U.S. stocks continue to soar!

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Stinky
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Re: U.S. stocks continue to soar!

Post by Stinky »

lostdog wrote: Tue Jul 13, 2021 8:06 am The premarket doesn't like the cpi report.
Just a small ripple in the vast ocean of FOMO and TINA.
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canadianbacon
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Re: U.S. stocks continue to soar!

Post by canadianbacon »

nigel_ht wrote: Mon Jul 12, 2021 2:07 pm
Robot Monster wrote: Mon Jul 12, 2021 1:42 pm When is the Shiller PE Ratio gonna hit 40, though? I hope it goes up and up making the bears look sillier and sillier, the Jenga blocks going higher and higher, and any moment it's gonna topple but it never does and finally the last bear on earth metamorphosizes into a bull and still years and years go by and then decades and the stock market is pure unadulterated froth yet any slight dip is seen as a deep discount buying opportunity and the market grinds higher and higher and then, finally, at last, a huge meteor narrowly misses earth and nothing changes and all that time international underperforms.
Mmmm...when Forester capitulates I'm selling everything...
Forester is 60% equities... he's more aggressive than many here :-D.
Bulls make money, bears make money, pigs get slaughtered.
nigel_ht
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Re: U.S. stocks continue to soar!

Post by nigel_ht »

canadianbacon wrote: Tue Jul 13, 2021 8:22 am
nigel_ht wrote: Mon Jul 12, 2021 2:07 pm
Robot Monster wrote: Mon Jul 12, 2021 1:42 pm When is the Shiller PE Ratio gonna hit 40, though? I hope it goes up and up making the bears look sillier and sillier, the Jenga blocks going higher and higher, and any moment it's gonna topple but it never does and finally the last bear on earth metamorphosizes into a bull and still years and years go by and then decades and the stock market is pure unadulterated froth yet any slight dip is seen as a deep discount buying opportunity and the market grinds higher and higher and then, finally, at last, a huge meteor narrowly misses earth and nothing changes and all that time international underperforms.
Mmmm...when Forester capitulates I'm selling everything...
Forester is 60% equities... he's more aggressive than many here :-D.
Well its all in good fun in this thread...but when he actually starts saying things like DOW 40K! or S&P 5000 we're doomed.
MishkaWorries
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Re: U.S. stocks continue to soar!

Post by MishkaWorries »

lostdog wrote: Tue Jul 13, 2021 8:06 am The premarket doesn't like the cpi report.
Down a bit on the open. Not too bad considering this was another month of inflation numbers coming in higher than expected.
We plan. G-d laughs.
atdharris
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Re: U.S. stocks continue to soar!

Post by atdharris »

10 year isn't really moving on the news. I guess the bond market still doesn't believe this inflation is persistent.
Marseille07
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Re: U.S. stocks continue to soar!

Post by Marseille07 »

atdharris wrote: Tue Jul 13, 2021 9:40 am 10 year isn't really moving on the news. I guess the bond market still doesn't believe this inflation is persistent.
I find this bond market really amusing because they spiked it up to 1.75% *before* inflation ticked up. Tbh I don't think they know what they're doing.
tsohg
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Re: U.S. stocks continue to soar!

Post by tsohg »

Stinky wrote: Tue Jul 13, 2021 8:09 am
lostdog wrote: Tue Jul 13, 2021 8:06 am The premarket doesn't like the cpi report.
Just a small ripple in the vast ocean of FOMO and TINA.
+1 TINA.

If inflation is coming, isn't cash one of the worst places to be?
atdharris
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Re: U.S. stocks continue to soar!

Post by atdharris »

tsohg wrote: Tue Jul 13, 2021 9:59 am
Stinky wrote: Tue Jul 13, 2021 8:09 am
lostdog wrote: Tue Jul 13, 2021 8:06 am The premarket doesn't like the cpi report.
Just a small ripple in the vast ocean of FOMO and TINA.
+1 TINA.

If inflation is coming, isn't cash one of the worst places to be?
I'd think so. But it seems like the equity market doesn't like inflation. We know the bond market doesn't like inflation. Holding cash is just losing money. So where do you go?
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Re: U.S. stocks continue to soar!

