Sheer blindness

User Forum Topic
Submitted by scaredyclassic on March 24, 2020 - 10:43am

Did anyone go all cash when coronavirus shut down italy.

Did it seem unthinkable the US could pause.

Is it alarming we are so clueless?
It was happening in slow motion before our eyes.

Will global warming effects unfold the same way, slower, harsher, much more intrusive, with zero foresight or planning.

Just more and bigger stimulus Bills to increase consumption and carbon output and cook us faster.

8 million homeless in florida.

Actual supply line problems

I am interested that I could not understand the extent of the problem when it should've been clear

DENIAL

Submitted by scaredyclassic on March 24, 2020 - 10:46am.

I'd say long on guns.

We are all gonna want plenty of ammo to shoot our even more desperate neighbors and countrymen

Submitted by svelte on March 24, 2020 - 11:18am.

I've been trying to look back in time and see why it wasn't obvious too. From this vantage point, it is hard to believe that just two weeks ago we really didn't know this was going to happen. I read the March 16th Bloomberg magazine again this morning and it wasn't even hinting at something like this (granted it had probably been written a week earlier).

Things changed very very fast but as you say - how could we have not seen it coming with China and Italy doing a lockdown? It seems as obvious as the nose on our face!

But then I remember that if I yanked my money out every time I worried about a threat to the economy, I'd yank it out several times a year. And that's no way to invest, as Rich so astutely points out.

Still my biggest regret is that someone came on Piggington just a week before the big Great Depression crash and told everyone to get out now. I didn't listen. Boy was that guy right. I've never been able to find that post again, but I certainly remember it.

Submitted by scaredyclassic on March 24, 2020 - 1:24pm.

We see what we want to see and we hear what we want to hear

Submitted by FlyerInHi on March 24, 2020 - 1:52pm.

You’re so right scaredy. We should have seen it coming. The shutdown in Italy was when we should have moved to all cash.

Submitted by scaredyclassic on March 24, 2020 - 5:37pm.

We were much slower

I was getting notice of all kinds of local business closures, still no reaction in stock mkt

Is the market actually efficient?

Submitted by barnaby33 on March 28, 2020 - 9:13pm.

Yes, but for whom?
Josh

Submitted by scaredyclassic on March 29, 2020 - 9:27am.

Efficient in the sense that stock price reflects all information knowable

Submitted by outtamojo on March 29, 2020 - 2:05pm.

Our info was either from the right wing pundits who downplayed the covid19 threat or the left leaning sources who were labeled alarmists. What would we have done had we access to the non public intelligence briefings people like Burr had access to?

Submitted by barnaby33 on March 30, 2020 - 10:17am.

Efficient in the sense that stock price reflects all information knowable

Ahem, no. It is more efficient for those with first access to information. Its a big club and you ain't in it!
Josh

Submitted by scaredyclassic on March 30, 2020 - 10:40am.

efficient market theory would disagree, but I have no idea what reality is.

https://en.wikipedia.org/wiki/Efficient-...

Submitted by FlyerInHi on March 30, 2020 - 11:46am.

scaredyclassic wrote:
efficient market theory would disagree, but I have no idea what reality is.

https://en.wikipedia.org/wiki/Efficient-...

Yeah... that’s what they taught me first economics class in college.

I think the markets are more about momentum.

Like the invisible hand in allocating resources. Not that efficient right now, haha

Submitted by Gunslinger on March 30, 2020 - 12:56pm.

He who dwells in the shelter of the Most High
will abide in the shadow of the Almighty.
I will say to the Lord, “My refuge and my fortress,
my God, in whom I trust.”

Psalm 91

Submitted by svelte on March 30, 2020 - 2:53pm.

Gunslinger wrote:
He who dwells in the shelter of the Most High
will abide in the shadow of the Almighty.
I will say to the Lord, “My refuge and my fortress,
my God, in whom I trust.”

Psalm 91

Great the man who gave us these intelligent insights has now "found god":

Gunslinger wrote:

More nonsense. Here is the key part of the article the punk omits.

