Investments Trade Log

[ertyu]

@Lucky, INFP here. That's what we've got to work with. For the rest we've got you engineering types

Joking aside, I believe all decisions are made on the basis of feeling. Ultimately, it's all about the "hunch." A detailed numerical analysis is only a tool one uses to validate a hunch - thus to manage emotions. Imo MBTI types that insist on objective analysis often have the opposite problem from me - they're often blind to the emotional component of their own decisions because they've used numbers to persuade themselves their guesswork is somehow not a guess.

In the particular case of GAZ, we're talking russia. Do you trust any balance sheets anyway? How do you properly discount political risk? Even if I were to run a DCF on the thing, it still comes down to "feel" - the diff. being whether I assigned my "feel" a numerical value or not.

[Lemur]

In a sea of Red, Walmart is the only one I'm seeing that held Green.

[Gilberto de Piento]

Confused as to why MMM is down. Expected it to skyrocket with the increased demand for masks.

I would guess there are two reasons:
1. I suspect very little of their business is masks and the rest of it will be negatively affected by a slowdown.
2. They can't ramp up mask production very fast and demand for masks is unpredictable. No one knows how long the virus will go on or how bad it will get.

[Gilberto de Piento]

Even though the market has been going wild in recent years it never felt like there was great confidence in it. Coronavirus may be the kick that people were watching for to set off a downturn. Or it will be setting records again next week, who knows these days. Whatever is happening in China might be a good predictor of the future.

[Lucky C]

"Fun" fact, thinking about circuit breakers and worst possible losses: if we were to hit the -20% day-long circuit breaker every day this week then at the end of trading Friday, the S&P500 would be below 1000 and CAPE would be below 9. As crazy as those low levels sound, valuations would still be nearly twice the all time low of CAPE = 4.78 set in December 1920. It would take eight -20% circuit breaker days in a row to set a new all time low in valuations based on CAPE.

In reality if we were to reach lower than average CAPE valuations it could take years. The low in 1920 was after a decade+ of pretty flat real total returns that ended with a post-WWI recession while inflation % was running in the double digits.

[Lemur]

Sold off my brokerage account indexes VOO ($2.4k gain), and VB (-$750 loss). Freed up ~$24,000 in capital.

Sold 2 Coca-Cola Puts @ $50 [$10k covered] expiring March 27.
Sold 3 Wells-Fargo Puts @30 [$9k covered] expiring March 27.

Collected $770 in premiums. Put my leftover capital and premium money on Walmart.

With this arrangement my brokerage account has no indexes and is now a fully actively management account. I freed up cash today and sold these puts after the mini-crash this morning. Worst-case scenario - I get assigned some positions I wanted to be long in anyhow. Best-case, I can hold cash while the world goes crazy and I can keep collecting premiums.

[2Birds1Stone]

Godspeed, everyone.

[thedollar]

Bought additional 150 x CCL at USD 21.74

What are people buying these days?

Why is Walmart not dropping?

[Bankai]

@thedollar: Walmart is a 'defensive' stock and these usually resist drops well. Consumers can cut on many things in a downturn but they still need to eat. It might even go up due to 1) people stockpiling - increased revenues (albeit temporarily) & 2) more buyers than sellers since there's not much else worth buying now.

[Bankai]

Bankai, let's say that you have cash to invest. What would be the signs for you that it is time to enter the market? Either to buy an index or individual stocks? Time is no issue, could be in a month, 6 months, a year, two years, 5 years.

I actually am in cash right now since I sold remaining shares months ago due to the possibility of a no-deal Brexit. My plan is to let individual stocks guide me as to when to start re-entering the market. I want to see stocks that best resist the general market decline breaking out and making new heights while the market is still going down. As the number of stocks going up increases, I plan to increase my exposure and buy the ones that go up the most. This 'usually' happens sometime before/around the general market bottom, however we are in uncharted territory now. I suspect there's a lot more to come - we are only at 30k cases outside China - how will the world look when we are at 1M (3 weeks from now) or 1B (2 months)? So I'm not inclined to catch a falling knife and want to see total capitulation first.

[George the original one]

Note that today's drop only brings the S&P500 to May 2019's level. At that time, most of us already felt that stocks were too expensive.

