Yes, software is still eating the world. Look at this chart of European cloud providers. The overall market is growing like crazy and the European companies are losing market share in their own backyard. MSFT is one of the U.S. companies they're losing market share to.
U.S. stocks in free fall
Re: U.S. stocks in free fall
Yes, software is still eating the world. Look at this chart of European cloud providers. The overall market is growing like crazy and the European companies are losing market share in their own backyard. MSFT is one of the U.S. companies they're losing market share to.
-
- Posts: 736
- Joined: Tue Feb 19, 2019 10:09 am
Re: U.S. stocks in free fall
I wouldn't change a thing about the Int'l allocation, personally, and am happy with my experiment, since, back of the envelope, we might be able to purchase a [car|vacation|cool big ticket item] down the road with just these invested cash back dollars, which would be kind of a cool outcome over frittering it away on non essentials.
Bottom line, I have a blended fund I've randomly been adding $5, $10 or $25 to since July 2020 and it's up 6.6%, not the 28% I'd have if I'd invested all the money in the S+P 500 on the front end on July 1, 2020.
6.6% isn't even matching inflation for the same timeframe.
So when people say that US equities have had a great run in the context of the market being down, that does assume that we all had money in the market ten years ago, or more. Yes, I agree that if that's true, this is a small correction.
However, some folks with more recent investment horizons will start to see numbers like I'm seeing, esp. if this market keeps cooling.
Nothing wrong, or chicken little, about realizing that's going to be true for some people.
If you started more recently, you just have to keep your eyes on the long term horizon and keep saving and investing.
Re: U.S. stocks in free fall
Tomorrow will be interesting.
Re: U.S. stocks in free fall
You are here --> The Hourly Financial News and Armchair Macro Economic Forecasting Threadbogledogle87 wrote: ↑Tue Jan 25, 2022 6:38 pm What is with all the market-timing speculators invading this thread!? Was not expecting this!
It's good reading, and it's only going to get better.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
-
- Posts: 645
- Joined: Thu Jul 13, 2017 5:57 pm
Re: U.S. stocks in free fall
I don’t think it’s correct to look at returns on periodic contributions and compare that based on inflation from the starting point.SantaClaraSurfer wrote: ↑Tue Jan 25, 2022 8:06 pm Bottom line, I have a blended fund I've randomly been adding $5, $10 or $25 to since July 2020 and it's up 6.6%, not the 28% I'd have if I'd invested all the money in the S+P 500 on the front end on July 1, 2020.
6.6% isn't even matching inflation for the same timeframe.
So when people say that US equities have had a great run in the context of the market being down, that does assume that we all had money in the market ten years ago, or more. Yes, I agree that if that's true, this is a small correction.
However, some folks with more recent investment horizons will start to see numbers like I'm seeing, esp. if this market keeps cooling.
Nothing wrong, or chicken little, about realizing that's going to be true for some people.
If you started more recently, you just have to keep your eyes on the long term horizon and keep saving and investing.
The $10 you invested last week did not experience 7%+ inflation but it is factored into your total returns.
Re: U.S. stocks in free fall
"Tomorrow will be interesting."
It will be if it's warm enough to go fishing, otherwise I get to trim back a dozen tall rosebushes and begin figuring where to move 5 English boxwoods that have to be moved before they start the deck replacement. I'm too old for this nonsense, but she's raised them since they were little. (And no, I wasn't around when she planted them next to the deck.)
Maybe I'll take the truck and my grandfather's logging chain and rip them out when she isn't looking.
I don't watch the financial news.
It will be if it's warm enough to go fishing, otherwise I get to trim back a dozen tall rosebushes and begin figuring where to move 5 English boxwoods that have to be moved before they start the deck replacement. I'm too old for this nonsense, but she's raised them since they were little. (And no, I wasn't around when she planted them next to the deck.)
Maybe I'll take the truck and my grandfather's logging chain and rip them out when she isn't looking.
I don't watch the financial news.
Re: U.S. stocks in free fall
Here is my prediction for tomorrow.
Market will start lower until the FOMC meeting. After that it'll reverse direction since I don't think there will be anything of surprise in that meeting. S&P500 will end in positive territory end of day. Emerging markets will end negative.
Disclaimer: I'm very poor at predictions, so remove your blinders, wear your seatbelts & helmets. There may or may not be life vests
Market will start lower until the FOMC meeting. After that it'll reverse direction since I don't think there will be anything of surprise in that meeting. S&P500 will end in positive territory end of day. Emerging markets will end negative.
Disclaimer: I'm very poor at predictions, so remove your blinders, wear your seatbelts & helmets. There may or may not be life vests
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
Re: U.S. stocks in free fall
Financial websites are all completely worthless...
For a while I held onto an old 1995-1996 special edition Money magazine... I remember reading it when I was young, and I devoured all the stuff about mutual funds and hot managers... There was a section on Index Funds, but it seemed boring, and I skipped over it...
