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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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Eastwood
Eastwood

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if o

Rusty Shackelford
Rusty Shackelford
Eastwood
Eastwood

I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

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ChiTownDoc

ChiTownDoc 21154

Posted
Posted
On 7/3/2019 at 11:36 AM, ChiTownDoc said:

Can call this luck but it’s worked nearly every time.  Run it to highs, set some puts as you climb.  If it doesn’t fall great.  If the puts hit add all that money back in as it falls 1% at a time.  Scared money don’t make money.  You’re not buying huge puts so if they never hit and your money keeps running it’s still a win.  But there’s always good chance you cover.  Then on way down below the put add UPRO (3x leverages s/p index fund).  When you hit prior highs you’re actually way up.  

Again this is on side with fun money.  The pros who handle my money laugh at how crazy I get but it’s bought me a lot of nice toys. 

This has worked time and time again - feels a little scary when you're doing it but has yet to fail me.  Not only do you usually get your gains on the climb - you almost always cover the puts that you lay out as you come down off a climb.  Now I wasn't around for 2010 and recession prior so I'm sure you could get stuck but if you're not playing with your whole ball of wax doing this it, it has been a good play. 

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bernorange

bernorange 8365

Posted
Posted
29 minutes ago, Anastasis said:

checks futures market. sighs relief (for a least a few minutes).  it looked to be setting up for a nasty day when I looked last night. 

Quote

China took steps to limit weakness in the yuan, providing some stability to global financial markets in the wake of Monday’s rout, and said it won’t depreciate the currency to be competitive.

The People’s Bank of China on Tuesday set the daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong. The moves, which came after the U.S. labeled the country a currency manipulator, helped drive the yuan up 0.2% a day after it sank the most since 2015. The central bank also rejected the accusation it manipulates the yuan.
...

https://www.bloomberg.com/news/articles/2019-08-06/yuan-fixing-in-focus-after-china-named-currency-manipulator

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Wally Fairway

Wally Fairway 5586

Posted
Posted
38 minutes ago, ChiTownDoc said:

 Otherwise stage your entry with more cash if you’ve got the dry powder.  Then set some puts behind yourself on big positive days.  Profit.  

Where are you buying your puts as a hedge, or selling at target prices? 10% out of the money, 5%, or close to the stock price?
How much theta are you risking - near term (weeks), 30, 60,90, 180, year end, 12 months?

I have some puts in place to cover about 50% of my major positions - but I'm not sure how well I'm positioned.

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ChiTownDoc

ChiTownDoc 21154

Posted
Posted
1 minute ago, Wally Fairway said:

Where are you buying your puts as a hedge, or selling at target prices? 10% out of the money, 5%, or close to the stock price?
How much theta are you risking - near term (weeks), 30, 60,90, 180, year end, 12 months?

I have some puts in place to cover about 50% of my major positions - but I'm not sure how well I'm positioned.

50% is high for me.  I’m pretty aggressive for growth then position 2-3% behind lead money usually at 90 days or less.  Has worked well so far.  If it runs another 3% I don’t get scared I just place more at 3-5% behind new highs I hit.  If all seems calm like last summer I may give myself 120+.  The recent rallies have been thin meaning we have had big runs without a lot of people participating.  I look for things to pull faster in that environment.   And full disclaimer, I’m only doing that with 2-5% of my total invested.  The pros handle most of my money very conservatively.   

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Girdwood

Girdwood 118

Posted
Posted

Unless your brokerage account balance has 8 digits or more, those “pros” be hustling yo ass for 1.38 percent. If so, then damn son you got a lot of money. Also, why the fuck are you working. Buy a catamaran and cruise at least, dumbass. Before the wife gets old and wrinkly.

For poors like me, contribute maximum to all tax advantaged accounts, make sure you have HSA set to max as well. Also, dollar cost average because the market is a cold, fickle bitch. But I’m poor so whatever. 

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Wally Fairway

Wally Fairway 5586

Posted
Posted
15 hours ago, ChiTownDoc said:

50% is high for me.  I’m pretty aggressive for growth then position 2-3% behind lead money usually at 90 days or less.  Has worked well so far.  If it runs another 3% I don’t get scared I just place more at 3-5% behind new highs I hit.  If all seems calm like last summer I may give myself 120+.  The recent rallies have been thin meaning we have had big runs without a lot of people participating.  I look for things to pull faster in that environment.   And full disclaimer, I’m only doing that with 2-5% of my total invested.  The pros handle most of my money very conservatively.   

50% is high for me as well, but I've taken some gains and I'm letting the puts run for now. So that has put me more hedged than I normally would like to be. But if it goes the right (or wrong) way, then I will get back in at a better entry point and have made a return on the options. I was in a similar spot last year, but didn't exit the puts at the right time and only made a nominal return.
Hopefully lesson learned, no one ever got poor taking their gains; but you can't get rich either by taking to the sidelines

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bernorange

bernorange 8365

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Posted
Quote

Gold prices have surged in dollars and all currencies due to the escalation in the trade wars and a return to currency wars between China and the U.S.