[classical_Liberal]

@GTOO
This is the way is like to look at it. I do index (mostly) in noncorrelators. I have almost zero cost basis in the S&P500 above the 2700 range. I have been buying Treasuries, gold, and hoarding cash. Since my accumulation period begin in 2015, the vast majority of my cost basis is S&P 1900-2700, although my small cap tilt has taken a bit more of a hit.

If, when gold was $1200, 10-yr Treasuries at 2-3% yield, I would have opted to buy some stocks at S&P 2600 (I did), then that's probably the point I start looking at dollar cost averaging some of this cash back into equities. They are cheaper now then they were then, from an earnings standpoint and compared to other asset classes.

I'm gonna let tomorrow dead cat bounce, then see what the rest of the week holds, but 2600 is only one more bad day from happening. Then c_L becomes a bull. Edit: or rather back to business as usual.

Edit #2: To strengthen my personal case here a bit, I ran S&P @2600 against some key indicators. This would put CAPE under 25, P/B under 3, and P/E under 20. All still high by historical standards, but back to within reason, particularly considering the very low yield environment.

[Bankai]

After initial drop of 8.7% yesterday morning, FTSE100 recovered about 4% by midday, only to give it all back in second half of the day. Today looks similar - positive opening and climb to +4% over last night's close followed by giving the gains back (currently only up 1.2%). Looks like buying the dip is over, and quite rightly so as there's probably much more to come.

Is there an official definition of a bear market? FTSE closed over 20% down from last 12 months high yesterday yet I've not come across any mention of a bear market in online news. Is this not to add to the panic similarly as pandemic is not used even though all the conditions are fulfilled?

[Lucky C]

Yeah in the USA "correction" = -10% and "bear" = -20% but I don't know if the whole world uses those terms.

[Lucky C]

CNN's Fear and Greed Index up to 4 out of 100 from yesterday's 3.
https://money.cnn.com/data/fear-and-greed/

Maybe if the White House said Trump has tested negative for coronavirus instead of claiming Trump has not been tested for coronavirus (really?) the markets would perk up a little more. I would not want to hold any US stocks while there has been one degree of separation in the past couple weeks between Trump and COVID-19 including physical contact and being on the same Air Force One flight. People are going to be on the lookout for any difference in his appearance (or lack of appearances) or demeanor in the next few days.

[wolf]

anybody using VIX as an indicator to start investing again?

[Lucky C]

This is a record steepest, or close to record steepest depending on how you measure it, descent from new highs to a correction (and bear market maybe?). Seems like there are too few historical similarities to compare it to if you want to make a data-driven trade. Based on VIX, RSI, sentiment, etc., history might lead you to believe that we are set up for a 10% or so rally to end the month, but on the flip side in some ways we are in uncharted territory.

I think Kyle Bass has the right idea for the most part standing back for now.
https://www.marketwatch.com/story/think ... 2020-03-09

[Lemur]

LEAP Puts on Oil companies seems tempting.... Wondering if one could just use a stock screener to pick up all the oil companies and then sift through the ones that have cash flow problems and lack of cash to bear the price war. Risk I'm thinking though is that Saudi Arabia / Russia solve their problems and then oil rebounds off the news.

[ertyu]

I agree with standing back. I think a good time to dip toes back in would be when the corona hits murican hospitals properly. But I can't decide if I think that will be the bottom-bottom or if I expect another leg down from there. What is everyone's opinion? Basically, at that point, there are 2 options (1) extend MMT to ordinary people (little can persuade me the US isn't doing MMT as we speak; it's ok when it's for the corporations/rich ppl/stock mkt i guess) or (2) don't. So, idk. From where I stand, all in cash and with my thumbs up my ass, it would be entertaining to have Trump die of covid.

[Bankai]

The BoE cut the base rate from 0.75% to 0.25% this morning and the budget just announced has a massive package (£30B) to 'fight' the virus. Yet, markets seem unimpressed with FTSE100 being slightly down. I don't see the situation improving anytime soon if this hasn't helped especially considering that the stream of bad news on the virus will continue for weeks/months to come. I'd not be buying anything just yet.