U.S. stocks in free fall

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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ »

marcopolo wrote: Fri May 20, 2022 3:07 pm But, I agree with you that the lack of panic is because it is quite possible that we are just getting started. It is possible that we are almost done with the drops.
And no matter which one is true, people 5 years from now will say "It was OBVIOUS in May 2022 that <the big crash> or <the recovery> was going to happen"

But not so true for those of us living through it (note those people 5 years from now will have lived through it too, but will have completely forgotten what today feels like)
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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peskypesky
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Re: U.S. stocks in free fall

Post by peskypesky »

JS-Elcano wrote: Fri May 20, 2022 3:23 pm
Californiastate wrote: Fri May 20, 2022 2:12 pm This isn’t 08. There aren’t a bagillion mortgages on the brink of default. Credit default swaps aren’t pulling down AIG. The market seems to be slowly finding its balance.
Who says only those things can cause a 45% drop? We have plenty else going on.
Good point.
exodusNH
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Re: U.S. stocks in free fall

Post by exodusNH »

Waiting_for_Godot wrote: Fri May 20, 2022 3:03 pm
pasadena wrote: Fri May 20, 2022 2:58 pm I guess the lesson from the last few months is "if you're going to check the market today, wait until the last 15 minutes".

Today is no exception.
Seriously, I’m really interested in learning how many players are responsible for what percentage of the price movement. I’m imagining a bunch of computers playing chicken during the last five minutes of trading, for a lot of trading days this year.
I wonder the same thing. I know algorithms are supposed to have limits, but, as a coder, I wonder how well they've been tested in weird conditions. None of the people who wrote the code have had experience with inflation, war, or pandemics. I feel a lot of code is firing off under if() statements that have the comment "this should never happen."
marcopolo
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Re: U.S. stocks in free fall

Post by marcopolo »

HomerJ wrote: Fri May 20, 2022 3:24 pm
marcopolo wrote: Fri May 20, 2022 3:07 pm But, I agree with you that the lack of panic is because it is quite possible that we are just getting started. It is possible that we are almost done with the drops.
And no matter which one is true, people 5 years from now will say "It was OBVIOUS in May 2022 that <the big crash> or <the recovery> was going to happen"

But not so true for those of us living through it (note those people 5 years from now will have lived through it too, but will have completely forgotten what today feels like)
I am quite certain that in that future world CAPE would have predicted it all... :beer
Once in a while you get shown the light, in the strangest of places if you look at it right.
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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ »

peskypesky wrote: Fri May 20, 2022 3:18 pm It's funny that one person is criticizing me for being too pessimistic about the market's prospects, and someone else is criticizing me for being too optimistic. :sharebeer

They probably should argue with each other, since I'm in the middle. :)
What was funny was you saying "Dark days are coming for years" AND "I wish I could borrow money to buy stocks" in the same post.

That worked in 2008 because you were still getting a paycheck. (and the market recovered quickly, so even if you were retired it could have worked).

If dark days continue for years, when your cash runs out, you will have to sell equities to eat.

You can't just wait 5-10 years for the market to bounce back if you are spending down your portfolio, AND paying interest on some margin loans (assuming they don't get called).
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Cheez-It Guy
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Re: U.S. stocks in free fall

Post by Cheez-It Guy »

U.S. stocks continue to be exactly flat!

VTI +/- 0.00% on the day.
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peskypesky
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Re: U.S. stocks in free fall

Post by peskypesky »

HomerJ wrote: Fri May 20, 2022 3:28 pm
peskypesky wrote: Fri May 20, 2022 3:18 pm It's funny that one person is criticizing me for being too pessimistic about the market's prospects, and someone else is criticizing me for being too optimistic. :sharebeer

They probably should argue with each other, since I'm in the middle. :)
What was funny was you saying "Dark days are coming for years" AND "I wish I could borrow money to buy stocks" in the same post.

That worked in 2008 because you were still getting a paycheck. (and the market recovered quickly, so even if you were retired it could have worked).

If dark days continue for years, when your cash runs out, you will have to sell equities to eat.

You can't just wait 5-10 years for the market to bounce back if you are spending down your portfolio, AND paying interest on some margin loans (assuming they don't get called).
The market took 5 years to recover in 2008. To me that's not so quick. But we can have different opinions on whether that's quick.

