Investments Trade Log

[cmonkey]

So 3 guys who know nothing about healthcare say they are gonna start a healthcare company, all the while admitting they just might fail....and all bedlam breaks loose. Yes please!

[bryan]

Well, it's about time AMZN gets into some new markets! Not many companies with similar strong positions. I'm not really sure why JPM is involved.. BRK makes sense, though. I would buy some AMZN if not for the fact that it's already skyrocketed in the last year. They are on my "buy if market crash" list.

Went short QCOM. Hard to know if it will perform well or not, though. They invest a lot into legal battles and monopolist practices, not so much expanding into new markets or innovating. Mostly I just hate the company The claims (sentiment) of US "nationalizing" 5G are generally good for QCOM, in the US, where they are already strong, but would hurt them internationally. I think low cost chips (MediaTek et al) will keep taking market share world-wide and there's a chance a European player could regain market share locally (though in 10m of research, and my industry background, it wasn't clear who that might be after years of consolidations.. maybe STMicro).

[jennypenny]

re AMZN: I don't want a company that has access to my health records also trying to sell me something. They'd probably require that Alexa be surgically implanted. Too much cross contamination for my taste.

[jennypenny]

If anyone is waiting for a correction before putting more money into the market, how much of a correction will it take to get you back in? For myself, I'm not sure. I feel like my usual rules don't apply in this market. I realize individual stocks will be different but I'm talking about in general for those of us with money stuck in 401K-ish index funds.

[Seppia]

Tangent off of JPs last posts:
I would be curious to know how long ago people that did go all-cash did it.
Some people have been calling this market “a bubble” for 7 years now.
Eventually they’ll be right, but how much have they given up in the process?
How much should the market tank for a re-entry to be advantageous vs the simple “buy monthly with your savings and hold”?
I personally can picture many scenarios where I’m cautious (I have built a larger percentage of cash since 2017), but all-cash?
I’d never do that.

Managing money Is a lot about regret minimization, and since I save a large percentage of my income and already have the issue of buying stuff monthly, I have a simple rule: I never sell, except to buy something else.

I can only imagine how excruciating it must have been for someone to sell in 2014 or around there, and watch the market go nowhere but up with zero opportunities to buy cheaper.

One needs to have downside risk, but we must deal with upside risk too

[jennypenny]

I sold most of my stock a couple of years ago. I really don't regret it. Sure, I'd love to have those gains. OTOH, I don't 'need' more and downside is a much bigger risk at my age. Losses are twice as hard on a portfolio as gains and I'm running out of time to make them up. I haven't always been risk averse. I rode out '87, '00, and '08. Age changes things though and I decided I'd rather watch this one from the sidelines.

I don't mean that to sound cocky. It's just that I'm at a point where other resources (or the lack of them) are more likely to be my downfall and so are more deserving of my attention.

[sky]

I was two thirds vttvx, one third vtxvx. Now one third vttvx, two thirds vtxvx.

[bryan]

I should have some posts somewhere with the exact times when I a) stopped buying any ETFs in my taxable accounts and b) rolled my 401k to an IRA without buying back into the market. The later was about 6 months ago, the former maybe two years ago? On the whole my portfolio has outperformed the stock market, despite being relatively cash heavy at A and B (thanks Bitcoin!).

My current concern is when to re-balance into the total market, as @jennypenny asks. I'm right at one of my FI numbers, so I'm a bit worried about poor sequence of returns atm. Other than individual stocks, I would perhaps get back into total market ETFs in my IRA once things start looking something like early 2009.. no set percentage. Even then there is a chance I invest in something other than total market ETFs (e.g. home, vans, small business(es)).

(and I guess this discussion is a bit off topic if no trades are happening!! Do we need a "call the top" thread or something?)

[Seppia]

Thanks JP, it's great to be reminded that there is no "one size fits all".
I was looking at it by MY perspective, but your reasoning makest 100% sense.
It it super important to know ourselves.
Personally, I would not have been able to sit there with 100% cash and watch the market go up a tad more than 50% excluding dividends (that's what it did in the last two years) without feeling the unavoidable urge to go back in.

I can definitely see why when someone already has enough, downside protection trumps any possible additional gain. I had just stupidly failed to put myself in that position.

[IlliniDave]

If anyone is waiting for a correction before putting more money into the market, how much of a correction will it take to get you back in? For myself, I'm not sure. I feel like my usual rules don't apply in this market. I realize individual stocks will be different but I'm talking about in general for those of us with money stuck in 401K-ish index funds.

Not me. I'm in the mode of positioning myself for cessation of employment and I'm incrementally ratcheting down my equity exposure. I'm not out, and am not headed out. In the future I'll only buy new equities (aside from distribution reinvestments which I can't stop in my 401k) when I get out of balance.

Well,that's not entirely true. If stocks were to drop something extraordinary like 70% or so without any accompanying catastrophe, I might swing for the fence one last time with a little market-timing. But I'll never be all-in again. I may go from 50ish% to 80ish% though if it doesn't seem too horribly reckless.

[jennypenny]

@Seppia -- It's cool. I used to be all about the numbers, too. Now I realize that the more I build up my other resources, the less money I need ... so in a sense, my kitty is still increasing if you count it in years, not dollars.

