Down goes the Dow

Ghost of Igloi wrote:

J. Hardy wrote:

SomeONE is not “investors as a class”. Some investors will win, some will lose. Investors are not required to hold stocks 100% of the time.

Every day financial media talks rhetorically of investors and markets. They are figuratively speaking. Yes one may do better or worse than the market. Yes one may be in or out of the market. The history of a bursting stock market bubble is not pretty for investors. That is market history, not my opinion. And investors like markets do have to hold stock 100% of the time. Where else would stocks go?

Your missing the point. 100% of stocks must be held by investors, but 100% of investors do not have to hold stocks. “Investors as a class” includes investors who do not currently hold stocks as well as those who do.

J. Hardy wrote:

Ghost of Igloi wrote:

Every day financial media talks rhetorically of investors and markets. They are figuratively speaking. Yes one may do better or worse than the market. Yes one may be in or out of the market. The history of a bursting stock market bubble is not pretty for investors. That is market history, not my opinion. And investors like markets do have to hold stock 100% of the time. Where else would stocks go?

Your missing the point. 100% of stocks must be held by investors, but 100% of investors do not have to hold stocks. “Investors as a class” includes investors who do not currently hold stocks as well as those who do.

I didn’t miss the point, since by definition you wouldn’t be stock investor if you weren’t invested in stocks.

Ghost of Igloi wrote:

J. Hardy wrote:

Your missing the point. 100% of stocks must be held by investors, but 100% of investors do not have to hold stocks. “Investors as a class” includes investors who do not currently hold stocks as well as those who do.

I didn’t miss the point, since by definition you wouldn’t be stock investor if you weren’t invested in stocks.

The issue I have with your description is that it tacitly assumes that anyone who buys at these levels would therefore have a cost basis fully at this current valuation. While I suppose that could be the case, one can easily avoid such predicaments by Dollar Cost Averaging,.

I can tell you from my personal experience, i have never bought an entire position at one time. The only way I would do that is if upon an initial entry into a position, it proceeded to go down to some appreciable degree, in which case, i probably would refrain from buying more until it appeared to form a bottom. And in so doing, I would have only a minor amount at risk.

But the cogent point is, positions built over time and at several price levels takes the risk out of wagering too much on a single purchase. Investing in this manner established average prices that more readily withstand a downturn without getting particularly ugly.

And another consideration might be, yes, there is a risk at entering the market at any given level. But alternatively, there is a risk to not entering the markets. Perhaps this is a point that is less applicable to a retiree, but to others, it is less of a viable option.

Ghost of Igloi wrote:

J. Hardy wrote:

Your missing the point. 100% of stocks must be held by investors, but 100% of investors do not have to hold stocks. “Investors as a class” includes investors who do not currently hold stocks as well as those who do.

I didn’t miss the point, since by definition you wouldn’t be stock investor if you weren’t invested in stocks.

You don't have to currently own stocks to be a stock investor. Perhaps you owned stocks for 10 years, got rid of them all and are now researching stocks or funds to get back into the market.

Unfortunately we both tested negative and will be permitted to enter the US. Geez I already have meetings to attend next week.

Bitcoin 51,130.75 at the moment, up over 118% YTD.

I might spring for in-flight wifi so that I can watch the jwst launch tomorrow. You guys can all feel comfortable in the knowledge that you will be vastly more comfortable than I will be on Xmas morning😁.

Happy holidays to everyone! 🎄

Ghost of Igloi wrote:

J. Hardy wrote:

Your missing the point. 100% of stocks must be held by investors, but 100% of investors do not have to hold stocks. “Investors as a class” includes investors who do not currently hold stocks as well as those who do.

I didn’t miss the point, since by definition you wouldn’t be stock investor if you weren’t invested in stocks.

Keep in mind that this discussion started in response to your term “investors as a class” which is not limited to “stock investors”. That being said, I agree with danube steak that one does not currently have to hold stocks to be considered a stock investor. Further, one can (and often does) sell the bulk of their stock investment while retaining some small positions. Depending on the timing of the sale, such a stock investor could easily be considered a winner during a crash. And finally let’s remember that, during a crash, there will still be some stocks that go in the opposite direction, or stay flat. And that is why it is really impossible to characterize “investors as a class” winners or losers at any given time. All investors are not created equal.

OK.

We woke up to a White Christmas Eve. At the Igy household I do the Christmas wrapping. Our daughter likes to do old fashioned cardboard puzzles. On the tags I make a humous twist to current events. For hers it was from “Joe Manchin, Build Back Better.”