Gunslinger wrote:

This discussion reminds me of a joke I heard over the holidays. President walks into a Congressional Meeting and says we just killed 1/2 a million Iraqi's and a beautiful blonde. The Majority leader stands up and asks "Mr President...why did we kill a beautiful blonde?" The President turns to the Secretary of State and whispers "See, I told you.....no one would care about the 1/2 million Iraqi's"

Gunslinger wrote:

Serious question. Are you a gay man?

Gunslinger wrote:

What utter nonsense from a lazy punk pulling facts out of his rear end.

Gunslinger wrote:

My, My, My...arent you the gal who ripped me for suggesting such a thing exists. Just the tip of the iceberg here. Enjoy life in your bubble.

Gunslinger wrote:

Not afraid to get my hands dirty as I recently retired from the LAPD and need something to fill my time outside of golf, sailing and gun shows. Where are them house that gal was talking about?

Submitted by NeetaT on March 30, 2020 - 3:23pm.

Nothing changed for me. Half of my money is in cash. The other half is in equities, bonds, precious metals and my paid off condominium. I took no action. The biggest hit I took was a beating on my High Yield Bond ETFs (Junk Bonds).
I am just pretending that I lost all my money with the exception of the cash and my condominium so that I will not worry about the other assets for at least another 10 years. I actually hope my condominium's value decreases so that I can reassess for a lower property tax. On the bright side, my cash is worth more now at least for the short term.

Submitted by Gunslinger on March 30, 2020 - 5:57pm.

svelte wrote:
Gunslinger wrote:
He who dwells in the shelter of the Most High
will abide in the shadow of the Almighty.
I will say to the Lord, “My refuge and my fortress,
my God, in whom I trust.”

Psalm 91

Great the man who gave us these intelligent insights has now "found god":

Gunslinger wrote:

More nonsense. Here is the key part of the article the punk omits.

Gunslinger wrote:

This discussion reminds me of a joke I heard over the holidays. President walks into a Congressional Meeting and says we just killed 1/2 a million Iraqi's and a beautiful blonde. The Majority leader stands up and asks "Mr President...why did we kill a beautiful blonde?" The President turns to the Secretary of State and whispers "See, I told you.....no one would care about the 1/2 million Iraqi's"

Gunslinger wrote:

Serious question. Are you a gay man?

Gunslinger wrote:

What utter nonsense from a lazy punk pulling facts out of his rear end.

Gunslinger wrote:

My, My, My...arent you the gal who ripped me for suggesting such a thing exists. Just the tip of the iceberg here. Enjoy life in your bubble.

Gunslinger wrote:

Not afraid to get my hands dirty as I recently retired from the LAPD and need something to fill my time outside of golf, sailing and gun shows. Where are them house that gal was talking about?

The weak that walk among us require tough love. Jesus has always been my savior. Got a problem with that hoss?

Submitted by svelte on March 30, 2020 - 7:25pm.

Gunslinger wrote:

The weak that walk among us require tough love. Jesus has always been my savior. Got a problem with that hoss?

You're just peachy keen in my book, sweetie!

Submitted by sdrealtor on March 30, 2020 - 9:34pm.

What is going on here?

What happened to talking about real estate around here? We are finally entering interesting times again. I will try to post an update on the main thread.

Submitted by outtamojo on March 30, 2020 - 11:49pm.

sdrealtor wrote:
What is going on here?

What happened to talking about real estate around here? We are finally entering interesting times again. I will try to post an update on the main thread.

Are we going to have a meltdown in commercial real estate? How about residential? Inquiring minds want to know!

Submitted by ucodegen on March 31, 2020 - 12:50am.

FlyerInHi wrote:
scaredyclassic wrote:
efficient market theory would disagree, but I have no idea what reality is.

https://en.wikipedia.org/wiki/Efficient-...

Yeah... that’s what they taught me first economics class in college.

I think the markets are more about momentum.

