Fiddling about with stocks, funds, etc. No conspiracy theories, please.

589 posts in this topic

On 3/23/2020, 7:27:36, mtbiking said:


since I almost only own US and world index Fonds I only need companies to exist in 10 to 15 years. Which ones is irrelevant.

 

The problem i see is that this is not a liquidity crisis. The central banks and Governments are assuming that this is a liquidity crisis when it is not. Social distancing is going to be around for a long time yet and if companies have no revenue, then it won`t make much difference how much liquidity they make available.  Not sure why the markets are rising so fast.

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1 hour ago, RenegadeFurther said:

 

The problem i see is that this is not a liquidity crisis. The central banks and Governments are assuming that this is a liquidity crisis when it is not. Social distancing is going to be around for a long time yet and if companies have no revenue, then it won`t make much difference how much liquidity they make available.  Not sure why the markets are rising so fast.


The crisis will pass and we’re a social species who loves to travel. We’ll return to the mean. And even if that takes longer than expected other businesses will flourish: communications, Virtual reality (big one), medical, logistics, etc. that’s the beauty of index investing: it’s self correcting. Old concepts and companies die off and are replaced by new. Markets are rising fast because markets are emotion and algorithm driven manic/compulsive-obsessive beasts. I prefer to ignore short term fluctuations.

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27 minutes ago, mtbiking said:


The crisis will pass and we’re a social species who loves to travel. We’ll return to the mean. 

 

A system built on more and more debt was never going to cope with a shock like this

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This is not going away in the short term !, I think the lock down will work and things can stabilize in about 1 or 2 months time, but then the virus will come back again unfortunately and  lock down will come again and this cycle will go on, until a vaccine comes along. This is one side to it, people dying etc.

 

But this going to cost an awful lot. When investors see the real cost of this shutdown of the economy - there could well be another big sell off - big time.

Government is going to have to bail out the Airline industry and affected parts like Airbus and Boeing, but there are so many other areas that need help, and the money that will be need is immense, this could break some countries. 

 

Baron Rothschild said "the time to buy is when there's blood in the streets.", what we are seeing at the moment is the closest thing I have seen to that

 

Must admit I cannot make my mind up, are we close to the bottom or we are going to see another big fall, in perhaps 3 or 4 months or so.

I have bought a lot so far, on the way down and at this semi-stable level - but am a bit scared to put more in, because countries maybe not be able to save their industries in the end.

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The reason the likes of Boeing need bailing out in the U.S. is because they spent the billions that they got with Trump's tax cut on reinvesting in their own stock instead of saving for a rainy day or reinvesting in their businesses per say to create more jobs.  I hear talk about forbidding them to do this with the bailout money but I haven't seen it in the bill itself.

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interesting that its not in the bill as i all heard it was going to be

 

wish, I had bought more boeing shares as they went up 30% today, any company that is effectively backed by the government seems like a good investment - even if it takes the market 5 years to recover

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1 hour ago, yesterday said:

interesting that its not in the bill as i all heard it was going to be

 

wish, I had bought more boeing shares as they went up 30% today, any company that is effectively backed by the government seems like a good investment - even if it takes the market 5 years to recover

 

It is like a pack of cards. So the Government offered boeing a loan of a few billion. Now if people don`t want to buy planes what good will the loan do?

 

This is not a liquidity crisis like in 2008. This is a solvency crisis, which is much worse.

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1 hour ago, RenegadeFurther said:

 

It is like a pack of cards. So the Government offered being a loan of a few billion. Now even people don`t want to buy planes what good will the loan do?

 

This is not a liquidity crisis like in 2008. This is a solvency crisis, which is much worse.

 

yes, I agree, playing on the stock market is kinda like a pack of cards,

- sure you can analysis the company and the general market

- sure you can count cards

 

but at the end of the day, you have to decide if you accept the risk or not

 

I think the governments will ball out Airbus and Boeing, they just have too many jobs dependent on them, like the banks and they make a lot of money - just like the banks, once carona is defeated.

One way or another, the airline business will come back, and they will order more aeroplanes, its just how long to wait - I think between 2 and 5 years.

of course I can always be wrong, so never put more in than you can afford to loose - the same as playing cards for money.

 

buying shares I think is more risky than funds, but you can make more/lose money out of it

 

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12 hours ago, yesterday said:

I think the governments will ball out Airbus and Boeing,

You may well be right. That doesn´t mean though that they´ll bail out shareholders along the way. They can still be wiped out chapter 11-style and government will become the major shareholder.

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good and valid  point, there are many stocks with reduced values a the moment - spread your money around - spread the risk - never put more money in than your could afford to lose, which is different for everybody

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1 hour ago, yesterday said:

good and valid  point, there are many stocks with reduced values a the moment - spread your money around - spread the risk - never put more money in than your could afford to lose, which is different for everybody

Or buy ETFs, it will do that for you.

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agreed ETF's are a good general investment, but when there large changes in stock prices, like now I prefer individual shares, but there is absolutly nothing wwrong with ETF's

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I closed my position before the Corona Virus panic because I sensed that the panic would have come. Maybe a bit too earlier ( i lost the last part of rally) but I don't regret at all.

Now i am liquid and waiting to enter again. Before starting to build again ETF positions, I was waiting the second part of the crash, the ones that supposedly should occur when the peak/panic will reach USA but it seems this is not going to be the case. 

Any view on this ? Do you think a second bear leg is going to come ?

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It's almost impossible to say. I only have a few ETF's and stocks that are performing well at the moment. Everything else is down. My only fear is one or more of my companies going belly up. Outside of that, I'm just waiting.

 

I will say that I think it will get worse before it gets better and it may take a year or two for things to begin settling.

 

As those who don't invest like to say, "Investing in the markets is a gamble."

 

They're right, btw.

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8 minutes ago, fraufruit said:

As those who don't invest like to say, "Investing in the markets is a gamble."

I will politely disagree.  And part of the problem in my view is that people are always way too attached to their "short run" ups and downs on paper.  I also saw this in the late 80s - mid 90s when we lived in the CA real estate market.  Here is just one take on the subject:

https://www.nytimes.com/2020/04/03/business/stock-market-coronavirus-strategy.html

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Quote

Shift enough money into cash — and hold it in a bank or a conservatively run money market fund — so that you can ride out a market storm without having to make sales under duress.

 

This is my normal MO. Keep enough cash to live from for a few years. Not time to shift anything now.

 

Good article. I just don't agree with changing strategy at this time which means selling and losing a lot of money.

 

In my other post, I was referring to the many people here on TT who don't invest that come around and judge those who do. It's a gamble they say. Of course it is. 

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4 hours ago, fraufruit said:

 

This is my normal MO. Keep enough cash to live from for a few years.

 

 

So any good advice for when the demand picks up again and all that cash they're throwing from helicopters starts working its way into inflation  or the dreaded stagflation?

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6 hours ago, Frantic said:

Any view on this ? Do you think a second bear leg is going to come ?

I think so. Once the current lockdown will be lifted the virus will raise it´s head again and cause disruption for longer (especially in the US) than markets may anticipate. At least that´s my guess.

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