Cheers.

Igy

No dog in the crypto hunt, though I do think it is just a byproduct of this incredible bubble:

“The top bitcoin holders control a greater share of the cryptocurrency than the most affluent American households control in dollars, according to a study by the National Bureau of Economic Research. The study showed that the top 10,000 bitcoin accounts hold 5 million bitcoins, an equivalent of approximately $232 billion…

…With an estimated 114 million people globally holding the cryptocurrency, according to crypto.com, that means that approximately 0.01% of bitcoin holders control 27% of the 19 million bitcoin in circulation. By comparison, in the U.S., where wealth inequality is at its most extreme in decades, the top 1% of households hold about a third of all wealth, according to the Federal Reserve.”

The “market knows” 😂:

https://twitter.com/jessefelder/status/1474047517776281602

Flagpole wrote:

Never get below 15% of your income. NEVER.

What do you mean by this? Save at least 15% of your paycheck?

Doug Kass likes to make a set of predictions for each year.

Here are his for the year just completed:

Surprise #1 Tesla’s Stock Declines By Two Thirds: No

Surprise #2 Political Normalcy Is Not Obsolete and Biden is The Calm After the Storm: No

Surprise #3 Former President Trump No Longer Remains A Dominant Political Force in the U.S.: No

Surprise #4 Stocks Experience Their Least Volatility Ever in the First Half of 2021 and the Most Volatility Ever in the Second Half of 2021: No

Surprise #5 Bottlenecks Multiply and Inflation Surges: Yes

Surprise #6 Inflation and Interest Rates Rip Higher Leading to A Valuation Reset (Lower) For Equities in 2021 –: No

Surprise #7 A Decline in the U.S. Dollar Spurs an Advance In Gold (to $3,000/oz) and a Ramp of +50% in Bitcoin (to $40,000) – But Silver Is The Big Winner As It Doubles to Over $50/oz : Only correct on BTC.

Surprise #8 Congress Acts On the SALT Deduction: No? I think No.

Surprise #9 The Fallout From Brexit Causes Trade and Other Chaos in Europe – Badly Shaking the UK and European Economies : No

Surprise #10 France’s Economy Approaches The Financial Brink: No

Surprise #11 Broad Regulatory Actions Against Big Tech Results In A More Rapid Pivot From Growth to Value – FANG Becomes GATFAT! No

Surprise #12 China’s Economy Sputters Under Massive Debts and Crackdown on Tech Giants – Leading To Some Moderation In Xi’s Policies . Sputter, yes, moderation No. Half a point.

Surprise #13 Despite Strong 4Q2020 Performance, Bank Stocks Lead the Market in The First Half of the Year – As tech falters under the weight of an existential antitrust threat, financials prosper. Citigroup (C) trades at $75, Wells Fargo (WFC) and Bank of America (BAC) trade at $35 and JP Morgan’s (JPM) price approaches $140/share by the early summer. Sure, why not. Close enough.

Surprise #14 Goldman Sachs Goes Private In 2Q2021 – The announcement marks a high-water mark for equities in 2Q2021. No

Surprise #15 Trump Is Barred From Twitter – Within one week after President-Elect Biden’s inauguration, Twitter suspends former President Trump’s Twitter account for tweeting false claims about the “stolen” Presidential election. Upon the news of the Twitter suspension announcement, Twitter’s shares fall by over -$7 to $8/share (or by about -15%) in one day. (The shares bottom in the high $30s, where I load up!) Yes to the ban, and close enough on TWTR stock price for a point.

So in summary, 4 points out of 15. Not too good.

https://www.zytrade.com/15-surprises-for-2021-by-seabreeze-partners-managements-doug-kass/#:~:text=15%20Surprises%20for%202021%20by%20Seabreeze%20Partners%20Management%E2%80%99s,regulators%20and%20the%20general%20population%20hits%20a%20wall

.

investing noob wrote:

Flagpole wrote:

Never get below 15% of your income. NEVER.

What do you mean by this? Save at least 15% of your paycheck?

No. You should invest 15% of your salary before taxes each year. So, if your salay is $100,000, you should be investing $15,000 each year into mutual funds within retirement accounts. That is bare minimum. I will even give an out to those who get a match from their companies, so for example if they give you 3%, it would be fine for you to invest 12%.

