Down goes the Dow

VS-SJW-IR-TS idiot wrote:

agip wrote:... These crises just go away...

I guess that's your take on this one? I hope you're right. I'm staying in my seat when the music starts playing again... :-)

Maser wrote:

Sweglord369 wrote:

Is a small rate rise really gonna crash equities?

It might, because even a small absolute rise in rates could mean a huge relative rise in debt service costs.

Fed backed itself into a corner. My guess is that it tries to let everything slide a bit (say 20-25%) and no one thing gets totally destroyed.

Although I think the dollar will be effed, no matter what. Not necessarily dxy, but domestic buying power.

So do Dems get slaughtered at midterms, and do we get a huge reactionary bounce followed by another crash as people realize that as far as markets and money are concerned, there is mo difference?

This time feels different, and it may be, because when we have a crisis, and it passes, we revert to baseline condition. But this time the crisis is the Fed ceasing to pump trillions of dollars into the market, which has been surmised to account for our massive run-up in the market for a long time, and without that, the fear is that the markets will drastically reverse and no longer have the stimulus that has sustained it.

That's why a v-shape recovery may not be in the cards here. Maybe a lot of investors are saying, this is not a one time event to get priced in, it is more akin to a new normal, which will be ongoing, and we don't know how it will effect stock appreciation.

This amounts to the thing Igy has been referring to

Maser wrote:

Sweglord369 wrote:

Is a small rate rise really gonna crash equities?

It might, because even a small absolute rise in rates could mean a huge relative rise in debt service costs.

Only for things that are massively over-leveraged and make no money, like Peloton. In this case it's a good thing because all these useless companies will dissolve and the labor will be picked up quickly by companies that can actually put it to good work.

I doubt we'll see much of fall in value and traditional. But yeah, the roulette table companies that no one thought would last long and only got in for the lolz are gonna get blown out

yeah the thing is...it ALWAYS feel different this time. and then a year later we don't even remember them.

There's no 10% correction that you just nod and say 'yeah this is fine, this is normal no problem,'

that;s why we all run to sell at the same time - we all feel that panic and fear at the same time and sell together.

And that's why I like to watch the VIX...when it gets high, that means the hive mind is panicking all together and we are near the end of when the loose hands have sold. When there are fewer shares being dumped, the market can stop falling.

It is pretty clear ARKK type stocks are not coming back. Many of these stocks will be down 90% before it ends. The belief that mega cap growth stocks can save the market ignores multiple expansion of 50% or more over the past five years. Government stupidity and Wall Street greed comeuppance has only just begun. As the nation’s wealth evaporates many will ask “all of this, for what?”

carmine9 wrote:

It feels like a massacre

Have you learned nothing? Relax.

Seattle Prattle “FWIW, I sold everything a few days ago.”

Everything, meaning ALL of your stocks, crypto, etc? Or just BTC/crypto?

If AMZN keeps falling, what price do you think it is worth buying back in at?

sicnarf wrote:

Seattle Prattle “FWIW, I sold everything a few days ago.”

Everything, meaning ALL of your stocks, crypto, etc? Or just BTC/crypto?

If AMZN keeps falling, what price do you think it is worth buying back in at?

No, just the bitcoin, and it was insignificant anyways.

Stocks - I have definitely been actively selling somewhat, maybe 14% less market exposure than at the peak about a month ago.

As for AMZN, it all depends on how it would fit into your overall portfolio. And I don't think it makes any sense in determining an absolute price where it would be a buy, because so much depends on the environment at the time, interest rates, inflation, etc. I don't really see how you can evaluate its attractiveness outside of the larger macro environment.

* and to further clarify, bitcoin was the only crypto i had. So totally out of crypto altogether.

The S&P 500 is expected to report (year over-year) earnings growth of 21.8% for the fourth quarter.

seattle prattle wrote:

And I don't think it makes any sense in determining an absolute price where it would be a buy, because so much depends on the environment at the time, interest rates, inflation, etc. I don't really see how you can evaluate its attractiveness outside of the larger macro environment.

That is how I feel, which is why I don’t have any price targets for anything this time. I’ll have to look around at the landscape whenever I get interested in buying something.

Had an amazing workout this evening, I actually didn’t think about investments even once!

Highly recommended.👍

This is one thing that's annoying about being invested fairly actively. The amount of mental stress you have from your asset exposure with regard to guessing macro movements is just annoying. I'd almost rather just use a dumb strategy like DCA into sp500, crypto, and grab any good bond deals like the TD iBond.

Or just actively invest during down times. Then when you're solidly up, take profit and go back to the "dumb mode" of DCA'ing etc.

Yeah, It's like a second job. Only one that never stops. From futures that start trading 8 PM my time, to pre-market at 1 AM, to the open at 6:30 AM and closes at 1 PM, until the market after-hour close at 5 PM (all PST).

