arnold would say, They'll be back!

[billethkid]

Past performance speaks loud and clear:

Dow Jones - DJIA - 100 Year Historical Chart | MacroTrends (https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart)

[stan the man]

Exactly.


If you have some cash...................BUY.

I agree 406

[ColdNoMore]

Past performance speaks loud and clear:

Dow Jones - DJIA - 100 Year Historical Chart | MacroTrends (https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart)

It sure does.

Particularly since this chart allows you to compare, using different criteria (by year, by fed chair, by recession).

Methinks though, some will be quite surprised (upset?)...by the facts. :D

[asianthree]

Buy ... when will you see Apple stock drop.

[ColdNoMore]

Speaking of "history," we are now in the longest bull market (even with yesterday's precipitous drop)...EVER.

IMHO (and many other, more professional opinions) it would be silly to think, that it can continue without some type of major correction...coming soon.

I certainly hope not, but history and common sense...says it WILL happen.

[ColdNoMore]

Given that almost 49% of Americans own NO stocks whatsoever, in any form (pension/company/investment/other)...it certainly doesn't matter to them.

Stock Ownership (trade here) (http://ritholtz.com/2020/01/stock-ownership/)

Last month, we looked at how the top 1% of wage earners in the USA — they garnered wage gains of 158% since 1979.

The bottom 90%? A bit more modest gains — of 23.9%.

But that is just income. Let’s consider wealth created by the stock market.

According to Torsten Sløk of Deutsche Bank, the distribution is quite astounding: 84% of stocks in the USA are owned by the Top 10% of households.

While half of the US population own equities directly or indirectly (i.e. in pension accounts), it is only a modest share: The bottom 90% of households owns only 16% of all equities. Note the bottom 50% own practically none at all.

If you choose to focus on the stock market as a measure of how well the US economy is doing, you are missing a huge part of the picture. This is especially true for gig economy workers, younger workers, areas outside of the wealthy coasts and cities, and workers displaced by technology and globalization.

It's great that the stock market is up and at record highs; but that is only half the story. Or, to be more precise, about 10% of the recovery story.

[Bucco]

Exactly.


If you have some cash...................BUY.

I, and this is just me who is a pure amateur in this area, the affect of the budget deficit which continues to grow at record pace.

Seems we had a group of people on this forum and in congress (tea party) that absolutely warned us of the dangers of this deficit, yet today are silent.

My little knowledge says this is the most pressing problem because of the time it will take to "fix". Really not sure but that deficit is now in a territory it has never been before.

[ColdNoMore]

I, and this is just me who is a pure amateur in this area, the affect of the budget deficit which continues to grow at record pace.

Seems we had a group of people on this forum and in congress (tea party) that absolutely warned us of the dangers of this deficit, yet today are silent.

My little knowledge says this is the most pressing problem because of the time it will take to "fix". Really not sure but that deficit is now in a territory it has never been before.

The February 3 issue of Time magazine, discusses the mess that we 'boomers'...are leaving the millennial's.

And the antipathy from so many, to even acknowledge, much less than to start addressing, the issues...continues. :oops:

Anyone who calls themselves a patriot or a true American...should care about our future generations. :ohdear:

[Bogie Shooter]

But, I just read that some guy said the "stock market looks great to me". Another distortion of fact?

[ColdNoMore]

But, I just read that some guy said the "stock market looks great to me". Another distortion of fact?

I would proffer that to "distort" a fact, there needs to be at least...a grain of truth.

With a 1,000 point drop of the DJIA, that grain of truth in "great"...does not exist in any form of the definition. :oops:

[villagerjack]

Given that almost 49% of Americans own NO stocks whatsoever, in any form (pension/company/investment/other)...it certainly doesn't matter to them.

Stock Ownership (trade here) (http://ritholtz.com/2020/01/stock-ownership/)

The Stock Market is an independent verification of how companies are performing. Good performance means more jobs and opportunities for everyone. Indirectly, people who belong to Unions, have company pension plans or have a job from small businesses who benefit from a good economy. University Endowments, invested properly, have huge gains from the stock market and many are using those gains to offer free tuition in California. For example, USC offering free tuition to students in families with less than $80,000 in family income. Without the recent gains in the Stock Market this would not be possible. There are many other examples of how the gains in the Stock Market benefit non owners of stock if you choose to look for it. Google will help but if your motives are not pure one might not want to find these facts.

[ColdNoMore]

The Stock Market is an independent verification of how companies are performing. Good performance means more jobs and opportunities for everyone. Indirectly, people who belong to Unions, have company pension plans or have a job from small businesses who benefit from a good economy. University Endowments, invested properly, have huge gains from the stock market and many are using those gains to offer free tuition in California. For example, USC offering free tuition to students in families with less than $80,000 in family income. Without the recent gains in the Stock Market this would not be possible. There are many other examples of how the gains in the Stock Market benefit non owners of stock if you choose to look for it. Google will help but if your motives are not pure one might not want to find these facts.

You didn't even bother to read my link...now did you? :oops:

And I'm one of the fortunate ones, who has benefited greatly...from the long-term rise in stock prices.

I'm also (barely :D) smart enough, to research the BIG picture and not rely on little snippets of confirmation bias...to guide my overall viewpoints. :ho:

[Bucco]

The Stock Market is an independent verification of how companies are performing. Good performance means more jobs and opportunities for everyone. Indirectly, people who belong to Unions, have company pension plans or have a job from small businesses who benefit from a good economy. University Endowments, invested properly, have huge gains from the stock market and many are using those gains to offer free tuition in California. For example, USC offering free tuition to students in families with less than $80,000 in family income. Without the recent gains in the Stock Market this would not be possible. There are many other examples of how the gains in the Stock Market benefit non owners of stock if you choose to look for it. Google will help but if your motives are not pure one might not want to find these facts.


A poster posted this earlier.....

"I can predict who enjoys the news most when the stock market drops.

Hmmmmm."


As i said, and nobody objected.......everyone likes when the market is up thus I really dont know why the discussion.

It took a dive...that is worth discussion but seems the subject is going to be changed by those who feel they have that right and nobody else.

Used to be, as I have often said.,..you could come to this forum and interact and learn from others. This area is always something I like to learn about but now days, it seems impossible because of other interests affecting posters and they need control

[l2ridehd]

You need to keep this in perspective. A 1000 point drop when the DOW is at 28,000 is about 3%. Go back and look at how many 3% drops have happened in the past. It's just when the DOW was 5000 and dropped 150 points or 3% it didn't seem so bad. And as an investor you should care more about the S&P or the total stock market than the DOW. One big stock with a significant drop can swing the DOW way out of proportion. Total market drop was 3.29% and that is pretty high for one day. But what you really need to do is just one simple thing. Do nothing.

[dewilson58]

No quick bounce today.


Hate to be a downer, but this dip might take months to recover.


Hope I'm wrong.

[graciegirl]

No quick bounce today.


Hate to be a downer, but this dip might take months to recover.


Hope I'm wrong.

I trust your assessment. I am sorry to read this.

Do you think it has something to do with the financial impact of trade relating to the Corona Virus?

[rustyp]

The historic P/E ratio of the S&P 500 is 15.54. As of a few minutes ago it is 21.28. It's a long way to the bottom baby.

[dewilson58]

I trust your assessment. I am sorry to read this.




Hopefully it returns in the next two weeks and someone pulls out my prior post and laughs at me. Hopefully.


:)

[ColdNoMore]

Don't blink, but things aren't looking much better...right now. :(

[dewilson58]

Do you think it has something to do with the financial impact of trade relating to the Corona Virus?




Absolutely. Very emotional response lead by computer triggers.



I don't think "we" have good numbers to determine the extent.


Going to take some time to get effective drugs out.


The good thing is it's less than a 5% hit right now.


Remember..........with yesterday's sell-off, somebody was buying.

[ColdNoMore]

As of right now, between yesterday and today...the DOW loss is about 6.5%. :(

[manaboutown]

The historic P/E ratio of the S&P 500 is 15.54. As of a few minutes ago it is 21.28. It's a long way to the bottom baby.

And that is just the average P/E. I remember that at times The DOW P/E has been down to the high 7's, low 8's.

[Lizziemay]

Just another day in the neighbourhood. buy buy if you have some cash

[Two Bills]

If you gambe at anything, losses are inevitable.

[TheWarriors]

The February 3 issue of Time magazine, discusses the mess that we 'boomers'...are leaving the millennial's.

And the antipathy from so many, to even acknowledge, much less than to start addressing, the issues...continues. :oops:

Anyone who calls themselves a patriot or a true American...should care about our future generations. :ohdear:




Do people still read Time magazine?

[MorTech]

Hope our owners catch this falling knife...How's that debt market looking :)

Heck, people here still have newspapers delivered. Magazines are for guns :)

[ColdNoMore]

Do people still read Time magazine?

Just those ever shrinking number of folks, who thirst for knowledge, facts and viewpoints...from a plethora of different sources. ;)

Yeah, yeah, I know..."how antiquated." :D




.

[tophcfa]

It’s only a matter of time before the bubble bursts. An economy supported by artificially low interest rates, along with the huge budget defect, and our country’s unsustainable debt levels, will eventually catch up in a very painful way. I hope I am wrong, but just in case I am correct, the gold we own will become very valuable.

[Aloha1]

Just those ever shrinking number of folks, who thirst for knowledge, facts and viewpoints...from a plethora of different sources. ;)

Yeah, yeah, I know..."how antiquated." :D




.

Time Magazine fails on two of your three reasons.

[Two Bills]

It’s only a matter of time before the bubble bursts. An economy supported by artificially low interest rates, along with the huge budget defect, and our country’s unsustainable debt levels, will eventually catch up in a very painful way. I hope I am wrong, but just in case I am correct, the gold we own will become very valuable.

Absolutely agree.
No.1 rule of basic economics. 'You cannot borrow your way out of debt!'

[dewilson58]

Turn that Frown upside Down.




Maybe.




:pray:

[karostay]

Who's buying what ?

[Two Bills]

Who's buying what ?

I thought I might buy Continental Country Club today if it's still on the market!:icon_wink:

[rustyp]

Day 3 - no dead cat bounce - not good.

