Recession 2020

User Forum Topic
Submitted by FlyerInHi on July 25, 2018 - 11:26am

All the signs point to a recession coming.
Since it takes 2 quarters of negative growth before a recession is declared, I'm thinking one will be announced sometimes in 2020. We will see....

Submitted by flu on April 10, 2019 - 12:45am.

The-Shoveler wrote:
IMO you are going out on a limb if you predict there will not be a recession.

Conventional wisdom say it is time (cycles etc..).
You have to be unconventional to say there will not be one IMO.

Not gonna try to predict one way or the other. Just gonna take advantage of any opportunities one way or the other..

So far, so good this year. Knock on wood.

Just sent in my loan payoff amount for my remaining $29k "bridge loan" I borrowed against my HELOC earlier this year to complete a property exchange, before rates creep up to 5.25%. Im back down to one outstanding loan on everything, fixed rate less, than $40k left... heh heh

Fortunately for me, funding for the entire amount came from 3 weeks of unexpected gain in AMD share price as last week selling some 1/17/2020 expiring $25 strike price AMD call option at $7.9/contract purchased at $3. Pure luck.

I'll take it and run, not walk, to the bank. Thank you AMD short sellers that got totally short squeezed and worked over for the past 3 weeks. ha ha .

Dr Lisa Su...
MAGA: Making AMD Great Again.

lol

Submitted by FlyerInHi on April 10, 2019 - 1:09am.

You have to predict in order to have a bias.
I expected rates to stay low so I had adjustable rate mortgages. That worked out pretty well over the last 20 years.

I expect there to be a recession during which i will buy an apartment building. I just bought a condo about $75k. On a small purchase, not that big a deal if prices drop 20% because I can make up the difference in rental income and location is important. But on a larger purchase, anticipating a recession makes a huge difference. Even today, 10 years after the 2008 crisis, we are not yet back to inflation adjusted peak.

Btw, Ray Dalio and Jim Rogers are predicting recession.

Submitted by temeculaguy on April 10, 2019 - 1:55am.

While i won't dispute the cyclical expectation of a recession, the fact that everyone is predicting it makes me suspicious. I also won't dispute the winning streak of adjustable mortgages, which is why mine is fixed. Contrarian has worked more for me than trendy. I went trendy once based on advice from this site when I was poised to invest just after the crash.

https://www.piggington.com/dow_to_4000#c...

read down a few comments, it's my fault but I picked 6 stocks and everyone talked me out of it. I just checked some of them, okay three of them and I was too nauseous to keep checking. Costco at $38, it's $244 today, Harley at $8 is $38 now. HOV was .58 and now $13, oh the humanity. But everyone said buy gold at 1200, just checked, 1300. When everyone zigs, you should zag.

BTW FLU, you win, playing the market to eliminate debt is the bomb. I would have just used my profits for hedonistic endeavors as it was a different time for me personally so perhaps I'm better off. Or I'll just keep telling myself that so I can feel better.

Submitted by scaredyclassic on April 10, 2019 - 12:21pm.

I admit I was dumb.

I think in retrospect that I just project out my own inner mental state out onto the world, so if i feel like my own life is maybe heading for disaster, i see the potential for disaster everywhere in the world and am risk averse, and if i think things will be pretty good, i act that way too.

My wife blithely has always just dumped everything at full risk into the market in her 401k, because she’s just not worried about a damn thing, she fully accepts the ups and downs of it all, while I generally think about things as if they are all on the edge of being revealed as a giant scam and ready to implode. Of course, my wife’s course has been better.

The last few years, I have surrendered to the probability that in the long term, at least till the end of my brief flicker of life on earth, the horrible wheels of capitalism and consumption will continue to churn pretty much as they always have. I no longer believe myself qualified to offer or even hold any opinion on where we are, whether prices are “high” or “low”, or to know anything about how to live or be.

except that bicycles are the only thing that can save us.

Anyway, I apologize for being part of a chorus of people who apparently were under the impression they knew anything and talked you out of a good windfall.

