I survived the 2000 dot com crash, the 2008 financial crash, and the 2020 covid crash. This minor correction is just a blip on the radar, and should be another opportunity to buy some great stocks at a discount, soon.
I max rothIRA's January 2 every year, this year it wasn't so great, but the 28% I got last year I would say I did ok. I'm still buying stocks and real estate. Maybe you are lucky and you got out in time. Or maybe it shifts again and you miss out on another 20% year. Nobody has the answer that, and if they tell you they do they're lying.
You only lose it if you sell. Keeping a lot of cash with the current rate of inflation doesn't interest me much, but to each their own.
Same with Bitcoin, dollar cost average
2021- Up 18.3% (and more than 1/3 of that gain was in January. Before the JB could impact much)
2022- down 11.94 for the year. But JB will turn it around on 1/31 ;)
2019 & 2020. Up 28% and 24% respectively.
At 56, don’t tell me the stock market isn’t the economy. (That is entitled loser talk)
My last two cents is diversify. Diversify what you have in the markets. Stocks, bonds whether mutual funds or individual stocks/bonds. Different sectors, small companies, large companies, US companies and over seas. Short term bonds/Long term bonds. No doubt sometimes the stock market is 2 steps forward and 1 step back. But if you really look it more like 3 or 4 steps forward and one step back historically speaking. If you have time on your side the markets are hard to beat for passive use of your money.
KHNC I think we can agree the investing in anything better than putting with that outfitter in ID that got you ;)
Time in the market beats timing the market.
I still have safe investments in my actual 401K. Not everyone uses the stock market for long term. Some use it for a short time, and others have to get out at some point. Cant always just wait and wait and wait. I chose to use real estate in this case. Sounds like yall have a plan. Of course, dont ever take dale06 advice. That guy is always quick to piss on someone.
AZB, that’s really cool, time is the great money maker!
Sticksender, I don’t think that comment works for all investors!
I would hate to retire and to have been planning on relying heavily on my investments and then have to suffer through a market crash early on!
Sticksender, I don’t think that comment works for all investors!
I would hate to retire and to have been planning on relying heavily on my investments and then have to suffer through a market crash early on!
These are reason I think it important to have a good competent financial advisor you trust if you are not savvy to what your options are and/or tend to make emotional decisions when things are bumpy. Especially as you near retirement. If for no other reason than to give you a idea of how much money you can spend and likely not run out of money before you die. If you have no clue to that question and there is really no precise answer. However you should be able to get within the ballpark you should quit spending until you do. You would hate to get to say 75 and realize your almost broke.
My 401K is strictly for the wife if she lives a lot longer than I do! I do not have to touch that money! I have had it in the safest offering since December!
As far as the market is concerned I only do index funds so I am not overly aggressive!
I simply want the money to be working for me instead of the bank!
Bottom line doing something is better than nothing. Down the line you can get a little more sophisticated.
Rocky, as you know, investing is a balancing act between risks and the time frame you have before you rely on your investments. I maintained an aggressive investment strategy while my wife and I were still earning at our peak. Now that we've both retired, I've adopted a conservation over growth strategy. About 1/2 of our net worth is in debt-free real-estate. The rest is about an even split between stock, bonds, and money markets. The net annual gains of our investments more than pays for our cost of living, barring any unexpected financial disasters, like serious health issues or some natural disaster.
I agree is not 'rocket surgery' when you are just socking away money. I think as you start getting closer to retirement and into retirement you better be very financial literate if you go it alone. If you use a advisor pick him or her wisely. Some are really good other not so much and some are just easier to relate to and understand.
GG, that is my exact point! There is a strategy which is more than just getting in the market. That is basically what I told Bob H now that he is the retirement countdown mode.
I did just sell a house and have a bunch of cash that I'm not sure what to do with now.
I had some huge gain in a few ETFs that I have owned for years. I found myself evaluating whether it was worth it to sell it and pay 50% in taxes on the gains or just ride it out. A couple of those are down 20%… it remains to see whether I was right.
I think the 7% reported inflation is way under the actual. The current government policies will only exacerbate inflation.
I’m looking to buy the semi index SMH, MGM, CSR, and a few others but I’m waiting for a sign of capitulation.
I’m always looking for a trade and open to ideas, hint, hint. Grin
The trick is no debt, except property, which I have just bought more,,,, As far as a vehicle, would not waste my money, but will buy land,,,,,,, 'some of you should wake up, because there is alot of opportunity out there,,,just open your eyes
After graduating college, 1991....I had an extra $10,000 or so. My local banker encouraged/begged me to open an IRA and just make the max contributions per year. She told me that...”I’d be swimming in money” at age 65. I’m now 53 and think about that missed boat all the time!!
At 22 years old, my mind was on other things. I couldn’t comprehend 45 years in the future.
For ME,that presently has been working for 30 years
The reason to move money into less risky investments near retirement is to conserve the gains. A retiree typically doesn't have the time to recover from a major market crash. Remember, a 50% crash requires a 100% gain to get back to even. I know several retirees who were crushed by the 2008 financial market crash because they weren't hedged against it. All of them had to drastically scale back their lifestyles and costs of living. A few even had to go back to work.
In this case, he is spot on.
Those of you who think you can time this beast are only kidding yourselves. You may get it right a time or two, maybe enough to build some dangerous and imaginary self confidence. Then with that false confidence you’ll make bigger bets, only to get it even more wrong eventually, hopefully without catastrophic consequences. Then ultimately, you claim that the “system” is broken because it didn’t go your way. I hope you traders aren’t doing this with money you’ll eventually need.
Those that maintain a long term view that ignores the noise are doing it right.
The bulk of my money tied up in the market is in retirement accounts that I likely won’t touch for 15-20 years. So these corrections we’re seeing now mean essentially nothing - if anything, it gives me a bit more buying power at the moment.
Like we talked about, if you are in a position where you cannot tolerate a 5-10% correction (or more), then perhaps the stock market isn’t the place to keep your money.
I switched to a professional (from mostly DIY) a few years before retirement, when I had "enough" money. I'm not greedy, so we went more conservative and moved some more into a solid annuity I was building. Yes, I lost out on some gains, but no one can predict the future and I couldn't risk another 2008 with my short window. I'm not sorry. My advisor is a bowhunter I've known for a long time and I trust him.
Now retired for almost 8 years and remarried to someone with a good gubmint pension and her own fat investment account. We are living confortably on my annuity, dividends, SS, and her pension, and our investments are just play money. Our income is not affected by market swings. So we moved a bunch into more aggressive investments. But if I was drawing that formulaic 4-5% a year (pick your number), I would still be in a very conservative portfolio to minimize the risk.
But I am young and finally had some good advice stick. Never think you know it all and have an egg in as many baskets as possible. I use play money in day trading to learn more about the market. I aim to pick up a new rental property every 1-2 years, and utilize a money manager for my other market investments, they know more than me and I’m okay with admitting that!
Or just invest in a 'target date' fund, which automatically tapers your investment risk downward as you approach retirement age. I did that several years before retirement with my IRA. My 401-k from my last job is still a moderately aggressive mix. Neither is immune to nor overly sensitive to market fluctuations in the longer run. (They did drop some this month, but I'm still well ahead of where I thought I'd be several years ago.)
If you don’t think we are going into volatile times with this president you have your head in the sand. A week president creates big problems. Trump was a bully and an ass, but he was our bully. ( Some abhor politics- sorry but politics matter)
There are many negatives out there inc the Fed raising rates which is historically bad, Massive inflation, Russia and the big dice roll: China/Taiwan. What if Biden keels and Kamala takes over? I’m OK with keeping a little over a third of my stock mkt money in cash.
Whether the market goes up or down in that time- I can’t read the future but it doesn’t look good. I’m content with keeping a percentage of my money in cash to manage the risk.
An investor always has to consider the tax consequences not only on sells but also buy strategies. I treat trades differently than I treat long-term investments using trades to offset gains and losses in my taxable accounts- multiple accts to get around the 30 day rule… and trading in my Non tax IRA.
I am a big proponent of the reversion to the mean theory and it has made me a lot of money over the years. Charts are very important and tell you a lot. Take a look at the chart of Nvidia or Moderna and that’s all you need to know. I do not buy stocks on a steep ramp ups, and will capture profit a steep run up, they always come back to earth. I always try to buy down around the 50 day or the 200 day MA mostly dollar cost averaging in. I don’t try to capture every dollar on trades and I try to stop out losses though that doesnt always work.
I stay away from companies that have zero earnings. Yes I have missed out on some big gainers but it’s part of my managing the risk strategy, I’ve also saved myself from some big duds. For every Tesla there is a Lordstown..
I look at forward trends….industries (ETFs) that I think will do well. I dont care much about past performance. A guy buying the Software index 30%+ off its highs will probably see a little more pain in the short term but in a few years he will way outperform the market. I question; What will do well in the next 5 years…. And is it a relative value is the way I approach it.
I sometimes capture gains and offset risk with covered options.
High flyers like Tesla will need 100 years to catch up to its stock valuation. Too much risk there for me.
The key to being a good investor is to have a strategy and to stick to it, take the emotion out of investing. I think a young guy would do well to study those topics above and develop his own strategy.
Chose poorly with either one, and your money will get better use buying slurpee's and hot dogs at the local 7-Eleven
Almost 20 years ago I got interested in trading stocks. Back then, brokers required you to fill out a lengthy application, including bank and tax statements. They all had a minimum deposit requirement, and they charged fees for every trade. IIRC, it took 3-4 weeks for my account to be approved. I started with an amount that wouldn't kill me, if I lost it all.
I began enthusiastically making numerous trades per day, while chasing a few percentage points with each trade. I soon learned I was spending more on trading fees than I was making in returns. The one stock that I let ride during that period was Apple. Holy cash cow!! It taught me the value of buying quality stocks and holding onto them. So, I added Amazon and Intuitive Surgical to my Apple shares, and let those 3 positions ride ever since. That small account has paid for 2 new trucks, a boat, and numerous vacations, and is still worth over 3 times what I invested. I often dream about what our retirement accounts would look like if I'd invested everything in just those 3 companies. 20/20 hindsight, of course.