Later, I went back to that magazine, and the index funds seemed to make a lot more sense... Then I found Bogleheads.org (check my join date), and I never looked back..
All those financial websites are junk.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
Sounds like your origin story contradicts your conclusion.HomerJ wrote: ↑Tue Jan 25, 2022 9:26 pm Financial websites are all completely worthless...
For a while I held onto an old 1995-1996 special edition Money magazine... I remember reading it when I was young, and I devoured all the stuff about mutual funds and hot managers... There was a section on Index Funds, but it seemed boring, and I skipped over it...
Later, I went back to that magazine, and the index funds seemed to make a lot more sense... Then I found Bogleheads.org (check my join date), and I never looked back..
All those financial websites are junk.
This example made me laugh because the Barron's reporter had the same story ready to go with diametrically opposed headlines. They had the same publication timestamp, so I assume he (or his editor) had a moment of panic at MSFT's immediate drop after its earnings release. Unfortunately, the news feed isn't as forgiving as their CMS.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: U.S. stocks in free fall
Sounds more like user error to me.HomerJ wrote: ↑Tue Jan 25, 2022 9:26 pm Financial websites are all completely worthless...
For a while I held onto an old 1995-1996 special edition Money magazine... I remember reading it when I was young, and I devoured all the stuff about mutual funds and hot managers... There was a section on Index Funds, but it seemed boring, and I skipped over it...
Later, I went back to that magazine, and the index funds seemed to make a lot more sense... Then I found Bogleheads.org (check my join date), and I never looked back..
All those financial websites are junk.
Re: U.S. stocks in free fall
Yup, the S&P 500 as a whole has had earnings growth of over 11% over the last decade. At this rate you expect valuations to more than double every 7 years, as the market is leading indicator. And PEs *declined* over the last 12 months.... think about that. From a high of 39 in December of 2020, to just 25 now, and we are still waiting on a bunch of earning reports.
Again... anyone selling right now.... well, they probably didn't deserve their money in the first place. They don't know what they are doing. But that's ok, I have a nice home for it in my Schwab account.
Last edited by mrspock on Tue Jan 25, 2022 10:05 pm, edited 3 times in total.
Re: U.S. stocks in free fall
Heh, good point... Money magazine did indeed talk about index funds in the 1990s... I wish I still had that magazine (it was special thick edition, and I did hold onto it for like 5-10 years).drk wrote: ↑Tue Jan 25, 2022 9:46 pmSounds like your origin story contradicts your conclusion.HomerJ wrote: ↑Tue Jan 25, 2022 9:26 pm Financial websites are all completely worthless...
For a while I held onto an old 1995-1996 special edition Money magazine... I remember reading it when I was young, and I devoured all the stuff about mutual funds and hot managers... There was a section on Index Funds, but it seemed boring, and I skipped over it...
Later, I went back to that magazine, and the index funds seemed to make a lot more sense... Then I found Bogleheads.org (check my join date), and I never looked back..
All those financial websites are junk.
But the same magazine talked up Janus 20 fund and I totally got into that (just like ARKK people today), so I'm guessing the index fund section was less than glowing.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
Core Four w/ nominal bonds & TIPS. Refi Rampage: Purchase: 3.875% 30 -> R1 3% 20 -> R2 2.375% 15 -> R3 1.99% 15 -> R4 1.875% 15
Re: U.S. stocks in free fall
The Nikkei hit a high of around 39k in late December 1989, and has still not recovered to that level.sureshoe wrote: ↑Tue Jan 25, 2022 2:15 pmFrom 1990 to 2000, "The Lost Decade", saw effectively a flat return for 10 years (since the following years stayed messy). It's not entirely the same thing, but 2000-2009 had a similar problem.marcopolo wrote: ↑Tue Jan 25, 2022 12:41 pmYou think Japan like scenario happened in US in the 2000's?!?sureshoe wrote: ↑Tue Jan 25, 2022 12:26 pmThere is no reason to believe the market won't do exactly what Japan did back in the 90s. The US market did it in the 2000s. We certainly could repeat that.carminered2019 wrote: ↑Tue Jan 25, 2022 12:00 pmWe are not in Japan and never invest based on the end of the world scenario!!
That would be news to me.
For the US, if you put $10k in the S&P on January 1, 2000, you would have lost about $1k by the end of 2009 - one decade later.
