Talk of The Villages Florida

Talk of The Villages Florida (https://www.talkofthevillages.com/forums/)
-   Investment Talk (https://www.talkofthevillages.com/forums/investment-talk-158/)
-   -   Anyone else preparing for a big selloff? (https://www.talkofthevillages.com/forums/investment-talk-158/anyone-else-preparing-big-selloff-354511/)

manaboutown 11-14-2024 12:33 PM

Anyone else preparing for a big selloff?
 
The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl

gatorbill1 11-14-2024 12:44 PM

I moved to all cash and some short term bond funds recently. Scary right now and next year. I can't afford a big loss but I can live with very small gains.

CoachKandSportsguy 11-14-2024 12:48 PM

Yes, the current SP500 P/E of Forward earnings is approx 22, which has been a ceiling for most rallies.
The Equity Risk Premium (ERP) has just gone negative versus the 10 year yield, which means that the stock market earnings' growth is less that the 10 year interest grate, and equity is supposed to be riskier than the 10 year treasury.
This is due to the sudden rise in interest rates against very little adjustment in the future earnings or in the index price.

Volatility (VIX) index, is low again, which is a sign of lack of expectation of a sell off
The sentiment bullish index of AAII bulls + II Bulls + MarketVane Bulls + NAAIM percent invested is in the 90 percent range of historically scaled results. . .the highest 90%+ was in July, and currently we are in the 80%s, with the decline mostly in AAII, not in the other three professional sentiment rankings. . still very high or greed phase.

So one valuation indicator and two sentiment indicators are all in the GREED / PERFECTION range, and momentum has yet to change. .

So currently I am all in BIL as of Monday until the market corrects and gives a buying opportunity.

YMMV

Two Bills 11-14-2024 12:57 PM

Quote:

Originally Posted by manaboutown (Post 2386402)
The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl

I make you right.
Were I still playing the market, I would definitely have taken my profit, and run to to the hills.
All bubbles burst eventually.

CoachKandSportsguy 11-14-2024 01:06 PM

if you want to get historical SP500 earnings from SP for the last 30 years, click on the link below

https://www.spglobal.com/spdji/en/do...0-eps-est.xlsx

Clicking should autodownload an excel workbook, with the SP500 earnings, and other great data, plus the current earnings forecast for the next 4+ quarters. .

good luck to us

justjim 11-14-2024 01:11 PM

Not a trader. Made my portfolio adjustments in July with my financial adviser. Remain diversified. It’s been a good year.

CoachKandSportsguy 11-14-2024 01:15 PM

If you want to read an analysis on what investments work well under different inflation assumptions, here is a great web page to research

Varying by Degrees: Fire & Ice 2.0 | Man Institute | Man Group

kkingston57 11-14-2024 07:44 PM

Quote:

Originally Posted by rustyp (Post 2386409)
I'm staying in. I have a promise that the market won't crash just the greatest economy one can imagine ahead.

Thought so in the dot com era, the mortgage crisis years and 2020C(covid). What goes up must come down

Stu from NYC 11-14-2024 07:54 PM

Quote:

Originally Posted by kkingston57 (Post 2386458)
Thought so in the dot com era, the mortgage crisis years and 2020C(covid). What goes up must come down

But sometimes the down part is mild and most people miss the bottom and should have stayed the course.

tophcfa 11-14-2024 08:02 PM

My crystal ball smashed a few years ago. Here is hoping winter green fees will go down if the market crashes?

dewilson58 11-14-2024 09:06 PM

Market Timing Experts???


:posting:

Rainger99 11-14-2024 09:43 PM

Quote:

Originally Posted by gatorbill1 (Post 2386404)
I moved to all cash and some short term bond funds recently. Scary right now and next year. I can't afford a big loss but I can live with very small gains.

Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

CoachKandSportsguy 11-14-2024 10:15 PM

Quote:

Originally Posted by Rainger99 (Post 2386472)
Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

not in an IRA. .

but you mean capital gains as a tax on success? I will gladly make millions and pay the appropriate capital gains versus losing money and waiting to return to a gain or taking a loss

FloridaGuy66 11-15-2024 12:54 AM

Quote:

Originally Posted by Rainger99 (Post 2386472)
Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

You can move your investments to money market funds which is essentially the same as moving to cash but you're getting a whopping 0.4% return.