I have no margin loans.

And I absolutely CAN wait 5-10 years for the market to bounce back. What other choice would I have? Wouldn't we all be waiting for the market to bounce back?
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Re: U.S. stocks in free fall

Post by smooth_rough »

Going to get worse before it gets better..?

"In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year."
Last edited by smooth_rough on Fri May 20, 2022 4:13 pm, edited 1 time in total.
Tamalak
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Re: U.S. stocks in free fall

Post by Tamalak »

Cheez-It Guy wrote: Fri May 20, 2022 3:40 pm U.S. stocks continue to be exactly flat!

VTI +/- 0.00% on the day.
We should have a "U.S. stocks completely flat" topic that gets about a post every 2 years.
NorCalHiker
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Re: U.S. stocks in free fall

Post by NorCalHiker »

exodusNH wrote: Thu May 19, 2022 3:27 pm Yeah. When I thought about this two years ago, inflation wasn't a thing. I doubt (perhaps hope?) that it won't persist more than a year or so. But I have no idea. While high inflation helps burn off the US debt, it also increases the liability on social security. The US demographics aren't as bad as Europe and Japan, but we cannot count on a large workforce propping that up.
WRT demographics, as has been mentioned in the past, the US is in a quite unique position demographically; our birth rates and organic population growth may be decreasing, the immigration card is heavily in the US favor. I see it in my big tech job. Work with lots of immigrants from Europe, Central America and Africa; not just the expected ones from China/India.

To get back on topic: https://www.youtube.com/watch?v=1lWJXDG2i0A
manuvns
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Re: U.S. stocks in free fall

Post by manuvns »

this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Thanks!
trirunner
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Re: U.S. stocks in free fall

Post by trirunner »

manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Cash?
smooth_rough
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Re: U.S. stocks in free fall

Post by smooth_rough »

manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Real estate? Purchase small apartment building and go into the landlord business. Different set of problems: tenant disputes, building repairs, etc.
Last edited by smooth_rough on Fri May 20, 2022 4:17 pm, edited 2 times in total.
trirunner
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Re: U.S. stocks in free fall

Post by trirunner »

smooth_rough wrote: Fri May 20, 2022 3:57 pm Its going to get worse before it gets better...?

In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year.
33% is less than most bear market, we should be so lucky if we do enter a bear market.

2007-2009: down 57% over 1.4 years
2000-2002: down 49.1% over 2.5 years
1987: down 33.5% over 101 days
1980- 1982: down 27.1% over 1.7 years
1973-1974: down 48% over 1.7 years
1968-1970: down 36.1% over 1.5 years
runninginvestor
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Re: U.S. stocks in free fall

Post by runninginvestor »

Tamalak wrote: Fri May 20, 2022 3:58 pm
Cheez-It Guy wrote: Fri May 20, 2022 3:40 pm U.S. stocks continue to be exactly flat!

VTI +/- 0.00% on the day.
We should have a "U.S. stocks completely flat" topic that gets about a post every 2 years.
This is bogleheads, there is no way that would only get a post every 2 years. There would be at least a dozen side topics being discussed at any given time on that thread that have nothing to do with that thread. I likely just posters arguing back and forth.
marcopolo
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Re: U.S. stocks in free fall

Post by marcopolo »

smooth_rough wrote: Fri May 20, 2022 3:57 pm Its going to get worse before it gets better...?

In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year.
I am not sure what would be "stunning" about that.
That would get us back to about pre-pandemic levels. SP500 was at 3235 at the start of 2020.

If you take a step back from the day-to-day gyrations, and consider we went through a global pandemic with large swaths of the economy shut down, millions of people getting seriously ill/dying, and end up 2.5 years later at about the same level, while collecting the dividends, the more stunning aspect might be that we are not a lot further down already.
Once in a while you get shown the light, in the strangest of places if you look at it right.
manuvns
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Re: U.S. stocks in free fall

Post by manuvns »

trirunner wrote: Fri May 20, 2022 4:08 pm
manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Cash?
something that grows over time , the betting is on heavily with options traders causing wild swings .
Thanks!
Firemenot
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Re: U.S. stocks in free fall

Post by Firemenot »

marcopolo wrote: Fri May 20, 2022 4:16 pm
smooth_rough wrote: Fri May 20, 2022 3:57 pm Its going to get worse before it gets better...?

