Early Retirement Extreme Forums

Long term care REITs are getting hammered today: UHT, SNH, LTC. OHI taking a bit of it, but it's been so beat up that today is just a light bruise.

Came across a pertinent quote today...

"Would anybody be surprised if rising rates cause stocks to have a negative year? And would that really be the end of the world? If you can’t handle twelve months worth of negative returns, you’re in for a rude awakening at some point in time."
- From http://theirrelevantinvestor.com/2018/0 ... onds-fall/

I just bought my first CD since 2006 or so

@jacob

Cash is king?

...music, right?

Wash day tomorrow. Nothing clean, right?

I hadn't been paying attention to rates in general and noticed at even 1-month was paying over 1.25%. I've set up a 3-month ladder because the worst of 2008/09 crash lasted about half a year, so having a period of about half that should provide money fast enough while installing some discipline to avoid buying on the first dip or bull-trap.

~$100 for $100k in a month. Is that worth the solvency risk? Picking up dollars in front of a steamroller? This isn’t me talking, but Harry Browne. Or are T-bills just not worth the hassle?

They're brokered so I can spread them around with $250k of FDIC insurance per institution. Biggest risk is one of them going bankrupt and having to wait 1-2 months for FDIC to cover the amount.

Mr. Market does not like the threat of trade wars now that President Trump is going ahead with tariffs. Only sector I spotted going against the trend today were the BDCs.

This is more akin to what the market (pros) initially expected when Trump was elected (due to "America First"(*) rhetoric) which is why the Dow shed 800 points in overnight trading on election night (like today). I would explain the upturn over the past 1.5 years as the "RedTeam retailer" effect(**) (a market-effect) + WH deregulation efforts (an economy-effect), which have flown under the radar of all the other WH-chaos. The WH has actually removed a lot of regs which is positive for the stock market in the short run. Risks will materialize later.

(*) I think "Mr Market" is getting worried that all other countries are pursuing a strategy of simply circumventing the US and pursuing trade deals between themselves these days (TPP-> Pacific Alliance, Mercosur dealing directly with the EU and Canada going around NAFTA, Brexit being delayed by 2yrs?). These days, the US is now only 15-20% of the world economy (and ~4% of the world population) and making it a viable option for the rest of the world just to ignore US. Also, the EU is hammering on US internet companies for taxes.

(**) Alternatively the fox news effect .. with half of voters/retailers having been told that the economy was doing terrible under Obama, etc. etc. and now being told otherwise, it seems that many retailers are swayed more by the shirt-color of their preferred media outlets than actual numbers. Recall, that many retailers stayed (stood?) completely out since 2009.

I was down 1.00% for the day (vs -2.5% for the general market). Most of my stuff resists the downturns by construction. Of course, I don't benefit as much on the recoveries, but on the net it seems to work out. What's my stuff currently? Boring widow-portfolio things with mostly low debt/equity ratios: Bleach, spam, running water, nuts and bolts and engines, trash service, windmills, self-destructive cigarettes, and cell-phones. My biggest slam for the day was pipelines and breakfast cereal. Biggest loser today was financials (I'm already out) and FAANGs that are still dragging from a few days ago.

Incidentally, anti-correlations held well today. REITs, bonds, and utilities were upish. BDCs would be in that department because they're predominantly yield-oriented (so temporary safety).

I am experiencing something similar. In the last three days, counting the firts trading hours today here in europe, my indexes have lost 4,3% while my stocks have lost "only" 2,4%

I keep cheering for a bigger and bigger drop, let's cross fingers

Notice how Defense (and oil somewhat) has been positive all along. Geopolitical risk anyone?

Yup, geopolitical risk is definitely up. Trump's fearmongering in fragile regions such as the Korean peninsula or the Middle East lead to an increased Defense spending of US allies such Japan, South Korea and Saudi Arabia. Where are these countries getting their weapons from? Why, the US of course! All part of the "America First" policy and boosting the US economy.

It's also because of the military budget included in the new spending bill. If you want to know where to invest, look at which sectors will see an increase in spending based on what's in the bill.

Keeping my eye on DropBox. Just had its IPO recently.
https://finance.yahoo.com/quote/DBX?p=DBX

My intuition is saying a drop is coming this year. I felt like the company IPO'd higher than it should have.
I have done no financial analysis on the company yet. Just going off a hunch.

Thoughts on the Spotify IPO? Worth it or risky?

Every IPO is risky, statistically speaking. For every FB there's ten turds. No matter how interesting it is I stay away from them at all costs, especially if they're SO EXCITING!!! That's another warning sign.

Went short on JPM. Well known that I'm not a fan of the financial sector, generally, and this stock has been a good performer, recently. Every time I read interviews with Dimon, his own writing, or accounts of his actions, it gives me the impression that he is not really steering the ship very well. Then again, maybe he (and JPM) have the right connections..

Water cooler talk: I am curious, the general sentiment here (and my own) is of a rising probability that we are approaching the end of the bull market, and that a major drop could happen any day now. Of course, history never quite repeats itself in the same way. I wonder, what are the chances that current prices simply move sideways for the next several years, without a significant net rise OR fall? Volatility doldrums, if you will. I don't know my market history well, but I seem to recall such scenarios have happened before.

I am not presently invested with ~90% of my assets, and it seems others are similarly holding a large % as cash/CDs/other "safe" positions. Wondering if I should have more in the market. Due to my youth, I wasn't around to experience the last big crash first-hand, so I'm largely going off historical accounts and folks reminiscing over '08/'09's similarities to the present day.

What if the market just... keep up truckin' upward for another few years with occasionally burps like the past few months, continuing to defy expectations/precedent?