General Investing and Economics Discussion - No Politics

[CuseJacket]

Per expectations LOL

One theory: Buttigieg and Klobuchar endorsing Biden, thus consolidating the delegation vs. Bernie. Doing so one day before Super Tuesday probably means more market fireworks this week.

Apple carried the day. One regret is that I didn't buy more over the years. Suppose that's true for every investor. Also pulled BRKB along with it, haters

 

[LibertyTurns]

Wall Street making money hand over fist. 650 million shares traded hands today - nearly 3.5x normal volume.

Volume at closing was above average but lower than the previous 5 trading days.

 

[Deleted member 2897]

Fed made a big 50 point interest rate cut today. They know what we should all know by now - we will have an economic slowdown. The good news is (I hate to make light of a bad situation) this isn't going to be from people over leveraged on debt, losing their job, and so on. Its going to be from international supply chains being interrupted and from international and domestic demand (for everything from goods, restaurants, travel, etc.) weakening. (Of course people will lose their job and so on, but it should be to the -600,000/month extent we had at the peak of the great recession.) . So the good news is this should be fairly temporary and then we resume forward motion. Right now I don't foresee a 2007 type situation where we have a couple years of no growth. We had 9 quarters of negative or +1%-ish growth from 2007-2011. I just don't see something like that right now.

 

[CuseJacket]

Fed made a big 50 point interest rate cut today. They know what we should all know by now - we will have an economic slowdown. The good news is (I hate to make light of a bad situation) this isn't going to be from people over leveraged on debt, losing their job, and so on. Its going to be from international supply chains being interrupted and from international and domestic demand (for everything from goods, restaurants, travel, etc.) weakening. (Of course people will lose their job and so on, but it should be to the -600,000/month extent we had at the peak of the great recession.) . So the good news is this should be fairly temporary and then we resume forward motion. Right now I don't foresee a 2007 type situation where we have a couple years of no growth. We had 9 quarters of negative or +1%-ish growth from 2007-2011. I just don't see something like that right now.

The Fed attributed today's rate cut to the coronavirus news:

"Although the fundamentals of the US economy remain strong, "the coronavirus poses evolving risks to economic activity," the central bank said in a statement."

Fed Chairman Jerome Powell echoed this sentiment during a press conference Tuesday.

"We saw the risk to the outlook to the economy and chose to act," Powell said, adding that the financial markets are functioning normally, the economy continues to perform well, and he expects the United States to fully recover after the outbreak ends.

To that end I agree this will be temporary. And since no one really knows how long the thing (virus + response) will last, it makes the market speculation all the more interesting. In theory most have priced in the risk of a pandemic, but people act irrationally both directions all the time, so it's sure to be a fun ride.

 

[LibertyTurns]

@CuseJacket @bwelbo Now we need the spineless, gutless cowards in the House and Senate to pass some tax relief. Let’s at least get some good out of having to listen to all the imbeciles yammering on the news every night. There’s an opportunity here to better our nation if we can just do the right thing.

I know it’s just wishful thinking.

 

[Techster]

One of my favorite legends in the investing world. Principles is a fantastic book, not just about investing, but life overall.

 

[Deleted member 2897]

One of my favorite legends in the investing world. Principles is a fantastic book, not just about investing, but life overall.

He may be rich, but that's probably the single dumbest take I've read on the virus yet. Not a single person in the entire world under the age of 63 has died. Children who got it are said to have felt like they just caught a mild cold. We will definitely have a pretty big disruption to our lives I think over the next bit, but this will be temporary and pass. I haven't read a single epidemiologist yet predict anywhere near what that guy just did.

 

[LibertyTurns]

He needs to spend his money on finding someone to help him do a comb over or better yet cut his hair. Dude, you’re bald. Take it like a man. You got one of the 3 things that helps you get chicks- money. You’re good.

