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What Did You Buy Today?
(04-23-2021, 12:49 PM)divmenow Wrote:
(04-23-2021, 12:18 PM)crimsonghost747 Wrote: He is addicted. He just can't stop. Big Grin

This is so true  Big Grin But I always add on significant dips from my top 10 holdings. Even if you consider a $10 dip off the highs ?

And I still have my cash. Just not adding to any new positions unless they fall off the cliff. KMB on list but needs to go lower.
I need a pretty good dip to add more than a few shares.  It's a lot easier after a 10% market pull back because some good stocks will be down 15%+ and that is a solid year in normal times. Trying not to look at every year like 2020.  I may never see another year like that again.

I watch a lot of Fast Graphs videos.  Chuck has 100 examples of lost decades caused by buying when blue chips are trading way above historical valuation and that will happen again.  We are set up for more of that now.
(04-24-2021, 05:17 AM)fenders53 Wrote:
(04-23-2021, 12:49 PM)divmenow Wrote:
(04-23-2021, 12:18 PM)crimsonghost747 Wrote: He is addicted. He just can't stop. Big Grin

This is so true  Big Grin But I always add on significant dips from my top 10 holdings. Even if you consider a $10 dip off the highs ?

And I still have my cash. Just not adding to any new positions unless they fall off the cliff. KMB on list but needs to go lower.
I need a pretty good dip to add more than a few shares.  It's a lot easier after a 10% market pull back because some good stocks will be down 15%+ and that is a solid year in normal times. Trying not to look at every year like 2020.  I may never see another year like that again.

I watch a lot of Fast Graphs videos.  Chuck has 100 examples of lost decades caused by buying when blue chips are trading way above historical valuation and that will happen again.  We are set up for more of that now.

Those lost decades also involved interest rates returning to historical norms. Other than the Fed, large banks that participate in our fractional reserve banking system, and bond funds required to do so by their prospectuses, no one is buying bonds at these yields.

The “risk-free” rate of return is likely to remain effectively zero for a while. I doubt it rises much until at least the middle of the decade. The economy won’t be able to support it until then. The mid-2020s are essentially the mid-1980s from a demographic perspective. At that point, a solid % of Millennials will be in their 40s and peak earning years, just as Boomers were hitting that point in the mid-80s. 

The small comparative size of Gen X has contributed to an economic lull. The past two decades have seen Boomers enter retirement (where people tend to spend/consume less), with not enough peak-earnings consumers to replace them. That dynamic is about to change in a big way.
(04-23-2021, 01:22 PM)EricL Wrote:
(04-23-2021, 01:03 PM)ken-do-nim Wrote: I'm incapable of sitting on cash.  Even if the markets are choppy, I still feel it's better going into AT&T then sitting in my bank account.  So, unlike the rest of you, I can't jump every time there is a dip.  I have to wait for my next cash infusion.  Probably May when I sell some company stock assuming the trading window opens then.

I'm the same way. Anytime cash gets over $200 I'm shopping!

(04-24-2021, 11:29 AM)Otter Wrote:
(04-24-2021, 05:17 AM)fenders53 Wrote:
(04-23-2021, 12:49 PM)divmenow Wrote:
(04-23-2021, 12:18 PM)crimsonghost747 Wrote: He is addicted. He just can't stop. Big Grin

This is so true  Big Grin But I always add on significant dips from my top 10 holdings. Even if you consider a $10 dip off the highs ?

And I still have my cash. Just not adding to any new positions unless they fall off the cliff. KMB on list but needs to go lower.
I need a pretty good dip to add more than a few shares.  It's a lot easier after a 10% market pull back because some good stocks will be down 15%+ and that is a solid year in normal times. Trying not to look at every year like 2020.  I may never see another year like that again.

I watch a lot of Fast Graphs videos.  Chuck has 100 examples of lost decades caused by buying when blue chips are trading way above historical valuation and that will happen again.  We are set up for more of that now.

Those lost decades also involved interest rates returning to historical norms. Other than the Fed, large banks that participate in our fractional reserve banking system, and bond funds required to do so by their prospectuses, no one is buying bonds at these yields.

The “risk-free” rate of return is likely to remain effectively zero for a while. I doubt it rises much until at least the middle of the decade. The economy won’t be able to support it until then. The mid-2020s are essentially the mid-1980s from a demographic perspective. At that point, a solid % of Millennials will be in their 40s and peak earning years, just as Boomers were hitting that point in the mid-80s. 

