Down goes the Dow

Ghost of Igloi wrote:I simply see Bitcoin as a proxy for speculation. Further breakdown in Bitcoin shows general risk aversion.

Ah, OK, I can get my head around that. Mind you, if true, you'd think the market should be generally well correlated with BTC, which isn't really the case, I don't think...?

Correlated more to ARKK, SPACs, IPOs, meme stocks. Broader market driven by mega cap growth, but even there driven by a belief that there is no penalty to excess.

VS-SJW-IR-TS idiot wrote:

Maser wrote:Is this it? Are we in the big selloff?

I don't want to wish that on anyone except myself. We are SO ready for a good sell off, stupidly sitting on mostly cash in our investment accounts...

You and me both. But hopefully not stupidly. I have done very well escaping loss, and buying low and selling back in. Avoided every single crash in my lifetime. Personally would love to see Igy’s 70% devastation, but who knows what the collateral damages would be.

Yes correlated to fangman, but the equities are the leading indicator, bitcoin merely a reflection.

Ghost of Igloi wrote:Correlated more to ARKK, SPACs, IPOs, meme stocks. Broader market driven by mega cap growth, but even there driven by a belief that there is no penalty to excess.

Roger that, interesting thoughts.

On another note, CNBC is reporting increasing mortgage rates in the US. The property we have a mortgage on (not in the US) is locked in for another 2.5 years at 1.77% which feels now like we got away with something a little dirty... :-)

What our dear friend Igy is conveniently overlooking is that most of the horsesh!t SPACs and barely viable companies that just IPO'd recently have been suffering for the past 6-8 months. It has little do with some imaginary line on botcoin of all things.

Markets are pricing in the reality it didn't want to accept - at least a couple of rate increases are coming in 2022 and that's gonna hurt profits

Well, the S&P gains have been due to only the top 5, the rest have been flat overall. So the top 5 have been a winning momentum play, i.e. ignoring certain risks.

Idiot are you ready with a shopping list?

Prof. Racket wrote:

Markets are pricing in the reality it didn't want to accept - at least a couple of rate increases are coming in 2022 and that's gonna hurt profits

Not sure a small increase in an ultra-short interest rate will materially hurt corporate profits. More like the worry is that inflation will cause a large increase in rates across the board, which could cause a recession.

Plus, valuation models react to changes in rates.

Saw this little essay today on work and retirement. Worth a quick read . The point is that it’s often hard on a soul when they give up something that has provided purpose.

Maser wrote:

Well, the S&P gains have been due to only the top 5, the rest have been flat overall. So the top 5 have been a winning momentum play, i.e. ignoring certain risks.

Idiot are you ready with a shopping list?

Yeah nah not true.

Equal weighed sp500 is up 23% per year for three years. It’s not just a Few big names.

Maser wrote:Idiot are you ready with a shopping list?

My intentions are very basic. Depending on how things go, I may simply load up on a mix of QQQ and VOO, at least that's what I've been waiting to do. Maybe TQQQ to if I'm feeling naughty. :-)

Of course, when BTC hits my magic number (16k), look out!

Except that it’s not equally-weighted.

https://www.atlasca.com/sp-5-sp-495/

Etc.

Discusses the big-5 premium:

https://quadrantprivate.com/the-big-5-sp-495/

Threw the rest of my cash into VTI at 231 and 230.41. If it dies, it dies.

If BTC falls to 16k then I'll get one. Maybe even two.

agip wrote:

Prof. Racket wrote:

Markets are pricing in the reality it didn't want to accept - at least a couple of rate increases are coming in 2022 and that's gonna hurt profits

Not sure a small increase in an ultra-short interest rate will materially hurt corporate profits.

We've been here before in the fall of 2018 when markets showed just how durable companies are to even 25 basis points

Maser wrote:

Except that it’s not equally-weighted.

https://www.atlasca.com/sp-5-sp-495/

Etc.

that's old information.

currently, you can compare two funds.

One is the regular Sp500, market cap weighted

the other is the same 500 stocks, but equally weighted.

SPY (traditional) and RSP (equal weighted)

By your claim that the SP495 has done nothing...the RSP fund should have also done nothing, because MSFT, GOOG etc are no more important to it than any other name.

But the SP495 did the opposite of nothing - it had very strong returns.

RSP has had outstanding returns, barely behind SPY.

RSP:

1 year: +25%

3 years: +21%

5 years: +15%

SPY

1 year: +25%

3 years: +23%

5 years: +18%

I hate to break up something you 'know' to be true, but in this case what you 'know' is just not true.

Prof. Racket wrote:

agip wrote:

Not sure a small increase in an ultra-short interest rate will materially hurt corporate profits.

We've been here before in the fall of 2018 when markets showed just how durable companies are to even 25 basis points

but did the rate rises then hurt corporate profits? I doubt it but to get an idea it would take more work than I am willing to put in right now.

I don't think rate rises in small amounts affect the real economy very much.

But rate rises do make future profits less valuable to us today, and give us options for our money other than stonks.

In other words, stocks may indeed fall because rates rise, but it's more about how stocks are valued than rates' effect on actual corporate profits.

Prof. Racket wrote:

What our dear friend Igy is conveniently overlooking is that most of the horsesh!t SPACs and barely viable companies that just IPO'd recently have been suffering for the past 6-8 months. It has little do with some imaginary line on botcoin of all things.

Markets are pricing in the reality it didn't want to accept - at least a couple of rate increases are coming in 2022 and that's gonna hurt profits

I envision rolling into a bear market where the sacred cows are the last to be sacrificed. You cannot have a serious bear market without a large cap growth blow up. These companies are so over owned it is impossible not to happen.

Hmm, looks like you are right even if I remove them completely.

Hmmm. Wtf I just received something that said the opposite, I guess I will have to read it thoroughly.

Thanks.