Down goes the Dow

I am sure Warren Buffett regrets violating his own rule:

https://investorplace.com/2016/11/american-airlines-group-inc-aal-stock-buffett-iplace/

Ghost of Igloi wrote:

I am sure Warren Buffett regrets violating his own rule:

https://investorplace.com/2016/11/american-airlines-group-inc-aal-stock-buffett-iplace/

The difference between me and Buffett with regards to airline stocks is that I bought them after they had fallen 50% or more from their 52-week high. So, even if it takes two years for them to return to 75% of their previous high, I will still make a 50% return on them, which is quite good. Buffett would have to wait a LONG time before getting any kind of comparable return on his investment. That being said, I was surprised to hear him say that Berkshire-Hathaway had sold ALL of its airline stocks. If anything, I suspected they were considering buying an entire airline outright, not dropping the industry completely. Airline traffic was projected to grow substantially over the next 10 years before this pandemic and likely still will. The next couple years are going to be a bit dicey, but I don't see any major long term changes to the industry (outside of a number of bankruptcies of the weaker companies).

Big American airline stocks are a slam dunk. No way the govt doesn’t take care of them.

All eight indexes on our world watch list posted losses through May 21, 2020. The top performer is China's Shanghai with a loss of 5.97%. our own S&P 500 is in second with a loss of 8.74% and in third is Tokyo's Nikkei 225 with a loss of 13.12%. Coming in last is France's CAC 40 with a loss of 25.64%.

https://www.advisorperspectives.com/dshort/updates/2020/05/21/world-markets-update-may-21-2020?bt_ee=VNzGpAd64embbPe1TfWHVDuoY9XeePGeCywyhD%2FrcRCTuEMTdryU6B316d3s%2BWQe&bt_ts=1590150214149

J. Hardy wrote:

Big American airline stocks are a slam dunk. No way the govt doesn’t take care of them.

the gummint can only do so much...if people wont' fly then many of these airlines have to disappear

I have a ticket credit on Alaska I need to use by year end, was going to be my airfare to San Diego for Carlsbad 5k. Not sure if I will use it. Is flying really worth the $200? Not sure?

S&P 500 hanging out at the Fib 61.8%.

What $200?

not worth the $200, imo.

We have had many similar sacrifices due to the new normal, and while it is not desirable, it is better than the alternative if things went badly, as they could.

Might be worth checking if Alaska would extend the credit due to the travel restrictions, etc.

Good luck.

Earnings Scorecard: For Q1 2020 (with 95% of the companies in the S&P 500 reporting actual results), 64% of S&P 500 companies have reported a positive EPS surprise and 57% of S&P 500 companies have reported a positive revenue surprise.

I'm seriously thinking about going to a conservative portolio...something like 35% in stocks, 40% bonds and the rest in cash and gold.

The US market is where it was a year ago. This makes no sense to me, given the wall of pain we're looking at.

I've never been bearish in my life until now. But i'm getting into the last few years of my work life, I have enough money, my stock position is worrying me...I'm just not sure why I am taking all this risk. So I can have more money? I have enough money. I can live without the fantasy car I want.

Argentina has defaulted, China is conquering HK and invading India and spoiling for a fight in the China Sea. Worldwide ecomomies are crushed. Globalism is dented and damaged. Interest rates indicate deflation is coming. Trump vs biden is going to be terrible for the nation. Yet stocks are expensive.

Expensive stocks just dont seem to make sense right now.

The only bullish thing I can say is that once we have a vaccine there are several trillion dollars of newly printed money out there waiting to be spent. And it will be spent. And people can borrow money for houses and cars at next to zero rates. And the yield curve is positive, indicating growth is coming.

a lot easier to say this in the middle of a long weekend while the markets are closed.

A lot harder to say it as the market ticks ever higher, day after day, and you just thank your lucky stars you have some skin in the game....

agip,

I'm surprised by this evident change of heart, but I guess I understand it. I'm choosing to bet against conventional wisdom and swim upstream this time. I am putting most of my loose marbles on large cap tech, since I think the path through this is through innovation, and good tech companies will outperform. Our family net worth is in:

50% RE (one condo each in two different non-US markets, one fairly stodgy and reliable, the other very peaky)

18% QQQ (tech index ETF)

17% stake in the company I work for

9% VOO (SP 500 index ETF)

5% investment grade bonds

< 1% cash

The next 6 to 24 months can either make my retirement more comfortable or not; our fall back is that one of us will get a defined-benefits pension that is plenty to live on, just not at the lifestyle to which we've become accustomed... :-)

For those who can get through the paywall, here's the good news - green shoots appearing all over.

If trump doesn't mess this up further with tariffs and regulations these shoots may keep growing. Unless the virus is not beaten.

https://www.wsj.com/articles/for-economy-worst-of-coronavirus-shutdowns-may-be-over-11590408000?mod=hp_lead_pos1

Holy! There’s over 2,000 pages how am I suppose to read this. Also why does it have more then 2000 pages

what????! wrote:

Holy! There’s over 2,000 pages how am I suppose to read this. Also why does it have more then 2000 pages

because we are still waiting for the dow to go down. So far it's weathered a once in a lifetime tech bubble, a housing bubble that was supposed to be totally impervious, a once in a century world pandemic, some valuations that are slighly above historical norms. Sprinkle in some sophmoric jabbing, a lot of moving of goalposts, and some russian slanted journalism, and well, we could hardly cram it all into 2000 pages.

.....Have i lost you yet?

We get these stories every week, and eventually learn it is mostly hype. But notice the power of these leaked stories get reduced over time.

https://www.cnbc.com/2020/05/25/stock-market-futures-open-to-close-news.html

Ghost of Igloi wrote:

We get these stories every week, and eventually learn it is mostly hype. But notice the power of these leaked stories get reduced over time.

So you're saying we are building an immunity to vaccine stories?

I kind of thought it might have to do with the very real changing landscape with most states in the process of opening back up and the numbers of new infections dropping.

Both the Gilead and Moderna stories proved to be hyped. In regards to numbers, we will hit 100,000 deaths by Tuesday evening. We’ll see how the re-opening influences death rates and new cases. In regards to the economy, doubt this will be a short lived recession, and we are still in a Bear Market except for a handful of mega cap stocks.

“Trends unfold when the world changes. Prices adjust as we recognize that the future is likely to look different from the past. Underlying change is often driven by natural cycles. They include cycles in weather, debt, leverage, capital investment, innovation, politics, population, international relations. In late stage, they are sometimes amplified by mass hysteria. Systematic trend-following strategies just finished their worst decade of performance in 120yrs. So did long volatility strategies. It was a decade of homogeneity, policy predictability. It’s over.“

Eric Peters, One River Asset Management