[dewilson58]

Finding footing.

[ColdNoMore]

Time Magazine fails on two of your three reasons.

:1rotfl:

Time Magazine (turn page here) (http://time.com/5524335/time-national-magazine-award-general-excellence/)

The American Society of Magazine Editors has recognized TIME as a finalist for General Excellence in the News, Sports and Entertainment category for the 2019 National Magazine Awards for Print and Digital Media.


:ho:


.

[Chi-Town]

Stock futures don't look good for tomorrow.

[asianthree]

So far ours have made no significant changes. But did buy stock yesterday

[villagerjack]

Financials are at ridiculously low levels.

[dewilson58]

There is our 10% correction.

[Heyitsrick]

The American Society of Magazine Editors has recognized TIME as a finalist for General Excellence in the News, Sports and Entertainment category for the 2019 National Magazine Awards for Print and Digital Media.




If only National Geographic hadn't won in 2019. Tough break on the 2020 nominations for TIME, though, eh? Well, all isn't lost. They are up for the photography award.

[Chi-Town]

:1rotfl:

Time Magazine (turn page here) (http://time.com/5524335/time-national-magazine-award-general-excellence/)




:ho:


.

Getting TIME on a 10" tablet works great. Been a subscriber since college.

[JimJohnson]

The market reacting to fear.

[rustyp]

Just curious did any of you get a call from your broker/advisor in the A. last week B. last month with any advice. If so what ?

[retiredguy123]

Just curious did any of you get a call from your broker/advisor in the A. last week B. last month with any advice. If so what ?
My broker/advisor is me. My advice to my client is to do nothing.

[ColdNoMore]

If only National Geographic hadn't won in 2019. Tough break on the 2020 nominations for TIME, though, eh? Well, all isn't lost. They are up for the photography award.

Exhibiting apoplexy due to totally fake news sources, like Breitbart...weren't nominated? :1rotfl:

[Heyitsrick]

My broker/advisor is me. My advice to my client is to do nothing.

In "normal" times, I would agree with that self-advice. This seems quite different to me. People are freaked, and businesses worldwide are publicly stating that they won't be able to make their numbers for the foreseeable future. There's been a report that someone in CA with no apparent contact with COVID-19 carriers is now infected. That scares people.

I heard a TV-business guy say this afternoon that this precipitous percentage drop in the DOW/NASDAQ/S&P has been faster since the 1930's. That makes it quite unique. Now sure, the markets have had an unusually fast run-up since December, too. But as of this writing, I'm not seeing news relief that will assuage fears. There's too much uncertainty. And it doesn't have to be said the many retirees are not in a position to sustain high-percentage investment losses (hopefully most are conservative).

So, stay the course and wait for everything to return to normal? I took some protective action for principal preservation a while back, and have increased that this week. I've been fortunate so as not to have lost too much since the bottom's been falling out. But I have lost $$$ on paper...make no mistake about it. I just don't see this calming down right away. Everyone's situation is unique to them, of course. But unless your investments are just "play money", I'd advise doing something to at least protect some of it. Just my opinion. Good luck.

[ColdNoMore]

Getting TIME on a 10" tablet works great. Been a subscriber since college.

:agree:


As I stated in my post way back, I enjoy trying to slake my thirst for knowledge...from a plethora of sources.

Even the obviously fake and conspiratorial ones, at least provide...entertainment and some belly laughs. :D

[rustyp]

In "normal" times, I would agree with that self-advice. This seems quite different to me. People are freaked, and businesses worldwide are publicly stating that they won't be able to make their numbers for the foreseeable future. There's been a report that someone in CA with no apparent contact with COVID-19 carriers is now infected. That scares people.

I heard a TV-business guy say this afternoon that this precipitous percentage drop in the DOW/NASDAQ/S&P has been faster since the 1930's. That makes it quite unique. Now sure, the markets have had an unusually fast run-up since December, too. But as of this writing, I'm not seeing news relief that will assuage fears. There's too much uncertainty. And it doesn't have to be said the many retirees are not in a position to sustain high-percentage investment losses (hopefully most are conservative).

So, stay the course and wait for everything to return to normal? I took some protective action for principal preservation a while back, and have increased that this week. I've been fortunate so as not to have lost too much since the bottom's been falling out. But I have lost $$$ on paper...make no mistake about it. I just don't see this calming down right away. Everyone's situation is unique to them, of course. But unless your investments are just "play money", I'd advise doing something to at least protect some of it. Just my opinion. Good luck.

One of the best posts I have ever seen here. Your honesty is a virtue I can admire.

[ColdNoMore]

Without a doubt, the fears of what the coronavirus can do to the world economy in the immediate future...is manifesting itself in the markets right now.

Particularly, with all of the unknowns of the virus.

The basic tenets of the "Johari Window"...seems to apply to this virus.

In other words, "Known unknowns result from recognized but poorly understood phenomena. On the other hand, unknown unknowns are phenomena which cannot be expected, because there has been no prior experience or theoretical basis for expecting the phenomena"

This being based on the fact that although "the flu" has many times the cases and causes more deaths than what has occurred with the coronavirus, the actual percentage of fatalities from those getting coronavirus...are 23 times higher than the flu. :(


Coronavirus Lethality (click here) (http://www.wthr.com/article/coronavirus-more-deadly-flu)

BEIJING (AP) — There's lots of confusion about how deadly the new coronavirus from China really is: Even health officials sometimes say "deadly" when they may mean "lethal."

Lethality is how often a disease proves fatal. For coronavirus, that's estimated at 2.3 percent in the current outbreak. That means more than one in fifty people die after being infected with coronavirus.

The flu's lethality is 0.1 percent. It kills about one in every thousand people infected with it.

That means the coronavirus is 23 times more lethal than the flu.

In the United States, about 36,000 people die from the flu each year.

The coronavirus has killed 1,868 patients in mainland China and five others elsewhere. It has also infected around 73,000 people.



As for our (and the world's) economy, it's my opinion that this virus gives cover to those who have refused to recognize how overvalued and precarious...most markets have become for a while now.

Leading indicators have shown for months, that even after the 'sugar rush high' of tax cuts (resulting mostly in stock buy-backs)/lowered interest rates/reduced costs of industries to protect the environment, have worn off and the long-term effects of tariff's come home to roost...that things have significantly slowed down.

Most people our age shouldn't be in high risk/high reward stock positions anyway, but this is IMHO (for those 51% of us that own stocks in some form or another)...a definite wake-up call.

And just like everyone else invested in stocks, I too have watched mine erode lately...and don't like it. :(

I have been publicly honest about becoming ever more leery of the longest bull market in history and even though there were times I naturally had twinges of experiencing FOMO (fear of missing out) as the market kept rising in starts and fits, I will now resist those feelings...and just be grateful for the last 12 years.

And if the right time, in my own mind, to become really aggressive again doesn't come along again before I kick the bucket, it will be my kids that will have to be the ones ticked off...at anything I left on the table.

Being more "conservative" :D (click here) (https://www.talkofthevillages.com/forums/1646784-post66.html)

Posted on 5-2-2019

I got chicken a little while back and went a lot more conservative, after the big drop before X-Mas...and then when the DJIA bounced back to just under 26,000.

While it may climb even higher, with this being the longest bull run in history...it's just my opinion we're due for a pretty large correction soon.

And while I may lose out in the meantime, I don't suffer from FOMO (fear of missing out)...because NO ONE can time the market perfectly.

I hung on during the Great Recession when the DJIA dropped to around 8,000 and am darned glad I did...as the DOW increased by over 2 times from then to up to 2016.

I keep thinking about the billionaire who was asked about how he became so wealthy and his response was..."By selling too early."

Even if this virus is miraculously hammered and stopped in its tracks next week, it still won't personally change my mind that we're experiencing a period of..."irrational exuberance." :oops:

[Chi-Town]

In "normal" times, I would agree with that self-advice. This seems quite different to me. People are freaked, and businesses worldwide are publicly stating that they won't be able to make their numbers for the foreseeable future. There's been a report that someone in CA with no apparent contact with COVID-19 carriers is now infected. That scares people.

I heard a TV-business guy say this afternoon that this precipitous percentage drop in the DOW/NASDAQ/S&P has been faster since the 1930's. That makes it quite unique. Now sure, the markets have had an unusually fast run-up since December, too. But as of this writing, I'm not seeing news relief that will assuage fears. There's too much uncertainty. And it doesn't have to be said the many retirees are not in a position to sustain high-percentage investment losses (hopefully most are conservative).

So, stay the course and wait for everything to return to normal? I took some protective action for principal preservation a while back, and have increased that this week. I've been fortunate so as not to have lost too much since the bottom's been falling out. But I have lost $$$ on paper...make no mistake about it. I just don't see this calming down right away. Everyone's situation is unique to them, of course. But unless your investments are just "play money", I'd advise doing something to at least protect some of it. Just my opinion. Good luck.

Curious as to what principal preservation you are employing during this freefall.

[CoachKandSportsguy]

As a part time trader since 1981, and having run some predictive analysis on market behavior on the last 20 years of daily data, this move has several components to it:


Unquantifiable and potentially large effects on the economy
potential bankruptcies from prolong supply disruptions
high debt levels in the corporate world.
slowing international trade and economies prior to the virus
Rate cuts won't help much


Trading wise
from the beginning of February,
I am long $GLD gold
I am long PUTS on the $SPY Aug 300 strike
I am long PUTS on TSLA Jan 21 $210 strike on the bankruptcy of that ponzi scheme
Long small assortment of high dividend equities, and bonds.


So, normal overbought oversold indicators are going to be less useful
The closet resemblance to this non monetary / banking crises is the 9/11 incident.
After 9/11 when the market opened on Monday, the market dropped 10% intraday,
and then rallied to close down about 5%, Tuesday was flat and the rest of the week was red. 5 day reaction and the next Monday the market reversed and continued higher

With that and the weekend news cycle, my expected market scenario is that the market may have another significant down day due to some trading houses giving margin calls and changing margin requirements, and freezing some traders. predict another 3-5% down, again it is a prediction and the future is always uncertain.