Gold surged as much as 2% in dollars yesterday and has consolidated on those gains today. It is gold’s highest level in dollars in more than six years (see chart) and gold reached all time record highs (nominal highs and not inflation adjusted highs) in many currencies including the British pound, the Japanese yen, Canadian and Australian dollars.

Trump’s escalation of the trade wars and the worsening U.S.-China trade conflict prompted investors to dump risk assets such as stocks and diversify into safe haven gold.

...

https://news.goldcore.com/us/gold-blog/gold-surges-to-1475-oz-and-all-time-record-highs-in-pounds-yen-canadian-and-australian-dollars/

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Anastasis

Anastasis 23483

Posted
Posted (edited)

fuck it, taking a few small bites today. 

 

a little bit of dumb luck and I ended up with ~30% of my 401k in cash during this dive.  gonna leave that in cash still for a bit looking for a good opp to buy back in with a longer eye to being predominantly in cash by mid 2020. 

Edited by Anastasis
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Trey3216

Trey3216 15356

Posted
Posted
11 minutes ago, Sbbruin said:

Honestly, I have most of my money in equities, but have a cash distribution coming that I want to put in to a slow growth stable investment.  What's my play here?

Farmland, with extra life insurance so your kids don't have to sell it to pay taxes.  

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HouTex

HouTex 1894

Posted
Posted (edited)
3 hours ago, Sbbruin said:

Honestly, I have most of my money in equities, but have a cash distribution coming that I want to put in to a slow growth stable investment.  What's my play here?

A good T. Rowe Price or an American fund.  And let it ride.  I wish I could predict the top and bottom of bull and bear markets, but I lost my crystal ball.

I'm not sure I posted this on this forum, but I did on the old one.  When I was young and stupid I tried to trade and time the market in my non-retirement account.  Over several years my retirement accounts (which held a variety of growth, large cap, mid-cap, small cap, and international funds) outperformed my non-retirement account by a substantial margin.  My friends that are brokers (now called "wealth advisors" or something like that) told me that for 90% of their clients that's the case.  So about 20 years ago I started to buy well managed funds and some index funds and except for re-balancing on occasion I never sell after a market sell-off.  I've done very well.  I recall guys after the financial crisis in 2008 selling everything and going to cash or gold.  They never told me when they got back in--if they ever did.  I just let it ride and I'm glad I did.  If they stayed in gold and didn't get back into equities they lost their ass and many people never got back in, or at least not for many years.  Many "smart" people were saying it was game over and that we would never recover.

I'm around 8 years or so from retirement so I've been slowly moving away from aggressive growth funds, but their 5 year averages are still hard to beat. The key, at least for me, was to stay steady and keep investing for the long haul.  I recall being depressed in my late 30's when my retirement accounts seemed tiny.  Then a couple of bull markets (yes, and even the financial crisis was in there) and 20+ years later I'm amazed at the growth. 

I also recall a study that we received when I became eligible for my firm's 401k back in the 90's.  It showed the current value of two $10,000 investments made each year during the 70's.  One was made at the absolute high of the market and the other at the absolute low of the market for each year.  While there was a difference, it wasn't nearly as large as you might think.  The lesson is to buy and hold for the long term.

Edited by HouTex
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Sbbruin

Sbbruin 21890

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Posted

Other than my savings account, I have all of my money in two managed equity funds.  One a little more growth oriented, the other more blue chip.  But I just feel like I should put this money into something a little less volatile.  I drive myself crazy watching things swing, even though I have no intention of touching the money in these funds for years.

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ChiTownDoc

ChiTownDoc 21154

Posted
Posted
15 hours ago, Girdwood said:

Unless your brokerage account balance has 8 digits or more, those “pros” be hustling yo ass for 1.38 percent. If so, then damn son you got a lot of money. Also, why the fuck are you working. Buy a catamaran and cruise at least, dumbass. Before the wife gets old and wrinkly.

For poors like me, contribute maximum to all tax advantaged accounts, make sure you have HSA set to max as well. Also, dollar cost average because the market is a cold, fickle bitch. But I’m poor so whatever. 

This was how my old man always thought - he couldn't wait to stop working, and he worked his ass off for decades.  Came from zero.   Also - when it has 8 digits you should be even more pissed if they're hitting you for more than 1%.  I'm at 40 basis points and feel they easily pay for themselves at GS. 

14 hours ago, Girdwood said:

That was in no way directed at ChiTown, just being a unscrupulous dickhead sorry. 

Didn't think it was directed at me.  I could retire - love what I do and winning is fun.  Trust me it's very much work hard / play hard.  

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Wally Fairway

Wally Fairway 5586

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Posted

If I had a $1 for every story of being on the correction cliff
I'm pretty sure that like economists, these guys have correctly predicted 10 of the last 2 corrections/recesssions

https://www.marketwatch.com/story/global-macro-trader-who-nailed-the-2008-crisis-says-next-3-months-mark-edge-of-the-cliff-for-marketsand-were-there-right-now-2019-08-07?mod=MW_home_top_stories

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52-80

52-80 19249

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Posted

I put a chunk of money in a private real estatement investment (rental complex) almost exactly 5 years ago.  Everyone on TOS said it was a bad idea.  And maybe it was.  We just had a buyer approach to buy it at over 2x our price.

