Investments Trade Log

[Dream of Freedom]

Bought TTD @233.50. Stop loss @223.98.

[jacob]

@thedollar - See my comments in viewtopic.php?p=115298#p115298 ... Any further comments on this issue should be made in the other thread.

[_bb_]

Bought BTI @ 36.18

[Mister Imperceptible]

PG&E (PCG) will file for bankruptcy following potential liabilities from wildfires in 2018 and 2017. This wipes out 17B+ of market value + the equity.

https://www.wsj.com/articles/pg-e-knew- ... 1562768885

[Dream of Freedom]

Opened a small position in AHT @2.58

The remodel of some of their hotels cost enough that they had to cut the dividend. Share price plumetted., but the remodels will end at some point.

[Dream of Freedom]

Sold TTD @255.46 for a 9.4% gain. 25 days in the market. Took longer than I expected, damned analysis' downgrades.

[Dream of Freedom]

Bought NOW @289.13. Stoploss @279. Trade.

[Dream of Freedom]

Got stopped out on NOW @270. for a 3.5% loss within a half hour. If that's going to happen, at least it happened early.

[Dream of Freedom]

Bought BRKS @40.31. Stop @37.8. Trade.

[jacob]

Yesterday, the FOMC dropped the rate for the first time since 2008. Also, another instance of the "first time since 2008" is corporate buyback+dividends>cash flow.

https://www.marketwatch.com/story/sp-50 ... 2019-07-29

(If you want to see what happens once buybacks and dividends become debt funded, check out IBM's price over the past 5ish years.)

Meanwhile, after Fed language about how the uncertainty of tariffs caused them to lower rates in an otherwise decent economy, the tweeter-in-chief made a comment about more tariffs. Consequentially, the stock market (especially economically sensitive sectors like banking and financials) is down while the futures (and bonds) are up expecting increased chances of another cut later this year. This should auto-resolve later.

I'm currently not sure what to do about this mess. Too many warning lights.

[AnalyticalEngine]

Is investing in cash a wise decision in a market like this? The current situation is so weird by historical standards that it's hard to know what to do.

[Seppia]

1- corporate buyback+dividends>cash flow.

2- I'm currently not sure what to do about this mess. Too many warning lights.

1- that sounds suboptimal. Wars against math are rarely won.

2- you are much smarter than me, but personally I keep turning, slowly*, more defensive every day.
I am now up to 16% cash, and I have, again slowly*, been tilting my stocks in the same direction: sold a couple big winners, moved the money into unloved cash machines (mostly BATS).
No big tilts, slow adjustments.
I am now down to 1% USA, almost everything in Europe and Emerging (but zero in Japan, sorry unemployable)
Obviously I have zero debt.

*Slowly being the key word.

[cmonkey]

It's a good time to hold some cash yes.

After selling some big winners I'm currently just under 25% cash and am planning to hold it there for any tweet/Fed-induced selloffs of 5+%.

Of course you can't hold off buying forever so I have been initiating a few micro (3 figure) positions here and there in some low(ish) debt, high yield stuffs.

[black_son_of_gray]

My two cents on the current state of the US stock market, which I present simply because it is quite different from the buy-and-hold crowd:

The view from [value/long game/historically useful statistics/"weighing machine"] is that the US stock market is generally outrageously priced, meaning long-term (the usefulness of value-related mean reversion statistics drops off after about 10 years) future returns will be essentially nothing. Lots of risk, no return, no thanks. This view has been blasting warnings for a while now (>1 year at least) and is especially loud right now. I've shifted my emphasis towards time frames of 5-10 years (see my journal if you want long-winded reasoning), because anything longer is highly unpredictable. I can get similar cash-flow (dividends, coupons, interest) from other investments anyway. So I don't find this view compelling right now.