Given any significant bad news over the week, Monday could be a Black Monday crash, which happens at very oversold levels where bids disappear. A no bid market with an oversold market, which is when there are no buyers left to buy, falls dramatically. Another 5% or so gets the market close to a 20% correction, which is a bounce location worthy of a 25% portfolio position in $SPY. The predictive part comes in if Monday is a big down day, then Tuesday has a high probability of a bounce lasting the rest of the week only. (that predictive is related to option expiry cycles)

If he market gets to 30% down from high, its worthy of a 50% market position. At 50% down, its worthy of adding another 25% increase in market exposure at 75%, I am all in.

Given I own gold, and have sold most stocks a long time ago for valuation and earnings growth and market breadth issues, I have plenty of cash waiting, and one very interesting point in history:

The roaring 20's followed the 1918 Spanish flu, in combination with the technology advancement of electrification, so remember to sell high, you must not be afraid of paying taxes, and to buy low, you must not be afraid of further downside, but the future is always uncertain, sometimes more so than other times.

sportsguy

[JimJohnson]

If this wakes voters to reality, then I consider it god sent.

[ColdNoMore]

If this wakes voters to reality, then I consider it god sent.


:boom:

[rustyp]

If this wakes voters to reality, then I consider it god sent.

The reality of the support brings to mind your namesake - Robert Johnson and his investment at the crossroads.

[Heyitsrick]

Curious as to what principal preservation you are employing during this freefall.

I still have a 401K. 401Ks frequently have a product (under some various names) that's known as a "stable value" fund. It's a principal protection fund - a bond fund that's wrapped by insurance. The insurance companies are on the hook to cover any losses. IRAs don't have stable value funds. Different investment companies might have their own marketing name for them, but stable value is the generic term you can usually find in a 401K.

Stable Value Fund Defined (https://www.investopedia.com/terms/s/stable-value-fund.asp)

My IRAs have been very conservative, but even conservative investments are still losing money now. I'm about half-cash now in my IRAs but may have to bite the bullet and go all cash and take the losses. I just don't see any sustained upside to the markets in the near future.

[dewilson58]

A good piece to read.........................

A capital market framework

Capital markets continue to react to virus-related developments around the globe, including new cases in Britain and Switzerland, tightening borders across the Middle East, and the first case in the U.S. with an unknown origin. The World Health Organization (WHO) highlighted today that the coronavirus is at a “decisive point” and could shift from an epidemic to a pandemic. In addition to virus headlines, continued speculation about the upcoming Presidential election and U.K./European trade negotiations have left investors with open questions; their response has been to sell riskier asset classes and buy historically safer assets. In the process, domestic government interest rates, which move inversely to prices, have reached historic lows based on 10-year Treasury note yields. Global stocks, which reached all-time highs two weeks ago, have shed over 8 percent, with some regions and indices experiencing double-digit declines.


So when will this stop? No one can say definitively, of course, but we do want to provide you with a framework to help process the news surrounding this development. While every news event carries its own unique properties, significant news events with uncertain outcomes and implications tend to follow a three-stage capital market absorption process: a reactionary stage, a liquidity stage, and finally a fundamental stage. These stages can interact with one another, but a framework can help contextualize market movements beyond what appears in headlines.


Stage 1: The Reactionary Stage. Once a news story emerges, some investors act quickly, either buying or selling without engaging in deep analysis. Their time horizon, investment style, or patience level may be short, and their reaction time follows. An example would be a trader who buys or sells a stock immediately following a company earnings report release; they see the headlines emerge and they enter their order. They do not wait for the company conference call explaining their results or the slew of Wall Street generated reports in the days that follow said release. With the advent of algorithmic and program trading, where more investors rely on formula and rules-based momentum strategies, the reactionary stage in events like the coronavirus can be drawn out. Unlike a company earnings release and the following conference call for investors, the coronavirus has extended news and developments, including new cases in previously unaffected countries, as well as updates from already affected countries. Additionally, there are business effects, with many companies issuing updated guidance for sales or earnings based on the coronavirus, so capital markets have plenty of new information to incorporate.


Stage 2: The Liquidity Stage. This stage is distinct from the reactionary stage in that certain investors are forced to sell assets. For example, some investors purchase or sell securities on margin (a specific loan to purchase securities) and margin lenders have strict rules about when a margin borrower must either exit their position or post more collateral (typically additional cash or securities deposits). If the investor has no more collateral to post, they are forced to exit their positions. The same is true for certain types of professional investors. At certain investment firms, if prices move against an existing position and price movements breach a risk limit, a portfolio manager is forced to liquidate that position. In an environment like this, where volatile prices may trip margin and risk boundaries, selling can beget more selling. Eventually, markets clear and the selling cascades, but prices tend to drive the investment decisions.


Stage 3: The Fundamental Stage. This stage is shaped by investors who wait to make investment decisions based on the longer-term implications of a given event. Those investors will sacrifice speed for analysis; they pay attention to price, but typically price will not drive their buy or sell decisions unless extreme levels emerge. These investors’ views may be shaped by ongoing event updates, but more fundamentally-driven investors tend to make buy or sell decisions after the proverbial dust settles.
Brexit in 2016 is an illustrative example. While the eventual “No” vote does not completely parallel a viral infection, investor reactions followed the three-stage sequencing. The vote results came late in the British evening, and immediately U.S. equity market futures sold off. Within a day, U.K. stocks fell 13 percent, the British pound fell to a 31-year low versus the dollar, and oil dropped 5 percent. The reactionary phase eventually drove the liquidity phase, and once investors anticipated a more limited impact than prices suggested, fundamentals prevailed.




We are believers in the adage that mental capital trumps financial capital. Market volatility can drive investors to take immediate action within their portfolio to improve their psychological well-being.

[Chi-Town]

I still have a 401K. 401Ks frequently have a product (under some various names) that's known as a "stable value" fund. It's a principal protection fund - a bond fund that's wrapped by insurance. The insurance companies are on the hook to cover any losses. IRAs don't have stable value funds. Different investment companies might have their own marketing name for them, but stable value is the generic term you can usually find in a 401K.

Stable Value Fund Defined (https://www.investopedia.com/terms/s/stable-value-fund.asp)

My IRAs have been very conservative, but even conservative investments are still losing money now. I'm about half-cash now in my IRAs but may have to bite the bullet and go all cash and take the losses. I just don't see any sustained upside to the markets in the near future.

very conservative, but even conservative investments are still losing money now. I'm about half-cash now in my IRAs but may have to bite the bullet and go all cash and take the losses. I just don't see any sustained upside to the markets in the near future.[/QUOTE]

My Fidelity 401k had a stable value fund which had the cash portion of my portfolio there. When I moved to a Morgan Stanley IRA after retiring that option was non existent. So that portion went into Cash Reserves in a Fidelity IRA along with the Freedom 2010 Fund.

Morgan Stanley has me scheduled for a 3/5 Coronavirus conference call.

[Chi-Town]

We are now back to January 5, 2018 when the Dow first hit 25,000. Two years gone in a few days.

[JP]

I sold everything yesterday morning and am glad I did. I've "road out" a couple of these and lost lots of money. Not taking the chance this time. Seems like a lot of panic and fear and real concerns about supply chain disruptions etc. Yikes.

[tophcfa]

As a part time trader since 1981, and having run some predictive analysis on market behavior on the last 20 years of daily data, this move has several components to it:


Unquantifiable and potentially large effects on the economy
potential bankruptcies from prolong supply disruptions
high debt levels in the corporate world.
slowing international trade and economies prior to the virus
Rate cuts won't help much


Trading wise
from the beginning of February,
I am long $GLD gold
I am long PUTS on the $SPY Aug 300 strike
I am long PUTS on TSLA Jan 21 $210 strike on the bankruptcy of that ponzi scheme
Long small assortment of high dividend equities, and bonds.


So, normal overbought oversold indicators are going to be less useful
The closet resemblance to this non monetary / banking crises is the 9/11 incident.
After 9/11 when the market opened on Monday, the market dropped 10% intraday,
and then rallied to close down about 5%, Tuesday was flat and the rest of the week was red. 5 day reaction and the next Monday the market reversed and continued higher

With that and the weekend news cycle, my expected market scenario is that the market may have another significant down day due to some trading houses giving margin calls and changing margin requirements, and freezing some traders. predict another 3-5% down, again it is a prediction and the future is always uncertain.

Given any significant bad news over the week, Monday could be a Black Monday crash, which happens at very oversold levels where bids disappear. A no bid market with an oversold market, which is when there are no buyers left to buy, falls dramatically. Another 5% or so gets the market close to a 20% correction, which is a bounce location worthy of a 25% portfolio position in $SPY. The predictive part comes in if Monday is a big down day, then Tuesday has a high probability of a bounce lasting the rest of the week only. (that predictive is related to option expiry cycles)

If he market gets to 30% down from high, its worthy of a 50% market position. At 50% down, its worthy of adding another 25% increase in market exposure at 75%, I am all in.

Given I own gold, and have sold most stocks a long time ago for valuation and earnings growth and market breadth issues, I have plenty of cash waiting, and one very interesting point in history:

The roaring 20's followed the 1918 Spanish flu, in combination with the technology advancement of electrification, so remember to sell high, you must not be afraid of paying taxes, and to buy low, you must not be afraid of further downside, but the future is always uncertain, sometimes more so than other times.

sportsguy

Great post, we think alike.

[MorTech]

The Fed just caught the falling knife...Be careful Monday.

[tophcfa]

The Fed just caught the falling knife...Be careful Monday.

Given how low interest rates already are and our nations out of control debt, there is not much that the Fed can do to bail out a bear market. They are going to war with a pea shooter instead of a gun.

[MorTech]

Given how low interest rates already are and our nations out of control debt, there is not much that the Fed can do to bail out a bear market. They are going to war with a pea shooter instead of a gun.

All the Fed can do is put a floor under the equity markets thru Yak-Yak and their trading desk. The USA debt is manageable compared to others...China, EU, Japan are a complete debt joke. The USA is the best horse in the glue factory :)

The Banksters won't let TSLA fail. (What? You don't think Ruthless, Depraved, Thieving, Psychopaths virtue signal once in a while?)