Weekends are a bit of a break, and I definitely sleep better then.

It doesn't feel like work, so that is a plus.

Makes you wonder how it got this way. LOL.

Swaglord__69 wrote:

This is one thing that's annoying about being invested fairly actively. The amount of mental stress you have from your asset exposure with regard to guessing macro movements is just annoying. I'd almost rather just use a dumb strategy like DCA into sp500, crypto, and grab any good bond deals like the TD iBond.

Or just actively invest during down times. Then when you're solidly up, take profit and go back to the "dumb mode" of DCA'ing etc.

How much more have you made than you would have if your investments tracked the S&P 500?

seattle prattle wrote:

Yeah, It's like a second job. Only one that never stops. From futures that start trading 8 PM my time, to pre-market at 1 AM, to the open at 6:30 AM and closes at 1 PM, until the market after-hour close at 5 PM (all PST).

Weekends are a bit of a break, and I definitely sleep better then.

It doesn't feel like work, so that is a plus.

Makes you wonder how it got this way. LOL.

If you enjoy it, def 100% a fine use of time.

I definitely enjoy the macro discussions. But I reminded myself after the April/May crypto crash that it might feel better to take the profit and forego the possible 50% gains to be had. Just wait for a serious down period and then get back in.

Although there is a strong lesson of stoicism to be gained through it all. Plus realizing that cashflow is king.

I'm 29 and moved back home because of covid, solid job. Going to just hold everything and weather the storm, inshallah.

Yeah, i would say I enjoy it, though if every week was like this one, It would be different.

Crypto I don't get at all. The best way I can describe it is unhinged. I really had no stake in it to speak of, either.

OFf course the market will eventually bottom. But I wonder what the trend will look like thereafter, without the Fed backing and amidst rising inflation and interest rates, cessation of bond buying from aforementioned Fed. I have a hard time thinking that it will look anything like the last two years or more.

Maser wrote:

Sweglord369 wrote:

Is a small rate rise really gonna crash equities?

It might, because even a small absolute rise in rates could mean a huge relative rise in debt service costs.

Fed backed itself into a corner. My guess is that it tries to let everything slide a bit (say 20-25%) and no one thing gets totally destroyed.

Although I think the dollar will be effed, no matter what. Not necessarily dxy, but domestic buying power.

So do Dems get slaughtered at midterms, and do we get a huge reactionary bounce followed by another crash as people realize that as far as markets and money are concerned, there is mo difference?

Seems to me that thinking a fast growing, incredibly massive and complex economy CAN handle a 10 year at 1.3% but CAN'T handle a 10 year at 1.8%...is not real world thinking. Esp because corporate balance sheet have record amounts of cash and household debt service burdens are very low.

Of all things to worry about, a moderate rise in interest rates is pretty low.

seattle prattle wrote:

Yeah, i would say I enjoy it, though if every week was like this one, It would be different.

Crypto I don't get at all. The best way I can describe it is unhinged. I really had no stake in it to speak of, either.

OFf course the market will eventually bottom. But I wonder what the trend will look like thereafter, without the Fed backing and amidst rising inflation and interest rates, cessation of bond buying from aforementioned Fed. I have a hard time thinking that it will look anything like the last two years or more.

Crypto I def agree. More vol = more opportunity, if your long term vision is spot on. I basically followed these guys who were spot on on most macro topics for the past 6 years or so, and they called the <5k btc bottom. That's when I got in. They're still bullish.

I personally think these past 2 peaks in 2021 were easily missed macro trading opps. But long term as more useful things come from crypto, it'll go up.

Tech, biotech, EV's, crypto -- up.

Thing with the Fed is.... if rates really do go up substantially, how does the US make debt payments? Either just print more money or substantially up tax collections, right? I highly doubt they go with the latter.

the good news is that federal tax receipts are going through the roof - up 22% - , nominal GDP just grew 10% year over year and the value of the national debt has been inflated away by 5%. Those factors take a lot of pressure off the debt situation. And the Rs can't cut taxes again for at a minimum 3 years.

The bad news is that the US debt owned by the Fed is mostly short term, so that debt will roll off quickly and someone else will have to buy it. That could raise rates some. But really...look around the globe. There is ginormous demand for bonds. In Europe you have to pay the government to take your money. I don't think the US will have much trouble selling debt.

Ghost of Igloi wrote:

It is pretty clear ARKK type stocks are not coming back. Many of these stocks will be down 90% before it ends. The belief that mega cap growth stocks can save the market ignores multiple expansion of 50% or more over the past five years. Government stupidity and Wall Street greed comeuppance has only just begun. As the nation’s wealth evaporates many will ask “all of this, for what?”

I'm up 25% on SARK now. Are you still holding? I think ARKK drops to 60 but maybe should take profit soon.

If ARKK goes to zero then would SARK max out at 60 (100% since inception)?