Down goes the Dow

“I am STILL thinking about just packing it in and building a dividend portfolio. I'm glad I didn't do that this year, as I thought I might. It was too volatile, and volatility makes for gains. My art and antiquities are now safe essentially forever--I gave a bunch of them to deeply-embedded family! I hope they are never sold off or disposed of, and the best way to ensure that is to let people who are younger than you, and who care, have them. Sure we kept some, but going forward I am glad I will never need to sell any, because that market has gone a bit squirrelly, IMO. It is too tied-in with government, culture, race, religion, power, etc. I was thinking about making a museum donation, but unfortunately I know too much about the direction museums are taking these days. Zero trust, better to be held in private hands for the pleasure of a select few, and some who are invited. I would no longer recommend to anyone, even to those who think they know, to "invest" in such things, at least not for the next few years. Prices are high because people have a lot of money, but that market too is becoming a thing of concentration. I am also saving it as a bargaining chip in case I get into some sort of tax/residency complexity. In many parts of the world, especially where I would now invest, it can be a get-out-of-jail-free card, good for a single use, but a valuable use. Also just to offset taxes owing. I hear that sometimes it's just easier to pay your way out. Money talks, and values in such situations are always, always, grossly inflated, but since everybody is in agreement, government included, that becomes the de facto market value.”

Maserati,

I heard Hunter Biden has some art for sale. Insiders looking for influence? Starts at just $70,000. Stare at the art too long causes nightmares and compulsion to do coke, and prostitutes. So probably advised to pass.

Igy

Tesla is the first junk-rated company to get a $1 trillion valuation.

lol Igy, yeah that should blow the whole thing wide open, but in bizarro world, it will cause art markets to rise.

I have real stuff, nothing contemporary of any note. Impressionists, and Roman and Greek. Standards.

He's not the only one working that scam, but he may be the best at it, who knows. It's about avoiding paper trails, and minimizing tax burdens.

Maseratl wrote:

You can call bs all you want, the proof is in the numbers. For a while everyone here thought I was full of shyte too, but I think I've been here long enough and have posted enough to offer proof. It's in text, including my admitted burns like my second block of miners last year.

I'm curious, would you recommend a b&h for someone our age, financially in decent shape and good health? And what would that mean at our age? Buy, hold forever, and bequeath taking advantage of stepped-up basis?

Biden is attempting to remove the step-up basis on some assets.

Sally Vixxxxxxxxens wrote:

Tesla is the first junk-rated company to get a $1 trillion valuation.

And lol somebody just published a $1600 target.

I, along with 2 other guys I know, am considering letting it go. I almost did it today, but these markets can go full ret@rd.

Maseratl wrote:

You can call bs all you want, the proof is in the numbers. For a while everyone here thought I was full of shyte too, but I think I've been here long enough and have posted enough to offer proof. It's in text, including my admitted burns like my second block of miners last year.

I'm curious, would you recommend a b&h for someone our age, financially in decent shape and good health? And what would that mean at our age? Buy, hold forever, and bequeath taking advantage of stepped-up basis?

there's no proof....you are a trader so your portfolio is always changing.

I disagree with Igy a lot but at least he sets a portfolio that is trackable.

you are all over the place so there's no proof whatsoever.

as for someone our age...I'm an asset allocator. I believe in buying and holding, but as we get older or our jobs become less secure we need to own fewer stocks. Pretty plain vanilla stuff I think.

My recollection was that the Mas entered into the market in phases, rather short-term, of buy and hold, and then claimed to have liquidated (got out). As i remember, he had a bias towards large cap.

You have avoided answering. What is a b&h? Forever? There is always a time window. Is there such a thing as short-term investing, or term investing at all? Of course there is. It is different from "trading", although of course a trade is required to effect the investment. Technicals, that is one form of trading. I buy for substantive reasons depending on conditions, and when either those substantial qualities or conditions surpass certain thresholds, I consider selling.

IMO, a real b&h broad-spectrum represents nothing more than going with the current--up and down. The MONETARY and POLICY currents. Those currents can, and do, change. We are in an unprecedented environment, at least on this scale. A b&h today does not represent the same thing as a dividend b&h in the early 20th century. Do you believe that you can meaningfully separate out organic growth and inflation at the macro level? We all have to make decisions relative to our personal situation, but b&h reduces you to a number. Yes it has worked, and yes it works--until it doesn't. Will you have any positive inflation-adjusted return this year? I mean actual inflation, not the CPI or PCE.

