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Markets still falling like whoa

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Rusty Shackelford

Rusty Shackelford 414

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Last year was odd in that it was really good for bonds too.  When that 12-15% correction comes take the pop you get with the bonds and pour even more in to equities.  It’s been said a million times here, unless you’re 55+ just keep investing.  If over a 10 year period stocks are down, we have much bigger issues than money.  

I’m not disagreeing but what about Japan? 3rd largest economy on the planet, and stock market still haven’t recovered from 1990.

 

 

https://www.macrotrends.net/2593/nikkei-225-index-historical-chart-data

 

I’m buying the bubble anyway, cause you have to.

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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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Johnny Sack

Johnny Sack 8,397

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On 1/21/2020 at 10:27 AM, Fudge Nuggets said:

Do highly-rated companies issue a lot of preferred stock?  I thought preferreds were for the dodgy co's that are trying to dress up their balance sheet by issuing debt without really calling it debt.

I had a bunch of Wells Fargo preferred during the meltdown.  It held its value like a boss.

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Fudge Nuggets

Fudge Nuggets 19,190

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3 minutes ago, Continental Op said:
1 hour ago, Fudge Nuggets said:
I always have my 401k maxed out, but no way in fucking hell I would be using extra funds to buy in right now.  This market is insane.

Not criticizing your thought process or being typical Surly know it all argumentative twat here but what are you doing with spare cash?

I sock it away in my "I work in oil and gas so need to have minimum two years living expenses saved for the inevitable layoff" fund.

While most people rightfully look for returns, I have always been shit scared of losing money.  Capital preservation is my jam.

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Fudge Nuggets

Fudge Nuggets 19,190

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Posted (edited)
10 minutes ago, Johnny Sack said:

I had a bunch of Wells Fargo preferred during the meltdown.  It held its value like a boss.

I remember back then most if not all the big banks issued preferred shares.  Warren Buffet raped those banks with the sweetheart deals he cut.

Yeah, back then even the likes of WFC were considered a bit dodgy and certainly did not want to show even more debt on their balance sheets.

Edited by Fudge Nuggets
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Johnny Sack

Johnny Sack 8,397

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6 minutes ago, Dbeasy said:

 


Preferred stock of banks dropped 78% before recovering. Are you saying you didn’t see a big drop?

 

I honestly don't remember when exactly I bought, but it was before Lehman, and I sold it in 2011 for a pretty decent gain.  I am not one that watches stocks closely.  I invest and hold.  And in the last 10 years have been also buying more real estate for investments to diversify.

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UT_OB1

UT_OB1 2,219

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I don’t really pay attention to my 410k. I just  put in the max contribution and forget it. Last time I looked at was about a year ago when i ReFi a rental. Doing the same thing again and had to give the info to mortgage company (thanks Utphil) and markets appears to have gone up like whoa.  I think my gain was twice what I contributed this year.  Pleasant surprise. 

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bernorange

bernorange 8,361

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There’s something quite odd about a sharemarket that rises more than 26 per cent over a year in which world economic growth was the weakest since the financial crisis.

That is, however, what the US market has done ... even though US GDP growth last year was only just above 2 per cent.
...
The better explanation for why the stock markets have been surging – they are up about 3 per cent already this month – lies with the usual suspect.

It would appear that it has been the US Federal Reserve Board’s response to the seizure in the US "repo" market last September that has driven sharemarkets to new heights. Since that market froze in mid-September, with rates soaring as liquidity disappeared, the US sharemarket has risen almost 11 per cent.
...

https://www.msn.com/en-au/news/other/us-fed-is-caught-in-a-trap-if-it-tries-to-escape-all-hell-breaks-loose/ar-BBZ9ZAR

 

Quote

The Federal Reserve seems on course to disappoint financial markets at some point this year, but maybe not this week.
...
Morgan Stanley experts think the Fed wants to end its $60 billion-a-month purchases of Treasury bills at the end of April and let its balance sheet plateau. In its place, they expect a smaller $15 billion-a-month of purchases across the Treasury curve, Sheets said. Mark Cabana of Bank of America Global Research thinks the Treasury-bill purchases will continue through June but might be tapered. He thinks the lending to the repo market will end in May.

