U.S. stocks in free fall

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alfaspider
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Re: U.S. stocks in free fall

Post by alfaspider »

atdharris wrote: Wed May 25, 2022 1:24 pm Here comes more rate hikes faster than anticipated. Interesting to see what happens tomorrow. SQQQ feels tempting, but perhaps the market will rally if it feels the Fed will act more aggressively to tame inflation? Who knows.
Fed Minutes don't seem to have had much of an impact so far. Things could take another leg down tomorrow, but I don't think the immediate fed news will be the catalyst.
bagastuff
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Re: U.S. stocks in free fall

Post by bagastuff »

atdharris wrote: Wed May 25, 2022 1:24 pm SQQQ feels tempting, but perhaps the market will rally
the temptation to use SQQQ is mainly born of FOMO based on certain days/weeks where it would have brought amazing returns.

I might buy one share at close to remind myself that I'm not smarter than the market.
Californiastate
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Re: U.S. stocks in free fall

Post by Californiastate »

elderwise wrote: Wed May 25, 2022 1:28 pm
atdharris wrote: Wed May 25, 2022 1:24 pm Here comes more rate hikes faster than anticipated. Interesting to see what happens tomorrow. SQQQ feels tempting, but perhaps the market will rally if it feels the Fed will act more aggressively to tame inflation? Who knows.
No idea why GME is up 30% yes 30% 🤓

We still have lot of froth ...
By now I don't think retail money is moving GME. I'd suspect Big Money is pulling the levers behind the curtain leading the lambs to the slaughter.
atdharris
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Re: U.S. stocks in free fall

Post by atdharris »

alfaspider wrote: Wed May 25, 2022 1:28 pm
atdharris wrote: Wed May 25, 2022 1:24 pm Here comes more rate hikes faster than anticipated. Interesting to see what happens tomorrow. SQQQ feels tempting, but perhaps the market will rally if it feels the Fed will act more aggressively to tame inflation? Who knows.
Fed Minutes don't seem to have had much of an impact so far. Things could take another leg down tomorrow, but I don't think the immediate fed news will be the catalyst.
Nvidia reports after the bell. If they miss and drop a ton, that could bring the market down. We will see.
trirunner
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Re: U.S. stocks in free fall

Post by trirunner »

elderwise wrote: Wed May 25, 2022 1:28 pm
atdharris wrote: Wed May 25, 2022 1:24 pm Here comes more rate hikes faster than anticipated. Interesting to see what happens tomorrow. SQQQ feels tempting, but perhaps the market will rally if it feels the Fed will act more aggressively to tame inflation? Who knows.
No idea why GME is up 30% yes 30% 🤓

We still have lot of froth ...
when you see GME up 30% for no reason, you know part of the market is still partying like 1999, still a long way to go.
bagastuff
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Re: U.S. stocks in free fall

Post by bagastuff »

trirunner wrote: Wed May 25, 2022 1:49 pm
elderwise wrote: Wed May 25, 2022 1:28 pm
atdharris wrote: Wed May 25, 2022 1:24 pm Here comes more rate hikes faster than anticipated. Interesting to see what happens tomorrow. SQQQ feels tempting, but perhaps the market will rally if it feels the Fed will act more aggressively to tame inflation? Who knows.
No idea why GME is up 30% yes 30% 🤓

We still have lot of froth ...
when you see GME up 30% for no reason, you know part of the market is still partying like 1999, still a long way to go.
I dunno, I don't think the outcome of the kentucky derby has anything to do with the TSM
H-Town
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Re: U.S. stocks in free fall

Post by H-Town »

alfaspider wrote: Wed May 25, 2022 1:28 pm
atdharris wrote: Wed May 25, 2022 1:24 pm Here comes more rate hikes faster than anticipated. Interesting to see what happens tomorrow. SQQQ feels tempting, but perhaps the market will rally if it feels the Fed will act more aggressively to tame inflation? Who knows.
Fed Minutes don't seem to have had much of an impact so far. Things could take another leg down tomorrow, but I don't think the immediate fed news will be the catalyst.
I hope stocks would go down tomorrow. It would be 31 days that I can do a round-trip TLH back to VTASX (VTI) and VTIAX (VXUS). Otherwise I am stuck with VLCAX and VFWAX for now.
Time is the ultimate currency.
elderwise
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Re: U.S. stocks in free fall

Post by elderwise »

Losing the steam already...
Marseille07
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Re: U.S. stocks in free fall

Post by Marseille07 »

elderwise wrote: Wed May 25, 2022 2:37 pm Losing the steam already...
Get those brokers back in here, turn those machines back on, turn those machines back on!
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OohLaLa
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Re: U.S. stocks in free fall

Post by OohLaLa »

Robot Monster wrote: Wed May 25, 2022 10:30 am Does anyone else have an extreme dislike for the words pump and dump? They're icky. If you were dining with Queen Elizabeth, would you dare voice something so undignified, so graceless? Dearest me!
Up until recently, it was also known as the "Wham, Bam, Thank You, Powell!" :mrgreen:
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Re: U.S. stocks in free fall