I'm beating the FJB inflation so I'm good.
The reason to move to conservative investments near retirement is a simple reason.
Once you won the game you quit playing.
If you won the lottery, you wouldn’t really be out there spending all the money on lottery tickets and gambling more at the casino to win again. A smart person would realize he just got lucky, now it’s about preservation.
Investing can be as simple or complex as your interest dictates. Pick your own investments or go with a broker who understands your needs.
Personally I'd rather spend time shooting than watching the market. ymmv
I think another major aspect that comes into play for the entrepreneurial types is forgetting about the stock market, forgetting about real estate, and betting on yourself. It's a different world, and it's not for everyone. But if you can become a business owner, or shareholder and influence the growth of said business your returns can far exceed even a good stock market portfolio. In the risk/reward relationship this is by far the riskiest, with the highest potential level of return. You don't necessarily need to be a business start-up type person either. If you are an incredibly valued employee, and you know your worth it is not out of line to talk to your employer and ask about share options. If you believe in your place of business, and like where it is going, maybe you can forego some salary or bonuses in place of some shares. It can be a win-win as the employer more than likely locks down commitment of a key employee. If nothing else, it's another form of diversification. When it comes to investing in real estate, it's fun to buy hunting land, but if you're actually using it for investing purposes it had better be income generating real estate ie: housing or commercial etc.
Dang, I must be dumb as hell... :^)
Right wrong or indifferent, my plan is to leave the bulk of retirements funds invested in stocks after retirement. Opened two Roth IRAs a few years ago and have been maxing those out ever since. Will likely go somewhat conservative on those smaller accounts at retirement. Plan to use them as income on years the stock market is down...with smaller withdrawals needed due to zero tax liability.
Based on account history, no reason to believe this is a bad decision. I can only review history online back to 2006, but during that 16 year span, accounts have only been in the red four times (12X in the black)...never red two years back to back (red once every 3-4 years)...and the worst crash in late 2008 was back in the black by mid-2010. Average gain during that 16 year span is over 12% annually. Think I'll take my chances....
If I were to go back in time and start over, I would not diversify. I'd start young in S&P Index funds and aggressive growth funds, small through blue chips, and keep dollar cost averaging into them. I wouldn't have bonds at all until quite a bit later. Not even sure I'd look at International. When I researched Int'l stock funds, they rarely beat U.S. Equity funds.
In that sense, go for it, it would make decent sense to stay risky.
For the ones who retire with about what it will take, a 2008 crash can cripple their retirement.
It may have recovered in a few years, but for one that’s not guaranteed as anyone would agree, also it’s harder to recover when you lose 40% PLUS are withdrawing every year.
Recovering is a lot easier when you don’t have to also withdraw the money to live on at the same times it’s down.
After awhile her portfolio got big enough that she was a little spooked, so we put most of it into our advisor account, and she kept on, except on a smaller scale. Then after she got sick, we rolled the rest over and took the burden off. But it was a great learning experience for her, and since she no longer worked outside the house, it gave her a productive feeling of contributing to our finances.
Some of the conventional portfolio advice of more bonds as you get older fails miserably in the interest rate environment we are going into now.
This is where I recommend looking forward. Using Past returns can fail you miserably and heres why; We are coming from an extended period of artificially low interest rates. We have had the Lowest home mortgage rates in my lifetime (6 decades) These can be manipulated for awhile…but not forever.
It doesn’t take much investment knowledge to see this upcoming trend.
The challenge with predicting what stock investments will work in the future is 2 fold. 1) what industries will work 2) what is their relative value
Tesla will sell more cars for sure…but at their $935B valuation, and only a tiny % of profit, the PE of 190 tells you it will be 190 year payback at the current earnings. Sure they are plowing $$ back into the co and no doubt their eps will rise….the Q is will it rise exponentially in the future now that they have a lot of competition? Typically when companies my first market they rock it up but as competitors come in their margins go down.
Do you think the need for semiconductors will rise in the coming years? Its an absolute certainty. Dollar cost avg into SMH will be a double in the next 5 yrs, the one negative would be if China takes over Taiwan and TSM.
I was pleasantly surprised when I thought I was going to have to sell securities on 1/2/22 to fund our 1H22 household expenses to learn that Plus a bit more already sitting in my investment account.
Those of you guessing your proper asset allocation based on age, or winging it based on what feels right, or historical returns, or current market conditions, anything else, you need not do so. As is the case with most things related to investing, with a good financial plan, you eliminate the guesswork. A plan will detail and quantify exactly how much you should have in specific asset classes to meet your unique goals. Let the math decide. Not emotions.
4% per year (without liquidating assets) used to be a no brainer for our parents and grandparents. But these days with near zero interest rates, it is a challenge. It requires everyone to take more risk, relying on greater concentrations in stocks. You have to supplement your bond and income producing assets with appreciation in the stock market. Not the ideal situation, but necessary today. Fortunately, everyone is chasing the stock market, placing excess cash in there. This is helping to really drive the market. Will it have a hard correction? You bet, but I can guarantee you before long everybody will be all in again. Add to that the government will eventually have turn on the quantitative easing again. That is just more capital that will get dumped into the markets, driven prices up further.
Don't forget, it ain't a gain or a loss unless you sell it. Unrealized does not count! Best advice I can give is don't look :)
Since you brought up the “4% rule”, I wonder what some of you more experienced guys think about that. That has been my plan when I retire in 8 years at 55 (my plan anyway). I’ve been reading some stuff that says to maybe dial that back to 3.5 or even 3%. Also, anyone have any knowledge on the “rule of 55” for accessing your 401k at 55?
Peterk, thanks for responding. Sounds like your plan is working well for you.
I also found the Trinity Study around that same time from where the 4% Rule originated which has impacted my decision making.
Attached is an article on the study somey may find helpful.
Take care. Mike
I predict real estate will be down about 20% by the end of next year and I plan to buy some more rentals.
However we basically had 0 inflation for a long time previously. Overall we are way ahead as most were still getting raises all those years on top of investment growth.
With a few rules anyone can do as well if not better than the investment advisors that charge you a % of your portfolio then plug it into index funds or even worse, high commission annuities.
Beendare, annuities have their place I guess, but you're correct about the high commissions. Those fees can suck the life out of the rate of return and a fast talking salesman can make them sound so good. We are in the process of getting my wife out of one and they don't make it easy.
Not all Annuities are bad...you can buy them direct from Vanguard....just saying, beware these can be a very high commission check to your advisor as evidenced by the long lock in period. [the advisors here will back me on this if they are honest]
Many of the financial planners are essentially salespeople. NOT all.... and its worth looking for one thats not. Many just plug your money into pre determined portfolio allocations by your age group following typical portfolio designs which you can get these yourself on every online investment company if thats the route you want to take.. I have a couple buddies that have done very well doing just that.
I'm not disparaging brokers....just pointing out this is not rocket science.You can do this. A no brainer strategy if thats what you want is Dollar cost averaging into diversified funds. The stats show that this has beaten a huge % of Hedge fund and other investment advisors over the years....without the fees. Spend a little more time understanding trends and reversion to the mean........and you can do extremely well.
Hindsight is 20/20. That money would have appreciated more in the market over that period, but like I said, 2008 spooked me. Nobody knew what would happen, nobody knew Trump would enact the policies he did. At the time, we had Obama and the Dems in power, and I had little faith in their fiscal responsibility and the reaction from the equity markets.
So now I'm drawing from it, and coupled with my SS, not only do we live very well, but I have a couple thousand left over every month to roll back into our mutual funds. I will regain my principal in 9 years (from when I started drawing).
Yes, inflation is also a concern, but I'm not sorry I did it. Nobody knows what will happen with the market in 20 years. In 9 years when my wife draws from her SS it will more than compensate for any inflationary pressures, plus she has a Federal pension too. Her pension goes right into our portfolio now, as well.
We have three paid-off houses in a hot real estate market, a nice fat diversified investment portfolio we don't have to touch besides adding to it, and every month that annuity deposit drops in and makes me smile. Doing ok considering I was totally broke and in debt at age 40, and retired on my 60th birthday.
But I totally agree that annuities are not for everyone, and there are some scammers out there who overpromise and under deliver. Buyer beware.
I've never understood not annuitizing an annuity. Doesn't a T-note or bond provide about the same fixed rate of return, while preserving the principle? It's been a while since I looked into annuities, and decided they weren't for me. Maybe they've changed.
I've had about 25% of our IRAs invested in a high yield bond fund. It has averaged around 7-8% since the 2008 crash. Granted it's mostly invested in junk bonds, so there is a little risk, but it's been my "safe haven". Nate gave me a private education on how annuities have changed since I last looked into them. I still don't think they are for me, but it sounds like their structure has improved a bunch. I'm glad your's has worked out for you.
Although now, there is money to be made, there always is, but its up to you, to stay on top of it, know what you own, and have a relationship, with your advisor........
I am afraid, that Inflation is here for a few years. However I am surprised how little gold or silver, has increased in value, which puzzles me,,,,, They are both over sold, but some, in the portfolio does not hurt.
Our market has not "collapsed" really since 29. 87 and 98, were not good, but it did not collapse....... The inflation has been coming. Trump spent too much, in many ways, here comes the spend Commando Biden, and its exactly what we did not need. I knew once the stimulous checks were coming out, it was going to be trouble.....
Biden now has put it in the Federal Reserves' hand, except they are going nothing, and I do not see it at all. The Democrats have their head in the sand, still believing good job reports and wage increases are good, yet they refuse to adjust inflation.
Biggest cause of it all, is the war on fossil fuel. They want green energy, which is not going to happen, and you should just suck it up..... I do think, that they might have to make corrections. No reason we should not be energy independent. I see oil going to 115 a barrel by summer.....................................
I don't advocate trading stocks........the tax consequences kill you. My son has been trading and he has had some huge gains in Moderna, [I think he said 400%] Pfizer, Nvidia, etc that he sold last year....but its funny to hear him talk about the taxes incurred from the sales. That Nvidia currently has a big fat covered call spread ....but I think the stock can be bought cheaper.