Mazjaz 11-15-2024 04:46 AM

[QUOTE=manaboutown;2386402]The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl[I


I did the same this week.

RoadToad 11-15-2024 05:10 AM

Quote:

Originally Posted by FloridaGuy66 (Post 2386482)
You can move your investments to money market funds which is essentially the same as moving to cash but you're getting a whopping 0.4% return.

Do you mean 4% vs .4 ?

rsmurano 11-15-2024 06:02 AM

Money market same as cash? Not sure where you get that info but I have millions in a money market making more than 5% and have for years. It did go down a few months ago to 4.9% but came back up, which is still better than any cash savings account.
As for sky high market, I made a large 6-digit gain in earnings the day after the election a week ago with the rest of my money invested in index funds and a couple stocks.
If you got out of the market in 2007/2008 and in 2020, you missed some of the best comebacks. The 2007/2008 collapse took longer to recover but in 2020, we all knew it was going to a ‘v’ shape recovery and I doubled my money by staying in.
Today, I look at the world economy, and our current political and economic environment before looking at stock market tea leaves to get a feel about the market. I sold everything at its highest point in late 2021 and moved everything to money markets earning 5.x% because of our policies and incoming inflation. In 2023 I started getting back in slowly and by December 2023, I had the majority of my money in index funds and a few stocks. This has been a banner 12 months. As for charts/reports on the market, what did the tea leaves tell you about Apple, meta, nvidia, tesla 1.5 years ago? I got into these over 1.5 years ago when meta and tesla were < $100 a share, Apple in the $120’s, and I can’t remember what nvidia was before the split. I sold some of these a couple months ago with nice profits to get back into more stable index funds making 30+%.
People’s feelings today are exactly what happened in 2016. Back then, A lot of people were scared and sold, others like me, bought more or stayed fully invested.
When people get scared about market evaluations, that’s when you make money in the market. The only issues I see now are: we should not be lowering rates because we aren’t done with inflation, consumers have the largest credit debt in history and defaults usually follow, the wars, and investors making too much hype out of AI, the same way they did about .com in the early 2000’s and we know what happened then.
I have no problem hitting the sell button and moving everything back into money market if any of these issues get worse.

CoachKandSportsguy 11-15-2024 06:47 AM

Sell Hubris, Buy Humiliation
Sell High, Buy Lower

BIL is 3-6 month TBILLS, which are currently over 5% before Cap gains, which is what money market buys for their returns. . .

What's a normal market? Less mega cap dominance of the weighted price indexes, less correlation of component movements. Less passive investment, which increases component correlation which increases volatility on two fronts, and less dependence upon money supply / liquidity growth and more on investment growth.

from a recent Chinese dinner
GFTU



Good Fortune to You

Desiderata 11-15-2024 06:59 AM

Quote:

Originally Posted by CoachKandSportsguy (Post 2386405)
Yes, the current SP500 P/E of Forward earnings is approx 22, which has been a ceiling for most rallies.
The Equity Risk Premium (ERP) has just gone negative versus the 10 year yield, which means that the stock market earnings' growth is less that the 10 year interest grate, and equity is supposed to be riskier than the 10 year treasury.
This is due to the sudden rise in interest rates against very little adjustment in the future earnings or in the index price.

Volatility (VIX) index, is low again, which is a sign of lack of expectation of a sell off
The sentiment bullish index of AAII bulls + II Bulls + MarketVane Bulls + NAAIM percent invested is in the 90 percent range of historically scaled results. . .the highest 90%+ was in July, and currently we are in the 80%s, with the decline mostly in AAII, not in the other three professional sentiment rankings. . still very high or greed phase.

So one valuation indicator and two sentiment indicators are all in the GREED / PERFECTION range, and momentum has yet to change. .

So currently I am all in BIL as of Monday until the market corrects and gives a buying opportunity.

YMMV

What does BIL and YMMV stand for? Thanks.

CoachKandSportsguy 11-15-2024 07:02 AM

Quote:

Originally Posted by Desiderata (Post 2386524)
What does BIL and YMMV stand for? Thanks.