Post by MishkaWorries »

atdharris wrote: Tue Jul 13, 2021 10:19 am
tsohg wrote: Tue Jul 13, 2021 9:59 am
Stinky wrote: Tue Jul 13, 2021 8:09 am
lostdog wrote: Tue Jul 13, 2021 8:06 am The premarket doesn't like the cpi report.
Just a small ripple in the vast ocean of FOMO and TINA.
+1 TINA.

If inflation is coming, isn't cash one of the worst places to be?
I'd think so. But it seems like the equity market doesn't like inflation. We know the bond market doesn't like inflation. Holding cash is just losing money. So where do you go?
I was pretty young during the last bout of inflation, but if my memory is correct, bank interest rates kept moving up at a good clip. It may not have been enough to keep up but it limited the damage.
We plan. G-d laughs.
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firebirdparts
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Re: U.S. stocks continue to soar!

Post by firebirdparts »

I don't know if we'd see that this time or not. The banks needed funds to lend, and so they were paying in the 1970's 10, 12, 14% on cash deposits. I had a CD paying 16% at one time which may have been 1981 or 2. That was a very different era for banks, and I may be remembering what was happening after Volker raised the prime rate to 20%, effectively cutting off their funds below that price. I wonder if they have the same level of needs now. Even if they did, the FED may behave quite differently.
This time is the same
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Re: U.S. stocks continue to soar!

Post by nigel_ht »

atdharris wrote: Tue Jul 13, 2021 10:19 am
tsohg wrote: Tue Jul 13, 2021 9:59 am
Stinky wrote: Tue Jul 13, 2021 8:09 am
lostdog wrote: Tue Jul 13, 2021 8:06 am The premarket doesn't like the cpi report.
Just a small ripple in the vast ocean of FOMO and TINA.
+1 TINA.

If inflation is coming, isn't cash one of the worst places to be?
I'd think so. But it seems like the equity market doesn't like inflation. We know the bond market doesn't like inflation. Holding cash is just losing money. So where do you go?
My “cash” is in 3 mos t-bills. So losing money but moderately slower than stuffed in a mattress.
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

paging lostdog. paging lostdog. lostdog report to the gym, please.
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HomerJ
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Re: U.S. stocks continue to soar!

Post by HomerJ »

You're going to kill the golden goose if you make lostdog work out too much...
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

canadianbacon wrote: Tue Jul 13, 2021 8:22 am Forester is 60% equities... he's more aggressive than many here :-D.
Whoa, that's way more than me at around 20% (50% of 401k). And I'm more invested than in the last 10 years. I'm bullish. See what the CEO of BLK is saying.
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

HomerJ wrote: Tue Jul 13, 2021 1:02 pm You're going to kill the golden goose if you make lostdog work out too much...
Good point, good point.

Although I think you mean the goose that lays golden eggs. The golden goose is different.

https://en.wikipedia.org/wiki/The_Golden_Goose
Last edited by anoop on Tue Jul 13, 2021 1:15 pm, edited 1 time in total.
Marseille07
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Re: U.S. stocks continue to soar!

Post by Marseille07 »

anoop wrote: Tue Jul 13, 2021 1:03 pm
canadianbacon wrote: Tue Jul 13, 2021 8:22 am Forester is 60% equities... he's more aggressive than many here :-D.
Whoa, that's way more than me at around 20% (50% of 401k). And I'm more invested than in the last 10 years. I'm bullish. See what the CEO of BLK is saying.
Personal finance is personal. If you are comfortable at 20/80 not a penny more, that's all good and fine. Much better than going too aggressive and selling at the bottom.
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Re: U.S. stocks continue to soar!

Post by anoop »

nigel_ht wrote: Tue Jul 13, 2021 11:06 am My “cash” is in 3 mos t-bills. So losing money but moderately slower than stuffed in a mattress.
with 3 mo t-bills, you probably mean infinitesimally slower rather than moderately slower. :)
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Re: U.S. stocks continue to soar!