 

[Techster]

He may be rich, but that's probably the single dumbest take I've read on the virus yet. Not a single person in the entire world under the age of 63 has died. Children who got it are said to have felt like they just caught a mild cold. We will definitely have a pretty big disruption to our lives I think over the next bit, but this will be temporary and pass. I haven't read a single epidemiologist yet predict anywhere near what that guy just did.

Lol, your response tells me you read the headline but didn't read the article. The headline is misleading to what he actually said.

 

[Deleted member 2897]

Lol, your response tells me you read the headline but didn't read the article. The headline is misleading to what he actually said.

I read the first half and then threw it in the trash.

 

[Techster]

I read the first half and then threw it in the trash.

Good for you.

This is why it's hard to have discussions with some of you. You read what you want to read, or you interpret it to however it fits your narrative. At least you're on record as reacting to headlines and not actually forming a reasoned opinion based the entirety of someone's responses. I guess I should treat you accordingly going forward.

 

[Techster]

For those who actually want a reasoned "look" at how someone at Dalio's level perceives the coronavirus, here's his full text on it:

https://www.linkedin.com/pulse/my-thoughts-coronavirus-ray-dalio/?articleId=6640623255357005825

He actually hits a LOT of points similar to what...wait for it... @LibertyTurns has been saying.

 

[Deleted member 2897]

Good for you.

This is why it's hard to have discussions with some of you. You read what you want to read, or you interpret it to however it fits your narrative. At least you're on record as reacting to headlines and not actually forming a reasoned opinion based the entirety of someone's responses. I guess I should treat you accordingly going forward.

Why are you so mad? The headline gave some end of the world scenario, the first half of the article confirmed it. How was I to know it was all fake news and the real text revealed later was different? Good for him. It is what it is. Not sure why you care so much. Maybe next time if an article is that false and problematic, give a warning label or something? You said not one comment about it to be careful its not what he actually says or anything like that. LOL.

 

[Techster]

Why are you so mad? The headline gave some end of the world scenario, the first half of the article confirmed it. How was I to know it was all fake news and the real text revealed later was different? Good for him. It is what it is. Not sure why you care so much. Maybe next time if an article is that false and problematic, give a warning label or something? You said not one comment about it to be careful its not what he actually says or anything like that. LOL.

The only thing I'm mad about is replying to someone who makes ill informed opinions. No worries, lesson learned...won't be happening anymore going forward.

Anyhow, back to the spirit of this thread.

 

[Deleted member 2897]

The only thing I'm mad about is replying to someone who makes ill informed opinions. No worries, lesson learned...won't be happening anymore going forward.

Anyhow, back to the spirit of this thread.

Wow, what a condescending you know what. What an embarrassment.

 

[LibertyTurns]

He may be rich, but that's probably the single dumbest take I've read on the virus yet. Not a single person in the entire world under the age of 63 has died. Children who got it are said to have felt like they just caught a mild cold. We will definitely have a pretty big disruption to our lives I think over the next bit, but this will be temporary and pass. I haven't read a single epidemiologist yet predict anywhere near what that guy just did.

OK I’ll take the side of @Techster as I’m not really sure what’s so dumb about this:

https://www.linkedin.com/pulse/my-thoughts-coronavirus-ray-dalio

He claims the following:

A. Virus will have a big emotional impact- check
B. Countries with good leadership that act well will fare better, poorer leadership will fare worse- guaranteed
C. Economic impact short term, then rebound. No sustained impact.- True so far, projected outcome likely
D. He goes on an income inequality rant- Not unexpected from someone predisposed to have disdain for free market capitalism
E. Market Impact- nearly 100% accurate
1) Leveraging: highly leveraged businesses in the most severely impacted countries will be hit the hardest- duh
2) Businesses will curtail activities causing revenues to go down, when the situation reverses so will their revenues- duh x2
3) The market will react disproportionally to risk levels- almost certain
4) Interest rate cuts will have little impact- almost certain

Outside of D, well I’m guessing far from probably the dumbest thing you’ve ever read.

