Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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Don
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Re: Stock scream room

Post by Don » Wed Jul 11, 2018 3:55 pm

ochotona wrote:
Mon Jul 09, 2018 8:12 pm
I heard an interesting explanation for why stocks have been going up since the "trade war" began. Some people are viewing it as a short squeeze, that so many people had gone short in advance of the trade war starting that they were too many short, and they could be taken advantage of by short squeeze.

Another reason to not try short term trading!
Stocks have been going up because profits are through the roof and economic optimism is off the charts.
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Re: Stock scream room

Post by Cortopassi » Thu Jul 12, 2018 8:00 am

Don wrote:
Wed Jul 11, 2018 3:55 pm
ochotona wrote:
Mon Jul 09, 2018 8:12 pm
I heard an interesting explanation for why stocks have been going up since the "trade war" began. Some people are viewing it as a short squeeze, that so many people had gone short in advance of the trade war starting that they were too many short, and they could be taken advantage of by short squeeze.

Another reason to not try short term trading!
Stocks have been going up because profits are through the roof and economic optimism is off the charts.
Don, that's why I am in the PP. I (partially), and it seems many others here and around the country, believe this market to be some sort of hallucination. How can we be doing well? The news always seems to be bad. Or tweaked. Or fake. Who can believe the market really can still keep on going up? Look at the chart, it is unsustainable. Obama screwed things up. Trump is screwing them up more. Trade wars. Russiagate.
Immigration. Mass shootings.

And on and on. Without the PP, I would be languishing in a hole (either in cash or too much gold) looking at the market going up and up and gold going sideways and getting more and more frustrated that it isn't crashing. At least I am participating.

The PP is the best thing that happened to my investing life.
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Re: Stock scream room

Post by Cortopassi » Thu Jul 12, 2018 3:13 pm

See, here's a perfect example. Market roaring higher. Any reasons? Not really.

Not like you'll hear on the news "Market higher because Trump pissed off NATO allies" Or "Market higher as new tariffs put in place"

I still can't rectify it mentally. I'm just glad I own stocks, even though on days like today they defy all logic.

https://www.marketwatch.com/story/extre ... 2018-07-12
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Re: Stock scream room

Post by ochotona » Thu Jul 12, 2018 6:30 pm

People need simple rules - rebalancing bands, or very simple technical trading rules that are not subject to interpretation.

I vent as much as anyone here, if not more, but I've learned trading by the news flow is a disaster.
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Re: Stock scream room

Post by Cortopassi » Thu Jul 12, 2018 6:43 pm

ochotona wrote:
Thu Jul 12, 2018 6:30 pm
trading by the news flow is a disaster.
Yes. Only things that can do it are computers on a mS timescale.
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Re: Stock scream room

Post by boglerdude » Fri Jul 13, 2018 4:20 am

Billions of people wake up every day and produce tons of stuff. Prices for everything should drop, but currency is printed to keep prices "stable." Scarce real assets (stocks) go up from inflation, inexorably.

Even when organic growth (population growth) declines, govs step in to support asset prices. eg BOJ buying stocks.
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Re: Stock scream room

Post by Cortopassi » Thu Jul 26, 2018 9:16 am

So Facebook is down 18.5% today, to levels not seen, since, gasp, May 7, 2018 A whole 2.5 months ago.

Kind of shows a bit of the craziness of a certain class of stocks, as described in the article below.

https://www.cnbc.com/2018/07/25/this-ma ... -says.html

This doesn't sound like our stock portion is as diversified as we might think.

“What has kept the market near record terrain are a mere six stocks — Alphabet, Apple, Amazon, Netflix, Microsoft and Facebook,” Rosenberg said in a note to clients Wednesday. “Strip out these six flashy stocks, and the overall market has done practically nothing year-to-date.”
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Re: Stock scream room

Post by dualstow » Thu Jul 26, 2018 9:21 am

Cortopassi wrote:
Thu Jul 26, 2018 9:16 am
This doesn't sound like our stock portion is as diversified as we might think.