Post by LadyGeek »

I removed an off-topic interchange regarding politically biased reporting of the CBO report. As a reminder, see: Non-actionable (Trolling) Topics
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TheoLeo
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Re: U.S. stocks in free fall

Post by TheoLeo »

I just can't come up with any reason to be bullish over the next 1-2 years. This makes it really hard to stay the course and not sell to buy back at lower levels later. It isn't just the fed removing liquidity, its also about valuations. I am worried about earnings going down by a lot. Why wouldn't earnings go back to prepandemic levels or lower even? Has the world population grown so much in two years? Has energy become cheaper? Are corporate taxes about to be lowered? Are we not cracking down on big tech anymore? Is the factory of the world, China, operating at a higher capacity than in 2019? Thw answer to all of those is no. So why are markets still above pre pandemic levels when we had significantly less problems? Add the feds QT on top of all this and we have a recipe for disaster.

This time really makes me admire the approach of some of the more conservative investors on this board who don't seem to worry about any of this. If you are always 50/50, always rebalance, then there is no point in trying to time the market by deviating from your approach. The rewards are too low relative to a 50/50 portfolio and the risks too high.

Thanks for reading. Had to get this off my chest. Am not happy with my investing approach so far.
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Re: U.S. stocks in free fall

Post by sailaway »

TheoLeo wrote: Wed May 25, 2022 6:34 pm I just can't come up with any reason to be bullish over the next 1-2 years. This makes it really hard to stay the course and not sell to buy back at lower levels later.
I am far too familiar with Murphy to play any games like that.

70/30, rebalance twice a year, buy when you have the money, sell when you need the money (use cash buffer to separate those two transactions, as it was never meant to be entirely literal).
Marseille07
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Re: U.S. stocks in free fall

Post by Marseille07 »

TheoLeo wrote: Wed May 25, 2022 6:34 pm I just can't come up with any reason to be bullish over the next 1-2 years. This makes it really hard to stay the course and not sell to buy back at lower levels later. It isn't just the fed removing liquidity, its also about valuations. I am worried about earnings going down by a lot. Why wouldn't earnings go back to prepandemic levels or lower even? Has the world population grown so much in two years? Has energy become cheaper? Are corporate taxes about to be lowered? Are we not cracking down on big tech anymore? Is the factory of the world, China, operating at a higher capacity than in 2019? Thw answer to all of those is no. So why are markets still above pre pandemic levels when we had significantly less problems? Add the feds QT on top of all this and we have a recipe for disaster.

This time really makes me admire the approach of some of the more conservative investors on this board who don't seem to worry about any of this. If you are always 50/50, always rebalance, then there is no point in trying to time the market by deviating from your approach. The rewards are too low relative to a 50/50 portfolio and the risks too high.

Thanks for reading. Had to get this off my chest. Am not happy with my investing approach so far.
I think you have it backwards. If the markets stay bearish over the next 1-2 years, this is a great opportunity to keep buying on the cheap.

Q4 2021 was actually a terrible time to be accumulating, as those expensive shares are now in red.
elderwise
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Re: U.S. stocks in free fall

Post by elderwise »

TheoLeo wrote: Wed May 25, 2022 6:34 pm I just can't come up with any reason to be bullish over the next 1-2 years. This makes it really hard to stay the course and not sell to buy back at lower levels later. It isn't just the fed removing liquidity, its also about valuations. I am worried about earnings going down by a lot. Why wouldn't earnings go back to prepandemic levels or lower even? Has the world population grown so much in two years? Has energy become cheaper? Are corporate taxes about to be lowered? Are we not cracking down on big tech anymore? Is the factory of the world, China, operating at a higher capacity than in 2019? Thw answer to all of those is no. So why are markets still above pre pandemic levels when we had significantly less problems? Add the feds QT on top of all this and we have a recipe for disaster.

This time really makes me admire the approach of some of the more conservative investors on this board who don't seem to worry about any of this. If you are always 50/50, always rebalance, then there is no point in trying to time the market by deviating from your approach. The rewards are too low relative to a 50/50 portfolio and the risks too high.

Thanks for reading. Had to get this off my chest. Am not happy with my investing approach so far.
You note very good points, but the proponents of nobody knows nothing and stay the course are not generally wrong.this too shall pass, I planned to sell and buy back in as the Ukraine thing was dragging, fed announcing more QT and easing of their bond sheet..etc etc. Rate hikes are never sure but generally war you cannot just undo by saying we will buy bonds or stimulus checks. It seems the world is still discounting (not talking about nuclear) the long term implications of the global economic repercussions if Ukraine Russia prolongs..it will most definitely have a meaningful impact to US and the greater world due to increased dependencies on each other's economy for export import and of commodities.

I had the same doubts and in January decided to covert my 401k to stable value maybe it's dumb market timing I don't take credit for it as in being very smart.

