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Dow plunges 1000 points

cnbc.com

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Re: Dow plunges 1000 points

#111

Post by justinsaccount »

krrrh wrote: post #90
buttcoinslol wrote: post #65

Earlier quoted context omitted.

There are other strategies to protect long positions if you have cash or an appetite for risk, this allows you to realize the gains from holding during the entire runup. It does require a good exit strategy for whatever hedge you choose.

Do you want to list some of the ones you’re thinking of? I’m trying to level up on hedging strategies for retail investors. I was thinking of buying VIX on Friday, and am kicking myself for missing out now.

Sell calls against long stock positions. If you're really scared, use the credits on the calls to buy further out puts.

Re: Dow plunges 1000 points

#112

Post by gbacon »

TheAdamAndChe wrote: post #82
hellogoodbyeeee wrote: post #30

Earlier quoted context omitted.

BRK.B is closer to a mutual fund than a "single stock"

It's also has a single Board of Directors, meaning there is still a single point of failure. It's not like putting all of your money on Tesla, but it's still riskier than a mutual fund.

As a BRK.B owner, the elephant in the room is the advanced age of Warren Buffett. No matter how much he and Munger talk soothingly about continuity and succession plans, the unknown is how the company’s stock will fare after Mr. Buffett heads for the great Dairy Queen in the sky.

Re: Dow plunges 1000 points

#113

Post by valuearb »

fancyfacebook wrote: post #100
valuearb wrote: post #25

Earlier quoted context omitted.

Buffett had a good quote about it once that I can't find now, but essentially during most of your life you will be a net buyer of stocks. Only at the end, during your retirement, will you be a net seller and only then will you want high prices. Until then, the less you pay for your stock purchases, the better your long term gains will be.

Buffett also went all in on Wells Fargo, so nobody's perfect.

Buffett first bought Wells Fargo in 1990 at a split adjusted price of roughly $2 per share. That doesn't include dividends, which are over $1 a share now.

Re: Dow plunges 1000 points

#115

Post by dragonwriter »

adventured wrote: post #10
ganeshkrishnan wrote: post #7

Earlier quoted context omitted.

Recessions are technically at the minimum 9 months, three quarters of negative growth Edit: it's two quarters as pointed out below

Recessions in the US are almost universally defined as being at least two consecutive quarters of economic contraction / negative GDP. https://www.investopedia.com/terms/r/recession.asp

Recessions in the US are defined by NBER, and while they usually include two consecutive quarters of GDP contraction, that is not always the case, and it certainly is not the definition (as GDP is not the only factor considered.)

Notably, the 2001 recession did not include two consecutive quarters of GDP contraction, and while the 2007-2009 did include more than two consecutive quarters of GDP decline, they weren't at the beginning of the recession.

http://www.nber.org/cycles/recessions_faq.html

Re: Dow plunges 1000 points

#116

Post by Robotbeat »

propman wrote: post #106
bhouston wrote: post #3

I do worry that this is the end of the current bull market and we'll be entered into a recession in the next half year or so.

There is no way we enter a recession this year unless something comes out of left field. Interviews with hundreds of economists and they think this is the least likely year to have a recession in history. Gdp is not going to drop due to the tax cuts. The cuts might cause problems in a few years but you have to realize marker doesn't correlate with the economy. In fact it's dropping because the economy is picking up s…

> Interviews with hundreds of economists and they think this is the least likely year to have a recession in history...

user furiously shorts the entire economy

Re: Dow plunges 1000 points

#118

Post by psyc »

refurb wrote: post #52
psyc wrote: post #31

Earlier quoted context omitted.

I’ve been watching for a sell signal for about 6 months, and I also got (mostly) out this morning.

The chance of you actually timing getting back into the market at the right point is really low. Miss the best days of a run up and you're giving up 75%+ of your returns. Far better to hold steady.

It’s been 10 years. Pretty epic bull run. I’ll cross the re-entry bridge at a later date.

Re: Dow plunges 1000 points

#119

Post by svachalek »

yodsanklai wrote: post #97
hsitz wrote: post #33

Earlier quoted context omitted.

Another way of thinking about it is: on average, stock value over the long term (20+ years) is very likely to be in range of, say, 5%/year, plus or minus (actual number is not that important for our purpose here), after adjusting for inflation. If stocks have been on a recent runup, gaining, say, 50% or 100% over a period of a few years, then they are very likely to grow more slowly than average (i.e., revert to the…

> on average, stock value over the long term (20+ years) is very likely to be in range of, say, 5%/year, plus or minus (actual number is not that important for our purpose here), after adjusting for inflation. Why should it be that way?

The classic explanation is that the economy is growing and thus the overall "pie" being shared is growing even if individual pieces are not as predictable. But I think broader and broader participation in the market via government policies like 401(k) has to be part of the story, and also I worry how much we try to extrapolate from modern financial history which is barely more than a single human lifetime.

Re: Dow plunges 1000 points

#120

Post by berberous »

valuearb wrote: post #36
gizmo385 wrote: post #27

Earlier quoted context omitted.

Seems unnecessarily reckless to put almost all of your net worth into a single stock.

Berkshire has more than 100 subsidaries and a massive stock portfolio. I understand it fairly well, and it doesn't have any significant risks, other than Buffett dying. And if the price tanks when he dies, I'll use that as an opportunity to buy more. Because I have a good grasp of what it's actual intrinsic value is, I can wait to buy more until it's cheap which increases my long term returns. That's much harder to d…

>> " it doesn't have any significant risks, other than Buffett dying."

That's somewhat comical given that he's 87 years old. Life expectancy tables show an expectancy of 5 years. Probably should cut that back a fair bit given his taste for Coca Cola, See's Candies, and burgers....

All that said, given the nature of his business and the strength of those in succession behind him, hopefully Berkshire continues to do well.

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