BIL is a market ETF which buys and holds Treasury Bills of 3 to 6 month diuration

YMMV stands for Your Mileage May Vary, which references the difference between theory and reality. . . because everyone situation is unique

ithos 11-15-2024 07:38 AM

Quote:

Originally Posted by dewilson58 (Post 2386468)
Market Timing Experts???


:posting:

Ever heard of Michael Burry?
Who Is Michael Burry?

RoboVil 11-15-2024 07:41 AM

Quote:

Originally Posted by manaboutown (Post 2386402)
The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl

The Buffett Indicator is over 200%. So, I am very cautious and would only invest in individual stocks which might not fall as much in a big selloff. Dell and GOOG at the moment seem reasonably valued and less likely to fall horribly if there is a crash. On the other hand, there is a lot of cash tied up in money market accounts which will help the market as interest rates go down. Be safe out there.

Janie123 11-15-2024 07:50 AM

Quote:

Originally Posted by Rainger99 (Post 2386472)
Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

Not if you are talking about IRAs and 401k’s but yes if regular investment accounts. Another reason I use to continue to move IRAs to Roths… no RMDs moved to an investment account so I would be able to move in and out of cash with no tax penalty. Currently my investment account is my cash world… mostly CDs and somewhat protected structured notes..

midiwiz 11-15-2024 07:54 AM

Quote:

Originally Posted by manaboutown (Post 2386402)
The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl

has not effected my portfolio at all. but I don't play the way y'all do. S&P is the least of my concerns. I use very specific investments in my portfolio.

Rich42 11-15-2024 08:15 AM

Ever since the stock market started, corrections (or drops if you prefer) have always been followed by even higher increases. How do you think the market got to where it is today? Make sure your portfolio consists of a good allocation of all types of investments and then stay the course. That is the best investment advice you’ll ever get.

gatorbill1 11-15-2024 09:37 AM

Quote:

Originally Posted by Rainger99 (Post 2386472)
Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

Majority of my cash is in IRA's balance is in over 5% CDs

retiredguy123 11-15-2024 09:47 AM

Quote:

Originally Posted by FloridaGuy66 (Post 2386482)
You can move your investments to money market funds which is essentially the same as moving to cash but you're getting a whopping 0.4% return.

When you move non-IRA stock funds to a money market, you will owe capital gains taxes.

jimhoward 11-15-2024 10:15 AM

I wish I were as smart as many here. I can never figure out when to sell everything, and more importantly, when to buy everything back. So I just stay in mostly equities even though I’m always nervous.

I’m also impressed by the high money market returns achieved. I’ve been getting around 5% for the past couple of years. But before that it was much lower.

I have found some nice fixed instruments over the past few years, but the highest yielding ones have short duration or are callable. So those nice returns aren’t really locked in.

retiredguy123 11-15-2024 10:19 AM

Quote:

Originally Posted by jimhoward (Post 2386603)
I wish I were as smart as many here. I can never figure out when to sell everything, and more importantly, when to buy everything back. So I just stay in mostly equities even though I’m always nervous.

I’m also impressed by the high money market returns achieved. I’ve been getting around 5% for the past couple of years. But before that it was much lower.

I have found some nice fixed instruments over the past few years, but the highest yielding ones have short duration or are callable. So those nice returns aren’t really locked in.

The idea is to buy low and sell high. But, some people, who consider themselves smart, do just the opposite.

manaboutown 11-15-2024 10:47 AM

I don't claim to be a market timer. What happened is I sold some real estate in 2022 and 2023 and have needed to make decisions about how to invest the money. I remain mostly invested in real estate but now have more money in the stock market than ever before. At the age of 82 with 83 looming on the horizon I prefer to stay on the cautious side. Like most of the world I follow what Buffett does and he has been selling some stocks that look fine to me and holding the proceeds rather than reinvesting them in other equities. I will not delve into speculating why he is selling but AAPL had become an overwhelming portion of BRK's portfolio and the potential for higher corporate tax rates had reared its ugly head.

HORNET 11-15-2024 12:12 PM

Never tell people how to spend their money

Ptmcbriz 11-15-2024 12:51 PM

Yes I met with my investment guy yesterday. We both agreed there is a big chance of major volatility in the coming months. Based on possible major changes in federal operations, we decided to de-risk the portfolio, so I’m not so exposed. I took my gains, and now in other sectors.

jimhoward 11-15-2024 01:07 PM

The indices are dominated by just a few stocks with enormous capitalization. So everybody is holding the same few stocks whether we know it or not. Another thing to be worried about. Or not.

