Markets still falling like whoa

[Dbeasy 15264]

How is he taking money away from employees? Are they not getting compensated for the work they're doing currently? 
And what do you mean fraudulent growth period? The growth was valued by investors, its getting re-looked at by investors and they've decided that it isn't worth what they thought initially. The goal of this company wasn't to provide economic benefits but to cultivate a return for those investors because they were the only ones with something at risk. Employees showed up after everything was set up and claimed and are claiming what's theirs every two weeks whether WeWork turned profit or not. It didn't and they still get to claim their wages. Investors didn't. The only people that Neumann is taking money away from are the investors, not employees.
 

No stock options were awarded to employees? Because those are now virtually worthless.

[hornhorn 100]

Just now, Dbeasy said:

 

No stock options were awarded to employees? Because those are now virtually worthless.

 

That's the risk of investing, sometimes it turns to zero sometimes it yields handsome returns. And they are investors in that role and not employees because a secretary buying stock at P&G and retiring with $5 million in the said stock twenty years later isn't because she was a great secretary but was a great investor. So again he's stealing from those said investors. The only difference is investors invested with actual money, employee-investors invested with their work in lieu of money. 

[Reagan1k 3026]

I guess one could say that he provided jobs  with real compensation during the time his “fraud” was running  so there was no harm.  You can play the chicken and egg game all day with answers totally dependent on perspective and point of view. 

Would there have even been a job without the smoke and mirrors?  Would there have even been options to be granted without it. 

Work /Career choice is an investment of one’s time and creates an opportunity cost question that must be considered as part of the equation with each employment engagement. 

Who is paying the price and who was harmed depends on the lens through which you chose to look IMO. 

 

[Anastasis 23520]

AMZN down 5% AH. 

[Trey3216 15382]

Make it 6.5%.  Getting crushed.  Market gonna be ugly tomorrow.  

[hornhorn 100]

9 minutes ago, Anastasis said:

AMZN down 5% AH. 

I'm glad bought a 1700-1665 put spread expiring tomorrow as a hedge against 1740-1950 call spread expiring in Dec. I suppose it will cover my would be losses at this point. 

Edited October 24, 2019 by hornhorn

[4thgenhorn 39]

20 minutes ago, Anastasis said:

AMZN down 5% AH. 

Time to buy more. I’ve 9 Amazon apps on my phone...hard to imagine this isn’t a buying opportunity. 

[Trey3216 15382]

7 minutes ago, 4thgenhorn said:

Time to buy more. I’ve 9 Amazon apps on my phone...hard to imagine this isn’t a buying opportunity. 

Last year when it did this, it went from 2000ish to 1350 in 3 months.  I'd let it play itself out for about a month, see what the FED is gonna do, before I did anything.  

[hornhorn 100]

5 minutes ago, Trey3216 said:

Last year when it did this, it went from 2000ish to 1350 in 3 months.  I'd let it play itself out for about a month, see what the FED is gonna do, before I did anything.  

It did that last year because FED decided to raise rates and said that they wouldn't expand the Balance Sheet. The entire market came down because of that. They are saying exactly the opposite this year. 

Amazon was expected to have an EPS miss because Bezos mentioned in Q1 conference call that this year is going to be the year of investments. One day delivery in particular is where they are spending a lot of resources. All that to say, if I were a buyer, I wouldn't mind buying the stock in parts. Dollar cost average down or up if you need to from here. 

[hornhorn 100]

Amazon after a 8% down move yesterday AH, almost recovers back within one percent.

And bunch of earnings to be reported next week:

 

[Captainant 28004]

With all this talk of economic growth and strength, it sure is weird that hiring is at a 7-year low. While that would typically make sense when we're at all-time lows for unemployment, there's also the small problem that pay increases have also stagnated and capital spending has significantly decreased as well.

Smells like recession is-a-comin, or at least more bad times for the non-shareholder class. Isn't it funny how GDP just keeps going up but employees get less and less? 

[hornhorn 100]

7 minutes ago, Captainant said:

With all this talk of economic growth and strength, it sure is weird that hiring is at a 7-year low. While that would typically make sense when we're at all-time lows for unemployment, there's also the small problem that pay increases have also stagnated and capital spending has significantly decreased as well.

