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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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0xdeadbeef

0xdeadbeef 1699

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Posted

Unfortunately, a global pandemic impacting every part of the supply chain and all sales and distribution channels world wide is unlike anything we've every seen before.  This has the potential to get very much worse.   There are no lessons to be learned from studying historical events.    

960x0.jpg?fit=scale

The dreaded Black Swan event is here.

 

The big panic in the US hasn't even started yet, when we see the virus spread in the US like it is in Italy, and it's going to, it will be pandemonium and the market will probably take an epic drop.... and then stabilize, and then it's time to buy.  Question is when.

 

 

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Eastwood
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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

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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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Wally Fairway

Wally Fairway 5674

Posted
Posted
5 minutes ago, 0xdeadbeef said:

Unfortunately, a global pandemic impacting every part of the supply chain and all sales and distribution channels world wide is unlike anything we've every seen before.  This has the potential to get very much worse.   There are no lessons to be learned from studying historical events.    

The dreaded Black Swan event is here.

The big panic in the US hasn't even started yet, when we see the virus spread in the US like it is in Italy, and it's going to, it will be pandemonium and the market will probably take an epic drop.... and then stabilize, and then it's time to buy.  Question is when.

Just wait until communities in the US are put on quarantine, and major events are cancelled (conventions, sporting events, etc)

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Captainant

Captainant 28528

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Posted

Well, it's a good thing we didn't blow all of our economic stimulus capacity while the markets were already doing fine last year. It'd be a real fucker if things went pear shaped in the middle of a global viral epidemic after hollowing out every agency in the spirit of reducing profit-stifling regulations.

Ah well, nevertheless.

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babysdaddy

babysdaddy 2731

Posted
Posted
11 minutes ago, Captainant said:

Well, it's a good thing we didn't blow all of our economic stimulus capacity while the markets were already doing fine last year. It'd be a real fucker if things went pear shaped in the middle of a global viral epidemic after hollowing out every agency in the spirit of reducing profit-stifling regulations.

Ah well, nevertheless.

What was 'all of our economic stimulus capacity' and why is there none left, in your opinion?

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Captainant

Captainant 28528

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Just now, babysdaddy said:

What was 'all of our economic stimulus capacity' and why is there none left, in your opinion?

A significant chunk of it was the tax bill which went into effect last year, which enabled businesses to buy back shares, which artificially kept stock prices high and enabled the party to keep on goin' thanks to the massive injection of cash into the overall marketplace. Which was a considerable amount of economic stimulus capacity, since its result is 1.5T in debt over the next 10 years.

It's not so much that "there's no stimulus left", but that there's diminishing returns to pumping more money into an economy. And that we have done fuck all to try and stabilize our overheated economy since we gotta hit those growth numbers otherwise the market might lose faith (see: party keeps on goin'). 

But that's just my opinion

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Wally Fairway

Wally Fairway 5674

Posted
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Just now, jimmyjazz said:

Good news!  Fastest S&P 500 10% correction in history!  We're #1!!!

S&P Correction

 

Seems like an interesting (cherry picked) criteria - I'm still saying this is not so bad as compared to the 1987 Black Monday (and Tuesday) where the market lost >20% on Monday, continued down on Tuesday until the halted trading, worked out new rules and then reopened and stabilized the crash.

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Blotto

Blotto 24013

Posted
Posted (edited)

 While undoubtedly a kick in the nuts, the S&P is still about 7% above where it was a year ago, and up 60+% from where it was 5 years ago. The retarded juicing of the market by the Fed has probably skewed some opinions on what a reasonable market return should be, but this is hardly a disaster yet. SPCE hitting damn near a $10 billion dollar market cap with zero revenues and a business plan reminded me of the heady dot com market days. Stonks don't always go up apparently. 

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BradInATX

BradInATX 9208

Posted
Posted (edited)
On 2/24/2020 at 8:58 AM, BradInATX said:

Friday before last I pulled all of my "fun" money (the piece of our retirement that I don't just set and forget) out which was primarily SPY at $336.7. I just dumped 1/3 of that back in at 325, so yay, some free SPY stocks for me.  Weighing what to do next with the other 2/3. No idea what next, this market just doesn't make any sense to me these days.

I took the rest of this and put in four limit orders this morning. First one executed instantly when the market opened and the second one executed almost at close. I'm almost hoping the other two don't hit.

 

2Qvx7A0.png

 

 

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jimmyjazz

jimmyjazz 47137

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30 minutes ago, Wally Fairway said:

Seems like an interesting (cherry picked) criteria - I'm still saying this is not so bad as compared to the 1987 Black Monday (and Tuesday) where the market lost >20% on Monday, continued down on Tuesday until the halted trading, worked out new rules and then reopened and stabilized the crash.

