decline
drop
pullback
correction
collapse
catastrophe
wipeout
To describe a small reduction in equity prices, I much prefer “decline” to “collapse” or “wipeout”.
I wanted to give lostdog a whole range of choices for future commentary, sorted by my perception of the magnitude of the terms.
Ah, does this one come with some smelling salts?Doom&Gloom wrote: ↑Fri Jan 07, 2022 4:10 pmI prefer "swoon."
Only if you want a quick recoveryResearchMed wrote: ↑Fri Jan 07, 2022 4:33 pmAh, does this one come with some smelling salts?Doom&Gloom wrote: ↑Fri Jan 07, 2022 4:10 pmI prefer "swoon."
RM
As long as we can pull in some Web 1.0 tech to auto-play the song, this gets my vote.
dipDoom&Gloom wrote: ↑Fri Jan 07, 2022 4:10 pmI prefer "swoon."
LOL... We ALL want a quick recovery.Doom&Gloom wrote: ↑Fri Jan 07, 2022 4:50 pmOnly if you want a quick recoveryResearchMed wrote: ↑Fri Jan 07, 2022 4:33 pmAh, does this one come with some smelling salts?
RM
Well, you and I and many others do, but there are always some accumulators here rooting for lower prices because they are bargain hunting. They have more faith than I would if I were in their positionsHomerJ wrote: ↑Fri Jan 07, 2022 8:13 pmLOL... We ALL want a quick recovery.Doom&Gloom wrote: ↑Fri Jan 07, 2022 4:50 pmOnly if you want a quick recoveryResearchMed wrote: ↑Fri Jan 07, 2022 4:33 pmAh, does this one come with some smelling salts?
RM
Imo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
At some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
Maybe I'm not following, but isn't that a case to be made to hold onto tech when the yields rise, instead of dumping?TheTimeLord wrote: ↑Sat Jan 08, 2022 12:26 pmAt some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
It is a case for not dumping extremely profitable tech companies with great balance sheets and strong earnings. Tech is so ubiquitous in the world now that saying Tech isn't very descriptive imho. I think most people consider Meta (Facebook), Alphabet (Google) and Amazon tech companies but if look in the XLK, the S&P Tech Sector ETF, you won't find them because they are considered to be in other sectors as of a couple years ago. Strangely, both Visa and Mastercard are in the Tech Sector ETF.Marseille07 wrote: ↑Sat Jan 08, 2022 12:31 pmMaybe I'm not following, but isn't that a case to be made to hold onto tech when the yields rise, instead of dumping?TheTimeLord wrote: ↑Sat Jan 08, 2022 12:26 pmAt some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
"I want a magic recession where only other people lose their jobs and RSU values"; amazingly common on /r/financialindependenceDoom&Gloom wrote: ↑Fri Jan 07, 2022 8:22 pm Well, you and I and many others do, but there are always some accumulators here rooting for lower prices because they are bargain hunting. They have more faith than I would if I were in their positions
TheTimeLord wrote: ↑Sat Jan 08, 2022 12:26 pm At some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.
It's only half of my portfolio. The S&P 500 is also going to experience pain as well as it also has a big tech component. I'll think about changes to make if it breaches the 200 day moving average. I think, worse case is that it ends the year flat or slightly down. What should offset this sell off would be earnings. It feels premature to sell ahead of Q4 earnings.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
I can't tell if you're being tongue in cheek, or if you are envisioning a positive real rate on cash. Are you an advocate for having an allocation to cash? If so, then what amount?TheTimeLord wrote: ↑Sat Jan 08, 2022 12:26 pmAt some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
No, I am not talking about a cash allocation for investors, nor am I discussing the possibility of short term rates yielding a positive real return.Robot Monster wrote: ↑Sat Jan 08, 2022 8:14 pmI can't tell if you're being tongue in cheek, or if you are envisioning a positive real rate on cash. Are you an advocate for having an allocation to cash? If so, then what amount?TheTimeLord wrote: ↑Sat Jan 08, 2022 12:26 pmAt some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
Ok, thank you for clarifying.TheTimeLord wrote: ↑Sat Jan 08, 2022 8:31 pmNo, I am not talking about a cash allocation for investors, nor am I discussing the possibility of short term rates yielding a positive real return.Robot Monster wrote: ↑Sat Jan 08, 2022 8:14 pmI can't tell if you're being tongue in cheek, or if you are envisioning a positive real rate on cash. Are you an advocate for having an allocation to cash? If so, then what amount?TheTimeLord wrote: ↑Sat Jan 08, 2022 12:26 pmAt some point look for some clever analyst to point out that rising interest rates allows Mega Tech companies like Apple, Microsoft and Google to start earning a return on their enormous cash hordes. Of course this applies to any company with a great balancesheet and a large cash horde but the majority of those are Mega Tech, although I believe I can think of at least one exception.Marseille07 wrote: ↑Fri Jan 07, 2022 11:44 pmImo US TSM or S&P is the way to go. Tech appears sensitive to the yields. I don't think it should be but it is, so you need to plan accordingly.