Smells like recession is-a-comin, or at least more bad times for the non-shareholder class. Isn't it funny how GDP just keeps going up but employees get less and less? 

No. It isn't interesting because you post SURVEYS.

But here's the actual data from the Bureau of Labor and Statistics: 

Real average weekly earnings up 0.9 percent from September 2018 to September 2019

https://www.bls.gov/opub/ted/2019/real-average-weekly-earnings-up-zero-point-9-percent-from-september-2018-to-september-2019.htm

 

It(lies) also isn't funny. 

[Captainant 28004]

7 minutes ago, hornhorn said:

No. It isn't interesting because you post SURVEYS.

But here's the actual data from the Bureau of Labor and Statistics: 

Real average weekly earnings up 0.9 percent from September 2018 to September 2019

https://www.bls.gov/opub/ted/2019/real-average-weekly-earnings-up-zero-point-9-percent-from-september-2018-to-september-2019.htm

 

It(lies) also isn't funny. 

WOWSER! Pay increased a whopping zero-point-nine percent over the last year!! Let's just take a quick look at CPI over the same time period from the same government agency you're citing....

Aw shucks, it's greater than the net increase in pay over the same time period! Surely that couldn't mean that compensation is in fact decreasing?

Edited October 28, 2019 by Captainant

[hornhorn 100]

2 minutes ago, Captainant said:

WOWSER! Pay increased a whopping zero-point-nine percent over the last year!! Let's just take a quick look at CPI over the same time period from the same government agency you're citing....

Aw shucks, it's greater than the net increase in pay over the same time period! Surely that couldn't mean that compensation is in fact decreasing?

That wage increase takes into account CPI. Its real wage increase.

Try again. Aw shucks!!!

Edited October 28, 2019 by hornhorn
Edited to add Aw shucks.

[Captainant 28004]

1 minute ago, hornhorn said:

That wage increase takes into account CPI. Its real wage increase.

Try again. Aw shucks!!!

Ah well then you've skewered me. The blazing wage increase off less than one percent compared against "better-than-ever" GDP growth of 3.4% completely debunks my claims of economic growth being withheld from workers and wage earners and going to the stockholders first.

Nevermind that cap spending has dropped, along with hiring, along with wage increases - WAGES ARE UP LESS THEN ONE PERCENT BAYBEEEEEE. And sure, we'll probably get a new jobs report that totally won't be off by a massive amount initially to get good press (and then is quietly adjusted downwards later) but that doesn't change the fact that there's a bunch of economic indicators and warning lights flashing, and it's pretty regarded to act like all's well.

[hornhorn 100]

2 minutes ago, Captainant said:

Ah well then you've skewered me.

That's all you needed to say, because I did. Take your cloak room BS to cloak room. 

Edited October 28, 2019 by hornhorn

[Captainant 28004]

3 minutes ago, hornhorn said:

That's all you needed to say, because I did. Take your cloak room BS to cloak room. 

What about my post was political? I didn't know it was political in nature to compare wage increase to GDP growth. You're missing the forest for the trees, sorry I invaded your safe space Mr. Snowflake ❤️

[choripan 790]

I'm not good at navigating the BLS' site, but it'd be interesting to see median earnings and quartiles or something like that. Averages don't mean much in this context, IMO.I'm not good at navigating the BLS' site, but it'd be interesting to see median earnings and quartiles or something like that. Averages don't mean much in this context, IMO.

[choripan 790]

In any case, Sy financial masterminds ... when do I switch my 401k over to money markets or something like that? Only posters with crystal balls please respond.

[TwiceHorn 31705]

Unless you're 5 years from retirement or have your 401k in just a handful of equities, I'd just ride it out.  

[Wally Fairway 5610]

26 minutes ago, choripan said:

In any case, Sy financial masterminds ... when do I switch my 401k over to money markets or something like that? Only posters with crystal balls please respond.

My best advice would be to do it about 6-8 weeks before you realize that you should have. 
If you think that you are 3-6 months away from a correction (aka needing to go into cash), look at buying some SPY puts (or other broad market indicator), then you can watch theta slowly erode your hedge value, which will expire about 6-8 weeks before they would have had significant value.