To each his own, my own feeling was I have consistently banked 15 18 19% gains in 100% index stock fund YoY or more last few years and 2020 21 I was shocked to see those kind of gains while the pandemic was in full force yea don't fight the feds..but what If we are adjusting back to actual valuations? This is kind of hard to ignore.

How much can the market rip in 5 to 12 months of uncertainty we know for sure the Fed is not going to brr the stimulus printer any more, interest rate hikes are a real reminder how the same house one has on a measly 2 to 3% fixed will change (monthly payments) when the rates go up to 6 or 7 or 8%..

So one makes your own decision and owns to it.

Atleast..moving from index to stable is not as risky as moving your whole retirement money to GME or Tesla as some have done and banked big gains or lost a lot..the risk is substantially less.

Like someone posted here before , if you panic sell its better to do it sooner than later..if it's already late it may make more sense to just ride it through as is.
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Re: U.S. stocks in free fall

Post by LadyGeek »

I removed an off-topic interchange conjecturing on Russia military actions. Also, conjecture on Fed policy.

Please stay on-topic, which is the market (decreasing).
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newyorker
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Re: U.S. stocks in free fall

Post by newyorker »

I guess it is too late to sell at this point.

Buy more is the only answer?
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Doom&Gloom
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Re: U.S. stocks in free fall

Post by Doom&Gloom »

newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
IMO: do nothing > buy >> sell

But, like Sgt Schultz, I know nothing!
Silk McCue
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Re: U.S. stocks in free fall

Post by Silk McCue »

newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
You might want to take a break from this thread. If you are in the accumulation phase you should ignore the noise and just keep investing. If not you should stick to your plan.

Cheers
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JoMoney
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Re: U.S. stocks in free fall

Post by JoMoney »

newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
Too late today, but the market will be open for both selling and buying tomorrow.
"Only answer" to what question?
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newyorker
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Re: U.S. stocks in free fall

Post by newyorker »

Doom&Gloom wrote: Wed May 25, 2022 8:30 pm
newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
IMO: do nothing > buy >> sell

But, like Sgt Schultz, I know nothing!
Why nothing > buy?
Hoongajji
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Re: U.S. stocks in free fall

Post by Hoongajji »

HomerJ wrote: Mon May 23, 2022 4:58 pm
Hoongajji wrote: Sun May 22, 2022 8:08 pm Long term investors in 20 years might break even.

YUM will drop 50%
F will drop 70%
TMUS will drop 70%
MCD will drop 53%
CMG will drop 70%
AMD will drop 95%
DE will drop 73%
Long-term investors will be buying those stocks (via the index) at 70%-95% discounts, and will break even long before the market gets back to it's old all-time high.

Deep discounts like that make it fairly easy to break even.

A stock that drops from $100 a share to $5 a share (95% drop like your AMD example), only has to go back to $10 a share before an investor doubles their investment.

By the time the stock gets back to $100 a share, even if it takes 20 years, the investor will have made 20x their investment on that low price.

The price may be "back to even". And the long-term investor's original money is "back to even". But all the new money they invested in those shares when it was down are up 10x,15x,20x.

Which puts the long-term investor at that point at far better than "even".
A 95% drop of a $100 investment equals $5. When that doubles it is $10. Still a 90% loss.

Say subject “A” had $1million and lost $950k but DCA 20k per year…loss.

Subject “A” sold the million near peak and reinvested years later…win.

20/20 hindsight.

Fun to think about Homer.

Amazon in the dot com bust is a rare exception to dca success.

My ice cube analogies of the selected stocks demise. Small taters.

The icebergs one would navigate around in a ship are interesting. What if they melt?

Let us entertain the idea that there are 5-7 icebergs.

Vanguard and Blackrock via etf and index funds which we bogleheads enjoy are major players in the Neo Equity ice Age.

When I sell VTI and Tony buys it…what if Tony sells…and so on…

Vanguard and Blackrock hold these shares for a fee. No other reason. We don’t buy it…they are gone.

The icebergs at one point were 48% of the nasdaq.

So far there are no bankruptcies, closures, implosions…no real estate foreclosures. Like a fantasy or utopia World?

Everything is fine.

I disagree.

Enjoy this financial side of life everyone,

H
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Re: U.S. stocks in free fall

Post by Dottie57 »

Marseille07 wrote: Wed May 25, 2022 6:39 pm
TheoLeo wrote: Wed May 25, 2022 6:34 pm I just can't come up with any reason to be bullish over the next 1-2 years. This makes it really hard to stay the course and not sell to buy back at lower levels later. It isn't just the fed removing liquidity, its also about valuations. I am worried about earnings going down by a lot. Why wouldn't earnings go back to prepandemic levels or lower even? Has the world population grown so much in two years? Has energy become cheaper? Are corporate taxes about to be lowered? Are we not cracking down on big tech anymore? Is the factory of the world, China, operating at a higher capacity than in 2019? Thw answer to all of those is no. So why are markets still above pre pandemic levels when we had significantly less problems? Add the feds QT on top of all this and we have a recipe for disaster.