US 2000's was nothing remotely like that.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Re: U.S. stocks in free fall
PE of Japanese market was also close to 100 prior to their crash. PE of US market is just 25.marcopolo wrote: ↑Wed Jan 26, 2022 2:45 amThe Nikkei hit a high of around 39k in late December 1989, and has still not recovered to that level.sureshoe wrote: ↑Tue Jan 25, 2022 2:15 pmFrom 1990 to 2000, "The Lost Decade", saw effectively a flat return for 10 years (since the following years stayed messy). It's not entirely the same thing, but 2000-2009 had a similar problem.marcopolo wrote: ↑Tue Jan 25, 2022 12:41 pmYou think Japan like scenario happened in US in the 2000's?!?sureshoe wrote: ↑Tue Jan 25, 2022 12:26 pmThere is no reason to believe the market won't do exactly what Japan did back in the 90s. The US market did it in the 2000s. We certainly could repeat that.carminered2019 wrote: ↑Tue Jan 25, 2022 12:00 pm
We are not in Japan and never invest based on the end of the world scenario!!
That would be news to me.
For the US, if you put $10k in the S&P on January 1, 2000, you would have lost about $1k by the end of 2009 - one decade later.
US 2000's was nothing remotely like that.
If PE of US market goes this high…. I’d have more in bonds at my present AA than I do in my entire portfolio — by a lot. It wouldn’t matter if the market took 20 years to recover. I wouldn’t care… and neither would most Bogleheads following their AA and rebalancing on the way up.
I suspect north of a PE of 70-80, you’d see many Bogleheads turning into Wall Street Bets market timers… ala John Bogle himself.
Re: U.S. stocks in free fall
That thread got the usual responses around here…willthrill81 wrote: ↑Tue Jan 25, 2022 1:31 pmAlready did, this one.HomerJ wrote: ↑Tue Jan 25, 2022 12:17 pmThanks for the response...willthrill81 wrote: ↑Tue Jan 25, 2022 12:14 pmI didn't say that retirees would not be served well by the 3-fund portfolio. However, the 3-fund portfolio in its most common iterations has been very erratic in its performance over time, and many other portfolios have been much less so. But that's heretical to many here, I know. I don't want to derail this thread, so I'll leave it at that.HomerJ wrote: ↑Tue Jan 25, 2022 12:11 pmThat's an interesting statement. Your way may be just as good or maybe even better, but you really think the 3-fund portfolio does not serve retirees well?willthrill81 wrote: ↑Tue Jan 25, 2022 11:04 am That said, I agree that retirees would be well served with resilient portfolios, and the 3-fund does not qualify IMHO.
You should start a new thread to talk about those other portfolios that were better... I think that would be interesting.
Re: U.S. stocks in free fall
No, you don’t get to merge threads when us bears finally have our day after a decade of soaring…maybe have our day.peskypesky wrote: ↑Tue Jan 25, 2022 10:45 pm I still think the "free fall" thread and the "soaring" thread should be merged. It's a bit absurd to have to keep jumping back and forth.
If the stock market correction causes the Fed to chicken out on raising rates, I think we'll be soaring tomorrow.
I guess that still remains to be seen.
Re: U.S. stocks in free fall
The 32% loss sound scary but if you end up with more money at the end vs bonds you still win.000 wrote: ↑Tue Jan 25, 2022 4:20 pmSo if you sell at -15%, then buy at -10.75% (effectively a 19.25% loss), then what? Put another stop loss order in? Now if drops 15% again do you sell for an effective 31.36% loss?CurlyDave wrote: ↑Tue Jan 25, 2022 3:18 amThank you. You are one tough commentator, and that helps me. It forces me to clarify my thoughts.
Here I was thinking I had done pretty well, beating BND by 9x over two years without taking on excessive risk. But you are right, I need a re-entry plan. I had entry and exit points but now that part has run its course and I am left holding a thick stack of cash. There are a lot of worse things that could happen to a guy, but now it is time to build on results so far.
Of course, the easy way would be to just buy BND on Tuesday and call it a day.
But YOLO, and I think I will just wing it for a few days. If QQQ goes up by 5% I will probably buy back in. Down another 10% and I will buy back in while declaring victory. No promises either way, except I will tell what I have done.
Homer: what do you think the next move should be?
That doesn't sound anything like bonds to me.
If you're skittish enough to need a stop to be invested in something then replacing it with bonds once the successful speculation seems to have run its course might be prudent..... Perhaps a nice chunk of SCHP or LQDI is in your future.
With bonds where they are vs say 5% it’s seems easier to grind out a win…
-
- Posts: 85
- Joined: Wed Sep 01, 2021 6:39 am
- Location: Philly burbs
Re: U.S. stocks in free fall
I'll add.... for those of you that have 20 plus years for an investing horizon, "be like Rip Van Winkle and ZZZZZZZZZZZ" (Greg Spears Humble Dollar).andypanda wrote: ↑Tue Jan 25, 2022 9:09 pm "Tomorrow will be interesting."
It will be if it's warm enough to go fishing, otherwise I get to trim back a dozen tall rosebushes and begin figuring where to move 5 English boxwoods that have to be moved before they start the deck replacement. I'm too old for this nonsense, but she's raised them since they were little. (And no, I wasn't around when she planted them next to the deck.)