Or you can average out of the market - say 4-8% a month, after 6 months you should be about 25-50% into cash and hating yourself for missing out on the increasing market. So you will put it all back in, about 6-8 weeks before the dip.

At least this has been my experience with market declines.

[HouTex 1902]

1 hour ago, TwiceHorn said:

Unless you're 5 years from retirement or have your 401k in just a handful of equities, I'd just ride it out.  

This.  I've been hearing the economy is about to crater and never recover for almost 30 years.  Even after every mini-crash and even after the great financial crisis the markets have always come roaring back.  Until a time machine is invented you'll never know the top and bottom of the markets--you can only make a guess.  You can lose a lot by selling too late and then lose again by buying too late.

[Tailgate 3027]

On 10/24/2019 at 12:03 PM, hornhorn said:

Amazon, Intel, Gilead, Visa and Verizon all report today after close/tomorrow before open, anyone playing these stocks or their derivatives?

Long AMZN. Took me a while to get in but jumped after it dipped below $1k per share. This is and will continue to be a beast long term.

Stay the course. Don’t try and time this insanity or you’ll go crazy. The market wins over time...every time.

Edited October 29, 2019 by Tailgate

[Wally Fairway 5610]

3 hours ago, TwiceHorn said:

Unless you're 5 years from retirement or have your 401k in just a handful of equities, I'd just ride it out.  

My Dad is retired, turns 89 next year, and has decided he needs to be more aggressively invested in the market. He is about 2-3% cash, 5% CD's, 20% balanced funds, 20 % sector funds (because he thinks he can get lucky guessing sectors), and the rest in 5-6 mutuals that are in the market.
He thinks he needs his savings to last another 15-20 years, and I try to tell him that he might expire before the rebound from the next correction/recession/downturn. But he is deaf and blind to those risks.
And he has all day to look for the needle in the haystack.....so much for me (and my brothers) getting a couple of bucks in the next 5+ years.

[Aqua Buddha 14671]

11 hours ago, Tailgate said:

Long AMZN. Took me a while to get in but jumped after it dipped below $1k per share. This is and will continue to be a beast long term.

Stay the course. Don’t try and time this insanity or you’ll go crazy. The market wins over time...every time.

This.  Despite all norms of finance on things like profit, AMZN will always be overpriced and will always continue to go up.  Just recently, the missed on profit after overspending wildly on an already astounding $800M investment in same day shipping and still haven't really explained Whole Foods after two spending $14B two years ago.  Their stock was down 1% on the news.

I took a deep breath and bought a lot a few years back at $700.  Thought it was overpriced then.  It probably was.

[TwiceHorn 31705]

12 hours ago, Wally Fairway said:

My Dad is retired, turns 89 next year, and has decided he needs to be more aggressively invested in the market. He is about 2-3% cash, 5% CD's, 20% balanced funds, 20 % sector funds (because he thinks he can get lucky guessing sectors), and the rest in 5-6 mutuals that are in the market.
He thinks he needs his savings to last another 15-20 years, and I try to tell him that he might expire before the rebound from the next correction/recession/downturn. But he is deaf and blind to those risks.
And he has all day to look for the needle in the haystack.....so much for me (and my brothers) getting a couple of bucks in the next 5+ years.

I guess the other thing is, what is going to be your short term (year or two) need for cash and what percentage of your total portfolio might that need be.

My parents went through multiple big recession cycles without ever cashing out or even doing a huge shift away from equities (funds).  Their cash needs were small most of the time (mostly lived off SS) and a very small percentage of that portfolio.

Cashing out risks locking in losses and missing gains on the rebound.  As long as the losses remain mostly paper, you're probably good.

This is a better way to look at it than how far out from retirement are you.

