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Thread: Where'd the money go?

  1. #41
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    Cnut, I thought you were making money just two days ago?

    Selling equities and converting them to cash is wise at this point, especially stocks that are getting pounded due to trade and other BS. So called "techs" like Facebook, Netflix, Twitter, and related garbage have run their course, are subject to regulatory pressure and probably won't recover like good solid BORING companies. Some money market funds are even paying interest now.

  2. #42
    Registered Member WagonCrazy's Avatar
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    If I have 10 more years until retirement (until I can gain direct access to these funds and start withdrawing), then why would i sell my positions now? at a low point in their value?.

    All of us have to ponder this reality: Is this just a low "hickup" point this month with stocks? Or is there much more downside before we see normalization on their values? Crystal ball kind of question for each of you, depending on how close you may be to needing the funds.

    Buy low, sell high...

    Might be time to buy in? Now where'd I stash that money tree again...
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  3. #43
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    In the best scenario, you should have already sold them at a higher value.

    Thing is, how do you know this is really the low point in value? If they are going to lose another 20%, you should sell. And obviously you shouldn't be buying any more if the value continues to fall.

    But if you think this is the low, you should be buying. But only certain stocks. Not all will rise again at the same rate. Some will fail even in an upswing. Others will have a saw tooth pattern to their appreciation. Example, it took a long time in the recent market expansion for mid caps to start appreciating.

    Myself, I think that the economy is still in good shape and things may stabilize fairly soon. When the trade stuff gets a positive outcome that will help. Timing on this is a big unknown. We have an advantage for now over the Chinese but they don't have short term pressure like we have.

    With interest rates up a little, you have another choice you didn't have in the recent past.

  4. #44
    Registered Member chevynut's Avatar
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    Quote Originally Posted by Rick_L View Post
    Cnut, I thought you were making money just two days ago?
    Yes I did well on the "rebound" a couple of days ago....that lasted half the day. The market ended up lower at the close and I lost all my morning gains that day. I thought we had reached the turning point or at least the bottom.

    Selling equities and converting them to cash is wise at this point, especially stocks that are getting pounded due to trade and other BS. So called "techs" like Facebook, Netflix, Twitter, and related garbage have run their course, are subject to regulatory pressure and probably won't recover like good solid BORING companies. Some money market funds are even paying interest now.
    I don't own any of the FAANG stocks or Twitter. I wouldn't touch Tesla. My investments are primarily hardware related with a few software stocks. Datacenters are exploding all over the world and software is always in demand. I've made some big bets in these areas and they paid off big in 2018.....until the crash.

    It's too late to sell now, imo, but I thought it was too late two weeks ago too. The NASDAQ is in a bear market (down 20%) and it could bottom and rebound anytime. It's so hard to tell where the bottom is, and when it's going to turn around. I think we have a "perfect storm" in the market this month with interest rate hikes, political turmoil, tax selling, triggered stop losses, computer trading, margin calls, and options expiration (Friday was quadruple witching) that drove the market down rapidly. It went from record highs to 2-year low in less than 3 months. Too many people I know sold at the bottom in 2001 and 2009 and lost their money permanently because they didn't reinvest on the upturn. I stuck it out both times and went on to recover and make new highs. Once the market takes off, it's hard to figure out where to re-enter, just as it's hard to figure out when to get out. It's always easy in hindsight.

    I plan to hold into January and see what happens. If nothing else, tax loss selling will be done and hopefully some good news will come out of the current mess.
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  5. #45
    Registered Member chevynut's Avatar
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    Quote Originally Posted by Rick_L View Post
    In the best scenario, you should have already sold them at a higher value.
    Yes, hindsight is 20/20 as they say. I should have sold everything in late September. Shoulda coulda.....didn't.

    Thing is, how do you know this is really the low point in value? If they are going to lose another 20%, you should sell. And obviously you shouldn't be buying any more if the value continues to fall.
    How did we know September was the high point? It's easy to see now. We won't know if this is the low point for a while either. I need a subscription to USA Tomorrow.

    Myself, I think that the economy is still in good shape and things may stabilize fairly soon.

    With interest rates up a little, you have another choice you didn't have in the recent past.
    I agree the economy is still in good shape. Nothing really warranted this sharp selloff imo. Interest rates are still very low historically speaking and the market over-reacted to this 1/4 point increase. I think the political turmoil has contributed to the sense of chaos.
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  6. #46
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    I wasn't chiding anyone for not knowing beforehand where the top or bottom was or is. I sure don't. Just saying that you need to have a sell point and a buy point in mind based on what the market is doing, and continually reset those sell and buy thresholds over time. Your sell and buy points may be different than mine depending on your outlook, and how much risk you'll take. The older you get, you should back off on the risk to preserve capital, unless you have plenty of capital. Warren Buffett can take more risk than I can because he has far more than he "needs". On the other hand he's a smart fellow with lots of tools at his disposal and that lowers his risk.