[ColdNoMore]

Given how low interest rates already are and our nations out of control debt, there is not much that the Fed can do to bail out a bear market. They are going to war with a pea shooter instead of a gun.

YEP...you're absolutely correct.


And it's not just The Fed that is out of ammo...to kill a bear. :ohdear:

[Bay Kid]

Somebody made lots of money the past few weeks.

[golfing eagles]

Somebody made lots of money the past few weeks.

Quite true. Remember the market is essentially a zero sum game. For every dollar lost, one is made

[villagerjack]

This downside has little to do with reality. We have the strongest economy in the world, banks are the
Healthiest-they have ever been, consumer is flush and relatively unleaveraged, real estate strong
, gold selling off, so generally speaking we are in great shape for a V shape recovery. Just a matter of when.

Panic will get you nowhere.

US Flu Cases Increased by 4 Million Over the Last Week (https://www.contagionlive.com/news/us-flu-cases-increased-by-4-million-over-the-last-week)

[dewilson58]

The Fed just caught the falling knife...Be careful Monday.






:1rotfl:

[villagerjack]

this downside has little to do with reality. We have the strongest economy in the world, banks are the
healthiest-they have ever been, consumer is flush and relatively unleaveraged, real estate strong
, gold selling off, so generally speaking we are in great shape for a v shape recovery. Just a matter of when.

Panic will get you nowhere.

us flu cases increased by 4 million over the last week (https://www.contagionlive.com/news/us-flu-cases-increased-by-4-million-over-the-last-week)

SUPER MONDAY.. We are half way back. Hope they did not scare you out and steal all your retirement funds.

Warren Buffet has been buying.

Don’t take your investment advice from someone you do not know.

[dewilson58]

Don’t take your investment advice from someone you do not know.






Agree.




And, even if you know him/her.............maybe the same advice.


And, And.......If they say they are a trader................RUN!!!!




:duck:

[ColdNoMore]

SUPER MONDAY.. We are half way back. Hope they did not scare you out and steal all your retirement funds.

Warren Buffet has been buying.

Don’t take your investment advice from someone you do not know.

1. After yesterday's comeback, we're only about 1/3 toward previous highs, NOT 1/2...which is a significant difference.

2. Proof as to "Buffett is buying?" Particularly since Buffett is currently sitting on the largest reserves of cash...in BH's history. If the market has nothing but tailwinds and will continue its already unprecedented bull run, why is the Oracle of Omaha...sitting on so much cash?

3. P/E ratios are extremely high right now. Which is pretty typical and comparable...prior to each historical sell-off/downturn/recession.

4. Only fool's, soon to be poorer ones at that, think the market's/stock's...can only go up. :oops:

CASH IS KING (poke here) (http://www.marketwatch.com/investing/stock/brk.b/financials/balance-sheet)


Don’t take your investment advice from someone you do not know.

On that...we agree.

Which is why I'm ignoring your guesses. :ho:

[ColdNoMore]

WOW, things are so rosy that The FED just slashed rates (the first since 2008) as an emergency response...to the REAL long-term outlook.

Fed cuts rates by 50 basis points amid coronavirus fears (https://finance.yahoo.com/news/fed-cuts-rates-by-50-basis-points-amid-coronavirus-concerns-150008506.html)

[ColdNoMore]

WOW, things are so rosy that The FED just slashed rates (the first since 2008) as an emergency response...to the REAL long-term outlook.

Fed cuts rates by 50 basis points amid coronavirus fears (https://finance.yahoo.com/news/fed-cuts-rates-by-50-basis-points-amid-coronavirus-concerns-150008506.html)



Which currently, is having the exact opposite effect...as intended. :(


A lot of folks are obviously thinking, "Gee, if the FED just lowered rates in an emergency move, maybe things are even worse...than we thought."


DJIA (click here) (http://finance.yahoo.com/news/stock-market-news-live-updates-march-3-2020-122022862.html)

Stocks fell after Federal Reserve Chair Jerome Powell delivered a press conference discussing the Fed’s emergency move to cut benchmark interest rates by 50 basis points. The Dow declined more than 1%, or 300 points.

[rustyp]

There is a formal name for yesterday's rally - "dead cat bounce". The fact that it did not take place on day 2 and waited this long is not good news in my opinion. It suggest to me the market knew it was way over heated and not just the virus scare. The virus was the push the market has been waiting as an exit excuse.

[ColdNoMore]

There is a formal name for yesterday's rally - "dead cat bounce". The fact that it did not take place on day 2 and waited this long is not good news in my opinion. It suggest to me the market knew it was way over heated and not just the virus scare.

The virus was the push the market has been waiting as an exit excuse.

Exactly the way I see it.

[graciegirl]

I just can't get over people being pleased when stocks tumble.

[Bucco]

I just can't get over people being pleased when stocks tumble.

Who EXACTLY are these people you often speak of ??? Please....making an accusation without names is simply name calling.

But PLEASE, name names......this is the same tact, and it is a "tact" used in the past. You owe anyone you make that accusation a specific person or persons that is wishing for that. And frankly that would be easy to do because anyone who does wish that would make headlines.

PLEASE ENLIGHTEN

[Chi-Town]

I just can't get over people being pleased when stocks tumble.

Who's pleased? And why would they be? Just curious.

[Bucco]

Who's pleased? And why would they be? Just curious.

It, to me, anyway, totally irresponsible to make such serious accusations and then just drop it. VP did it on TV Sunday and had to back track because all the political garbage was coming from one place.

[ColdNoMore]

Who EXACTLY are these people you often speak of ??? Please....making an accusation without names is simply name calling.

Yep.

I don't know of a single person, that is "pleased" that their stocks are going down...and they're losing money. :oops:

However, there is some satisfaction in having called something correctly ahead of time (especially when it comes to stocks)...and having taken the appropriate mitigating action.

A HUGE difference...that intelligent folks can discern. :ohdear:

But we both know, the real issue...is something entirely different.

Along the lines of what happens, when you hang your hat on one hook...and that hook breaks.

At this moment the DOW is down about 800 and here's hoping...it rallies by closing time.

[Bucco]

Yep.

I don't know of a single person, that is "pleased" that their stocks are going down...and they're losing money. :oops:

However, there is some satisfaction in having called something correctly ahead of time (especially when it comes to stocks)...and having taken the appropriate mitigating action.

A HUGE difference...that intelligent folks can discern. :ohdear:

But we both know, the real issue...is something entirely different.

Along the lines of what happens, when you hang your hat on one hook...and that hook breaks.

At this moment the DOW is down about 800 and here's hoping...it rallies by closing time.



This stuff is getting old. This begins with the family we should trust for truth.....now, they are calling the Corona virus a "hoax".

How anyone buys into this total and complete irresponsible crap is well outside my pay grade. Not, in my life, am I used to our government, not allowing it, but being those actually giving out false information and lying about so very important things.

When does anyone believe this.

People have been completely ruined with these kind of lies from up high over the years, but we are treading on very serious ground here. '
That human beings can buy into all of this makes it even more scary. We are well beyond simply P talk.

[Chi-Town]

Which currently, is having the exact opposite effect...as intended. :(


A lot of folks are obviously thinking, "Gee, if the FED just lowered rates in an emergency move, maybe things are even worse...than we thought."


DJIA (click here) (http://finance.yahoo.com/news/stock-market-news-live-updates-march-3-2020-122022862.html)

50 basis points is a huge cut. The 10 year Treasury is below 1 percent yield and the stock market is down sharply. Hard to believe that there still was a tweet demanding more easing.

[ColdNoMore]

50 basis points is a huge cut. The 10 year Treasury is below 1 percent yield and the stock market is down sharply. Hard to believe that there still was a tweet demanding more easing.

Given history, not really THAT hard to believe. :D

[tophcfa]

50 basis points is a huge cut. The 10 year Treasury is below 1 percent yield and the stock market is down sharply. Hard to believe that there still was a tweet demanding more easing.

Agree, 50 BPs is a huge rate cut relative to how low rates already are. This big a rate cut leaves very little room for more cuts if needed.

[tophcfa]

I just can't get over people being pleased when stocks tumble.

I am not pleased that stocks are taking a big hit even though I feared a major correction was in the cards and sold all my stocks earlier this year before the Corona virus scare. As others have stated, the market was very rich as measured by many different statistics and the virus scare was simply the trigger that began the sell off. I currently only own older high quality municipal bonds with tax free coupons between 4 1/2% and 7%, cash, and gold. That being said, my monthly defined benefit payments are backed by a mostly stock portfolio and the pension plans funding status and ability to remain solvent is highly correlated to the equity market. I hate seeing both my pensions plans funding status eroded as well as many people heavily invested in stocks suffering pain. If stocks rebound I will be very happy, and if they continue to sell off hard I will begin to gradually get back into the market at cheaper valuations.

If anyone does not feel that stocks were overvalued a couple weeks ago, read the book “The Aftershock Investor” by David and Robert Wiedemer and Cindy Spitzer.

[MorTech]

I just can't get over people being pleased when stocks tumble.

If you shorted on 21 Feb...You are.

10 year Treasury at 1.09%...Lovely.

The Repo market is the tell-tail. It's been bad for months. Where did the Fed get $120B?


Here is a Fed insider - Danielle DiMartino Booth...Price Discovery does not exist.

YouTube (https://www.youtube.com/watch?v=gh16UlreKfo)

[ColdNoMore]

If you shorted on 21 Feb...You are.

10 year Treasury at 1.09%...Lovely.

The Repo market is the tell-tail. It's been bad for months. Where did the Fed get $120B?


Here is a Fed insider - Danielle DiMartino Booth...Price Discovery does not exist.

YouTube (https://www.youtube.com/watch?v=gh16UlreKfo)


A conference put on by Stansberry?