Maybe I'll take the truck and my grandfather's logging chain and rip them out when she isn't looking.
I don't watch the financial news.
John Bogle- You have the ability to control: Risk, Time, and Cost, but not Reward in Investing!
-
- Posts: 10433
- Joined: Mon May 18, 2009 5:57 pm
Re: U.S. stocks in free fall
This thread and others on this forum and in a couple of Facebook groups I'm in really shows the emotions that so many investors have.
This is a 9% drop after 3 years of 26% compound annual growth rate. Had you told me three years ago that the S&P 500 would be around 4,400 in 2022, I'd have thought that was great.
Imagine in 2015 or 2016, when people were already calling the market over valued, being told that the S&P 500 would more than double by January 2022. An "over valued" market having 14-15% annual returns? Impossible! Yet, here we are. And then we have a little teeny tiny 9% drop and people are sounding the alarms.
Stretch your horizon. Look at the market over longer periods. What the market does in a few weeks is no more relevant than what it does over any given minute or day.
This is a 9% drop after 3 years of 26% compound annual growth rate. Had you told me three years ago that the S&P 500 would be around 4,400 in 2022, I'd have thought that was great.
Imagine in 2015 or 2016, when people were already calling the market over valued, being told that the S&P 500 would more than double by January 2022. An "over valued" market having 14-15% annual returns? Impossible! Yet, here we are. And then we have a little teeny tiny 9% drop and people are sounding the alarms.
Stretch your horizon. Look at the market over longer periods. What the market does in a few weeks is no more relevant than what it does over any given minute or day.
-
- Posts: 241
- Joined: Tue Jan 26, 2021 5:42 am
Re: U.S. stocks in free fall
Agreed. Intraday low was closer to 12-12.5 I think. Same story, year after year. Sometimes looks and feels different, turns out it’s not. I see it as a purchasing opportunity on top of my regularly scheduled DCA. The show goes on…Triple digit golfer wrote: ↑Wed Jan 26, 2022 7:04 am This thread and others on this forum and in a couple of Facebook groups I'm in really shows the emotions that so many investors have.
This is a 9% drop after 3 years of 26% compound annual growth rate. Had you told me three years ago that the S&P 500 would be around 4,400 in 2022, I'd have thought that was great.
Imagine in 2015 or 2016, when people were already calling the market over valued, being told that the S&P 500 would more than double by January 2022. An "over valued" market having 14-15% annual returns? Impossible! Yet, here we are. And then we have a little teeny tiny 9% drop and people are sounding the alarms.
Stretch your horizon. Look at the market over longer periods. What the market does in a few weeks is no more relevant than what it does over any given minute or day.
-
- Posts: 1043
- Joined: Thu Aug 13, 2015 1:05 pm
Re: U.S. stocks in free fall
What kind of international allocation do folks have here? I know wrong thread, but etf recently added a nice chunk of international to diversify
Re: U.S. stocks in free fall
20% is my target and was slightly below that but with the free fall it's now above that.Keenobserver wrote: ↑Wed Jan 26, 2022 7:38 am What kind of international allocation do folks have here? I know wrong thread, but etf recently added a nice chunk of international to diversify
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
Re: U.S. stocks in free fall
And now up 5%. You're right, I don't know anythingcanadianbacon wrote: ↑Tue Jan 25, 2022 5:25 pmNow *up* 2.7%. I think the only thing we know for sure about the market right now is that it's nuts.
Re: U.S. stocks in free fall
Ok, so there is no point to these comments other than to express panic, which is fine. If you have advice to help people avoid being "hit in the face with a hammer", I think everyone would enjoy reading it.peskypesky wrote: ↑Tue Jan 25, 2022 4:14 pmI'm not a certified financial advisor, so I don't give investing advice.sureshoe wrote: ↑Tue Jan 25, 2022 3:17 pmOk, fine, my comments weren't constructive.peskypesky wrote: ↑Tue Jan 25, 2022 2:31 pmAnd I don't think your original comments were constructive. And I think the analogy holds steam.sureshoe wrote: ↑Tue Jan 25, 2022 2:25 pmI think the analogy loses steam and distracts from anything constructive.peskypesky wrote: ↑Tue Jan 25, 2022 1:10 pm
I guess some people are ok with being hit in the face with a hammer.
If the market losses are serious to you, then what's your recommendation that is actually actionable?
What's your recommendation that is actually actionable?
Re: U.S. stocks in free fall
Using MSFT as an example, but really it could apply to anything. What percentage of Microsoft's drop is part of just generic index sell-offs? There has been a lot of chatter on that, but I wonder how much that actually forces down a company like MSFT - and then specific investors swoop in for the value.atdharris wrote: ↑Wed Jan 26, 2022 8:15 amAnd now up 5%. You're right, I don't know anythingcanadianbacon wrote: ↑Tue Jan 25, 2022 5:25 pmNow *up* 2.7%. I think the only thing we know for sure about the market right now is that it's nuts.