Post by Triple digit golfer »

HomerJ wrote: Tue Jul 13, 2021 1:02 pm You're going to kill the golden goose if you make lostdog work out too much...
He's over trained. Time to cut the gym days to 2-3x per week to aid in recovery. Then you'll see the market pop.
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HomerJ
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Re: U.S. stocks continue to soar!

Post by HomerJ »

anoop wrote: Tue Jul 13, 2021 1:04 pm
HomerJ wrote: Tue Jul 13, 2021 1:02 pm You're going to kill the golden goose if you make lostdog work out too much...
Good point, good point.

Although I think you mean the goose that lays golden eggs. The golden goose is different.

https://en.wikipedia.org/wiki/The_Golden_Goose
You are correct! And here I thought I was pretty well-versed in fables and fairy tales. I loved old Aesop when I was a kid.
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Re: U.S. stocks continue to soar!

Post by lostdog »

anoop wrote: Tue Jul 13, 2021 12:55 pm paging lostdog. paging lostdog. lostdog report to the gym, please.
I just got back. I tried...

I saw the fast drop so I stepped up the work out.
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Stinky
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Re: U.S. stocks continue to soar!

Post by Stinky »

lostdog wrote: Tue Jul 13, 2021 2:22 pm
anoop wrote: Tue Jul 13, 2021 12:55 pm paging lostdog. paging lostdog. lostdog report to the gym, please.
I just got back. I tried...

I saw the fast drop so I stepped up the work out.
Boglehead Nation appreciates your efforts.

We really do. :D
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Vtsax100
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Re: U.S. stocks continue to soar!

Post by Vtsax100 »

lostdog wrote: Tue Jul 13, 2021 2:22 pm
anoop wrote: Tue Jul 13, 2021 12:55 pm paging lostdog. paging lostdog. lostdog report to the gym, please.
I just got back. I tried...

I saw the fast drop so I stepped up the work out.
It appears that you at least stopped the free fall.
atdharris
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Re: U.S. stocks continue to soar!

Post by atdharris »

Small caps are getting destroyed today. Down nearly 2%
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Re: U.S. stocks continue to soar!

Post by firebirdparts »

atdharris wrote: Tue Jul 13, 2021 2:57 pm Small caps are getting destroyed today. Down nearly 2%
I figure small cap investors are used to that.
This time is the same
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Re: U.S. stocks continue to soar!

Post by nzahir »

atdharris wrote: Tue Jul 13, 2021 2:57 pm Small caps are getting destroyed today. Down nearly 2%
Why are small caps and scv falling if inflation is up?

Are the cycles for small caps and scv that short?
atdharris
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Re: U.S. stocks continue to soar!

Post by atdharris »

nzahir wrote: Tue Jul 13, 2021 3:04 pm
atdharris wrote: Tue Jul 13, 2021 2:57 pm Small caps are getting destroyed today. Down nearly 2%
Why are small caps and scv falling if inflation is up?

Are the cycles for small caps and scv that short?
Who knows. You would think inflation in general would cause equity prices to increase, but it seems to have the opposite effect (for now).
lostdog
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Re: U.S. stocks continue to soar!

Post by lostdog »

Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
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Re: U.S. stocks continue to soar!

Post by anoop »

lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
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Re: U.S. stocks continue to soar!

Post by lostdog »

anoop wrote: Tue Jul 13, 2021 3:24 pm
lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
Are you selling when he says it?
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anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

lostdog wrote: Tue Jul 13, 2021 3:26 pm
anoop wrote: Tue Jul 13, 2021 3:24 pm
lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
Are you selling when he says it?
The moment he says they are starting to taper or raise rates, I will move to cash.

I won't act if he says they will be doing it at a future date, because that's his poker face to try and keep the market from overheating.

If he actually does it, then I move to cash because he will be forced to reverse course within 6 months at the most.
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

This is the only chart that matters.
https://www.federalreserve.gov/monetary ... trends.htm

If there's any hints of this actually dropping, I move to cash.
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Re: U.S. stocks continue to soar!

