Investments Trade Log

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2Birds1Stone
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Re: Investments Trade Log

Post by 2Birds1Stone » Thu Aug 01, 2019 7:06 pm

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
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Re: Investments Trade Log

Post by black_son_of_gray » Thu Aug 01, 2019 8:23 pm

@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
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Re: Investments Trade Log

Post by Seppia » Fri Aug 02, 2019 1:54 am

@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
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Re: Investments Trade Log

Post by Seppia » Fri Aug 02, 2019 3:08 am

jacob wrote:
Thu Aug 01, 2019 1:35 pm
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
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Re: Investments Trade Log

Post by FIRE 2018 » Fri Aug 02, 2019 3:43 am

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
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Re: Investments Trade Log

Post by jacob » Tue Aug 13, 2019 10:39 am

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

Seppia
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Re: Investments Trade Log

Post by Seppia » Tue Aug 13, 2019 12:20 pm

I bought some Campari today (both the stock and the aperitif).
Best CPG company in Italy that one can buy on the stock market by a significant margin, a global player with core products that generate huge margins and have zero competitors.
Still enormous room to grow.

Expensive, but I cannot think of a better business to own in the CPG world.

Seppia
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Re: Investments Trade Log

Post by Seppia » Wed Aug 14, 2019 5:18 am

Germany economy contracts, UK yield curve inverts.

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Bankai
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Re: Investments Trade Log

Post by Bankai » Wed Aug 14, 2019 5:55 pm

So... will we have repeat of last autumn's dip? Markets usually like to have at least 4-5 things to worry about to go into correction (the more the better). Currently, we have:
HK
Brexit
Trade wars
Possible recession in Germany
Same in UK
Inverted yield curve
China's growth at 17y low
Plus couple more which I forgot
This seems to me more than enough for at least short term correction. Possibly more if there's Indeed a recession in Europe. As usual, the trick will be to 'pick the bottom', or at least close enough to it to get in at decent price. But what if there'll be few bottoms? Or a proper 🐻. Thoughts?

Seppia
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Re: Investments Trade Log

Post by Seppia » Thu Aug 15, 2019 12:44 am

I’ve been hoping for a real bear for about 4 years now, so I’ll try not to jinx it this time.
This bull market really doesn’t want to die though.

2Birds1Stone
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Re: Investments Trade Log

Post by 2Birds1Stone » Thu Aug 15, 2019 11:00 am

Seppia wrote:
Thu Aug 15, 2019 12:44 am
I’ve been hoping for a real bear for about 4 years now, so I’ll try not to jinx it this time.
This bull market really doesn’t want to die though.
Are you trying to time the equities market?

Seppia
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Re: Investments Trade Log

Post by Seppia » Thu Aug 15, 2019 4:22 pm

No, it's just that being a high saver / net buyer I've been hoping for cheaper prices

cmonkey
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Re: Investments Trade Log

Post by cmonkey » Mon Aug 19, 2019 9:58 am

Looking through fund choices for my new employer's 401K, I've discovered something called a 'front load fee', which looks to be just a chopping off of anywhere from 3% to 6% of my deposit. The investment choices are terrible - basically just WFC and BEN. I miss Vanguard! It's either this or 22% to USA.

Jason
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Re: Investments Trade Log

Post by Jason » Mon Aug 19, 2019 10:44 am

I have been buying Cisco over the last few years as a dividend stock but enjoyed its growth until the last few days back when it became clear that China was treating it like the technological equivalent of Donald Trump's assshole and it plunged 10%. It's not a good sign as they are the barometer of global technological growth. There are some stocks that should not be punished by the trade war that have been. Such as Facebook which is completely banned in China and Microsoft which is limited in the country. So I bought some FB on the dip. MSFT is too close to all time highs for me. I hate everything about Facebook but I would have bought Pablo Escobar, Inc. if it he had gone public. It's essentially the same product. I suspect there will be a few more algorithmic shit storms to play with over the next few months until Trump makes nice when the election gets closer. I also bought some GS and some financial ETF's. They've been beaten like a child predator in gen pop. Plus Warren Buffet usually gets the banks right even though he appears to have lost his fastball elsewhere.

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Lemur
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Re: Investments Trade Log

Post by Lemur » Mon Aug 19, 2019 10:45 am

@cmonkey

The 401(k) plan with my previous employer seemed almost like thievery...front load fees, asset fees, trade fees, 'earnings fees' were all too common ; made me seriously consider not even investing in the 401(k) plan.

jacob
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Re: Investments Trade Log

Post by jacob » Mon Aug 19, 2019 10:56 am

Shitty 401k plans seems par for the course in smaller companies. If they can't make the money on volume, they make it in fees.

Insofar tax-deferred accounts fit into the overall plan I would not avoid the 401k though. Most people mistakenly put money into them to get the match (free money, yay), but the real value of them is that transactions (and non-qualified income) aren't taxed. This makes it possible to engage in more flexible strategies than eternal buy&hold w/o taking tax hits.

Keep in mind that the plan can be (and probably should be) rolled over into a self-directed IRA later on once you quit.

cmonkey
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Re: Investments Trade Log

Post by cmonkey » Mon Aug 19, 2019 11:04 am

I was spoiled by my first employer - Fidelity has great 401K options. I paid 2 dollars per quarter (yes every 3 months) on a 5 figure balance invested in what amounted to the S&P 500 index. It's very hard to beat that for fees and set the bar for my expectations. My last employers provider had Vanguard funds but then took their own hefty cut which amounted to something like 20-30 a month on the same size balance.

Doing the math between taxes and fees the 401K still makes sense though.

SavingWithBabies
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Re: Investments Trade Log

Post by SavingWithBabies » Mon Aug 19, 2019 8:50 pm

@jacob Also some 401k plans allow in service rollovers so that is an opportunity to get it in pre-tax and then roll it out to try to avoid the nibbling mouse. So far, I have not been employed by an employer that offers it though (post learning about it).

jacob
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Re: Investments Trade Log

Post by jacob » Wed Aug 21, 2019 10:33 am

Target!!

cmonkey
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Re: Investments Trade Log

Post by cmonkey » Wed Aug 21, 2019 12:34 pm

I feel like that is an overreaction to their earnings beat, given how slight it is. But hey, I'll take it.

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