In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year.
I am not sure what would be "stunning" about that.
That would get us back to about pre-pandemic levels. SP500 was at 3235 at the start of 2020.

If you take a step back from the day-to-day gyrations, and consider we went through a global pandemic with large swaths of the economy shut down, millions of people getting seriously ill/dying, and end up 2.5 years later at about the same level, while collecting the dividends, the more stunning aspect might be that we are not a lot further down already.
Agreed. There’s so much hyperbole thrown around these days. Everyone anchored to an all-time high I guess. Such hyperbole is not consistent with taking the long-view of a long-term investor.
Last edited by Firemenot on Fri May 20, 2022 4:21 pm, edited 1 time in total.
Californiastate
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Re: U.S. stocks in free fall

Post by Californiastate »

JS-Elcano wrote: Fri May 20, 2022 3:23 pm
Californiastate wrote: Fri May 20, 2022 2:12 pm This isn’t 08. There aren’t a bagillion mortgages on the brink of default. Credit default swaps aren’t pulling down AIG. The market seems to be slowly finding its balance.
Who says only those things can cause a 45% drop? We have plenty else going on.
We don’t currently have anything that resembles a financial collapse. Treasury isn’t trying to push through TARP nor are they merging investment banks. We had easy Covid money with easy Covid rates that pushed up the market. I don’t see anything other than a valuation reset. I liked the afternoon reversal. That’s not predicting Armageddon.
Last edited by Californiastate on Fri May 20, 2022 4:22 pm, edited 1 time in total.
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InvestorHowie
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Re: U.S. stocks in free fall

Post by InvestorHowie »

marcopolo wrote: Fri May 20, 2022 4:16 pm If you take a step back from the day-to-day gyrations, and consider we went through a global pandemic with large swaths of the economy shut down, millions of people getting seriously ill/dying, and end up 2.5 years later at about the same level, while collecting the dividends, the more stunning aspect might be that we are not a lot further down already.
Nailed it. Sometimes I look at all that is going on in the world and am amazed that we're 'only' down as much as we are. Still buying though. Just like the last time and the time before.
Time is your friend; impulse is your enemy. --John C. Bogle
Nathan Drake
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Re: U.S. stocks in free fall

Post by Nathan Drake »

strummer6969 wrote: Fri May 20, 2022 3:11 pm Bought some VUG today. I don't do "factor investing" but the prices were getting too tempting.
If you were a true factor enthusiast you’d be avoiding VUG :)

As a factor enthusiast I am buying more AVUV, AVDV, and AVES

The market declines have been a nice opportunity to TLH MCW funds into SCV instead
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: U.S. stocks in free fall

Post by Yesterdaysnews »

How does that end of the day make any sense?
trirunner
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Re: U.S. stocks in free fall

Post by trirunner »

Yesterdaysnews wrote: Fri May 20, 2022 4:38 pm How does that end of the day make any sense?
Bear market never go straight down, it zig zug down, we just had 2 zugs, today was the zig(barely).
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Re: U.S. stocks in free fall

Post by barberakb »

manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Real Estate
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Re: U.S. stocks in free fall

Post by Chief_Engineer »

Yesterdaysnews wrote: Fri May 20, 2022 4:38 pm How does that end of the day make any sense?
People closing out put positions before the weekend?
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Re: U.S. stocks in free fall

Post by H-Town »

manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
if you can't stand the downturn, you don't deserve the high return of stocks.
Time is the ultimate currency.
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Re: U.S. stocks in free fall

Post by ivgrivchuck »

barberakb wrote: Fri May 20, 2022 4:46 pm
manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Real Estate
Just because the value of an asset cannot be reliably measured daily doesn't make it any less volatile than an asset which value is measured daily.

If you only look at the value of your stocks every 6 months, the resulting plot will look a lot more stable...
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exodusNH
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Re: U.S. stocks in free fall

Post by exodusNH »

ivgrivchuck wrote: Fri May 20, 2022 5:18 pm
barberakb wrote: Fri May 20, 2022 4:46 pm
manuvns wrote: Fri May 20, 2022 4:04 pm this is really crazy is there an asset class that does not fluctuate like stocks markets or other paper assets .
Real Estate
Just because the value of an asset cannot be reliably measured daily doesn't make it any less volatile than an asset which value is measured daily.