Re: U.S. stocks in free fall
I'm sure a good portion of its drop is due to indexes falling. I believe it was down 14.5% this year before today. That's a big drop in 17 trading days for a company executing as well as MSFT is currently.sureshoe wrote: ↑Wed Jan 26, 2022 8:33 amUsing MSFT as an example, but really it could apply to anything. What percentage of Microsoft's drop is part of just generic index sell-offs? There has been a lot of chatter on that, but I wonder how much that actually forces down a company like MSFT - and then specific investors swoop in for the value.atdharris wrote: ↑Wed Jan 26, 2022 8:15 amAnd now up 5%. You're right, I don't know anythingcanadianbacon wrote: ↑Tue Jan 25, 2022 5:25 pmNow *up* 2.7%. I think the only thing we know for sure about the market right now is that it's nuts.
Re: U.S. stocks in free fall
60 equities/40 fixed incomeKeenobserver wrote: ↑Wed Jan 26, 2022 7:38 am What kind of international allocation do folks have here? I know wrong thread, but etf recently added a nice chunk of international to diversify
Within equities, 60 US/40 international.
I'm fairly close to retirement, and the diversification is very helpful to my peace of mind during downward volatility like we've had this week. Still not fun, but less not fun than it would be otherwise.
-
- Posts: 169
- Joined: Fri Sep 08, 2017 11:00 pm
- Location: Madison, WI
Re: U.S. stocks in free fall
It sure seems like all of this optimism is already priced in. This is the 2nd most "optimistic" market in history (2nd only to the dot com bubble).mrspock wrote: ↑Tue Jan 25, 2022 4:13 pm This is almost comical. It reminds me of waaaaaay back in 2020 when the outcome was so obvious and predictable if anyone bothered to understand history. Same deal now.
Here's how the weighing machine is going (since people are too concerned about watching the market moves vs. actual earnings data):
MSFT - Earnings beat
3M - Earnings beat
Verizon - Beats
Texas Instruments - Beats
Nvidia - Goto BestBuy....go try to find a card, they can't make these things fast enough (Crypto, AI etc).
APPL - Expected to post historically high earnings tomorrow
... and on and on.
You can't even order a car right now without waiting months, savings rates are high, wages are increasing, the economy is booming, and the fed pumped in billions into the economy. If we hit -15% or -25%, this is going to be like taking candy from a baby.... I almost feel guilty.
People were in similar denial in 2020, and it was only after successive earnings seasons where bit by bit the narrative of the pandemic causing a prolonged recession began to fall apart -- ultimately the bears were trampled by the bulls. This time it's interest rate hikes and inflation.... let us see how the weighing goes this time!
The million dollar question is whether the current exuberance that's priced in is rational or irrational
- AnalogKid22
- Posts: 474
- Joined: Wed May 18, 2016 8:26 pm
- Location: Babylon, but I'd love to spend a night in Zion
Re: U.S. stocks in free fall
Indeed. In 2018, the DOW broke 25,000 for the first time ever: viewtopic.php?f=10&t=236779Triple digit golfer wrote: ↑Wed Jan 26, 2022 7:04 am This thread and others on this forum and in a couple of Facebook groups I'm in really shows the emotions that so many investors have.
This is a 9% drop after 3 years of 26% compound annual growth rate. Had you told me three years ago that the S&P 500 would be around 4,400 in 2022, I'd have thought that was great.
Imagine in 2015 or 2016, when people were already calling the market over valued, being told that the S&P 500 would more than double by January 2022. An "over valued" market having 14-15% annual returns? Impossible! Yet, here we are. And then we have a little teeny tiny 9% drop and people are sounding the alarms.
Stretch your horizon. Look at the market over longer periods. What the market does in a few weeks is no more relevant than what it does over any given minute or day.
At that time, the comments on this board about the market being overvalued, people sitting on the sidelines, oh, the panic, were the same if not more exaggerated than the last year. Since then, the DOW has added another 10,000 points!!!
Bogle's intent was to take the fear and complexity out of investing for the average person: create a plan, set an AA in a well-diversified portfolio, invest early and often, avoid timing the market, and, though clearly impossible for many, including myself, don't peek. Reacting to daily market swings likely won't accomplish what you "hope" it will and overreacting will usually lead to making poor decisions based on emotion, which has no place in investing because "nobody knows nuthin". If we decide to take on more risk than we can handle, we need to be prepared for the outcomes like we've seen this month. Using terms like "bloodbath" to refer to very minor (normal) corrections should be a red flag that one's AA might be too aggressive. A true "bloodbath" of, say, 30%+, for example, will happen at some point
-
- Posts: 2241
- Joined: Fri Oct 19, 2012 11:24 am
Re: U.S. stocks in free fall
TBH I wouldn't read it.sureshoe wrote: ↑Wed Jan 26, 2022 8:31 amOk, so there is no point to these comments other than to express panic, which is fine. If you have advice to help people avoid being "hit in the face with a hammer", I think everyone would enjoy reading it.peskypesky wrote: ↑Tue Jan 25, 2022 4:14 pmI'm not a certified financial advisor, so I don't give investing advice.sureshoe wrote: ↑Tue Jan 25, 2022 3:17 pmOk, fine, my comments weren't constructive.peskypesky wrote: ↑Tue Jan 25, 2022 2:31 pmAnd I don't think your original comments were constructive. And I think the analogy holds steam.
