Investing General Discussion

Lejina · Mar 10, 2022

It's a lot easier to average down your positions if you have cash put aside ready to be thrown in. Trying to time the market is one thing but in times of turmoil it's not a bad play to keep more cash than you normally would so you can capitalize on opportunities.

Gravel · Mar 10, 2022

Aldarion said:
What I don't understand about this position is, its certainly true long term but inflation doesnt cut 20-50% of your value overnight, while in theory a market crash can. Why not pull back for a short period when things are shit? Seems like a minor loss for a large benefit (if done at the right time) or a minor loss for no benefit (if done at the wrong time).

Not arguing, just trying to understand the position.

The other side of it is that the CPI basket is manipulated. I'm sure someone can post the charts with 1980s CPI basket where we're actually much closer to 20% inflation.

So sitting in cash is a pretty big haircut, not just the 8% they're talking about which is all shit no one actually buys (or something like a TV where they say a TV from 40 years ago sucked, so your 2022 TV is actually a savings of 90% with a technology factor).

Sanrith Descartes · Mar 10, 2022

Aldarion this thread is replete with discussions on the pros (few) and cons (many) of market timing. It might help you answer your question.

Furry · Mar 10, 2022

Zog said:
If you employ 10 people at $10/hr and you replace them with robots, the cost of production goes down considerably, hence deflationary.

Amazon being able to completely automate their fulfilment centers with robots would absolutely explode in profitability.

Of course it's not just automation but just efficiency in all forms through technology.

Being able to just look at an inventory database instead of hunting through a giant pile of shit to see if you can sell someone something in itself saves labor and we've definitely come a long way in this but the great reset is with full automation for labor which will basically destroy the labor market but make everything so cheap, it's one of the biggest conundrums we will face, what are we all going to do when we don't need billions of low skilled workers to drive trucks and put shit in boxes?

As someone who works to maintain a massive machine necessary for transportation to operate, this is a highly simplified view. I monitor the machine to make sure it’s working. When it breaks I call others to fix it. There’s a constant balance of things always being broken so that the mechanics that fix them are employed and well payed. If someone in management tries to upset this balance, things are suddenly more broken than not and we need all mechanics on deck. If I were stupid enough to say anything about how the mechanics are fucking with you, my TV and Wi-Fi relay stop working and suddenly I can’t play video games all day at work. To top it off, my boss doesn’t even know what the machine I operate does, so I can just make things up and they go along with it.

Basically, things stay perfectly balanced. I have no doubt that a fully automated facility still requires manpower to operate, and it might even been more expensive for it to be that way. Good ideas are often a lot messier in reality.

Sanrith Descartes · Mar 10, 2022

Aldarion said:
What I don't understand about this position is, its certainly true long term but inflation doesnt cut 20-50% of your value overnight, while in theory a market crash can. Why not pull back for a short period when things are shit? Seems like a minor loss for a large benefit (if done at the right time) or a minor loss for no benefit (if done at the wrong time).

Not arguing, just trying to understand the position.

To make it visual. If you bought at the peak the day before Corona Black Monday you bought in to the QQQ at just about $240. If you rode down that 30%+ drawdown and then road back up you are now, even with the 20%+ we have lost this year, up roughly 75% in 2 years. Yes, if you somehow knew to sell right before the crash and then buy in 3 weeks later at the bottom you made a lot more money.

Reality: Go back and read this thread from those days. When the markets are crashing, and by this I mean CRASHING and not some standard correction, you get bit by fear. No one buys in at the bottom. You keep checking to see if its a head fake or get convinced it will only go lower. People in this thread did just that. Look at this chart and ask yourself when you think you would have had the balls to buy back in after the markets were 35 or 40% down in less than 2 weeks. This is why market timing rarely works out for people.

Sanrith Descartes · Mar 10, 2022

Let me add something to my previous post. I consider myself to be an experienced trader who parks my emotions at the door and trade off technical levels and fundamentals. All that being said, there was a day when I saw the futures limit down for like the 3rd day in a row and I actually started feeling sick because it was the first time I did not have faith in a recovery. I wasn't alone. It was hard as fuck hitting that "buy" button that day. I might look back and see if I can find some of those posts from the pit of despair.

Gravel · Mar 10, 2022

Sanrith Descartes said:
Let me add something to my previous post. I consider myself to be an experienced trader who parks my emotions at the door and trade off technical levels and fundamentals. All that being said, there was a day when I saw the futures limit down for like the 3rd day in a row and I actually started feeling sick because it was the first time I did not have faith in a recovery. I wasn't alone. It was hard as fuck hitting that "buy" button that day. I might look back and see if I can find some of those posts from the pit of despair.

I said it just before my three day "gaming weekend" ban from useful threads, but there are two realities. One is that shit hits the fan and the stock market crashes to zero (or realistically, anything greater than 70% and the economy is basically over). In that case, your money and assets are worthless. Forget you even had stock in "companies" because it's Mad Max time.

The other is we recover. Unless your plan was to liquidate everything in the next 5 years, it'll recover. Even someone like me who's now going to live off it, I'm only liquidating a single year at a time, so a drop isn't ideal but not the end of the world (and I hope we recover from this one sometime before December).

