Down goes the Dow

Buy and hold wrote:

Gvyggbyggy wrote:

If I look back to Oct 2007, the Dow was at a then high of 14,000.

And those who didn’t panic and sat pat saw their investment go up 90%.

Talk to me a few weeks from now.

Who can ya trust? wrote:

If you're in that line of business, then surly you must have a theory? Otherwise, anybody's guess is as good as your's. I say Hyperinflation! Of course, the Fed Reserve is always in the business of telling us the truth - so probably nothing to see here.

Yes, pretty much everybody's guess is as good as mine.

During the dot com bust however, I was in a privileged situation. I was in the eye of the storm, so I knew what was going on. Tech stocks hit their peak in mid summer of 2000. Everything was going amazing. Then in late summer 2000, orders stopped coming. Our company felt alone, since everybody was still saying that everything was great (publicly). In October, stocks really started sliding. Everybody was still saying that things were great (publicly). Cab drivers and your uncle called it a "correction" and used the "opportunity" to get into some tech stocks. November, December.... stocks still sliding and people still saying stories. Order backlogs were shrinking at crazy rates. Only in January 2001, did the first tech company admit to a problem. They called it "lack of visibility of orders" and they stopped forecasting... so there I knew 3 months before the general population.

In Oct 2007, I had never heard of Fannie Mae and Freddy Mac, but for some reason I became an expert in Oct 2008. I knew something was going wrong with the banking system (before most people) in late spring/summer 2008, but I had no clue what the "problem" was or the extent.

This time, I have even less clue. My initial thought was that there is a war being planned, but the Raytheon, Lockheed.... stocks are falling like all the other ones. Some type of huge banking attack being planned or having started? (Which could explain the bit coin interest a few months back). This time, it's too quick.

.

Talking out of my back side here.

Ghost of Igloi wrote:

I find it interesting how valuation rarely enters the conversation, but over the long run governs all investments. One should really be cheering for a valuation reset since that creates the opportunity for sustainable long term returns. If there is one thing that hurts people, it was the central bank policy of lower for longer. It forced investors out the risk curve creating a fake market belief of “money for nothing.”

What? Valuation is all anyone has been talking about for months, if not years. And central bank policy has made a lot of money for investors. Get a clue.

Cyberark Software stock price did go up yesterday (as the Dow plunged a further 4.2%), so maybe there is something related to cyber security/attack here...

Hjhgjhbjjhb wrote:

Cyberark Software stock price did go up yesterday (as the Dow plunged a further 4.2%), so maybe there is something related to cyber security/attack here...

One big false flag attack by the ruling elite and the market goes to shite. And they profit by betting on its collapse.

Just like 911 and the airlines options scandal that has been swept under the rug.

Everyone and their brother started pumping money into Dow ETFs once Trump got elected. Once tax reform was passed, it really got out of hand because that's when all the barbers and cab drivers started getting involved. As much as I love anarchy and would love a good economic collapse (still really rooting for another housing market collapse so I can buy a mansion for 10 cents) it really just seems like a simple correction

another 3%+ correction today.

sell on the peak

Not too swift wrote:

[quote]Flagpole wrote:

Honestly at this point for me it doesn't even really matter. I have more than met my retirement goal, and I plan to work for 4-8 more years still. How the market does the rest of my life now just affects how much I give to charity and leave to my kids.

Really? If the market drops 60% like it did in 2008-2009 and you are 60% in equities and so lose 36% of your liquid investments this will not affect you?

How about like in 1929 when it was nearly a 90% drop? No problem for you.

You guys need to wake up

If aliens come down and take over, yes, that would affect me.

But, to answer your question, yes, a 60% drop would not derail me at this point. Why? I have zero debt including a home I own outright. I have more than 2.5 years of expenses saved in an MMA...the plan is to get it to 3 years before I retire. I have more in my retirement accounts today than I ever planned on with 4 years minimum left to work. Realize that with a 60% drop, that means that that would be it. It could stay stagnant at that point, and I would just work for 8 more years rather than 4 more (which I might decide to do anyway)...BUT, I don't believe it would stay at that level. After 2008, it took me less than 3 years to get back to where I was before the crash, not counting contributions. A similar thing would likely happen here. In 8 years, I will be 60. I will have more than enough to retire on then (I have enough to do it now if I really wanted to), and then just 2 years after that, my wife and I can get SS if we want to the tune of just under $49,000 a year at that point (actually it might end up being a little less, but mid $40s for sure).