What's your recommendation that is actually actionable?
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
Re: U.S. stocks in free fall
Prices in at a PE of 25? How does that work?incognito_man wrote: ↑Wed Jan 26, 2022 8:53 amIt sure seems like all of this optimism is already priced in. This is the 2nd most "optimistic" market in history (2nd only to the dot com bubble).mrspock wrote: ↑Tue Jan 25, 2022 4:13 pm This is almost comical. It reminds me of waaaaaay back in 2020 when the outcome was so obvious and predictable if anyone bothered to understand history. Same deal now.
Here's how the weighing machine is going (since people are too concerned about watching the market moves vs. actual earnings data):
MSFT - Earnings beat
3M - Earnings beat
Verizon - Beats
Texas Instruments - Beats
Nvidia - Goto BestBuy....go try to find a card, they can't make these things fast enough (Crypto, AI etc).
APPL - Expected to post historically high earnings tomorrow
... and on and on.
You can't even order a car right now without waiting months, savings rates are high, wages are increasing, the economy is booming, and the fed pumped in billions into the economy. If we hit -15% or -25%, this is going to be like taking candy from a baby.... I almost feel guilty.
People were in similar denial in 2020, and it was only after successive earnings seasons where bit by bit the narrative of the pandemic causing a prolonged recession began to fall apart -- ultimately the bears were trampled by the bulls. This time it's interest rate hikes and inflation.... let us see how the weighing goes this time!
The million dollar question is whether the current exuberance that's priced in is rational or irrational
- burritoLover
- Posts: 4097
- Joined: Sun Jul 05, 2020 12:13 pm
Re: U.S. stocks in free fall
If this month has you panicking, you have way too much in equities. This is nothing.
-
- Posts: 492
- Joined: Fri Jun 11, 2021 3:37 pm
Re: U.S. stocks in free fall
Very well said!AnalogKid22 wrote: ↑Wed Jan 26, 2022 9:06 amIndeed. In 2018, the DOW broke 25,000 for the first time ever: viewtopic.php?f=10&t=236779Triple digit golfer wrote: ↑Wed Jan 26, 2022 7:04 am This thread and others on this forum and in a couple of Facebook groups I'm in really shows the emotions that so many investors have.
This is a 9% drop after 3 years of 26% compound annual growth rate. Had you told me three years ago that the S&P 500 would be around 4,400 in 2022, I'd have thought that was great.
Imagine in 2015 or 2016, when people were already calling the market over valued, being told that the S&P 500 would more than double by January 2022. An "over valued" market having 14-15% annual returns? Impossible! Yet, here we are. And then we have a little teeny tiny 9% drop and people are sounding the alarms.
Stretch your horizon. Look at the market over longer periods. What the market does in a few weeks is no more relevant than what it does over any given minute or day.
At that time, the comments on this board about the market being overvalued, people sitting on the sidelines, oh, the panic, were the same if not more exaggerated than the last year. Since then, the DOW has added another 10,000 points!!!
Bogle's intent was to take the fear and complexity out of investing for the average person: create a plan, set an AA in a well-diversified portfolio, invest early and often, avoid timing the market, and, though clearly impossible for many, including myself, don't peek. Reacting to daily market swings likely won't accomplish what you "hope" it will and overreacting will usually lead to making poor decisions based on emotion, which has no place in investing because "nobody knows nuthin". If we decide to take on more risk than we can handle, we need to be prepared for the outcomes like we've seen this month. Using terms like "bloodbath" to refer to very minor (normal) corrections should be a red flag that one's AA might be too aggressive. A true "bloodbath" of, say, 30%+, for example, will happen at some point
"The greatest enemy of a good plan is the dream of a perfect plan"
Re: U.S. stocks in free fall
Well if one has way too much in equities, why one would be panicked? If you have $30 million in VTI, would you be worried at all?burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
Time is the ultimate currency.