Really? :1rotfl:

Porter Stansberry was sued by the SEC and fined $1.5 million for security fraud...about a dozen years ago. :oops:

Maybe not as bad as fake universities...but darn close. :ohdear:

[ColdNoMore]

Agree, 50 BPs is a huge rate cut relative to how low rates already are. This big a rate cut leaves very little room for more cuts if needed.
Yep. :thumbup:

Some people should ask themselves why they would believe someone touting how great, deep and strong the economy is...would also say why ANY cut (much less such a large one) is needed. :oops:

And no, it's not really because of the coronoavirus, because certain people have been whining about needing it cut...for a long time now.

Makes no freaking sense. :ohdear:

[ColdNoMore]

I just saw a thought-provoking Tweet.


Socialism is bad.

Now central banks...please bail us out.

[MorTech]

A conference put on by Stansberry?

Really? :1rotfl:

Porter Stansberry was sued by the SEC and fined $1.5 million for security fraud...about a dozen years ago. :oops:

Maybe not as bad as fake universities...but darn close. :ohdear:



Really :a040: What did she say that was incorrect? Can you be specific?

[ColdNoMore]

Really :a040: What did she say that was incorrect? Can you be specific?

To be perfectly honest, after I saw "Stansberry" at the :15 mark...I quit watching. :oops:

But hey, unlike some (who side with you) here who claim to never even look...at least I clicked on the link. :D

[MorTech]

To be perfectly honest, after I saw "Stansberry" at the :15 mark...I quit watching. :oops:

But hey, unlike some (who side with you) here who claim to never even look...at least I clicked on the link. :D

Alrighty then...I will try to find a conference with a name that won't trigger people...How about this?

New Orleans Investment Conference 2019 — Danielle DiMartino Booth — Still Fed Up - YouTube (https://www.youtube.com/watch?v=w2AiY8y6d5o)

[MorTech]

Thinking people should consider placing Danielle DiMartino Booth in their investor toolkit. As a former Fed insider, she has intelligent insight to what is really going on. Here she is on Hedgeye explaining the decline that started last September...huge corporate Insider selloff and Repo market seizure:

Real Conversations: Global 'Black Hole' Risk Rising with Danielle DiMartino Booth - YouTube (https://www.youtube.com/watch?v=wsHyRwaeQ5U)

Real Conversations: Trouble Ahead For The Fed & Economy with Danielle DiMartino Booth - YouTube (https://www.youtube.com/watch?v=_vXPVPFKHLA)

[manaboutown]

Who's pleased? And why would they be? Just curious.

Shorts and likely some quant hedge fund managers and investors who benefit from market movement either way such as Renaissance and Medallion funds. Famed Medallion Fund “Stretches . . . Explanation to the Limit,” Professor Claims | Institutional Investor (https://www.institutionalinvestor.com/article/b1k2fymby99nj0/Famed-Medallion-Fund-Stretches-Explanation-to-the-Limit-Professor-Claims)

Why? They are making a lot of money from the drop. Oops. Bloomberg - Are you a robot? (https://www.bloomberg.com/news/articles/2020-03-02/citadel-millennium-hedge-funds-post-gains-in-february-rout)

[ColdNoMore]

Alrighty then...I will try to find a conference with a name that won't trigger people...How about this?

New Orleans Investment Conference 2019 — Danielle DiMartino Booth — Still Fed Up - YouTube (https://www.youtube.com/watch?v=w2AiY8y6d5o)

As I typically do, I have been researching her and her book (instead of listening to her speeches)...plus what her critics say.

More power to you if you like her opinion/viewpoint, I tend to side with those who say she's mainly angry from her stint with the predominately male and more educated members of the Dallas FED...and she has an axe to grind.

You're still entitled to your opinion, just don't try to pass her off as some indisputable financial demigod...because she isn't.

No one is. :ho:

When you're bored, read how the FED was established by the titans of the day...on Jekyll Island.

'The Creature From Jekyll Island' is one of the driest books I've ever read and took me forever to finish it, because I kept putting it down for days, but it does impart a lot of history...and is very educational.

[dewilson58]

A new sunrise, maybe a new market rise.




:popcorn:

[jebartle]

And the sun will shine tomorrow.:popcorn.

[ColdNoMore]

Like a rollercoaster! :oops:


Whooda thunk, that the biggest news of last night...would make the markets rise so much today? :D


A lot of 'experts' say though, that you don't get this much volatility, regardless of the short-term news cycle...if the foundation is strong. :shrug:

[MorTech]

....We are so Screwed.

Energy, Finance, MOVE, Repo

[tophcfa]

Like a rollercoaster! :oops:


Whooda thunk, that the biggest news of last night...would make the markets rise so much today? :D


A lot of 'experts' say though, that you don't get this much volatility, regardless of the short-term news cycle...if the foundation is strong. :shrug:


Agree, even though the market is up for the week, the level of volatility is not a good sign.

[MorTech]

The Fed tends to catch the falling knife on Fridays at 3:00 PM in order to avert panic selling on Mondays.

What experts? Which ones? Maybe we should all turn on our Idiot Box and have parasitic chimps like little Jimmy Cramer scream at us :)

[CoachKandSportsguy]

As a long time market participant, who has made a lot of money and lost even more money, I have been in cash and bonds waiting for a correction to get stawks back to a reasonable valuation to re-invest. Traders learn from watching stawks go up and down, why they tend to go down and tend to want to buy them low and then sell them high. I am very short in the market, offsetting some high dividend reits. After buying in TV for retirement, I can't lose money again, as I won't be able to replace it with earnings. Therefore, I do sell when markets are over valued, and wait for the lower prices to buy again. You might think that recent history of the last 30 years of nearly positive yearly returns will last forever, but humans and greed always screw it up. I am short $SPY TSLA, and SQ. am I making a lot of money, no, am I losing any money, hell no!

sorry if your financial advisor might have his best interest at heart at your expense.

sportsguy

[rustyp]

I truly hope you are not in the market heavy for Monday. The usual progressive disclosure is slowly taking place. I am not at liberty to disclose my source but I can pass on info a step above hearsay. Do with it what you want.- a major northeastern university is making plans to have any employee capable of working from home to do just that. Is also considering closing the semester after spring break. No students abroad at present aloud to return to school for the remaining of the semester. These are some serious impacts to the economy long term. Expand this thought process ! As a disclosure before being lambasted my primary concern is for all and I truly emphasize all of us here in TV to be healthy. But very concerned about our financial health. Until I see a good bounce back in the market of at least 2 - 3 consecutive days. I see nothing on the near term horizon that warrants that bounce.

[ColdNoMore]

I truly hope you are not in the market heavy for Monday. The usual progressive disclosure is slowly taking place. I am not at liberty to disclose my source but I can pass on info a step above hearsay. Do with it what you want.- a major northeastern university is making plans to have any employee capable of working from home to do just that. Is also considering closing the semester after spring break. No students abroad at present aloud to return to school for the remaining of the semester. These are some serious impacts to the economy long term. Expand this thought process ! As a disclosure before being lambasted my primary concern is for all and I truly emphasize all of us here in TV to be healthy. But very concerned about our financial health. Until I see a good bounce back in the market of at least 2 - 3 consecutive days. I see nothing on the near term horizon that warrants that bounce.

Since the DOW's record closing of 29,551.42 set on Feb. 12, 2020, as of yesterday it is down about 12.5% from that high.

While I haven't shorted anything, the adjustments that I made about a year ago...have at least resulted in less than 1/4 of that loss.

While a loss nevertheless, I'm not changing anything soon and am satisfied with staying the course, even though certain people are touting this..."as a great time to buy."

There were those saying the exact same thing and touting that "the fundamentals are sound"...all during 2008 also. :oops:

Then again, those are mostly the ones who get paid for the trading itself...regardless of which way the market(s) move.

[OrangeBlossomBaby]

I have some Intel stock. Got it in the late 1970's when it was worth less than 50 cents a share. It's worth over $50 per share now, down from an all-time high of $73-something, back in 2000. It's down just a couple of points over the past month and Intel isn't going out of business any time soon, so I'm not worried.

[vinricci]

I’m buying Royal Caribbean and American Airlines on Monday.

[ColdNoMore]

I’m buying Royal Caribbean and American Airlines on Monday.

Just before the closing bell...I hope? :D

[DAVES]

I, and this is just me who is a pure amateur in this area, the affect of the budget deficit which continues to grow at record pace.

Seems we had a group of people on this forum and in congress (tea party) that absolutely warned us of the dangers of this deficit, yet today are silent.

My little knowledge says this is the most pressing problem because of the time it will take to "fix". Really not sure but that deficit is now in a territory it has never been before.


Realize, we are being had. Say something often enough and people think it is true and it makes sense. We are being told the deficit is. truth I am loosing count, 26 Trillion dollars? Stop, think realize do we understand what one Trillion dollars is let alone 26 Trillion? Who do we owe that money to? Most of us would say China. I looked it up a while ago, actually we owe slightly more to Japan but more important, together Japan and China together hold roughly 20% of our National Debt. More shocking is that Social Security holds 40% of the national debt. All of this is simply insane accounting. If a company, a corporation was doing this we would expect, we would demand that our government close them down. The same government that is feeding us this same
information.
How to pay this debt? The answer is simple. You cannot pay this with a few $10,000 toilet seats. You have to cut the big stuff and that is Education, Military, and Welfare (Social Security) of course the people will scream. What they will say, what we will say is cut him not me. Increase his taxes not mine.
So far we've paid the deficit with slight of hand. Interest on a 10 year treasury is below 1%-the lowest in American history. Our Fed is telling us they want a 2% rate of inflation.
Oh and you, if you buy a Treasury pay whatever your highest Federal tax rate in that below 1% that they will pay you.
You are, we are being had.

[DAVES]

I would proffer that to "distort" a fact, there needs to be at least...a grain of truth.

With a 1,000 point drop of the DJIA, that grain of truth in "great"...does not exist in any form of the definition. :oops:

Far as stock market losses. I don't recall the number but we've been told ??? 3-4 Trillion have been lost. I dare to ask, I dare to see, if money is real it cannot simply disappear-E=MC2. Thus, it is not real. In fact 80% or so of the dollars floating about do not exist as coins or worthless paper-just computer figures.
Current screaming about a 15.00 minimum wage. Since the dollar is not a true standard as is an inch, a yard, or in metric a centimeter etc all that matters is how long you need to work to buy ?????? People simply do not understand reality. If, you/we raise the minimum wage, everyone earning more than minimum will want, will demand a raise.
The result is a loss of real value of the American Dollar. Simple slight of hand, will reduce the real value of the national debt.
We are being had and it is not one party doing it.