There's an adage about stocks that it's the only asset that people buy where when the price goes down they panic, and when the price is going up they buy. Unless you think it's the end of the world as we know it, stocks are on sale right now. And if it is the end of the world, as I said above, who gives a shit? It's all worthless.

Captain Suave · Mar 10, 2022

Sanrith Descartes said:
Reality: No one buys in at the bottom. You keep checking to see if its a head fake or get convinced it will only go lower. People in this thread did just that.

My dad was one of those. Cashed out a lot when covid news broke, but then missed the bottom completely and ended up ~5% down on net because he kept thinking the meteoric return was fake and held out for the "real" drop.

In terms of emotion, also worth noting that as shitty as the last couple months have felt we're still 7-8% up year over year, which would be an acceptable, if unexciting, year historically.

Trading is fun, but it's really hard to overstate the power of fire and forget into indices. Not bragging, just providing an anecdote, but my wife and I have both been doing this since our teens and now in our early 40's are in the rare position of having zero debt, being able to buy a house in cash, and still consider retirement in the next 10 years. We've both benefited from good educations and career choices, but most of the wealth generation is from market returns.

I only trade with play money.

Moglyzoke Moogleman · Mar 10, 2022

Gravel said:
I said it just before my three day "gaming weekend" ban

Sorry man. That was a seriously dick move on my end and going forward all investorbros will be safe.

Don't wanna sidetrack the thread but I also believe in fessing up when I done fucked up.

Sanrith Descartes · Mar 10, 2022

Captain Suave said:
Trading is fun, but it's really hard to overstate the power of fire and forget into indices.

40% of my funds sit in an ETF. I agree 100%. The ETF gives me the breadth of diversification I can't buy otherwise individually. All my individual stock holdings are built around the ETF core.

Sanrith Descartes · Mar 10, 2022

I found one of those posts I spoke about previously.

Jysin · Mar 10, 2022

Been busy with admin most of the day. Not really any tradeable action anyway.

Just looking through my charts and it looks like we will hit the SPY death cross in a few days. (50D below the 200D)

Curious if that will spook anyone or we just continue this range chop.

Locnar · Mar 10, 2022

Investing is like dieting. You KNOW what you should be doing , but sometimes its so so hard.

For me I'm looking forward to the day I can get out of the hole I dug myself in and have the vast bulk of my money in indexes.

Lightning Lord Rule · Mar 10, 2022

A few more mins until power hour. Do we get the flush we've been often getting the last few weeks rather than more steady rise of the last couple of hours?

Blazin · Mar 10, 2022

Tmac said:
Sanrith Descartes see above.

I didn't say I saw a 50% drawdown coming, I'm saying the only reason you would sell long term investments is to avoid that type of decline, ie you don't sell long term investments during corrections.

For further clarification the vast majority of my day to day posts are about trading (ie timing the market). Occasionally I speak to longer term investing, if I am, I always try to call that out and make that clear. Today's "watch 419" has jack all to do with my long term outlook. I'm struggling reading what I wrote in your quote that made you think I saw a major decline coming.

Today's action is not so bad, little ugly out of the gate but key level held. We have a red vix and a market that looks like it could strengthen into close and bulls could have a shot tomorrow to keep rally going.

Sanrith Descartes · Mar 10, 2022

Lightning Lord Rule said:
A few more mins until power hour. Do we get the flush we've been often getting the last few weeks rather than more steady rise of the last couple of hours?

Tmac · Mar 10, 2022

Blazin said:
I didn't say I saw a 50% drawdown coming, I'm saying the only reason you would sell long term investments is to avoid that type of decline, ie you don't sell long term investments during corrections.

For further clarification the vast majority of my day to day posts are about trading (ie timing the market). Occasionally I speak to longer term investing, if I am, I always try to call that out and make that clear. Today's "watch 419" has jack all to do with my long term outlook. I'm struggling reading what I wrote in your quote that made you think I saw a major decline coming.

Today's action is not so bad, little ugly out of the gate but key level held. We have a red vix and a market that looks like it could strengthen into close and bulls could have a shot tomorrow to keep rally going.

I was asking for a general perspective.

I don't desire to be a "trader" as I don't think I have the energy or balls for it. But, I do like to understand what to look for in scenarios when they're laid out. Which is why I asked what kind of triggers, in the fundamentals, would have to happen to sell off after you're already down bigly.

There's a lot I don't know, so I tend to be pretty aggressive with the quesitons.

Zog · Mar 10, 2022

Well, vix down, no massive sell off at close but we didn't get anywhere near 334.

Looks like sideways until the next narrative.

Sanrith Descartes · Mar 10, 2022

Zog said:
Well, vix down, no massive sell off at close but we didn't get anywhere near 334.

Looks like sideways until the next narrative.

Yeah I am counting today as a win. AMZN did a lot of the heavy lifting today with the indexes.

Big Phoenix · Mar 10, 2022

Zog said:
Looks like sideways until the next narrative.

"consolidation"

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