patrick.net

Shaman says

That we were going to have a V shaped recovery, and everything would be back to normal by summer or at least by Fall. As that fails to happen, markets will decline, slowly at first and then faster as the panic sets in. By September it will be in crash zone.

Don’t say I didn’t warn you

You don't have to say, but I believe you're out in CA? IL has draconian lock down rules, but no one gives a fuck. Things opened up pretty much the last week or two. I've been to WI, IN, TN and KY since the major lock downs started. Most places aren't as bad as the deep blue states. Even IL now is kind of normal, just with stupid restrictions.

Also a massive chunk of the service jobs on UE are making more than they would working. I'm not saying you're wrong, but July will be interesting. People are going to have to get up off their ass and work. The problem is we won't know about it until September to see if people did because the data lags. Age matters obviously so I'm a bit more careless about stocks as I have plenty of time before retirement.

I'm personally sinking more money in with every check. It could drop 50% tomorrow and I'd be okay by the time I reach 50. Unless every dividend fund/stock dries up and I'm not getting income from the investments. I don't see that happening.

Local and state governments are getting destroyed though. That's where the blood bath is. I don't know how that plays out in the stock market, but I do think the businesses that survive will do just fine, if not better since some of the competition will have gone out of business.

Shaman says

Don’t say I didn’t warn you.

You could be right. But the odds of you being right is already priced into the current asset prices. Studies have shown again and again that market timing lowers your returns.

But hey, it takes a lot of guts to post that you made a move like this. In 6 months you’ll either look like a genius or a moron.

WookieMan says

Things opened up pretty much the last week or two. I've been to WI, IN, TN and KY since the major lock downs started. Most places aren't as bad as the deep blue states. Even IL now is kind of normal, just with stupid restrictions.

Also a massive chunk of the service jobs on UE are making more than they would working. I'm not saying you're wrong, but July will be interesting. People are going to have to get up off their ass and work. The problem is we won't know about it until September to see if people did because the data lags. Age matters obviously so I'm a bit more careless about stocks as I have plenty of time before retirement.

I'm personally sinking more money in with every check. It could drop 50% tomorrow and I'd be okay by the time I reach 50. Unless every dividend fund/stock dries up and I'm not getting income from the investments. I don't see that happening

I agree. I've been to SC, NC, GA and FL and operations are beginning to resume as normal. Traffic is coming back down here as well. In fact when I was vacationing last week in NC, the vacation company was having a hard time hiring people due to the temporary bump in unemployment benefits.

I don't think the fear mongering is going to work. Yes I believe there will be more pain, but I think things will come back quickly after the election.

I'm with wookie in that I'm investing more and more every check into the market. It may take a year or so, but I think my return will be 2-3xnmy initial investment.

Ppl. I'd posted this chart, quite some time ago, it's the S&P500 with the 1 business quarter Bollinger bands around the index using weekly candlesticks.



So far, the current rally has easily closed above that median of some ~2959 and has none of the features (price bars not able to have a weekly close above the pre-crash median) which tells one that this is the bear market rally preceding the next wave down.

I think the future crash, via QE, etc, has dodged the bullet again for another season. So yes, someday, the markets will in fact enter a bear market, but that time isn't now.

I bought CDs and bonds in 2008 and while I didn't lose, I also missed out on one of the biggest bull markets ever.

Yes, the market is being irrational, but I'm going to roll with it for now.

Not investment advice. I could totally be wrong, I just want to be wrong differently this time.

Shaman says

The stock market bounced back based on ONE CALCULATION!

Agreed. But how are you gonna get a return from bonds? Just asking.

mell says

people may cash out of trannies that appreciated beyond their wildest dreams

Since when have trannies appreciated in value???

B.A.C.A.H. says

Shaman says

The stock market bounced back based on ONE CALCULATION!

Agreed. But how are you gonna get a return from bonds? Just asking.

Just like I did last time (2009). Sell them and buy stocks on the upswing. Finding a bottom is always hard, but at some point the math will work out beautifully for a very very large return on the way back up. Because it will go back up. The people who’ve said they’re going to hold for now won’t lose in the long run. They’ll just have missed a grand opportunity to buy stocks at a fire sale.

