Down goes the Dow

Johannes wrote:

Racket wrote:

When?

At Bershire’s annual shareholders meeting.

That's not what he said. He said the world has changed for airlines (it has, probably for the foreseeable future) and decided to dump his entire position. He has not once said selling it all off was a mistake, at least as far as I can find.

Yes, but the misogynist Ken Fisher said Buffett was making mistakes because he was old. OLM = Old Lives Matter ?

NASDAQ had to hit 10,000, and didn’t even need a dead Italian mathematician, statistical analysis, or fundamentals. Who would have guessed?

Maybe you could paraphrase what these links are saying. It feels like you just want a bunch of people to read what appears to me to be unmitigated, slanted commentary.

Have you ever listened to MarketPlace on PBS? I'd listen to something like that on an ongoing basis.

Or, Fresh Air.....

Racket wrote:

Johannes wrote:

At Bershire’s annual shareholders meeting.

That's not what he said. He said the world has changed for airlines (it has, probably for the foreseeable future) and decided to dump his entire position. He has not once said selling it all off was a mistake, at least as far as I can find.

I think we got our wires crossed. I was referring to Buffett saying it had been a mistake to buy airlines. Indeed there are others who think his mistake was selling them.

I sold my entire position of United Airlines yesterday when it was down about 7.5% from the previous day's closing price. Still have mixed feelings about it, but my ROI was about 50%, and I viewed it as probably my riskiest position. I think United will probably survive and climb higher causing me to have missed out on more than doubling my money, but I decided that after making 50% this quickly, I'd rather reallocate my money into something with less risk that still has decent upside like an energy ETF. I have also been much more cash poor than I usually am having put almost everything I have into stocks when things were bottoming, so it's nice to have a little bit of a cash cushion again just in case.

Still think it's crazy that the Nasdaq is hitting all time highs and the S and P 500 is positive for the year, but maybe it makes sense given the injection of trillions of dollars into the system by the FED? That's a lot of money to pump things up... Theoretically, we very well could see more all time highs this year. Investors seem to be totally fine investing in the market regardless of what the economy is doing... Feels almost like bitcoin in 2017, but I'm less sure this bubble will pop. It's a very different scenario than 2000, 2008, and crypto.

PRD wrote:Theoretically, we very well could see more all time highs this year.

S&P500 hit 3386 in February, which is 5.6% above yesterday's close. A naive estimate of probability based on market behaviour from 1950 to 2017 (17000 trading days) suggests a 50% chance of seeing a 5.6% gain over the remaining 142 trading days of the year.

Of course we are all free to incorporate other knowledge / belief and adjust that probability, perhaps considering:

- stocks are overvalued relative to fundamentals

- the Fed is pumping a gazillion dollars into the markets

- there's an ongoing pandemic (or plan/scamdemic if you prefer that point of view)

- Jim Cramer probably has something to say about all this

- Hussman and Igy's other bear friends have other things to say...

Pick your poison. I still think there's a good chance (I make it even odds, unchanged from the naive estimate, since I think no information - other than insider information - has any informational value in predicting future market behaviour) we'll see new highs this year.

I also see a 0.01% chance we'll get below 1700, and effectively zero (but not actually zero) chance I owe Igy my dignity for a dip below 1500...

At the February high what was the statistical probability that the S&P 500 would hit 2,180? Should we not break 1,500 by December 31st, you can send a letter of thanks to the Fed for temporarily saving your dignity. :-)

How quickly Powell forgot:

https://twitter.com/NorthmanTrader/status/1270658095405023232

Ghost of Igloi wrote:At the February high what was the statistical probability that the S&P 500 would hit 2,180?

Great question. The chance, on a randomly selected day, of seeing a 33.9% or bigger drop 23 trading days later, is 0.4%.

Maybe that seems like a low number, but it means it happens, on average, every 250 trading days, or almost once a year. Which is not particularly uncommon.

However, that simplistic analysis is a little misleading, since all of the days when such a loss started occurred within the lengthy bear market of 2008. So, such a big drop happening so quickly is fairly rare. As are pandemics I suppose...

Ghost of Igloi wrote:Should we not break 1,500 by December 31st, you can send a letter of thanks to the Fed for temporarily saving your dignity. :-)

On 31 December, at the close of trading, when SP500 is still above 1500, I expect to receive your dignity without excuses, rationalization or diversion, and definitely with no mention of Hussman, Northman Trader or the like. As you will receive mine should the index be below 1500.

the idiot wrote:Great question. The chance, on a randomly selected day, of seeing a 33.9% or bigger drop 23 trading days later, is 0.4%.

And when I first presented the naive probabilities in 2018, on, ironically, 23 March of that year (go back and check the thread if you like), the chance of seeing 2237, from that day forward, on 23 March 2020, was just shy of 10%.

the idiot wrote:And when I first presented the naive probabilities in 2018, on, ironically, 23 March of that year (go back and check the thread if you like), the chance of seeing 2237, from that day forward, on 23 March 2020, was just shy of 10%.

Here's the 23 March 2018 projection, showing the actual market index values since that time:

You'll see on 23 March this year it dipped below the 23rd %ile. And now it's back to hovering around the median projection from that time.

I remember being mocked fairly strongly for presenting these projections, since the bounds were so wide.

the idiot wrote:You'll see on 23 March this year it dipped below the 10th %ile. ...

Stupid typing fingers, they never listen...

Johannes wrote:

Racket wrote:

That's not what he said. He said the world has changed for airlines (it has, probably for the foreseeable future) and decided to dump his entire position. He has not once said selling it all off was a mistake, at least as far as I can find.

I think we got our wires crossed. I was referring to Buffett saying it had been a mistake to buy airlines. Indeed there are others who think his mistake was selling them.

Ah, I thought you were referring to him selling the airlines. Anyways, I think it was a good move for Berkshire. If the new norm for airlines is 80% hits every decade then it makes long term ownership more questionable, especially for Berkshire which is focused on the 50 year outlook or something crazy.

the idiot wrote:

I remember being mocked fairly strongly for presenting these projections, since the bounds were so wide.

I will admit I was unproductively harsh in my presentation so I apologize.

But I still think you're using the wrong tools for the job here.