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Dunnie

Anyone buying stock this week ?

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There will be another downturn, not coronavirus related, and sooner rather than later. 

If you bought when the Dow dipped below 25k, that was the move, and now you should probably return to a larger cash position. This expansion has gone on for too long and there will be a serious correction next 12/18/24 months; be in a position to buy at the low of that. 

In the long run, as others have echoed, it’s best to always have some skin in the game. But stocks are overvalued for quite a while now. If you can day trade and make money, more power to you. If you’re a long termer like I am, selling everything is never the plan, but I am wary enough not to buy right now. 

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On 2/28/2020 at 8:17 AM, Dunnie said:

 

Seems like a good time to jump in. Curious what you guys think.

 

 

 

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I opened up a brokerage account over the weekend bought an index fund. I have my 401k but it seemed like a good time to jump in. I will watch the airline stocks for a bit, they are going to come back at some point.

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On 3/4/2020 at 9:11 AM, southparkcpa said:

Yes..basic math.  Try to NOT pay any closing costs but if your mortgage is say 100K, your not gonna save much.    Mistake I see many make is they REFI every 3-4 years.  20 years later their mortgage is as large as it was when they bought the house as they pull cash out each time.  Consider a 10 year or a 15 year and get out of debt .  I did and it is a VERY liberating feeling.  My mortgage was paid off at 50.  

Back in September my bank offered me a interest only loan with 2.8 percent rate.  I wonder if it would be less than 2.5 percent now.  Crazy.  800k loan and pay 20k a year in mortgage cost. 

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23 hours ago, Maxman said:

I opened up a brokerage account over the weekend bought an index fund. I have my 401k but it seemed like a good time to jump in. I will watch the airline stocks for a bit, they are going to come back at some point.

Be careful with which airline stock.  Lots of them have debt that are high.  I own delta but sold some in middle of feb.  wish I sold it all. 

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16 minutes ago, batman10023 said:

Be careful with which airline stock.  Lots of them have debt that are high.  I own delta but sold some in middle of feb.  wish I sold it all. 

Yes Feb would have been a great time to sell for sure.

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23 minutes ago, batman10023 said:

Back in September my bank offered me a interest only loan with 2.8 percent rate.  I wonder if it would be less than 2.5 percent now.  Crazy.  800k loan and pay 20k a year in mortgage cost. 

I make a great living but would NEVER EVER have a mortgage that high.  I see it all day long. Clients living in million dollar homes and 20 years later still have a huge mortgage.  We live 80 percent of our lives in 20 percent of our home.  Interest free I wouldn’t buy that house...  just me. 

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21 hours ago, southparkcpa said:

I make a great living but would NEVER EVER have a mortgage that high.  I see it all day long. Clients living in million dollar homes and 20 years later still have a huge mortgage.  We live 80 percent of our lives in 20 percent of our home.  Interest free I wouldn’t buy that house...  just me. 

That’s a fair point but it works for us.  I can rent the house out for august and pay my interest only mortgage and taxes for the year. 

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On 3/2/2020 at 6:51 PM, jetstream23 said:

I sold out of the SDS (Ultra Short S&P ETF) today.

You should have held it a little longer because it looks like tomorrow is not going to be pretty. With everything getting cancelled and oil dropping over 20% I'll probably be purchasing some SDS.

Great post BTW. 

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56 minutes ago, RobR said:

You should have held it a little longer because it looks like tomorrow is not going to be pretty. With everything getting cancelled and oil dropping over 20% I'll probably be purchasing some SDS.

Great post BTW. 

Oil is not having a good weekend lol.

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New York (CNN Business)Oil prices suffered an historic collapse late Sunday after Saudi Arabia shocked the market by launching a price war against onetime ally Russia.

US oil prices crashed as much as 27% to a four-year low of $30 a barrel as traders brace for Saudi Arabia to flood the market with crude in a bid to recapture market share.
Crude was recently trading down 22% to $32 a barrel. Brent crude, the global benchmark, also plunged 22% to $35 a barrel. Both oil contracts are on track for their worst day since 1991, according to Refinitiv.
The turmoil comes after the implosion of the oil alliance between OPEC and Russia on Friday.
 
Russia refused to go along with OPEC's efforts to rescue the coronavirus-battered oil market by cutting production. The failure of the Vienna meeting left the oil industry shell-shocked, sparking a 10% plunge in oil prices Friday. Oil prices were already stuck in a bear market because of the coronavirus outbreak that has caused demand for crude to fall sharply.
But then Saudi Arabia escalated the situation further over the weekend. The kingdom slashed its April official selling prices by $6 to $8, according to analysts, in a bid to retake market share and heap pressure on Russia.
"The signal is Saudi Arabia is looking to open the spigots and fight for market share," said Matt Smith, director of commodity research at ClipperData. "Saudi is rolling up its sleeves for a price war."
The biggest one-day percentage drop for US oil prices this century occurred in September 2001 when they plunged 15%, according to Refinitiv statistics that go back to 2000.
 