WookieMan says

It could drop 50% tomorrow and I'd be okay by the time I reach 50.

There are people here under 50?

Newbie123 says

Red days are buying opportunities,

And red YEARS are massive buying opportunities... if your cash isn’t all tied up in bottomed out stocks.

Booger says

There are people here under 50?

Oh me me me!!

Shaman says

Just like I did last time (2009). Sell them and buy stocks on the upswing

If you're going to use bonds for dry powder to get back into stocks, have you considered cash instead? Especially since bond yields are so low.

There are risks with bonds that their market value could drop.

B.A.C.A.H. says

have you considered cash instead?

That's me too! I'm aligned with Shaman but I got out way too soon and there is an opportunity cost. I believe Rin as well but I think once the free money runs out the technicals are going to change.

But I'm just some amateur who made a lot of money over the last 15 years and who's skared to lose it.

Considering going some swing trading with a small position again though. Just using RSI, candles and maybe a dow etf for some quick ins and outs.

I've been out of the market for five years. Everything is in CDs with my credit union. I am 67-years-old, retired, debt-free, and have a positive cash flow. Most of my estate is going to charity after I pass away.

MAGA says

I've been out of the market for five years. Everything is in CDs with my credit union. I am 67-years-old, retired, debt-free, and have a positive cash flow. Most of my estate is going to charity after I pass away.

Job well done.

The potential to accumulate wealth is the carrot on the stick that many people chase. And if they are engaged in productive pursuits, society benefits. What happens if you take away the ability to build and retain wealth? Look at communist countries. And so when events happen that derail the economy, like Covid-19, the Fed steps in to support the price of assets, which are stores of wealth. And the gov steps in to bail out the banks, in which people stash money. And folks who have accumulated wealth are grateful, and believe that the right actions were taken.

The Fed has been and will be propping.

Invest and don’t miss the boat bears.

In the famous words of Warren Buffet, “buy the dip, faggot”

WineHorror1 says

So, there's never going to be any more crashes?

Of course there will be...major volatility makes for major profits for the insiders. Like the oil prices a couple of months ago....$-100 a barrel to $+30 a barrel in a few weeks...How many insiders made a fortune from that?...lolol...and how many ousiders got their faces ripped off? lol

MAGA says

I've been out of the market for five years. Everything is in CDs with my credit union. I am 67-years-old, retired, debt-free, and have a positive cash flow. Most of my estate is going to charity after I pass away.

Have you considered BLM or the george floyd family?

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I like writing covered calls as I did that back in 2009 to 2013. I bought 1000 share of Carnival Cruise Line at $10 a share a couple of months ago.

I have been writing covered calls each week and making at least $250 a week with the contracts expiring (ie.., out of the money) for last 10 weeks just on the underlying stock or asset Carnival Cruise Line.

I am also writing covered calls for other stocks and ETFs I bought in April like JETS, UNG, Bloomin Brands, IMAX, Royal Caribbean, MGM, Exxon, Chevron, Phillips 66, and Twitter.

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I read "One Up On Wall Street" by Peter Lynch when I started investing, and I always remembered Lynch saying "Options are a fast game played by some of the smartest people in the world."

That was enough to keep me out of options. I don't short stock either. Or buy mutual funds (except for Vanguard index funds). I just straight out own shares.

komputodo says

Have you considered BLM or the george floyd family?

hhahahahahahaaha!

The risk-reward for parking "capital" in treasury debt that pays no interest, (or nearly no interest), especially for small depositors like most of us, is not worth it. Since there's no interest income, the only upside will be for a capital gain if the rates go negative.

The downside though, is that the market value of those bonds could go down. A lot. In recent months UST bond yields (and therefore bond market values) have been more volatile than stocks.

When, or if, a stock price crash comes and it's time to "jump back in", we must buy with cash (or credit I suppose for fancy-pants margin folks). We cannot buy with bonds. Those bonds must be sold to convert to cash to make the stock purchase. If the market value of those near zero yielding bonds has dropped, you won't get your money back in the sale. If you're in cash, you'll still have your cash. It won't be like you missed out on much income compared to those low yielding bonds.