[CoachKandSportsguy]

um, i would not be in a rush to buy based upon a level of any number at the moment. Why? the bond market rates are telling us that something is happening of which we do not know, but will know sometime in the future. The interest rates on treasury bills and notes and bonds are the lowest since the depression, and that was a long time ago and through a lot of ups and downs. It is true that the treasury is managing the supply to keep the interest rates low, and that the current environment is that the world can buy treasuries, which are a lot more customers than just the us domestic population, which distorts the demand to supply relationship of the past.

The interest rate on the 10 year note is below one percent, about 0.78% which means that if you have $1M dollars and bought 10 year us government bonds, you would get $7,800 a year in interest for the next ten years. and in 10 years, that will be $5,600 of buying power in todays world after inflation.

What this means is that smart investors are pricing in a credit event, similar to 2007, somewhere, and the two most likely places are the oil industry, and the hospitality industry. The oil industry due to the actions of Saudi Arabia late last week, driving down prices and increasing supply being ****ed at Russia for not participating in the opec supply cut, and the probability of bankruptcies in high debt , marginal cash low hospitality companies, large and small, primarily in the corporate debt market.

So just like buffet sat on his hand for two years and did nothing in the early 70s, until the valuations were ridiculous cheap, now is not the time to try to catch a falling knife, as the future shape of the economic recovery may be an L versus a V. Hence my not owning much equities and waiting for a large devaluation before buying again.

YMMV

sportsguy

[rustyp]

Realize, we are being had. Say something often enough and people think it is true and it makes sense. We are being told the deficit is. truth I am loosing count, 26 Trillion dollars? Stop, think realize do we understand what one Trillion dollars is let alone 26 Trillion? Who do we owe that money to? Most of us would say China. I looked it up a while ago, actually we owe slightly more to Japan but more important, together Japan and China together hold roughly 20% of our National Debt. More shocking is that Social Security holds 40% of the national debt. All of this is simply insane accounting. If a company, a corporation was doing this we would expect, we would demand that our government close them down. The same government that is feeding us this same
information.
How to pay this debt? The answer is simple. You cannot pay this with a few $10,000 toilet seats. You have to cut the big stuff and that is Education, Military, and Welfare (Social Security) of course the people will scream. What they will say, what we will say is cut him not me. Increase his taxes not mine.
So far we've paid the deficit with slight of hand. Interest on a 10 year treasury is below 1%-the lowest in American history. Our Fed is telling us they want a 2% rate of inflation.
Oh and you, if you buy a Treasury pay whatever your highest Federal tax rate in that below 1% that they will pay you.
You are, we are being had.

The national debt is $23.4 trillion. That is how much the government owes total. The deficit for 2020 is projected at over $1 trillion. The deficit is the difference between how much we spend in a year Vs how much we collect. Thus for 2020 we are projecting to add another $1 trillion to the debt making it close to $25 trillion.

Now for the scary part. You are correct that most people do not realize what a trillion is. Here is a good way to visualize a trillion. It uses time as the base:

- A million seconds = a little more than 12 days
- A trillion seconds = 32,000 years (yes I said 32 thousand no decimal point error).

[tophcfa]

Realize, we are being had. Say something often enough and people think it is true and it makes sense. We are being told the deficit is. truth I am loosing count, 26 Trillion dollars? Stop, think realize do we understand what one Trillion dollars is let alone 26 Trillion? Who do we owe that money to? Most of us would say China. I looked it up a while ago, actually we owe slightly more to Japan but more important, together Japan and China together hold roughly 20% of our National Debt. More shocking is that Social Security holds 40% of the national debt. All of this is simply insane accounting. If a company, a corporation was doing this we would expect, we would demand that our government close them down. The same government that is feeding us this same
information.
How to pay this debt? The answer is simple. You cannot pay this with a few $10,000 toilet seats. You have to cut the big stuff and that is Education, Military, and Welfare (Social Security) of course the people will scream. What they will say, what we will say is cut him not me. Increase his taxes not mine.
So far we've paid the deficit with slight of hand. Interest on a 10 year treasury is below 1%-the lowest in American history. Our Fed is telling us they want a 2% rate of inflation.
Oh and you, if you buy a Treasury pay whatever your highest Federal tax rate in that below 1% that they will pay you.
You are, we are being had.

Agree with a lot of what you stated, specifically that our countries deficit/debt level is the most toxic cloud hanging over our country’s future. There is no way to reduce our deficit and pay down our debt without severe pain. The longer our leaders take to finally address the problem, the bigger the bubble gets. The bigger the bubble gets, the worse the explosion will be when the bubble finally bursts.

Long standing financial theory has been thrown out the window. Interest rates used to be set so that bond holders would earn a REAL rate of return, above the inflation rate. If inflation was expected to run at 2%, interest rates used to be set around 3 1/2 to 4%. When the economy was good, higher rates would keep the economy from overheating and keep inflation in check. Good economy’s were not fueled by low rates and cheap debt, but rather real fundamentally solid underlying economic growth. Then when the economy began to slow down, and inflation resulantly became less of a concern, there was adequate room to lower rates TEMPORARILY to reignite the economy while still providing bond holders with a positive REAL, inflation adjusted, rate of return. During strong economies, our country ran a budget SURPLUS and PAID DOWN our debt, leaving comfortably breathing room to run TEMPORARY deficits during periods of economic slowdown.

Unfortunately, sound historical financial and economic logic and theory has been abandoned. Interest rates are no longer set to allow bond holders to earn a REAL rate of return, we run huge budget defects every year regardless of the strength of the economy, our national debt never gets paid down but instead grows at an exponential pace, and economic growth is fueled by cheap borrowing and ever increasing debt, not strong underlying fundamentals. We learned nothing from the last severe housing market economic crisis fueled by cheap and poorly underwritten debt and unstainable leverage. Instead of learning from our mistakes, our country doubled down on the same mistakes. Unsustainable economic practices can survive for a long time and nobody really knows when the bubble will finally burst, just that eventually it is inevitable.

One thing about the above post that I can’t let go and have to comment on is the statement that social security is welfare. Both social security and Medicare are often referred to as entitlements and in lesser references welfare. Both programs are in the crosshairs of the easiest way for the government to cut it’s out of control spending. Welfare is designed for the needy that are not capable of providing entirely for themselves and entitlements are handouts to people who did little or nothing to earn them. As someone who paid into both of those programs for my entire working career, I do not feel that I am entitled to receive benefits and the benefits I am owed certainly are not welfare. The benefits I expect to receive from these programs are OWED to me as repayment for all the money I paid into the programs over my working career. If I was able to keep all the money I paid into those programs, and invest it myself, then I wouldn’t need the benefits or be owed anything.

[jebartle]

Realize, we are being had. Say something often enough and people think it is true and it makes sense. We are being told the deficit is. truth I am loosing count, 26 Trillion dollars? Stop, think realize do we understand what one Trillion dollars is let alone 26 Trillion? Who do we owe that money to? Most of us would say China. I looked it up a while ago, actually we owe slightly more to Japan but more important, together Japan and China together hold roughly 20% of our National Debt. More shocking is that Social Security holds 40% of the national debt. All of this is simply insane accounting. If a company, a corporation was doing this we would expect, we would demand that our government close them down. The same government that is feeding us this same
information.
How to pay this debt? The answer is simple. You cannot pay this with a few $10,000 toilet seats. You have to cut the big stuff and that is Education, Military, and Welfare (Social Security) of course the people will scream. What they will say, what we will say is cut him not me. Increase his taxes not mine.
So far we've paid the deficit with slight of hand. Interest on a 10 year treasury is below 1%-the lowest in American history. Our Fed is telling us they want a 2% rate of inflation.
Oh and you, if you buy a Treasury pay whatever your highest Federal tax rate in that below 1% that they will pay you.
You are, we are being had.

Why not cut same percentage of EVERYTHING, deficit problem solved????

[blueash]

Why not cut same percentage of EVERYTHING, deficit problem solved????

You know they tried that don't you? The Budget Control Act of 2011 was to equally cut defense and non-defense spending. It was based in part on the mandated expiration of the Bush tax-cuts due to end in 2012 which had increased the deficit. Of course those tax cuts were not allowed to expire [and more were enacted] . And of course, the bipartisan agreement to equally share the spending cuts between the military and non-military costs was thrown into the garbage by one side once they took control of the budget for later years.

Look it up for yourself. Don't trust my telling of history. Sequestration is a good search word.

[rustyp]

Why not cut same percentage of EVERYTHING, deficit problem solved????

Then what do you do with the debt problem ?

[jebartle]

Then what do you do with the debt problem ?

Same, same!

[jebartle]

You know they tried that don't you? The Budget Control Act of 2011 was to equally cut defense and non-defense spending. It was based in part on the mandated expiration of the Bush tax-cuts due to end in 2012 which had increased the deficit. Of course those tax cuts were not allowed to expire [and more were enacted] . And of course, the bipartisan agreement to equally share the spending cuts between the military and non-military costs was thrown into the garbage by one side once they took control of the budget for later years.

Look it up for yourself. Don't trust my telling of history. Sequestration is a good search word.

Vaguely remember. Cut congress benefits accordingly, hmmmm, pretty sure they won't go for that cut.

[Kenswing]

Looks like another bad day coming up tomorrow. The 5% down limit has already been triggered on futures.

[ColdNoMore]

Oil crashing...being one reason.


Stock market news live: Oil crashes, stock futures crater on coronavirus, crude war fears (https://finance.yahoo.com/news/stock-market-news-live-stock-oil-futures-crater-on-coronavirus-crude-war-fears-224253935.html)

[MorTech]

Whoa! The markets just got BitchSlapped by Russia...Oil at $28.

Buckle Up!

Fed a-gonna-be bailing.