You can use the trading of losers and offset with some gainers to be tax neutral...or rotating from sectors you don't want to be better positioned. I think I can rotate into some good long term holds at a cheaper price later this year.
If not, then no sweat....I just get a mid single digit return in the meantime and I'm good with that while still holding a lot of cash. If the market dips, I buy some good stuff at a discount and hold it which typically results in big gains.
Which market did you see "rip" today? Did you mean "dip"?
Sagging more today. I cant predict the future…but typically markets drop more on interest rate rises…then recover some months later. A lot of that selling is in…its the selling for a huge Biden boo boo that Im worried about…and that can happen in multiple categories. I think the Odds are fairly high.
The love of money IS the root of all evil.
Bowsite makes the world go around!!!
It is being shortsighted, but in a spiraling economy, you have to be shortsighted. especially in my case where I retired at age 55, 4 years ago. Since I retired all my investments are in fixed income and inflation protected annuities. I could care less if the market goes up or down. Inflation also has far less of an impact on me.
I had enough to retire in 2018, and my strategy allows me to have approximately same buying power throughout my retirement. I'm not interested in capital gains anymore. It's my time to reap the benefits of my agressive investments leading up to retirement, not to pay a financial advisor's salary.
Goldman says its a 35% chance we will go into recession. With the Issues above, I don't see how its not 100% we go into recession. Currently its still buy the dip....when it should be sell the rip. It will probably take a year for the reality to take hold, then it will get progressively worse for the equity markets and small businesses. The companies with no earnings will of course get slaughtered.
Ask yourself; what happens when the folks that bought a home in the last 2 years suddenly have no equity?
Don't shoot the messenger.......
"Be greedy when people are fearful......"
Inflation is rampant, so someone that bought their house 2 years ago will have more equity, they're paying for an asset with less valuable money than when they locked in that mortgage 2 years ago.
I'm continuing to lock in cheap debt on income producing assets while still slugging away at the stock market. I'm in for the long haul while keeping enough cash liquid.
I retired last year at 51 and my money manager at Morgan Stanley cautioned strongly against the traditional investment advice of re-balancing one's portfolio away from equities and towards bonds for early retirees. His thesis is, while may have been sound advice for people who were retiring at 65 and only expecting to live until 80, it could potentially result in people who retire at 50-55 and live to 90 running out of money prior to their deaths.
In terms of liquidity, we are ~98% in equities although we have shifted a bit more toward value/dividends than growth.
As stated above, generating a 7.5% return today is flat/negative once inflation adjusted.
Good for all you that retired when you wanted and could!! If you have solid advice outside what my wife and I are doing I'd love to hear it!
Worth repeating ^^^^^
Historically, the stock markets have averaged around a 10% annual return (not adjusted for inflation). With compounding interest, that means your stock investments should double every 7 years, without adding any principle. So, under normal market conditions, a $10K investment today would be worth $80K in 21 years. If you periodically add to your investments, your nest egg grows even faster. Exponential growth is truly a wonderful thing, especially if you start investing early in life.
Now, I could easily pay off the balance and not make a big dent in the portfolio, but at 2.4% interest, it makes no sense. It's cheap money that won't come due until I sell the house, and with the real estate market so hot here, my equity is far outgaining the interest accruing on the balance owed.
The other was a hot tech company I joined in 2000 at the peak of the tech boom. Tellabs. It had the 4th best performing stock of the decade of the 90s (behind Cisco, Dell, Intel). Admin assistants were driving Maseratis after multiple splits. Then WorldCom collapsed (our biggest customer), most of the tech sector collapsed, the stock, and my options, went from $77 to $3 almost overnight. What was a $2B+ annual revenue company now no longer exists.
Matt, I gave that rationing up long ago. I'd get the hell out and put the $ in something that's positive. JMO
Learning when to take profits before giving too much back and when to get out has been my hardest lessons. That and fail safe to avoid disasters. I had one in February or January. I'm stuck with miserable dsl feed (sometimes uploads as slow as .1 or .2 damn !)and sold all my 3x leveraged ETFS when they started turning. Except the sell orders never got through to Ameritrade. I had some life stuff going on, MRI and stuff and truck to fix etc..... when I got back in the game I checked my accounts and discovered I'd been semi slaughtered. I now make it a cardinal rule to set stops same time I buy.
And I now have a Verizon 150 g hotspot I use for solid internet hookups and double check my orders now instead of assuming they went through.
It's fun I enjoy it. Maybe fighting dementia as an old man LOL
Be well Hombre
It sounds like we have similar investing styles. I have my "fun money" account that I "swing trade" with, then we have our retirement accounts that are more long term. I rarely touch them.
There's definitely an addictive quality to trading stocks. I started dabbling with options a few years ago, but quickly decided that was a little too much "action' for me. LOL!
.Options are too tough for me..... the 2x and 3x etfs are my favorites.
Here's an example of my system at work. (Top horizontal line is stop out, bottom horizontal line is buy in) Only trade of the day was a stop out...Bought SOXL on March 16 @ 34.665, stopped out at 39.57 today. Usually use 10 day ema as a stop but some like SOXL I use the 20 day ema as stop because of wild volatility. Since I trade mostly in a IRA and a Roth IRA I have to live with the 3 day buy/sell rule. However in IRA there are no tax implications until cashing out of IRA. (wish it was all ROTH LOL) Anyway after giving back a bit I ended up with a 14% gain on this trade... 2 weeks held
I checked Mint's Disney sell and think he sold it perfect. Obviously he's more fundamental while I'm 95% pure technical. But we arrived at same conclusion.
Here's 2 more examples of what I do...
TQQQ was bought on 3/16 @ 46.33 and is still open. Top horizontal line is my stop and bottom line is buy point. Currently up 28.94%
TECL was bought 3/29 @ 65.22 and still open. TOP line is buy point and BOTTOM line is stop. Currently down 3.45%
I've tried to arrive at how to set stops forever...this is a recent change and I like it. When I want a tight stop, like on a new buy, I usually just use the close of the previous day. Seems like almost all of my good trades are good right out of the gate. I've also learned not to buy during first hour or hour and a half, let the day traders settle in.
I'm trying to develop system that requires nothing during the day from me so on nice days I can do stuff.
It's been hard for me to go this way but I'm pretty sure for me it's the way to go.
Just my opinion...if you're gonna change your stop because it's gong to be hit, why'd you set it in the first place?
Still learning and hopefully always will be.
Bluedog, thx for posting…interesting. Is there an indicator in your system that would have you increase the $$ devoted to a trade?
badbull...... I had my own disaster around your Enron time.. I'd run my account up over 450k with what I recognized as very dubious valued internet crap. I was 10 foot tall and bulletproof no stops. No skills and really a total FNG... I'd just sell when market turned. Then the fickle finger of fate threw a knuckleball. I got stupid and did a compound skull fracture, mri showed 2 brain tumors previously unknown .. anyway after surgery and gamma knife..maybe 8, 9 months later I'd come around enough to remember I owned stocks. After logging in my fat 450k was down over 95%. Yup.. fk me. LOL Should write a how not to self improvement book.. How to turn 450k into 18k.. lord , makes me nauseous just remembering, try to block it from memory.
Guess education isn't free.
“ Dan, I hear you. I just hate pushing the sell button when I'm in the red this far.”
You both would be smart to take the emotion out of investing - it causes people to make bad decisions because they “feel good”.
That account kept dropping and they said, Buy and hold works. Then it dropped to 50% and we told them to sell....no, it will come back they said. We finally forced them to sell at Down 70%. It could have been worse, many of those companies went to zero.
Now I know their buy and hope strategy sucks.
That was when I decided I need to run my own money. I too own mostly ETF's broad market and actor specific....I'm currently only holding 2 stocks, GOOGL, TRTN. I will probably buy more Googl shortly [before the 7/1 split]
There are industries that I want to own going forward for long term growth like Semis, [SMH] but I'm going to wait as inflation and current market and politics point to tough sledding. FENY, XME, FMAT, XLB, XLE are all sectors that will hold value in inflationary times.
I might trade the China internet ETF and the Cannabis ETF's next week on news...but then I might already be too late to the party-grin
"You both would be smart to take the emotion out of investing ..."
Matt, obviously you're correct. I took your advise, yesterday. I dumped Cathy Wood's crappy ARKG fund for a 46% loss. Then I used the remaining cash to buy call options on GDX, which are currently up 31% in just one day. I just set a tight stop on them, so I've locked in those gains, with plenty of expiration time left for them to climb even higher. Now that feels pretty good ;-)
Mint, perhaps I haven't had enough coffee this morning, but I don't understand how your employer's after-tax plan is much different than a regular ROTH plan. Do you mind explaining? Thanks.
i don't think it is. i think he is just referring to after tax 401k contributions being reclassified as roth at the end of the year.
I'll PM you my address so you'll know where to send the advisory fee. ;-)
Not to mention you now have some losses that can be used to offset gains if you want to re-balance anything within your portfolio.
Except, whoops- the CPI print is well above 8% and rising in March. Worst inflation in 40 years. That brings up 2 questions;
1) when will people take their earnings after tax and multiply by .08 to see how much they are losing due to this administration.
2) when will the avg Democrat see through this load of horse puckey the current Dem politicians are selling? Its costing us all a lot of $$$$
“The stock market is a device for transferring money from the impatient to the patient.”
Yes, Stocks are cheap….and they can get even cheaper.
Im in no hurry to jump back in. I look at future trends. Are things going to be better economy wise in another year? I don’t see how with the current idiots in charge.
Some industries should hold their own; oil, nat resources, Healthcare…but again, no hurry.
We are in a worse financial position than we were in the 1970’s when inflation took off and stagflation set in. It was brought back under control with a 13+% fed rate because the federal government could afford the high rate on their own debt. Debt to GDP was only 35%, now it’s 135% and they are still printing money, it hasn’t stopped. As far as I can see a 3% to 5% fed rate won’t stop an 8+% inflation rate it never has, has it? Can anyone give an example when it has?
So Supply was strangled.
Then the same Marxist zealots juiced the economy with printed free money. THEN!! As if that wasn’t bad enough. Paid people to stay home, digging the supply side hole deeper.
