Down goes the Dow

fartlekpa wrote:

First time I've ever done it actually. The only way you learn is by trial and error--'07-'08 taught me a lot, mostly thru mistakes. If I take financial advice, it sure as heck doesn't come from people who have to work for a living.

But you're still not getting it.....it's not about "let's see how it turns out". It's about risk management in the face of extreme uncertainty. You're playing a non-ergodic game that is advertised as ergodic.

Better: https://www.youtube.com/watch?v=LGqOH3sYmQA

fartlekpa wrote:

Better:

https://www.youtube.com/watch?v=LGqOH3sYmQA

I've been following Ole Peters for a few years now, link was intended as a simple introduction for the others who are unfamiliar with the concept.

Sorry didn't mean to insult. Just like the way he lays out the premise in 15 minutes. His recent paper in Nature was pretty amazing too.

la gente ésta muy loca wrote:

fartlekpa wrote:

First time I've ever done it actually. The only way you learn is by trial and error--'07-'08 taught me a lot, mostly thru mistakes. If I take financial advice, it sure as heck doesn't come from people who have to work for a living.

But you're still not getting it.....it's not about "let's see how it turns out". It's about risk management in the face of extreme uncertainty. You're playing a non-ergodic game that is advertised as ergodic.

https://taylorpearson.me/ergodicity/

cool.

This is part of my daily life when considering advising people to dollar cost average into portfolios or do it all in one day.

I know that over a population of investors, it's best to invest the whole thing in one day. Because the odds are that markets will rise over time.

But for an individual...that doesn't hold true. I got in a bunch of cash from an investor last week. If I had invested it all in stocks she would have a large loss already.

At least I think this is ergocity...although maybe it's not since DCA is going against the odds. I dunno. But that's one of the hardest things I have to deal with regularly.

I don’t think maser is panicking, he said he already sold most, and he said he is only in to the tune of 3-1/2 percent. If he had a 60/40 and liquidated then that would be panicking.

Over the short time the market is ergodic, only because of l the machine algorithms. But, when panic sets in, all bets are off.

The way I see it agip, we can maximize our long-term expected rate of return by moving everything into the stock market as early as possible. But, dollar cost averaging is a way to mitigate risk. Most people wouldn't want to lose a fraction of an inheritance in a month, even if they will regain it over a year or two.

It would drive me nuts to be a stock broker or a financial planner.

10 year treasury is at 1.36%.

geez. How can that be worthwhile? Only if we're heading for deflation, I'd say.

Refinance ?

old crusty mathematician wrote:

Over the short time the market is ergodic, only because of l the machine algorithms. But, when panic sets in, all bets are off.

Exactly. And predicting panic can't be done. Hence non-ergodic.

good lord

https://twitter.com/CarlHerberger/status/1231628241334566913?s=20

Stocks : down by a lot

Bonds : down by a lot (wait what?)

Gold : up by 1%

Stock Market : makes no fvcking sense

Racket wrote:

Stocks : down by a lot

Bonds : down by a lot (wait what?)

Gold : up by 1%

Stock Market : makes no fvcking sense

huh?

bonds are making good money today.

Total bond index up 38 bps. Treasury funds up more than that.

gold etfs are up 1.8%.

so...

SPX is down 5% from all time highs.

It's still around 6% above the 200 day.

The year is basically flat now.

I suspect we'll drop to test the 200 day...that would be a regular 10% correction, with lots of good reasons for it to happen. It will feel like a bear market because we haven't had losses for so long.

Not sure what my plan is...yesterday I was around 4% too heavy in stocks...Now that's less obviously. I might keep selling as I have been.

I probably wont' start consider buying in the trading account until we get near the 200 day moving average. That seems to be what this market likes to do,...fall until the 200 day, puncture it, scare people, then build back.

If history is any kind of guide, when I sold 3 weeks ago, I will have sold earlier than the absolute peak (true), and will have sold above where the market will settle (already looking true).

It is what has happened every time, the only question now is how low it will go. I would not be buying at this time.

Holding this small b&h through this is fascinating. Haven’t sold yet, but the day is not yet over.

Since nobody here believed me, this time around I have let you know most of what I did, as I did it. Big market moves CAN be timed, fairly well. I consider within a month to be good enough.

I will also not buy at the very bottom, I pretty much never have. This is an interesting cycle, somewhat different from others. Honestly I have no idea where it lands us, but absent direct or single proxy gov buying, I think it will have legs. Today is just the beginning. I might even unload the b&h and be free.

This is no joke. Yes ,people here are still working, kids are in school, buildings are still going up. For now. Fed rate cuts are an almost certainty, but will not carry the day.

The last month’s gains—heck all of 2020 gains—had no good foundation, other than nowhere else to park money, and Fed risk mitigation. It was a default position. So far this drop is totally fair as far as that is concerned—but after this level, we will still have yet to see the virus-related drop, IMO.

I told you.

Schit is coming unhinged.

Maserati wrote:

I told you.

Schit is coming unhinged.

maser, with respect, you'll say 'I told you so' no matter what happens anywhere, anyhow.

Down 1,000 points.

that just sounds crazy to old timers like me