[rustyp]

This is one I don't remember. Indeed this morning the futures are frozen at a projected 5% loss. Has this actually happened to FUTURES before since the stop mechanism has been instituted ? When the market opens and the futures indicate a loss of more than 5% do they let the market trade and then immediately shut it off as soon as the 5% is triggered ?

Europe markets are down 7%. Do they stop trading those markets like the US markets ?

[rustyp]

I did just learn on a financial network the markets do open even if the Futures are frozen at minus 5% and will close at the following trigger points if tripped:

- Minus 7% Close for 15 minutes
- Minus 13% Close an additional 15 minutes
- Minus 20% - Close for remainder of the day

Still haven't found what foreign market rules are.

[Moderator]

The topic is the state of the stock market.

A number of partisan political posts had to be removed.

Please stay on topic or the thread will be closed.

Moderator

[ColdNoMore]

US Stock Markets trading halted! :(


U.S. stocks halted as markets plummet on coronavirus fears [Video] (https://finance.yahoo.com/video/u-stocks-halted-markets-plummet-140002756.html)

[Kenswing]

Whoa! The markets just got BitchSlapped by Russia...Oil at $28.

Buckle Up!

Fed a-gonna-be bailing.
More like the Saudis called Russia's bluff then went all in.. lol

[rustyp]

I’m buying Royal Caribbean and American Airlines on Monday.

Did you buy today ? I'm a chicken - I'm holding out for two consecutive significant up days. How do feel about big oil ? Will some of the giants continue to pay a dividend ?

[alwann]

Tell me how much Warren Buffet lost so far and I won't feel as bad. Even so, those free dinner come-ons are having more appeal. :D

[Kenswing]

Did you buy today ? I'm a chicken - I'm holding out for two consecutive significant up days. How do feel about big oil ? Will some of the giants continue to pay a dividend ?
Got Exxon at $43. That makes the dividend around 7%. They have a great dividend history but you never know. Will continue to accumulate on the way down.

[rustyp]

Got Exxon at $43. That makes the dividend around 7%. They have a great dividend history but you never know. Will continue to accumulate on the way down.

Yes - I'm looking at exactly that - Exxon. I forecast only the strongest of big oil surrives out of this romp. I would be leery of the cruise industry. I foresee a lot of regulation coming there. However airlines are a necessity and maybe worth a serious consideration.

[tophcfa]

This falling knife is very sharp. Don't try to catch it on the way down, wait until it hits the floor, and don't try to pick it up if it bounces off the floor, wait for it to firmly settle down on the floor.

[MorTech]

There is no way Our Rulers/Owners are going to allow oil under $50 for very long.

I figure free market discovery price for oil is about $30.

Energy is huge to USA financials...Putin knows this.

For all those who think the national debt is a huge problem, how much is the yearly nut to service the $23T debt?

[MorTech]

More like the Saudis called Russia's bluff then went all in.. lol

Check this out...Our Owners must be fuming at smug Putin :)

Russia swiftly reacts to bloodbath in markets, says it’s ready for $25 oil — RT Business News (https://www.rt.com/business/482638-russia-oil-prices-fall/)

[Jack58033]

Pandemic crashing. Oil prices crashing and the Saudis playing hardball. Credit markets shaking . Banks shaking with huge loans outstanding to the oil company's. Recession? You betcha. We are far from the bottom. Inexperienced leadership at the top. This will be a rough ride. Are your Annuities safe? Maybe. Sleep tight.

[dewilson58]

Pandemic crashing. Oil prices crashing and the Saudis playing hardball. Credit markets shaking . Banks shaking with huge loans outstanding to the oil company's. Recession? You betcha. We are far from the bottom. Inexperienced leadership at the top. This will be a rough ride. Are your Annuities safe? Maybe. Sleep tight.




Not quite. :ohdear:




Market is up.




:ho:

[Kenswing]

I'm guessing there's a lot of short covering going on. Let's see if we can actually hold onto a gain today..

[dewilson58]

I'm guessing there's a lot of short covering going on. Let's see if we can actually hold onto a gain today..




She held.


I would love to see the market get back "to investing". Forget day-traders, Forget computer-trading. You purchase a stock and you must hold it a minimum of 30 days. I know, I know.................it sounds like a devil talking.


Thanks for a good day. :ho:

[MorTech]

Big bailouts coming for the "connected" 10%...At your grandchildren's expense...WooHoo! It's good to be a counterfeiting Central Banker Gangster...Great work if you can get it.

[rustyp]

Big bailouts coming for the "connected" 10%...At your grandchildren's expense...WooHoo! It's good to be a counterfeiting Central Banker Gangster...Great work if you can get it.

Or maybe at the expense of your social security. Payroll tax holiday ?

[CoachKandSportsguy]

Twitter (https://twitter.com/bespokeinvest/status/1237473577877868548/photo/1)

Care of @bespokeinvest

S&P makes it 10 for 10 in rallying at least 2%+ on the day after a Monday 5%+ drop. Gained 4.94% today, slightly better than the average gain of 4.2%. http://bespokepremium.com

one can look at the chart and extrapolate that this time is similar to all the others, and that the market will be up at some time in the future. At some point the flu will pass, and maybe the oil price will return, however, those are not an immediate given. However, after waiting 100% in bonds in my 401K for over 18 months, I put 20% to work at 20 % down Monday close. I will put another 20-30 % to work at 30% down. But being patient is always a good idea.

The future is always uncertain, sometimes more uncertain than at other times.

sportsguy

[Bay Kid]

What goes up will come down. What comes down will go up. The guess is when?

[dewilson58]

What goes up will come down. What comes down will go up. The guess is when?




Yep. And most market timers miss. :faint:

[Chi-Town]

Up a thousand, down a thousand. Sound familiar? But doubt if it has the staying power of 2008.

[tophcfa]

My advise would be not to get caught up in daily price movements, focus on volatility levels and longer term price trends. My expectation is for continued high levels of volatility with some up and some down days, but for the overall longer term trend to continue to be negative. When/if the Dow Jones hits 20,000 I am in at a 25% allocation. After that I will continue to add exposure each time the Dow declines another 1,500 points, if it happens. I hope my expectations are wrong, but it’s good to have a plan.

[Kenswing]

At what point does Boeing start to look attractive? lol

[CoachKandSportsguy]

Boeing looks attractive near zero. They have exhausted their first emergency draw on their line of credit and have now requested the max at $13 B or some number. When that is exhausted, bankruptcy

[Chi-Town]

S & P -6%. Can't wait for that bell to ring.

[CoachKandSportsguy]

When/if the Dow Jones hits 20,000 I am in at a 25% allocation.

I am back in at 50 % at SP500 2000, which is the plan, but I am short 1,000 shares of SPY until then

Good luck,

sportsguy

[CoachKandSportsguy]

They are targeting the circuit breaker of 7% at the close to trap peeps (from the rate of descent at this time of day) Its a prediction, at 3:20, not a fact, but has a shelf life of 40 minutes to come true, or not. Reasoning, the White House just declared Corona virus meetings classified from now on. Which is F* ridiculous. . .

[Rapscallion St Croix]

If this wakes voters to reality, then I consider it god sent.

Wow, you mean COVID-19 can be eradicated by Executive Order or legislation and we just need the right people in office to get 'er done?

[retiredguy123]

So, the S&P 500 Index just closed at 2741. One year ago, it closed at 2783. No big deal.

[MorTech]

5 more down days like today and S&P 500 will be at fair value :)

[rustyp]

5 more down days like today and S&P 500 will be at fair value :)

What is fair value ?

[tophcfa]

What is fair value ?

Fair value is the value that reflects discounted future earnings. Since no one knows what future earnings will be, or uses the same discount rate, fair value is the market consensus of these two factors. When the market can not reach a consensus of what fair value actually is, volatility exists, which is where we currently are.

[MorTech]

What is fair value ?

I figure S&P500 1500 low...2000 high. The USD almost guarantees high side.

BTW - You can just dismiss those who fixate on the DJIA :)

[MorTech]

"Gubbermint Leadership" is always code for stealing wealth from the bottom 90% (aka, The Basket of Deplorables) and transferring it to the upper 10% (aka, The 1%).

Bring it on! :)

[CoachKandSportsguy]

Fair value is the value that reflects discounted future earnings. Since no one knows what future earnings will be, or uses the same discount rate, fair value is the market consensus of these two factors.

That is the theory, and having tried it, and watched investment bankers try to do it, and having been in corporate M&A, tried it my self with inside information, reality doesn't work so well. Damodarian who wrote a novel on valuation has never been able to make money with his DCF models and actual investments.

With the markets limit down overnight, now is a good time to just be patient and wait.

18 holes to discuss the markets?

sportsguy

[MorTech]

Ask Yourself - What would Jesse Livermore do? LOL

(Everybody still in the speculation game should read his book.)

[MorTech]

$300B tossed at Repo - $1.5T QE (aka, Stealing)...just today.

[MorTech]

Another Federal Reserve "Catch the Falling Knife" Friday?

[dewilson58]

Last night was a great time to purchase cruise line stocks. Sold this afternoon and got back +100% of my prior losses. I'm a great trader.






(and everything posting on ToTV is true)

[retiredguy123]

Last night was a great time to purchase cruise line stocks. Sold this afternoon and got back +100% of my prior losses. I'm a great trader.






(and everything posting on ToTV is true)
Why didn't you post that yesterday?

[MorTech]

Some catch of the falling knife just before close...eh? Wonder who did that :) There is no price discovery...just theft and fraud. Central Bank economics is just a confidence game. Trump knows this...He has been in the game all his life.

Repo to $500B per day. QE to multi-trillions coming. The Central Bankers will own us all.

Give me a criminal gang with guns and jails called "Government" and a counterfeit money racket called "Central Bank" and I would own everything and everyone as well. LOL.

It must be getting more difficult for them. Scaring everyone with a virus in order to cover your criminality is pretty extreme. But it has been incredibly effective :)

[jimbomaybe]

lurked in background here but never posted, I think your broker is right, trying to "plan" for a disaster,correction, meltdown during the process is like trying to catch a falling safe, a balanced portfolio of investments constructed for your situation and risk tolerance is always the best long term approach

[Kenswing]

The Fed just dropped rates to 0%. :shocked:

[tophcfa]

When the only thing that supports the market is the Federal reserve shooting one of the last arrows in their quiver, don’t make the mistake of thinking Friday’s bounce is the end of the bear market.