If you only look at the value of your stocks every 6 months, the resulting plot will look a lot more stable...
This, apparently, is one of the hidden benefits of people who invest in private equity firms. Since they don't see daily reports of the investment's value, they don't have the same level of angst that is normies do! Rational Reminder did a segment in this some time ago.
Hola
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Re: U.S. stocks in free fall

Post by Hola »

ivgrivchuck wrote: Fri May 20, 2022 5:18 pm
Just because the value of an asset cannot be reliably measured daily doesn't make it any less volatile than an asset which value is measured daily.

If you only look at the value of your stocks every 6 months, the resulting plot will look a lot more stable...
Nicely said.
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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ »

peskypesky wrote: Fri May 20, 2022 3:51 pm
HomerJ wrote: Fri May 20, 2022 3:28 pm
peskypesky wrote: Fri May 20, 2022 3:18 pm It's funny that one person is criticizing me for being too pessimistic about the market's prospects, and someone else is criticizing me for being too optimistic. :sharebeer

They probably should argue with each other, since I'm in the middle. :)
What was funny was you saying "Dark days are coming for years" AND "I wish I could borrow money to buy stocks" in the same post.

That worked in 2008 because you were still getting a paycheck. (and the market recovered quickly, so even if you were retired it could have worked).

If dark days continue for years, when your cash runs out, you will have to sell equities to eat.

You can't just wait 5-10 years for the market to bounce back if you are spending down your portfolio, AND paying interest on some margin loans (assuming they don't get called).
The market took 5 years to recover in 2008. To me that's not so quick. But we can have different opinions on whether that's quick.

I have no margin loans.

And I absolutely CAN wait 5-10 years for the market to bounce back. What other choice would I have? Wouldn't we all be waiting for the market to bounce back?
Look, you may not realize this, but if you are SELLING stocks each year to buy food, you can run out of money if it takes too long to recover.

Because the 3% or 4% that you are pulling from your 100% equities each year never gets a chance to bounce back.

If you retire with $1 million, 100% in stocks, and the market crashes 50%, so you only have $500,000 now... AND you are pulling $40,000 a year from that $500,000 (4% withdrawals from the original $1 million), after five years you will have pulled $200,000 out, and be down to $300,000.

If the market finally bounces back to it's original heights, you're only going to have $600,000 when it gets back to even. The $200,000 you spend over those 5 years is gone, and never bounces back. You technically blew through $400,000 in 5 years because you were selling stocks at 50% down.

This is why one should have a good chunk in fixed-income at retirement, so you can spend that in a crash and leave your stocks alone and wait for them to recover.

If you were 60/40, the $600,000 in stocks would drop to $300,000, you wouldn't touch it, instead spending $200,000 out of the fixed-income.

After five years the $300,000 would bounce back fully to $600,000, and you'd still have $200,000 in fixed-income, so you'd be at $800,000 after the recovery instead of at $600,000.
Last edited by HomerJ on Fri May 20, 2022 6:58 pm, edited 1 time in total.
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Cheez-It Guy
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Re: U.S. stocks in free fall

Post by Cheez-It Guy »

Tamalak wrote: Fri May 20, 2022 3:58 pm
Cheez-It Guy wrote: Fri May 20, 2022 3:40 pm U.S. stocks continue to be exactly flat!

VTI +/- 0.00% on the day.
We should have a "U.S. stocks completely flat" topic that gets about a post every 2 years.
I thought about that before posting, but assumed it would be locked, and I'm already on relatively thin ice.
bagastuff
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Re: U.S. stocks in free fall

Post by bagastuff »

smooth_rough wrote: Fri May 20, 2022 3:57 pm Going to get worse before it gets better..?

"In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year."
at this point, I'll take it.
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Re: U.S. stocks in free fall

Post by jjj_22 »

Cheez-It Guy wrote: Fri May 20, 2022 5:52 pm
Tamalak wrote: Fri May 20, 2022 3:58 pm
Cheez-It Guy wrote: Fri May 20, 2022 3:40 pm U.S. stocks continue to be exactly flat!