So then with everyone at home with free cash, demand for EVERYTHING skyrockets. When demand outstrips supply, Inflation occurs.
But for some reason everyone has already forgotten that the incompetence started with the 3 yr Covid lock downs.
And they are pleased that no one is tying this back to Covid.
Because it took Civil disobedience to remove the mandates. Other wise we would still be locked down. So thank Joe Manchin and the Covid protests or this would be even worse.
That may be one of the oddest takes I have read on this site - of which there have been many.
That’s called the truth. Our Canadian debt was doubled during Covid. We had a greatly lowered supply of goods and a giant increase in money supply, way more than we needed in either country and we now have inflation. How could we have known that would happen?! And now we won’t be able to get it under control any time soon without paying a huge price.
Spot on Mike. Monetary policy has been far too accommodative for far too long…
In a series of tweets, Mr. Trump said, “The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” adding that “the USA should always be paying the the lowest rate.” Mr. Trump continued to criticize his handpicked Fed chair, Jerome H. Powell, saying, “It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing.” - September 2019
But let us not forget. Millions of people were calling for the Covid shut downs to end 18 months before they finally admitted they were wrong. (Studies showed the lock downs and masks did nothing to stop Covid).
They had the FBI on terrorists parents. Had kids locked out of schools. They listened to that hack Fauci who if given a chance would lock us up again.
Free money has been going on for too long and eventually had to be reconciled.
But It was their Marxist tendencies that really drove us off the cliff. Again we should be thanking 2 democrat senators for saving us from further damage.
The definition "no one" to start.
It’s frustrating to me that it seems that many have appeared to let them off the hook for demolishing children’s education, mental health, and the economy. Because the Marist elites knew better than the peasants who actually ended up being correct after all.
I don’t see how this situation can be resolved quickly. It seems to me there are more shoes to drop…but I’m just a working stiff and not an economist.
This current US admin- along with Obama and Trump- don’t understand budgeting and being fiscally conservative. Obama and Biden ( actually the same admins) spend on Social issues. Trump used his mantra, spend money to make money. These politicians think they can spend whatever they want.
We have inflation with the next phase being folks clamoring for higher wages….which will exacerbate things. The Biden admin will jump on this wage/unionize bandwagon using Corporations and “the rich” like Hitler used the Jews as his bad guy. ( They always have to have a bad guy)
I just don’t see a quick resolution….and if there is some catastrophic event things will go sideways in a hurry. In a big sucking downtrend, very few businesses aren’t affected.
I’m really trying to identify an investible trend here moving forward….
I think if we get a decent bump over the next month 8 will jump back into the inverse ETFs that have done pretty good as hedges over the last few months.
He is talking about people who throw themselves under the bus because they are too dumb to separate politics and finance.
And then there are those who can’t distinguish between themselves and their grandmother….
I feel bad for anyone who follows your advice.
Cash is depreciating at almost 10%/year based on the current rate of inflation, so it is probably the worst way to hold value right now. I have a couple of very conservative elderly friends who are 100% in cash because they think like you and their financial wherewithal has been significantly diminished over the past year.
On the other hand, putting cash into a depressed stock market should prove to be a great investment over time. My wife and I invested heavily through the 2008 recession and are in a very fortunate position as a result. By low, sell high.
Who says the moon and stars don’t align just right every now and then.
I've been trying to hammer a couple accounts and buy as much as possible since they've been going down so far.
I'm 25 years from retirement and 9 years from my daughter's college. I can't help but think both longer terms will benefit from me buying now when the prices are low
And the S and p doesn’t always give a 10% annual return every year. There are 5 year periods where it gave a negative return, that is important to consider when you are 70 yrs old.
We’ve been heavily invested in stocks since the ‘90s. We always contributed the max we could to our SEP IRAs. We rode out the crashes in 2000 and 2008, without cashing out any of it. Yes, it was tough seeing our balances plummet, but they eventually recovered and continued to climb. We were both making decent money, so we simply stayed invested for the long haul. It proved the old saying “it’s all about time in the markets, not timing the markets”.
And the S and p doesn’t always give a 10% annual return every year. There are 5 year periods where it gave a negative return, that is important to consider when you are 70 yrs old.
This is why historical returns can’t tell us the whole story for a next decade time frame. The last time these economic indicators aligned was the early 70s and if you look at The following decade after that the overall stock market was dead money. I get the impression there are many here like myself that don’t have a 40 year stock market time frame- grin.
I mentioned sectors, trends and in particular semiconductors early in this thread. One trend I think is worth watching is for semis to be in more and more of the products we use. Its estimated the semi industry demand will double in the next 10 years. Thats a trend we can make money on.
How you do it is up to you. Its awfully tough to pick rock bottom….or pick one no brainer winner. Its easy to dollar cost avg into a a basket of these companies over the next year, 2 years or more to capture most of that gain- BTW, this is my strategy.
I will do a couple individual names but most of my money will be in SMH, an ETF that owns a basket of hundreds of these companies.
Who knew you could get such good investing advice on a Bowhunting forum- grin
Excellent strategy. Very few people get rich by correctly anticipating market highs or lows. Most get rich by steady investments over time into an index whose trajectory is up and to the right.
I’m holding back a chunk for tech and semis later this year…a ways from the bottom. When Apple tells suppliers to cut production- thats a telling indicator.
That's called Efficient Market Hypothesis and I'm a big believer. It's also why you should view anyone that claims to know for sure what way markets are going with a very healthy dose of skepticism.
And as an extension of that, retirees generally do not liquidate their portfolio all at once to fund their expenses, but rather we take it out a little bit at a time monthly/quarterly over decades. That makes it even easier to ride out the up's and down's with a buy and hold strategy. Think of it as dollar/cost averaging on the sell side.
Guys can try to time the market all they want, but in more normalized/less volatile times it was not uncommon for the market to generate ~ half its annual gains in just a few sessions each year. For those who jump in and out trying to time the market, it is pretty easy to miss most of the upside in and given year (not to mention suffering the potential tax consequences). Slow and steady wins the race.
I'm also kicking myself for not investing in the structured notes that a financial fiduciary friend suggested to me a year ago. They were too new and complicated for me to pull the trigger on. Turns out they would have been my best investment over the last year. 20/20 hindsight, I guess.
Agreed, good strategy.
I get the argument for S&P…but I find looking at sectors that will outperform in the 1,3,5 year time frame does a lot better.
Example; lots of big Software Co’s out there with very high valuations (30+ PE’s). Earnings estimates are notoriously slow to adjust… many of these are way overvalued and could really tank if earning come in bad qtr after quarter. Sure a company like NOW is ubiquitous and used by many companies…a proven and great product…but it has no PE…still loosing money. Will it be a winner in 10 years…probably…but its risky to pay too much for anything…and I think the S&P qualifies as overvalued right now.
On the contrary; There are energy co’s trading at low single digit PE’s and paying very good dividends…IMO, a much safer bet for the next year or so anyway…. I own some for a couple years now, and nibbled..but will be piling in if oil goes below $70 or they dip another 5-10%.
Any other favorite ETFs out there? Or specific sectors with the conditions we’re in now?
Good factual article on Zero Hedge on E V’s and where are all of the minerals going to come from at link
Beendare, do you have a reason for investing in just one metal company instead of a ETF that focuses on all EV related metals, like EVMT?
Might put some numbers in this calculator and see what you come up with.
That is all good and well if your pension system is in good financial health. There are examples of municipalities cutting pension payments by as much as half due to financial issues (e.g. Stockton bankruptcy). That would be pretty tough on retirees without a plan B.
Edit: high inflation can have a big, negative impact as well depending on COLA features.
“I get the argument for S&P…but I find looking at sectors that will outperform in the 1,3,5 year time frame does a lot better.”
For sure, that was just one example to highlight the error in looking at short, discrete time periods to come to conclusions about the value of equities as an investment vehicle.
On the flip side, if one wants a set it and forget long-term investment strategy, the S&P 500 is broad/diversified. While it has been a few decades, a finance professor I had in grad school had done a bunch of work and demonstrated the S&P 500 index outperformed the majority of assets managers in the intermediate/long term.
For those of you who tout higher than market returns, are you netting the tax implications (short/LT capital gains tax) against those that or just quoting a gross return? Taxes are the hidden cost of an active management strategy.
FWIW, I have done well by doing extensive research…and following a simple concept, “reversion to the mean”
That hurts me a little on high flyers that run way up as I prefer to lock in profits on steep run ups………but its made me a lot of $$ and it limits my market risk. Heck just look at a LT chart on Apple and then tell me the buy and hold strategy is better.
edit; I should clarify. I do not just buy stuff because its off 50%- thinking it will rebound. I look at charts and then reconcile with real time market conditions.
I used the software example earlier. Take CRM. Its been a good LT performer over many years…now its off big. They just laid off 10% of employees…and more importantly, businesses are pulling in their horns and not just throwing money at software right now. No way 8 buy a CRM here…but down the road, when there is light at the end of the tunnel for business it will rebound.
That reversion to the mean is powerful…but its critical to reconcile with both the market and sector conditions. .
Very difficult to judge when there's a light at the end of the tunnel IMO. Which is why I think the best strategy - particularly on a long term basis - is to continue to invest in a well-diversified portfolio. If stocks have further to fall, you will be lowering your cost basis for what is likely an inevitable bounce. It's really hard to predict the general trajectory of the market, which sectors will outperform others, and - most importantly if you're trying to make money off that information - where there are opportunities to generate alpha.
Speaking of which, I checked out SQM, and I like it!! I couldn't find a single negative in their fundamentals or valuation. And their earnings are projected to go from their latest $2/share to $13/share in their next report in March. Wow! I don't see any reason not to buy some. Thanks for the tip.
I will ping you off line.
The worry is recession and the corresponding downward revisions to Earning estimates which IMO is almost guaranteed for the S&P index stuff ( except oil) stuff like EEM I hold in taxable acct and will keep- it should hold up.
Going in and out of the market to hedge your risk is not the same as traders timing the market. I use the former especially in IRA accts and anticipate I will be in bonds by mid year……with remaining equities hedged in my taxable account.