Been through 2 impressive ones plus covid. Can't argue with the concept of it.canadianbacon wrote: ↑Sat Jan 08, 2022 1:24 pm "I want a magic recession where only other people lose their jobs and RSU values"; amazingly common on /r/financialindependence
Very interesting chart and presentation. Thank you.
I find it interesting that even from prior market peaks, one could have gotten something close to the 7% real "Siegal Constant" (tag sometimes mockingly applied to Wharton Prof. Jeremy Siegel's Stocks For The Long Run chart) as long as they held out for the next boom. Similarly, from trough to subsequent trough/bust was roughly 7% real.SimpleGift wrote: ↑Sun Jan 09, 2022 2:05 pmVery interesting chart and presentation. Thank you.
It makes clear the run up of stocks in the 1960s (the Nifty Fifty era), followed by the crash and disappointment of the 1970s. Same for the run up in the 1990s during the tech boom, followed by the lost decade of the 2000s. An understanding of these periods of boom and bust should be indelibly imprinted on the mind of every buy-hold-rebalance investor.
Plus, from a historical perspective, your chart doesn't make today's market prices look all that extreme.
Interesting, too, that the respective peaks and troughs over the past century were roughly 30 years apart. As you say, a buy-and-hold investor would have done quite well — irregardless of when she bought into the market — but only if she stayed the course for at least three decades.
Scary thing is that the market can drop more than 50% tomorrow and still be between the red lines.
A range of -0.38% to 10.45% annual real returns for the next 10 years.Triple digit golfer wrote: ↑Sun Jan 09, 2022 4:20 pmScary thing is that the market can drop more than 50% tomorrow and still be between the red lines.
... OR, if they averaged in and out across the time period, and could get past framing it with an anchor at some particular high or low point, but of their XIRR across the multiple periods they bought/sold across.SimpleGift wrote: ↑Sun Jan 09, 2022 2:39 pmInteresting, too, that the respective peaks and troughs over the past century were roughly 30 years apart. As you say, a buy-and-hold investor would have done quite well — irregardless of when she bought into the market — but only if she stayed the course for at least three decades.
Well, looking at the bright side of this, just averaging and projecting by eyeball we have about another 10 years of better than average growth before we hit the top channel line.Triple digit golfer wrote: ↑Sun Jan 09, 2022 4:20 pmScary thing is that the market can drop more than 50% tomorrow and still be between the red lines.
Indeed. Plus, you made me look. Wish I hadn't.
A very nice flush indeed.TheTimeLord wrote: ↑Mon Jan 10, 2022 10:10 am Starting to look like the toilet flush investors want to see.
-->Goldman strategists don’t expect yields to rise much further
-->BlackRock, JPMorgan strategists see recent selloff as overdone
Unfazed by the stock market’s bumpy start to the year, strategists from Goldman Sachs Group Inc. to UBS Global Wealth Management reiterated their bullish calls on bets that equities can weather higher interest rates and rising bond yields.
Take a longer look at this index: https://www.chicagofed.org/research/dat ... backgroundRobot Monster wrote: ↑Tue Jan 11, 2022 7:09 am Great graph showing how easy financial conditions are relative to the past. Twitter link
Futures are soaring, the 10yr yield lower.
"Strategists From Goldman Sachs to UBS Say Buy Dip in Stocks" from Bloomberg
-->Goldman strategists don’t expect yields to rise much further
-->BlackRock, JPMorgan strategists see recent selloff as overdone
Unfazed by the stock market’s bumpy start to the year, strategists from Goldman Sachs Group Inc. to UBS Global Wealth Management reiterated their bullish calls on bets that equities can weather higher interest rates and rising bond yields.
