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Anyone buying stock this week ?


Dunnie

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I honestly believe the dow goes below 20K maybe 19K and soon.

Thats a 33% haircut from recent highs. 2008 was 40% and we could see that.

I moved almost of what I have (small cap & large cap indexes) to cash when the dow went to 26,200 ( I have a 10% circuit breaker mentality)

Like they say, calling the bottom is like trying to catch a falling knife but I will start moving back in in 10-15% blocks when I feel its there.

I suspect financial markets will reach full capitulation today. Not a pretty sight.

Younger guys, pay close attention to this as it plays out. It will serve you well a few times in life.

Remember this is not unprececented, I manipulated 2008 - 2009 greatly to my advantage and will do so again.

I think the main diff is the recovery will be much swifter because the etiology is exogenic from actual financial makets as opposed to 1987, 2000, 2008 in which equities, real estate etc were in a huge bubble. When the virus is gone in June, July I expect a 6-10 month recovery to begin.

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1 hour ago, Dunnie said:

I sold a small amt . But am dubious about selling en masse at this point.. wondering if there will be a clear bottom to reinvest at .. luckily a majority of 401k is in cash.

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The time to sell was in the Dow 25 - 26.5K range when it was not too much of a haircut. Only move at this point esp if you are young might be to stay put, ride it out because eventually like every other bear market it always winds up in the rear view mirror.

Market timing is tough. You have to be right twice. You have to pick when to exit and then decide when to re-enter. Just being right once is tough enough. Like they say, trying to buy the bottom is like catching a falling knife.

BTW majority of 401K in cash give you plenty of dry powder to nail this opportunity. It can be a life changer depending on the amount.

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It is now a full on bear market panic sell off. This is the territory where market historians make  fortunes.  Full market capitulation ? I dont know if it was today but if it wasnt it will be soon and even uglier.

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58 minutes ago, Dunnie said:

Once this virus scare is over ... Dont you think in today's age of no patience and crypto greed that the market will roar back within 2 years ?

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It will recover and go to new highs  most likely in less than 2 years. 

Oct 1987 was the worst one day sell off ever.  A 20% one day crash. By the end of the year however the SP 500 was back in positive territory.

2008 ended the year off just under 40%.

In 2009 the year ended up 23% followed by 2010 up 12%.

It always comes back. 

 

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I wouldnt buy anything NOTHING until the SP500 goes to 1900-2000.

I think that level could represent market capitulation.

That would represent roughly 40% drop from the high.

Even then I would buy in small bites.

 

 

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5 hours ago, jetstream23 said:

Is that based on market technicals?  Where does that number come from as a downside target?

Present losses on the large cap indexes are at about 33% including todays sell off.

In the 2003 bear market the SP500 lost almost 50%

In 2008 it was a 40% drop.

If the Dow goes to 18000 it would represent a 40% drop from 29000

I have to think we are close to seeing full market capitulation. I think a 40% -50% drop would be the bottom providing this virus begins to wane without taking more than a few thousand lives in the USA.

There will be more sucker rallies or dead cat bounces as some call it but this is far from over.

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1 hour ago, jetstream23 said:

Funny how he makes no mention of 2003. 

I am a buyer at Dow 17,500-18,000

It may very well go lower but the recovery will be meteoric.

GRAB THAT FALLING KNIFE!

It will be like a buffet.

 

 

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48 minutes ago, CTM said:

Yeah I dont get how we hit the bottom. Stock market was around 17k 4 years ago. It's been inflated by stock buy backs , some of which was funded by debt.

Entire industries are going to need to be bailed out and unemployment is going to skyrocket while the government hands out money for free. (Not productive)

Maybe you want to argue it'll go up based on impending hyper inflation? Seems like there is going to be too much deflationary pressure in short term.

Russia seems settled in to out shale companies out of business top with oil prices and maybe they move to go off dollar standard at dome point.

This feels a lot like a new world order coming to me 

Full respect for your opinion.

However  I think 2008 was worse.

It was a full system collapse from internal failures caused by horrible business practices mixed with poor governmental oversight vs this sell off caused by a sole exogenic event.

Lehman Bros, Merrill Lynch, AIG Freddie Mac, GM, Chrysle, internationally HBOS, Royal Bank of Scotland, Bradford Bingley, Fortis all gone forever, nationalized or bailed out. I could go on but you get the pic.

In the throes of these things the cacophony of the talking heads and the prevailing market psychology says its gonna be different, apocalyptic, the world as we knew is over, but it never is.

 

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11 hours ago, RobR said:

I appreciate your posts but the story hasn't been written on what happens here in 2020. As of right now we don't know what the fallout and what companies will no longer exist. The news keep getting worse and I've never seen anything like this, at least in my lifetime.

