Market Philosophy: What You Got?

billyymc wrote

it's so hard to actually time the turn and so easy to miss it and get left behind.

This is the real risk of market timing.

PeeTex wrote

Harv, if you 3.5 years from retirement then start thinking about setting aside money in low risk investments, CDs or bank accounts. The yield will suck but when you retire you won’t be forced to withdraw in a down market.

I spoke to a young college student this week. He had his tuition money for law school in the market. He
Panicked and pulled it out. Now he won’t have enough to go. Never put what you will need in the next year or two in risky investments. At least that’s my rule.

I will likely let my cash position drop as I ride this out and then replenish it when things get back to normal.

 
Not nearly as much as you, I'd bet your cash is significantly more than our entire net worth, but as of this summer we do have about 20% in MM.  Not really any brilliance, partially a coincidence that relates to our house sale.

That law student story is tragic, who was giving him advice?  If he doesn't have enough to go now anyway, maybe he should get back in?

Sincere: I appreciate your advice, thanks.

Johnnyonthespot wrote

How do you all buy in to your investments? Through a broker, E Trade, or are you adjusting 401k's?

401k adjustments (well, my plan is a 457) mostly, but I also have a TDAmeritrade stock account for gambling on individual stocks & sector ETFs. Free trades for everything. I refuse to pay a broker.

I had about 20% of my portfolio in cash, 75% in stocks, like 5% in bonds. And for the last year or so, I was doing 50% stocks, 50% cash. I was building up side cash so I could buy more stocks in the event of a crash. The last of that side cash went into the market yesterday, so now I'm in for the long haul with 95% stocks, 5% bonds.

Even with all those machinations, I'm down like $35k since my last 457 statement. Mo money, no problems, I guess. It'll come back eventually, but it sucks to see my accounts get decimated.

Harv,
I hope my cash reserve is not more than your net worth. Its enough to cover expenses but not a lot of mad money - for vacations and things like that.

With regards to the student, I discussed this with him and he’s response was that he had to do it because it was his only chance to make any real profits. In the end he still didn’t see that the risk was not worth it.

This will turn around. I read a good article that stated that this virus does not survive warm climate and we are quickly approaching spring.

This is the first intelligent thing Willy has posted on here

If you miss the first 5% of a rally no biggie if you avoided the bigger down days.  The hard part and why you can’t time the market is figuring where the real bottom is.  So is today a dead cat bounce or the start of a rally?

I might buy some MSFT and Berkshire Hathaway.  Warren always benefits long term from these market events since the only thing with more cash than Warren is the govt.

Z wrote

This is the first intelligent thing Willy has posted on here

I guess you're bitter that your 401k is down a lot this year, and mine isn't.

so you are claiming you went all cash or bonds before the last 2-3 weeks?  You are the smartest man alive i guess

at end of 2019 i was 60 bonds and cash and 40 stocks and increased my cash by taking profits over the first couple months of this year. I have an advisor that handles the fixed income side and i do the equity.  I'm clearly not as smart as you are but i do have an MBA.  Now I'm about 80/20 and looking to buy back in.  I dipped a toe in buying a small lot of MSFT this morning.  Maybe too soon but we will see.

we all have taken a hair cut on this market except for Willy

Z wrote

so you are claiming you went all cash or bonds before the last 2-3 weeks?  You are the smartest man alive i guess

Yup. That’s exactly what I did. In early Feb I went 90% cash. I don’t have the exact dates at my fingertips.

It felt quite apparent to me that this coronavirus was going to hit the US, and that we weren’t going to be prepared for it.

I started slowly getting back in already. Yesterday near the close I was about 65-70% back in the market. As of this morning I was down about 2% since Jan 1. Not stellar but I’ll take it given where we are.

Call it lucky, but I did my own research and assessed the situation.

Frankly I’d rather have been wrong at this point.

If it makes you feel better I let my non retirement accounts ride since the tax implications of moving in and out aren’t worth the risk. Those are down obviously

billyymc wrote

Call it lucky, but I did my own research and assessed the situation.

Frankly I’d rather have been wrong at this point.