I think they are different graphs. The Twitter graph says, "GS US Financial Conditions Index". So, it's a Goldman Sachs index. I can make the timeline in your link match the timeline in the Twitter graph, and the graphs look monstrously different. For example, in the Twitter graph you can see a huge spike in 2003. The graph you linked to shows not even a bump.Tubes wrote: ↑Tue Jan 11, 2022 7:59 amTake a longer look at this index: https://www.chicagofed.org/research/dat ... backgroundRobot Monster wrote: ↑Tue Jan 11, 2022 7:09 am Great graph showing how easy financial conditions are relative to the past. Twitter link
Futures are soaring, the 10yr yield lower.
"Strategists From Goldman Sachs to UBS Say Buy Dip in Stocks" from Bloomberg
-->Goldman strategists don’t expect yields to rise much further
-->BlackRock, JPMorgan strategists see recent selloff as overdone
Unfazed by the stock market’s bumpy start to the year, strategists from Goldman Sachs Group Inc. to UBS Global Wealth Management reiterated their bullish calls on bets that equities can weather higher interest rates and rising bond yields.
Doesn't mean much to me with regard to stocks.
Ah, I see.Robot Monster wrote: ↑Tue Jan 11, 2022 8:24 amI think they are different graphs. The Twitter graph says, "GS US Financial Conditions Index". So, it's a Goldman Sachs index. I can make the timeline in your link match the timeline in the Twitter graph, and the graphs look monstrously different. For example, in the Twitter graph you can see a huge spike in 2003. The graph you linked to shows not even a bump.Tubes wrote: ↑Tue Jan 11, 2022 7:59 amTake a longer look at this index: https://www.chicagofed.org/research/dat ... backgroundRobot Monster wrote: ↑Tue Jan 11, 2022 7:09 am Great graph showing how easy financial conditions are relative to the past. Twitter link
Futures are soaring, the 10yr yield lower.
"Strategists From Goldman Sachs to UBS Say Buy Dip in Stocks" from Bloomberg
-->Goldman strategists don’t expect yields to rise much further
-->BlackRock, JPMorgan strategists see recent selloff as overdone
Unfazed by the stock market’s bumpy start to the year, strategists from Goldman Sachs Group Inc. to UBS Global Wealth Management reiterated their bullish calls on bets that equities can weather higher interest rates and rising bond yields.
Doesn't mean much to me with regard to stocks.
This chart below is less good than the one in the Twitter link, but for those who don't want to crack open Twitter...
Just a note about that graphic above:Tubes wrote: ↑Tue Jan 11, 2022 8:36 amAh, I see.Robot Monster wrote: ↑Tue Jan 11, 2022 8:24 amI think they are different graphs. The Twitter graph says, "GS US Financial Conditions Index". So, it's a Goldman Sachs index. I can make the timeline in your link match the timeline in the Twitter graph, and the graphs look monstrously different. For example, in the Twitter graph you can see a huge spike in 2003. The graph you linked to shows not even a bump.Tubes wrote: ↑Tue Jan 11, 2022 7:59 amTake a longer look at this index: https://www.chicagofed.org/research/dat ... backgroundRobot Monster wrote: ↑Tue Jan 11, 2022 7:09 am Great graph showing how easy financial conditions are relative to the past. Twitter link
Futures are soaring, the 10yr yield lower.
"Strategists From Goldman Sachs to UBS Say Buy Dip in Stocks" from Bloomberg
-->Goldman strategists don’t expect yields to rise much further
-->BlackRock, JPMorgan strategists see recent selloff as overdone
Unfazed by the stock market’s bumpy start to the year, strategists from Goldman Sachs Group Inc. to UBS Global Wealth Management reiterated their bullish calls on bets that equities can weather higher interest rates and rising bond yields.
Doesn't mean much to me with regard to stocks.
This chart below is less good than the one in the Twitter link, but for those who don't want to crack open Twitter...
Well, the NASDAQ still has a tenuous hold on green. But it is fading fast.
Defensive sectors are doing much worse. It keeps changing, but