I will also say that there were ~2 years in there in my life when we had moved to a new place and bought a house and my wife began a 15-year-stint as a stay at home mom were we did 5% only (my company at the time gave me 3%, so technically we were up to 8%), so I do understand the need to drop it down sometimes, but that should be temporary, and you should more than make up for that later. Prior to that 2-year period though, we had 7 years of investing half (50%) of our income, and after that 2-year-period, we put it back to 15% for another couple of years and then eventually over 20% since then.

People can and do retire on less...MUCH less. If you want to work until age 67 and invest nothing, there are decent places to retire in this country on Social Security alone (especially if a married couple). There are usually lists of such towns every year.

IF though, you want to retire earlier much than 67 and/or retire in style, then the 15% is a bare minimum goal.

It seems like a lot for some people, but it's really not. Make a budget and just set it up to be automatic. If you end up paying your house off early (a solid goal), and you have kids out of the house by the time you are in your mid-late 50s, it should be EASY to save 50% of your income from then on. If you make a decent amount, you'll have to invest some of that into non-retirement mutual funds, OR have separate 401ks for you and a spouse and maybe even separate IRAs. I don't know the specifics there as my wife and I have just one 401k and one IRA and then other things are in non-retirement mutual funds.

A lower than 75 IQ poster noted this trend months ago: https://www.cnbc.com/2021/12/26/bubblicious-used-car-prices-rising-faster-than-bitcoin-jim-bianco-warns-.html

Ah okay. I think saving 15% of your paycheck is the same as saving 15% of your salary? We max out 401k, backdoor Roth, HSA and contribute to taxable accounts and 529 too.

Igy what's going on with your health and your running?

I imagine you have some snow this time of year so probably running is tough.

Any goals for the winter?

all time high SPX but not Dow, NASDAQ or R2k

is that just indexing? money moving into the SP500 because that's what people do these days?

Geez. I'm seriously thinking about moving to equal weighted ETFs.

agip,

Doing well, my three year post CT scan was clean in September. Hopefully the lymphoma is behind me, but then again you never know. Most of my issues are age related, and for 71 doing pretty well. Taking a bit of a running break currently, but last week logged 2,000 yards swimming, 2 hours spin bike, 13 miles walking, with two days of free weights and core. One of my oncologists told me to stay active in retirement. The premiere masters meet the Hayward Classic at University of Oregon is schedule May 7, 2022 (Covid permitting). I would really like to do that. My forte should be the longer events, but I will be targeting 400 meters thru 3,000 meters this year, which I believe is a little more age appropriate.

Weather turned wintery Christmas Eve with snow and decreasing temperatures. Predicted lows to single digits this week. One of the Covid casualties was the Boise State Indoor facility. A wealthy donor bought the Atlanta Done track nearly two decades ago. For a time they hosted numerous events there, and during winter it was open two days a week for youth and masters track. Budget cuts. Stacey Dragila (Olympic Pole Vault Champion) formed a committee to try to purchase the track and keep facilities open, but overhead cost was too much of a burden.

I still coach a group of masters, sans indoor track, starting the first six weeks of the new year the schedule will be Monday hills, Wednesday track tempos, Saturday foothill long run. Strength oriented. By mid-February we are typically past peak winter, and Monday will transition back to the track. On the 50-plus masters thread there is a 70 year old from the UK that posts, last year ran 5:10 1500m and 39:00 10k track times. The recent Club National saw one of the largest M70-74 with about 30 entrants. Plenty of Geezer competition if you’re looking for it.

How about you health and otherwise? Any 2022 training and racing plans yet? You have some access to indoor facilities don’t you?

Igy

Good to hear you are scannign clear, cross training and staying active in med terms. Heh. I remember getting a physical when I turned 50 and the doc had never quite seen a 50 year old who was so fit. Runners aren't like other people. Good luck with the outdoor coaching. Must be strange having coached fast young people and figuring out how to coach old less fast people. Coach of my team has to do that switch on an hourly basis. It must cause her brain to do some flips.

Yeah you have real weather there. Where I am we have sort of half-real weather. We haven't had anything on the ground to prevent running and it has barely been below freezing. So I've had time to do probably my best training of the year. I've not had to train indoors yet but I have that choice if I need it (until they close it for covid anyway).

I've raced a couple times but not quite got to where I think I think I should be in terms of race times. Meaning, judging by my workouts I should have raced faster. Sometimes I wonder if going to the well for 41 years makes it harder to dig deep in races. We'll see.

In any case, traditionally I peak in January-March so I'm hoping for more the same this year.

Next race is a 10k in Mid January. Hoping for an 83% age graded score. I hit 82% earlier in the fall so trying to pick things up.