Early Retirement Extreme Forums

Fidelity just announced two 0% fee index funds.

FZROX
FZILX

Bought a little BLK.

This came up in a post a while back, and I figured it might be helpful in the future for those long in dividend stocks.

From listening to earnings Conference Call today for GOV, someone asked a good question on the possibility of dividends being cut. To this the CEO or CFO replied, the dividends are safe for the remainder of the year. I take this as meaning up through the January, 2019 dividend. And then they would again reassess dividends for 2019 in the 1st quarter [for the remainder of that year]. Since dividends play such a major role in stock price, listening in to Conference Calls and even asking the question yourself could be an excellent way to avoid losses, i.e. in regards to dividend stocks.


GOV - “A replay of the conference call will be available through 11:59 p.m. on Thursday, August 9, 2018. To access the replay, dial (412) 317-0088.”

https://finviz.com/map.ashx just redrew their matrix.

The FAANG whales are getting bigger and bigger as the rest of the market seems to be shrinking.
It would be cool to see an animation of how it has evolved over the years.

https://www.bloomberg.com/news/articles ... s-forecast

Highest yoy CPI increase since 2008! Trade wars and tax cuts are beginning to have an impact on main street. Hopefully this guarantees two further interest rate hikes this year (Sep and Dec) which will be good for cash and hopefully bring the market down a bit from the stratosphere while being relatively good for value/low-beta stocks.

Still increasing my cash hoard.

One of my chores today is to put in the order to sell ~10% of my US equities which will transact Monday afternoon. No good cash option in my 401k, so it will probably go into some sort of bond fund (limited choices there as well). On the taxable side I've been hesitant to move much out of my MM (where it gets deposited) so I'm in violation of my plan in the sense of holding too much cash. Not a hoard by any stretch, though, and the return is still negative real. Even modest changes in inflation have big effects on how heavily I must lean on my stash going forward simply because it's like a swarm of termites chomping the non-COLA annuity leg of my stool. It's getting to be less of a game of balancing fear and greed as it is of mitigating fear. Even with the planned move and almost all my new money for the last ~3 years going away from US equities (all equities, actually) I still won't be much below 70% stocks as prior to Friday mine on the US side were up about 9% YTD, so maybe closer to 8% now.

My recently completed apartment purchase and its associated costs has brought down my cash allocation from almost 5 years of current expenses to slightly above 3.5*.
Unless the stock market starts to tank, I’m considering putting on hold all my stock purchases, which should replenish the fund fairly fast since I should be able to save 2-3 months of expenses every month going forward (as I did in my recent Italian years).

*I hold zero bonds and count all my cash together

jennypenny wrote: ↑

Tue Jul 17, 2018 11:08 am

Any thoughts on why rising interest rates are driving gold prices down? I know gold prices drop when the stock market goes up (generally), but since the 'smart' money is predicting a pullback I would think they would be propping up gold prices.

Anyone with a PP/GB type portfolio have any ideas? I'm tempted to keep adding to my gold position but I don't want to OG.

https://seekingalpha.com/amp/article/29 ... cial-crash

“Really, the basic steps are straightforward:

Economic/financial crisis leads to asset liquidation and dollar shortage

Dollar shortage leads to dollar appreciation and gold depreciation (in dollar terms)

One form of asset liquidation – forced gold selling – leads to gold depreciation (in all currencies)

Eventual monetary response creates surplus of dollars

Surplus of dollars causes dollar depreciation and gold appreciation

For US investors, in my opinion, a crisis in which a skyrocketing dollar sends gold plummeting in US dollar terms could create a big gold buying opportunity, like it did in 2008. That said, the basic steps outlined above could take months to fully materialize.”

http://www.kitco.com/commentaries/2018- ... -2018.html

“What could drive the prices of the metals higher? Whenever we ask this question, we mean durably. Of course, speculators in the futures markets could begin to buy long positions with leverage. But then what? Such buying inevitably turns to selling, unless there is real buying of the metal.

Right now, so far as we can see, there’s weak demand for retail coins and bars. The Indian rupee has been falling all year. The average Indian is about 7% less able to buy gold than he was at the end of December. The Russian ruble peaked at the end of January, and is now down 11.65. The Chinese yuan is down about 6% since its peak in early February.

And the reason for these big currency moves is simple. All around the world, governments and corporations have previously borrowed US dollars. Their revenues are in their local currencies. This mismatch creates a risk. It’s great when everyone from currency traders to yield-starved fund managers are borrowing dollars, to sell them short and buy other currencies. Then the local currency, which is their asset, is rising against the dollar which is their liability.

Eventually, the tide turns. It becomes a bit harder to generate local currency revenue. Perhaps because the world seems to be headed towards a repeat of the tariff policies that exacerbated the last great depression. Perhaps because it’s time for the cycle to turn. Perhaps because QE has become QT. It could even be that market participants lower their estimate of the quality of the debt backing these currencies.

Whatever the reason, market selling begins pushing these currencies down. This compounds the problems of dollar-debtors around the world. This makes their local currency bonds even less attractive, and hence their local currency too. What was a lot of fun on the way up, turns into a lot of pain on the way down.