VTI +/- 0.00% on the day.
We should have a "U.S. stocks completely flat" topic that gets about a post every 2 years.
I thought about that before posting, but assumed it would be locked, and I'm already on relatively thin ice.
I would enjoy a "U.S. stocks moving violently sideways!" thread -- a little more general purpose than completely flat.
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Cheez-It Guy
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Re: U.S. stocks in free fall

Post by Cheez-It Guy »

jjj_22 wrote: Fri May 20, 2022 6:52 pm
Cheez-It Guy wrote: Fri May 20, 2022 5:52 pm
Tamalak wrote: Fri May 20, 2022 3:58 pm
Cheez-It Guy wrote: Fri May 20, 2022 3:40 pm U.S. stocks continue to be exactly flat!

VTI +/- 0.00% on the day.
We should have a "U.S. stocks completely flat" topic that gets about a post every 2 years.
I thought about that before posting, but assumed it would be locked, and I'm already on relatively thin ice.
I would enjoy a "U.S. stocks moving violently sideways!" thread -- a little more general purpose than completely flat.
If you want to make it, I will gladly post in it.
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Re: U.S. stocks in free fall

Post by rockstar »

HomerJ wrote: Fri May 20, 2022 5:42 pm
peskypesky wrote: Fri May 20, 2022 3:51 pm
HomerJ wrote: Fri May 20, 2022 3:28 pm
peskypesky wrote: Fri May 20, 2022 3:18 pm It's funny that one person is criticizing me for being too pessimistic about the market's prospects, and someone else is criticizing me for being too optimistic. :sharebeer

They probably should argue with each other, since I'm in the middle. :)
What was funny was you saying "Dark days are coming for years" AND "I wish I could borrow money to buy stocks" in the same post.

That worked in 2008 because you were still getting a paycheck. (and the market recovered quickly, so even if you were retired it could have worked).

If dark days continue for years, when your cash runs out, you will have to sell equities to eat.

You can't just wait 5-10 years for the market to bounce back if you are spending down your portfolio, AND paying interest on some margin loans (assuming they don't get called).
The market took 5 years to recover in 2008. To me that's not so quick. But we can have different opinions on whether that's quick.

I have no margin loans.

And I absolutely CAN wait 5-10 years for the market to bounce back. What other choice would I have? Wouldn't we all be waiting for the market to bounce back?
Look, you may not realize this, but if you are SELLING stocks each year to buy food, you can run out of money if it takes too long to recover.

Because the 3% or 4% that you are pulling from your 100% equities each year never gets a chance to bounce back.

If you retire with $1 million, 100% in stocks, and the market crashes 50%, so you only have $500,000 now... AND you are pulling $40,000 a year from that $500,000 (4% withdrawals from the original $1 million), after five years you will have pulled $200,000 out, and be down to $300,000.

If the market finally bounces back to it's original heights, you're only going to have $600,000 when it gets back to even. The $200,000 you spend over those 5 years is gone, and never bounces back.

This is why one should have a good chunk in fixed-income at retirement, so you can spend that in a crash and leave your stocks alone and wait for them to recover.
But you need fixed income that doesn't crash just as badly. Long term treasuries are down as bad as equities, and they haven't provided inflation resistance. For a long time, treasuries didn't keep up with inflation, so while you weren't feeling the big equity drops, you were slowly losing buying power. This year is a double whammy. You get to lose buying power and take a hit in both bonds and equities. I'm hiding out in t-bills, and I'm losing to inflation. Basically, this is a good example of why the old pensions before 401ks were a much better deal.
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Re: U.S. stocks in free fall

Post by incognito_man »

9-5 Suited wrote: Fri May 20, 2022 12:50 pm
Abalyon wrote: Fri May 20, 2022 12:24 pm Wow, S&P starting to test 3,800. This is awesome. When I started investing at 4,300, I dreamed of levels this low and they might get even lower!
I wish people would stop with this unabashed excitement about stock declines. I'm 35 and still accumulating as well, so I understand the value that can come from continued investment during market declines. But it's also not that hard to temper or moderate this "excitement" if you have a few small ounces of empathy. Many people - including people I know and care about - are in or near retirement without tremendous amounts of money to spare.

To me it's an indicator of selfishness and lack of experience as an investor to have such outward expressions of enthusiasm on the topic. Maybe in echo chamber bubbles of young high earners in FIRE forums it's a nice rallying cry.