Analysts said that Russia's refusal to cut production amounted to a slap to US shale oil producers, many of which need higher oil prices to survive.
"Russia has been dropping hints that the real target is the US shale oil producers, because it is fed up with cutting output and just leaving them with space," analysts at energy consulting firm FGE wrote in a note to clients Sunday. "Such an attack may be doomed to failure unless prices remain low for a long time."
The 2014-2016 oil crash caused dozens of oil and gas companies to file for bankruptcy and hundreds of thousands of layoffs. However, the US shale industry emerged from that period stronger and the United States would eventually become the world's leading oil producer.
"The perils of playing a game of brinksmanship with Vladimir Putin were proven in dramatic fashion," Helima Croft, head of global commodity strategy at RBC Capital Markets, wrote in a Friday note to clients. "It is hard to see how the relationship can easily be put back on a solid footing."

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Hopefully gas is soon under $2 a gallon here.

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39 minutes ago, Maxman said:

Oil is not having a good weekend lol.

Not something to LOL when the market will follow suit. This could be the biggest one day oil price decline in almost three decades....not good.

XOM has already announced in my state that they are cutting production in the Permian basin.

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24 minutes ago, RobR said:

Not something to LOL when the market will follow suit. This could be the biggest one day oil price decline in almost three decades....not good.

XOM has already announced in my state that they are cutting production in the Permian basin.

The market can tank, as long as I have my health I can laugh at oil.

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Still sitting on some SDS as a good hedge against what's going on.  Certainly not enough to mitigate losses but it takes some of the sting out of watching everything else go down.  Starting to sell some of this before the market closes as it's up 12% today.

 

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Novice question..  I have my 401k in a set it and forget situation as I still have at least 20 more years before retirement.  I had a buddy who worked at Scott Trade set me up a long time ago and I don't really mess with it..  It's done well the last 10 or so years (I know everything has).

That said I just opened a roth IRA and put the max contribution in..  should I be looking at good performing mutual funds and just dump like 60% in something domestic and 40% in something overseas?

I'm not interested in gambling with individual stocks as that's not anything I've ever truly researched...  My understanding is getting good at playing the stocks is sort of a job in itself and I don't have the time nor inclination.

don't care about short term as it will likely sit there for 20 years.  just wondered if it was as easy as using the tools fidelity has available on their site and picking a 4 star or above rated fund with low fees and a good history of returns.

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3 hours ago, Pac said:

Novice question..  I have my 401k in a set it and forget situation as I still have at least 20 more years before retirement.  I had a buddy who worked at Scott Trade set me up a long time ago and I don't really mess with it..  It's done well the last 10 or so years (I know everything has).

That said I just opened a roth IRA and put the max contribution in..  should I be looking at good performing mutual funds and just dump like 60% in something domestic and 40% in something overseas?

I'm not interested in gambling with individual stocks as that's not anything I've ever truly researched...  My understanding is getting good at playing the stocks is sort of a job in itself and I don't have the time nor inclination.

don't care about short term as it will likely sit there for 20 years.  just wondered if it was as easy as using the tools fidelity has available on their site and picking a 4 star or above rated fund with low fees and a good history of returns.

I am a CFP, do this for a living. I would advise you to read the book titled Enough by John Bogle.  Read the four pillars of investing by Bob Bernstein, a little more complex but easy civilian reading.  I am 58 fairly well off from the market and if I could do it all again... I’d put all my money in the Vanguard Total market  fund or ETF and leave it until I was 5 years from retiring.   Then I’d reset.  Read David Swenson as well, manager of the Yale endowment. those 3 books , if read, would make you better educated than 90 percent. 

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9 hours ago, Maxman said:

Trading halted, ouch.

Scary stuff but in 5 years I believe we will be almost 50 percent higher than today. 

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1 hour ago, southparkcpa said:

Scary stuff but in 5 years I believe we will be almost 50 percent higher than today. 

That would be great, I don't know enough to comment if that is true but I hope so. I saw what you said in the other post and I am an index fund believer.

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Here, Alberta is getting just destroyed due to oil cratering.  Our economy is almost totally based on the the oil business and our provincial governments have done nothing to diversify over the last 50 years.

Our newly elected govt basically doubles and tripped down on the oil industry while cutting every thing else under the sun.

We are seriously f'cked.

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9 hours ago, Beerfish said:

Here, Alberta is getting just destroyed due to oil cratering.  Our economy is almost totally based on the the oil business and our provincial governments have done nothing to diversify over the last 50 years.

Our newly elected govt basically doubles and tripped down on the oil industry while cutting every thing else under the sun.

We are seriously f'cked.

