(11-20-2020, 12:44 PM)vbin Wrote: Jeffrey Gundlach advocating that equities will trade at single PE. It can happen In a month, 6 month, 18,24. But definitely not taking another decade. Treasuries markets are dead right now( make sense low interest rates). A lot more bbb to junk downgrades coming. Lot more deliquencies, shutdowns, business closures. Advocating for not to put more than 25% in equities. I am still ~40% cash.You should copy your post over to the Covid Recession thread. Our opinions are diverse and I find value in the debate. I type too much lol but I do enjoy NOT being agreed with. I don't need any cheerleaders. It gets expensive.
Corona coming back in bigger waves.
News papers reporting Trump pushing for coup.
WHO says vaccine not enough.
S&P PE is pretty high.
Markets not budging.
How does this makes sense?
I love to watch Gundlach interviews. He is truly a bond guru and has the bucks to prove it. But.............. if you listened to him you'll never get back all the equity money you left on the table for 10 years.
Liquidity, near zero rates and a renewed interest in investing by young people can keep the music playing a lot longer.
I am too cashy most of the time now, but the reason is because I was 95% IN the market for 30 years. Now I could get along with a 3-4% overall total port return just fine forever. Everything you typed about the current market is valid, but 40% is too much cash for a guy your age and current bond yields. Remember when Mike and I were chatting about putting some of our excess cash in way out of the money puts in blue chip stocks. I do that when we get a decent dip in the market. KO at 45, sell a put in the 30s. If you get near the strike, things went really bad and you can likely flip the put into something with more growth potential than KO. Personally I don't see a big market dip n 2020. The market won't panic IMO. We should get a pullback at some point though. They find a way to happen. Even very defensive stocks will do better than cash if you take advantage of dips. You just can't pay too much and there is the rub 10 months a year. Don't fall too deep in love with any one sector. You know all that.