The S and P 500 peaked at about 4700 in Dec 2021 then dropped to 3900 now. The Energy portion of it went up by 50% or more during that same time. The funny thing is that the mainstream media barely reported on it. I guess they don’t like Oil and Gas…
I guess that depends on what "mainstream media" you pay attention to. Places like Fox Business Network and CNBC discuss the energy sector's performance almost daily. So does online investing sites like Zero Hedge, Marketwatch, and Motley Fool. Not everything is a conspiracy.
Besides, it doesn't take a stock market genius to recognize that oil and gas companies would do well with oil at over $100/barrel and gas at $5/gallon with strong demand. I piled into the energy ETF called XLE almost 2 years ago. It has propped up the rest of my portfolio.
Beendare, when do you think this will be "priced in". I was thinking since everyone (just about) thinks we are headed to recession and poor earnings, it might be close to priced in already. I suppose there is always room for it to be worse than forecast. But then there is also the possiblity of surprise to the upside as well. Again, timing is tough.
Working for an oil and gas company, a tremendous amount of my financial future is tied to the performance of the sector (salary, bonus, stock options, etc) - so I'm pretty heavily exposed. With regards to my investments, I treat them as a hedge to the rest of my O&G exposure and diversify into other sectors.
Beendare, when do you think this will be "priced in". I was thinking since everyone (just about) thinks we are headed to recession and poor earnings, it might be close to priced in already
This is my opinion as well. The downturn we seen has been driven more by the impact of a potential recession than the impact from the change to working capital costs. Very possible we see a very slight recession and a hit to earnings and actually see stocks bounce because of it. Seems more and more people think this might be a soft landing instead of a hard landing.
And yes, it’s very under reported in mainstream news and there is a definite anti-oil and gas bias. You’ve heard of the climate catastrophe coming up that they occasionally report on, all caused by the horrible oil and gas industry?
And good for you if you had the sense to ignore the bull and invest heavily in oil and gas 2 years ago. You’ve more than doubled your money! Most people didn’t and it was off the radar for many financial advisors. That’s why I asked who did, I was curious.
In my opinion I would avoid any financial advisor that suggests you invest a heavy amount of your portfolio into a single sector.
If you look at the Shiller P/E by sector, financial services is the only sector that is significantly lower than the 20-year S&P average. Considering that rising interest rates will benefit financials, I'm guessing that sector will outperform the rest in 2023.
Not that anyone should go all in on one sector. A well diversified portfolio is always the safest bet. But, If you're like me, and like to invest a bit more in individual sectors that you think will outperform during a specific period, you might take a look at financials.
Disclaimer: I'm just some dude squawking about investing on a bowhunting forum. Take my opinions for what they are worth.
Mike- That is sector rotation investing- my chosen strategy like I previously mentioned. Example; I think something like EEM is a sector that should do well in the next 1-5 yrs ( country risk here- use stops)
I think a recession is only partially priced in, in other words, I don’t think its a steady ramp up from here. We are seeing the January effect, my bet is it doesn’t last until mid year. I think Analysts haven’t priced in a recession yet.
Why; 1) the fed is essentially telling us they will tank the economy and overpriced assets ( ie- the market) 2) Demand has fallen off a cliff, Ports clearing up- less goods coming in, just about every retailer cutting back on orders, RE, Car sales dropped like a rock, companies laying off, etc
When Goldman lays off a bunch of folks…thats telling us that some of the smartest folks on the planet think we are going into recession. I will lighten up my broad SP stuff ( in my IRA- non taxable) in the next couple months. I will keep oil stuff…but I dont expect returns like last year, probably no more than 10%. I own low PE stuff like SQM and will hold that and sell covered calls on some. I will hold my EEM LT but with tight stops.
IMO all of this is going to show up quicker in stock prices than the broader economy; which I think explains exactly what has happened to valuations over the last year. That is, all of these recessionary fears have been priced in and prices won't move much if we actually see a mild to moderate recession. But, that's the trillion dollar question. How much has it been priced in. Time will tell.
Its all an educated guess...and there is risk involved in every asset class. There is no 100% safe investment.
The folks that had money in bonds for the last couple of years to avoid risk- most bond funds lost money though not nearly as much as the S&P.
The good news is we don't have to be geniuses to see trends that will succeed over a longer time frame.
That would depend how much you overall net worth is in the stock market and your time horizon for your investment. And how much you believe in your research, convictions and risk tolerance. Also If the overall markets are dropping the only way to make money is to be heavily invested in sectors that will outperform the market, like oil and gas has done for the last 2 years. Too much diversity in a bear market will get you negative returns. Lots of diversity looks so smart in a bull market, but it’s mindless, just buy an overall index etf.
A great financial advisor or smart investor will still make money in a bear market, above the rate of inflation.
Still plenty of places and sectors to do well in.
I hope I didn't jinx him.
It’s essentially unheard of for anyone to deliver alpha every year or in every. In efficient markets (and I believe our markets, while not perfect, are largely efficient) everything is essentially a bet, and people may have their rationale as to why their bet is right, but the asset price will reflect all available information so the only thing that will move that price is new info - and there’s no way to tell if that new info will be good or bad. This is the crux of Efficient Market Hypothesis. And the data backs up this fact. Active managers, over the long term, have historically under delivered against passive managers.
Grey Ghost must not be too bright for doing what he did, quoted below:
“I piled into the energy ETF called XLE almost 2 years ago. It has propped up the rest of my portfolio.”
Kinda seems like active management to me, especially if he took the money from an S and P 500 ETF? Seems pretty smart too? Is piling in the same as heavily invested in a certain sector?
I put my money into a wide range of mutual funds, covering company types (eg, small cap growth stocks, etc), industries (eg, healthcare, real estate, etc), foreign markets (eg, emerging markets), and also index funds (eg, S&P, etc). Every few years I will look at where things are and rebalance my portfolio. As I don’t put much faith in active management and believe in EMH and Modern Portfolio Theory, I don’t use a financial advisor and aim towards a well diversified portfolio.
I have a question for you, Mike. You keep bringing up the performance of the energy sector, particularly oil and gas, over the last year. Your comments make it seem like it was pretty obvious that the sector was going to do well. Can you tell me why it was so obvious that oil and gas was going to do so well?
Take a look at those energy ETFs starting say Feb 2020 to today. Bh
Sector specific ETFs have made this type strategy very easy. I own ETFs in every sector, and simply move money around in them as the economic cycles dictate. My energy sector trade 2 years ago was fairly predictable. I didn't expect it to last this long, but I'm happy it has.
It's not always a slam dunk, however. I didn't expect the communications services sector to drop as far as it has. Consequently, I got caught in an overweight position in that sector, and incurred more losses than I should have.
Overall, the sector rotation strategy has served me well. It keeps my brain in the game.
My investing advice comes from listening to many wealthy, smart hunters from all kinds of sectors, from technical people to big business owners, to board members of huge pension funds, even some financial advisors and from a variety of investing podcasts. Lots of podcasts while I drive and scout for critters, and I purposely pick ones that I disagree with to challenge my own bias. I thought the S and P 500 was overvalued at 4600, a heavy decline was coming and oil and gas stocks were undervalued. The political nature of anti-oil and gas investment, climate alarmism, mainstream news bias against it told me it was a great place to put your money. Their solid cash flow, high dividends and stock buy backs convinced me. I wish I had done it with way more money! I don’t have much after ridiculous Covid lockdowns crushed my outfitting business. Thanks for asking.
I don’t have a chart in front of me, but I’m fairly confident in saying during the last 25 years or so, the broader market (use whatever benchmark you’d like) has outperformed oil and gas in all but a few years. Yes, there’s been a nice bounce in the last two years. But if you look at the 20 year period leading up to that point, the return of the XLE (as a data point) was essentially 0%. For context, the S&P 500 returned about 500% or so over the 20 year period leading up to the COVID related dip. In short, oil has been trash for a long time.
Possibly, but you feel there are people that can find the bull market and generate a positive return every year then I’ve got some ocean front property in Arizona to sell you :) (I kid I kid). I’m much more comfortable with a diversified portfolio that will balance risk and return.
Not sure why you would do mutual funds instead of low cost ETF’s though that simply track the main stock markets?
I just threw out “mutual funds” as a catch all. Yes, I am in ETFs where I can be.
The political nature of anti-oil and gas investment, climate alarmism, mainstream news bias against it told me it was a great place to put your money.
I’ve been in the business 20 years, and these forces aren’t new. And historically the industry has generated strong cash flows, high dividends, and lots of buybacks. They are primarily value stocks that, as the data has shown, have not generated much in returns for a long time. We’ve benefited a lot from the macro environment the last few years that’s for sure and it’s great to see the rebound from the COVID era lows. What are your sources prognosticating for oil and gas valuations over the next few years?
As for oil and gas over the short term, less than a year, it could easily go lower but then it will rebound and go much higher, probably into an energy crisis. Way more likely to go higher, over the long term, for oil, gas and mining of metals. I would want to be pretty heavily invested in these areas, hopefully you’ve already bought in at lower prices from a year or two ago and can buy more when the prices drop, hopefully over this year. The idiotic “non-green, not-possible-transition” will be driving these value companies way up over the longer term. Just my two cents.
Yup. There have certainly been boom and bust cycles. But that’s kind of the point. You need to time things to do well. Even in the recent run up of energy, you still needed to time things. But essentially if you compare the XLE to say the SPY over any time frame outside of the past six months to a year, the S&P has outperformed. And there was a LONG run where energy stocks returned zero growth when averaged out.
Also, I had no idea that oil and gas has always generated strong cash flows, high dividends and lots of buybacks?!
My company didn’t lower their dividend payment for nearly 80 years (until COVID). Pretty common with most of the industry. And cash flows have historically been strong in the industry, especially operating cash flows. It’s a pretty capital intensive business though. So despite the dividends and buybacks, still needed to pour a lot of money back into the business to maintain the status quo. All historically speaking. It kept valuations pretty flat. Even now with the windfall, most of that money is not going into growth, it’s going back to shareholders so I think there are long term questions about the industry’s ability to deliver cash down the road.