I'm also not totally in cash. I have treasuries and gold and a PIMCO bond fund, and most of my 'fund' cash is in stable value funds because that's the only option. That means I'm still getting a reasonable return. I was never an 'all in' kinda gal anyway. My gambling habit has taught me how to skim profits as I go, and that's served me well.

[Michael_00005]

If anyone is waiting for a correction before putting more money into the market, how much of a correction will it take to get you back in?

. There are plenty of stocks out there that pay around 10% in dividends, why not go that way? Even if the price drops for a few years you can hold and collect the dividends. I'm guessing the div. stocks will not drop like the rest of the market.

I've been out of the US markets since Dec. 2016, except for a small percent of play money, but then moved the bulk of it into international and emerging markets where it's matching US returns. My guess is that the US will be one of the first to see a correction, when that happens it might be time to put more into cash.

If you have extra funds and looking for security, it's possible donating to a worthy cause is the best investment you can ever make.

[George the original one]

I'm guessing the div. stocks will not drop like the rest of the market.

The real question when holding through a downturn is whether the dividends will be cut. And right now most dividend stocks are priced too high, so it's likely they will drop when the market drops... dividends, in general, are not that special when it comes to market price.

[arcyallen]

I would never consider a 10% dividend as safe or stable. Especially during a market drop. That's just too much cash flowing out for the company. As soon as markets drop and the economy goes south, those companies will likely be under extraordinary pressure and cut the dividends. Even large strong companies had to do that back in the late 2000's.

[Michael_00005]

What companies are you guys talking about? Currently I've got some money in GOV and AGNC. GOV rents property to the government, and recently diversified the portfolio to go outside govt. rentals. The GOV PE is off due to a purchase in 2017 which should correct this year. These companies don't go price ballistic like all the other growth companies do, like from the past year... the price is stable within a range. I see GOV was down to 19.50 in 2009, now it's at 16.92; i can't see what happened to the dividend. AGNC PE is under 10.

We are talking about less risk George, not no risk. I would say there is a lot more risk in holding cash than putting money in several diversified dividend stocks.

I'm certainly not saying these stocks can't go down, cut dividends, or lose money, stocks are a risky.

Were you just looking to find faults or do you actually have a better idea? With a little effort I bet we could add something constructive to the conversation.

[Chris]

Currently I've got some money in GOV and AGNC.

I notice that GOV's 2017 dividends were almost 50% return of capital. Prior years were also significant (42%, 37%, 36%). Any idea what that's about?

[Michael_00005]

I notice that GOV's 2017 dividends were almost 50% return of capital. Prior years were also significant (42%, 37%, 36%). Any idea what that's about?

I'm still working FT and don't have much time to research, but this guy seems to have a good grasp of the numbers at GOV: https://seekingalpha.com/article/413711 ... lding-reit

[George the original one]

We are talking about less risk George, not no risk. I would say there is a lot more risk in holding cash than putting money in several diversified dividend stocks.

You're new here, so you might want to have a look at my open history regarding risk-taking before making assumptions about my knowledge: viewtopic.php?f=3&t=975&hilit=leverage+experiment

AGNC dividend was $1.40 per quarter in 2011 ($0.46/month). They cut dividend a couple times before going to monthly payments in 2016 at $0.20/month. Today, in 2018, it is only $0.18/month. If you're looking for a reliable long term income, a -70% drop in income is a crappy track record. Short term, it might be worth the risk, but I'm retired, so dividend growth is what I'm looking for. Realize, also, that AGNC is a lending company known as a mortgage REIT, not a traditional REIT that holds properties. mREITS are highly leveraged and very subject to interest rate risk; a small interest rate movement has a significant impact on their ability to pay dividends as well as what happens with their portfolio's mortgage default rate.

GOV has been around longer than the record you can see on Yahoo finance or other locations. I considered and rejected them in 2012. They merged with First Potomac in 2017, which apparently allowed them to start a fresh exchange record... you might ask yourself why they felt that was a good idea.

Edit: Some safer, higher yield alternatives to cash are leveraged bond funds. I like VKQ (municipal bonds, so tax free) and PGX (short term corporate preferred stock).

[cmonkey]

Finally a nice little correction. This is the first time I've lost any substantial amount of capital value since starting this journey (currently down 1 year of expenses from 1 week ago) and it's not really that scary.

Edit - Make that a very nice correction!

[jacob]

For those whose portfolios are a bit more.. uhh.. nuanced, now is a good time to see what's dropping faster and what's dropping slower and perhaps what's holding and even rising. If the overall equity market keeps dropping, this is a good indication of where you'll end up. Note that since the marginal prices on the market tend to be traded with borrowed money "on the margin", margin calls are often met by selling those stocks with the most recent "bestest" performance. If they drop, it doesn't mean they're bad investments; just that desperate people desperately need the money.

One thing I did today was to calculate my portfolio betas. This can easily be done in googlesheets using =googlefinance(TICKER,"beta")*...

They come down to 0.73 for my "risk portfolio" (which is also my everyday dividend cash for a living portfolio) and 0.24 for my tax-deferred portfolio (which is the age 59.5 boost portfolio). They're about equally large, so my overall beta is about half of the market.

For indexers (and concentrated FAANG speculators), AMZN is helping to hold up the rest of the market today. There was some significant selling pressure on AMZN a few moments ago, where amazon dropped 5%+ over a few minutes because of lack of liquidity on the buyer side ... taking the rest of the market down with it for another 1.5%. AMZN has since recovered.