And everyone is an asset allocator.

Fun coming back in, but time to go for a run. As always, thanks for entertaining the rambling.

yes, so far I have a positive inflation-adjsuted return this year. US stocks are up 22% so far this year.

Ben and Jerry's is still 6.49 a pint, my taxes are the same, mass transit costs the same, my home maintenance has not gone up, clothes don't seem to be more expensive, I still buy running shoes for $80 on sale...I'm just not getting hit much by inflation.

What is a buy and hold? In my world you are 100% in a stock index until you get to around 50 (or have an insecure income), then you start selling the stock index fund slowly and moving into bonds and maybe gold and cash.

The 'life-cycle fund' model is what I do. I'm down to 65% in stocks right now. I have owned a large portion of that for 30+ years. I'll own some portion of that for another 30 years, Pre willing.

As for separating out organic vs inflationary growth..the whole idea of a broad index fund is that you don't have to do all that. You let Mr Market, you let the invisible hand, do it for you. Stocks do quite well in high inflationary times. You are over thinking it.

I wouldn't start selling my equity funds until about early 60s if even then. You figure you are going to live to around 75 or 80 or older and that is just too young to be getting rid of those funds.

I can understand that argument.

but

In my work I've seen enough 50-60 year old people get into job crises that I start to think some bonds when they hit 50.

When you lose a job in your 50s, even in this booming job market, it becomes very hard and rare to replace your income 100%.

Are you familiar with the sequence of returns problem? If you lose your job and start taking money out of a portfolio in a bear market, even if you use the 4% rule prudently, your net worth will likely be permanently impaired. Early returns in the withdrawal phase are almost unrecoverable. Even if the market recovers well.

It's an interesting phenomenon that only shows itself when withdrawals are made. Otherwise sequence of return doesn't matter.

Owning some bonds is an insurance policy - it is likely a financial loser but it can help a lot if things go wrong.

You make some valid points. The only bonds I own are in target retirement funds which transition gradually to bonds as your target retirement date approaches.

A simple definition offered by Peter Lynch is that a buy and hold investment is purchasing a company stock with the intent of holding it long term until something changes regarding the fundamentals of the company or the reasons why you bought it. I suppose a change in the reason why you bought it could be as simple as a need to rebalance one's portfolio to keep it within their investment parameters.

Looking back over the last decade at least, b & h has been an effective strategy, with particularly strong performance in the US sector and a select set of large caps, with tech bias prevalent.

“I wouldn't start selling my equity funds until about early 60s if even then. You figure you are going to live to around 75 or 80 or older and that is just too young to be getting rid of those funds.”

Good thing I lowered my equity exposure with only four years to live. I probsbly should have slowed my training run this morning. It might be my last. 😹

danube steak wrote:

I wouldn't start selling my equity funds until about early 60s if even then. You figure you are going to live to around 75 or 80 or older and that is just too young to be getting rid of those funds.

100% correct. Modern investment theory calls for holding a relatively high stock allocation through the first stage(s) of retirement. It makes a lot of sense.

“...until something changes regarding the fundamentals of the company or the reasons why you bought it”

=

“I buy for substantive reasons depending on conditions, and when either those substantial qualities or conditions surpass certain thresholds, I consider selling”

Semiotician wrote:

“...until something changes regarding the fundamentals of the company or the reasons why you bought it”

=

“I buy for substantive reasons depending on conditions, and when either those substantial qualities or conditions surpass certain thresholds, I consider selling”

I just posted this on the spending bill thread and wanted to hear what you guys think about Biden's proposed "wealth tax" which Manchin appears open to.

So increased tax collections on the wealthiest, i.e., billionaires, to get at their unrealized capital gains. Let's say my investment portfolio is $2 million with a cost basis of $1 million. I have $1 million in unrealized gains. They want to tax that annually, so in 2022 they tax my $1 million. My portfolio's value remains unchanged for 2023 so again I am taxed on that $1 million in unrealized gains. In 2024 my portfolio value drops to to $1.5 million. Am I going to be refunded the tax that I previously paid. If my portfolio value drops below my $1 million cost basis is the government going to be sending any money? After I pay taxes each year, and on dividends, when I do sell part of my portfolio I will be realizing those capital gains and paying taxes on those. Doesn't seem too fair to me.