Regarding the bolded you just don't know that yet. When has an entire global economy basically come to a standstill? Even with the financial crisis that never happened and people were still free to go about their regular day lives. This is different.

 

You ask good questions that nobody can answer. Like everyone who follows financial markets  I am astounded at this turn of events. This selloff was obviously started by the virus but I also  believe as a market that had been building since 2010 it reached a level that increasingly seemed greedy and unsustainable.  Example? Tesla. I know some here love what they are doing and I am also a fan of the product but a $950 price share really? (now down 60%) This bear market was overdue.

I know its hardest to see when you are standing in the middle of this storm. Behavioral finance is also at play here and is an aspect of all this many are unfamiliar with. Guys like Amos Taversky and Daniel Kahnerman  wrote at length regarding this but most of all as a firm believer in the investment philosophies of Benjamin Graham (his disciples are a who's who of modern investing Templeton Buffet dozens more)  I remain confident of the eventual turnaround.  

 

 

 

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14 hours ago, jetstream23 said:

I was buying a little on the close today.  Not a lot....but being 10+ years from retirement it felt like the right time to buy some AMZN, JPM, and GOOGL at discounted prices.

 

Smart move. You will be rewarded. I grabbed some DAL UAL and AAL.

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20 minutes ago, CTM said:

I grabbed DAL, Buffet owns 11%  and just bought 1M at like 42-44, I'm in a $22. Bailout or Buffet news could send this soaring, of course all planes being grounded could do the opposite 

Agree they airline stocks could still go lower but even so 18 - 24 mos out maybe even less they should shine.

I am hoping UAL will be a 4 bagger for me.

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Still bottom fishing. Added ALK to the other airline stocks. Might be the safest one.

I think the eventual broad market bottom will be around 40% off. 

 

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2 hours ago, southparkcpa said:

Ive got my 3 handguns and a conceal carry permit.  

Im not as subtle as you. I have 2 shot guns and a cabinet full of slugs, bird and buck shot.

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This airline play was truly low hanging fruit. 

In - out boom with a good stack.

Get off the bench!

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11 hours ago, CTM said:

I can't believe I blew it by day trading for a few k. Cost myself significantly more today by being restricted.

So what do we think happens short term. When bad economic data starts surfacing this thing is going to tank again no?, And then maybe pop up and then tank again on bad news

Anyone have any thoughts on volatility trading. I'm trying to learn as much as I can in a short time (I'm not a regular trader, hence the restriction). But i'm thinking there's going to be a lot of yoyo happenning as news changes.

 

 

FIx that acct restriction asap. There are many more bites at the apple coming up. This is far from finished. We will continue to see days of deep selloff and upswings in the near term.

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5 minutes ago, CTM said:

100% Another hit as soon as unemployment numbers come out. Thursday I think?

I wish I understood this better from a Macro level. The fed is basically inventing 6T of imaginary money right now and pumping it into the economy. 

Wth are the impacts of that in short and long term. Right now being in cash is good

However we are getting an expansion of money and bailouts which equals more short term demand, but since it's not tied to productivity gains the supply side is wonked. Particularly now with people not producing anything, at what point do necessities start to inflate like crazy.

Part of me is thinking the best play here is to buy a truck load of non perishables now while it's still relatively cheap. The minute the cost of this pops, the public, now fresh off their first hit of UBI is going to demand another shot as the #1200 they just got doesn't go very far.. more demand, less supply, prices go up, value of dollar down, more / bigger checks.. vicious cycle.  

The above seems clear but there are short term deflationary pressures I think with so much economic activity halted and liquidity so low

Really feels like the whole damn system is breaking down and we are bordering on an extremely ugly situation.

 

Honestly you dig a lot deeper and extrapolate much more than I do. If I crunched as much as you do I would probably not be buying anything and just be sitting wringing my hands. I am a simple trader. I stay within my pay grade. No margins, no puts, calls etc. It has worked well for me. I have a 7 figure 401K that I went to full cash in Feb at DOW 26,200 which represented roughly a 10% haircut. 10% is my personal circuit breaker to move to cash. It worked in 2001 and 2008. Seperately, my brokerage acct. which was largely a buy and hold forever type thing for us got smashed up but by trading in and out of some of the airlines and a few others I have recouped more than 1/2 of the losses and will continue to do that with a sharp eye on preservation of capital. Having lived through previous debacles I learned it always comes back. I crushed it in 2003 and 2009-10 and I am convinced I will do the same here. 

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18 hours ago, CTM said:

I hear that, but I'm kind of worried what happens with the supply shock/inflation we are about to see. Prices are going to go up rapidly the longer people are panic'd and not producing. My company is exempt as online seller of live animal supplies. We have 2 warehouses in Trump country and suddenly I have people too afraid to come to work (who a week ago thought this was a hoax). So.. we are having to increase wages to keep people coming in. 