[rustyp]

The Fed just dropped rates to 0%. :shocked:

My opinion - huge mistake. Fed just signaled we are in big trouble here. No more bullets left in the quiver. My guess is this will backfire tomorrow. 0% interest great if you are borrowing not good if you are a senior just trying to be safe. The Fed just gave the banks a free coupon to charge us for the privilege of holding our money from this day forward.

[Kenswing]

When the only thing that supports the market is the Federal reserve shooting one of the last arrows in their quiver, don’t make the mistake of thinking Friday’s bounce is the end of the bear market.

My opinion - huge mistake. Fed just signaled we are in big trouble here. No more bullets left in the quiver. My guess is this will backfire tomorrow. 0% interest great if you are borrowing not good if you are a senior just trying to be safe. The Fed just gave the banks a free coupon to charge us for the privilege of holding our money from this day forward.Yeah.. Investors weren't impressed. Futures are already limit down..

[dewilson58]

Symbolic. Banks are not borrowing. They are liquid.


Fed still has bullets to fire.

[dewilson58]

Why didn't you post that yesterday?




:clap2:

[tophcfa]

Symbolic. Banks are not borrowing. They are liquid.


Fed still has bullets to fire.

The only bullets they have left to fire will be at the USA taxpayers, especially the younger generations. The Feds last remaining bullet to fire now that Fed Fund rates are zero is injecting liquidity into the markets (referred to as quantitive easing). QA is fed speak to disguise going further into debt, which can only go two ways. Default, or on the backs as a very heavy burden of future generations. The third possible outcome, paying down the debt by running many years of budget surplus, has become an unattainable pipe dream given our countries addiction to spending and the fact that simply paying the interest on the debt will eat up most of the tax revenues. Unfortunately, our Governments lack of fiscal discipline, going back through multiple administrations, have left us in this very precarious situation. Oh well, at least the golf courses are still open, and even without a priority membership I can get a good T-Time these days.

[MorTech]

Our Fed Owners just shot their entire wad...Unlimited currency counterfeiting and purchasing, aka, Stealing.
Let's see what they do today. Wanna guess?

Will losses magically disappear at 3:00 PM?

[MorTech]

Who needs nuclear weapons to destroy the world when all you need is a central bank, mass media, and a virus scare :) All they have to do now is link the words "Climate Change Causes Viruses", and they will own us all.

[Kenswing]

Silver under $13 per ounce.. Wow!

[OrangeBlossomBaby]

Intel is down to 44.61. I'm starting to be slightly disappointed. Just slightly since I don't own much of it. If it becomes worthless I'll be out the initial $50 investment. But at its height, it was worth over $8000. That would've been a couple of really nice dinners out, a new bathing suit, and the cash to combine with a trade-in on my old jalopy for a decent newer vehicle.

[rustyp]

Intel is down to 44.61. I'm starting to be slightly disappointed. Just slightly since I don't own much of it. If it becomes worthless I'll be out the initial $50 investment. But at its height, it was worth over $8000. That would've been a couple of really nice dinners out, a new bathing suit, and the cash to combine with a trade-in on my old jalopy for a decent newer vehicle.

You got to know when to hold them, know when to fold them, know when to walk away and know when to run.

[alwann]

That is the theory, and having tried it, and watched investment bankers try to do it, and having been in corporate M&A, tried it my self with inside information, reality doesn't work so well. Damodarian who wrote a novel on valuation has never been able to make money with his DCF models and actual investments.

With the markets limit down overnight, now is a good time to just be patient and wait.

18 holes to discuss the markets?

sportsguy

Well, I kinda planned my finances to die on the day of my last dollar. Death may come sooner than anticipated now.:a20: Meanwhile, gas is cheap and I'm stockpiling in anticipation of the hurricane.

[ColdNoMore]

Prime is now 0.0% - 0.25%.

"Money for nothin' and..."

We're now basically out of ammunition for stimulus, except for cutting those items (Social Security/Medicare/Medicaid/Etc.) that have been considered until now..."the third rail."

It will be interesting to see, who reaches in first...to be electrocuted.

I suppose some people might think another tax cut for the wealthy and corp's might help, so +-75% of companies can buy back even more stock...thereby helping the 51% of Americans who own stocks.

Not sure how that's gonna help the other 49% though. :ohdear:

[ColdNoMore]

Depending on how far mortgage rates fall, some people may be looking at financing/refinancing their homes...and taking a lot of equity out.

Particularly for those people whose retirement is mostly in a defined contribution plan...and not a solvent defined benefit plan.

A 70-80 year old that takes out a 30 year mortgage, uses the money to buy more stocks at the lowest level in years, or just have the cash as a buffer for uncovered medical expenses...might not be a bad option.

I, for one, have a lot of empathy right now for those who aren't fortunate enough to have a solid and well-funded...defined benefit plan.

Because the scary part is, that a lot of the old defined benefit plans are heavily invested in stocks...so as to maintain that defined benefit for retirees.

Here's hoping we all pull out of this in good shape...and soon. :(

[BK001]

You got to know when to hold them, know when to fold them, know when to walk away and know when to run.



Ha, and therein lies the secret. :bigbow:

[manaboutown]

For some time Buffet has been chastised for sitting on a large cash position. I have hung in there with him as an investor in BRK as he is a lot smarter than I am. It will be interesting to see if, when and what he buys.

IMHO the P/Es of the S&P and DJIA have been running quite high. They likely will dip below their historical 15ish average before they stop dropping.

We live in interesting times.

[tophcfa]

Depending on how far mortgage rates fall, some people may be looking at financing/refinancing their homes...and taking a lot of equity out.

Particularly for those people whose retirement is mostly in a defined contribution plan...and not a solvent defined benefit plan.

A 70-80 year old that takes out a 30 year mortgage, uses the money to buy more stocks at the lowest level in years, or just have the cash as a buffer for uncovered medical expenses...might not be a bad option.

I, for one, have a lot of empathy right now for those who aren't fortunate enough to have a solid and well-funded...defined benefit plan.

Because the scary part is, that a lot of the old defined benefit plans are heavily invested in stocks...so as to maintain that defined benefit for retirees.

Here's hoping we all pull out of this in good shape...and soon. :(

Don’t make the mistake of assuming defined benefit plans, which were questionably funded before the market crash and are typically invested very heavily in risky assets classes, will come out of this solvent. And also don’t assume the Pension Benefit Gurantee Corporation will have the capital to bail out multiple insolvent plans.

[rustyp]

Don’t make the mistake of assuming defined benefit plans, which were questionably funded before the market crash and are typically invested very heavily in risky assets classes, will come out of this solvent. And also don’t assume the Pension Benefit Gurantee Corporation will have the capital to bail out multiple insolvent plans.

That is why I took the cash equivalent in 2005 when I retired. But it takes discipline to manage that money. And of course once again I was the idiot per my peers ! Ha Ha. My sleep has never been better.

[ColdNoMore]

Don’t make the mistake of assuming defined benefit plans, which were questionably funded before the market crash and are typically invested very heavily in risky assets classes, will come out of this solvent. And also don’t assume the Pension Benefit Gurantee Corporation will have the capital to bail out multiple insolvent plans.

That was actually the exact point...I was trying to make. :thumbup:

A lot of people who have defined benefit retirements, feel comfortable that at least they aren't watching their defined contribution plans losing massive amounts...while not fully understanding what funds those defined benefit plans.

And you're absolutely correct about not assuming that the PBGC... can't become insolvent. :(

[Heyitsrick]

Many defined benefit plans (ok, the ones that still exist) have an option for a lump-sum payout at the outset of benefits, vs. depending upon the company to cover the pension over one's lifetime. The company's pension annuity payout is probably somewhat better than one could do on their own when purchasing an annuity in the outside market But, you can also use the lump sum for other investments, like IRAs.

I like my company, but do I think their pension is going to be solvent as long as I need it? No.

[collie1228]

My company has (criminally) underfunded its retirement program for years - despite being a large government contractor who gets much of its defined benefit pension programs underwritten by the government in its defense contracts. I love the monthly checks, but I have a big concern about their ability to continue over the long run, as the actual funding of the program was underfunded by over $17 billion in 2018. Since then they have added some new funding, but obviously the current state of the investment world will have a further negative impact.

[Enjoying Life]

Is this a good time to sell gold and can you give reputable place to sell? Secondly did anyone hear of the possible withdrawal of up to $100,000 from our IRA's without paying taxes? A friend recently said she heard the latter is to happen soon.

[retiredguy123]

Is this a good time to sell gold and can you give reputable place to sell? Secondly did anyone hear of the possible withdrawal of up to $100,000 from our IRA's without a tax penalty?
No, about the IRA. But, if you are over 59 1/2, you can withdraw any amount from a traditional IRA without a "penalty". You just need to pay tax on it.

[Paper1]

My company has (criminally) underfunded its retirement program for years - despite being a large government contractor who gets much of its defined benefit pension programs underwritten by the government in its defense contracts. I love the monthly checks, but I have a big concern about their ability to continue over the long run, as the actual funding of the program was underfunded by over $17 billion in 2018. Since then they have added some new funding, but obviously the current state of the investment world will have a further negative impact.

A number of us are facing underfunded private sector pension funds, the price you pay for "greatest stock market ever" and taxpayer backing of these pension funds. Public sector will soon have to worry soon.

[MorTech]

Watching the Central Bank counterfeiting criminals buy the entire world with Trillions$ they create out of thin air is just surreal. Not 1 in 1000 understand what is really going on. I wouldn't worry about the Taxtaker Parasite Sector pension funds...They will be bailed out State and Local.

[capecoralbill]

When the only thing that supports the market is the Federal reserve shooting one of the last arrows in their quiver, don’t make the mistake of thinking Friday’s bounce is the end of the bear market.

TOPHCFA Hoboy!! Were you right. I own about 10 000 shares of RWM for the last 10 years, I think now is the time to sell, what do you think....? They represent almost half of my assets including my house.