Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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pmward
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Re: Stock scream room

Post by pmward » Tue Oct 13, 2020 12:26 pm

It's all about stimulus. If congress can pull their heads out of their collective arses and can actually get a stimulus deal through at some point, markets will continue to go up to dizzying heights. If they fail to do so, stocks will fall until they eventually force their hands similar to how they forced Powells hand to flip dovish in Q4 2018. Back in March after a 30% drop in the S&P congress was willing to do whatever it took in the form of stimulus. This same scenario will play out again if they continue to do nothing. The market will force their hands if they have to. Either way, the stimulus will inevitably come and the market will go up to substantial new all-time highs afterward just like it did following Q4 2018, imo. It may be a bumpy road though, at this point in the cycle volatility should be assumed to continue until the secular bull market finally ends.

The economy has nothing to do with stock prices these days. The only thing the election matters for is how much stimulus and how fast it will come. I actually think a Biden win will be better for stocks than a Trump win because of this, especially if the senate also flips blue, because then the real spending will begin, and in turn the true 1998-2000 like melt-up to end the bull market from the 2009 lows can truly begin in earnest. When we inevitably get fiscal stimulus fully on board permanently like we got monetary stimulus fully on board permanently coming out of the 08 crisis, there will be nothing stopping the market from going to 5,000+ before the bull market finally tops and starts the next true secular bear market. There is a lot of risks at this point, but there is also a lot of potential rewards. Selling stock now could look very silly in a year or two. Fiscal is necessary to keep the economy afloat at this point, and as such the fiscal will come, it's not a matter of if, it's only a matter of when. At least this is another angle worth considering before actively selling stocks on the assumption that they have to go down in the near to mid term. Remember Corto we had a similar discussion in this thread back in March that you can scroll back to, where I said they would do whatever it took to have the market back at all time highs by the election, and you didn't see how it was possible then either. So maybe once again this other angle is one worth looking at and at least considering before selling stocks. Eventually, sure every bull market dies some day, but if the whole country being under Corona lockdown couldn't kill the bull, it means the bull is still strong enough to keep going, and that in turn means the bull has a much higher destination in mind before it's willing to give up the ghost. That's my current take on things at least.
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Re: Stock scream room

Post by Cortopassi » Tue Oct 13, 2020 2:05 pm

pmward wrote:
Tue Oct 13, 2020 12:26 pm
It's all about stimulus. If congress can pull their heads out of their collective arses and can actually get a stimulus deal through at some point, markets will continue to go up to dizzying heights. If they fail to do so, stocks will fall until they eventually force their hands similar to how they forced Powells hand to flip dovish in Q4 2018. Back in March after a 30% drop in the S&P congress was willing to do whatever it took in the form of stimulus. This same scenario will play out again if they continue to do nothing. The market will force their hands if they have to. Either way, the stimulus will inevitably come and the market will go up to substantial new all-time highs afterward just like it did following Q4 2018, imo. It may be a bumpy road though, at this point in the cycle volatility should be assumed to continue until the secular bull market finally ends.

The economy has nothing to do with stock prices these days. The only thing the election matters for is how much stimulus and how fast it will come. I actually think a Biden win will be better for stocks than a Trump win because of this, especially if the senate also flips blue, because then the real spending will begin, and in turn the true 1998-2000 like melt-up to end the bull market from the 2009 lows can truly begin in earnest. When we inevitably get fiscal stimulus fully on board permanently like we got monetary stimulus fully on board permanently coming out of the 08 crisis, there will be nothing stopping the market from going to 5,000+ before the bull market finally tops and starts the next true secular bear market. There is a lot of risks at this point, but there is also a lot of potential rewards. Selling stock now could look very silly in a year or two. Fiscal is necessary to keep the economy afloat at this point, and as such the fiscal will come, it's not a matter of if, it's only a matter of when. At least this is another angle worth considering before actively selling stocks on the assumption that they have to go down in the near to mid term. Remember Corto we had a similar discussion in this thread back in March that you can scroll back to, where I said they would do whatever it took to have the market back at all time highs by the election, and you didn't see how it was possible then either. So maybe once again this other angle is one worth looking at and at least considering before selling stocks. Eventually, sure every bull market dies some day, but if the whole country being under Corona lockdown couldn't kill the bull, it means the bull is still strong enough to keep going, and that in turn means the bull has a much higher destination in mind before it's willing to give up the ghost. That's my current take on things at least.
Thanks. I did drop my overall stock allocation from 31% to 30%. No major change, just something that makes me feel a little better. I'd rather nibble some gains off on the way up, if that's the case.
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Re: Stock scream room

Post by mathjak107 » Tue Oct 13, 2020 2:40 pm

That happens at times ...for the year 2008 gold was up and the miners got hammered....miners are stocks first and a play on gold second .

