Investments Trade Log

Ask your investment, budget, and other money related questions here
ToFI
Posts: 136
Joined: Thu Jun 16, 2011 1:22 am

Re: Investments Trade Log

Post by ToFI »

The virus in China is under control. The active case is in decline.
The problem is the active cases are increasing outside of China. This is what Mr.Market is worrying about. It's just started outside of China. No end in sight.
No countries will quarantine the whole country like China did.Cough. . Maybe North Korea but they don't have the same technological capability as China.

User avatar
Bankai
Posts: 816
Joined: Fri Jul 25, 2014 5:28 am

Re: Investments Trade Log

Post by Bankai »

Is a worldwide recession now inevitable?

I'd certainly not buy anything anytime soon - the markets are way too volatile and news-driven. Another (possibly massive) leg down seems only a matter of time.

What sectors will get hit the hardest? Anything to do with international travel - airlines, ferry operators, holiday resorts & hotel companies are already suffering. The second wave might be 'local gatherings' types of businesses - cinemas, pubs, restaurants, casinos, gyms, etc. I'm not shorting anything but these seem likely candidates. The death of retail might come even sooner with people even more likely to buy stuff online - retail chains already struggling will go under. Also, 'recrutment freeze' is a default response to any economic slowdown so recruitment companies will be in big trouble.

Who can do well? Any in-house entertainment, streaming services, video games, online gambling, food takeaways possibly? They might be most resistant to falls but not necessarily going up considering overall market sentiment. Insolvency practitioners.

Also, since crisis is just another word for opportunity, I'm sure there will be new businesses offering 'from home' version of services previously dominated by brick and mortar businesses.

It's almost impossible to value anything now since no one has any idea how profits will look like 3-24 months from now. Profits after 2008 took a while to recover. Markets already overpriced (hi US!) could see severe drops with this uncertainty. Selling into strength on a spike up seems like a good idea.

Seppia
Posts: 1418
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Bought a bit of Disney today

User avatar
Dream of Freedom
Posts: 501
Joined: Wed Aug 29, 2012 5:58 pm
Location: Nebraska, US

Re: Investments Trade Log

Post by Dream of Freedom »

Ray Dalio weighs in on coronavirus and It's economic impact.
Reactions to the virus (e.g., “social distancing”) will probably cause a big short-term economic decline followed by a rebound, which probably will not leave a big sustained economic impact. The fact of the matter is that history has shown that even big death tolls have been much bigger emotional affairs than sustained economic and market affairs. My look into the Spanish flu case, which I’m treating as our worst-case scenario, conveys this view; so do the other cases.
https://www.linkedin.com/pulse/my-thoug ... ticle_view

User avatar
Lemur
Posts: 620
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

@Seppia

Yeah Disney is getting really cheap. I'm still holding a put option @ 100 that I'm trying to break-even off but it is an incredibly good long-term value stock right now.

Sold 1 covered call on MSFT today in my brokerage acct expiring in 2 weeks for $169 premium. Used money to buy more Walmart stock.

bigato
Posts: 2798
Joined: Sat Mar 05, 2011 12:43 pm
Location: Brazil

Re: Investments Trade Log

Post by bigato »

I received a bonus from work today and used it to replenish cash reserves used to pay the monthly expenses. Also sold all short-term bonds (2025), used some of it to rebalance my bovespa etfs and my small caps etf. The rest I used to buy long term bonds (2045) which pay inflation plus 3.34% per year. Gold is up a lot for me because it is going up in the international market but also amplified by the fact that it is priced in dollars here and dollars are up. GB is holding well.

Seppia
Posts: 1418
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Lemur wrote:
Thu Mar 05, 2020 1:02 pm
Used money to buy more Walmart stock.
Walmart, was, timing wise, the luckiest investment that I bought and sold (I've never sold most of my stocks).
I bought in in 2015 for $58 per share, almost the bottom, and sold it a couple EDIT years (not days) later whan it hit $98, close to a peak.

Sometimes we do get lucky
Last edited by Seppia on Fri Mar 06, 2020 1:00 am, edited 1 time in total.

classical_Liberal
Posts: 1677
Joined: Sun Mar 20, 2016 6:05 am

Re: Investments Trade Log

Post by classical_Liberal »

I sold 2/3 of my US I-Term Treasuries in 401K today(about 4% of total net worth) and left as cash. 10-yr is below 1% yield and I just don't see US going negative like Europe/Japan. Very little potential upside left, IMO. I'll hold out for buying opportunities as the market evolves.

jacob
Site Admin
Posts: 12426
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Investments Trade Log

Post by jacob »

@cL - The duration of the 10yo is 9years, so at ~1%, there would still be 9% upside left with a ZIRP. Check out TLT over the past 1 year.

classical_Liberal
Posts: 1677
Joined: Sun Mar 20, 2016 6:05 am

Re: Investments Trade Log

Post by classical_Liberal »

@Jacob
Right, assuming complete ZIRP on 10-yr. I don't think it'll get that low. I did hold onto 1/3 in case I'm wrong, it's happened before :D.

User avatar
Bankai
Posts: 816
Joined: Fri Jul 25, 2014 5:28 am

Re: Investments Trade Log

Post by Bankai »


black_son_of_gray
Posts: 452
Joined: Fri Jan 02, 2015 7:39 pm

Re: Investments Trade Log

Post by black_son_of_gray »

Over the last few days I've been really mulling over when I want to sell my TLT as well. As @classical_Liberal said, I'm not sure there's too much juice left to squeeze, and I'd rather be a little early than a little late. We're already at yields unprecedented in the history of the US, right (at least, at the long end)?

Bull argument: stocks more likely than not to keep going down, and LT bonds are classic safety that people rush to. Also, very likely that the Fed cuts more. In the near term at least, this seems to be a relatively safe place to be. Potential upside best case: maybe 20%.