Way more likely to go higher, over the long term, for oil, gas…
The idiotic “non-green, not-possible-transition” will be driving these value companies way up over the longer term
Why do you think it’s going higher? Supply? Demand? Production and investment has been increasing (albeit much more moderated than in the past) and you’ve got people calling for some level of recession. So what forces do you think will push valuations higher? Asking genuinely. I don’t have an opinion one way or the other. I think things are more complex and complicated now than ever, so it’s very hard to even form an opinion as to which way things will go for the industry.
Grey Ghost's Link
BEG, I found this recent article interesting. They poled 250 institutional investors on how they see the future of oil and gas.
I diid find it interesting that 85% thought natural gas will play a larger role in our energy needs in the near future. And that 66% felt that peak oil demand will occur by 2030. Like you, I wonder if those predictions have changed any over the last year.
So for example; I bought TSM in my ira on a couple buys after I mentioned it here and its up about 15%. Now what? They produce 70-80% of the high end chips 5nm and smaller…eps up 78% last yr, great 5 yr outlook but their future eps projections and cap spending are lower. The stock is 40%+ off it high but I ask myself what is fair value?
Country risk, sector risk and a few more negatives….but its still probably worth $100 ($86 today, under 80 last week) its to be expected it will back and fill as its gone up big in the last month. Personally, I am not going to watch the big electronic sellers like Apple for difrection…but I think we have seen the bottom on this. I put in a stop 10% up so no matter what I win. If it drops into the 70’s, I look at it hard again. TMI? Grin
Same with SQM, thatI mentioned to Matt, it looks like their labor issues are over ( maybe, its a banana republic) and it will back and fill but with more wild swings. its riskier than a TSM and its priced accordingly.
Bigeasy is right about one thing….its hard to outperform the indexes but its possible even for an avg guy like myself….I have clients that do it every year. They won’t take your $100k…typically its $10M minimum or more and just from word of mouth these guys are buried.
I don’t really pay attention to buy and hold SP performance…I balance my risk differently. It didn’t bother me one bit to be mostly in cash last year with only a couple sectors- that killed the S&P.
Oil is up, but I wouldn’t expect it to do what it did last year. Buying the oil indexes is OK…but within that index there will be outperformers. Multiple sources ID’d A few…which I bought along with adding to the indexes. I bought CNQ the end of last week. I was comparing it to another low PE and high div oil co. ENQR ( PE 4, 8% div) numbers looked good…but they are plowing a big % in windmills and such- so I passed. More fish in the ocean ….which is the advantage to hand selecting these over indexes. More risk? not if you manage that risk well; stopping them out…selling covered calls or option spreads or just plain watching it with a plan.
Anyway, some random thoughts on my process. If I can help or if you like something, ping me but I hesitate to give picks and then a guy just sits on it. FYI, the stuff I mentioned in my posts I have a strict plan for each.
The Random Walk down WS guys think all of this stuff is priced in, thats hogwash. There is anomolies we can use as individual investors…and its worked for me.
Then what is our plan? If we hit a recession those gains could turn to losses.
Anyway…IMO now is the time to be developing a plan for your assets. I’m going to try and kill another Coues deer with my recurve to show the first wasnt a fluke!
In your 20 years on the production side of the oil and gas industry how many rigs have you invested in and were they successful and when the price per barrel went below $0 How many barrels did you buy?
I will say this though. There are plenty of decent, good, and better options “on sale” right now, that will eventually go back to where they were closer to their highs. I prefer to get paid while i wait, so i own very few positions that do not pay a decent or better than decent dividend. Some ive had for years, some are recent acquisitions to my portfolio.
As someone above said though, its best to have an idea on a good exit plan. A simple stop loss can take the emotion and thought out of it if its a concern.
I tend to hold and not sell, unless something has changed in company management or financials in the company are going the wrong direction.
Ups and downs occur in the market and are out of most of our control, and that will never go away. If you make good choices going in, in the long run you will be fine.
(A simple investment, like an energy ETF, XEG went from $8.42 in Feb of 2020 down to $2.65 in March of 2020 to now at $15.63.)
FWIW, the WSJ had a rather obvious article this weekend saying Semiconductors are the new oil that every economy runs on. My bet, this wont be straight up from here- its a huge cap ex intensive industry and they are spending a lot going into a downturn.
For guys who don’t want to do the research; I have been following Dan Niles- danniles.com- for decades since he was the Intel analyst. He has his own fund, Satori fund that was up last year. If I was going to have someone manage my $$$, he would be on the short list. I don’t know his min…He does a short/long strategy that, contrary to what some say here about active mgrs- he made money last year and outperformed.
He is on CNBC a lot and you can search his commentary. If you lost money last year…look at Dan. Unlike the supposed financial advisors that just plug your money in indexes and collect a fee, Niles actively manages and controls your risk.
Disclosure; I dont know or have any money with him…but I follow his comments regularly.
The price of oil going negative was essentially an anomaly. It was related to there being essentially no storage capacity left. Unless you had a massive storage you had no way to capitalize on the negative oil price. One only need to look at the future contracts for out months and also to oil and gas valuations to recognize $0 oil was a temporary anomaly.
And I said it already, the vast majority of my personal financial exposure is tied up in oil and gas. I have more oil and gas stock in my portfolio than anything else. Those aren’t the questions RK asked.
I like buying my stocks on sale, so I generally only buy when there have been several very bloody days in a row on the market that have driven prices way down. Yeah, I know, don't try to catch a falling knife. Thing is, I've generally been pretty successful with this strategy, catching several of the lowest days in the last 5 years. I'm sure I do have some lost opportunity cost by not being more invested in the market for longer periods of time and catching extended performance upswings. I'm re-evaluating some of my strategies. I put a lot of stock in Warren Buffett's investing theories, and there was a time when he was an extreme "value" buyer, but eventually got to a point where he said he'd rather pay a fair price for an excellent business than an excellent price for a fair business. I've never been one to buy stock in what I think is only a "fair" business, but I'm getting to the point where it's a little easier for me to pull the trigger at a fair price for an excellent business. Though I still will only buy on significant down days in the market.
One thing that has always amazed me (and continues to do so) is how most people like to buy everything on sale, except stocks. The average investor wants to buy stocks when they're on an up-swing, and wants to sell them when they're on sale. My thinking is the opposite of that. I do definitely end up holding through some significant drops in the market, but just try to average down in per share price as the price goes down, as long as it's a good company stock and there isn't some specific worrying reason that particular stock or sector is getting bloodied.
A simple investment, like an ETF that tracks the energy portion of the S and P 500, XEG, went from $8.42 in Feb of 2020 down to $2.65 in March of 2020 to now at $15.63.
Did either of you catch the 2-3 times increase at least?
For me, the light went on when oil went over $100/barrel and gas went over $4/gal, with no significant drop in demand. That was my signal to pile into an energy sector ETF about a year ago. I didn't realize the full gains from the low point in 2020, but I'm up 76% on what I did buy. And as I said earlier, that overweight position prevented my overall portfolio from suffering loses similar to what the S&P did last year. I wish I would have bought more, but hindsight is always 20/20.
How about you? When did you conclude the energy sector was going to have this amazing run, and when did you invest in it?
For the part of my energy portfolio that I invested in around that time, yes, it did. I already had energy investments at a higher cost basis, so they didn't see the same rise.
But pretty much every industry recovered 2-3x from their COVID lows, until the Fed became hawkish anyway so it's not like energy was really anything special relative to the market when talking about the COVID recovery. It's only for the last year or so that it really outperformed the broader market.
Satori is a hedge fund, correct?
In my system- I’m rarely early and I miss some of that early up move, thus I did good last year but not great- the index stuff dragged me down. I only got 35% from the 65% up in energy- I was admittedly late.
I bought some semi stuff recently- late again…. But I think those might test their lows again in the summer or fall if there is a recession. It’s a very high cap ex industry- profit can go away quickly- just ask Intel grin
I’ve made no bones about my strategy. I am a long term investor, I believe timing the market is ridiculously difficult, I believe in Efficient Market Hypothesis and Modern Portfolio Theory - therefore I build a diversified portfolio and take a relatively passive approach to investing. Mike seems to think that it was a no brainer that energy was going to go on an amazing run. So we’re keen to understand how he played it. You know, did he walk the talk? Furthermore, where does he think the winners are this year?
Maybe you should try a bit more humility and respect for your fellow bowsite members even when they can’t give some technical analysis or use phrases like Efficient Market Hypothesis. It’s such an intellectual high horse you always ride on with a “I’m smarter than all of you peons”, attitude.
You bigeasy are an expert in the oil industry for the last 20 years right? And you missed a 5 time gain in energy stocks, not 2 or 3 times. 5 times! The S and P 500 had a less than 2x gain from the Covid lows to now so No it was a very special increase in YOUR AREA OF EXPERTISE. ’And both of you say that $0 oil wasn’t a signal that the industry wasn’t going to have a massive increase?! That timing that play was ridiculously difficult?! Really? You two can’t even admit when you totally missed a golden opportunity.
Matt says he piled into oil stocks when oil hit $100 and mainstream news told him to do it. There’s a lot of space between $0 and $100! I would say he took a big risk, it could have easily been too late, he got lucky. These huge boom and bust and then growth opportunities don’t come along often but there is no reason you can’t capitalize on them when they do with timing the market and heavily investing, or divesting in one sector. Or even dumping a whole index like the S and P 500 after a 20+ year bull run. Smart investors really proved it by making a lot of money right after the 2009 financial crisis and again right after the Covid crisis and they usually weren’t the technical analysts, trying to prove how smart they are.
Chicken is essentially a commodity, but they are trying to brand it, even though it looks to be a pretty weak branding effort.
If someone follows it, please ping me in a PM.
You seem to not understand how equities are priced, how oil companies are priced, and how oil prices are factored into the equation. Again, you understand that oil company valuations did not go to zero despite oil prices going to zero, right? In fact, if you look at their valuations, I believe the implied price premise on a go forward basis at the time was somewhere around $30-40/bbl. In other words, there was actually already upside priced into oil companies based on the short term future prices even when oil was at $0.