They are subject to all the things stocks are ...earnings ,revenue , strikes , workers being healthy and able to work , mgmt , political issues ,etc ....miners are not the same as gold despite having their profits rise and fall with the price
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Re: Stock scream room

Post by Kriegsspiel » Fri Oct 16, 2020 10:28 am

As Cullen sees it:
Now, this is really important to understand when you’re trying to understand why the stock market has reacted and also why the coming couple of years could actually be very good for the economy. In short, the stock market is front-running the probability of a vaccine. And in the case of a vaccine life essentially returns to some semblance of normalcy reflecting where we were in 2019. So, let’s say we get a vaccine in mid-2021. In that case the economy will begin to aggressively soak up all that excess labor to meet all that pent up demand. You’ll go to dinner more, movies more, take two vacations next year. Etc. As that pent up demand soaks the economy in 2021/2022 the labor market snaps back aggressively and by the end of 2022 the economy looks more or less like it did in 2019. The end result will be this weird “recession” that wasn’t really a cyclical recession at all. Instead, it will look more like a continuation of the 2019 expansion with 2-3 year pause within it. link
You there, Ephialtes. May you live forever.
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Re: Stock scream room

Post by dualstow » Mon Nov 09, 2020 7:06 am

Market is set to surge 5% — that’s more than 1400 points for the Dow — on Pfizer’s 90% effective vaccine.
RIP Marcello Gandini
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Re: Stock scream room

Post by pmward » Mon Nov 09, 2020 7:46 am

dualstow wrote:
Mon Nov 09, 2020 7:06 am
Market is set to surge 5% — that’s more than 1400 points for the Dow — on Pfizer’s 90% effective vaccine.
Yeah I was pretty shocked to wake up and see that myself, even though when I went to bed they were already up ~2%. And with volatility continuing to collapse there is still room for much more upside as lower volatility triggers systematic flows into stocks via large hedge fund strategies like risk parity, vol-targeting, and the like.
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Re: Stock scream room

Post by Tyler » Mon Nov 09, 2020 9:59 am

If you think stocks are exciting today, take a look at small cap value. 8)
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Re: Stock scream room

Post by Smith1776 » Wed Nov 11, 2020 10:55 am

Indeed! My value fund has really popped!
F46C3C5D-BAB8-4F9E-AD24-95EB043BFEDE.png
F46C3C5D-BAB8-4F9E-AD24-95EB043BFEDE.png (505.98 KiB) Viewed 9877 times
I still find the James Rickards portfolio fascinating.
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Re: Stock scream room

Post by doodle » Mon Nov 16, 2020 7:02 pm

This market is getting insane. Cramer is attributing it to younger inexperienced investors who have only seen stock gains for the last decade. To them the party can go on forever. I'm starting to slowly divest. We hitting some pretty lofty numbers here. Id be surprised if we see 4k on the SP before we see 3k or less. Anyone else getting that feeling?
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Re: Stock scream room

Post by buddtholomew » Mon Nov 16, 2020 7:07 pm

I don’t disagree but certain areas of the market are either still -ve YTD or only slightly positive <+5%.
REITs fall into the first camp and SCV in the latter.

