Early Retirement Extreme Forums

A collapse requires significant undermining of the house of cards that is the market. This means that many people have to be believing they're doing something intelligent while in reality they're doing something stupid(*). Examples: pricing stocks in clicks in 1999, RE in 2008, and shale in 2013.

(*) Making investments that lose money/destroy value.

Right now I don't see what people might be doing that is stupid. People are certainly overpaying for stocks, but other than that, I don't know what money would go into that's directly a net-loser(**). (Other than maybe crypto because of the energy-requirements ... but that's a small part of the moneyflow; maybe military hardware given increased spending there since that is by definition unproductive.) This suggests that the market will go sideways/up rather than down and that we're in a trading range. If the money that's being dumped into the market via TARP, QE, and now tax breaks ever finds its way into consumer hands, they will be inflation and this will bring down the market (relatively speaking) as interest rates go up. (They're currently going up.)

(**) Something that's economically destructive, that is, negative earnings or cashflow that's only possible from debt or outlier market conditions (fads).

I'd watch the oil price. If it goes up to $100 again, there will be trouble. Right now, the demand doesn't seem to be there.

I bought more of a Commodity ETF which I already own. I think commodities are undervalued and have more upside than downside potential. My innvestment/speculation horizon on this is mid term (3-10 years).

I'm still only buying intermediate-term bonds and MM. Don't see that changing anytime soon. My spider sense does not get looming crash vibes, just a susceptibility to hysteria swings apparently linked mostly to politics. I checked and I'm actually up 1.75% in my 401k YTD. Didn't check VG. It "feels" like I should be down. Of course, I'm just a tweet away from it being -2% YTD.

I've put a chunk into certificate of deposits, but that's with the knowledge that I need to ensure covering 2.5 years of expenses before my pension begins. IRAs & Roth IRAs are still invested.

Anybody looking at P&G? It's been dropping like a rock and I may buy a few shares soon

Seppia wrote: ↑

Tue Apr 24, 2018 3:53 pm

Anybody looking at P&G? It's been dropping like a rock and I may buy a few shares soon

Instead of P&G, take a look at CLX & their dividend growth. They've crossed into the 3% yield zone and whenever CLX does that, they are an automatic buy for me.

I hold PG, but it's not been one of my better long term holdings. It's not a bad company or stock, it's just not great.

George the original one wrote: ↑

Wed Apr 25, 2018 9:59 am

Instead of P&G, take a look at CLX & their dividend growth.

seems like a nice company indeed, thanks for the tip. I have started following them and studying.

Ended up buying some P&G, I just think there's a lot of stuff to like. Great brands in a time whenI believe people tend to underestimate the power of consumer brands, great cash generation, recently re-focused brand portfolio, good dividend (even if the payout ratio seems too high to me), lowest price in 5 years.

I'll take that in this environment.


Side note: anybody read about the last Tesla earnings call?
I find it fascinating that people would have any kind of money in this company, it is really nothing short of amazing.

https://www.cnbc.com/2018/05/03/here-ar ... ng-me.html

Seppia wrote: ↑

Fri May 04, 2018 9:28 am

Side note: anybody read about the last Tesla earnings call?
I find it fascinating that people would have any kind of money in this company, it is really nothing short of amazing.

I've just read about it a bit from Matt Levine and some capitalists on twitter. Was curious to see how it has performed since I got out of it just over a year ago: -4.4% (whereas the S&P is up 14.3%, CARZ up 18.67%).

I went ahead and put an order in for Daimler AG on a whim as I think they may do well in EVs, vans (though it may be some ways out.. maybe would be best to wait a while before buying).

I just sold a piece of my Royal Dutch holdings (my largest single stock holding at 16% of my total portfolio).
I had added significantly to my position during the oil crash and had it at an average cost of €20,3 (I buy them on Amsterdam).
Just sold about 15% of my holdings at 31€

I would sell more if I only had any idea of where to put the money

Seppia wrote: ↑

Fri May 18, 2018 4:14 am

I would sell more if I only had any idea of where to put the money

Big timers I respect have been encouraging people to get into emerging markets. I'm considering it but they are really volatile and I wonder if I'm getting a little old for that kind of risk-taking. Anyone else watching EMs?