This time really makes me admire the approach of some of the more conservative investors on this board who don't seem to worry about any of this. If you are always 50/50, always rebalance, then there is no point in trying to time the market by deviating from your approach. The rewards are too low relative to a 50/50 portfolio and the risks too high.

Thanks for reading. Had to get this off my chest. Am not happy with my investing approach so far.
I think you have it backwards. If the markets stay bearish over the next 1-2 years, this is a great opportunity to keep buying on the cheap.

Q4 2021 was actually a terrible time to be accumulating, as those expensive shares are now in red.
+1. The GFC was a terrifying time. But sticking to my accumulation plan got me to retirement.
bigblue1ca
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Re: U.S. stocks in free fall

Post by bigblue1ca »

TheoLeo wrote: Wed May 25, 2022 6:34 pm I just can't come up with any reason to be bullish over the next 1-2 years. This makes it really hard to stay the course and not sell to buy back at lower levels later. It isn't just the fed removing liquidity, its also about valuations. I am worried about earnings going down by a lot.
You make all valid points. But, keep in mind the Fed in the minutes today, and Atlanta Fed President Bostic the other day, alluded that the Fed may pause their hikes to see where things are at this fall.

In light of how the market seemingly functions today, if the Fed announces that I would expect a healthy spike, regardless of what the economy is doing, because the market will think the Fed Put is back in play.
RubyTuesday
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Re: U.S. stocks in free fall

Post by RubyTuesday »

rockstar wrote: Tue May 24, 2022 12:30 pm
alfaspider wrote: Tue May 24, 2022 12:24 pm
ClassII wrote: Tue May 24, 2022 12:10 pm I guess if I want to predict the next "Bear Stearns" event (knowing full well what a fool's errand that is), I'd say corporate debt is going to be where things start to fall apart once this bear market and Fed tightening does it's thing. It's pretty well established that a lot of companies are completely up to their eyeballs in debt right now. Doing things like stock buy-backs and dividends on the backs of taking on low-interest loans and all before Covid, no less. Some companies did phenomenally in the last 2 years but quite a few did little to fix their debt load (or even took on more thanks to the government's covid programs). But now, with rates going up and the economy contracting it's going to make refinancing that debt extremely difficult. Those cows will come home to roost and we might start to see even some big name companies declare bankruptcy due to inability to refinance.

But again, if the next 2008 is coming we're still way back in 2007 at the moment. A truly boring, normal correction of the stock market. Whether it tips into something more severe and how exactly that'll happen is anyone's guess. But it is fun placing innocent bets (at least for now).
But inflation actually provides relief from debts because it cuts the real value of the debt. It's only a problem if you need new debt (which would have to be at a much higher interest rate). In fact, there's a huge disincentive against paying down existing debts right now because those loans are typically at sub-inflation rates.
Not if you're a business that can't raise prices. Then inflation is a problem debt wise. Wages are going up, so margins are getting crushed for businesses that can't raise prices without negatively impacting demand. Buffett did a great write-up on inflation and how it impact corporations in one of his letters to shareholders back in the early 80s. It's definitely worth reading.

I expect this repricing of risk to continue. However, it does feel good that the 10 year has stabilized for now and that you can buy 10 year TIPS with positive real yields right now.
You’ve stated that margins are getting crushed several times. Do you have a source for this? Most info I’ve read indicates margins are expanding beyond increases in input costs (look at energy for example). Some are accusing corporations of opportunistic gouging.
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AnnetteLouisan
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Re: U.S. stocks in free fall

Post by AnnetteLouisan »

I think this is a healthy correction and the extreme pessimism is overwrought.
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Doom&Gloom
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Re: U.S. stocks in free fall

Post by Doom&Gloom »

newyorker wrote: Wed May 25, 2022 8:43 pm
Doom&Gloom wrote: Wed May 25, 2022 8:30 pm
newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
IMO: do nothing > buy >> sell

But, like Sgt Schultz, I know nothing!
Why nothing > buy?
I've been Bogled!
I know that I don't know where we're going from here. Given enough time, buying should turn out ok. Who knows with selling?
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JoMoney
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Re: U.S. stocks in free fall

Post by JoMoney »

AnnetteLouisan wrote: Wed May 25, 2022 9:09 pm I think this is a healthy correction and the extreme pessimism is overwrought.
I agree that it's a "healthy correction", whether or not it's overwrought might depend on what/how someone is investing.
A typical Boglehead portfolio is probably going to ride through this just fine, people following HEDGFUNDIES now 'BOGUS JOURNEY' may have to eventually 'FACE THE MUSIC' (which were all the known sequels following 'EXCELLENT ADVENTURE')
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Beensabu
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Re: U.S. stocks in free fall

Post by Beensabu »

TheoLeo wrote: Wed May 25, 2022 6:34 pm So why are markets still above pre pandemic levels when we had significantly less problems?
Did you read the FOMC minutes?

Here's my tldr: Resilience, but it all depends on "consumption spending".

