Stock scream room

[boglerdude]

https://mattstoller.substack.com/p/warr ... -folksiest

[dualstow]

https://mattstoller.substack.com/p/warr ... -folksiest

I read most of it and don't understand how Buffett is a "predator" because he bought Amazon shares. In fact, besides the newspaper example, he really hasn't done anything wrong. The author has a beef with capitalism and and capitalism isn't perfect. What a weird target. But not because Buffett is folksy and friendly.

[buddtholomew]

There was basically no point to getting out of the market before the crash. (I didn’t).
Amazing recovery. I’ve been trimming my vp, though.

Seems logical to trim some gains on shares purchased during the decline (no tax implications). I convinced myself to at least rebalance to the more aggressive 80/20 stock allocation and not all the way back to 70/30.

Quoting myself here.
Updated AA in VP to 75/25 to SWAN.
I mean who has 50% gains in an International Growth fund...

[dualstow]

I stocks.

[Smith1776]

I stocks.

Me too!

#MeToo

[Cortopassi]

I've been rebalancing stocks down on this way up. Going against all the rules, but this run seems really out of whack.

[Kriegsspiel]

I love stock, I've been investing in quite a bit recently. One day I hope to be a bouillonaire.

[buddtholomew]

I love stock, I've been investing in quite a bit recently. One day I hope to be a bouillonaire.

Chicken

[Kbg]

I love stock, I've been investing in quite a bit recently. One day I hope to be a bouillonaire.

Chicken

Brings a whole new spin to "bull" market.

[dualstow]

I love stock, I've been investing in quite a bit recently. One day I hope to be a bouillonaire.

Gold. Absolute gold.

I sold a lot of indy positions yesterday, not knowing if stocks are going to go up for another ten years.
On my way down to 50% stocks (vp + pp), I’m hoping to capture some of the irrational exuberance.

[sophie]

Guess I should keep an eye on the allocations if you guys are all rebalancing. I'm within a couple percentage points of bonds crossing the low end of the band.

[dualstow]

...
I sold a lot of indy positions yesterday, not knowing if stocks are going to go up for another ten years.
On my way down to 50% stocks (vp + pp), I’m hoping to capture some of the irrational exuberance.

Big drop today. Ok, now my sale doesn't feel so bad.

[Cortopassi]

A little lower today, but still insane

[Cortopassi]

I am seriously considering another strategic allocation change to lower exposure to stocks (currently 31% for me). On Aug 5th, I dropped from 35% to 31%.

I still have no idea what's driving the S&P 10% up for the year when Covid just keeps on stretching out longer and longer. Sure, there are some small # of companies benefitting, but I otherwise see major destruction happening or going to happen, like commercial real estate.

Am I missing something?

[yankees60]

I am seriously considering another strategic allocation change to lower exposure to stocks (currently 31% for me). On Aug 5th, I dropped from 35% to 31%.

I still have no idea what's driving the S&P 10% up for the year when Covid just keeps on stretching out longer and longer. Sure, there are some small # of companies benefitting, but I otherwise see major destruction happening or going to happen, like commercial real estate.

Am I missing something?

The market can be generally irrational for long periods of time? Being far too reactive in one direction or the other?

Vinny

[Cortopassi]

I am seriously considering another strategic allocation change to lower exposure to stocks (currently 31% for me). On Aug 5th, I dropped from 35% to 31%.

I still have no idea what's driving the S&P 10% up for the year when Covid just keeps on stretching out longer and longer. Sure, there are some small # of companies benefitting, but I otherwise see major destruction happening or going to happen, like commercial real estate.

Am I missing something?

The market can be generally irrational for long periods of time? Being far too reactive in one direction or the other?

Vinny

Quite possibly, Vinny.

But either way, I see the election being an "event" that will cause the market to roll over regardless of the winner. It's either going to be an oh shit, Biden is president and he's going to lock us down or oh shit, Trump is president and people are going to keep dying.

Either way, not good. And then a vaccine comes out, and people either don't take it, don't want to be first in line, or realize it's only 50% effective and are disappointed.

[Vil]

But either way, I see the election being an "event" that will cause the market to roll over regardless of the winner. It's either going to be an oh shit, Biden is president and he's going to lock us down or oh shit, Trump is president and people are going to keep dying.

Makes sense And indeed, I also plan to get some juice of some of my stock allocations. Today, it seems the S&P run is considerably higher than yesterday, and even though the trading day has not yet ended it would be based on considerably lower volume than yesterday. So, for me it appears there is a sort of discrepancy between price move and volume... All time highs are not that far away too .. IMHO a near term correction is inevitable, but let's see.

In any case (Trump or Biden) I'll be extremely happy when that's over, as this forum looks more and more as tribune for politic discussions, rather than a PP discussion forum. I recognize that PP itself might be a boring one, but still ...

[Kriegsspiel]

I'm with you, Corto, it's perplexing. I'm looking at nudging my overall stock % down about a bit as well. Where are our resident finance nerds when we need em?

[pmward]

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.

[Cortopassi]

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.

[mathjak107]

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

[Kriegsspiel]

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

[boglerdude]

http://brooklyninvestor.blogspot.com/20 ... ks-up.html
https://www.yardeni.com/pub/valuationfed.pdf

Stocks undervalued?

[dualstow]

Market is set to surge 5% — that’s more than 1400 points for the Dow — on Pfizer’s 90% effective vaccine.

[pmward]

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.