  7. #47
    Registered Member chevynut's Avatar
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    Curious how you guys ended the year, compared to the end of 2017. I calculate my net worth and track it every 2 months to see if I'm making progress toward my goals or not, and to make sure I understand my overall financial situation accurately, something I've been doing for over 25 years now. I ended 2018 DOWN 5.6% from the end of 2017 which is less than I though I lost. I got a little pop the last week of December but not enough to offset losses earlier. However, I ended the year DOWN 29% from the late September highs so it was a fast drop for me as I had a huge gain for the year up to that point. I have a pretty high risk tolerance so I have still been investing aggressively and will continue to do so this year while I try to protect any gains I might make. I have a feeling that the CES coming to Vegas in early January will help some of my tech holdings.

    I see recent progress being made on trade with China, and I believe Trump will continue to get the wall built and work to stop illegal immigration despite the protestations from the leftists. I worry about the Dems obstructing further progress and trying to disrupt the government and reverse the progress Trump has made so far. If they try to impeach him, I think all hell will break loose especially if they try to remove him from office. So there's still political risk and uncertainty ahead which the markets hate. Hopefully Ginsberg finally decides she's too senile to be on the SCOTUS and retires soon so Trump can replace her to secure a conservative majority for the next generation. I'm sure the Dems will try to block anyone he nominates, no matter who it is. Overall, I think the market will continue an upward trend out of this recent hole it fell into but I'm no fortune teller . What are your thoughts for 2019?
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    56 Chevy 210 4-door sedan
    57 Chevy 210 4-door sedan
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  8. #48
    Registered Member scorpion1110's Avatar
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    If you have been reading these are the key issues.

    Analysts and fund managers have been pointing out the market behaviors which have been unusual this year. October is traditionally a bad month. Not December. Typically its a month of calm. Lots of vacations not much going on, except this year's December was the worst performing since the Great Depression. I did a full rebalance while creating a defensive position in April and I was positioned for a bad end of year and I still got demolished.

    So what are the triggers? The Tweet Machine in the White House, Brexit still causing uncertainty, Trade Tariffs, a strong dollar, Corporate earnings likely on track for about 7% on average in 2019 (compared to about 23% this year due to the tax breaks). And perhaps more importantly electronic trading.

    Algorithms.

    Nearly every ETF, Target Fund, and anything else passively managed is algorithmically traded. The computers now search for KEY WORDS, and trade based off of these in addition to any other program constraints. And when the computers start trading the impact is exponential. This isn't a new issue, its been around for a while, and arguably the same drivers of decline could have also impacted gains. In other words our losses are greater and our gains were greater. So one might say that in total over the last 5-8 years, we are on average where we should be.

    So what's the plan? Gentlemen there are bargains out there. Right now the market is oversold. If you can, look for the good companies with decent P/E ratios and begin incrementally buying (dollar cost average). If you have patience and can afford to weather an 18 month storm of turbulence, you will find yourself in a pretty solid position.

    Just an opinion

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  9. #49
    Registered Member chevynut's Avatar
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    Quote Originally Posted by scorpion1110 View Post
    Gentlemen there are bargains out there. Right now the market is oversold. If you can, look for the good companies with decent P/E ratios and begin incrementally buying (dollar cost average). If you have patience and can afford to weather an 18 month storm of turbulence, you will find yourself in a pretty solid position.

    Just an opinion Scorp

    I agree that there are some terrific bargains in stocks right now, and the market is oversold. The markets ended up with a loss for the year, with the DOW, S&P 500, and Nasdaq all down about 8% for the year.

    I don't rely on PE ratios alone to make investment decisions, as I'm sure you don't, but it is one factor to look at. A low PE doesn't always mean the stock is a bargain, if earnings are expected to drop in the future. Take a look at Micron Technology.....PE is under 3 but it's been low for a long time. The company is growing revenue for the past 3 years but the stock is off 43% since September and has been downgraded recently by several analysts. I traded it a year ago and did well, buying in the low $40s and selling in the low $50s....the stock is now under $32. I own stocks with PE ratios over 50, but they are growing earnings rapidly. So one has to look at the whole picture, not just PE ratio. Established companies with steady earnings are the ones where PE is most useful, imo.

    Right now the DOW and Nasdaq futures are up 0.5-0.7%, so we may get a nice bounce in the first trading day of the year. Sure wish I had a bundle of cash to invest now.
    56 Nomad, Ramjet 502, Viper 6-speed T56, C4 Corvette front and rear suspension

    You can see my 56 Nomad build here http://www.picturetrail.com/chevynut

    For affordable C4 Corvette Suspension conversions for your car, visit http://www.classicedgedesigns.com

    Other vehicles:

    56 Chevy 2-door BelAir sedan
    56 Chevy 210 4-door sedan
    57 Chevy 210 4-door sedan
    1961 Willys CJ3B Jeep
    2001 Porsche Boxster S
    2003 Chevy Silverado 2500 HD Duramax

  10. #50
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    And just listen to that small voice within which tells me...... When all is said and done...... 'It will be OK'.
    You are correct there Harry. The key thing is the time line - when?. Few in the media, even the financial media, are going to offer a long term outlook. And for many of those types, 3 months is "long term". Plus there's the obvious bias wanting to make other things instant (like getting rid of Trump). We live in an instant success/instant failure world media-wise, that's what they deliver.

    On the other hand, I think there's some validity for expecting the market to do ok soon, or at least not go further negative.

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