Submitted by FlyerInHi on April 10, 2019 - 1:34pm.

Not everyone is predicting a recession. It feels like 2007 to me right now.

I think Janet Yellen said we won’t have any more recessions. Of course Ben Bernanke coined the Great Moderarion.

I never believed in gold. That’s 1980s thinking. Back then there was high demand and supply constraints. Since China joined WTO, we now have unlimited supply of almost everything. IMO, we are headed to a wonderful world of plenty, if only policy makers would make it happen — not let money become an artificial constraint on human productivity.

I am amazed at China’s ability to build infrastructure. They have automated the building of bridges, train tracks, etc... theoretically, we could automate almost everything and live in a world of plenty. You are very rich if you own the technology and means of production.

Submitted by flu on April 10, 2019 - 4:00pm.

There will always be people who think the world is ending regardless of which adminstration is in office. Some people felt the previous administration was doom and gloom. Some people probably feel the same thing with this one too. Imho, just about the worst thing one could.do is make significant financals decisions based on your feelings toward the imcumbent government.. Been there done that ....AN talked some.sense into me about that..

In the past, every time I try to fck with my passive investments, it always ended up doing worse in the long term than if I left it alone. The 4 main categories of account I have are 529k,401k, After tax Vanguard index fund basket, and a self managed trading account. And their performance over a long period of time has always been from best to worst in that order.. simply because those accounts are in the order of difficulty to fck around with.

The 529k account is the most restrictive because you can only elect changes to your investments twice per year and you are limited severely by the types of funds you can invest in. Since 2006, it's been the best performing account for me for that reason. The 401k accounts would have been better (due to the lower fee structure) if I didn't generally fvk with it too by trying to time the market and trying to borrow against it when I didn't need to.. I thought it would be good to take some money off the table, and a self loan wuth 4% interest paid to myself sounded like a great idea....Certainly it would be better than leaving it in that Fidelity Contrafund longer to get that extra 27% gain....doh .... And the after tax vanguard account has an issue simply that capital gains distributions can't compound as well as all those other account types, though some index funds Vanguard offers a more tax efficient flavor (tax managed small cap, mid cap, etc)... The self trading accounts are hit or miss. short term fine, long term not so fine...

I've just got use to deferring $7000 each month between my 401k, 529k, after tax vanguard account, and leave my speculation account on life support to no longer feed that gambling addiction lol... That deferral was much higher before, but I'm sorry, I like to enjoy life more these days. I always max out my 401k to get whatever matching there is... if any... And lately I've been putting a lot more in the 529k versus the after tax vanguard, simply because of the new tax law changes for the 529k. Theoretically you can contribute I think up to $500k to one 529k...and distributing it shouldn't be a problem for me since you can use it now for K-12 private schools , which my pedigreed raised nieces and nephews are attending anyway... I figure I can get a lot more capital gains tax free versus a traditional after tax index account... and the funds are basically the same...

Don't fk around with your 401k/529k/or passive index funds....Just do that biweekly or monthly automatic deposit, and forget about it.

Submitted by FlyerInHi on April 11, 2019 - 11:30am.

I subscribe to the Homepath emails. 10 years after the Great Recession, Fannie Mae is still foreclosing on people who bought at the peak.

https://www.homepath.com/

Submitted by FlyerInHi on April 11, 2019 - 11:52am.

So much for for people who predicted runaway inflation from budget deficits. They were all over the airwaves complaining about the stimulus package that got us out of recession. That was especially true of Ron Paul type supporters who want a return to the gold standard. No calls to audit the Federal Reserve coming from them lately.

Kudlow: Fed may not hike interest rates 'in my lifetime'
https://www.politico.com/story/2019/04/1...

Submitted by flu on April 11, 2019 - 12:06pm.

for reference..

https://investor.vanguard.com/mutual-fun...

https://investor.vanguard.com/mutual-fun...

https://investor.vanguard.com/mutual-fun...

pretty damn convincing to have a slow small investment drip regularly contribution plan over a long period of time.