I’ve lightened up on SPY and kept investing in SC, SCV and REITs.
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Re: Stock scream room

Post by pmward » Mon Nov 16, 2020 8:38 pm

Not at all, see my thread in the VP section for the long version of my thoughts. All leading economic and technical indicators are still up and to the right. We are now getting rotation into small caps and value which is really confirmation more than anything else that this rally is for real. It's no longer just 5 stocks at the top dragging the market up, the rally has broadened out. That being said, a pullback to 3k like you mention would be a healthy thing. I would buy that dip. I have no worries at the moment of a secular bear market. That could change any day with emerging info, but for the moment Cramer is looking dead wrong (but what is new there???). Not to mention Santa is coming to town, and we know how strong the market tends to perform from late December though about Feb.
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Re: Stock scream room

Post by dualstow » Tue Nov 17, 2020 8:13 am

doodle wrote:
Mon Nov 16, 2020 7:02 pm
This market is getting insane. Cramer is attributing it to younger inexperienced investors who have only seen stock gains for the last decade. To them the party can go on forever. I'm starting to slowly divest. We hitting some pretty lofty numbers here. Id be surprised if we see 4k on the SP before we see 3k or less. Anyone else getting that feeling?
Plenty of pundits and prognosticators on both sides. I heard Cramer say that and was concerned, but he could be right about young naive investors and we could still see sustained gains for a variety of reasons. I’m at about 55% in stocks (vp + pp). I’m not really adding shares, but I don’t want to go lower than 50%. If it crashes, it crashes. I’ll maintain my allocation.
RIP Marcello Gandini
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Re: Stock scream room

Post by pmward » Tue Nov 17, 2020 11:00 am

We all have to keep in mind that fundamentals, price, value, etc really only matter about once or twice a generation. Since we went through two major episodes where those things mattered in just the 00's alone, what makes today the time when these things need to suddenly matter again? If you look back at history, odds are we got another 5-10 years to go at least before the next secular bear market. Now, there will be some short lived cyclical bear phases in between (like this year for example). The odds are MUCH greater that the bull has much further left to run vs the bull being winded and ready to keel over. Obsessing over fundamentals/price/value is a good way to be on the wrong side of the trade 90% of the time. But hey, I guess a broken clock is still right twice a day, right?
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Re: Stock scream room

Post by Cortopassi » Tue Nov 17, 2020 1:51 pm

pmward wrote:
Tue Nov 17, 2020 11:00 am
Obsessing over fundamentals/price/value is a good way to be on the wrong side of the trade 90% of the time.
Can I have the first 20 years of my investing career as a do over because of this stupid notion I had!
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Re: Stock scream room

Post by doodle » Tue Nov 24, 2020 10:34 am

https://www.cnbc.com/2020/11/24/cramer ... een.html

I don't know when the bear is going to wake up, but when it does it's going to be brutal.

It makes me nervous when 'braaahs' I used to work dead end jobs with are texting me with stock market stories.
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Re: Stock scream room

Post by dualstow » Tue Nov 24, 2020 2:28 pm

Sure, it’s a meaningless metric but hooray Dow 30,000 🎉
RIP Marcello Gandini
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Re: Stock scream room

Post by Kbg » Tue Nov 24, 2020 5:29 pm

I think the most important thing I learned from HB was the difficulty of predicting...this lesson is so well ingrained now that all I really look for is some indication that what I'm holding is not performing according to historical data. If the data says whatever I'm holding should be getting trashed for the given conditions we are in...don't really care anymore. I actually get more "weirded out" when something is performing well that shouldn't be...my radar warning receiver is on high when this happens.

For me the "inability to predict thing" sinking in and its ramifications has changed everything including my bottom line in a big way.
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Re: Stock scream room

Post by vnatale » Tue Nov 24, 2020 6:40 pm

Kbg wrote:
Tue Nov 24, 2020 5:29 pm
I think the most important thing I learned from HB was the difficulty of predicting...this lesson is so well ingrained now that all I really look for is some indication that what I'm holding is not performing according to historical data. If the data says whatever I'm holding should be getting trashed for the given conditions we are in...don't really care anymore. I actually get more "weirded out" when something is performing well that shouldn't be...my radar warning receiver is on high when this happens.

For me the "inability to predict thing" sinking in and its ramifications has changed everything including my bottom line in a big way.
I well learned that lesson from reading Bernstein's book in the early 2000's, which led me to index funds and choosing an asset allocation and sticking with it NO TIMING!