“What has kept the market near record terrain are a mere six stocks — Alphabet, Apple, Amazon, Netflix, Microsoft and Facebook,” Rosenberg said in a note to clients Wednesday. “Strip out these six flashy stocks, and the overall market has done practically nothing year-to-date.”
Diversified enough to capture some return from those six. That’s why we index, right? Buy the haystack, because it’s not so easy to find the needle.

https://www.bogleheads.org/forum/viewto ... 0&t=253655
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Re: Stock scream room

Post by buddtholomew » Thu Jul 26, 2018 10:35 am

dualstow wrote:
Thu Jul 26, 2018 9:21 am
Cortopassi wrote:
Thu Jul 26, 2018 9:16 am
This doesn't sound like our stock portion is as diversified as we might think.

“What has kept the market near record terrain are a mere six stocks — Alphabet, Apple, Amazon, Netflix, Microsoft and Facebook,” Rosenberg said in a note to clients Wednesday. “Strip out these six flashy stocks, and the overall market has done practically nothing year-to-date.”
Diversified enough to capture some return from those six. That’s why we index, right? Buy the haystack, because it’s not so easy to find the needle.

https://www.bogleheads.org/forum/viewto ... 0&t=253655
Leadership in the S&P changes over time.
I also have a healthy amount of MC and SCV to diversify further.
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Re: Stock scream room

Post by boglerdude » Fri Jul 27, 2018 1:07 am

> “Strip out these six flashy stocks, and the overall market has done practically nothing year-to-date.”

"An equal-weight index of the S&P - which reduces the importance of the top 5 to just 1% of the total - is on pace for a 10% gain in 2018"
via http://fat-pitch.blogspot.com/2018/07/t ... heyre.html

And hasnt small value been doing well? How to reconcile?
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Re: Stock scream room

Post by Cortopassi » Fri Jul 27, 2018 8:21 am

Now it's FAAMG, instead of FANG? Microsoft is a big growth stock again? Whatever.

All the media coverage on Facebook's plunge yesterday was over the top and unsettling. Plummeting! Biggest loss ever by a company in one day!

But again, it only takes them back to where they were on May 4, 2018. Madness!

And of course, people will buy the "dip"

https://seekingalpha.com/article/419080 ... ok-buy-dip

And they will probably be right. What will it take, a week or two to recover? :P
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Re: Stock scream room

Post by buddtholomew » Fri Jul 27, 2018 8:35 am

Cortopassi wrote:
Fri Jul 27, 2018 8:21 am
Now it's FAAMG, instead of FANG? Microsoft is a big growth stock again? Whatever.

All the media coverage on Facebook's plunge yesterday was over the top and unsettling. Plummeting! Biggest loss ever by a company in one day!

But again, it only takes them back to where they were on May 4, 2018. Madness!

And of course, people will buy the "dip"

https://seekingalpha.com/article/419080 ... ok-buy-dip

And they will probably be right. What will it take, a week or two to recover? :P
Corto, even with FB > 20% decline, S&P500 did fine, NASDAQ took a little bit but nothing concerning.
FB was due...
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Re: Stock scream room

Post by ochotona » Fri Jul 27, 2018 2:59 pm

TWTR, wow!
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Re: Stock scream room

Post by hardlawjockey » Fri Jul 27, 2018 3:16 pm

When I see a headline like Mark Zuckerburg "losing" the greatest amount of money any human being has ever lost in a single day it only tells me how financially illiterate people are (or else knowingly posting click-bait with a hyperbolic headline).