For most people trying to go for the big bang one time hat trick investment approach, you will give up a lot of opportunity in between with your ill-timing.... If you really could beat the long term returns consistently with a meaningful sized amount of money, you would be running a hedge fund, imho.

Submitted by FlyerInHi on April 11, 2019 - 12:59pm.

Drip drip into an investment account does not give you the full return shown on the chart since your investment drips in over time.

I will leave stocks to people who know more. Sure diversification is important, but I can make more in real estate. By managing my own real estate, I get cash flow and appreciation. Timing is much more important with real estate. Real estate is a leveraged business so when recession hits, many Investors have to liquidate. I never bought high and don’t ever intend to.

Submitted by temeculaguy on April 12, 2019 - 12:10am.

Scardey, no need to apologize, I only used the example as a historical reference. Everything happens for a reason. Had I lucked into a windfall I would have squandered it. Keep in mind I was a 40 year old divorced guy, I wouldn't have paid off my house I would have bought some exotic car, found a gold digger for wife #2 and been on these boards looking to make up for poor decisions once again. Because I pussed out, I found a wonderful, reasonable, low maintenance wife who insisted on a pre-nup so my kids would not resent her as an inheritance thief. A decade later, my wife is still the same person I met and I'll never have to donate real estate again or find another wife. So you did me a favor, because I do not believe I was mentally equipped to handle that money at the time. Once again, everything happens for a reason, and I chose to take that advice so it's on me and any regrets are in jest, I'm grateful for how life turned out. I did like your self actualization on your wife and how her strategy is likely better. Even Brian admitted others are better at this, thus his endorsement of mutual funds. I like these new admissions.

FLU, spot on once again. Leaving alone retirement funds is fantastic advice, my experience in the investments I've left passive have been the most successful, furthering my understanding as I age that my emotions are my greatest enemy. When I enter a casino and play 3 card poker, I win more at 3 card poker when I play "blind." Furthering my theory that emotion and money should be kept separate, not that casinos are a good investment. I only say this because I have to attend a wedding in vegas soon and I've decided I'm not playing any games of skill while there, especially given my proclivity to partake in the free beverages on offer there. It took 50 years to learn my faults, but at least I learned them.

Submitted by flu on April 12, 2019 - 4:54am.

I don't know.. but it certainly feels like we are on the cusp of run-up in the stock market, led once again by tech companies, similar to 1999-2000... I say this because I see the same games tech/media companies playing now that tech companies played back then...a lot of them are running, not walking to Wall Street investment bankers to slam through the IPO floodgates while the going is good...Lyft and Uber are just the beginning ... Pinterest just filed, IHeartMedia just filled.
AirBnb and Slack probably will file. Maybe Vbro, Robinhood, WeWork....

I also see a bunch of companies using the next set of buzzwords to go public or get involved with M&A : "AI" and "Analytics" and "Cloud" ...
PagerDuty leads this IPO marching band. And they killed it in their debut.
https://markets.businessinsider.com/news...

My current private company rebranded all it's work under those glorified buzzwords in its attempt to secure more funding from VCs..
My colleague's company, Sumo Logic looks like they are aligning to go the IPO route too...$230 million funded , on Series F (late stage ) , with the typical high profile VC backers: Sequoia Capital, Accel , Grey Lock Partners, etc

List is growing ...

https://www.nasdaq.com/markets/ipos/acti...

https://www.nasdaq.com/markets/ipos/acti...

The way I look at is, the folks that are involved the go-no-go decisions on these blockbuster IPOs are not stupid... They aren't going to file to launch if they think the market conditions are bad.... And everyone involved in IPO , including the underwriters, all have a vested interest to launch at the best time that all their analysts, researchers, etc think it is...Because there is a shitload of money involved in this ...From banking underwriting fees, to corporate insiders and early investors that want to cash in... You can say one company filing for an IPO as a fluke and doesn't suggest anything, but when you see many high profile companies reaching the same conclusion and doing the exact same thing, that's not a coincidence.. it's no different than all these big REITs building a shitload of rental homes in SD anticipating a sharp demand for rentals, like we see now...Someone(s) with a lot of money spent a lot of money and time analyzing and figured out now was a "good enough" time to do economic activity X.

