Stock Talk
I've devoted all the (considerable) amount of time spent on sports, and devoted it to stocks over the past week. Curious as to what more seasoned traders thoughts on: market - bottom coming shortly or prolonged? Individual stocks that have caught your eye? General strategies? Have enjoyed insight of previous post a week ago and have been getting my feet wet making very small trades mostly for shits and giggles.
I have never bought stocks in my life but last week I downloaded a trading app and bought $2,000 worth of stocks in some streaming companies and social media companies. I figure it can't hurt to try. I've already made over $200.
Which streaming companies? I'm in that space.
Disney and Netflix.
Spend $29/year and join the AAII, the American Association of Individual Investors. Lots of great articles and information. Within six months or less, up to you, you will know what is going on. https://www.aaii.com/
Bogleheads is another good source of information. https://www.bogleheads.org/forum/index.php
Lots of young docs like White Coat Investor. https://www.whitecoatinvestor.com/
Index funds for the long term are the easiest way to go. A ton of diversity which reduces risk and over time most investors don't beat average annual market gains.
As you get older, leave enough money around to live on for a while when your portfolio goes into the crapper.
Yes I recommend Bogleheads.
Exchange traded funds are probably best bet for individual investors. Instant diversity & no restrictions on buying or selling. Inverse ETF's allow you to be your own hedge fund manager without the need for a margin account.
Market bottom is anyone's guess. Past bear markets have taken anywhere from 200 to 2500 days to recover.
My last trading window in late Jan, I debated selling 50k in my company stock and putting it in a reverse ETF. But we had such a huge q4 I couldn’t pull the trigger. Wish I had now. Oh well, definitely during the next once in a lifetime pandemic.
We did the opposite. We sold all of my wife’s RSUs at what ended up being the high point for the stock. I wanted to hold and wait for it to go up more. Good thing we didn’t listen to me.
she just got another round of RSUs where the total value was decided is January, but the actual stock price is based on low of March. So that’s good.
Got a few shares of 3M the other day. Seems like they're going to be making a lot more masks and whatnot in the coming days.
What's the margin on masks though? Are they stopping production on high margin products to make low margin ones? High sales volume not necessarily a good thing.
Unless they publicize the hell out of their mask production and get a halo effect on their base products as a result after the virus dies down, I'm not sure how much this boosts their stock value.
I'm not sure I'll be buying a lot of scotch tape or other adhesive products
Besides, they don't make a lot of the things you buy, they make the things you buy better....
Have fun, but just know it's basically the same as sports betting. You're not going to win in the long run unless you're really, really skilled.
My favorite anecdote on this: Fidelity did an analysis of whose 401(k)s did the best with them over a 10 year period. The best "investors" were the ones who either (1) switched jobs and forgot they even had a Fidelity 401(k), or (2) were dead. Basically, the people who just left their money sitting in an average index fund.
Well then I'm looking like a damn genius right now.
Are you saying you're dead?
I read that too. Just a fun way to get the juices flowing w no sports to spend (waste) time. Not touching or changing a thing w retirement. Downloaded Stash, and after realizing I wanted something a little more in depth, TD Ameritrade.
For a short period of time I used a professional firm to manage my money - shortly after the 2008 downturn. They ended up being too conservative and I missed much of the rebound before I fired them.
I only buy individual stocks when I know the company and industry intimately. I was making money on GM, Ford and Chrysler when they were bouncing up and down before bankruptcy. I lost some in the end on GM but made out well on Ford in the short term. I was doing it for entertainment and made a good return on a small investment - essentially a gamble.
I did the same thing for a company I worked for post year 2000 downturn. Our stock was swinging pretty good and I would buy on the dips and sell on the ups - until we were bought by a larger firm. Made a bit of money there but small potatoes.
For the most part now I buy index funds and ride the market with the majority of my money - I don't have the skill, time or knowledge to reliably beat the market average. I do try to do that with a few select mutual funds but never on individual stocks unless it is a small % just for fun.
That's pretty much me. I put my 401k and IRA into mutual funds and let them ride. I only trade stocks around the edges in discretionary accounts that I can afford to lose.
March 29th, 2020 at 10:26 PM ^
This is why you should not be a discretionary trader unless you are very skilled (natural ability to read situations, markets, people, price action, sentiment, etc). If you can’t do that, just follow a rules based systematic process for the long term. Much butter than just buy and hold and exhibiting extreme home country bias
My imaginary portfolio has done quite well dipping in and out of cruise stocks over the last week or two.
Cruise line stock got crushed when they got left out of the govt rescue. Serves them right.
Wasn't the problem that many cruise lines are not registered as US companies?
I'm not sure, other than that, what the cruise lines did that was so terrible. Sure, people in confined spaces got sick, but that happens from planes and trains also. Nobody was in a hurry to pull the trigger that would hurt bottom lines.
We need airlines, we need small business, we need automakers, we need banks. We don't need cruise lines.
Tell that to Tom, Penelope and Terry.
Personally I think the character wasn’t quite as interesting after he came back from his death in Wrath of Khan.
Oh, you said STOCK talk.
Been a good month. Overall flat. Stock losses canceled out by Bond and Currency gains. Will see what happens now that I am net short US equities. Just follow price and manage risk- and watch your account grow.
Strategy? Just follow the price/trend!