Post by Doom&Gloom »

firebirdparts wrote: Tue Jul 13, 2021 3:01 pm
atdharris wrote: Tue Jul 13, 2021 2:57 pm Small caps are getting destroyed today. Down nearly 2%
I figure small cap investors are used to that.
Yep. Right in my comfort zone. :beer or :(

I am so conflicted, but I think I would like to venture far out of my wheelhouse.
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Re: U.S. stocks continue to soar!

Post by stocknoob4111 »

Small Caps got hosed today
Vtsax100
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Re: U.S. stocks continue to soar!

Post by Vtsax100 »

anoop wrote: Tue Jul 13, 2021 3:36 pm This is the only chart that matters.
https://www.federalreserve.gov/monetary ... trends.htm

If there's any hints of this actually dropping, I move to cash.
How well has this strategy work for you?
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

Vtsax100 wrote: Tue Jul 13, 2021 4:10 pm
anoop wrote: Tue Jul 13, 2021 3:36 pm This is the only chart that matters.
https://www.federalreserve.gov/monetary ... trends.htm

If there's any hints of this actually dropping, I move to cash.
How well has this strategy work for you?
Trying it for the first time.
MishkaWorries
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Re: U.S. stocks continue to soar!

Post by MishkaWorries »

anoop wrote: Tue Jul 13, 2021 3:24 pm
lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
We plan. G-d laughs.
minimalistmarc
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Re: U.S. stocks continue to soar!

Post by minimalistmarc »

anoop wrote: Tue Jul 13, 2021 4:28 pm
Vtsax100 wrote: Tue Jul 13, 2021 4:10 pm
anoop wrote: Tue Jul 13, 2021 3:36 pm This is the only chart that matters.
https://www.federalreserve.gov/monetary ... trends.htm

If there's any hints of this actually dropping, I move to cash.
How well has this strategy work for you?
Trying it for the first time.
Don’t you already have 80% cash in your asset allocation?
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
anoop wrote: Tue Jul 13, 2021 3:24 pm
lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

minimalistmarc wrote: Tue Jul 13, 2021 4:33 pm
anoop wrote: Tue Jul 13, 2021 4:28 pm
Vtsax100 wrote: Tue Jul 13, 2021 4:10 pm
anoop wrote: Tue Jul 13, 2021 3:36 pm This is the only chart that matters.
https://www.federalreserve.gov/monetary ... trends.htm

If there's any hints of this actually dropping, I move to cash.
How well has this strategy work for you?
Trying it for the first time.
Don’t you already have 80% cash in your asset allocation?
More like 20% stock for the first time since 2008!
MishkaWorries
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Re: U.S. stocks continue to soar!

Post by MishkaWorries »

anoop wrote: Tue Jul 13, 2021 4:36 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
anoop wrote: Tue Jul 13, 2021 3:24 pm
lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
We plan. G-d laughs.
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
anoop wrote: Tue Jul 13, 2021 4:36 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
anoop wrote: Tue Jul 13, 2021 3:24 pm
lostdog wrote: Tue Jul 13, 2021 3:16 pm Fed official on CNBC made a comment that spooked the markets.

"San Francisco Fed President Mary Daly gave her view that asset purchases might be dialed back by late this year or early in 2022."

https://www.investors.com/market-trend/ ... ock-dives/
Until Powell says it, I'm staying invested.
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
jarjarM
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Re: U.S. stocks continue to soar!

Post by jarjarM »

stocknoob4111 wrote: Tue Jul 13, 2021 4:09 pm Small Caps got hosed today
This happens all the time. That's why it's fun to play with URTY/SRTY pair trade. Some reasonably good :moneybag there.
nigel_ht
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Re: U.S. stocks continue to soar!

Post by nigel_ht »

anoop wrote: Tue Jul 13, 2021 4:56 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
anoop wrote: Tue Jul 13, 2021 4:36 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
anoop wrote: Tue Jul 13, 2021 3:24 pm

Until Powell says it, I'm staying invested.
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
Yah, the whole “pick an AA you can live with” thing works until you pick an AA that isn’t likely to meet your retirement goals. 20/80 is better than 0/100 but you’re deep in preservation territory vs growth.