I dunno, dude. With government bond yields where they are now, I'd use FDIC insured bank deposits for dry powder. (Maybe that's what I'm doing). I would not be buying bonds for dry powder.

If you wanna have bonds or bond funds for the income then those might be the "high yield" corporate types. But you said as dry powder to jump into equities. I like cash for that. Cash is King.

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Writing covered calls presents the least risk.

Never trade on margin and never short a stock. Always trade with a cash account (ie.., covered calls), and your option level is 0 (covered calls and cash secured puts).

If you want extra risk by shorting the market than get a Proshares ETF like Proshares Short S&P 500 (SH) or even the more leveraged short ETFs like Proshares Ultrashort S&P 500 (SPXU).

I did the covered call strategy back in 2009-2013 and am doing it now with the repeat in volatility.

Its not difficult and it does not require any significant analysis. Just sell or write contracts (i.e., "sell to open" or "write to open") that expire within 5 business days and with strike prices that are at least 20% greater than the current share price for the most volatile stocks and ETFs like Carnival Cruise Line and JETS.

I expect perhaps silver etf (SLV) will rise and show volatility as well, but bitcoin and cryptocurrencies are competition to precious metals more now than in 2009-2012.

Even with non volatile or stable underlying stocks and ETFs you can make an extra 7% a year with covered calls.

This is one of the better sites out there: https://www.borntosell.com/covered-call-tutorial/covered-call-example

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Booger says

WookieMan says

It could drop 50% tomorrow and I'd be okay by the time I reach 50.

There are people here under 50?

I don't think there are many. 37 this month for me. I for some reason got into real estate as a career during college and stumbled across this site I think about 2007ish. I can't remember the exact year, but I lurked forever before getting active and commenting. I was a fucking baby when I found this place basically.

Patrick says

I read "One Up On Wall Street" by Peter Lynch when I started investing, and I always remembered Lynch saying "Options are a fast game played by some of the smartest people in the world."

That was enough to keep me out of options. I don't short stock either. Or buy mutual funds (except for Vanguard index funds). I just straight out own shares.

Vanguard has a low etf equivalent for nearly every MF they offer...

I gave you all plenty of warning.
Now, here comes the Depression.

Shaman says

I gave you all plenty of warning.
Now, here comes the Depression.

What happened?

Shaman says

I gave you all plenty of warning.
Now, here comes the Depression.

Dow is still almost at 26k as I type this. Did I miss something newsworthy? Not being a dick, I just still don't see a depression coming besides a war breaking out at this point. Almost everyone has the same or more money to spend now than they did 5 months ago. They're going to spend it. Certain industries will be fucked though for sure. Cruise lines and commercial real estate are top of mind.

WookieMan says

Certain industries will be fucked though for sure.

Big cities are fucked too. Their reliance on consumption taxes is getting thrown back in their faces.

1)lockdowns coming back in some states
2)businesses continue to fold
3)unemployment increasing not decreasing
4)insane orders from governors creating chaos
5)25-30% of renters not paying and haven’t been paying
6)40% of businesses not paying rent
7)housing dipping down (7% so far)
8) banks were propped up by stimulus but beginning to falter as mortgage delinquencies rise dramatically
9)no stimulus on horizon, Congress still AWOL
10)shipping traffic way down Due to lack of demand
11)education mafia trying to get paid without serving the community
12)second race riots on horizon
13) federal $600 unemployment runs out in two weeks.
14)states out of money and borrowing to sustain spending.

Shaman says

5)25-30% of renters not paying and haven’t been paying

Shaman says

6)40% of businesses not paying rent

Shaman says

10)shipping traffic way down Due to lack of demand

Shaman says

7)housing dipping down (7% so far)

I'm not sure where you're getting this info, but I've yet to see any of the quoted stuff happening around me. You have any links? My SIL is the only one I know not working and she lives with MIL. Everyone has been busier than usual to be honest. My primary network is in the line of work for real estate and construction (housing, infrastructure, municipal engineering, etc). My one buddy is in textile marketing (hats, shirts, etc) and he's as busy as can be. Another does office IP phone systems and he's working more hours than ever.