-
- Posts: 169
- Joined: Fri Sep 08, 2017 11:00 pm
- Location: Madison, WI
Re: U.S. stocks in free fall
I'm actually kinda bummed that stocks are up today, but I bought some VTSAX anyway. We all need financial-noise-canceling headphones nowadays.burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
- burritoLover
- Posts: 4097
- Joined: Sun Jul 05, 2020 12:13 pm
Re: U.S. stocks in free fall
Well, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.H-Town wrote: ↑Wed Jan 26, 2022 9:42 amWell if one has way too much in equities, why one would be panicked? If you have $30 million in VTI, would you be worried at all?burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
Re: U.S. stocks in free fall
I'd put my entire portfolio in VTI if I have $30 mil. What's the difference? I won't even spend over $6 million in my lifetime according to my current projected spending. If I lost half of $30 mil, I'm still rocking with $15 mil. (and $15 mil of tax loss harvested).burritoLover wrote: ↑Wed Jan 26, 2022 9:45 amWell, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.H-Town wrote: ↑Wed Jan 26, 2022 9:42 amWell if one has way too much in equities, why one would be panicked? If you have $30 million in VTI, would you be worried at all?burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
Time is the ultimate currency.
- peskypesky
- Posts: 1023
- Joined: Fri Mar 08, 2013 7:56 pm
Re: U.S. stocks in free fall
zzzzzzzzzsureshoe wrote: ↑Wed Jan 26, 2022 8:31 amOk, so there is no point to these comments other than to express panic, which is fine. If you have advice to help people avoid being "hit in the face with a hammer", I think everyone would enjoy reading it.peskypesky wrote: ↑Tue Jan 25, 2022 4:14 pmI'm not a certified financial advisor, so I don't give investing advice.sureshoe wrote: ↑Tue Jan 25, 2022 3:17 pmOk, fine, my comments weren't constructive.peskypesky wrote: ↑Tue Jan 25, 2022 2:31 pmAnd I don't think your original comments were constructive. And I think the analogy holds steam.
What's your recommendation that is actually actionable?
Last edited by peskypesky on Wed Jan 26, 2022 9:55 am, edited 1 time in total.
Re: U.S. stocks in free fall
Log on to Vanguard account today, go to Cost Basis tab, and all lots show "green".
TLH is a great tool to help me with thinking life is good.
TLH is a great tool to help me with thinking life is good.
Time is the ultimate currency.
- burritoLover
- Posts: 4097
- Joined: Sun Jul 05, 2020 12:13 pm
Re: U.S. stocks in free fall
I'm living the high life with that kind of money - not my normal projected spending.H-Town wrote: ↑Wed Jan 26, 2022 9:47 amI'd put my entire portfolio in VTI if I have $30 mil. What's the difference? I won't even spend over $6 million in my lifetime according to my current projected spending. If I lost half of $30 mil, I'm still rocking with $15 mil. (and $15 mil of tax loss harvested).burritoLover wrote: ↑Wed Jan 26, 2022 9:45 amWell, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.H-Town wrote: ↑Wed Jan 26, 2022 9:42 amWell if one has way too much in equities, why one would be panicked? If you have $30 million in VTI, would you be worried at all?burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
Re: U.S. stocks in free fall
But is it worth it if you still live in fear of losing money?burritoLover wrote: ↑Wed Jan 26, 2022 9:51 amI'm living the high life with that kind of money - not my normal projected spending.H-Town wrote: ↑Wed Jan 26, 2022 9:47 amI'd put my entire portfolio in VTI if I have $30 mil. What's the difference? I won't even spend over $6 million in my lifetime according to my current projected spending. If I lost half of $30 mil, I'm still rocking with $15 mil. (and $15 mil of tax loss harvested).burritoLover wrote: ↑Wed Jan 26, 2022 9:45 amWell, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.H-Town wrote: ↑Wed Jan 26, 2022 9:42 amWell if one has way too much in equities, why one would be panicked? If you have $30 million in VTI, would you be worried at all?burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
$30 mil might be just an entry level to high life society. I would rather live the life I want to live and never have to worry about money.
Time is the ultimate currency.
Re: U.S. stocks in free fall
PE 25 is historically overvalued…lol…I almost said that with a straight face…mrspock wrote: ↑Wed Jan 26, 2022 9:33 amPrices in at a PE of 25? How does that work?incognito_man wrote: ↑Wed Jan 26, 2022 8:53 amIt sure seems like all of this optimism is already priced in. This is the 2nd most "optimistic" market in history (2nd only to the dot com bubble).mrspock wrote: ↑Tue Jan 25, 2022 4:13 pm This is almost comical. It reminds me of waaaaaay back in 2020 when the outcome was so obvious and predictable if anyone bothered to understand history. Same deal now.
Here's how the weighing machine is going (since people are too concerned about watching the market moves vs. actual earnings data):
MSFT - Earnings beat
3M - Earnings beat
Verizon - Beats
Texas Instruments - Beats
Nvidia - Goto BestBuy....go try to find a card, they can't make these things fast enough (Crypto, AI etc).
APPL - Expected to post historically high earnings tomorrow
... and on and on.