So, follow the unicorns..And there's more unicorns to come ....And many of them arent profitable , but who cares.... neither is Lyft or Uber...Once the initial higher quality IPOs launches you'll see a followup of IPOs from less-than-stellar companies, followed by bunch of extremely shitty companies getting on the bandwagon. Using an old motto from old school IPO days, "...it's all about the revenue and subscriber growth...The greater the loss, the more glorious it is...."

But hey, there will always be retailer stock buyers that insists on making insiders instant millionaires by buying shares post-IPO while pre-IPO insidersof all size and shape desperately dump as many vested shares possible once any sort of lockup period expires...so that those unicorn capital gains achieved by insiders can be put into more predictable/stable investments for the long haul..such as CDs and a basket of Vanguard index funds....lol...

Submitted by FlyerInHi on April 12, 2019 - 10:14am.

1999-2000 was followed by the dot com bust. So my prediction may yet come true. We shall see.

Submitted by FlyerInHi on April 12, 2019 - 2:22pm.

If you know that rates will be low, you should keep maximum adjustable rate mortgages and invest the money in higher yield ventures.

I predict that interest rate will remain low for a long time. In that regard, Larry Kudlow may be right.

Hidden Bond Market Dangers Expose Traders to $2 Trillion Wipeout
Ultra-low bond yields and reduced liquidity could blindside investors and exacerbate losses once the market turns.
https://www.bloomberg.com/news/articles/...

So the Fed has been unwinding its balance sheet, but it looks like, later this year, they will pause the unwind and start buying mortgage securities again. Does the Fed know something we don't? And can we trust the Fed to steer us away from recession?

I hear of lot of people saying that the Fed is clueless, while at the same time, they trust the Fed will lower rates to keep the economy going.

The twist is that strategists predict that sometime after October the central bank will reach a turning point, when it will need to start increasing its assets again. It would need to do that to prevent bank reserves from declining so far that funding markets become disrupted.

Submitted by scaredyclassic on April 12, 2019 - 3:28pm.

temeculaguy wrote:
Scardey, no need to apologize, I only used the example as a historical reference. Everything happens for a reason. Had I lucked into a windfall I would have squandered it. Keep in mind I was a 40 year old divorced guy, I wouldn't have paid off my house I would have bought some exotic car, found a gold digger for wife #2 and been on these boards looking to make up for poor decisions once again. Because I pussed out, I found a wonderful, reasonable, low maintenance wife who insisted on a pre-nup so my kids would not resent her as an inheritance thief. A decade later, my wife is still the same person I met and I'll never have to donate real estate again or find another wife. So you did me a favor, because I do not believe I was mentally equipped to handle that money at the time. Once again, everything happens for a reason, and I chose to take that advice so it's on me and any regrets are in jest, I'm grateful for how life turned out. I did like your self actualization on your wife and how her strategy is likely better. Even Brian admitted others are better at this, thus his endorsement of mutual funds. I like these new admissions.

FLU, spot on once again. Leaving alone retirement funds is fantastic advice, my experience in the investments I've left passive have been the most successful, furthering my understanding as I age that my emotions are my greatest enemy. When I enter a casino and play 3 card poker, I win more at 3 card poker when I play "blind." Furthering my theory that emotion and money should be kept separate, not that casinos are a good investment. I only say this because I have to attend a wedding in vegas soon and I've decided I'm not playing any games of skill while there, especially given my proclivity to partake in the free beverages on offer there. It took 50 years to learn my faults, but at least I learned them.


i cannot agree that everything happens for a reason, but I can compromise perhaps with we can find a reason after the fact for everything that happens, and maybe that ends us up in the same place.

In spite of all the general worrying about things that are largely out of my control, not one thing bad has ever really happened. The 2nd kid is gearing up to graduate college and all of my financial worst case scenarios have ended in basically no debt and plenty of money for whatever we would want to do. I’m not sure things could’ve turned out better for me in life.