If you're feeling guilty about being right and need to absolve your guilt through charity, you can Venmo me some of the cash you salvaged

I don’t like Trump all that much but this news conference has really been well received by the market up about 1000 points during it

Bought some stocks this afternoon before and during the call

Z wrote

Bought some stocks this afternoon before and during the call

Well congrats on that Billy
I took some profits as I said but still had a lot of chips on the table.   I got lucky in 2018 when the market dropped I was in the middle of moving assets from a 401k to a roll over ira and totally missed the drop.

I still have 10 yrs to work so I have to be in the equities market to some extent.  I had moved my sons 529 which has a yr horizon fully out of the market in January

Like the sheep photo.  I put my toe in the water with about 20% of my available cash not my full wad

I hope this was the bottom but chances are it’s not and it will get tested.  I bought stocks that go well with working from home and some of the medical stocks that can benefit from covid19

https://news.crunchbase.com/news/toilet-paper-hoarding-boosts-bidet-sales/

Just gonna leave this here :

Until we FLATTEN the virus containment curve and bring the spread under the current hospital,bed capacity , notwithstanding yesterdays emergency declaration THERE WILL BE more cases which will result in market volatility the likes of which we have not seen in many decades .

I personally do NOT think we have established the bottom yet . As the healthcare system will require time to ramp,up capacity and the GREAT unknown is the degree to which cases are not yet  identified.

We simply do NOT know,about People  feeling asymtomatic AND god forbid IF our healthcare workers become disproportionately affected .I have seen info regarding a 37 day quarantine period not 14 days and also incidence where patients have been re infected .  

All of which WILL impact this economy .as social distancing becomes normalized UNTIL abatement ,

SO be prudent , stay with a your long term goalsmespecially if you have a longer horizon

Me :  still holding my powder dry until i see evidence that the containment curve  is moving in a positive direction . But at my age i have secured our corpus with little need to gamble .

Good luck stay healthy and positive
WD

Good advice, Warp. Also, I’m noticing that your use of the all- caps button is starting to make a little more sense to me. Not sure if that’s because you’re doing something different or cause you’re getting inside my head.

You may have alluded to it sort of but I think it’s worth mentioning that the numbers of people testing positive is going to spike dramatically as a better, more widespread testing regime is implemented. This does not necessarily mean it is spreading. It might just mean that we’re identifying it’s pervasiveness more accurately. If positives blow up without the number of deaths or serious cases increasing proportionately, that could be viewed as a positive indication.

Regarding how this affects the market, I have no advice other then to calm down, hold your ground and wait it out. But that’s always my market philosophy. Trying to time the bottom is impossible and timing the top is even more impossible because there is no top.

Brownie : UR. On target re the notion that when the number of cases dramatically increases without a parallel reltionship with the current mortality rate then it is a positive sign . Hopefully that is the situation.

Gotta forgive an old professor who adds CAPS for emphasis 😉😆😱

Got an email from my manager last night, I feel pretty lucky. Only off 7% from the high in Mid Feb. I love those guys, they are on the ball. I have not look at my Fidelity funds but they never seem to do as well. I just don’t have the aptitude to do this myself.
Example: In about 1990 I invested in 3d printing and additive manufacturing, lost a bit of coin - just too early. Held onto Fiber optic and telecom through the bust, left me with some penny stocks. After a few shellackings I decided to pay the pros to work it and I have slept soundly for the last 20 years.

Not bad P, thats really decent .

I took a deep dive last evening  at our curent status from 12/31/19 ,  i do this routine bi-weekly


At this point 3/14 /20 entire corpus  balance UP. 4 k from 12/31/19 balance .

That’s good, I can’t say where I am over that period, usually there is some strangeness that goes on in the 12/31 statement as they try to minimize my tax impact. I tend to only look at it 4 times/year. Tax time is coming.

Not that that is going on exactly, but IMO not correct to compare results between different age brackets or net worths.

If I was 80 years old or had 5 million invested, I'd be 20% in stock.

Also regarding advisors, if you are worth less (not worthless!) IMO you probably shouldn't be picking individual stocks.