So, what if this drop happened the day I retire? Well, I would likely use my 3 years of saved expenses while waiting for the market to recover, and if I didn't retire until age 60, I wouldn't even need to wait that long because at age 62 we can get Social Security. Being debt free allows you to live on the cheap if you need to. Also, I plan to downsize the house and likely get about $100,000 (perhaps a little less) on that trade.

So...would I rather that the market NOT drop 60% right before I retire? Of course. I would rather be able to help my kids buy homes, set up college funds for grand kids, etc., but that's just gravy. We will be able to live the lifestyle we want unless there is Armageddon.

Cyberark up a further 1.9% this AM with a flat Dow... I'm starting to believe my own BS.

Does anybody know what is really going on?

Vhvgvghvhg wrote:

Does anybody know what is really going on?

The market is going down.

I suspect that there is a lot of repositioning going on, and that as usual, retail will get nailed.

Found out last night that rich guy has not yet repurchased his BRK-A.

To me, what happens after stabilization is critical. We are trying to put together a set-and-forget portfolio that will require little management, but it’s easier said than done, and nobody knows what the future holds.

[quote]Flagpole wrote:

[quote]Not too swift wrote:

[quote]Flagpole wrote:

But, to answer your question, yes, a 60% drop would not derail me at this point. Why? I have zero debt including a home I own outright. I have more than 2.5 years of expenses saved in an MMA...the plan is to get it to 3 years before I retire. I have more in my retirement accounts today than I ever planned on with 4 years minimum left to work. Realize that with a 60% drop, that means that that would be it. It could stay stagnant at that point, and I would just work for 8 more years rather than 4 more (which I might decide to do anyway)...BUT, I don't believe it would stay at that level. After 2008, it took me less than 3 years to get back to where I was before the crash, not counting contributions. A similar thing would likely happen here. In 8 years, I will be 60. I will have more than enough to retire on then (I have enough to do it now if I really wanted to), and then just 2 years after that, my wife and I can get SS if we want to the tune of just under $49,000 a year at that point (actually it might end up being a little less, but mid $40s for sure).

Working 8 years instead of 4 years is "not affecting you" in your mind? You think you can live on $49k per year? You think the next crash will fully recover in 3 years?

You really have no clue.

Delusions Rule wrote:

You really have no clue.

Hi, K5! Do you think this is the big one where we finally go below 13,000 like you promised 4.5 years ago?

1) I am probably going to work for 8 more years anyway. I own my own business, so not a big deal. I have not really decided to retire in 4 years...just that I could comfortably if I wanted to. Even if the market goes down 60%, I still could.

2) The crash in 2008 took me less than 3 years to recover from, and it was the worst one since the Great Depression, so yes, I do think it would take 3 years or less to recover from the next crash.

3) If you are debt free including living in a house that is paid for, and you are not in a high-cost of living area (can still be a desirable area), then yes, you can easily live on $49,000 per year. BUT, I never said I would live on that. That's just what Social Security would provide. I am not going to tell you how much retirement savings I have, but it is substantial. I could take as little as 2% annually from it in hard market times and we would be living quite well. Here are some places you can retire to on Social Security alone -

- It uses an average of SS income, and we would be above that average.

4) The biggest key to being able to retire comfortably no matter the market is to make sure you retire with zero debt. When your housing is paid for, as long as you don't live in a place so expensive that the taxes kill you, you can live on next to nothing. If you have to...$49,000, easily. We won't live on anywhere near that little though. The median household income in my state is $52,500. Most of those people are using that money to pay for rent or a mortgage or car payments, etc. I have none of that.

As one of the few on here who is not shy about publicizing my transactions, I offer the following:

2017 was a year devoted to selling and not buying for me. This continued into early 2018 to the point where my stock account was sitting at 50% cash. Today I decided to DIP back into buying mode and took home some PG, JNJ, and added to my XOM. That ate up about 25% of my cash reserves.

Have at me.

I got out of the market in spring of 2017. A little early, but who cares. I am two years away from retirement, and I will bet back in 100% when the market bottoms, or is close to it. As long as I get back in below where I got out, then my move beats a buy-and-hold strategy.

I have to believe there will be more money moving out of the market than moving in for quite some time.