Only language of concern that I noted was this:
The staff noted that leverage at key nonbank financial institutions (NBFIs) was elevated and that bank lending to NBFIs continued to increase notably. Relatedly, NBFIs' reliance on bank credit lines to meet unexpected liquidity needs could generate moderate liquidity pressures at large banks during times of financial stress. With regard to funding risk, the staff highlighted structural vulnerabilities in some types of mutual funds as a continuing focus.
They really seem to think that Q2 real GDP rate will be positive (and also Qs 3 & 4). So yeah. I guess we'll see.
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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ »

Hoongajji wrote: Wed May 25, 2022 8:48 pm
HomerJ wrote: Mon May 23, 2022 4:58 pm
Hoongajji wrote: Sun May 22, 2022 8:08 pm Long term investors in 20 years might break even.

YUM will drop 50%
F will drop 70%
TMUS will drop 70%
MCD will drop 53%
CMG will drop 70%
AMD will drop 95%
DE will drop 73%
Long-term investors will be buying those stocks (via the index) at 70%-95% discounts, and will break even long before the market gets back to it's old all-time high.

Deep discounts like that make it fairly easy to break even.

A stock that drops from $100 a share to $5 a share (95% drop like your AMD example), only has to go back to $10 a share before an investor doubles their investment.

By the time the stock gets back to $100 a share, even if it takes 20 years, the investor will have made 20x their investment on that low price.

The price may be "back to even". And the long-term investor's original money is "back to even". But all the new money they invested in those shares when it was down are up 10x,15x,20x.

Which puts the long-term investor at that point at far better than "even".
A 95% drop of a $100 investment equals $5. When that doubles it is $10. Still a 90% loss.
It's okay that you don't understand the math. Any new money put in at $5 is doubled at $10... And when it gets back to $100, the new money grew 20x.

So even if it was a small amount compared the original portfolio, even a year or two buying at those low prices will make a huge difference. Two years of $20k investments will be worth $800k when the $100 investment gets back to "even". And the original $1 million will be back to $1 million as well. And the longer it takes to bounce back, the more money one will invest at the very low prices you are predicting.

Assuming of course you have any idea how far things will actually drop, which you don't (and neither do I).
Subject “A” sold the million near peak and reinvested years later…win.
It's too bad you don't understand how hard it is to time the market either. Or, so far, how unnecessary.

Peace.
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Re: U.S. stocks in free fall

Post by manatee2005 »

Beensabu wrote: Wed May 25, 2022 9:32 pm
TheoLeo wrote: Wed May 25, 2022 6:34 pm So why are markets still above pre pandemic levels when we had significantly less problems?
Did you read the FOMC minutes?

Here's my tldr: Resilience, but it all depends on "consumption spending".

Only language of concern that I noted was this:
The staff noted that leverage at key nonbank financial institutions (NBFIs) was elevated and that bank lending to NBFIs continued to increase notably. Relatedly, NBFIs' reliance on bank credit lines to meet unexpected liquidity needs could generate moderate liquidity pressures at large banks during times of financial stress. With regard to funding risk, the staff highlighted structural vulnerabilities in some types of mutual funds as a continuing focus.
They really seem to think that Q2 real GDP rate will be positive (and also Qs 3 & 4). So yeah. I guess we'll see.
Even my 6 year old knows that Q2 will be negative and we’ll officially be in a recession. Maybe they should put him on the Fed 😀
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Re: U.S. stocks in free fall

Post by manatee2005 »

newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
The problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
marcopolo
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Re: U.S. stocks in free fall

Post by marcopolo »

Hoongajji wrote: Wed May 25, 2022 8:48 pm
HomerJ wrote: Mon May 23, 2022 4:58 pm
Hoongajji wrote: Sun May 22, 2022 8:08 pm Long term investors in 20 years might break even.

YUM will drop 50%
F will drop 70%
TMUS will drop 70%
MCD will drop 53%
CMG will drop 70%
AMD will drop 95%
DE will drop 73%
Long-term investors will be buying those stocks (via the index) at 70%-95% discounts, and will break even long before the market gets back to it's old all-time high.

Deep discounts like that make it fairly easy to break even.

A stock that drops from $100 a share to $5 a share (95% drop like your AMD example), only has to go back to $10 a share before an investor doubles their investment.

By the time the stock gets back to $100 a share, even if it takes 20 years, the investor will have made 20x their investment on that low price.

The price may be "back to even". And the long-term investor's original money is "back to even". But all the new money they invested in those shares when it was down are up 10x,15x,20x.

Which puts the long-term investor at that point at far better than "even".
A 95% drop of a $100 investment equals $5. When that doubles it is $10. Still a 90% loss.

Say subject “A” had $1million and lost $950k but DCA 20k per year…loss.

Subject “A” sold the million near peak and reinvested years later…win.

20/20 hindsight.

Fun to think about Homer.

Amazon in the dot com bust is a rare exception to dca success.

My ice cube analogies of the selected stocks demise. Small taters.

The icebergs one would navigate around in a ship are interesting. What if they melt?