If you’re saving 2x expenses every year or already met your goal and coasting in for the win this doesn’t matter and may be the perfect AA.
anoop
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Re: U.S. stocks continue to soar!

Post by anoop »

nigel_ht wrote: Tue Jul 13, 2021 5:06 pm
anoop wrote: Tue Jul 13, 2021 4:56 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
anoop wrote: Tue Jul 13, 2021 4:36 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
Yah, the whole “pick an AA you can live with” thing works until you pick an AA that isn’t likely to meet your retirement goals. 20/80 is better than 0/100 but you’re deep in preservation territory vs growth.

If you’re saving 2x expenses every year or already met your goal and coasting in for the win this doesn’t matter and may be the perfect AA.
Kind of hard to say that with inflation and future health being complete unknowns. But if I believe the fed's 2% inflation target and assume I am reasonably covered for medical through ACA, then I'd say if I move to a LCOL area, I should be OK with what I have saved & current expenses. I continue to save a good chunk of my earnings (> 50% of take home) but the longevity of work & compensation is also questionable.

Bottomline -- for me preservation has always been more important than growth. I got to that approach by following Zvi Bodie's work on "Worry Free Investing".
https://zvibodie.com/book/worry-free-investing/
The general strategy was to increase your savings and used fixed income to guarantee a certain minimum level of retirement funding before venturing into stocks.

Of course, that was pre-ZIRP that strategy has not worth at all for the last decade.
marcopolo
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Re: U.S. stocks continue to soar!

Post by marcopolo »

anoop wrote: Tue Jul 13, 2021 4:56 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
anoop wrote: Tue Jul 13, 2021 4:36 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
anoop wrote: Tue Jul 13, 2021 3:24 pm

Until Powell says it, I'm staying invested.
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
Presumably, you did "see better opportunities" in cash from 2008 until just a few months ago?

How did your vision serve you?

If I had been that wrong for that long, I am not sure I would be making such confident analysis of future market behvior.
Once in a while you get shown the light, in the strangest of places if you look at it right.
anoop
Posts: 3930
Joined: Tue Mar 04, 2014 12:33 am

Re: U.S. stocks continue to soar!

Post by anoop »

marcopolo wrote: Tue Jul 13, 2021 10:43 pm
anoop wrote: Tue Jul 13, 2021 4:56 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
anoop wrote: Tue Jul 13, 2021 4:36 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:33 pm
This is how it works. The Fed turns the knob just a little bit to get the frogs accustomed to the new temperature. By the time Powell says it, you'll be the last man out the door.
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
Presumably, you did "see better opportunities" in cash from 2008 until just a few months ago?

How did your vision serve you?

If I had been that wrong for that long, I am not sure I would be making such confident analysis of future market behvior.
Back then I was naive and there were several things going on.

One, I didn't know that fed is essentially infallible because they can gain new powers at will. And so I believed a lot of bearish bloggers. The only blogger I was following back then that timed things correctly was CalculatedRisk. But there was so much noise from the other blogs I ignored his call that everything was on the up and up starting March 2009.

Two, as a result of reading all these blogs, I started to understand how wealth transfer was taking place and destruction of middle class. Outside of the blogs, I also started becoming more aware of things like socially responsible investing (e.g. banks that were destroying the middle class, companies engaging in war, etc.) and I started to feel ethically conflicted about making gains at the expense of destruction of society. (I had to work on myself to get over this because of three & four below.)

Three, I had hope that we would someday normalize and fixed income would be viable again. After COVID, I know we are never going back to a market economy again. From here on out, it's centrally planned economy. Not just in the US, but in fact central banks worldwide are working in coordination.

Four, up until now, the fed had a 2% max inflation target. This means I lose no more than 50% of my purchasing power every 36 years. I could live with that. Now they are letting inflation run hot. I have no idea when they will decide it's a problem. At 5%, I lose 50% of my purchasing power every ~15 years. I cannot afford that. It is clear that they do not care about inflation and that became my biggest fear. Just like they were surprised that subprime wasn't contained during GFC, they will be surprised that inflation isn't transient this time around.