ElDiabloJoe 11-15-2024 01:10 PM

Quote:

Originally Posted by Rich42 (Post 2386556)
Ever since the stock market started, corrections (or drops if you prefer) have always been followed by even higher increases. How do you think the market got to where it is today? Make sure your portfolio consists of a good allocation of all types of investments and then stay the course. That is the best investment advice you’ll ever get.

While I possess advanced degrees, and I am a longtime member of Mensa, I do not have the hubris that many others might. I do not think I cannot outsmart or out-time the markets. The only one that can do that probably got a fiddle of gold to be able to do it. The Oracle.

So, like you, I stick to two strategies: Buy and Hold, and Dollar Cost Averaging. I concur with your perspective, Rich42.

dewilson58 11-15-2024 01:43 PM

Quote:

Originally Posted by ithos (Post 2386534)
Ever heard of Michael Burry?
Who Is Michael Burry?

I didn't realize he is posting on ToTV.

Runway48 11-15-2024 02:20 PM

As long as the US dollar is the reserve currency there will be an upward bias to US equities. So, what goes up does not necessarily go down. But the upward trend is not a straight line. Many end up buying high and selling low. What has worked for me has been to decide on a distribution of equities and fixed income and other assets such as real estate. The idea is to have some orthogonality to the portfolio. For many years I was aggressive with equities, as I've gotten older, I reduced my exposure and at 70 I fixed it to 50% to keep up with inflation. I periodically rebalance to maintain the 50% equities. If the market gets really frothy or depressed, I may do an additional rebalance. I have about 5-10% in a brokerage account to have fun with and while I often pick losers or mediocre stocks, every now and then having one do >10 fold can put a smile on my face. Most importantly, I sleep well at night.

Plinker 11-15-2024 02:24 PM

When is enough enough?

Based on one’s lifestyle, is it not possible to reach a level of assets such that it is no longer necessary to concern yourself with stock market fluctuations? In other words, just invest in those vehicles that provide guaranteed returns. I’m not necessarily speaking of annuities. Mark Twain: “I’m more concerned about the return OF my money than the return ON my money”.
There must be some amount that even inflation would not be a concern.
If your annual expenses average “X” then what multiple of “X” would be enough? Or, at some point, does investing become more of a hobby than a necessity? Also, what would such a conservative portfolio look like?

CoachKandSportsguy 11-15-2024 04:19 PM

Quote:

Originally Posted by Plinker (Post 2386660)
When is enough enough?

Based on one’s lifestyle, is it not possible to reach a level of assets such that it is no longer necessary to concern yourself with stock market fluctuations? In other words, just invest in those vehicles that provide guaranteed returns. I’m not necessarily speaking of annuities. Mark Twain: “I’m more concerned about the return OF my money than the return ON my money”.
There must be some amount that even inflation would not be a concern.
If your annual expenses average “X” then what multiple of “X” would be enough? Or, at some point, does investing become more of a hobby than a necessity? Also, what would such a conservative portfolio look like?

All depends upon your lifestyle needs. .
some people can get along fine on social security.
other people want to travel the world, or have two/three homes.

its about lifestyle needs and wants. .

pick a number for your annual lifestyle cost, and then work from there.

mikempp 11-15-2024 06:12 PM

Warren Buffet is afraid, he is like 75% in cash i read.

mntlblok 11-16-2024 06:18 AM

lac
 
Quote:

Originally Posted by CoachKandSportsguy (Post 2386414)
If you want to read an analysis on what investments work well under different inflation assumptions, here is a great web page to research

Varying by Degrees: Fire & Ice 2.0 | Man Institute | Man Group

Most cool. I presume that lithium would fall into the "energies" section under the Commodity Groups, no?


All times are GMT -5. The time now is 08:53 AM.

Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2025, vBulletin Solutions Inc.
Search Engine Optimisation provided by DragonByte SEO v2.0.32 (Pro) - vBulletin Mods & Addons Copyright © 2025 DragonByte Technologies Ltd.