Such policy shifts could rattle the stock market, said Diane Swonk, chief economist at Grant Thornton.

“Many financial market participants believe that the liquidity provided by the Fed has helped to boost stock prices above and beyond what rate cuts along could do; any moves to stop that growth could show up as a loss in momentum for stock prices,” Swonk said.
...

https://www.marketwatch.com/story/fed-starts-some-tricky-communications-with-financial-markets-this-week-2020-01-26?mod=the-fed

Bubbles don't bubble forever.

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workswithseed

workswithseed 2,103

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1 minute ago, bernorange said:

https://www.msn.com/en-au/news/other/us-fed-is-caught-in-a-trap-if-it-tries-to-escape-all-hell-breaks-loose/ar-BBZ9ZAR

 

https://www.marketwatch.com/story/fed-starts-some-tricky-communications-with-financial-markets-this-week-2020-01-26?mod=the-fed

Bubbles don't bubble forever.

Do you think that the virus scare "corrects" some of the market?

This is all new territory for me.

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bernorange

bernorange 8,361

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35 minutes ago, workswithseed said:

Do you think that the virus scare "corrects" some of the market?

In general, I think most "scares" that affect the market have very short half lives (ie. they only affect the market for a very short time).  There is always a danger for some market moving event to metastasize into a black swan type market breaking event, but unless this virus really develops into something "Egon Spengler bad", I don't think this will qualify.

 

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EuroHorn

EuroHorn 3,263

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Posted (edited)
1 hour ago, workswithseed said:

Do you think that the virus scare "corrects" some of the market?

This is all new territory for me.

History has shown that it has been a short-lived correction.  Who knows this time...

https://www.marketwatch.com/story/heres-how-the-stock-market-has-performed-during-past-viral-outbreaks-as-chinas-coronavirus-spreads-2020-01-22

Historically, however, Wall Street’s reaction to such outbreaks and quickly spreading diseases is often short-lived.

According to Dow Jones Market Data, the S&P 500 posted a gain of 14.59% after the first occurrence of SARS back in 2002-03, based on the end of month performance for the index in April, 2003. About 12 months after that point, the broad-market benchmark was up 20.76% (see attached table):

Epidemic Month end 6-month % change of S&P 12-month % change of S&P
HIV/AIDS June 1981 -0.20 -10.73
Pneumonic plague September 1994 8.22 26.31
SARS April 2003 14.59 20.76
Avian flu June 2006 11.66 18.36
Dengue Fever September 2006 6.36 14.29
Swine flu April 2009 18.72 35.96
Cholera November 2010 13.95 5.63
MERS May 2013 10.74 17.96
Ebola March 2014 5.34 10.44
Measles/Rubeola December 2014 0.20 -0.73
Zika January 2016 12.03 17.45
Measles/Rubeola June 2019 9.82% N/A
      —Source: Dow Jones Market Data

 

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Trey3216

Trey3216 15,346

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On 1/24/2020 at 9:53 AM, Rusty Shackelford said:

I’m not disagreeing but what about Japan? 3rd largest economy on the planet, and stock market still haven’t recovered from 1990.

 

 

https://www.macrotrends.net/2593/nikkei-225-index-historical-chart-data

 

I’m buying the bubble anyway, cause you have to.

Japan is a complex case. Isolated (to some extent), net retiring society, net population decliner, retirees primarily funded through pensions.   

 

 

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Wally Fairway

Wally Fairway 5,544

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On 12/13/2019 at 10:09 AM, Parliament said:

I wanna short Tesla stock, and to that end, I set up a brokerage account with Vanguard.  Looks like no i gotta "borrow" Tesla stock from them and pay 9% interest to do so?  That sounds wrong.  What am I missing here?

If you wanted to short in mid-December, then now is an even better time to jump into the pool....

I think today's the day (or maybe tomorrow) for TSLA earnings release, 

and here is an article today about the spread in put/call options
https://www.wsj.com/articles/tesla-poised-for-dramatic-move-after-earnings-options-show-11580216400?mod=lead_feature_below_a_pos1

excerpt, if paywalled
 

Quote

Options traders are forecasting as much as an 11.8% move in Tesla’s shares over the two sessions following its earnings report. That is a bigger swing than the average 9.5% move over the past eight quarters, according to data provider Trade Alert.