Bottom line -- I realize that now none of the economic data matters. Even the bond market can no longer offer reliable signals of stress. In fact, if there is stress it might anticipate more intervention from the central banks and rates may fall! The only thing that matters is what central banks are doing. Avoid assets they do not like (e.g. gold, silver, crypto). Buy assets they support -- stocks and real-estate. Stocks and real-estate cannot go down even a little bit because now hedge funds, banks, and private equity are all over-leveraged in those assets. Even a minor setback will cause a massive liquidity event. The fed cannot afford to have that because they have seen how hard it is to bootstrap an economy after a crisis and they also know that they will be held responsible for it.
marcopolo
Posts: 8445
Joined: Sat Dec 03, 2016 9:22 am

Re: U.S. stocks continue to soar!

Post by marcopolo »

anoop wrote: Tue Jul 13, 2021 11:10 pm
marcopolo wrote: Tue Jul 13, 2021 10:43 pm
anoop wrote: Tue Jul 13, 2021 4:56 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
anoop wrote: Tue Jul 13, 2021 4:36 pm
I think there’ll be plenty of time to act. It’s not like they withdraw support and we hit the circuit breaker the next day. In fact chance are we go up for a little, and then a liquidity event somewhere causes a collapse. Kind of like what happened when they started to cut rates and implement “not QE”.
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
Presumably, you did "see better opportunities" in cash from 2008 until just a few months ago?

How did your vision serve you?

If I had been that wrong for that long, I am not sure I would be making such confident analysis of future market behvior.
Back then I was naive and there were several things going on.

One, I didn't know that fed is essentially infallible because they can gain new powers at will. And so I believed a lot of bearish bloggers. The only blogger I was following back then that timed things correctly was CalculatedRisk. But there was so much noise from the other blogs I ignored his call that everything was on the up and up starting March 2009.

Two, as a result of reading all these blogs, I started to understand how wealth transfer was taking place and destruction of middle class. Outside of the blogs, I also started becoming more aware of things like socially responsible investing (e.g. banks that were destroying the middle class, companies engaging in war, etc.) and I started to feel ethically conflicted about making gains at the expense of destruction of society. (I had to work on myself to get over this because of three & four below.)

Three, I had hope that we would someday normalize and fixed income would be viable again. After COVID, I know we are never going back to a market economy again. From here on out, it's centrally planned economy. Not just in the US, but in fact central banks worldwide are working in coordination.

Four, up until now, the fed had a 2% max inflation target. This means I lose no more than 50% of my purchasing power every 36 years. I could live with that. Now they are letting inflation run hot. I have no idea when they will decide it's a problem. At 5%, I lose 50% of my purchasing power every ~15 years. I cannot afford that. It is clear that they do not care about inflation and that became my biggest fear. Just like they were surprised that subprime wasn't contained during GFC, they will be surprised that inflation isn't transient this time around.

Bottom line -- I realize that now none of the economic data matters. Even the bond market can no longer offer reliable signals of stress. In fact, if there is stress it might anticipate more intervention from the central banks and rates may fall! The only thing that matters is what central banks are doing. Avoid assets they do not like (e.g. gold, silver, crypto). Buy assets they support -- stocks and real-estate. Stocks and real-estate cannot go down even a little bit because now hedge funds, banks, and private equity are all over-leveraged in those assets. Even a minor setback will cause a massive liquidity event. The fed cannot afford to have that because they have seen how hard it is to bootstrap an economy after a crisis and they also know that they will be held responsible for it.

It sounds like you think you now have it all figured out. I suspect, you would have written a similar detailed and self confident post back in 2009, and 2013, and 2018, etc. about why all cash was the obviously smart thing to do.

if you truly believe what you wrote above, why are you holding 80% cash in your portfolio?!?

In any case, good luck to you. Hope it works out OK for you.
Once in a while you get shown the light, in the strangest of places if you look at it right.
anoop
Posts: 3930
Joined: Tue Mar 04, 2014 12:33 am

Re: U.S. stocks continue to soar!