Let us entertain the idea that there are 5-7 icebergs.

Vanguard and Blackrock via etf and index funds which we bogleheads enjoy are major players in the Neo Equity ice Age.

When I sell VTI and Tony buys it…what if Tony sells…and so on…

Vanguard and Blackrock hold these shares for a fee. No other reason. We don’t buy it…they are gone.

The icebergs at one point were 48% of the nasdaq.

So far there are no bankruptcies, closures, implosions…no real estate foreclosures. Like a fantasy or utopia World?

Everything is fine.

I disagree.

Enjoy this financial side of life everyone,

H
You know that DE (whatever that is) is going to drop 73%?!?
Not 72% or 74%, but 73%?

Man, where do I get one of those crystal balls?

Something tells me you actually have no idea how much any of those stocks are going to drop.
Once in a while you get shown the light, in the strangest of places if you look at it right.
TheoLeo
Posts: 576
Joined: Mon Apr 02, 2018 11:39 am

Re: U.S. stocks in free fall

Post by TheoLeo »

manatee2005 wrote: Thu May 26, 2022 12:33 am
newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
The problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
You get back in when the Fed announces: "Post pandemic overstaffing and overfilling of inventories has led to significant deflationary pressures und a rise in unemployement. The comittee therefore decided to stop the balance sheet run off and to lower the federal funds rate."
Tom_T
Posts: 4837
Joined: Wed Aug 29, 2007 2:33 pm

Re: U.S. stocks in free fall

Post by Tom_T »

TheoLeo wrote: Thu May 26, 2022 4:12 am
manatee2005 wrote: Thu May 26, 2022 12:33 am
newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
The problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
You get back in when the Fed announces: "Post pandemic overstaffing and overfilling of inventories has led to significant deflationary pressures und a rise in unemployement. The comittee therefore decided to stop the balance sheet run off and to lower the federal funds rate."
No such announcement would ever happen. There would be little hints in statements, possibly contradictory, and it would be up to the market to read the tea leaves.
TheoLeo
Posts: 576
Joined: Mon Apr 02, 2018 11:39 am

Re: U.S. stocks in free fall

Post by TheoLeo »

Tom_T wrote: Thu May 26, 2022 5:47 am
TheoLeo wrote: Thu May 26, 2022 4:12 am
manatee2005 wrote: Thu May 26, 2022 12:33 am
newyorker wrote: Wed May 25, 2022 8:21 pm I guess it is too late to sell at this point.

Buy more is the only answer?
The problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
You get back in when the Fed announces: "Post pandemic overstaffing and overfilling of inventories has led to significant deflationary pressures und a rise in unemployement. The comittee therefore decided to stop the balance sheet run off and to lower the federal funds rate."
No such announcement would ever happen. There would be little hints in statements, possibly contradictory, and it would be up to the market to read the tea leaves.
If the fed can announce in clear language that they are hiking rates then they can also announce in clear language that they will lower rates. Market will of course try to anticipate it by reading between the lines, but eventually the fed makes its intentions clear. Then you buy.
bagastuff
Posts: 137
Joined: Mon Apr 11, 2022 7:38 pm

Re: U.S. stocks in free fall

Post by bagastuff »

bagastuff wrote: Wed May 25, 2022 1:34 pm
atdharris wrote: Wed May 25, 2022 1:24 pm SQQQ feels tempting, but perhaps the market will rally
the temptation to use SQQQ is mainly born of FOMO based on certain days/weeks where it would have brought amazing returns.

I might buy one share at close to remind myself that I'm not smarter than the market.
Suddenly glad I didn't even bother with this

Also was there some kind of news??
Tamalak
Posts: 1989
Joined: Fri May 06, 2016 2:29 pm

Re: U.S. stocks in free fall

Post by Tamalak »

bagastuff wrote: Thu May 26, 2022 9:12 am
bagastuff wrote: Wed May 25, 2022 1:34 pm
atdharris wrote: Wed May 25, 2022 1:24 pm SQQQ feels tempting, but perhaps the market will rally
the temptation to use SQQQ is mainly born of FOMO based on certain days/weeks where it would have brought amazing returns.

I might buy one share at close to remind myself that I'm not smarter than the market.
Suddenly glad I didn't even bother with this

Also was there some kind of news??
Yeah, GDP contracted worse than expected. So of course the market's up! :D
drg02b
Posts: 235
Joined: Fri Dec 18, 2015 1:08 pm

Re: U.S. stocks in free fall

Post by drg02b »

bagastuff wrote: Thu May 26, 2022 9:12 am
bagastuff wrote: Wed May 25, 2022 1:34 pm
atdharris wrote: Wed May 25, 2022 1:24 pm SQQQ feels tempting, but perhaps the market will rally
the temptation to use SQQQ is mainly born of FOMO based on certain days/weeks where it would have brought amazing returns.