I think I learned from my parents the fallacious reasoning that if you worry, then it will tend to make things come out all right, and people who don’t worry are fools, so the reason you must worry is to avert disaster.. Sometimes I think, “I made it!”, as if the outcome is still uncertain and I need to remind myself that I’m doing great… I’m not sure where I made it to, but I definitely seem to be doing good, and I don’t really worry about money. Nowadays, it’s more of a sense of time running out and the feeling like maybe I have wasted big chunks of time.

It seems like a recession has to come at some point, but the market can remain irrational longer than you can remain solvent, as they say. In the meantime, I will continue to scrimp and save, regardless of recessions or booms, I’ll iron my own shirts and do my own yardwork…a not inconsequential economic gain for me, as there is probably $2-3000 worth of weed removal I do every year. So much weedwhacking. Not sure what the reason is for all these weeds; to test my resolve? To keep me working? So tall this year, with the rains.

Submitted by flyer on April 13, 2019 - 7:36am.

It's great to read how so many of us on this forum are pretty much living the lives of our dreams. As scaredy alluded to--the clock is ticking--nothing any of us can do about that--other than continue to live the lives we want to live.

Submitted by flu on April 13, 2019 - 9:25am.

scaredyclassic wrote:

I think I learned from my parents the fallacious reasoning that if you worry, then it will tend to make things come out all right, and people who don’t worry are fools, so the reason you must worry is to avert disaster.. Sometimes I think, “I made it!”, as if the outcome is still uncertain and I need to remind myself that I’m doing great… I’m not sure where I made it to, but I definitely seem to be doing good, and I don’t really worry about money. Nowadays, it’s more of a sense of time running out and the feeling like maybe I have wasted big chunks of time.

Andy Grove (former Intel CEO) best said it..

"Only the paranoid survive"...

ok, maybe a little exaggerated for everyday life but the gist of it useful....

That said. I am ready to retire. I want to do something else. Doing tech is getting to be a drag for me. unfortunately, I haven't motivated to find what that something else is yet. I don't want to just sit on my ass on day or waste all my time working on my cars.... and generally the tech scene is still good and it's hard to say goodbye especially when it's not difficult work....I am getting lazy in my older age. lol

Submitted by FlyerInHi on April 13, 2019 - 11:26am.

There is a time for everything.
Feeling the pulse of the economy has nothing to do with personality.

Back in 2008/2009 we should have supported more stimulus and infrastructure spending to improve the economy and build on national wealth. We would have built a stronger economic base. Just look at what China did with infrastructure. Now they own the technology and the economies of scale to build things. They can easily build a new HSR line once a week; and on open bid, they will win every time on technology and costs.
The doom and gloomers who opposed good policies cost us great national wealth.

Now, a decade later, we are due for cyclical recession. Cyclical recessions occur in cycles and have nothing to do with doom and gloom. That's just objective thinking.

Scaredy, you planned well and bought a house at the low. Now, you're doing well. Why not buy a commercial or apartment building next recession? I think would be a good apartment manager in retirement, although I believe you might be too lax on tenants who don't pay on time.

Submitted by scaredyclassic on April 13, 2019 - 4:54pm.

i think the best option for me is to just keep working.

Submitted by flyer on April 13, 2019 - 8:46pm.

Agree, keeping busy with a variety of endeavors, along with other interests keeps life exciting. We've taken on multiple real estate, film and other projects over the years, and plan to continue to do so indefinitely. Really never plan to "retire," as long as we find the projects interesting, and they are things we can pass along to our kids.

Submitted by flu on April 14, 2019 - 8:34am.

Time is more precious than money these days...Today is a great example...

