02-10-2020, 12:29 PM
(02-10-2020, 12:21 PM)fenders53 Wrote:(02-10-2020, 11:39 AM)Otter Wrote: Went to 100% Ultrashort Bond Fund allocation in the 401k today (had a small % left in an emerging markets index fund).Well that was kinda sudden Otter! I realize this is not all your earthly possessions by any means, but when did you start trying to totally time the market like this? I truly hope this thread isn't encouraging you to buy a lot of options. If it's a hedge you truly feel the need to do then fine. This thread is titled "conservative" for a reason. That is exactly what NilesMike and I are doing consistently. Everything is calculated risk to reward. There is a reason you don't see us posting straight up option purchases. Do it enough and you will definitely lose in the end. And this is ALL ABOUT the end goal right? I think I can speak for Mike and say we prefer the odds in our favor EVERY trade because we know it works after a hundreds of trades.
Bought 20 SPY MAR 19 2021 305 Puts this morning in the taxable account. SARS resulted in a 10% market dip, and killed fewer people in over a year than 2019-nCoV has in a few short weeks, without any quarantines of major Chinese manufacturing or shipping hubs. WHO confirming reports of virus transmission outside of China by people with no known travel history to China, and that 15% of infected patients contract pneumonia, with 3-5% of all infected requiring ICU-level care. Those statistics, assuming the WHO is accurate, would overwhelm all health systems globally in short order if this goes global (as it appears to be doing). Assuming Chinese official reported numbers of 2.4% death rate are accurate, that's 185,000,000 dead if this goes global (roughly 2.5x the total number killed in WWII).
https://www.cnbc.com/2020/02/10/coronavi...dates.html
I agree the US markets are not showing enough respect for the "Big Flu". I've been mostly sitting on my hands with new money. I'm just trying to not force anything. BTW the ultrashort bond fund is about the best idea I have for parking money. You'll have your moments when it beats up a CD notably, and rarely underperforms a CD much when it's going wrong.
You're here now. If you get a market dip try some covered puts. Best way ever to make some income while you attempt to get forced long at cheaper prices than today. Lesson two is rolling that put forward if it ends up making sense.
It is a substantial bet, but one I can stomach. If I'm right, the returns could be substantial. if I'm wrong, it is annoying, but not the end of the world.