I might buy one share at close to remind myself that I'm not smarter than the market.
Suddenly glad I didn't even bother with this

Also was there some kind of news??
Market is happy FOMC minutes don't suggest more drastic measures and initial jobless claims had a slight downtick from last month.
HDM1004
Posts: 52
Joined: Thu Sep 30, 2021 9:33 am

Re: U.S. stocks in free fall

Post by HDM1004 »

bagastuff wrote: Thu May 26, 2022 9:12 am
bagastuff wrote: Wed May 25, 2022 1:34 pm
atdharris wrote: Wed May 25, 2022 1:24 pm SQQQ feels tempting, but perhaps the market will rally
the temptation to use SQQQ is mainly born of FOMO based on certain days/weeks where it would have brought amazing returns.

I might buy one share at close to remind myself that I'm not smarter than the market.
Suddenly glad I didn't even bother with this

Also was there some kind of news??
Yes, nobody knows anything! :oops:
elderwise
Posts: 836
Joined: Fri Jul 22, 2016 10:27 am

Re: U.S. stocks in free fall

Post by elderwise »

When gme is up another 25% and nasdaq is 2% green what do you do?

Buy sqqq and fngd..

This fake rally will die soon. :mrgreen:
atdharris
Posts: 2091
Joined: Wed Jan 02, 2019 2:18 pm

Re: U.S. stocks in free fall

Post by atdharris »

Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
alfaspider
Posts: 4816
Joined: Wed Sep 09, 2015 4:44 pm

Re: U.S. stocks in free fall

Post by alfaspider »

atdharris wrote: Thu May 26, 2022 9:18 am Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
I posted earlier that housing market shows signs of slowing down. That indicates that more rate hikes beyond those already planned are likely enough to tamp down the asset bubbles. But there's still going to be a big problem with food and energy costs. I don't think the fed can tame that without raising rates until we are in a pretty bad recession. I guess it's up to the fed how they want to balance that dilemma.
Tamalak
Posts: 1989
Joined: Fri May 06, 2016 2:29 pm

Re: U.S. stocks in free fall

Post by Tamalak »

atdharris wrote: Thu May 26, 2022 9:18 am Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
Wouldn't BND be soaring if this were the case? It's practically flat today.
bagastuff
Posts: 137
Joined: Mon Apr 11, 2022 7:38 pm

Re: U.S. stocks in free fall

Post by bagastuff »

alfaspider wrote: Thu May 26, 2022 9:21 am
atdharris wrote: Thu May 26, 2022 9:18 am Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
I posted earlier that housing market shows signs of slowing down. That indicates that more rate hikes beyond those already planned are likely enough to tamp down the asset bubbles. But there's still going to be a big problem with food and energy costs. I don't think the fed can tame that without raising rates until we are in a pretty bad recession. I guess it's up to the fed how they want to balance that dilemma.
How are rate hikes going to do anything about food prices? I can modify my behavior to use less gas but I still need food to live. Actually maybe high food prices will help solve the obesity epidemic and healthcare crisis. Quick sell off XLV!
bagastuff
Posts: 137
Joined: Mon Apr 11, 2022 7:38 pm

Re: U.S. stocks in free fall

Post by bagastuff »

elderwise wrote: Thu May 26, 2022 9:17 am When gme is up another 25% and nasdaq is 2% green what do you do?

Buy sqqq and fngd..

This fake rally will die soon. :mrgreen:
Did you say that on March 15th and did you also have the balls to hold sqqq through the end of March and into May till it recovered?
atdharris
Posts: 2091
Joined: Wed Jan 02, 2019 2:18 pm

Re: U.S. stocks in free fall

Post by atdharris »

alfaspider wrote: Thu May 26, 2022 9:21 am
atdharris wrote: Thu May 26, 2022 9:18 am Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
I posted earlier that housing market shows signs of slowing down. That indicates that more rate hikes beyond those already planned are likely enough to tamp down the asset bubbles. But there's still going to be a big problem with food and energy costs. I don't think the fed can tame that without raising rates until we are in a pretty bad recession. I guess it's up to the fed how they want to balance that dilemma.
Sales have dropped in my city now for 3 straight months. Prices are still sky high, but as demand lessens, I think prices will begin to drop. We have already peaked at a median home price of over $400k. That really has to change.

I am not sure how the Fed will control food prices. I think inflation there is more due to supply chain and supply issues, which isn't an area the Fed can really control.
alfaspider
Posts: 4816
Joined: Wed Sep 09, 2015 4:44 pm

Re: U.S. stocks in free fall

Post by alfaspider »

bagastuff wrote: Thu May 26, 2022 9:26 am
alfaspider wrote: Thu May 26, 2022 9:21 am
atdharris wrote: Thu May 26, 2022 9:18 am Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
I posted earlier that housing market shows signs of slowing down. That indicates that more rate hikes beyond those already planned are likely enough to tamp down the asset bubbles. But there's still going to be a big problem with food and energy costs. I don't think the fed can tame that without raising rates until we are in a pretty bad recession. I guess it's up to the fed how they want to balance that dilemma.
How are rate hikes going to do anything about food prices? I can modify my behavior to use less gas but I still need food to live. Actually maybe high food prices will help solve the obesity epidemic and healthcare crisis. Quick sell off XLV!
Part of the food price problem is the energy price problem. Farmers are getting hit hard by increases in fertilizer and diesel. That can be alleviated somewhat by lowering energy demand. That can happen when people shop less, carpool or switch to public transit, stop unnecessary trips, and adjust thermostats.