My hope is this attitude can be dialed down a few notches on the forum. And this comment is one of hundreds of similar ones, so I'm responding to this one but not responding only to Abalyon in particular.
Counterpoint:

Those nearing retirement are likely to have less equity exposure seeing a decline currently and just benefited from a historic bull market and are likely among the most historically "lucky" investment windows/paths for their lives.

I can't really see myself feeling sorry for anyone at a point where the market is STILL historically high/expensive even after a 19% drawdown.
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Re: U.S. stocks in free fall

Post by rockstar »

bagastuff wrote: Fri May 20, 2022 6:12 pm
smooth_rough wrote: Fri May 20, 2022 3:57 pm Going to get worse before it gets better..?

"In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year."
at this point, I'll take it.
I wouldn't be surprised by a 30-40% drop in total before it starts to come back.
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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ »

smooth_rough wrote: Fri May 20, 2022 3:57 pm Going to get worse before it gets better..?

"In a recent analyst note, Bank of America strategist Savita Subramanian warned that a "worst case" stagflation scenario – the rare combination of economic stagnation and high inflation – could see the benchmark S&P 500 fall to 3,200, a drop of roughly 17% from current values. It would mark a stunning 33% drop from the beginning of the year."
Not sure why a 33% drop is "stunning". We've seen bigger total drops in 2000 and 2008...

And 3200 is around where we were right before the pandemic... just 2 years ago...

So it's a flat 2 years. (if you rebalanced on the way up, you got to keep some of those gains).
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ »

rockstar wrote: Fri May 20, 2022 7:00 pm But you need fixed income that doesn't crash just as badly. Long term treasuries are down as bad as equities, and they haven't provided inflation resistance. For a long time, treasuries didn't keep up with inflation, so while you weren't feeling the big equity drops, you were slowly losing buying power. This year is a double whammy. You get to lose buying power and take a hit in both bonds and equities. I'm hiding out in t-bills, and I'm losing to inflation. Basically, this is a good example of why the old pensions before 401ks were a much better deal.
This is very true... Since most fixed-income has also dropped some, we're hurting on both sides... but still probably less on the bond side if the stock market drops 50%. Like you said, short-term bonds have fallen less, and cash and CDs and stable-value funds haven't dropped except for inflation (which affects stocks too)
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
rockstar
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Re: U.S. stocks in free fall

Post by rockstar »

HomerJ wrote: Fri May 20, 2022 7:03 pm
rockstar wrote: Fri May 20, 2022 7:00 pm But you need fixed income that doesn't crash just as badly. Long term treasuries are down as bad as equities, and they haven't provided inflation resistance. For a long time, treasuries didn't keep up with inflation, so while you weren't feeling the big equity drops, you were slowly losing buying power. This year is a double whammy. You get to lose buying power and take a hit in both bonds and equities. I'm hiding out in t-bills, and I'm losing to inflation. Basically, this is a good example of why the old pensions before 401ks were a much better deal.
This is very true... Since most fixed-income has also dropped some, we're hurting on both sides... but still probably less on the bond side if the stock market drops 50%. Like you said, short-term bonds have fallen less, and cash and CDs and stable-value funds haven't dropped except for inflation (which affects stocks too)
It all pretty much sucks right now.
Waiting_for_Godot
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Re: U.S. stocks in free fall

Post by Waiting_for_Godot »

incognito_man wrote: Fri May 20, 2022 7:01 pm
9-5 Suited wrote: Fri May 20, 2022 12:50 pm
Abalyon wrote: Fri May 20, 2022 12:24 pm Wow, S&P starting to test 3,800. This is awesome. When I started investing at 4,300, I dreamed of levels this low and they might get even lower!
I wish people would stop with this unabashed excitement about stock declines. I'm 35 and still accumulating as well, so I understand the value that can come from continued investment during market declines. But it's also not that hard to temper or moderate this "excitement" if you have a few small ounces of empathy. Many people - including people I know and care about - are in or near retirement without tremendous amounts of money to spare.

To me it's an indicator of selfishness and lack of experience as an investor to have such outward expressions of enthusiasm on the topic. Maybe in echo chamber bubbles of young high earners in FIRE forums it's a nice rallying cry.