Post by anoop »

marcopolo wrote: Tue Jul 13, 2021 11:34 pm
anoop wrote: Tue Jul 13, 2021 11:10 pm
marcopolo wrote: Tue Jul 13, 2021 10:43 pm
anoop wrote: Tue Jul 13, 2021 4:56 pm
MishkaWorries wrote: Tue Jul 13, 2021 4:47 pm
Why not just pick an asset allocation you can live with if the market tanks or soars?
Actually, I'm comfortable with what I have now. Let's see how things unfold. I am not going to panic sell if the market drops today. But if I see better opportunities (than we have now) in fixed income, I'd much prefer being there.
Presumably, you did "see better opportunities" in cash from 2008 until just a few months ago?

How did your vision serve you?

If I had been that wrong for that long, I am not sure I would be making such confident analysis of future market behvior.
Back then I was naive and there were several things going on.

One, I didn't know that fed is essentially infallible because they can gain new powers at will. And so I believed a lot of bearish bloggers. The only blogger I was following back then that timed things correctly was CalculatedRisk. But there was so much noise from the other blogs I ignored his call that everything was on the up and up starting March 2009.

Two, as a result of reading all these blogs, I started to understand how wealth transfer was taking place and destruction of middle class. Outside of the blogs, I also started becoming more aware of things like socially responsible investing (e.g. banks that were destroying the middle class, companies engaging in war, etc.) and I started to feel ethically conflicted about making gains at the expense of destruction of society. (I had to work on myself to get over this because of three & four below.)

Three, I had hope that we would someday normalize and fixed income would be viable again. After COVID, I know we are never going back to a market economy again. From here on out, it's centrally planned economy. Not just in the US, but in fact central banks worldwide are working in coordination.

Four, up until now, the fed had a 2% max inflation target. This means I lose no more than 50% of my purchasing power every 36 years. I could live with that. Now they are letting inflation run hot. I have no idea when they will decide it's a problem. At 5%, I lose 50% of my purchasing power every ~15 years. I cannot afford that. It is clear that they do not care about inflation and that became my biggest fear. Just like they were surprised that subprime wasn't contained during GFC, they will be surprised that inflation isn't transient this time around.

Bottom line -- I realize that now none of the economic data matters. Even the bond market can no longer offer reliable signals of stress. In fact, if there is stress it might anticipate more intervention from the central banks and rates may fall! The only thing that matters is what central banks are doing. Avoid assets they do not like (e.g. gold, silver, crypto). Buy assets they support -- stocks and real-estate. Stocks and real-estate cannot go down even a little bit because now hedge funds, banks, and private equity are all over-leveraged in those assets. Even a minor setback will cause a massive liquidity event. The fed cannot afford to have that because they have seen how hard it is to bootstrap an economy after a crisis and they also know that they will be held responsible for it.

It sounds like you think you now have it all figured out. I suspect, you would have written a similar detailed and self confident post back in 2009, and 2013, and 2018, etc. about why all cash was the obviously smart thing to do.

if you truly believe what you wrote above, why are you holding 80% cash in your portfolio?!?

In any case, good luck to you. Hope it works out OK for you.
Thank you.
User avatar
HomerJ
Posts: 21281
Joined: Fri Jun 06, 2008 12:50 pm

Re: U.S. stocks continue to soar!

Post by HomerJ »

marcopolo wrote: Tue Jul 13, 2021 11:34 pmif you truly believe what you wrote above, why are you holding 80% cash in your portfolio?!?
This. Actions speak louder than words. anoop, you speak confidently, using phrases like "in fact"

But you don't believe your own words since you are only 20% in stocks.

Which is okay... Because most of us here believe that "nobody knows nothing"*... Not you anoop, not us. So it's okay that you're not sure.

But don't talk like you are sure, when your actions prove you're not.

*(I prefer, "Nobody knows enough")
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: U.S. stocks continue to soar!

Post by UpsetRaptor »

Anoop, I think you're the most risk averse investor I've seen on these boards. Which is totally fine, especially since you're saving over half your income; if you know your risk tolerance, you know it. Just an observation.
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