I am getting old... hopping park to park didn't use to be so tiring. And I'm starting to feel it. I use to ride the above all the time no problem. It's not that the g's that bother me... It's the cracking of my neck and back and muscles after being flung around a few times. Six Flags also got this pretty new ride called X2... It's just ridiculously awesome, you start out leaning backwards, head first...But 7 times later, my neck hurts and my head kinda hurts. It didn't help the first ride was at night when I couldn't see.. . unfortunately, I wasn't able to sneak my GoPro on board. Try again in the summer, after I've recovered .. That's what season passes are for....lol

Submitted by The-Shoveler on April 13, 2019 - 11:47pm.

flu wrote:
I don't want to just sit on my ass on day or waste all my time working on my cars....

My wife refuses to let me get a metal detector so I can search for treasure on the beach, I guess I will just keep working.

Submitted by flu on April 14, 2019 - 8:46am.

The-Shoveler wrote:
flu wrote:
I don't want to just sit on my ass on day or waste all my time working on my cars....

My wife refuses to let me get a metal detector so I can search for treasure on the beach, I guess I will just keep working.

https://www.harborfreight.com/9-function...

$50.... With a 25% coupon you normally can get, it's $40 after tax.

Tell you what, PM your address and I'll send you one...And I'll give me your address and you can send me these 6 ton jack stands I want to get , as one of many things I "need"..I think I am going to figure out how to do my own alignments. at least for my two cars. I think the alignment shops are getting tired seeing me every month that or two with my lifetime alignment package

https://m.harborfreight.com/6-ton-steel-...

Submitted by The-Shoveler on April 14, 2019 - 6:55pm.

LOL Thanks flu, sorry I should have been more clear,

My wife will not let me "have" a metal-detector.

Too many honey do's won't get done LOL.

Submitted by flu on April 14, 2019 - 9:58pm.

The-Shoveler wrote:
LOL Thanks flu, sorry I should have been more clear,

My wife will not let me "have" a metal-detector.

Too many honey do's won't get done LOL.

Sigh...This is where you need to "think outside the box" and merge that idea with "do first, ask for forgiveness later" together... Let me explain...

Step 1: Go here and buy your metal detector and leave it in your trunk
https://www.harborfreight.com/9-function...

Step 2: Go here and buy something around $500
https://www.tiffany.com/jewelry/shop/ear...

Step 3: show your wife the metal detector, and withstand whatever scolding you get from her... Say things "you're right dear. I'm sorry dear. I don't know what I was thinking dear. Because I was stupid, dear. I'll make sure not to waste that much time dear.... Don't worry dear, it's more as a joke dear.

Step 4: wait a few days and say you're going to the beach for an hour to exercise, because you're trying to lose weight...and then go play with your metal detector for a few hours....

Step 5: when you come back home, before she has a chance to get pissed at you for being at the beach for a few hours jerking around with your metal detector... in the happiest mood say "Honey, honey. I'm sorry I'm late, but I was at the beach playing with my metal detector, and look what i found with it!!!!" And quickly pull out the thing you bought in step 2 coverd with wet sand and show her...

Even if she doesn't believe your bullshit, if you remember to do step 2 each time after you do step 4, you'll be fine so long as each time what bring back in step 2 is better than what you brought back last time... As a rule of thumb use this simple formula to guide you:

$J(new) = $J(old) * 2

Which is why I suggest you start your first step 2 $J(first) around $500.

Apology is policy...

Submitted by The-Shoveler on April 15, 2019 - 10:18am.

LOL I don't think I can afford it, maybe I am not ready for retirement,

Submitted by svelte on April 16, 2019 - 6:10pm.

My 7 year old has been asking me for a metal detector.

I didn't even know 7 year olds knew what a metal detector was!!

Submitted by flu on April 24, 2019 - 1:36pm.

Facebook beat earnings numbers...

Twitter beat.

Snapchat beat.

So did Microsoft...

So did Visa....

That disasterous Q1 earnings people were predicting doesn't look like is gonna happen

Submitted by flu on April 25, 2019 - 1:46pm.

Amazon beats..

Intel getting clobbered probably because of AMD ha ha ha.

Submitted by flu on April 25, 2019 - 3:22pm.

Starbucks also beats...

Ford beats...

t-mobile beats

mattel beats

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