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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#961

Post by arbuge »

RhodesianHunter wrote: post #919
arbuge wrote: post #732

Earlier quoted context omitted.

> Only consider buying stocks when nobody but nobody thinks it's a good idea. When "buy the dip" has utterly left the popular vocabulary. When dividends + valuations are at bargain-basement levels. I would say the above is definitely true for certain sectors of the market now. Energy (oil & gas) comes to mind. Perhaps banks and emerging markets too. The broad market, on the other hand, isn't even down 20% yet.

I'm not sure why anyone would buy oil and gas given the way the world is changing but that's just me.

There you go...

Re: Trading halted as U.S. stocks plummet

#962

Post by Nasrudith »

ltbarcly3 wrote: post #907
IAmEveryone wrote: post #673

Earlier quoted context omitted.

The efficient market hypothesis would like a word with you.

The efficient market hypothesis says you will never find money on the ground, because someone will always find it before you.

That is a misunderstanding akin to saying price differences by location cannot exist. It factors in all /available/ knowledge and the abilities aren't perfect either. Even if everyone was omniscient there is time to converge to the inevitable end state and perfect knowledge doesn't exist.

Expecting walking or driving around to provide free money wouldn't be workable. The closest precedent are the venerable professional of the poor - urban scavenging for discarded valuables like recycling. And this goes to well before the industrial revolution. To say a tradesman it wouldn't be worth taking their bones from a meal to sell to a gluemaker and just discarded it in the street. To the desperately poor it was input they could turn to money and was sort of a proto street cleaner to a society lacking modern waste disposal infastructure and institutions.

Re: Trading halted as U.S. stocks plummet

#963

Post by madengr »

froindt wrote: post #819
madengr wrote: post #777

Earlier quoted context omitted.

Well you can be fucked by your employers 401k manager. The day my wife quit, she was locked out of here 401k for 2 weeks. They divest everything during that term, and you have no control over the timing. She quit near market peak last year (and began re-investing this week), but say she quit this week? It's volatile enough presently that you could lose $$$ of they decide to sell at a low to boost their stock, and you…

>Well you can be fucked by your employers 401k manager. The day my wife quit, she was locked out of here 401k for 2 weeks. They divest everything during that term, and you have no control over the timing. What type of a company did your wife work for? I actively learn about personal finance and retirement plans and have never heard of a lockout from a 401k. > It's volatile enough presently that you could lose $$$ of…

No, $300k. She was locked out for 2 weeks as it was liquidated and a check cut to her IRA. Fortunately there was no volatility then.

My employer changed the 401k match (in company stock) to a single purchase in January. Of course you can sell immediately, but it has the effect of boosting the shares when you do it for over 100k employees.

Re: Trading halted as U.S. stocks plummet

#964

Post by madengr »

csnover wrote: post #945
froindt wrote: post #819

Earlier quoted context omitted.

>Well you can be fucked by your employers 401k manager. The day my wife quit, she was locked out of here 401k for 2 weeks. They divest everything during that term, and you have no control over the timing. What type of a company did your wife work for? I actively learn about personal finance and retirement plans and have never heard of a lockout from a 401k. > It's volatile enough presently that you could lose $$$ of…

I’m not the OP, but when I left a company where I had a 401(k) and transferred the balance to my preferred brokerage, the source account was frozen for about that long during the approval and transfer process.

Yes, and I assume they cut a check to your IRA?

Re: Trading halted as U.S. stocks plummet

#965

Post by bluGill »

OJFord wrote: post #830
thekyle wrote: post #811

Earlier quoted context omitted.

Ideally, shouldn't someone planning to retire have already moved more of their money to bonds? Then they could just withdrawal from the bonds portion of the portfolio (which is likely up right now) while the stock market recovers.

However you frame it, there's always a time you start withdrawals. And if when you planned to do that coincides with a dip, of course you'll have second thoughts.

Though you should have options. Don't retire in a down year. Start moving things to safer investments several years before you retire. Don't spend as much that first year. Still the numbers given are good examples and something to keep in mind.

Re: Trading halted as U.S. stocks plummet

#967

Post by jfengel »

phreeza wrote: post #734
jfengel wrote: post #700

Earlier quoted context omitted.