I'm assuming, of course, that Mr. Zuckerburg didn't sell any of his stock in his own company to lock in the loss, in which case he still owns the same number of shares he did before. Any accountant will tell you there was no "loss".
Last edited by hardlawjockey on Fri Jul 27, 2018 3:17 pm, edited 1 time in total.
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Re: Stock scream room

Post by buddtholomew » Fri Jul 27, 2018 3:16 pm

ochotona wrote:
Fri Jul 27, 2018 2:59 pm
TWTR, wow!
20 is the new 10, didn’t you know.
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Re: Stock scream room

Post by dualstow » Tue Jul 31, 2018 10:50 am

hardlawjockey wrote:
Fri Jul 27, 2018 3:16 pm
When I see a headline like Mark Zuckerburg "losing" the greatest amount of money any human being has ever lost in a single day it only tells me how financially illiterate people are (or else knowingly posting click-bait with a hyperbolic headline).

I'm assuming, of course, that Mr. Zuckerburg didn't sell any of his stock in his own company to lock in the loss, in which case he still owns the same number of shares he did before. Any accountant will tell you there was no "loss".
I don't know, it feels like one kind of loss. You're technically right that he didn't lock in a loss. Still, when the lira was suddenly worth a fraction of its value, my Italian buddy's father was worth far less overnight. It probably never recovered in a significant way before the Euro came along (I didn't check).

Certainly, some stocks go down and never come back up, which is why it's a fallacy to think that we'll be fine as long as we just hold on (to individual stocks). I'm not putting words in your mouth and I know you know this. I'm just putting it here because it's part of my argument.

On the other hand, Zuckerberg is in that rare position of being able to steer the company in which he's invested. He has a chance to actively create value. I don't feel too sorry for him for losing more than I'll ever have. O0
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Re: Stock scream room

Post by barrett » Tue Jul 31, 2018 4:21 pm

dualstow wrote:
Tue Jul 31, 2018 10:50 am
hardlawjockey wrote:
Fri Jul 27, 2018 3:16 pm
When I see a headline like Mark Zuckerburg "losing" the greatest amount of money any human being has ever lost in a single day it only tells me how financially illiterate people are (or else knowingly posting click-bait with a hyperbolic headline).

I'm assuming, of course, that Mr. Zuckerburg didn't sell any of his stock in his own company to lock in the loss, in which case he still owns the same number of shares he did before. Any accountant will tell you there was no "loss".
I don't know, it feels like one kind of loss. You're technically right that he didn't lock in a loss. Still, when the lira was suddenly worth a fraction of its value, my Italian buddy's father was worth far less overnight. It probably never recovered in a significant way before the Euro came along (I didn't check).
I've never heard this logic applied to the gains that people have in their investments... that you haven't really "made" money until you sell.
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Re: Stock scream room

Post by hardlawjockey » Tue Jul 31, 2018 5:33 pm

barrett wrote:
Tue Jul 31, 2018 4:21 pm
dualstow wrote:
Tue Jul 31, 2018 10:50 am
hardlawjockey wrote:
Fri Jul 27, 2018 3:16 pm
When I see a headline like Mark Zuckerburg "losing" the greatest amount of money any human being has ever lost in a single day it only tells me how financially illiterate people are (or else knowingly posting click-bait with a hyperbolic headline).

I'm assuming, of course, that Mr. Zuckerburg didn't sell any of his stock in his own company to lock in the loss, in which case he still owns the same number of shares he did before. Any accountant will tell you there was no "loss".
I don't know, it feels like one kind of loss. You're technically right that he didn't lock in a loss. Still, when the lira was suddenly worth a fraction of its value, my Italian buddy's father was worth far less overnight. It probably never recovered in a significant way before the Euro came along (I didn't check).
I've never heard this logic applied to the gains that people have in their investments... that you haven't really "made" money until you sell.
Maybe individual investors don't apply this logic in their thinking but the IRS does. Which most of us appreciate at tax time, I'm sure.
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Re: Stock scream room

Post by barrett » Wed Aug 01, 2018 6:42 am

hardlawjockey wrote:
Fri Jul 27, 2018 3:16 pm
When I see a headline like Mark Zuckerburg "losing" the greatest amount of money any human being has ever lost in a single day it only tells me how financially illiterate people are (or else knowingly posting click-bait with a hyperbolic headline).