Like the invisible hand in allocating resources. Not that efficient right now, haha


The way that Warren Buffet put it is;

  • In the short term, the market is a voting machine. (momentum)
  • In the long term, the market is a weighing machine. (efficient)

    So that means it may be both. Not everybody in the market is logical. They see a stock, sounds good, sounds like a familiar name, and it is going up!.. so buy some. They don't bother with looking at the financials. The PE ends up at 100, but revenue growth is at 5% and profit margin is unchanged. They stay in the stock. The increase in the price of the stock slows down - but they feel better times are ahead! Stock price tops out, starts to go down - but they feel it will resume going up and don't double check valuation. Price is now in free fall and of course it will turn around. They have had the stock for 3 years and the true valuation is about 15% more than they paid for it. Now the stock price crashes through the +15% over cost valuation and head for their buy-in price. They panic and sell (capitulation) at about 2% below their buy in price. The stock continues down an additional 10%.. bottoms and moves in a flat line for a bit then starts going up. The emotional investor is to scared to buy because they don't look at valuation and instead just looks at the movement of the stock price. Stock price continues to rise and goes past the +15% valuation (true valuation) of the company and the emotional investor starts worrying that they are getting left behind and that the 'train has left the station'. They end up jumping on, buying the stock at 19% above true valuation... rinse and repeat (selling at 10% below true valuation again).

    I have seen it so many times... I have had colleagues ask about how I have managed to save for retirement and I tell them. They ask for suggestions, I give them some basic mutual fund advice, but they don't act on it until more than 5 years later at the top of the market (fearing they would be left behind), and they panic and buy in at the top... then as it drops, they panic and sell, sometimes below buy in. Of course they get angry at me and I ask when did they buy, and why didn't they buy when I suggested? Why didn't they tell me that they were going to buy the fund right before they actually bought it. I also don't give them any more suggestions, even when asked. They don't have to stomach for the volatility.

    To succeed at stock investing, you generally need to be calm and have a 'cast iron stomach'. You need to realize that the cattle herd moves to stock around violently sometimes and in fact, that might give you opportunities .. and a chance to pick up some 'steak'...

    flu - remember earlier this year when I said that this market downturn might have some 'legs' on it?..

  • Submitted by scaredyclassic on March 31, 2020 - 10:04am.

    ucodegen wrote:
    FlyerInHi wrote:
    scaredyclassic wrote:
    efficient market theory would disagree, but I have no idea what reality is.

    https://en.wikipedia.org/wiki/Efficient-...

    Yeah... that’s what they taught me first economics class in college.

    I think the markets are more about momentum.

    Like the invisible hand in allocating resources. Not that efficient right now, haha


    The way that Warren Buffet put it is;

  • In the short term, the market is a voting machine. (momentum)
  • In the long term, the market is a weighing machine. (efficient)

    So that means it may be both. Not everybody in the market is logical. They see a stock, sounds good, sounds like a familiar name, and it is going up!.. so buy some. They don't bother with looking at the financials. The PE ends up at 100, but revenue growth is at 5% and profit margin is unchanged. They stay in the stock. The increase in the price of the stock slows down - but they feel better times are ahead! Stock price tops out, starts to go down - but they feel it will resume going up and don't double check valuation. Price is now in free fall and of course it will turn around. They have had the stock for 3 years and the true valuation is about 15% more than they paid for it. Now the stock price crashes through the +15% over cost valuation and head for their buy-in price. They panic and sell (capitulation) at about 2% below their buy in price. The stock continues down an additional 10%.. bottoms and moves in a flat line for a bit then starts going up. The emotional investor is to scared to buy because they don't look at valuation and instead just looks at the movement of the stock price. Stock price continues to rise and goes past the +15% valuation (true valuation) of the company and the emotional investor starts worrying that they are getting left behind and that the 'train has left the station'. They end up jumping on, buying the stock at 19% above true valuation... rinse and repeat (selling at 10% below true valuation again).

    I have seen it so many times... I have had colleagues ask about how I have managed to save for retirement and I tell them. They ask for suggestions, I give them some basic mutual fund advice, but they don't act on it until more than 5 years later at the top of the market (fearing they would be left behind), and they panic and buy in at the top... then as it drops, they panic and sell, sometimes below buy in. Of course they get angry at me and I ask when did they buy, and why didn't they buy when I suggested? Why didn't they tell me that they were going to buy the fund right before they actually bought it. I also don't give them any more suggestions, even when asked. They don't have to stomach for the volatility.