I thought that it was a pretty damn attractive 5-year exit.  But turns out I couldve gotten the same returns with Apple/Goog/FB/Salesforce...  but with Hamazon or Netflix I couldve done 5x. 

The investment group wants to do Code 1031 to roll it into a new, larger property... but im thinking I'd rather cash out and play with the money

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Fudge Nuggets

Fudge Nuggets 19224

Posted
Posted
18 hours ago, Sbbruin said:

Other than my savings account, I have all of my money in two managed equity funds.  One a little more growth oriented, the other more blue chip.  But I just feel like I should put this money into something a little less volatile.  I drive myself crazy watching things swing, even though I have no intention of touching the money in these funds for years.

I have the vast majority of my retirement money in large-cap / dividend paying funds.  I only check the balance once a month and have purchases on autopilot.

It has done wonders for my anxiety levels.

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Wally Fairway

Wally Fairway 5586

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Posted
12 minutes ago, Fudge Nuggets said:

I have the vast majority of my retirement money in large-cap / dividend paying funds.  I only check the balance once a month and have purchases on autopilot.

It has done wonders for my anxiety levels.

That is similar to my basic investments - but I'm hoping to be <5 years from retirements and the last year has 2 years have made me nervous as can be; but then I have to remember that retiring is just the start of the process as my dad is >25 years into retirement; so it is still a long time horizon for most of those investments.
I'm curious what your time horizon is until you start to need those funds?

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Bozo_Casanova

Bozo_Casanova 26556

Posted
Posted

I'm not a bull or a bear, but this feels different, like a cool morning that prompts the easy listening radio weatherman to remind you at the end of a long, hot summer that he can see the sitrring atmospheric phenomena that tell us fall is coming. 

Anyhow, I'm doing some profit taking over the next few weeks. Not seeking advice, but curious if you fellas were way too much in cash what low risk thing you would get into with the goal of either conservative growth or passive income. 

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Incredulity

Incredulity 11683

Posted
Posted
32 minutes ago, Bozo_Casanova said:

I'm not a bull or a bear, but this feels different, like a cool morning that prompts the easy listening radio weatherman to remind you at the end of a long, hot summer that he can see the sitrring atmospheric phenomena that tell us fall is coming. 

Anyhow, I'm doing some profit taking over the next few weeks. Not seeking advice, but curious if you fellas were way too much in cash what low risk thing you would get into with the goal of either conservative growth or passive income. 

German Bonds, your growth will be extremely conservative.

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Fudge Nuggets

Fudge Nuggets 19224

Posted
Posted
3 hours ago, Wally Fairway said:

I'm curious what your time horizon is until you start to need those funds?

If I want to get out of the race with the bare minimum to scrape by in retirement I could probably do that in six years.  But I have a job that doesn't completely suck (i.e. I don't dread going in every day, but I'm certainly not bolting out of bed in order to get to the office as early as possible either) and my company definitely over pays me for what I do. 

That said, I could see myself sticking it out until the kids are out of college because why not?  In that case I'm looking at 12 years.

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Bone3421

Bone3421 716

Posted
Posted

Curious question/questions....are any surly members putting anything into marijuana companies?

Do you feel confident in Canadian companies with the headstart or do think if/when its legal here a big american company will be ready to catch up

I know big tobacco is looking into it

How do we all get rich in the coming Green Rush?

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ABSR

ABSR 5324

Posted
Posted
7 hours ago, Fudge Nuggets said:

I have the vast majority of my retirement money in large-cap / dividend paying funds.  I only check the balance once a month and have purchases on autopilot.

It has done wonders for my anxiety levels.

My perspective on timing the market is mostly based on the table below.   This is a $10K investment (ignoring taxes and fees etc) if done Jan 1, 1980 and what the returns would be over that time if you missed the best days on the upside.  Because timing is not just about getting out, but also getting in.

https://www.thesimpledollar.com/investing/stocks/tempted-to-sell-missing-just-a-handful-of-the-best-stock-market-days-can-tank-your-returns/

 

chart showing how much investors lose if they miss out on best performing market days

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Continental Op

Continental Op 3934

Posted
Posted
My perspective on timing the market is mostly based on the table below.   This is a $10K investment (ignoring taxes and fees etc) if done Jan 1, 1980 and what the returns would be over that time if you missed the best days on the upside.  Because timing is not just about getting out, but also getting in.
https://www.thesimpledollar.com/investing/stocks/tempted-to-sell-missing-just-a-handful-of-the-best-stock-market-days-can-tank-your-returns/
 
volatile-_markets_2018_chart_3.jpg
Yup. I have thrown my lot in with the bogleheads. Set it and forget it for the most part.
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Rusty Shackelford

Rusty Shackelford 414

Posted
Posted

I don't have anything against the boglehead club, but you would have to be the most unlucky SOB in history to ride out all the ups and downs of the market for 39 years ****EXCEPT**** for these handful of extremely good days.

If there were a graph showing the most lucky SOB in all history (holding for 39 years except being lucky enough to avoid the 5 -50 worst days) you would see the same effect in the upward direction.

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