My hope is this attitude can be dialed down a few notches on the forum. And this comment is one of hundreds of similar ones, so I'm responding to this one but not responding only to Abalyon in particular.
Counterpoint:

Those nearing retirement are likely to have less equity exposure seeing a decline currently and just benefited from a historic bull market and are likely among the most historically "lucky" investment windows/paths for their lives.

I can't really see myself feeling sorry for anyone at a point where the market is STILL historically high/expensive even after a 19% drawdown.
^ This
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peskypesky
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Re: U.S. stocks in free fall

Post by peskypesky »

rockstar wrote: Fri May 20, 2022 7:06 pm
HomerJ wrote: Fri May 20, 2022 7:03 pm
rockstar wrote: Fri May 20, 2022 7:00 pm But you need fixed income that doesn't crash just as badly. Long term treasuries are down as bad as equities, and they haven't provided inflation resistance. For a long time, treasuries didn't keep up with inflation, so while you weren't feeling the big equity drops, you were slowly losing buying power. This year is a double whammy. You get to lose buying power and take a hit in both bonds and equities. I'm hiding out in t-bills, and I'm losing to inflation. Basically, this is a good example of why the old pensions before 401ks were a much better deal.
This is very true... Since most fixed-income has also dropped some, we're hurting on both sides... but still probably less on the bond side if the stock market drops 50%. Like you said, short-term bonds have fallen less, and cash and CDs and stable-value funds haven't dropped except for inflation (which affects stocks too)
It all pretty much sucks right now.
Gold is where it was 6 months ago.
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ResearchMed
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Re: U.S. stocks in free fall

Post by ResearchMed »

Waiting_for_Godot wrote: Fri May 20, 2022 8:32 pm
incognito_man wrote: Fri May 20, 2022 7:01 pm
9-5 Suited wrote: Fri May 20, 2022 12:50 pm
Abalyon wrote: Fri May 20, 2022 12:24 pm Wow, S&P starting to test 3,800. This is awesome. When I started investing at 4,300, I dreamed of levels this low and they might get even lower!
I wish people would stop with this unabashed excitement about stock declines. I'm 35 and still accumulating as well, so I understand the value that can come from continued investment during market declines. But it's also not that hard to temper or moderate this "excitement" if you have a few small ounces of empathy. Many people - including people I know and care about - are in or near retirement without tremendous amounts of money to spare.

To me it's an indicator of selfishness and lack of experience as an investor to have such outward expressions of enthusiasm on the topic. Maybe in echo chamber bubbles of young high earners in FIRE forums it's a nice rallying cry.

My hope is this attitude can be dialed down a few notches on the forum. And this comment is one of hundreds of similar ones, so I'm responding to this one but not responding only to Abalyon in particular.
Counterpoint:

Those nearing retirement are likely to have less equity exposure seeing a decline currently and just benefited from a historic bull market and are likely among the most historically "lucky" investment windows/paths for their lives.

I can't really see myself feeling sorry for anyone at a point where the market is STILL historically high/expensive even after a 19% drawdown.
^ This
Whoa!

Many older folks, especially here on BH, may indeed have benefited from savings that compounded during some great market times.

However, not everyone who is older was fortunate enough to have a stash of investments that grew during those years. They may have finally been able to start saving... We can't know what all of those individual or family circumstances were.
(There have been a few posts here on BH where someone describes some misfortunes such that they are just starting out, or just starting over, etc.)

You can feel sorry for certain others or not. That's up to you.
But I'd suggest not being so dismissive of others' circumstances, fortunate or not.

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

Post by JoMoney »

If someone is sensitive to reading comments about falling stocks and those "excited" by it, they probably shouldn't be reading threads about "stocks in free fall."
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: U.S. stocks in free fall

Post by Marseille07 »

JoMoney wrote: Fri May 20, 2022 9:17 pm If someone is sensitive to reading comments about falling stocks and those "excited" by it, they probably shouldn't be reading threads about "stocks in free fall."
I think their expectation is that people are crying about stocks in free fall, not excited about it.
000
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Re: U.S. stocks in free fall

Post by 000 »

Capitulation candle?
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unclescrooge
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Re: U.S. stocks in free fall

Post by unclescrooge »

JS-Elcano wrote: Fri May 20, 2022 2:39 pm
trirunner wrote: Fri May 20, 2022 2:10 pm
ClassII wrote: Fri May 20, 2022 2:06 pm
JS-Elcano wrote: Fri May 20, 2022 2:00 pm
smooth_rough wrote: Fri May 20, 2022 1:42 pm Longest streak of weekly losses since the Great Depression?
Yes, longest streak of weekly losses for the Dow in 90 years.