The small comparative size of Gen X has contributed to an economic lull. The past two decades have seen Boomers enter retirement (where people tend to spend/consume less), with not enough peak-earnings consumers to replace them. That dynamic is about to change in a big way.
Type that as many times as you care to but I'm just not hearing it when we got stocks at 150% historical PE.  Fast and sustained growth can get you out of a bad buy if you are holding it long-term.  The majority of my port will be reasonably valued and I'm confident that works out in the end.  We'll revisit this in two years.  I'll be a little careful in the meantime as that is working out fine.  I wasn't even aware a ton of stocks are down 50% the past few months.
(04-24-2021, 03:55 PM)fenders53 Wrote:
(04-23-2021, 01:22 PM)EricL Wrote:
(04-23-2021, 01:03 PM)ken-do-nim Wrote: I'm incapable of sitting on cash.  Even if the markets are choppy, I still feel it's better going into AT&T then sitting in my bank account.  So, unlike the rest of you, I can't jump every time there is a dip.  I have to wait for my next cash infusion.  Probably May when I sell some company stock assuming the trading window opens then.

I'm the same way. Anytime cash gets over $200 I'm shopping!

(04-24-2021, 11:29 AM)Otter Wrote:
(04-24-2021, 05:17 AM)fenders53 Wrote:
(04-23-2021, 12:49 PM)divmenow Wrote:
(04-23-2021, 12:18 PM)crimsonghost747 Wrote: He is addicted. He just can't stop. Big Grin

This is so true  Big Grin But I always add on significant dips from my top 10 holdings. Even if you consider a $10 dip off the highs ?

And I still have my cash. Just not adding to any new positions unless they fall off the cliff. KMB on list but needs to go lower.
I need a pretty good dip to add more than a few shares.  It's a lot easier after a 10% market pull back because some good stocks will be down 15%+ and that is a solid year in normal times. Trying not to look at every year like 2020.  I may never see another year like that again.

I watch a lot of Fast Graphs videos.  Chuck has 100 examples of lost decades caused by buying when blue chips are trading way above historical valuation and that will happen again.  We are set up for more of that now.
Those lost decades also involved interest rates returning to historical norms. Other than the Fed, large banks that participate in our fractional reserve banking system, and bond funds required to do so by their prospectuses, no one is buying bonds at these yields.

The “risk-free” rate of return is likely to remain effectively zero for a while. I doubt it rises much until at least the middle of the decade. The economy won’t be able to support it until then. The mid-2020s are essentially the mid-1980s from a demographic perspective. At that point, a solid % of Millennials will be in their 40s and peak earning years, just as Boomers were hitting that point in the mid-80s. 

The small comparative size of Gen X has contributed to an economic lull. The past two decades have seen Boomers enter retirement (where people tend to spend/consume less), with not enough peak-earnings consumers to replace them. That dynamic is about to change in a big way.
Type that as many times as you care to but I'm just not hearing it when we got stocks at 150% historical PE.  Fast and sustained growth can get you out of a bad buy if you are holding it long-term.  The majority of my port will be reasonably valued and I'm confident that works out in the end.  We'll revisit this in two years.  I'll be a little careful in the meantime as that is working out fine.  I wasn't even aware a ton of stocks are down 50% the past few months.

Sure. Bull markets typically last six years. There’s usually a dip in the third (but only single-digit %). Historical trends favor the market being substantially higher in 2023 than it is now.

Equities price relative to other assets (treasuries, real estate, gold, cash). Based on where bonds are, and historical norms regarding pricing of the S&P 500 relative to treasuries, there’s a strong argument to be made that the indexes are undervalued right now.

I’m old enough to remember when Ray Dalio said cash is trash last year and got mocked for it, back when the S&P was 25% lower. Anyone who held cash over the same period lost a ton of value. Don’t fight the Fed.
I’ve said more than once this will be the most hated bull market in history. 2009-2020 will remain the second most hated.

If Boomers were around for it in appreciable numbers, the next 20 years are likely to be the most hated secular bull market in history. Last demographic shot in the arm currently on the horizon for the economy. Tech advances will also easily rival those of the 80s/90s in terms of pace of economic/productivity acceleration.

Macro factors point to a boom, which can be a hard mindset to switch into after the 2000s were a lost decade and 2010s were mostly digging out of a hole.
Inflation is also bullish for equities (stagflation is not).

If you think inflation is a risk due to rapid economic growth, equities are a great place to be. All else being equal (demand for equities, earnings, etc), as the value of cash decreases, it takes more of it to buy the same equity value that it used to before the new money was created. Stock prices have to go up just to tread water, and up a lot to reflect any real gains. Equities can even go up and lose value on a real basis.
(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.




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