    To succeed at stock investing, you generally need to be calm and have a 'cast iron stomach'. You need to realize that the cattle herd moves to stock around violently sometimes and in fact, that might give you opportunities .. and a chance to pick up some 'steak'...

    flu - remember earlier this year when I said that this market downturn might have some 'legs' on it?..

  • Well. Maybe.

    But doesnt that assume that conditions for growth stay roughly similar? You seem to say theres an objective right price that the market eventually moves toward, and fools chase higher prices.

    But what if instead of a 2 trillion stimulus we have a 200 trillion stimulus. Or there is some other shock to the system that recalibrated what earnings might be in number terms

    Submitted by ucodegen on March 31, 2020 - 7:06pm.

    scaredyclassic wrote:

    Well. Maybe.

    But doesnt that assume that conditions for growth stay roughly similar? You seem to say theres an objective right price that the market eventually moves toward, and fools chase higher prices.

    But what if instead of a 2 trillion stimulus we have a 200 trillion stimulus. Or there is some other shock to the system that recalibrated what earnings might be in number terms


    The market does not move 'toward' the accurate valuation - but about it; sometimes higher, sometimes lower.

    There are always shocks to the system that can 'adjust' or change the earnings and performance of a company. Volatility occurs almost proportionate to the unknowns. The trick is to figure out how much the shock will actually change the earnings. Nothings constant except change.

    When confronted with the unknown, I discount the valuation for by the unknown, trying to bound how much is uncertain. I do take 'jumps of faith' on some, however I severely restrict how much I buy.

    Submitted by sdrealtor on March 31, 2020 - 9:34pm.

    outtamojo wrote:
    sdrealtor wrote:
    What is going on here?

    What happened to talking about real estate around here? We are finally entering interesting times again. I will try to post an update on the main thread.

    Are we going to have a meltdown in commercial real estate? How about residential? Inquiring minds want to know!

    Check main thread on home page

    Submitted by scaredyclassic on April 21, 2020 - 6:44am.

    ucodegen wrote:
    scaredyclassic wrote:

    Well. Maybe.

    But doesnt that assume that conditions for growth stay roughly similar? You seem to say theres an objective right price that the market eventually moves toward, and fools chase higher prices.

    But what if instead of a 2 trillion stimulus we have a 200 trillion stimulus. Or there is some other shock to the system that recalibrated what earnings might be in number terms


    The market does not move 'toward' the accurate valuation - but about it; sometimes higher, sometimes lower.

    There are always shocks to the system that can 'adjust' or change the earnings and performance of a company. Volatility occurs almost proportionate to the unknowns. The trick is to figure out how much the shock will actually change the earnings. Nothings constant except change.

    When confronted with the unknown, I discount the valuation for by the unknown, trying to bound how much is uncertain. I do take 'jumps of faith' on some, however I severely restrict how much I buy.

    So is oil worth zero, given its negative externalities, and we are just moving that value , plus 30, minus 30.?
    Seriously, how does one discount valuation when oil goes this negative. Or maybe this is bullish for growth. We will pay you to mindlessly drive to the mall...

    Submitted by FlyerInHi on April 21, 2020 - 10:20am.

    outtamojo wrote:
    sdrealtor wrote:
    What is going on here?

    What happened to talking about real estate around here? We are finally entering interesting times again. I will try to post an update on the main thread.

    Are we going to have a meltdown in commercial real estate? How about residential? Inquiring minds want to know!

    Of course we are. The question is by how much.
    The market is frozen right now. But as the recession takes hold, and the financial ramifications become apparent, real estate will be hit.

    sdrealtor’s posts are meaningless sales stats that don’t reflect the future. People are shell-shocked right now and sellers aren’t selling.

    Submitted by FlyerInHi on April 21, 2020 - 1:24pm.

    The implosion of WeWork will have dire consequences for commercial real estate.
    https://www.bloomberg.com/news/articles/...

    Retail will be hit hard. Covid is pushing people who heretofore didn’t like to shop online into the digital age.

    In the short to medium term, residential in the top 10 metros will be hit as urban migration slows or reverses.

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