Sure, because it's measuring time for the S&P to fall 10% down from the most recent peak, which had already happened by Black Monday (late August peak --> ~ 10% down a couple of days before Black Monday).

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0xdeadbeef

0xdeadbeef 1699

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Posted
20 minutes ago, BradInATX said:

I took the rest of this and put in four limit orders this morning. First one executed instantly when the market opened and the second one executed almost at close. I'm almost hoping the other two don't hit.

 

2Qvx7A0.png

 

 

Why buy back so soon?

Are you feeling like the drop is mostly over? It's sitting at $297 which is near a 6-month low. 

I keep seeing articles talking like this was a large, but normal, market correction, suggesting that there may be a little more to come, but we've had the bulk of it.   I don't know if these journalists are just sunshine-pumpers or if I'm being paranoid.  I hope I'm wrong, and this post ages poorly, but I think this is getting much worse.   We've had floods in Asia impact manufacturing in the Tech sector before, we've have crop problems impact ag futures, we've seen Oil issues impact the market all the time, but I can't recall anything as wide spread as this before.   I work for a global Tech company and I know our Asian sales and pre-sales teams have been treading water for more than a month.  I don't know if it's going to impact the quarter we're just about to report, but the next one is going to be disastrous.    

 

 

 

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babysdaddy

babysdaddy 2731

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48 minutes ago, Captainant said:

A significant chunk of it was the tax bill which went into effect last year, which enabled businesses to buy back shares, which artificially kept stock prices high and enabled the party to keep on goin' thanks to the massive injection of cash into the overall marketplace. Which was a considerable amount of economic stimulus capacity, since its result is 1.5T in debt over the next 10 years.

It's not so much that "there's no stimulus left", but that there's diminishing returns to pumping more money into an economy. And that we have done fuck all to try and stabilize our overheated economy since we gotta hit those growth numbers otherwise the market might lose faith (see: party keeps on goin'). 

But that's just my opinion

Totally agree that  stimulus spending has diminishing returns.  Especially in leverage situations.

But I disagree that fiscal/stimulus policy is shot (and for the record, I don't think it would be effective right now anyway).  For reference, the S&P 500 companies uses of cash since 2007 on stock buybacks went like this: 33%, 25%, 23%, 21%, 28%, 23%, 26%, 27%, 24%, 25%, 24%, 28%, 28%.  So in '18 and '19 they did a little bit more as a percentage of cash but not drastically different.  Dividend history was similar, fyi.  Dollar amounts were higher but that's because they had more cash.  Regardless, buybacks and dividends were there before and didn't increase drastically due to tax stimulus.  Capex percentages were similar in percentage history too, just more on a dollar basis. 

So, respectfully, your analysis is wrong and you should feel bad;).  There is plenty left in the tank, should the Fed and government feel the need to.  But this sell off has fuck all to do with that and more about unknown impact to economic activity of everyone on the planet sitting at home in fear of this virus.

 

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BradInATX

BradInATX 9208

Posted
Posted (edited)
17 minutes ago, 0xdeadbeef said:

Why buy back so soon?

Are you feeling like the drop is mostly over? It's sitting at $297 which is near a 6-month low. 

I keep seeing articles talking like this was a large, but normal, market correction, suggesting that there may be a little more to come, but we've had the bulk of it.   I don't know if these journalists are just sunshine-pumpers or if I'm being paranoid.  I hope I'm wrong, and this post ages poorly, but I think this is getting much worse.   We've had floods in Asia impact manufacturing in the Tech sector before, we've have crop problems impact ag futures, we've seen Oil issues impact the market all the time, but I can't recall anything as wide spread as this before.   I work for a global Tech company and I know our Asian sales and pre-sales teams have been treading water for more than a month.  I don't know if it's going to impact the quarter we're just about to report, but the next one is going to be disastrous.    

 

 

 

 

All good points. I'm not necessarily trying to catch the knife at the bottom. I sold at a pretty fortunate time (basically the peak prior to the drop), and with my plan I can outperform the market by 10-15%. I'll happily take that and run. I'm an amateur.

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Wally Fairway

Wally Fairway 5674

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39 minutes ago, Trey3216 said:

Not going to CR, but I wouldn’t be surprised to see that if this thing really gets going,  the Wuhan 2: Corona Boogaloo that is, and a candidate wins that Wall St/Corp America doesn’t care for, that we see Dow 15k by Inauguration Day.  

