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Just now, 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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Not sure if it's 1 year, 3 years, 5 years....but there will definitely be some pent up demand for things that people didn't do while we're all heading into lockdown mode for a couple weeks/months.  Certain industries can survive because if someone is putting off that iPhone purchase for a few months I think they'll still eventually make that purchase.  But other industries are tougher....If you stop going out to dinner for two months you're not going to suddenly go out and start eating 2 dinners a night in May.  I think some industries will sustain short term damage and bounce back....others may enter a survival of the fittest mode and the upcoming recession, no matter how short or long, will cause some weak companies to fail.

Longer term changes are more interesting.  Does this accelerate a return of American manufacturing?  Do we really start to distance ourselves from China as a supply chain partner?  Are there longterm implications for the travel industry again (remember, we've had TSA and 9/11 security fees added to ticket prices since 2001...and they're not going away).  Will airlines, hotels, etc. incur more cleaning and sanitation costs, will travelers only come back to 50%....70% of where we were before?  Will companies, after having workers telecommute for 2 months suddenly say, "This is a longterm solution.  We can reduce floor space and don't need to lease as many buildings as we did previously"?

I don't know.  I'm trying to think of the short term (who survives, who thrives) and the long term structural changes we'll see.

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I think what Reddit is doing to wall street is awesome.

My grandmother bought me a savings bond when I was kid so I pocketed $25 in 1993.  That was good.

I can't think of a single reason to buy this week. We're nowhere near knowing where the floor is here. 

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4 minutes ago, Butterfield said:

Dow was down -9.99% today, 4th worst day by percentage points ever.  

When we see real panic selling across the board and true "capitulation"....that might signal a bottom.  Today was starting to feel like that.

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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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6 hours ago, jetstream23 said:

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 wouldn't close those positions yet because I think we're going much lower, at least another 10-15%. I've never seen so much panic nationwide as this in my life and it's getting worse by the minute. This is affecting every business from the largest to the smallest and it's not like we can turn the light switch on again once it clears.

I'll probably buy some out of the money calls with a two to three month horizon once I think we stabilize. It's impossible to time but not so hard for an educated guess, which is basically what all of us are doing now.

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56 minutes ago, RobR said:

I wouldn't close those positions yet because I think we're going much lower, at least another 10-15%. I've never seen so much panic nationwide as this in my life and it's getting worse by the minute. This is affecting every business from the largest to the smallest and it's not like we can turn the light switch on again once it clears.

I'll probably buy some out of the money calls with a two to three month horizon once I think we stabilize. It's impossible to time but not so hard for an educated guess, which is basically what all of us are doing now.

Not closing all of them, but just like averaging into things I like to average out of them as well.  Got rid of a 25% of my SDS today.  We go down another 5-10% in the market I'll get rid of some more, but I hear you....The panic is palpable and we haven't had the big whoosh quite yet!  There are some troubling longterm support levels that could be tested from a technical standpoint...and some of those date back to financial crisis levels.

 

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10 hours ago, TeddEY said:

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.

Probably not, but perhaps a cruise line with a weak balance sheet isn't quite prepared for a longterm downturn and has to declare bankruptcy. Those are the kinds of things that happen in recessions and downturns....the tree is shaken and the weakest apples fall, leaving the strong, healthy ones behind.  I would have never imagined Merrill Lynch getting sold for pennies on the dollar...but it happened.

In terms of airlines, hotels, cruise companies they are certainly compelling....but the old adage of not trying to "catch a falling knife" applies.  They could go lower.  Some could disappear.  If you have some pure risk capital to put to work and a long time horizon then those kinds of things look pretty appetizing.

I'm actually stupid enough to now be looking at the XLF....a basket of financials with some beaten down blue chip names in there.  Remember, banks and financials have been some the most regulated and scrutinized companies since 2010.  Dodd-Frank, capital tests, stress testing against recession scenarios, etc.  Financials might be a place to dip a toe soon.

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I picked up Disney today. Hesitated on both CVS and Costco, and shouldn’t have.

I don’t do much in the stock market. And I wanted to give the Robinhood app a test drive,. Has anybody else use this app before? I have a couple questions.

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4 hours ago, RutgersJetFan said:

I went all in on Disney and Microsoft this AM and drinks are on me tonight everyone. Except for people I don't like. You know who you are.

I wouldn't pump my chest up yet.....just saying. 

 

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4 minutes ago, RobR said:

Looks like tomorrow is going to be another bloodbath on the market. I picked up a bit of SPXO so I'm ready for it.

I hope @RutgersJetFan didn't make it rain too hard last friday. 

