Investments Trade Log

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Jin+Guice
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Re: Investments Trade Log

Post by Jin+Guice »

Does anyone think that doing the rate cuts and QE at the start of the outbreak is not a wildly terrible idea?

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TheWanderingScholar
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Re: Investments Trade Log

Post by TheWanderingScholar »

@Jin+Guice:
I don't know man. This is so much different from other financial crisis's I just don't know. All I know is a recession is pretty much guaranteed at this point, listening to my gut instinct.

George the original one
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Re: Investments Trade Log

Post by George the original one »

Remember that Wuhan is still under lockdown, case counts have only stabilized, and we haven't even gotten to a lockdown yet. Italy's lockdown only began a week ago (10(?) days for Lombardy).

So, yes, a recession is a guarantee.

ertyu
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Re: Investments Trade Log

Post by ertyu »

deflationary or stagflationary?

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Recession odds during Trump's 1st term at 75% currently on predictit.org

Supply chain disruptions -> shortages = inflationary?
Unsustainable US govt debt -> loss of faith in USD = inflationary?

George the original one
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Re: Investments Trade Log

Post by George the original one »

I think a lot depends on how many go broke rather than merely deeply in debt.

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Bankai
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Re: Investments Trade Log

Post by Bankai »

Bloodbath continues, FTSE opened 7% down and is now 35% off last July's peak. How low can it go? I start to think it might drop 50% by summer's epidemy peak. Which would mean 8-9% dividend yield when (if) earnings return to previous levels.

Seppia
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Re: Investments Trade Log

Post by Seppia »

If we keep this on we may be 50% down by the end of this week :lol:
This is getting better by the day, P/E of a european index is around 10.8 now (granted, earnings will drop significantly). Div yield now at 5.1% which is extremely juicy considering where bonds are

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Bankai
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Re: Investments Trade Log

Post by Bankai »

P/E is not reliable at all right now. Some companies will go bust, others will take a lot of debt on to survive the storm and profits will collapse across the board. Any 'forecast' is just a pure guess at this point. The yield on FTSE is already well over 7% which clearly indicates severe dividends cuts to come. However, 2-3 years down the like profits should recover. I still think it's not the time yet - imagine what the sentiment will be once virus deaths are in millions (hope this never happens but you can't rule it out considering how things develop).

EDIT: to get an idea of how bad this could get: figures from China released last night show retail sales down 20% in Jan-Feb (year on year) and industrial output down 13.5%. And this is with only parts of the country on lockdown - imagine what will happen here with most of Europe on lockdown.

IlliniDave
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Re: Investments Trade Log

Post by IlliniDave »

Certainly looks like we're teed up for another Really Bad Day. Stocks down 50% or more for the year by late summer feels like a reasonable expectation. Not certain, but reasonable.

I always say that the fundamental relationship is that we get paid to put our money at risk. We're getting a reminder that the risk we're buying into is real.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

It feels like we've been alternating Down days and Up days every other trading day for weeks, but here's the daily close direction on the S&P500 from Feb 20th to Friday:

D D D D D D D U D U D D D U D D U, and D today(?)

So that's only 4 up days out of 17, 18 counting today. Less than a fourth of the days! Seems like it was more, maybe because those up days were really good. There's that silly argument that you should stay invested all the time because otherwise you will miss out on the best trading days. Yeah, the best trading days occur during bear markets because volatility is high - that doesn't mean I want to be invested through a bear market!

jacob
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Re: Investments Trade Log

Post by jacob »

A few Danish banks/investment companies have suspended trading/redemption/contribution in their mutual funds due to inability to calculate NAV. That caught some in positions they didn't/don't want to be in. Short term speculation might had additional risks now.

I wonder if/when US exchanges will eventually suspend trading like they did after 9/11.

thedollar
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Re: Investments Trade Log

Post by thedollar »

@Jacob

That's pretty common for these Danish 'investment associations'. Happened a few days last week as well but it's my experience that they will trade later in the day.

Seppia
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Location: Italy

Re: Investments Trade Log

Post by Seppia »

Bankai wrote:
Mon Mar 16, 2020 6:12 am
severe dividends cuts to come.
Historically, dividends are much more resilient than one may think. At teh worst of the GFC, dividends in teh S&P were "only" cut 20%, VS a 50% price decline.

I agree PE doesn't matter now (it's very probable it will go up significantly in the coming quarters due to collapsing earnings), but you see what I mean. Should have said CAPE maybe for better clarity.

Bought a bit of European Index funds again today, we just hit the lowest prices since 2012
Last edited by Seppia on Mon Mar 16, 2020 10:15 am, edited 1 time in total.

ajcoleman22
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Joined: Mon Apr 16, 2018 8:45 am

Re: Investments Trade Log

Post by ajcoleman22 »

And here we go!

2Birds1Stone
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Re: Investments Trade Log

Post by 2Birds1Stone »

Well that stung. 10k dow is looking very real now.

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TheWanderingScholar
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Re: Investments Trade Log

Post by TheWanderingScholar »

The DOW went from nearly 30k to 20k within a month. And it has not even begun to hit the US like in Italy.

jacob
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Re: Investments Trade Log

Post by jacob »

Weirdly, we (the US) has only just about touched the bottom of the December 2018 dip. We've gone from a total market cap/GDP of almost 160% to 112%... but the historic average is still 80%. Of course, it's not written in law (or economics) that it should converge on 80%... and a month ago, you could have convinced me that we've been in a new era (ha!) where 120% was the new normal since the dotcom bust.

Still, if https://www.gurufocus.com/stock-market-valuations.php is any guide, the US has only gone from "insanely overvalued" and back to "modesty overvalued". IOW, in terms of valuations the 29% drop we've seen so far is more like the drop seen in late 2018. It's nowhere near comparable to the credit crisis.

George the original one
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Re: Investments Trade Log

Post by George the original one »

Where's that "like" button :-)

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@Jacob

So you're telling me to buy puts on SPY? lol.

Its tempting as always but if I were to play that ...would only do it on one of those out-of-nowhere rallies that accompany the downfall. However...my INDA Put is doing really well. Bought the $26 PUT for INDA last Friday when the stock was trading around $29 or so for average cost of $1.88 a contract. INDA dropped 15% today...so I'm sitting on hypothetical break-even if I held until expiration April 17. So I could take 40-50% gains now or just sit on it a little bit which I think I'm going to do. Another art of these trades....letting your winners ride a bit but their is a fine-line with greed that I'm trying to discover.

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