And again, you keep saying I "missed" the low. It all depends on what your definition of "missed" is. I have plenty of oil stock that was purchased during the COVID lows of March 2020. Did I move all of my personal wealth into oil stocks in March 2020? No. That would be the height of stupidity IMO. I'm employed by an oil company and already have plenty of financial exposure to the highs and lows of the industry. Also, the valuations have been driven by some pretty incredible circumstances that not a lot of people were predicting - namely, the shift to capital discipline and sacrificing growth (particularly from the US shale patch) plus the war in Ukraine. As mentioned, I'm a believer in having a diversified portfolio that hedges risk to any one industry and I believe timing the market is essentially a crap shoot. And no, I'm not trying to make anyone feel dumb - on the contrary, it's about pointing out that there is fairly well established theory around this approach (theory that has won Nobel prizes for its biggest advocates). As someone who has proclaimed they listen to a lot of podcasts on these things, they shouldn't be unfamiliar to you.
To further the concepts, these attached charts were shown when I was in grad school during an investments class where we talked about things like Modern Portfolio Theory. The point of the chart was to show the amount of variation in asset class and sectors when looking at historical returns. None of them are always winners. None of them are always losers. Their order in terms of returns are all over the board. To further the discussion on a "go-forward" basis, if all signs point to a strong result in a particular industry, how do you know whether or not that upside has been priced in? All of this led me to be a big proponent of having a well diversified portfolio that balances risk and return. I'm sure there are people who generate higher returns in their portfolio than me - I guarantee there are people that have lost more more than me. In fact, on the second chart, the Asset Allocation Portfolio probably replicates both my approach as well as the returns I've seen (both relative to other assets as well as from an actual return perspective).
So, back to Grey Ghost's question, Mike. Since you keep suggesting that it's easy to pick winners and time the market, what are going to be the best performing sectors and asset classes in 2023?
GG is very much a traditional fundamentalist btw...he has been quite successful at it.
Beendare seems to have blended Ta and fundamental analysis very successfully.
I mostly just follow trends and patterns... have little interest in fundamental analysis or valuation.
Hope you guys carry on with this, maybe time for a new 2023 thread?
Different strokes and all. It's a very fascinating field of study to me.
I see no reason to be negative regarding someone else's thoughts. I'm not competing with others, only myself
Someday you need to teach me that voodoo that you do. The charts you've sent to me in the past looked like hieroglyphics to me. ;-)
Beendare...I like it. As I've said I don't use fundamental at all (well, seldom). My "voodoo" TA tells me it's a buy right now and likely will be a more certain buy soon.
I already had it on my "watch" list...will follow it closer. I'm fully invested at the moment so won't be buying any at present.
I use a very very simple charting system btw. Oftentimes I think people make it too complicated
I’m not smart enough to know what is going to happen, long-term.
I do think there is a danger to the groupthink of buy and hold, Its why I use sectors and rotating in and out of the market to control my risk.
I don’t catch every move up, but then I don’t get slaughtered on the way down either.
The modern portfolio group think uses diversification and long term hold as risk management. Color me skeptical when everyone is saying, the same thing .
I think there is a similarity here to 1970’s inflation- a list decade- which is a risk to that strategy and its worth evaluating for yourself.
Stock movement is all. Make a note on Tyson's stock price and follow it for a couple months. Nothing iron clad locked up but Tyson looks very well positioned to me. Not giving advice to anybody else. I get little use out of fundamental stuff. Just doesn't work for me. Example is the discussion on petroleum... I did play it some last summer, got out too soon but still made a little $.. I suspect the $ has been made on it and will be surprised if it's real strong from here on out. And i could be wrong, I don't mind being wrong at all. :) (a good thing)
Regarding interest rates in next year..... i suspect they've about reached their high. Expect light to moderate lightening. I think the feds are walking a tight line, doing as good a job as they can. Trying to moderate inflation without killing the economy seems a difficult procedure to me. Notice I DID NOT tell you what interest rates are going to do..... just what I expect and I could be totally wrong.
What danger is that, other than it not being adequately contrarian? ;-)
Like I indicated above, if one looks at the S&P's long-term performance, I think that it would be tough to claim that a buy and hold strategy with a well-diversified portfolio is "dangerous". From where I stand, I would think a strategy that relies on active trading and accurately timing markets would carry greater risk.
TSM buy last Oct is looking really promising. May purchase some more. Same as the PARA buy last year.
TSCM is going to do well. Take some time to build here but they will do 2-3 Nano here. Which means if China goes forward with aggression threat by 2027. These two new plants in Az will keep producing. With CHIPs act the Government is on hook to get Semi’s built here.
The 11-year decade you reference above both began and ended in recession (and ended during the deepest recession in our lifetimes), which somewhat reflects the folly I referenced above of trying to assess investments over relatively short time periods.
When people are investing for retirement, they are looking at a 30-40 year time horizon between when they start investing for retirement and when they actually retire/need to start drawing funds. The 7% rate of return you referenced is more normalized/representative of that sort of timeframe than what may have happened in a given 11-year period in the middle of that. Further, people don't draw down their retirement in a lump sum the day they retire but rather in dribs and drabs over 20-30 years. With that, the same sort of normalization occurs (some will be drawn down in bad markets and some in good, so there is an averaging of sorts over time).
But if you mis-timed the market during 2000-2010, you could have missed out on the ~5-year run where the S&P 500 was up 90% (9/02-10/07).
Those stocks you named are looking similar to Tyson far as positivity to me. I trade 3 accounts, 2 IRA and 1 regular taxable account which I tend to longer term hold in, mainly just keeping my taxes easier to do I think. ;)
In my regular account I'm all in Amazon currently. Guess Amzn fits right in with stocks you named. My other 5 current holdings are all in ETFs.
Stressing I'm not giving advice just telling what I do.
I also think most people spend way to much time and energy screening and reading to select just the right stock. I keep a stable of maybe 2 dozen and mostly trade out of the same 8 or 10 stocks (etfs) repeatedly.
What I'm comfortable with. To me it's money management over stock selection
I personally think the markets are going down a lit more. I am shorting a lot. I also sell options on stocks I own a lot.
I short the meme stocks on all spikes. BBBY, AMC, APE, GME, BB, APRN, CVNA. I am 55% short, 5% long all high dividend stocks, 10% commodities the rest cash. The past 4 years I have spent 3-5 hours a day studying the economy and stocks.
I strongly believe DCA long term. I also strongly feel everyone long in the market is going to getvhurt this year.
Maybe last disclaimer: I offer no advice and only state what I'm doing. Like Don and others I have spent many hours studying the market and arriving at my style. Whether I'm doing it right could be debatable ... I strongly feel everybody should develop their own personal style, hopefully with an edge that proves profitable.
I got in house just now and took a closer look at Tyson stock. TSN , for me, is trending towards a possible buy but currently not there for me.
Possible Ghost's pessimism is well founded. Time will tell I reckon.
Of course they are, Shawn. We'd expect nothing less from you. Care to share with the class what trades produced those YTD gains?
Must've cashed in on that $200/bbl oil bet!
Not in it for the long game. No im not shorting anything. Long as GVT does not default of some $ I put in T Bills with Itll be another great year. Let the Trust Attorney figger up what I owe Uncle Sugar in April. Bh
CBG: 1 year return: -8%; YTD return: 7% BBB: 1 year return: -71%; YTD return: 75% NVDA: 1 year return: -33%; YTD return: 22% AA: 1 year return: -8%; YTD return: 24%
Color me skeptical that you perfectly timed the bottom which was essentially a few weeks ago or that your portfolio is up 146% trading those stocks. Just sayin...
They were not timed. Just common sense , world events, and supply markets factors.
ElCryoto was easy after Mini Madoff! Clear buy, jingle in the pocket. Cant lose on that in short term. With Gvts the world over using it to pay digital ransoms. Until USA opens its digital central bank it is a easy pick. Sold it before for Record Profit why give up on it.
Metals , another easy pick. Look at commodities track. With the Russians bogged down, Joe adding Obama’s EPA Regs back on in USA and Fuel Trans cost. I figgered be a great time on a great company and it worked out well. In fact, so far today im killin it. Will it last the Summer out, Who knows? if it dont i take the $ and send it down the road.
Plenty of good short term deals out there. Not all work out.
My exposure to the current down turn does not bother me in least. Sold every asset i had save some very old Oil and Energy stocks in Jan 20. Jumped back April 20 and in with a much heavier exposure today. Timing most times will get ya. Just hit the cut right one time and its all jingle. Own zero funds (group of 20 or more stocks). I own my Fund, i built. Meets my goals
Where oil will go from now? I have no idea, I never said I did. I said it was during boom and bust and then growth cycles when you can invest heavily in one sector and make lots of money. Let’s say like real estate in 2010.
So, why didn't you, if it was so obvious?
Once my bank assured me they weren’t going to call my operating loans and were actually offering more loans I bought back into stocks. My other 50% went into gold mining stocks that have all held their value, zero losses. I can sell them all and buy other dividend paying mining metal mining stocks or keep them.
I’m sure your balanced, genius portfolio has lost money?
So where are we now in terms of the boom or bust cycle? More upside or downside? You seem to suggest it's easy to identify these cycles. I mean look at the chart I posted - energy underperformed the S&P in 8 out of 9 years prior to 2020. This included booms and busts in oil price (see 2014/2015). Why were you so certain energy was going to outperform during a period where we had demand falling off a cliff, had incredible supply surpluses, and ultimately had a Democrat elected into the White House?
I’m sure your balanced, genius portfolio has lost money?
Over what time frame?
A bloodletting out there today. See what gives at 1000est tomorrow.
Btw, sorry you have to take on debt to keep your business running.
Grey Ghost, thanks for the kind comment on having to go all cash at a not good time. The good part was that it got me out of the S and P 500 etf, and other ETF’s and bonds and made me really analyze what to do next to try to make up the losses. Oil and gas and even gold did it.
I agree with you there. That's always the case, IMO.
The main part of the boom, bust and growth stage is over
What does that mean? I don't understand what the "main part" is referencing? Are you saying oil prices will be stable for awhile? Are you saying valuations will be unchanged for awhile? Oil is cyclical, and you basically just said every stage of the cycle is over - so where does that leave us?