Therefore when I learned of Harry Browne and Permanent Portfolio last year, it was a reinforcement with being more specific on the asset allocation.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Stock scream room

Post by pmward » Wed Nov 25, 2020 10:56 am

Kbg wrote:
Tue Nov 24, 2020 5:29 pm
I think the most important thing I learned from HB was the difficulty of predicting...this lesson is so well ingrained now that all I really look for is some indication that what I'm holding is not performing according to historical data. If the data says whatever I'm holding should be getting trashed for the given conditions we are in...don't really care anymore. I actually get more "weirded out" when something is performing well that shouldn't be...my radar warning receiver is on high when this happens.

For me the "inability to predict thing" sinking in and its ramifications has changed everything including my bottom line in a big way.
Yeah, I love intermarket analysis. It's not fool-proof by any means, but there's a lot of info that can be gleaned from comparing what different asset classes, factors, locales, etc are doing relative to each other.
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Re: Stock scream room

Post by Vil » Fri Nov 27, 2020 2:28 am

pmward wrote:
Wed Nov 25, 2020 10:56 am

Yeah, I love intermarket analysis. It's not fool-proof by any means, but there's a lot of info
I can recall you making a lot of such comparisons in your analysis. Oddly enough, I can see that it's not extremely popular approach on market reading. Just handful (of the hundreds) of books are putting some significance on relative strength and sector strength - one of those being the 'ancient' (published sometime in 1980-ties) Stein Weinstein's "Secrets for Profiting in Bull and Bear Markets". Beside the obvious reason for stock/sector selection and possibly hedging positions for what else do you use this - for your quant strategy ?
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Re: Stock scream room

Post by pmward » Fri Nov 27, 2020 8:27 am

Vil wrote:
Fri Nov 27, 2020 2:28 am
pmward wrote:
Wed Nov 25, 2020 10:56 am

Yeah, I love intermarket analysis. It's not fool-proof by any means, but there's a lot of info
I can recall you making a lot of such comparisons in your analysis. Oddly enough, I can see that it's not extremely popular approach on market reading. Just handful (of the hundreds) of books are putting some significance on relative strength and sector strength - one of those being the 'ancient' (published sometime in 1980-ties) Stein Weinstein's "Secrets for Profiting in Bull and Bear Markets". Beside the obvious reason for stock/sector selection and possibly hedging positions for what else do you use this - for your quant strategy ?
It's not cheap by any means, but this textbook by John Murphy is basically the bible of intermarket analysis https://www.amazon.com/Intermarket-Anal ... 8&qid=&sr=

Yeah I use intermarket analysis a lot to understand what is going on in the markets. Most people try to start with a "why" and then look to the markets to see if the markets are behaving as they should based on that why. Intermarket analysis is not about starting with a "why", it's about looking at what is actually happening relatively speaking between the different markets, and then asking "why" based on this evidence. Intermarket analysis never looks at the market as being wrong. It always looks at the market as being right. And since "right" or "wrong" in the markets is only decided by if you're making money or not, it makes sense to start with the data instead of starting with some made up theory.

And yes, in my quant strategy it does use intermarket relationships in a few ways, you can read my giant post from a couple days ago in the VP section. I'm comparing different VIX futures contracts, comparing economic data, and actually comparing relative intermarket performance in the "relative momentum layer". It's all intermarket analysis in some form. Of course I do a lot of intermarket analysis even when I'm not trading it, just to keep abreast of the current themes playing out in the market. There's just so much meaning hidden in plain sight if you take the time to do the comparisons.
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Re: Stock scream room

Post by whatchamacallit » Mon Sep 20, 2021 11:57 am

Down 2 to 3% so far today depending on which index your looking at.

I had contemplated selling a chunk last week due to evergrande issue but got cold feet.

Hope it jumps right back but this might be a big one.
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Re: Stock scream room

Post by dualstow » Mon Sep 20, 2021 2:10 pm

I bought a bit more Total Stock Market.
RIP Marcello Gandini
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Re: Stock scream room

Post by Vil » Fri Nov 26, 2021 4:24 am

dualstow wrote:
Mon Sep 20, 2021 2:10 pm
I bought a bit more Total Stock Market.
Bought that dog shit ? What a crap ... ;D
From now onwards I'll be the stocks buddtholomew ..

Joke aside, Stoxx 50 is already more than 3% down for the day (Nikkei was also), so SPY will follow. For the tmie being the "explanation" is the new South African strain that marks big jump in the COVID evolution (so it is a thinking organism now, and also convinced that investing in gold is worth.. ;D )
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