[52-80 19287]

Anybody read Matt Levine's columns on Bloomberg?  He's been beating the wework horse lately, but writes about everything else in finance.  Fun read, and often insightful

Edited October 29, 2019 by 52-80

[Reagan1k 3026]

16 hours ago, Wally Fairway said:

My Dad is retired, turns 89 next year, and has decided he needs to be more aggressively invested in the market. He is about 2-3% cash, 5% CD's, 20% balanced funds, 20 % sector funds (because he thinks he can get lucky guessing sectors), and the rest in 5-6 mutuals that are in the market.
He thinks he needs his savings to last another 15-20 years, and I try to tell him that he might expire before the rebound from the next correction/recession/downturn. But he is deaf and blind to those risks.
And he has all day to look for the needle in the haystack.....so much for me (and my brothers) getting a couple of bucks in the next 5+ years.

Unless he is making poor decisions (trying to time sectors might fall into this) or runs the risk of needing to sell at a bottom for income needs, you might end up benefiting.

I know a number of folks in retirement who now manage their portfolio or a sizable portion of it with the mindset that they are managing their heir's money now.  Obviously their current income needs are met, but they defy cookie cutter wisdom with their approach.

Their allocations mirror their children's or grandchildren's profiles.  Even though the retirees may be in their late 70's or 80's, they are keeping a 30-50 year time horizon so as not to squander the benefits of compounding growth assets during a 20+ year time which they would were they to go conservative.

Just food for thought.

[Nice Guy Eddie 13568]

17 hours ago, Wally Fairway said:

My Dad is retired, turns 89 next year, and has decided he needs to be more aggressively invested in the market. He is about 2-3% cash, 5% CD's, 20% balanced funds, 20 % sector funds (because he thinks he can get lucky guessing sectors), and the rest in 5-6 mutuals that are in the market.
He thinks he needs his savings to last another 15-20 years, and I try to tell him that he might expire before the rebound from the next correction/recession/downturn. But he is deaf and blind to those risks.
And he has all day to look for the needle in the haystack.....so much for me (and my brothers) getting a couple of bucks in the next 5+ years.

Extended low interest rates cut into retirement money as you can't count on bonds or any interest bearing account from earning as much as you may have assumed. Retirees may have put much of their money into safer funds that are earning next to nothing while equities have skyrocketed.  They don't have FOMO, they have MO.

[hornhorn 100]

Grubhub down 43% today after earnings call. Damn!

[Wally Fairway 5610]

6 hours ago, Reagan1k said:

Unless he is making poor decisions (trying to time sectors might fall into this) or runs the risk of needing to sell at a bottom for income needs, you might end up benefiting.

I know a number of folks in retirement who now manage their portfolio or a sizable portion of it with the mindset that they are managing their heir's money now.  Obviously their current income needs are met, but they defy cookie cutter wisdom with their approach.

Their allocations mirror their children's or grandchildren's profiles.  Even though the retirees may be in their late 70's or 80's, they are keeping a 30-50 year time horizon so as not to squander the benefits of compounding growth assets during a 20+ year time which they would were they to go conservative.

Just food for thought.

His idea of being more aggressive is to find high dividend paying stocks, I've tried to show that some of them are due to stock prices that have fallen, or niche REIT's or MLP's. When I ask him about the individual companies he only knows they are paying high dividends.
He wants the income, which is an old school investing concept - he is looking for 8%+ in income, not that he currently needs the income as between collecting his pension, SS, and on his LTC insurance he is monthly cash positive. I've tried to get him to understand that if he needs cash we can sell from his stocks/funds and only have to pay cap gains - but it is somehow stuck in his mind that dividends are more attractive than gains because they are more constant. 

I do understand that he has done better by being in the market, and that's great - I don't like him being in individual stocks, especially if his selection method is dividend %. At the end of the day he still has his mental facilities, we have direct and intentional discussions about risk and return, and it is his money.

[Anastasis 23520]

Smolzs can suck my cock. 

[TwiceHorn 31705]

7 hours ago, Nice Guy Eddie said:

Extended low interest rates cut into retirement money as you can't count on bonds or any interest bearing account from earning as much as you may have assumed. Retirees may have put much of their money into safer funds that are earning next to nothing while equities have skyrocketed.  They don't have FOMO, they have MO.

Yeah, that's a big reason my parents never moved away from equities.  If they could have gotten decent interest rates on anything, they probably would have.  Plus the tax hit on big moves would have pained them.