Plus we now have the government willing to pay them full wages if they don't work.  Most want to be laid off now, it's a better deal. I can't blame them. Why load product all day and risk illness of the government teet is there for "free" suckling. This is the unintended consequence of most government programs that end up huritng the people they are trying to help. Poor people are going to be impacted first.

That means we have to raise wages even more.

Finally our inventory is dwindling as the supply chain constricts.

All of this results in higher prices. We don't want to do that as sales are down, but we don't have a choice. We sell some pet Rx and there's a real issue there already with supply we can't get our hands on stuff

 What does the government do in response to supply issues?

Throwing money at it just causes huge inflation, which causes more demand and more supply issues and more price increases.

 If they pretend it's a gouging thing and fix prices, people will just stop producing even more., So then what?

The government can't fix this with any of their interventions. You need to fix supply side and eveyrthing they are doing right now hurts supply side

Are people going to be starving and resorting to crime to eat? Not having access to meds? I honestly don't think it's that far fetched.

Maybe people will end up having to work for food. Really don't know

If the scenario you describe materializes, and I dont say its impossible, at that point I think trading stocks and managing 401Ks will be the least of our concerns. Also, I dont discount the danger of this virus one iota however I cant help wondering if this is a case where the cure (permanent financial destruction for many from misguided govt intervention) is worse than the disease.

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Are we off the bottom already? 

Bear market suckers rally?

History says most bear markets have a double bottom.

Will we see it soon?

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1 hour ago, southparkcpa said:

Think about a world with so much less oil consumption.  200 years ago, the Middle east was a poor region of the world.  In 50 more years it will be poor  again.  Yes, air travel will come back but auto usage and oil usage in general will never again be at the levels it has had been in the years 50's to 90's.

But what we see now is incredible.. almost NO oil consumption so yes, as we kearned from Paul Samuelson (trivia), demand drops, price falls.

 

Is it any coincidence the Saudis took Aramco public late last year cashing out on a decent chunk of their oil business and cushioning themselves for exactly what we see today? 

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5 hours ago, jetstream23 said:

Your jinx is off.

These are crazy days indeed.  I'm not shorting this market but I am starting to sell here as this "melt up" continues.  We've just come back too far too fast in my opinion.  In any kind of best case do we see unemployment dropping back down towards 5% in the next year?  What about flying....I think it might take 2-3 years to get back to 2019 air travel levels.  It just seems crazy that the overall stock market is approaching its all-time highs again in an environment where we're slowly opening the economy, the Government has thrown over $2 Trillion at the problem and we're hovering at 15% unemployment. ........................

I read all you wrote and it is a very rational and measured assessment of where the market stands however nothing about this market is making any sense. This is virgin territory. Personally, I have taken advantage of the melt up buying back in slowly. I now stand about 45% invested and will likely continue to buy the dips. The Dow is still 5000  (20%+-) points lower from its highs and the broader market, S&P, Wilshire are similarly off. That tells me there is still room to rise and I am hopeful it continues. So far it looks like a V shaped recovery and not the W most of us predicted. I agree with what you said about airlines ( I was able to crush a few in out airline trades) and restaurants but I think retail, manufacturing and most other sectors will be rehiring / recalling layoffs this fall. At the most recent economic peak hiring was a problem in that businesses couldnt hire enough people. That problem may actually worsen.

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Post covid unemployment reversal is beginning.

Re-opening of the economy is the impetus.

Seems now that March April May period was the equities investment opportunity of a lifetime I thought it could be.

I'm fairly certain of the V shaped recovery now.

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29 minutes ago, Rangers9 said:

I hope you're right but economists I've heard say V shaped is a pipe dream. And the May unemployment report had a +3 mistake. And we are not post Covid by any means. 

Pipe dream?  Economists say one thing, traders say another. We will know for sure by fall if it makes a W but having said that, an investment opportunity of massive proportion has occupied the fast lane since March and it has to pain those that remained on the sideline and or worse sold at the bottom and stayed in cash.  

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58 minutes ago, Rangers9 said:

V shaped refers to return of the economy not the stock market. It's best case scenario. And if there's a spike in the virus it won't happen.

 
Looks like a recent stock market chart and looks like a V to me.
Could it reverse and make a W? Of course nobody has a crystal ball but if it does it can be another opportunity if handled correctly.

20939.jpeg

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It isnt 2 different things. I would be glad to explain how corporate profits, hiring, employment, equity, bond, energy and comodities markets are the life blood of the American economy as I have studied and participated in it for decades but that would take much too long and this is not what we signed up for here. Also, I sense you have your mind closed to any near term post covid positive outcome economic scenarios and may actually prefer the alternate model you describe so I will just say best of luck.😀

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