Sounds scary and aptly reflects the times we live in, imo :?

Let's hope that if it has to be a recession it will not be a depression.
On the other hand it doesn’t feel like a panic. This has been the most telegraphed, talked about recession ever. Maybe the fun is only beginning and investors steely resolve will be shaken at some point. If nothing else there’s got to be a lot of meme stock, crypto, wallstreetbets traders out there who might start to get margin called into oblivion. Heck Elon Musk must be getting awfully nervous about that iron clad sale agreement he made with Twitter considering how much of the deal is leveraged against his personal TSLA holdings. What would the market do if Musk goes bust suddenly? That right there could be the “Lehman Bros. Moment” that turns this from an orderly adjustment into a panic.
With TSLA going down 10% regularly now, we will find out soon enough. Popcorn ready
I think it doesn't feel like a panic because we are very early in this downturn.

The SP500 fell 20% between Oct 2007 and late March 2008. Nobody was panicking then either. LOL, I bought my first house in early 2008. If I remember correctly, no one was panicking until Sept 2008.

We don't need a housing crash. We have: a pandemic that is still unpredictable and has shut down major manufacturing in the world, a war in the bread basket of Europe, which combined with sky rocketing food prices led the World Bank to warn of a coming global food crisis, we have highest inflation in 40 years.

There is no realistic expectation (on my part anyway) that any of these current problems can be solved in the foreseeable future. Hence, I would not be surprised by continued drops, another 30-35% from here.
As someone who sold me primary residence inn late 2005 and all my rentals in 2006, and went to cash in mid-2008 I can assure you some people were worried in the years leading up to the GFC.

If you think this time is anything like that, you don't understand either economic environment.

Every 10 years, someone calls for a global economic collapse. So far they have been wrong.

Bring pessimistic doesn't pay in investing. I highly doubt stocks can fall 30% from here.
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Re: U.S. stocks in free fall

Post by MichRoots »

I see an awful lot of pessimistic posts on here - and this is supposed to be an optimistic place. I do not enjoy seeing the pessimism here but it does seem to show that we are reaching a fear level among market optimists that I rarely see (I saw it in March 2009 when the SP had dropped 50%from its high). We should welcome when stocks are on sale. But it sounds like many of you think the world is ending. I thought this place would be the voice of reason. I am now 78% SP500 in my account from 74% before today. If this continues I keep moving the $ left in my stable fund and put it into SP 500 until I am at 100%. But I doubt I will reach 100% because the market will roar back before I get to 100% SP 500. And I will kick myself, but these moments are rare. How often do we get 20% pullbacks in the SP500. Maybe a day in 2018 and less than a month in 2020. In the last 13 years I think that is it, no 20% pullbacks. Do we get 50% pullbacks, well we got one in 2001 after the mother of all market pumps. We got one 50% pullback in 2009 after the financial system nearly collapsed. I don't see a 50% pullback in the cards. Those are extremely rare.

The SP 500 was at 1500 back in the year 2000 which was 22 years ago. It was overvalued then, in my mind this January's valuations were nowhere near the moon shot that we saw in the year 2000. Yes we were high in January. Can we go down further? Of course. If so, I will be glad so I can keep moving to my 100% allocation in SP 500. I thought Amazon was a steal at $2700. Today it can be bought for $2150. We are oversold. We are pricing in a recession that hasn't happened yet. So my 100% buy back price would be around SP 3386 because that is the pre-pandemic high. Things will get better - I promise you. :sharebeer
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Re: U.S. stocks in free fall

Post by drk »

I don't know what capitulation looks like, but Bloomberg's home page is panicking about the lack of panic ("It May Be a Bear Market, But It’s Not a Panic. That’s Worrisome").
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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peskypesky
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Re: U.S. stocks in free fall

Post by peskypesky »

MichRoots wrote: Fri May 20, 2022 10:21 pm Things will get better - I promise you. :sharebeer
Somebody hold me.
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