The Nikkei high was wildly artificial; its price-to-earnings ratio indicated that there was an enormous bubble. The US stock market is (probably) currently inflated, but by a factor closer to 2 (or less) than 10. (I've looked less into the price of gold, which has a weird place in people's minds and would require a lot more research than I've put into it.) It's entirely possible, of course, that the US is entering a…

Could it be that the E part of the P/E Ratio is currently also significantly inflated? For the tech sector I could definitely see that happening due to the influx of VC money, causing unsustainable b2b spend on cloud&ads, which currently show up as earnings for FAANG but may quickly subside when VCs pull out?

It's entirely possible. Earnings are historically high, and the Fed has been pumping money into the economy for over a decade. But it hasn't translated into higher consumer inflation, which has actually been below the Fed target. So the companies are earning money without raising prices, at least on the consumer basket of goods.

FAANG, as you say, are B2B and don't show up as inflation. It's entirely believable that that's all fake money that will disappear from the market when the going gets tough. Whether it will come back... well, you probably don't want my complete unfocused brain dump which all comes down to "I dunno".

Re: Trading halted as U.S. stocks plummet

#968

Post by bluGill »

solveit wrote: post #844
perl4ever wrote: post #807

Earlier quoted context omitted.

All costs are on a spectrum of urgency. Food can be put off longer than water. A small plumbing problem can be put off longer than a large plumbing problem. A furnace problem can be put off longer if it's not cold. Replacing a car can be put off longer than fixing the brakes. There is no such thing as having all your costs due immediately with equal urgency.

On the one hand, you're absolutely right. On the other hand, if I'm putting off food or even general house/vehicle maintenance because of market conditions, my retirement has already failed from my point of view.

If you are that badly off you couldn't afford to retire. For most of the US you have a big spending problem because SS is enough to provide food and basic house/vehicle maintenance. (I know a few people who opted out of SS and then did bad retirement planning - but most people didn't even had the option to opt out of SS)

SS isn't much I'll grant. However it is enough to provide the basics.

Re: Trading halted as U.S. stocks plummet

#969

Post by bluGill »

ltbarcly3 wrote: post #878
Der_Einzige wrote: post #828

Earlier quoted context omitted.

It's a lottery ticket except when an event happens that you know more about than most investors. In this case, investors are dealing with something they know nothing about - Epidemology. When black swans happen, you can EASILY beat the market. We've known that Coronavirus was going to get this bad for months. We know the R0 rate. We know the CFR. Markets completely failed to "price coronavirus in" Sometimes, you real…

I have no idea why you are getting downvoted. Rollback to mid Feb. The stock market keeps hitting new highs. Tesla stock is trading for around 5x what it was trading for just weeks before. Meanwhile China is basically shut down and dealing with a deadly illness. The country where everything is made these days is in deadlock, and there's no reason to think it won't spread everywhere. Cases are popping up all over the…

The market can remain irrational longer than you can remain solvent. (Attribution controversial)

What you write can be true, and yet you can still go bankrupt trying to trade it.

Re: Trading halted as U.S. stocks plummet

#970

Post by ttul »

anm89 wrote: post #872
ttul wrote: post #625

I notice that there are many commenters here offering opinions on the future price of equities. Note that nobody has any idea where equity prices will be in one day, never mind one year or ten years' time. As a retail investor (i.e. not extremely rich), you can't gain any advantage over the market that overcomes your transaction costs. So relax. There's nothing to do here. If you're contributing to a retirement fund,…

>Note that nobody has any idea where equity prices will be in one day, never mind one year or ten years' time This is more or less true. > As a retail investor (i.e. not extremely rich), you can't gain any advantage over the market that overcomes your transaction costs. This is patently absurd. It's an easily falsifiable statement which is a rare feat in economics. On average, the the average retail investor will not…

I’d like to offer a source to back up my statement about transaction costs: A Random Walk Down Wall Street.

It’s true that even a retail investor can research and implement a strategy that beats the market average. However, their transaction cost - which includes the cost of their time doing research - will, over a large number of tries, eat up this advantage.

Said another way: could _anyone_ reliably beat the market by enough to pay off the costs they expended coming up with their unique winning strategy? Not just you - I am sure you are very smart - but any typical retail investor.

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