I'm very anecdotal in my observations and making decision about how things are going. I live along a busy train line (BNSF) and unless the amount of cars are less, the frequency hasn't changed. Corp. jets at the local airport. During 2008 that was one of the first things to disappear. No closed down restaurants. If you can't pay the rent, you're not buying product to cook. Lots of help wanted signs. My Toyota buddy tells me their sales are fine. Just a slight dip when this all first came around. They're struggling to get sales people at dealerships to handle demand because of the $600/wk.

Commercial real estate and government debt is going to be where the problem is. I just don't think it's going to be that big of a problem for now. I worry about next year, but I'd be hesitant to pull out of anything now. At least collect a dividend on a blue chip stock/fund with a safe amount of money.

I personally thought we were going to see 12-15k on the Dow at some point early on in this Covid BS (May/June). I'm not really seeing it now, but I could be wrong. It really makes no difference to me at my age though, so maybe I'm naive. We're pumping money into the market with each check. It will be worth more in 20 years and pump out dividends over that time that just get reinvested. If anything a downturn helps my family, so maybe I'm not the best person to listen to.

History shows again and again
How nature points up the folly of man
Stimunculus!

WookieMan says

My SIL is the only one I know not working

My SIL lost high paying corporate job at Marriott HQ. BIL lost high paying IT job.

WineHorror1 says

WookieMan says

My SIL is the only one I know not working

My SIL lost high paying corporate job at Marriott HQ. BIL lost high paying IT job.

Winehorror, where was the BIL doing IT? I'm curious as to what industry that was affected.

I've been dead busy. I'm currently working 2 full time jobs (both remote and can juggle, one ends August). My online company just had a killer month and my wife's company had her best month ever in the last 6 years in March. I wonder depends what industry we're talking. My BIL is a realtor and says he's still selling homes.

I don't know anyone unemployed from this, but I do know a few in the medical industry who's hours have been cut severely.

WineHorror1 says

WookieMan says

My SIL is the only one I know not working

My SIL lost high paying corporate job at Marriott HQ. BIL lost high paying IT job.

\
High paying is a relative term currently though. You get your usual unemployment benefits which is not full pay, but still a decent amount. Then plus the $2,500ish a month. They may not have received the one time stimulus I suppose, but if you're at that level of income, you didn't need it.

I'm not saying people aren't losing jobs. But in rare cases do you make less being unemployed until the end of this month when you factor in the median family income is something like $60k. And if you lose a truly high paying job you should be able to handle it. You were paid the big bucks in most cases because of your skill. Go get another job or collect a lower UE check and figure it out.

I'm not trying to be a dick, I'm just simply stating that it's not that bad here in IL of all places. I think coastal areas, if that's where you are, are getting hit much harder because of the high COL. When your $150k job goes away and you have a $600k mortgage, I get it's probably going to get tight. Hence why you don't live in those areas and make $150k somewhere else with a $200k mortgage. And then spend $10-20k per year to travel to those places and enjoy them. Then bank the rest. I love CA, but will never live there for the reasons just stated.

You guys crack me up.

It was about a year a half after the fall 1929 stock market collapse before folks began to realize they were living in something worse than what we now call a "recession".

Party On, Hipsters.

WookieMan says

I worry about next year

B.A.C.A.H. says

It was about a year a half after the fall 1929 stock market collapse before folks began to realize they were living in something worse than what we now call a "recession".

That's why I made the above comment. Consumption tax states and municipalities (sales tax, amusement, etc.) are going to be hurting. How they're dealt with is going to be interesting. Outside of that, our economy has a lot of bend to it without breaking due to monetary policy. I've yet to see any fatigue in the bending is all I'm saying. September is going to be an interesting month when we see the fall out of the $600/wk dropping off the balance sheets of business revenue.

joshuatrio says

Winehorror, where was the BIL doing IT? I'm curious as to what industry that was affected.

Oracle

WineHorror1 says

joshuatrio says

Winehorror, where was the BIL doing IT? I'm curious as to what industry that was affected.

Oracle

He can try at communication sw/hw co. they are still hiring.