Yeah....I'm not as well positioned for tomorrow as I'd like to be.  Still have some SDS but closed about half of it last week.

We're limit down on the Futures right now.  I think tomorrow could turn out to be absolutely horrendous....like halting trading twice kind of horrendous.  But who the hell knows?!?!?

At the extremes there will be people putting on an "end of the world" type trade and others buying on the gap down and thinking it's the opportunity of the decade.

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18 minutes ago, jetstream23 said:

We're limit down on the Futures right now.  I think tomorrow could turn out to be absolutely horrendous....like halting trading twice kind of horrendous.  But who the hell knows?!?!?

Unfortunately, I tend to agree. 

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1 hour ago, jetstream23 said:

Yeah....I'm not as well positioned for tomorrow as I'd like to be.  Still have some SDS but closed about half of it last week.

We're limit down on the Futures right now.  I think tomorrow could turn out to be absolutely horrendous....like halting trading twice kind of horrendous.  But who the hell knows?!?!?

At the extremes there will be people putting on an "end of the world" type trade and others buying on the gap down and thinking it's the opportunity of the decade.

I think I'm getting in after tomorrows blood bath..  but part me thinks this could go lower if economic restrictions tighten 

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47 minutes ago, CTM said:

I think I'm getting in after tomorrows blood bath..  but part me thinks this could go lower if economic restrictions tighten 

Time horizon is important.  In something like an IRA or 401(k) where money isn't needed, in my case, for another 15 years it will look very appetizing to add quality companies tomorrow......and then just logout and not look at it for a year or two. lol

 

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2 hours ago, RobR said:

Unfortunately, I tend to agree. 

Reminder....

Quote

The rules, which apply to regular trading hours only, are as follows: Level 1: If the S&P 500 drops 7%, trading will pause for 15 minutes. Level 2: If the S&P 500 declines 13%, trading will again pause for 15 minutes if the drop occurs on or before 3:25 p.m. ET. There will be no halt if the drop happens after that.

 

I think the bet tomorrow should be on whether we get halted once or twice.

The market will also look to big guys like Warren Buffett for potential reassurance in times like this.  He was a voice of calm and reason in 2008-2009.  If he or a Carl Icahn or someone starts stepping in and saying things like we're artificially low because of a panic then it will cause a bounce.

Buffett probably can't believe his eyes and that he's going to get another chance to snap up some great companies on the cheap.  He might wait for some near bankruptcies though in the energy sector or travel industries like airlines, cruise lines, etc.

 

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Grabbed a few chunks of OXY pretty cheaply over a couple days last week. The potential oil price war and buffoon CEO aside - Icahn bought in and may battle an already vested Buffett for control. Entertaining at least.

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Okay.  What do we think?

Did that feel like a bit of a flush....maybe a temporary bottom at least?

Dow down about 3,000 points and this follows some pretty ominous news where I get the sense most of the country and Wall Street now sees the real possibility of essentially shutting down everything (restaurants, domestic flights, all economic activity except for essential shopping, etc.) for a period of several weeks or months.

Is that news now baked into the market?

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17 minutes ago, Kleckineau said:

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.

 

 

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

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36 minutes ago, jetstream23 said:

Is that news now baked into the market?

You would tend to think so but my biggest worry is the news will keep getting worse and we are already at a point of irreparable harm. Think of all of the people that are not only going to lose their jobs but many people will lose their businesses. I'm glad I'm not involved in the restaurant industry because a ton of them are going to end up closing their shops. 

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56 minutes ago, jetstream23 said:

Okay.  What do we think?

Did that feel like a bit of a flush....maybe a temporary bottom at least?

Dow down about 3,000 points and this follows some pretty ominous news where I get the sense most of the country and Wall Street now sees the real possibility of essentially shutting down everything (restaurants, domestic flights, all economic activity except for essential shopping, etc.) for a period of several weeks or months.

Is that news now baked into the market?

I dunno dude, many companies are heavily leveraged and cash poor, not equipped to deal with sizable reduction of cash flow. Sales down, AR not going to come in. This feels more like the beginning of the end than the end. FWIW though, I have thought our economy was a house of cards for a decade and lost a ton of money sitting on sidelines waiting for the collapse

Too much debt everywhere 

https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2020-03-11/boeing-is-said-to-plan-full-drawdown-of-13-825-billion-loan

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34 minutes ago, RobR said:

You would tend to think so but my biggest worry is the news will keep getting worse and we are already at a point of irreparable harm. Think of all of the people that are not only going to lose their jobs but many people will lose their businesses. I'm glad I'm not involved in the restaurant industry because a ton of them are going to end up closing their shops. 

