What Did You Buy Today?

[fenders53]

(04-08-2020, 12:16 PM)Otter Wrote:

(04-08-2020, 12:00 PM)fenders53 Wrote:

(04-08-2020, 11:36 AM)Otter Wrote:

(04-08-2020, 11:29 AM)fenders53 Wrote:

(04-08-2020, 10:59 AM)Otter Wrote: Yes. I have been waiting for more clarity on the "E" side of the P/E equation. That clarity will also end up moving the P.

Edited to add - The "E" information also plays in to most of my other metrics for determining DGI value, like payout ratio, and how realistic Chowder Numbers based on past 5yrs results are likely to be.

This may not be the best plan but I do have a plan.  I nibbled quality all the way down and it was scary, and slowly trimming all the way back up.  I prayed for a bear market bounce but nobody predicted this outcome.  I suspected it would be months before we had any clarity on company financials and that came true.  I do want some earnings guidance, but waiting for the all clear signal will be WAY too late like always.  The market is running on nothing this week.  The last bounce was understandable.  There were stocks selling for pre-BK pricing (Wendy's at sub $8 when they are not shut down comes to mind).  This run is irrational.  The momentum algo machines have taken over lol.  The market will work it out when they get some facts.  There will be some downgrades when the numbers come to light.

Still holding a few SPY puts just in case.  I am four years from needing some of this port and another 30% haircut would not be welcomed.  Anything I share here should be read in that context.  When I was 30 I invested with my hair on fire.  Painful but it worked out.

Even if you waited for the all-clear and technical end of the last recession (June 2009, actual reported figures confirming available a few months later), you did okay in the decade afterwards. 

My initial buys after earnings come out will be companies with pristine balance sheets that don't have earnings deteriorating to a point that points to skyrocketing debt.

Stuff lower down the quality food chain can wait for the all-clear. I won't catch the bottom, but debt is dynamite with a lit fuse at this point.

I understand your fear of the current uncertainties and you can make a case.  I can also make a case I've been rewarded for looking a forward and taking a chance by averaging back into the fear.  I'll respectfully disagree on waiting for a vibrant economy.  A considerable portion of the rebound happens while the sky is gray, not blue.  You are younger than I am.  That affects my decisions.  

I am receptive to being disagreed with.  I watch the too bullish fools on S.A. high five themselves into crushing losses in certain sectors.  Oil, REITs.  I doubt I need to explain that further.  I come here everyday hoping somebody will disagree with me and cause me to research something I may have underestimated.  

Excessive fear, greed, and a closed mind are the greatest risk to my net worth.  I believe that strongly.

I wasn't talking about a vibrant economy. I remember 2008 and 2009 vividly. Even when the technical data showed an end to the recession, no one thought the economy was vibrant in 2009. The U-shaped recovery took a long time, and people and analysts were generally pessimistic into 2011, as the market continued to climb a wall of worry.

My strategy is to start buying the highest-quality companies with pristine balance sheets after upcoming earnings. Even if this is equivalent to purchasing in October/November 2008, those picks should still do well within five years (and I will average into them if they continue to decline).

The lower quality equities with worrying debt/equity levels can wait for my purchases until there are technical indicators that a recession has ended and their earnings are stable. Even missing the bottom should be fine, on those. It's a fair risk trade-off given those companies' historically poor allocation of capital

I will again disagree because it's much more productive than posting up our our latest successful trades.  I have some awesome recent short term trades to share.  I've had an amazing few weeks .  Who really cares?  I do because I got caught with some stocks with awesome balance sheets that suddenly vaporized with zero revenues now and managed to fix it some.  Your list of companies with pristine balance sheets is going to be very short and most have already run 20% and likely near fair value because they are already obvious.   Waiting has a cost.  You already missed half the run.  I missed some runs myself on stocks I wanted to own.   Now we wait and hope for the market to give us another chance.  This timing thing is always hard.  Buffet and Lynch warned us decades ago.  Balancing fear and greed is hard, very hard.  You called the dip big-time, now don't mess up the re-entry being too scared.  It's hard to get both parts of the trade right.  I sense fear right now.  I too hope for a big dip soon.  We'll see what actually happens.  We may or may not have seen the market bottom.   We definitely haven't seen the economy bottom.    

Soon I gotta go play door guard at HD and deal with entitled idiots that "need" lawn care products and don't want to wait five minutes while we control the customers in the store.  I'll read your reply when I get a break.  I always appreciate your insight.