The view from [play-the-player/short game/game theory/beauty contest/technicals/momentum/market psychology/"voting machine"] is that there is always the possibility for a decent return, assuming you can read the tea leaves correctly. This view is more compelling... if and only if you think that the beauty contest isn't rigged by the organizers. That is, that the normal operation of the markets still applies. But I'm not so sure, or at least, I don't know how to operate under the new regime. New regime: decisions by the Fed or ECB on interest rates or QE or Trump's unpredictable and unilateral whims over trade policy or his obvious need to have a juiced up economy going into the next election (...or [X,Y,Z]) can move the market in huge ways that have more to do with politics than business. These are market-wide swings that can destroy your trade arising from the individual decisions of a very few people who aren't even necessarily playing the same game (are there "two sides to the trade" when new tariffs could be decided because someone was feeling irritable because they didn't like the club sandwich they got at lunch or is frustrated because they are under investigation or is being leaned on by their superiors to come to a specific conclusion? There can't be- you didn't even know about that trade), and I ... I just have no ability to play that game. I'm not sure anyone can, successfully. It's like you go up to a roulette table and put some money on black and then they change out the wheel to one that only has purple and green before spinning it. Ok, it isn't that bad. But it's bad enough that I don't want to play that game either.

So my own personal conclusion (influenced strongly by my near-term plans for buying real estate and my permissive tax situation) is that I'm out of the US market. I'd rather potentially lose a couple percent (it that) over 5-10 years to inflation, than to gamble on either long or short orientations on US stocks. I'm not out forever: the market will change and develop with time, and I feel confident there will be better opportunities for both long and short positions at some point, and I'll refit my curve then. Isn't this why we save so much anyway? To have the ability to not play rigged games for crappy prizes?

[2Birds1Stone]

I appreciate the conversation in this thread, but as the saying goes, "markets can stay irrational longer than you can stay solvent". What if new norm is CAPE 50? Would it hurt that much to still have a small but not insignificant chunk in US equities? Going into this year, it was all doom and gloom, and we're up 20%?

[black_son_of_gray]

@2Birds1Stone If CAPE 50 is the new normal, that would imply an inflation-adjusted return of ... nothing? Then why risk a potentially huge capital loss if/when stocks return to valuations similar to the past (or the rest of the world)? To this point, that 20% YTD return conveniently begins at the bottom of a sudden 20% dip in December.

As far as others having a position in US equities, I've got no problem with that. Just isn't for me right now. Maybe you've got some nice dividends coming in or there are tax considerations or you really can pick stocks better than most people or you've got limited funds to choose from in a 401k or you want diversification in your portfolio... there are plenty of good reasons (they just might not apply to everyone evenly).

Now that I think about it, I'm not sure that I agree fully with the "markets can stay irrational longer than you can stay solvent" saying, because it assumes that you have to be in or in some way dependent on specific markets...and you don't. Professional investors may have to be in certain markets because of fund rules or whatnot, but if you don't like a specific market (say, the US stock market) because it is behaving irrationally, you can focus on other markets that you feel more comfortable with. Solvency and sanity risk averted.

And if all available markets are irrational, then I don't know what to tell you!

[Seppia]

@2b1s
Keep in mind I’m a european living in Europe, spending in euro.
Gap between USA and rest of the world stocks has rarely been wider, and the dollar is very strong.
The downside risk of having a chunk of NW in USA index funds today for someone in Europe is in my opinion huge.

[Seppia]

I'm currently not sure what to do about this mess. Too many warning lights.

Interesting article that tangentially touches on the subject.
https://www.bloomberg.com/opinion/artic ... ium-europe
Markets down significantly at the open here in Europe.
Let's see what happens, but many signs are pointing in a certain direction, see also Siemens (= Germany) showing a very significant slowdown in the last quarter, idem Royal Dutch, Credit Agricole and SocGen lifting capital buffers etc

It seems like everything is slowing down and the rally feels like it's on life support.
The yield curve has been inverted now for what, three months?

[FIRE 2018]

When the sky is falling its a great time to buy but we will see. Too many so called experts. When some thought the sky was falling when Trump was elected president in 2016, experts said it would be bad for our economy and some pulled out their $$ out of equities, missed out on tremendous gains.

[jacob]

US delays 10% tariff on cell phones and sneakers by 4 months. The crowd goes wild!