I'm assuming, of course, that Mr. Zuckerburg didn't sell any of his stock in his own company to lock in the loss, in which case he still owns the same number of shares he did before. Any accountant will tell you there was no "loss".
I'm with Dualstow on this one although I realize it's just a matter of semantics. It's probably more correct to write "Zuckerberg Suffers US$18.8 Billion Portfolio Diminution", or something like that. I just know that if my net worth were down 20% in one day, I'd be freaking out and at least feel "a sense of loss." Or, put another way, Zuckerberg has a lot less that he can convert to T-Bills, gold or whatever (assuming he is OK with taking a rather significant tax hit and upping his cost basis!).
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Re: Stock scream room

Post by Cortopassi » Wed Aug 01, 2018 9:14 am

I would have put a billion in each of the PP assets and let the rest ride. Pretty sure my, and the next 200 generations in my family would be ok.

Now for us peons in the PP who don't have that many zeros in their net worth, today is yet another painful day. Getting close for me to the max down % I have had for the year.

It makes me understand the usefulness of the rebalancing bands. I can't tell you how many times I've said to myself, it (GLD/TLT) just can't go any lower, and in a previous life, I would have averaged down, only to see it go lower. The bands are at such painful losses for each asset that they work better than guessing. Same for upside bands, but feels like I will never see that on any asset, except cash.
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Re: Stock scream room

Post by buddtholomew » Wed Aug 01, 2018 2:26 pm

Cortopassi wrote:
Wed Aug 01, 2018 9:14 am
I would have put a billion in each of the PP assets and let the rest ride. Pretty sure my, and the next 200 generations in my family would be ok.

Now for us peons in the PP who don't have that many zeros in their net worth, today is yet another painful day. Getting close for me to the max down % I have had for the year.

It makes me understand the usefulness of the rebalancing bands. I can't tell you how many times I've said to myself, it (GLD/TLT) just can't go any lower, and in a previous life, I would have averaged down, only to see it go lower. The bands are at such painful losses for each asset that they work better than guessing. Same for upside bands, but feels like I will never see that on any asset, except cash.
Took the words out of my mouth...
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Re: Stock scream room

Post by dualstow » Wed Aug 01, 2018 2:28 pm

Cortopassi wrote:
Wed Aug 01, 2018 9:14 am
..
Now for us peons in the PP who don't have that many zeros in their net worth, today is yet another painful day.
..
I'm like John D Rockefeller. The only thing that gives me pleasure is to see my dividends coming in.
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Re: Stock scream room

Post by buddtholomew » Wed Aug 01, 2018 2:34 pm

It’s always GLD and TLT taking the beating.
No one ever mentioned the pitfalls of GLD and TLT cannobalizing each other...
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Re: Stock scream room

Post by dualstow » Wed Aug 01, 2018 3:08 pm

buddtholomew wrote:
Wed Aug 01, 2018 2:34 pm
It’s always GLD and TLT taking the beating.
No one ever mentioned the pitfalls of GLD and TLT cannobalizing each other...
Budd, it's always mentioned, in the form of "The assets are not designed to all move in the same direction."
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Re: Stock scream room

Post by buddtholomew » Wed Aug 01, 2018 3:12 pm

dualstow wrote:
Wed Aug 01, 2018 3:08 pm
buddtholomew wrote:
Wed Aug 01, 2018 2:34 pm
It’s always GLD and TLT taking the beating.
No one ever mentioned the pitfalls of GLD and TLT cannobalizing each other...
Budd, it's always mentioned, in the form of "The assets are not designed to all move in the same direction."
Haha, see the irony in that statement with everything down today. Just venting...just sad that we sit for 8 years waiting for either GLD or TLT to rally enough to rebalance. Now that stocks are feeling some pain, they still go down. Hmmm..
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