Their best moves are to reduce staff a little and reduce pay, shifting to Drive Thru or delivery models temporarily where possible.  People still need to eat....it just needs to be delivered differently.

But the biggest problem, as always, is that most Americans and small businesses never save for a rainy day.  Things have been so good for so long (10 years) in this country that people and businesses should have fortress balance sheets at this point with decent capital.  Yes, I know that not everyone can do that...I'm not talking about hourly workers, very young adults or others here.  But a restaurant that can't sustain a 50% loss in business over a month while at the same time reducing it's costs and getting certain support like delayed rent payments, etc. probably shouldn't be in business.  And, when the owner drives up in a shiny BMW to put the CLOSED sign on the door that kinda tells you where his priorities were while running his business.

I'm being a little bit of a d!ck here (but just a little) and I'm not talking about those hourly workers and people living paycheck to paycheck who simply don't have the means to avoid this, but we've had almost a decade to plant the seeds of financial well-being and to stuff money under mattresses.  You're gambling with your future if you chose cars, big screen TVs, vacations to Hawaii and other discretionary spending rather than saving into the Emergency Fund.

Ignoring the virus for a second, typical recessions are actually a good thing.  The business cycle flushing out poorly run businesses every 7-8 years is kinda what's supposed to happen.  It's like when storm blows through town....the weak trees are toppled, the strong ones survive, and then new growth (smarter businesses) sprout up afterwards.  Darwin works in the business world too IMO.

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8 minutes ago, jetstream23 said:

Their best moves are to reduce staff a little and reduce pay, shifting to Drive Thru or delivery models temporarily where possible.  People still need to eat....it just needs to be delivered differently.

But the biggest problem, as always, is that most Americans and small businesses never save for a rainy day.  Things have been so good for so long (10 years) in this country that people and businesses should have fortress balance sheets at this point with decent capital.  Yes, I know that not everyone can do that...I'm not talking about hourly workers, very young adults or others here.  But a restaurant that can't sustain a 50% loss in business over a month while at the same time reducing it's costs and getting certain support like delayed rent payments, etc. probably shouldn't be in business.  And, when the owner drives up in a shiny BMW to put the CLOSED sign on the door that kinda tells you where his priorities were while running his business.

I'm being a little bit of a d!ck here (but just a little) and I'm not talking about those hourly workers and people living paycheck to paycheck who simply don't have the means to avoid this, but we've had almost a decade to plant the seeds of financial well-being and to stuff money under mattresses.  You're gambling with your future if you chose cars, big screen TVs, vacations to Hawaii and other discretionary spending rather than saving into the Emergency Fund.

Ignoring the virus for a second, typical recessions are actually a good thing.  The business cycle flushing out poorly run businesses every 7-8 years is kinda what's supposed to happen.  It's like when storm blows through town....the weak trees are toppled, the strong ones survive, and then new growth (smarter businesses) sprout up afterwards.  Darwin works in the business world too IMO.

What about the people that recently poured their life savings into opening a new restaurant or business for that matter? Seems like you're leaving all of them out.

The perfect example is a middle eastern restaurant that just opened by my house. I've talked to the owner before and he told me the long hours and how much of his savings he put into opening the place and it was a success story up until last week. I stopped in for a take out order and he was already contemplating shutting the doors. This wasn't some guy who was spending lavishly, he's a man who was trying to make his dream come true. That is the type of person I was talking about. 

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Jet stream you are a good read for stocks and football and I’ve been reading the board for a few months.  I got out of the market in August at 25,500 and have watched the ridiculousness since.  I pulled out 300k and am contemplating getting back in and I’m 46.  Any stocks or ETF suggestions if you were me since I’d be getting in low again.  What would you do if you sat out for 7 months?  I have been watching Shopify like a hawk for a year smh.

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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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4 hours ago, RobR said:

What about the people that recently poured their life savings into opening a new restaurant or business for that matter? Seems like you're leaving all of them out.

The perfect example is a middle eastern restaurant that just opened by my house. I've talked to the owner before and he told me the long hours and how much of his savings he put into opening the place and it was a success story up until last week. I stopped in for a take out order and he was already contemplating shutting the doors. This wasn't some guy who was spending lavishly, he's a man who was trying to make his dream come true. That is the type of person I was talking about. 

I hear you, it’s painful. Unfortunately, you are right and there are a lot of people in that situation. People who have made significant investments recently, whether it is starting a business or venturing into the stock market will be hurt the most. We need to see a support/stimulus package from the government that helps small businesses.

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