There's also still quite a bit of food waste. I know I've been guilty of tossing old leftovers in favor of making something fresh or going out. In a recession, people are more likely to be careful to avoid waste.
H-Town
Posts: 5905
Joined: Sun Feb 26, 2017 1:08 pm

Re: U.S. stocks in free fall

Post by H-Town »

Hoongajji wrote: Wed May 25, 2022 8:48 pm
HomerJ wrote: Mon May 23, 2022 4:58 pm
Hoongajji wrote: Sun May 22, 2022 8:08 pm Long term investors in 20 years might break even.

YUM will drop 50%
F will drop 70%
TMUS will drop 70%
MCD will drop 53%
CMG will drop 70%
AMD will drop 95%
DE will drop 73%
Long-term investors will be buying those stocks (via the index) at 70%-95% discounts, and will break even long before the market gets back to it's old all-time high.

Deep discounts like that make it fairly easy to break even.

A stock that drops from $100 a share to $5 a share (95% drop like your AMD example), only has to go back to $10 a share before an investor doubles their investment.

By the time the stock gets back to $100 a share, even if it takes 20 years, the investor will have made 20x their investment on that low price.

The price may be "back to even". And the long-term investor's original money is "back to even". But all the new money they invested in those shares when it was down are up 10x,15x,20x.

Which puts the long-term investor at that point at far better than "even".
A 95% drop of a $100 investment equals $5. When that doubles it is $10. Still a 90% loss.

Say subject “A” had $1million and lost $950k but DCA 20k per year…loss.

Subject “A” sold the million near peak and reinvested years later…win.

20/20 hindsight.

Fun to think about Homer.

Amazon in the dot com bust is a rare exception to dca success.

My ice cube analogies of the selected stocks demise. Small taters.

The icebergs one would navigate around in a ship are interesting. What if they melt?

Let us entertain the idea that there are 5-7 icebergs.

Vanguard and Blackrock via etf and index funds which we bogleheads enjoy are major players in the Neo Equity ice Age.

When I sell VTI and Tony buys it…what if Tony sells…and so on…

Vanguard and Blackrock hold these shares for a fee. No other reason. We don’t buy it…they are gone.

The icebergs at one point were 48% of the nasdaq.

So far there are no bankruptcies, closures, implosions…no real estate foreclosures. Like a fantasy or utopia World?

Everything is fine.

I disagree.

Enjoy this financial side of life everyone,

H
Hoongajji, if you have the benefit of hindsight, then yeah we can be billionaires in simulation.

Now back to reality, no one can succeed in market timing on a consistent basis. Many Bogleheads members shoulder the responsibilities to manage their 6, 7, or even 8 figure portfolios. It's real and hard earned money. We follow boglehead investing philosophy (See wiki page here for a refresher). We don't just make moves to our portfolio the same way that WSBets/reddit folks do to their few thousands dollars play money.

I hope this helps.
Time is the ultimate currency.
alfaspider
Posts: 4816
Joined: Wed Sep 09, 2015 4:44 pm

Re: U.S. stocks in free fall

Post by alfaspider »

atdharris wrote: Thu May 26, 2022 9:29 am
alfaspider wrote: Thu May 26, 2022 9:21 am
atdharris wrote: Thu May 26, 2022 9:18 am Economic slowdown = less demand = less inflation = less rate hikes

Or so the market seems to be thinking. So glad I'll get to buy into this rally on payday tomorrow.
I posted earlier that housing market shows signs of slowing down. That indicates that more rate hikes beyond those already planned are likely enough to tamp down the asset bubbles. But there's still going to be a big problem with food and energy costs. I don't think the fed can tame that without raising rates until we are in a pretty bad recession. I guess it's up to the fed how they want to balance that dilemma.
Sales have dropped in my city now for 3 straight months. Prices are still sky high, but as demand lessens, I think prices will begin to drop. We have already peaked at a median home price of over $400k. That really has to change.

I am not sure how the Fed will control food prices. I think inflation there is more due to supply chain and supply issues, which isn't an area the Fed can really control.
The difference between the 2.8% mortgages of a year ago and the 5.3% of today is a pretty huge increase in payments. If I took out my mortgage today (refinanced early 2021), it would be equivalent to paying another 30% for my house. That's likely hitting the sub $400k market the hardest. Part of the runup in median home price is not just increase in prices for a specific house, but also that transactions at the low end just aren't happening. Those buyers are much more cost sensitive and can't just make room in their budget for a 30% higher payment due to mortgage interest rates. At the high end of the market, people are more likely to have some room and also are more likely to pay cash.
Locked