 

[Deleted member 2897]

OK I’ll take the side of @Techster as I’m not really sure what’s so dumb about this:

https://www.linkedin.com/pulse/my-thoughts-coronavirus-ray-dalio

He claims the following:

A. Virus will have a big emotional impact- check
B. Countries with good leadership that act well will fare better, poorer leadership will fare worse- guaranteed
C. Economic impact short term, then rebound. No sustained impact.- True so far, projected outcome likely
D. He goes on an income inequality rant- Not unexpected from someone predisposed to have disdain for free market capitalism
E. Market Impact- nearly 100% accurate
1) Leveraging: highly leveraged businesses in the most severely impacted countries will be hit the hardest- duh
2) Businesses will curtail activities causing revenues to go down, when the situation reverses so will their revenues- duh x2
3) The market will react disproportionally to risk levels- almost certain
4) Interest rate cuts will have little impact- almost certain

Outside of D, well I’m guessing far from probably the dumbest thing you’ve ever read.

That’s not the point - I read the article he posted, not that. The title and the first half were apparently sensational...but were a false representation of what he actually said. There was no warning it was a false representation - the link was merely posted for us to read. It was so bad that I quit halfway. Somehow that got him really pissed off at me...but that seems like a booby trap then. And I got some good insults hurled for good measure. Either way I’m not sure why it would get someone so upset. If it was that important that it was a false/fake article, I would have thought he would have pointed that out. Anyway, I think it’s old news now.

 

[LibertyTurns]

That’s not the point - I read the article he posted, not that. The title and the first half were apparently sensational...but were a false representation of what he actually said. There was no warning it was a false representation - the link was merely posted for us to read. It was so bad that I quit halfway. Somehow that got him really pissed off at me...but that seems like a booby trap then. And I got some good insults hurled for good measure. Either way I’m not sure why it would get someone so upset. If it was that important that it was a false/fake article, I would have thought he would have pointed that out. Anyway, I think it’s old news now.

It’s why I always try to get to the source material. Doesn’t matter what your media source- Bloomberg, CNN, MSNBC, Fox, etc it’s all editorialized now. Less than .1% is straight up news any more. For this one, the 2nd sentence contained the source of the article so I read it there. Didn’t have to hunt for the truth like I normally do. There was no need to read the politician who wrote the article’s biased & inaccurate opinion. As far as headlines go, damn they’re downright farcical anymore.

 

[LibertyTurns]

Back to investing.

Well, not sure I’m ready to call a bottom. We are experiencing unusually high volatility exacerbated by the fact we’ve had an extraordinarily long period of way below normal volatility. It probably looks very alarming to many because of the recent relative calm.

Personally, I’m preparing to re-invest. Spending a good deal of time analyzing what I had as opposed to what I really wanted to have but was incapable of getting because of lack of discipline or stubbornness.

The silver lining out of this is I’ve long since ditched my most unfavorable assets. I’ve abandoned the middle tier and most of the high risk/ high reward ones. For a while I was nearly ready to move to 100% cash.

Now I’m accumulating the buy list and waiting for a re-entry point without huge risk. Patience is at a premium and I’m not normally patient so it has not been easy.

 

[Deleted member 2897]

Back to investing.

Well, not sure I’m ready to call a bottom.

We have seen close zero data on economic activity other than from other countries (China service/manufacturing activity at record lows, Japan -6% GDP in the recent quarter). Until we start seeing that, I don't think we can call a bottom. Could be Dow 15,000, could be today, hard to predict. We moved a large amount of our money into cash, because for our personal risk profile (1 kid starts college this fall, the other starting in 4 years), I don't see > 10%-20% upside in the next year, but I definitely see a risk of a large downside. That's totally my gut, so where we are we made the decision to sit for awhile and watch. I don't see how we escape a pretty strong recession. That doesn't mean the stock market will drop, because it should be a temporary thing we have to then work back out of, but you never know.