You (@Seppia) have me rethinking my current bench warming strategy. I can't figure out what I would be comfortable investing in though. I've always liked Tyler's Golden Butterfly -- I tried to find a place to add some EM to that. Right now, I'm playing around with an allocation of 30% of LCV (through Wellington), 30% intermediate bonds (Well, PIMCO), and 10% each in REITs, EM, Gold, and LTT.

I know many of you don't like using funds and asset allocations, but I'm trying to rework our financial position so that it's easy for my DH to manage should the need arise, and also make the best use of the funds available to us in various retirement accounts. Using funds/allocation also frees up some mental energy to put towards side hustles and cost-saving projects (I've been slacking off a bit in those departments this past year).

jennypenny wrote: ↑

Fri May 18, 2018 6:21 am

Anyone else watching EMs?

EMs have been getting 1/2 of my monthly automated investing since January 1st, 2016, and they represent now approximately 10% of my net worth.
I would double the allocation if only there was a way for a European investor to buy EM Value.
Regular EM indexes have too much exposure for my liking to companies priced for perfection such as Tencent or Alibaba

Also interesting: Campbell soup down 11% at around $34 per share.
Anybody know them?

Seems like there's a lot of pessimism around CPG companies in general, may be a good time to buy a few up?

I had seen that, but the CEO being fired is not exactly a terrible structural issue.
Cambpbell has some great brands, recently acquired some more (Kettle potato chips and Cape Cod potato chips must be huge money makers if handled correctly) and has shaved a good amount of market cap recently.
These are the type of stocks that peek my interest.

I'll keep watching but I'm all ears if anybody has an opinion

Large consumer staples are tricky right now because many of them are trying to adapt to changing consumer tastes and competition from smaller companies. The supposed solution is to buy up the competition, which works until tastes change again or consumers learn their favorite brand is now owned by "evil corporation".

That said, SJM and KHC both look pretty good right now and are a couple of the better options.

Seppia wrote: ↑

Fri May 18, 2018 10:49 am

I had seen that, but the CEO being fired is not exactly a terrible structural issue.
Cambpbell has some great brands, recently acquired some more (Kettle potato chips and Cape Cod potato chips must be huge money makers if handled correctly) and has shaved a good amount of market cap recently.
These are the type of stocks that peek my interest.

I'll keep watching but I'm all ears if anybody has an opinion

Well, as a chip conoisseur I have to have an opinion on Kettle and Cape Cod, which is that they are premium-priced chips but not as good as the ‘artisanal’ smaller brands (Deep River comes to mind) and so I’d choose the cheaper store brand (say Whole Foods kettle) over the former every time when given the option.

I agree 100% with cmonkey’s synopsis.

I bought CVS most recently at 62. It was either that or P&G and represented my own foray into staples, albeit broadly defined.

I ended up buying some Vodafone.
Wasn't 100% sold on Campbell and what killed it for me is that I find most of their products disgusting (Pepperidge Farm and Kettle/Cape cod being the exception).
I know it may sound stupid, but I still view stock ownership as me buying into a business, and I would not buy into a business I don't like, regardless of the prospects.

https://www.marketwatch.com/Story/abiom ... yptr=yahoo

How to exploit this? Should Abiomed automatically get a boost as index investors buy automatically? Is it too late?

Index funds based on S&P 500 will add ABMD. Index funds based on the S&P Midcap 400 will sell. Funds like VTSAX already hold it.

The S&P 500 is a weighted average. ABMD will have a low weight. You can check major holders of a similarly-sized company already in the index (such as GWW) to estimate of the value of shares are controlled by S&P 500-based index funds. Compare this to the midcap funds that will be selling when ABMD graduates. And then consider how much of that buying will impact ABMD's volume for a typical trading day.

It might be a profitable trade, or it might not. Index frontrunning isn't sure money.

Anyone else excited for the T/TWX decision? Care to make any predictions?