I may make it seem like they scrimped in retirement.  They didn't.  They took a couple of nice trips every year.  Bought a couple of new cars for security on their car trips, and did a lot of social things that didn't cost a ton of money.

My Dad's company also maintained healthcare after retirement as a Medicare supplement for a couple hundred a month for both of them, so they had no appreciable health care costs, either. And were healthy until the end. That's the big Kings X on the whole thing.

Edited October 30, 2019 by TwiceHorn

[Tailgate 3027]

4 hours ago, hornhorn said:

Grubhub down 43% today after earnings call. Damn!

Ouch...haven’t followed their stock but I use their service frequently.

[Not a cat 5741]

8 hours ago, Reagan1k said:

Unless he is making poor decisions (trying to time sectors might fall into this) or runs the risk of needing to sell at a bottom for income needs, you might end up benefiting.

I know a number of folks in retirement who now manage their portfolio or a sizable portion of it with the mindset that they are managing their heir's money now.  Obviously their current income needs are met, but they defy cookie cutter wisdom with their approach.

Their allocations mirror their children's or grandchildren's profiles.  Even though the retirees may be in their late 70's or 80's, they are keeping a 30-50 year time horizon so as not to squander the benefits of compounding growth assets during a 20+ year time which they would were they to go conservative.

Just food for thought.

I plan on doing something like this as I hope to have more than enough for my simple ass.  Right now I'm opening up roths for my 2 teenagers since this is the first year they've had earned income. Since they'll have a 45 year time horizon, I'm toying with the idea of just putting it in a 2x or 3x qqq fund and forget it.  Tell them about it in my will and they'll likely either have nothing or a few million tax free.  

[staboner 5017]

2 hours ago, Anastasis said:

Smolzs can suck my cock. 

I'd buy that!

[Trey3216 15382]

7 hours ago, Not a cat said:

I plan on doing something like this as I hope to have more than enough for my simple ass.  Right now I'm opening up roths for my 2 teenagers since this is the first year they've had earned income. Since they'll have a 45 year time horizon, I'm toying with the idea of just putting it in a 2x or 3x qqq fund and forget it.  Tell them about it in my will and they'll likely either have nothing or a few million tax free.  

Do not do that.  The 2x and 3x finds are trading vehicles only.  They will be eaten up by fees, decay, and volatility crush 

[Anastasis 23520]

8 hours ago, staboner said:

I'd buy that!

Astros at home still falling like whoa. 

[Reagan1k 3026]

2 hours ago, Trey3216 said:

Do not do that.  The 2x and 3x finds are trading vehicles only.  They will be eaten up by fees, decay, and volatility crush 

Yeah, that's not a long term investment.  Those are short term trade / hedge vehicles.

Buy them some core index based investments and sprinkle in some long term aggressive plays in ETFS to spread the risk of single stock selection...maybe consider AI plays or the like for a sliver of the allocation.  Over 45 years, you don't need blow-out returns to create wealth.  You need to 1) beat inflation plus some 2) minimize fees and taxes 3) add to principal regularly .

Just my two cents.

You'll be much happier hitting  singles and doubles instead of trying for homers that die on the warning track....and the best way to time the market is to make regular additional investments at consistent fixed points year after year after year.....by default you time the market in a sense due to dollar cost averaging.

[LurkingHorn 1077]

Pardon my ignorance, but if you open up a custodial IRA don't you have to turnover the assets to the kids at 18? Also, if their earned income isn't that much, can you still max out the account annually? 

[Reagan1k 3026]

11 minutes ago, LurkingHorn said:

Pardon my ignorance, but if you open up a custodial IRA don't you have to turnover the assets to the kids at 18? Also, if their earned income isn't that much, can you still max out the account annually? 

Age when the custodial control is removed depends on the state I believe.

Contributions are limited to earned income up to the max that year.  Can't earn $1000 and contribute $5000 for instance.

But, you can technically let the kid keep all of their earnings to spend and use other funds (yours) to fully fund it up to the max or earned income level.

[Trey3216 15382]

39 minutes ago, Reagan1k said:

Age when the custodial control is removed depends on the state I believe.