I'm actually looking for a summer home in Kelowna.  I suspect this might bring the cost of housing down even though rates are cratering?  

We have done the same thing in the USA.  We have been drilling like crazy with no regulation and the industry is loaded with high debt players.  If the Russians and Saudi's continue their oil war the US oil patch is going to go through massive bankruptcies and layoffs.  

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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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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.
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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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.

Sent from my Pixel 2 XL using Tapatalk
 

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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On 3/9/2020 at 11:32 PM, Beerfish said:

Here, Alberta is getting just destroyed due to oil cratering.  Our economy is almost totally based on the the oil business and our provincial governments have done nothing to diversify over the last 50 years.

Our newly elected govt basically doubles and tripped down on the oil industry while cutting every thing else under the sun.

We are seriously f'cked.

Happened to Texas in the 80s.   That sucks.

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On 3/5/2020 at 9:37 PM, batman10023 said:

Be careful with which airline stock.  Lots of them have debt that are high.  I own delta but sold some in middle of feb.  wish I sold it all. 

What are your thoughts on cruise lines?  Trading so low right now - and I can't imagine cruises just going away.  Seems like you could at least double up in 6-months to a year.

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Starting to close out some short positions and sell SDS which has done really well as a hedge the past week or so.  Probably will still go lower but the palpable sense of panic in the markets feels like we may pause at some point or bounce a little bit.  Who knows, but I'm going to book some gains on some shorts.  Not buying long yet though.....although it's a little tempting.

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Starting to close out some short positions and sell SDS which has done really well as a hedge the past week or so.  Probably will still go lower but the palpable sense of panic in the markets feels like we may pause at some point or bounce a little bit.  Who knows, but I'm going to book some gains on some shorts.  Not buying long yet though.....although it's a little tempting.
I'm.gonna double down soon

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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.
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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9 hours ago, Kleckineau said:

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.

This is great advice.  Learn lessons from everything.  This is truly a time when a good asset allocation strategy and a balanced portfolio can help you....There's a reason people have 70/30, 60/40, 50/50 ratios of stocks to bonds/cash at different stages of our lives.  It's not fun to watch but if you have a long time horizon (retiring in more than 10 or 20 years) then these days, no matter how frightful, could be looked back upon as a good buying opportunity.

If you are dollar-cost-averaging into stocks in a 401(k) every two weeks then you are buying lower these days.  Have a plan and try to stick with it.  It's hard, but close your eyes and don't worry about money you weren't going to touch for a couple decades anyway.

Like you, @Kleckineau, I learned some ways to "hedge" myself over the years, particularly during the 2009-2011 financial crisis.  I owned stocks in companies I loved with strong balance sheets and great growth prospects.  I didn't really want to sell them, although I did a little.  What I mostly did instead was to buy some Puts (options that allow you to sell things at a set price in a certain period of time) and buy some ETFs that perform inverse to the market like SDS which are very liquid and easy to trade in and out of like a stock.  Trust me....it doesn't mitigate losses like we're seeing this week but if used appropriately these things definitely take the sting out of the downturn a little.  Ex. I see a sea of red across 10 stocks I own as they're down 4%, 6%, 7%, etc. but there's my short...up about 19.53% today.  It's kind of like whipped cream on a sh!t sandwich.

Stay diversified fellas.

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This is great advice.  Learn lessons from everything.  This is truly a time when a good asset allocation strategy and a balanced portfolio can help you....There's a reason people have 70/30, 60/40, 50/50 ratios of stocks to bonds/cash at different stages of our lives.  It's not fun to watch but if you have a long time horizon (retiring in more than 10 or 20 years) then these days, no matter how frightful, could be looked back upon as a good buying opportunity.
If you are dollar-cost-averaging into stocks in a 401(k) every two weeks then you are buying lower these days.  Have a plan and try to stick with it.  It's hard, but close your eyes and don't worry about money you weren't going to touch for a couple decades anyway.
Like you, [mention=7251]Kleckineau[/mention], I learned some ways to "hedge" myself over the years, particularly during the 2009-2011 financial crisis.  I owned stocks in companies I loved with strong balance sheets and great growth prospects.  I didn't really want to sell them, although I did a little.  What I mostly did instead was to buy some Puts (options that allow you to sell things at a set price in a certain period of time) and buy some ETFs that perform inverse to the market like SDS which are very liquid and easy to trade in and out of like a stock.  Trust me....it doesn't mitigate losses like we're seeing this week but if used appropriately these things definitely take the sting out of the downturn a little.  Ex. I see a sea of red across 10 stocks I own as they're down 4%, 6%, 7%, etc. but there's my short...up about 19.53% today.  It's kind of like whipped cream on a sh!t sandwich.
Stay diversified fellas.
I wish I had the knowledge to play options ... I'm strictly long term in my self managed account ... But diversified accross 401k, IRAs, CDs and cash

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