The projections are based on an options trade called a straddle, which entails acquiring both bullish and bearish options contracts that allow investors to buy or sell stock at a specific price. The trade doesn’t measure the direction of the swing, just the size.

As Tesla’s stock has rallied to records, options have been changing hands at a frenzied pace. The auto maker just logged an eight-week winning streak, gaining 71% through Friday, the best performance during such a period since 2013. During the ascent, options volume jumped to a five-year high, and bullish options have been particularly popular in recent days.

 

Edited by Wally Fairway
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Tailgate

Tailgate 3,021

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The future will be electric/non-fossil-fueled vehicles. TSLA appears to have a monster leg up in this race. I’d feel much better if it included Elon’s Space X...but damn...this stock has been a rocket itself. I’m heavy into AAPL and AMZN but I think long term TSLA could be a good position to have. I jumped into AMZN at $800-900 when a lot of people thought that was really high...I’m really eyeballing TSLA even after today’s/after-hours move.

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Tailgate

Tailgate 3,021

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1 hour ago, DalTxHornFan said:

So, where is all this electricity going to come from?  Non-fossil fuels?  Really?  I don't get this aspect of the TSLA story.

My point is our reliance on fossil fuels will come to an end at some point. Will leave the answer up to Elon and other geniuses like him...but the kids on a fucking roll.

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Nice Guy Eddie

Nice Guy Eddie 13,511

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8 hours ago, DalTxHornFan said:

So, where is all this electricity going to come from?  Non-fossil fuels?  Really?  I don't get this aspect of the TSLA story.

Nope you’re right that Teslas are definitely powered by fossil fuels but a certain percent of that power is renewable. A Tesla dream scenario is that you have solar power on your roof that recharges a house battery all day, which then recharges your Tesla car battery at night.

that doesn’t mean all teslas must be 100% solar or wind powered to be successful or impactful to the environment.

as a business, Tesla looks to have a better cost structure than traditional car manufacturers. Not to mention that they can raise capital by just presenting a concept and their fans throw them 100s of millions or more in deposits for something a couple of years out.

Perhaps Tesla is worth dropping some money into even at this valuation.

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Blotto

Blotto 23,498

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41 minutes ago, DalTxHornFan said:

Oh, yeah.  I've been hearing about "peak oil" being only 20 years away for most of my life.  

"Peak oil" is not the same thing as civilization slowly migrating to renewables. Percentage of electricity from renewables in the US has grown from roughly 7% in 2000 to about 16% today. Countries like Germany are approaching close to 50% currently, I believe (all these figures come from memory). Look at how much China is investing in renewables.

Prices of renewables will continue to fall, investment increases, and battery storage is the last nut to crack. We will likely never hit peak oil because society will have moved on to cleaner technologies. That doesnt mean that all oil and gas consumption will cease, but the economics for O&G companies will shift once transportation migrates to electric cars, hydrogen fuel cells etc...

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Incredulity

Incredulity 11,668

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12 hours ago, Tailgate said:

My point is our reliance on fossil fuels will come to an end at some point. Will leave the answer up to Elon and other geniuses like him...but the kids on a fucking roll.

I'm not a Elon hater, or fanboy.

I am pretty suspicious of Tesla's ability to maintain a competitive advantage against Ford, Toyota or any of the Germans when battery and solar technology gets to a point where its essentially a commodity.

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drt

drt 638

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Despite their head start and fact that so far they seem to not suck as much at engineering and design?  I've got no skin in the game but comparing Ford to Tesla; assuming everyone started from scratch tomorrow I'd bet on Tesla and its not close.  Das Germans and Japanese would make me think harder but I'd still lean to Tesla.

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Chapo

Chapo 104

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25 minutes ago, Incredulity said:

I'm not a Elon hater, or fanboy.

I am pretty suspicious of Tesla's ability to maintain a competitive advantage against Ford, Toyota or any of the Germans when battery and solar technology gets to a point where its essentially a commodity.