You can't even order a car right now without waiting months, savings rates are high, wages are increasing, the economy is booming, and the fed pumped in billions into the economy. If we hit -15% or -25%, this is going to be like taking candy from a baby.... I almost feel guilty.
People were in similar denial in 2020, and it was only after successive earnings seasons where bit by bit the narrative of the pandemic causing a prolonged recession began to fall apart -- ultimately the bears were trampled by the bulls. This time it's interest rate hikes and inflation.... let us see how the weighing goes this time!
The million dollar question is whether the current exuberance that's priced in is rational or irrational
Re: U.S. stocks in free fall
We have been very spoiled in recent years.burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
It’s not easy to deal with no matter how experienced you are with markets because you don’t know when the bleeding stops. But you know not to do anything. Probably best not to even look at markets. No reason for most of us.
Last edited by am on Wed Jan 26, 2022 9:59 am, edited 1 time in total.
- burritoLover
- Posts: 4097
- Joined: Sun Jul 05, 2020 12:13 pm
Re: U.S. stocks in free fall
I might just throw that all in TIPS - I wouldn't be spending it to the ragged edge - a lot of dumb stuff rich people buy I'm not interested in but I'd sure be taking a lot of trips all over the world and other experiences.H-Town wrote: ↑Wed Jan 26, 2022 9:56 amBut is it worth it if you still live in fear of losing money?burritoLover wrote: ↑Wed Jan 26, 2022 9:51 amI'm living the high life with that kind of money - not my normal projected spending.H-Town wrote: ↑Wed Jan 26, 2022 9:47 amI'd put my entire portfolio in VTI if I have $30 mil. What's the difference? I won't even spend over $6 million in my lifetime according to my current projected spending. If I lost half of $30 mil, I'm still rocking with $15 mil. (and $15 mil of tax loss harvested).burritoLover wrote: ↑Wed Jan 26, 2022 9:45 amWell, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.
$30 mil might be just an entry level to high life society. I would rather live the life I want to live and never have to worry about money.
Re: U.S. stocks in free fall
1929 lost 89%…H-Town wrote: ↑Wed Jan 26, 2022 9:47 amI'd put my entire portfolio in VTI if I have $30 mil. What's the difference? I won't even spend over $6 million in my lifetime according to my current projected spending. If I lost half of $30 mil, I'm still rocking with $15 mil. (and $15 mil of tax loss harvested).burritoLover wrote: ↑Wed Jan 26, 2022 9:45 amWell, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.H-Town wrote: ↑Wed Jan 26, 2022 9:42 amWell if one has way too much in equities, why one would be panicked? If you have $30 million in VTI, would you be worried at all?burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
I’d be happy at $3.3M starting from where I am today but not starting from $30M…
- peskypesky
- Posts: 1023
- Joined: Fri Mar 08, 2013 7:56 pm
Re: U.S. stocks in free fall
No NFT's of Bored Apes for you? Come on! What better way to spend a few mil?burritoLover wrote: ↑Wed Jan 26, 2022 9:59 amI might just throw that all in TIPS - I wouldn't be spending it to the ragged edge - a lot of dumb stuff rich people buy I'm not interested in but I'd sure be taking a lot of trips all over the world and other experiences.H-Town wrote: ↑Wed Jan 26, 2022 9:56 amBut is it worth it if you still live in fear of losing money?burritoLover wrote: ↑Wed Jan 26, 2022 9:51 amI'm living the high life with that kind of money - not my normal projected spending.H-Town wrote: ↑Wed Jan 26, 2022 9:47 amI'd put my entire portfolio in VTI if I have $30 mil. What's the difference? I won't even spend over $6 million in my lifetime according to my current projected spending. If I lost half of $30 mil, I'm still rocking with $15 mil. (and $15 mil of tax loss harvested).burritoLover wrote: ↑Wed Jan 26, 2022 9:45 am
Well, I wouldn't put my entire portfolio in VTI, that's for sure. And if this kind of market action worried me, I would have a lot higher bond allocation.
$30 mil might be just an entry level to high life society. I would rather live the life I want to live and never have to worry about money.
- burritoLover
- Posts: 4097
- Joined: Sun Jul 05, 2020 12:13 pm
Re: U.S. stocks in free fall
I feel like if you have to force yourself not to look at your account or market news, your equity allocation is still too high. Unfortunately, because bond yields are low and people have been taking on more risk, I think we are going to see epic levels of panic the next time there's a real, extended bear market.am wrote: ↑Wed Jan 26, 2022 9:59 amWe have been very spoiled in recent years.burritoLover wrote: ↑Wed Jan 26, 2022 9:37 am If this month has you panicking, you have way too much in equities. This is nothing.
It’s not easy to deal with no matter how experienced you are with markets because you don’t know when the bleeding stops. But you know not to do anything. Probably best not to even look at markets. No reason for most of us.