Contributions are limited to earned income up to the max that year.  Can't earn $1000 and contribute $5000 for instance.

But, you can technically let the kid keep all of their earnings to spend and use other funds (yours) to fully fund it up to the max or earned income level.

Correct.  They can contribute up to 100% of their earned income or the maximum contribution annually, whichever is lower.  

[Not a cat 5741]

They get legal title at age of majority (18-21 depending on the state).  But if the funding is all your money, they don't know about the account until you die and tell them in the will, are they really going to take Dad to court about it?  

As far as all the advice about the dangers of leveraged funds, I hear you, those things are dangerous as hell- volatility decay, fees, etc.   I guess my point is that I'm looking for something that can turn 1,000 into an insane amount of money over 45 years or just go to zero.  A long term roll of the dice knowing full well of the risk you're accepting.

One guy on bogleheads is doing something similar employing a mix of 3x S&P (UPRO) and 3X Treasury (TMF).  This is clearly not something you would do with any money you might actually need but it is an intriguing theory.    

  https://www.bogleheads.org/forum/viewtopic.php?t=272007

 

 

[Reagan1k 3026]

On the kids' / grand kids' IRA deal, you really don't have to worry too much about the age limit.  Just keep the statements coming to your mailing address in their name even after the custodial time frame is up.  They don't even have to know it is there....if you are worried they'll take an early distribution once they come of age.

Once they get out on their own and are filing their taxes personally  / making their own contributions you stop, but let the IRA's ride.

At that point, you could also cut a deal with them to provide money for them to make contributions to a new IRA using your excess funds if in fact they can't or choose not to be able to afford to do it on their own.  Not many if any better ways to advance some of their inheritance to them in the most tax efficient manner allowed at this time.  Stipulate that the gravy train stops if the account is foolishly liquidated.  

A few grand a year in a tax free account growing from teen years into one's seventies could be a pile of money.

[Trey3216 15382]

7 minutes ago, Not a cat said:

They get legal title at age of majority (18-21 depending on the state).  But if the funding is all your money, they don't know about the account until you die and tell them in the will, are they really going to take Dad to court about it?  

As far as all the advice about the dangers of leveraged funds, I hear you, those things are dangerous as hell- volatility decay, fees, etc.   I guess my point is that I'm looking for something that can turn 1,000 into an insane amount of money over 45 years or just go to zero.  A long term roll of the dice knowing full well of the risk you're accepting.

One guy on bogleheads is doing something similar employing a mix of 3x S&P (UPRO) and 3X Treasury (TMF).  This is clearly not something you would do with any money you might actually need but it is an intriguing theory.    

  https://www.bogleheads.org/forum/viewtopic.php?t=272007

 

 

What I'm saying is that the leveraged funds are guaranteed to go to zero in the long run.  If your goal is to have a chance, any at all, to grow, then find something else to invest in.  

[Not a cat 5741]

There is a much higher risk of loss, for sure, but to say it is guaranteed to go to zero is overstating it.  Unless the market drops 50% in one day (for a 2x fund) or 33% (for a 3x fund), it's not going to go to zero.  Sure, returns will suck if there are multiple huge drops and that's a real risk.

For example investing 10,000 in the 2X QQQ fund of UOPIX fund (the oldest I could find for actual backtesting purposes) at its inception in January 1998 would be worth 52,076 for an annual return of 7.88.  Make it an absolute worst case scenario of investing 10K in January of 2000 at the height of the internet bubble and you'd have 5,477 for an annual return of -3%. 

Is it insane to do this as part of your core investing? Absolutely.  But to say funds are guaranteed to go to zero in a span of 45 years is not correct.     

[ChiTownDoc 21256]

Kept dumping more in.  Looks good.  There still people under 50 here trying to time things?  

[Tailgate 3027]

No one will be able to compete with Disney content.

Buddy is in Beta.

[Bone3421 716]

No one will be able to compete with Disney content.

Buddy is in Beta.

So is this saying buy more disney stocks?

[Continental Op 3934]

Their earnings are going to be shit this week but the long term looks great for Disney.