I am interested in this subject
I don't think anyone knows the answer but I'll tell you my strategy:
Before the crisis I moved my stuff to bonds. I did this because I was worried about a war with Iran and a number of other potential crisis's, including the one we are in. Reason: I did this because I got my ass handed to me in 2008, both on my 401K and my home value, having bought a house at the peak in the Bay Area. I felt the market was overpriced so I decided to not follow the herd and to be careful. I lost maybe 5-10% of the last of the market increase because of my move.
Now I moved out of bonds too because I am not sure even those are safe. I have been playing some companies with a small portion of my money, but I am almost all cash. I am being super aggressive with 1/3 of my money and super safe with 2/3's. My net worth has increased 15% or so since this started. I did miss out on a lot of the rebound this week, caught a little of it though.
My forward strategy is to be as informed as I can be on the macro-view of this crisis. I believe we are only at the beginning. In the meantime, I am thinking about the impact to business and which sectors will rebound quickly and plan to add companies in my portfolio in those sectors. I think companies like google, twitter home depot are safe bet's at the bottom. I don't think we are at the bottom yet, and it may change so I am being as flexible as possible and trying to stay informed as possible so I can react when the time is right. When I conclude that we are almost done with this crisis I will buy the companies I like, spreading out the risk and I will hold them for the long haul (10 to 20 years).
The market rebound will be strong when it comes.
Smart man and excellent strategy! I put my 401k in a treasury/ bond fund last fall because I felt the market was overvalued, and I entered it back in a fund that tracks the S&P on Monday.
I am with you on the long term view. I expect a small rally followed by another downturn that will test the low already made or go lower. Between oil plunging, companies carrying a lot of debt, and earnings being shot for the rest of the year, there is more fallout left IMO.
I am resigned to the fact I will probably go in too early or late and miss the bottom by a little.
With all the rate cuts and stimulus it should take of like a rocket at some point
Almost no one has perfect timing. As long as it is somewhere in the vicinity of the bottom it will be a success. You can already claim some success by missing the near 40% drop.
It's tough to time the market either up or down. You might come out ahead or you might not. I know a lot of people who panicked in 2008 and moved out of equities at huge losses and missed the run back up. If I was nearing retirement I would went more into bonds or cash but I have time for it to turnaround.
Use the r/wallstreetbets investment model
Become autistic and call everyone a gay bear?
^this guy gets tendies
3x ETFs that mirror the indexes. You can play it both ways and as long as you don’t get greedy looking for the peak or the absolute bottom (just get in and out 2/3 way up or down those waves) you can make a killing. I made just shy of 40% last wk.
I assume you're referring to SQQQ and TQQQ?
there are others out there too. i choose the ones related to the s&p500. i just think it is more broadly market based. but who knows.
quarterly rebalancing to happen monday and tuesday. Several hundred billion will be put into equities. Assuming no landmines, the market should move higher early in the week.
Should be shortlived. After the new month, the talking heads are planning on the market to move lower. A retest of the lows probably needs to happen. Will take longer than normal imho because everyone is expecting it.
Generally stay away from energy except the large integrated oils. Chevron is generally favored over ExxonMobil.
Technology sector seems to be best positioned given that they have the best balance sheets. Boeing is an interesting long term play. They account for 20% of the manufacturing base in this country, is the US's largest exporter, and is vital to National security.
Yea, eager to jump in and grab “discounted” stock but thinking market will get lower towards next week (earnings) and unemployment? In short term, thinking of getting in on Berkshire B and Disney before they get too high. Berkshire especially as it seems there is going to be significant buyback from Buffett.
At this point, I would think that the market has priced in lower earnings. Last week, on the same day we saw the largest spike in unemployment ever we saw the third consecutive rally day (the S&P 500 and Dow were both up over 6%). Using the definition of 20% rise off it's low, the Dow is actually now back in a Bull Market.
Interesting that you believe the market will move up tomorrow and Tuesday due to quarterly rebalancing, as I believe the opposite will occur.
Managers will want to limit showing losers in their holdings.
But that is what makes a market.
One of us is likely to be correct. Ain't placing any bets though.
Of course you have the active manager piece and I agree with you, but how much of an impact does the passive piece have?
You have balanced funds (and life cycle funds) with large gains in bonds. They're going to want to be getting out of the over allocation in bonds and move to stocks. . .
I'm not making any bets either and the market definitely has a downward bias these days.
Some of the rebalancing was driving the increases last week because equites had dropped so much that there were more buys just to get portfolios balanced again.
Nice post, I work in a technical field so I am not savvy enough when it comes to investing to know for sure what's going to happen tomorrow. So I play the big picture.
I might look at Boeing. I had the same thoughts around GM and it payed off a little the last couple of weeks after coming down below $15/ share.
Got out again Friday to all cash and some biotech's right now. So my bet is lower first before the bottom.
Set it and forget it is my strategy. I personally haven't changed anything that I've been doing. I use a robo-advisor that invests in a handful of ETFs based on your risk tolerance (0-10 scale) and every now and then may rebalance your portfolio if things get out your risk tolerance but for the most part just let's it ride while also reinvesting dividends and tax loss harvesting. It does suck seeing 5 years of gains wiped out in a month, but I have a long term horizon so I'm trying to frame it as having an opportunity to buy at prices 5 years ago.
My take is that I've spent a considerable amount of time consuming football in my life (playing, watching, reading, etc.) but there is no way I'd be able to develop a better playbook than a competent professional coach. Similarly, I've had a passive interest in the market for a while, but there is no way that I would be able to manage a portfolio better than a professional (in my case a robot).