Elon is the greatest car salesman alive and that's their biggest edge. I haven't seen any survey about dream cars that teenagers would want but I wouldn't be a surprise if Tesla Cybertruck is one of the top choices. And that car is not even available yet. 

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BabaYaga

BabaYaga 15,292

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4 minutes ago, Chapo said:

Elon is the greatest car salesman alive and that's their biggest edge. I haven't seen any survey about dream cars that teenagers would want but I wouldn't be a surprise if Tesla Cybertruck is one of the top choices. And that car is not even available yet. 

He's a marketing guy.  Always has been.  I see his endgame as a market disrupter, looking to shift the paradigm of the industry, then getting bought out and moving on to the next big challenge.  

I also question those that see lithium battaries as the natural evolution to the internal conbustion engine.  The extraction/mining process absolutely wrecks everything near it.  A mineral crisis replaces a fossil fuel crisis.  As the the world scrambles to replace fossil fuels with clean energy, the environmental impact of finding all the lithium required to enable that transformation could becomes a serious issue in its own right.  Starting with water.  Not only do you destroy much of the available resources around you, you also consume vast quantities needed for extraction.  500,000 gallons per tonne of lithium.  Chile’s Salar de Atacama, mining activities consumed 65 per cent of the region’s total water supply.  Then you have to also contend with toxic chemicals to leak from the evaporation pools into the water supply.  

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Tailgate

Tailgate 3,021

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13 minutes ago, Dbeasy said:

One thing I noticed about TSLA is that four friends in the last month told me they were either buying one or seriously considering it. Maybe their cars are moving into the mainstream.

I believe this to be the case. I’ve never seen more on the road. And it continues to increase every time I drive...in any state.

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Blotto

Blotto 23,498

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Posted

It will be interesting to watch how the coronavirus affects apple stock. they currently get about 15% of their revenue from China and the vast majority of their phones come from China. If the shit really hits the fan and their supply gets interrupted, I would imagine the stock could take a dive (at least momentarily). With the largest market cap in the world, this would have a somewhat disproportionate affect on the indexs, no? Isnt APPL alone over 5% of the Nasdaq composite and over 12% of the Nasdaq 100(QQQ)? Of all companies to have such a huge reliance on China for manufacturing. 

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davidg

davidg 4,036

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1 hour ago, TwiceHorn said:

Mhm.  I'm also curious what having a plug-in car does to your electric bill.  No one ever mentions that.

Basic rough calc:   EPA rates the Tesla S at 3mile/kwh.  Inverting and dividing by 85% charging efficiency gives you .39 kwh/mile.  Multiply that by your  $/kwh gives you a $/mile rate to compare to your gas vehicle.  At $0.10/kwh electricity rate you are $0.04/mile which is 56mpg at $2.25 gas.   1k miles a month is $40 in electricity

 

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HouTex

HouTex 1,867

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Basic rough calc:   EPA rates the Tesla S at 3mile/kwh.  Inverting and dividing by 85% charging efficiency gives you .39 kwh/mile.  Multiply that by your  $/kwh gives you a $/mile rate to compare to your gas vehicle.  At $0.10/kwh electricity rate you are $0.04/mile which is 56mpg at $2.25 gas.   1k miles a month is $40 in electricity
 

Popular Science had an interesting article several years ego about electric cars and their environmental impact and their cost. It depends on where you are in the country and how your power is generated. In most areas with a good mix of nuke, nat gas, etc., it’s like driving a compact gas car. In areas like West Va. that are coal heavy, it’s not a huge improvement at all over gas cars.

On the cost side, my garage at work in downtown Houston has several charging stations for electric cars. I wonder if the garage charges more for those spots?
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Incredulity

Incredulity 11,668

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8 hours ago, drt said:

Despite their head start and fact that so far they seem to not suck as much at engineering and design?  I've got no skin in the game but comparing Ford to Tesla; assuming everyone started from scratch tomorrow I'd bet on Tesla and its not close.  Das Germans and Japanese would make me think harder but I'd still lean to Tesla.

Well when the UAW finally organizes Tesla we will see who can stamp and paint fucking steel efficiently.

 

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