Bear argument: At some point-I'm not sure when-investors are going to start balking at the government deficit/debt, and what once was "safety" is going to look risky (you mean you don't want to give the government your money for 30 years for no return and a high inflation/interest rate risk?). I'm guessing the kind of extreme fiscal measures that will be taken to deal with the fallout of the coronavirus will blow out the deficit in a dramatic, never-before-seen way... at the same time that tax revenue tanks because businesses are failing and people aren't working and trade is broken (tariffs). Either investors realize that one day and demand more yield for the risk, or the government tries to print its way out of its problems->higher interest rates. Potential downside worse case: easily more than 20%. If yields/rates spike up even a few percent, this gets ugly fast.

classical_Liberal
Posts: 1677
Joined: Sun Mar 20, 2016 6:05 am

Re: Investments Trade Log

Post by classical_Liberal »

@BSOG
Not only are yields the lowest in history, but inflation is the highest since 2011. It may even tick up a notch in March and April if we have some supply issues from China, and if people are really stocking up due to corona virus fears. Plus the rate cut. 10 year at sub 1% already looks like -1.5% real yield to me over the medium term, more if inflation increases. Anyone playing even a semi-long game can't like that. I think refuge will be sought in gold vs treasuries due to this and the factors you pointed out. We are still well below historical highs there.

Seppia
Posts: 1418
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Bankai wrote:
Thu Mar 05, 2020 8:21 pm
He seems quite optimistic:

https://www.oaktreecapital.com/insights ... arks-memos
Marks is always a great read.
I follow a relatively simple approach that has been working for me.

In normal times I have a cash cushion and invest monthly all my savings
In times where I consider that stocks are high, I save a Pty if my savings into cash and build some dry powder (been doing it for about a year or so)
When the stock market crashes, I invest 1/3 ed of the dry powder when the market falls 10-15%, then another third when it falls an additional 10% and the last third after an eventual other 10%.

Lucky C
Posts: 561
Joined: Sat Apr 16, 2016 6:09 am

Re: Investments Trade Log

Post by Lucky C »

@Seppia Out of curiosity I did a little math. In the event of a -50% bear market your always-invested portion will lose 50% and your spare cash will lose 36%. Not saying -50% is likely or not, just wondering how that would play out.

Looks like the global recession is on for 2020 based on PMIs around the world - strongly declining before even COVID-19 hit. Gold miners' momentum continues to lag gold itself and it's reasonable to think that will continue in a global recession, so now I have more IAU than gold miners (small amount only in GOLD = Barrick Gold Corp). If gold is rising during better economic times it may make more sense to hold Newmont (NEM) as that is the only one in the S&P500 so may be subject to more passive buying than the other miners. Newmont also recently raised its dividend.

My equity exposure is tiny now. I can SWAN with my cash though USD strength fading is a concern. Might exchange some for Euros or a beaten down emerging markets currency. Don't want to catch a falling knife though.

wolf
Posts: 1046
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Investments Trade Log

Post by wolf »

@seppia: I have considered the same tactic to buy, instead of dca-investing during the next few years. So have you already invested the first 1/3 cash buffer?

User avatar
Bankai
Posts: 816
Joined: Fri Jul 25, 2014 5:28 am

Re: Investments Trade Log

Post by Bankai »

Yeah I agree buying now is premature. Risk to reward just doesn't look good at all. Even recent drop is only taking us markets to where they were only 4 months ago so no cheap at all while risk of further big drop is very real.

Seppia
Posts: 1418
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Lucky C wrote:
Fri Mar 06, 2020 5:56 am
@Seppia Out of curiosity I did a little math. In the event of a -50% bear market your always-invested portion will lose 50% and your spare cash will lose 36%. Not saying -50% is likely or not, just wondering how that would play out.
And if markets lose 90%, I'll lose even more!
Volatility is the price of admission. Statistically, drops beyond 30% are VERY rare, and if they happen, as a 70%+ saver, I'll just rejoice thinking about the amazing prosperity that (should) lie ahead.
wolf wrote:
Fri Mar 06, 2020 6:02 am
@seppia: I have considered the same tactic to buy, instead of dca-investing during the next few years. So have you already invested the first 1/3 cash buffer?
A little less actually, maybe 25%, including today :)
Bankai wrote:
Fri Mar 06, 2020 6:47 am
Yeah I agree buying now is premature. Risk to reward just doesn't look good at all. Even recent drop is only taking us markets to where they were only 4 months ago so no cheap at all while risk of further big drop is very real.
With the exception of a very brief period at the end of 2018, European equity indexes haven't been this low since the summer of 2017.
For emerging markets, it's early 2017.
I hadn't bought any indexex for months prior to today, and I am certainly not touching the S&P500 for another long while.
There are some good stocks that are cheap now, it was impossible to find bargains a month ago.
Siemens, Disney, Royal Dutch Shell are a couple names that are at least decently priced

classical_Liberal
Posts: 1677
Joined: Sun Mar 20, 2016 6:05 am

Re: Investments Trade Log

Post by classical_Liberal »

For everyone laughing at my treasury sale and looking at yields this morning. The transaction actually won't go through until end of business today since it was in my 401K. Maybe I lucked out and today will be bottom? :shock:

Lucky C
Posts: 561
Joined: Sat Apr 16, 2016 6:09 am

Re: Investments Trade Log

Post by Lucky C »

Actually today might be a great day for a short term buy to hope for a rally next week. If prices calm down and start to trend up after the "dumb money" in the first hour of trading finishes selling, that could be promising. Delay of the million COVID-19 test kits for the US next week might buy us another week or so.

@classical_Liberal No shame in selling treasuries at negative real yields with probably more downside risk than upside.

Post Reply