Add to this the fact that interest rates in the dollar have risen. The cost of funding such “carry trades” is much higher, and the attractiveness of other higher-rate currencies is less compared to the dollar, than it was a few years ago.

This, by the way, is what it means that the dollar is the world’s reserve currency. The reserve currency is not whatever oil is priced in—oil is priced in dollars because it’s the reserve. It is that the dollar is an asset on every major balance sheet in the world. The other currencies are dollar-derivatives. It is appropriate to describe their motion up and down with reference to the dollar from which they derive.

We are painting a picture of credit stress. The first phase of such stress is a general impoverishment, reduction in profits, wages, and savings. This is not an environment for accumulating gold or silver. The question is will the second phase come, a.k.a. fear. This is when investors (those who are still solvent) rush to trade some of their paper for metal. When they don’t like the risk of the counterparties who issue that paper.

We are not embedded in the culture in India or Russia or China. We can speak only to America, and right now, there is a general optimism that GDP is doing great, the stock market is going great, employment is doing great, and even policies that harm the economy like tariffs are great. This won’t last, as these purported signs of greatness show accelerated capital consumption (along with the rise in debt levels). Not even counting the impact of tariffs which has not been felt yet.”

ROTH -
Purchased LX today, earnings expected 8/23. China trade issues, and now the emerging market scare really put a kink in the price. risk vs rewards looks favorable.

edit --- I'll like sell all or half of position on or before 8/22 if there is a nice profit. 8/17 was a nice 10% jump in price, it will likely be a hold and wait if the price drops.

Edit 2 -- 8/23 sold LX, current time (today) LX is up ~21% after earnings so it ended up being a favorable trade.

Seppia wrote: ↑

Fri May 04, 2018 9:28 am

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.

Found my portfolio being heavily powered by CLX this summer, so I hope you bought some!

No but I had added some PG which had more more less the same trajectory

We have been investing about $6K/month in Betterment, 90% stocks - 10% bonds ($141K so far). I am seriously considering in accumulating cash instead of investing for a while...

HCLP is heading back into buy territory, added a bid for 11.65

Edit #1 (9/4); sold HCLP @ 12.20

Edit #2 Company news notes problem with demand so this company will be looking for a new bottom

https://seekingalpha.com/article/420295 ... ons-matter

https://seekingalpha.com/article/420212 ... -now-34_66

https://seekingalpha.com/article/420044 ... t-position

https://www.marketwatch.com/story/warre ... 2018-08-06

https://www.marketwatch.com/story/slamm ... 2018-08-30

https://www.yardeni.com/pub/stmkteqmardebt.pdf

http://danielamerman.com/va/ccc/RErb2FiveGraphs.html

The US Dollar and gold.

FB is starting to look good, back in @ 171.80

--Edit (9/26), average purchase price @ $166.05. Will likely sell some or all of the position prior to earnings if the prices goes above 180.

UK small-caps, eps. high growth, are melting down this week. Yesterday was especially drastic with some of my (ex- thanks to stop-losses) holdings down double digits % at some point. Looks like private investors are fleeing to the safety of cash. Since arguing with the market usually doesn't pay off, I reduced my exposure by selling remaining small caps and my brokerage account is now 80% in cash. Is this just another correction, or the beginning of something more serious? I guess time will tell, for now, though I'm quite happy to watch from sidelines.

Investors are discovering a new world where interest rates exist/are larger than 0.
Something people under 32 have not ever experienced in their professional careers.

October slide is happening because yields are rising (slightly) again. Give it a week or two and they'll forget. All the better for me, I would be buying some Fidelity CDs but I have no interest in boosting my taxable income at this point.

I'm happy to see that my individual stocks are performing significantly better than my indexes.
In today's environment, I'm also happy I own 0% USA indexes and 0% bonds (the one asset I wouldn't buy under any circumstance today thinking about the long term)
Europe and emerging seem priced somewhat fairly, so if they keep getting cheaper that's only good news: I have to stay disciplined and not buy too much too soon.

If you are a stock investor and panic / go all cash for a blip this small you should really reevaluate your asset allocation because you're likely to just hurt yourself.

@ Seppia - when sentiment changes, high growth, high PE small caps go down like a rock. With these kinds of stocks, it's usually better to sell first and then ask questions, i.e. you can always re-enter when the dust settles and outlook improves. On Tue morning I was not expecting to sell anything, by today I was taken out of 5 of my 10 positions after they hit stops. No panic selling involved, just 'natural' change in asset allocation in reaction to market conditions.

Obviously, different rules apply to indexes, big caps etc.

Sorry bankai for the misunderstanding, I wasn't referring to your investing strategy in particular.
I remember we discussed this and you have a very different approach than I have: I'm not questioning your moves, just the rather curious fact that a bunch of index investors who are in theory in "for the long run" are already re-thinking their supposedly immovable asset allocation after a very trivial drop
My circle of friends and the media are already full of such people.
It puzzles me every time