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What Did You Buy Today?
(04-25-2021, 07:10 AM)Otter Wrote: Inflation is also bullish for equities (stagflation is not).

Agreed and while I was contemplating winding down my real estate investments as I near retirement, I have switched to another acquisition phase.

<3% interest, inflation /higher rates somewhere out on that horizon-I AM BUYING RENTALS
I am just hard pressed to be bearish for any lengthy period of time. The modern history of markets is up and to the right over any meaningful period of time. There are times where it outperforms the average, and times where it underperforms, but overall the trajectory is growth. The entire premise of dividend growth investing is rooted in that growth (we are wary of the companies that play financial games to juice the dividend, rather than paying them through increasing earnings).

Capitalism is predicated on a model of economic growth, and has been ridiculously successful at it for centuries. If that breaks down, capitalism fails, and gets replaced with something else. All of this discussion then becomes meaningless. There are a lot of very powerful people who think cash is trash, whose trash cash positions are a small part of their overall holdings, but those positions are multiples of all of our equity portfolios combined. Those people have a vested interest in keeping the growth model going. Everything falling apart doesn't serve their interests.

There will be volatility from time to time, corrections, and bear markets, but those are the exception, and not the rule. The wall of worry is real, and as the market makes new highs for the majority of our investing lifetimes, our ill-equipped ape brains stay focused on the few memorable negative events where CNBC said everyone's hair was on fire and we were all going to end up living in cardboard boxes. Markets are as much applied sociology as they are anything to do with economics. In any event, I can't think of anywhere better to park my money.
To put it another way, if the worst pandemic in a century that caused the worst unemployment since the Great Depression was good for a 30% drop that lasted a quarter until the Fed turned on a firehose of money, what exactly is the catalyst for a bear market when we are looking at the biggest GDP % growth in 35 years, continued accommodative monetary policy from the Fed, and global reopening that will occur in stages (first movers are USA, UK, and Israel based on % of population vaccinated) well into 2022?

10yr yields were spiking because of anticipated economic growth, which should make its way into corporate earnings. I'd be more concerned if 10yr yields were cratering.

Are there individual stocks that I think are overvalued? Yes. TSLA is one, in my opinion. I've sworn off ever buying TSLA Puts again, though, so won't be making any bets there. Do I think the market itself is overvalued a year after the Fed doubled its balance sheet, with treasuries still having negative real yields, as we head into what looks like a multi-year stretch of promising growth numbers? No.
I remember a lot of people discussing how we needed a valuation reset in late 2019, because everything was so ridiculously overvalued. We got one. The supply of dollars went up immensely, lowering the value of dollars, so the market repriced at a higher figure in dollars, despite unemployment briefly topping 20% and the economy closing.

All else being equal, just based off of what the Fed did last year, the S&P 500 should be at about 6,000 just to match where we were in December, 2019.
Wasn't my intent to state the entire market needs to reset although it wouldn't shock me. I AM saying it's time to stop mindlessly buying anything you want because interest rates are low. I've thought that since last fall. Never mind the obvious froth in dozens of reopening stocks with burning balance sheets. The Spec stocks needed reset and it just happened big time. Just how much is too much to pay for soap and paper towel companies that may have 2% growth for years? If you bought Chlorox at a 30+ forward PE you might be waiting 5+ years to break even. The aristocrats are now loaded with stocks that are low yielding and highly unlikely to offer anymore safety than SPY. It's my sign to be a little cautious. I can play Vegas with 5% of the port, but not if the rest is going to pullback 40%.
Is everyone ready for some earnings? Should be a busy week.
Selling Iron Fly in XLU this morning, it actually has good IVR ( a rarity right now)
(04-26-2021, 05:34 AM)fenders53 Wrote: Is everyone ready for some earnings?  Should be a busy week.

Ready!  April has a chance to be my best month yet if the earnings drive big price increases.  (November of last year currently stands as my single best month since I started this a year ago.)
(04-26-2021, 06:44 AM)ken-do-nim Wrote:
(04-26-2021, 05:34 AM)fenders53 Wrote: Is everyone ready for some earnings?  Should be a busy week.

Ready!  April has a chance to be my best month yet if the earnings drive big price increases.  (November of last year currently stands as my single best month since I started this a year ago.)
I predict lumpy.  Some great earnings with a few disappointments in the mix.  World needs to open back up and it can't in selected places right now because Covid is hanging on.  That will effect some industries and spare others.
(04-26-2021, 06:44 AM)ken-do-nim Wrote:
(04-26-2021, 05:34 AM)fenders53 Wrote: Is everyone ready for some earnings?  Should be a busy week.

Ready!  April has a chance to be my best month yet if the earnings drive big price increases.  (November of last year currently stands as my single best month since I started this a year ago.)

Don't get too excited. Greed will get you in trouble  Big Grin

Most stocks are beyond over valued and are priced for perfection. If you don't have cash to buy on on hand to buy hard sips t can get dangerous going forward. Eventually that will be the case. They question is when? I think May we start to drift some. 

I did some selling 5 min ago. I'm 50-50% which is right where I want to be. I'm in a process of buying a shore property in the next 30 days so keeping that cash to buy a home as an investment  Tongue
I could make that claim if a lot of my cash wasn't backing cash secured puts. I try to keep 80% of my port at work when I can. I intend to shop some this week. I need somebody to blow earnings.
(04-26-2021, 11:15 AM)divmenow Wrote:
(04-26-2021, 06:44 AM)ken-do-nim Wrote:
(04-26-2021, 05:34 AM)fenders53 Wrote: Is everyone ready for some earnings?  Should be a busy week.

Ready!  April has a chance to be my best month yet if the earnings drive big price increases.  (November of last year currently stands as my single best month since I started this a year ago.)

Don't get too excited. Greed will get you in trouble  Big Grin

Most stocks are beyond over valued and are priced for perfection. If you don't have cash to buy on on hand to buy hard sips t can get dangerous going forward. Eventually that will be the case. They question is when? I think May we start to drift some. 

I did some selling 5 min ago. I'm 50-50% which is right where I want to be. I'm in a process of buying a shore property in the next 30 days so keeping that cash to buy a home as an investment  Tongue

Greed is good; I learned that from Michael Douglas   Big Grin .  I need to rewatch that movie.

But anyway there's a difference between hope & greed.  Most of the stuff I bought in March is already up ~10% so even if things get choppy from here on out I more or less made my money for the year.  I keep a tight leash on the triples so I'll just drop out of them if they start to sink.

A shore property, how nice!  Make sure it is on high ground.

Btw, all of the principal in my E*Trade account I don't need until I retire (I might use the dividends to supplement my income).  Anything else that comes along like buying cars, home repairs/improvements, college for my daughter, etc. will come out of my company stock. I guess that's why I'm more aggressive than most here with my funds.




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