I thought that was obvious so now I’m wondering if I’m really lost.
I guess I'll stay overweight in cash and ride it out for a while longer. AA and BBBY...ouch!!
XEG went quickly from $8 down to $3. I thought it going back up was an easy call, so I invested in it. I was correct.
I’m not seeing those huge moves now so it’s become much more difficult to predict. I’m sorry if this is too complicated for you. Good luck with your investing.
I'll disagree. For the 100th time, you realize oil stocks were still priced at a price assumption of around $30-40/bbl even when oil was trading at $0/bbl. In other words, of course the spot price of oil was going up - the next months contracts were trading in the $30s from what I remember and things were about to roll over - but there certainly wasn't a guarantee equities were going up (that oil price upside was already priced in). As GG has pointed out, none of that really features into the reasons energy has outperformed the broader market recently. Sounds like bought something not fully understanding how it was priced and you got lucky more than anything - which is always a big part of investing! Best of luck as well - and I encourage you to diversify your investments.
Lets see what peeks an interest. AA made a tidy sum in 4 wks. No sense in taking it in the shorts. last gew days not many been spared. When most your expose is at the DOW 18k level its not wearing a hole. Bh
Coinbase had one of it regions just tap out?
Once the USDCB gets a foothold i really wonder if Crypto will fold or go Apey? One thing i do know is the middle man will get screwd ie; Banks.
Keep it up !!
So, unless you wanna go out in a last two three year blast off. Thats cool. Just lotta folks just dont realize whats waiting.
Cuts both ways i reckon, cuz at 60 you got around 20 years on average for your $ to make Some coin for yourself but you got to figger in a period of time to use it. Bh
Took care my grandkids. With that done. Theres no long haul in my plan.
"It tolls for thee"
I will most likely be 40% oil and the rest in short term bonds for much of the year.
If I can ekk out 20% this year I will be happy…..someone did 146%- wow
S&P earnings estimates dropping….( I think analysts are always late to the party going both ways)
MSFT earnings soft, the CEO even says “ 2 yrs” Cloud stuff soft. Enterprise software tanking. Rails reporting poor results. Then add a Dem admin that hates business and cant find their Ass with both hands….
Like I said earlier, Im ok with being out of that type of mkt environment to manage risk.
Someone *said* they did 146%. There is a difference. ;-)
Beendare's SQM call continues to roll.
I'm going to buy some YINN, based on conversations with a friend who I respect. With China re-opening, their people have a record amount of savings built up and burning a hole in their pockets, just like the US population did in 2021. The triple leveraged ETFs scare me a little, so I'm buying conservatively, but the payout could be big.
Was reading a gud paper from Heritage on what is likely to happen to the world economy when Chynah moves. Ugly stuff. 1st whiff i dumped it all like Covid.
Its a car company for gods sake, in a highly Cap ex intensive industry. This should be valued at about 15x-20x- and thats probably generous. Its at 50x now.
IMO, thats gambling not investing. Same for Crypto. How do you value it? What is a Bitcoin worth? Buy and hope is not a strategy. At least with a company you can value it through its assets and market opportunity. Even the staples have some pretty high valuations right now. Is Coke worth 27x earnings? Is Procter and gamble worth 25x? I don't think so.....
The last 15 years was a free for all with cheap money, growth at any cost. The high flyers with negative earnings ....or very high valuations have to pay the piper at some point.
I wish I had the gonads to short the Cathy Woods ETF's.
If i see markets start to dip im going take some more profits and pickup a few of those.
The news; No surprise Intel eps was horrible. Qcom ( next week) will have good results but poor guidance going forward. Cell phone sales off big. We will get a good buy in opportunity on semis later in the year. Sure semis are important…but demand is dropping like a rock at record rates.
This from CNBC yesterday; A total of 1.21 billion smartphones were shipped in 2022, which represents the lowest annual shipment total since 2013 “due to significantly dampened consumer demand, inflation, and economic uncertainties,” IDC said. Apple maintained its position as the number one smartphone maker in the world. The U.S. tech giant shipped 72.3 million iPhones in the fourth quarter, down 14.9% year on year, IDC said. Samsung, the second-largest smartphone player, saw shipments decline 15.6% year on year to 58.2 million units. —— FWIW, If you buy the Semi ETF….you get dogs like intc and a lot of exposure to over valued companies. If China takes over Taiwan, companies like AMD and Nvidia will go under- know the risk going in. With the totally bought and paid for Biden in Chinas back pocket, risk is very high.
Smart to take it while its in Black. Why ride out losses when you don't have too. Saw folks crying, literally crying over 2020 fall out. Was no need. Same folks will ride out the Funds and ETF's into the dirt if this Market terds out. Hope it does not.
All of you that lost money in your accounts last year have heard the excuses.
Take a look at this…….This from Forbes;
Citadel surged past Ray Dalio’s Bridgewater to the top of the all-time list despite Bridgewater’s estimated $6.2 billion in net gains in 2022. Citadel’s flagship multi-strategy Wellington fund returned 38.1% last year, shining during a year when equity markets crashed, and LCH estimates the firm finished 2022 with $62.3 billion in assets under management after posting the largest single-year profit by any hedge fund on record.
“It even surpasses [John] Paulson’s 2007 gain, which has been described as ‘the greatest trade ever,’” says Rick Sopher, chairman of LCH Investments and CEO of Edmond de Rothschild Capital Holdings, in a press release. “Their progress up the rankings in the past few years has been remarkable.” [ Lucky- ugh no!] The stellar year for Citadel’s flagship fund followed a 26% return in 2021 and decades of strong performance–$1 million invested in Wellington at inception in 1990 would be worth $328 million today, compared with $23 million if it were invested in the S&P 500 Index.
There are good and bad strategies ….but much of what goes as “financial planning” is simply group think. Look what group thinks money did in the 1970’s inflationary time frame.
On the flip side, Many HF’s and Money managers underperform…..I think it was Tiger Global that lost 54% of their clients $$ last year-ouch.
The point is, there are strategies that out perform…or are simply less volatile, less risky. Its up to us to do our homework.
Threw a nice jag, for me anyway, into a time deposit account last month. First time in my adult life that sounded like a solid move. Rolls over every 90 days with current interest rate. 4.25 for now. Sounded like it was going to continue up for a while until the meetings last week and bank fallout now. Also openend a SEP ira as I needed something more than the Roth and wanted the tax offset. Heavy in stocks/etfs for both. Still in the green vs contributions but getting cold feet finally. Starting to think it might be time to sit it out for a bit?
Looking to buy now at fire sale prices. Got 62 week highs on what sold. Avg 38%.
Prudent after last few days. Looking more like Powell will try and save Wall St but lil guy gonna get beat up pretty hard.
Not interested in this lashing going on. Cant print 80 billion dollars a month for 12 yrs then spend it without market disfunction occurring.
Shawn apparently making the perfect stock picks and timing the market once again haha
Lost some $ like everyone in last few days.
52 week highs on a product that had done well. No brainer to sell it. 38% cleared. Long term capital gains not going to hurt me to bad next April either.
Dumped half the $ into a QComputing tech firm. Glad i did. Good buy, decent sheet and dividend.
Easy to see what was going happen with bond yields dropping like a stone last ten days. Banks going TU was ancillary to my decision.
Again, i have two fully funded retirements. So, my retirement is taken cate of. Remember some retirement funds you can not use in an IRA. Seems wrong to me but thats the way it is.
Sometimes you hit the cut or your going to have to sweat it out. Was not going wait it out. Bird in the hand.
What's "Air stock?"
Kinda interesting to revisit some of the stocks and industries that were brought up as part of this thread. On a YTD basis (which is essentially when this thread started), we have:
NASDAQ +12% DJIA -4% S&P500 +3% WTI (Oil price) -16% (XOM -7%, CVX -12%) XLF (Finance sector ETF) -8% SQM -9%
Those of you that had "tech" or "balanced portfolio" are probably in a better place than those that picked "oil" or "finance" this year.
I had said “ if your selling your Apple with 90 billion quarterly's you probably made a big mistake”.
I bought some mineral, new upstart material and industrial stocks last fall. Doing very well. one is outstanding, all are used in core based materials for the two basic type EV battery production.
At what im in with Petroleum based products, low volume guys and blue chip oil. Have zero worries. At what im in it at over 40yrs with some its negligible with this correction currently. One them with 2000employees has been paying a great dividend for 25yrs.
Lotta profit taking in last two weeks. Probably a prudent move. Heck, i may buy back same Air Stock and 2/3 what it just sold as they has an excellent future performance ratings in near term future.
I think this Q Computing firm will pan out as well. First folks to conquer Quatum computing will change everything we know in digitworld. It will make our current tech look like Grandma Walton walking two miles to use phone at the general store to make a call.
Not investing for retirement. Making $ to enjoy it. Now.
Quantitative Easing, aka Money Printing has begun once again, propping up the stock market and making the Inflation fight impossible. They can’t go higher on interest rates now! They/we are truly screwed, Canada too.
The $9 trillion dollar fed balance sheet that was slowly shrinking is going to explode up in size now. They’ve literally taken on responsibility for all $17 trillion in bank deposits in the USA with the precedent of the bailout of Silicon Valley Bank and all of their deposits. The moral hazard they’ve created is unbelievable.
There is no going back, no way to shrink the balance sheet, no way to raise interest rates to fight inflation. If you think a balanced portfolio in US stocks in going to save you, good luck! Historic change is coming fast.
Last thing Joe want is markets to crash out hard. About all he has in the black at this point. Powell is in a tight spot. Pump fake $ back into circulation right on top of burning $ at rate 90 billion/ mo. QT
I see Powell leaving rates untouched next week or 25 basis pt rise. So, your either going to fair in market and get screwd buying goods and services at inflated prices or raise rates and watch more banks with upside down sheets start dropping. Joe and Yellen should have let Silicon get sold off at .75/1.00$. I told my partner “ i would be glad if i was exposed large in Silicon and was made whole by FDIC cuz later in this Joe Depression you may be left holding the bag”. Yes, agree horrible precedent set now.