And that is why I have 11/20/20 and 3/19/21 SPY puts, that I ride the current gains and not act to early - and those are really my hedge, so otherwise I would have lightened my long SPY.
And it makes it easier for me to sleep at night, hoping that I can retire in the next 6-8 years. Well retire from the full-time daily grind.

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Covri

Covri 6368

Posted
Posted

Should I move my 401k at work from the target end date fund to the bonds fund? Normally I wouldn’t even ask as I’m 25+ from retirement, but this seems like a unique situation. Seeing this one day drop makes me wonder if I should park it until the situation levels. 

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atomheartbevo

atomheartbevo 90641

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4 hours ago, Wally Fairway said:

how long until the virus is contained or a pandemic is declared?
how long until the primaries settle the nomintation?
how long until the general election?
how long until the next black swan comes onto the horizon?

Hitchihiker's guide says the answer is 42, so I'm going with that 

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Continental Op

Continental Op 3934

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22 minutes ago, Covri said:

Should I move my 401k at work from the target end date fund to the bonds fund? Normally I wouldn’t even ask as I’m 25+ from retirement, but this seems like a unique situation. Seeing this one day drop makes me wonder if I should park it until the situation levels. 

Keep shoveling money into that bitch. Stocks are on sale. 

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Rip76

Rip76 5022

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20 minutes ago, Covri said:

I meant because of it being driven by a health crisis and China being shut down a month so far. Can’t think of another time like this, but I’m no Norman Einstein either.

Wait until the first and second school closing in the US.

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Continental Op

Continental Op 3934

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5 minutes ago, Covri said:

Alright, thank you. Was questioning myself, but I figured let it play out and long term were the correct plays, just needed one or two random internet people to assure me I’m smrt.

I should mention I do not have a penny to my name and can I blow you behind a dumpster for $0.50?

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atomheartbevo

atomheartbevo 90641

Posted
Posted
4 hours ago, 0xdeadbeef said:

Unfortunately, a global pandemic impacting every part of the supply chain and all sales and distribution channels world wide is unlike anything we've every seen before.  This has the potential to get very much worse.   There are no lessons to be learned from studying historical events.    

960x0.jpg?fit=scale

The dreaded Black Swan event is here.

The big panic in the US hasn't even started yet, when we see the virus spread in the US like it is in Italy, and it's going to, it will be pandemonium and the market will probably take an epic drop.... and then stabilize, and then it's time to buy.  Question is when.

Avatar checks out

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atomheartbevo

atomheartbevo 90641

Posted
Posted
4 hours ago, Wally Fairway said:

Just wait until communities in the US are put on quarantine, and major events are cancelled (conventions, sporting events, etc)

They can’t quarantine a city like Houston.   And every fucking Billy “Jade Helm” Bubba will be looking to evade any quarantines, or trying to take matters into his own hands and shoot somebody that does.    So that will make it even worse   

Meanwhile, shitloads of container ships will sit idle off the coast of China, or make runs carrying a fraction of what they used to.  

And even if they deliver goods, will there be enough people to offload them and get them across the country?

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ChiTownDoc

ChiTownDoc 21345

Posted
Posted
6 minutes ago, Wally Fairway said:

Do you stonk too? I picked a bad day not to buy puts at the close.

It feels like I could loss up on shor't expire puts and calls, as the market seems likely move in big swings. What could go wrong?

Stonks are lame, leverage is the autists game

It’s addictive.  I’m not proud of it my man.  

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0xdeadbeef

0xdeadbeef 1699

Posted
Posted
53 minutes ago, Covri said:

Alright, thank you. Was questioning myself, but I figured let it play out and long term were the correct plays, just needed one or two random internet people to assure me I’m smrt.

Normally, the let-it-play out is almost always better. If you sell, you need to get back in at some point, and often time novice investors (myself included) miss selling at the peak, and miss getting in at the bottom.  The last thing you want is to sell thinking it's going to drop more only to have it start recovering. 

That said, this is not a normal time, IMHO, I believe that when this starting spreading in the US, like it is in Italy, and that will probably in within 2 weeks, there is going to be a nationwide 'panic'.  Kinda like what happens when a hurricane is coming... panic buying.  I think that's going to cause a huge drop in the market. It may recover a little and stabilize quickly, but I think there is a cliff ahead.   I also don't think the market is going to fully recover for the rest of the year.  I know my global 500 tech company is looking at a really bad 2nd Qtr because of the virus...and that's just because of Asia.  Mix in EMEA and the Americas and the 3rd Qtr will probably be worse... I don't think we will be alone in missing our targets.

I'm not giving advice at all, just stating my opinion.

 

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