The Investment Thread (6 Viewers)

[Turfie]

Got a baseless hunch we rally into close.

 

[SaintInBucLand]

Got a baseless hunch we rally into close.

I hope so, I bought super cheap calls as a gamble, but I honestly don't see it happening. Sentiment knows our economy is in shambles right now and bulls don't run in markets like this, we may get a bounce but I am not feeling it at all, nor do I have confidence in those who are making the decisions.

Edit to add: We could see a bump tomorrow because of options expiration so that can lead to some buying. But nothing really market influenced. Right now in the options market it's 75% bearish.

 

[bclemms]

Wow premiums on calls are CHEAP for SPY and QQQs... may have to play some gambles that things swing to the upside for the end of the week.

You can risk so little right now for huge potential upside.

Now you are seeing what I'm seeing.

Now look at put prices for stocks like TSLA and AAL. $5 January puts for AAL get very little discount even 50% out the money. When you see everyone on one side of the market like this it sets up huge potential the other way. Particularly with so many sitting on the sidelines waiting for a buy spot. All those put buyers deep in the money are also stock buyers. Shorts have to cover as well. A little good news can drive a 3% upswing and that 3% upswing can turn into a 10-15% rally. Happens way more than people realize early in bear markets with high volatility. There are even some that bet on those days with short term calls for pennies. They'll loose 10 weeks in a row then hit one of those dead cat bounce days and make it all back 10x.

 

[SaintInBucLand]

Now you are seeing what I'm seeing.

Now look at put prices for stocks like TSLA and AAL. $5 January puts for AAL get very little discount even 50% out the money. When you see everyone on one side of the market like this it sets up huge potential the other way. Particularly with so many sitting on the sidelines waiting for a buy spot. All those put buyers deep in the money are also stock buyers. Shorts have to cover as well. A little good news can drive a 3% upswing and that 3% upswing can turn into a 10-15% rally. Happens way more than people realize early in bear markets with high volatility. There are even some that bet on those days with short term calls for pennies. They'll loose 10 weeks in a row then hit one of those dead cat bounce days and make it all back 10x.

That's why I did so well on the recent spy tank. When everyone was long I bought puts way out of the money.

Now I bought calls way out of the money.. 410 July 15, but they were dirt and worth the risk.

 

[SaintInBucLand]

Got a baseless hunch we rally into close.

Unfortunately this didn't happen. And I really don't expect any kind of bounce tomorrow.

Sentiment is what drives the market right now, and it's not good.

 

[Mr. Blue Sky]

Got a baseless hunch we rally into close.

 

[SaintInBucLand]

Pretty sobering headline right here.

Stock market's fall has wiped out $3 trillion in retirement savings this year

With Americans' nest eggs mostly held in 401(k)s and IRAs, the swoon could force many to delay their retirement.

www.cbsnews.com

 

[efil4stnias]

Pretty sobering headline right here.

Stock market's fall has wiped out $3 trillion in retirement savings this year

With Americans' nest eggs mostly held in 401(k)s and IRAs, the swoon could force many to delay their retirement.

www.cbsnews.com

I posted about this on the inflation thread. I can't imagine having to have just retired or on verge of, only to see valuations drop 30% or more.

And it's all relative. Someone at 25 who had 50k balance now has 35k balance but decades to recover.

Someone at 65 who had a 1.2mm balance now around 800k and doesn't have the "years to come" to recover.

Gotta be involved with your FA for sure.

 

[Mr. Blue Sky]

Pretty sobering headline right here.

Stock market's fall has wiped out $3 trillion in retirement savings this year

With Americans' nest eggs mostly held in 401(k)s and IRAs, the swoon could force many to delay their retirement.

www.cbsnews.com

And that’s just the amount i lost in my Fidelity account alone ! (Or at least it feels like it)…

 

[UncleTrvlingJim]

I posted about this on the inflation thread. I can't imagine having to have just retired or on verge of, only to see valuations drop 30% or more.

And it's all relative. Someone at 25 who had 50k balance now has 35k balance but decades to recover.

Someone at 65 who had a 1.2mm balance now around 800k and doesn't have the "years to come" to recover.

Gotta be involved with your FA for sure.

Which is why you are supposed to move to a more conservative portfolio the closer you get to retirement. If you are retired it's risky to have a stock heavy portfolio. We have large market corrections every few years.

 

[efil4stnias]

Which is why you are supposed to move to a more conservative portfolio the closer you get to retirement. If you are retired it's risky to have a stock heavy portfolio. We have large market corrections every few years.

Oh sure. Like I said, gotta be involved. Ask questions and demand answers.

I've taken a large lump this year. I lost my FA (10 years ) and the new guy has called me once since 4/1 and that was to introduce himself lol. Nothing since then.

And with how busy I have been at work, life comes at you fast and 3 months have passed without making moves other than stacking contributions.

 

[NewOrleansFan]

Another way to look at this. Right before the covid crash, SPY was around 320. SPY is at 367 now. So for most people 401Ks, their portfolios should be up around 15% since then.

 

[UncleTrvlingJim]

Another way to look at this. Right before the covid crash, SPY was around 320. SPY is at 367 now. So for most people 401Ks, their portfolios should be up around 15% since then.

Yes, the market was up 27% in 2021. We've basically erased those gains, but we're still above where were at right before Covid hit... we've been spoiled in a lot of ways, addicted to continuous gains, which is not the norm over the life of the market. The market moved pretty slowly from 2002 to 2007 and then it crashed.... basically any investment made in 2000 was flat or a loss in 2009.

The longest running bull market from 2009 to 2020 was an aberration.

 

[UncleTrvlingJim]

Oh sure. Like I said, gotta be involved. Ask questions and demand answers.

I've taken a large lump this year. I lost my FA (10 years ) and the new guy has called me once since 4/1 and that was to introduce himself lol. Nothing since then.

And with how busy I have been at work, life comes at you fast and 3 months have passed without making moves other than stacking contributions.

My general philosphy is in line with Buffett's on personal investing. Trying to beat the market is a fool's game. My retirement portfolio is basic just broad based mutual funds that roughly mirror the market. And for my portfolio outside of my retirement accounts are similar. I don't even try to beat the market... i'm happy to mirror it. Over the lifetime of the market it averages about 10%... that's plenty good enough for me. Just set it and forget it.

Any money that I'll need sooner than 5-7 years I keep in cash or bonds.

 

[HoustonSaint68]

Yes, the market was up 27% in 2021. We've basically erased those gains, but we're still above where were at right before Covid hit... we've been spoiled in a lot of ways, addicted to continuous gains, which is not the norm over the life of the market. The market moved pretty slowly from 2002 to 2007 and then it crashed.... basically any investment made in 2000 was flat or a loss in 2009.

The longest running bull market from 2009 to 2020 was an aberration.

Sometimes it’s just luck, sometimes good planning.

In early 2008, my FA retired and I was really busy at work, so I just shoved most everything into cash and a Vanguard bond fund until I had some time to find a new FA. Dumb luck saved my arse in the 2008 bloodbath.

Now, post-retirement, I’ve watched many portfolio approaches outstrip my performance over the last few years because I live on a modest income and was shored up against what’s happening now. I’m certainly not up for the year, but I’m FAR outperforming the market in my losses and my income hasn’t been notably affected…yet. That was good planning fit-for-purpose for me.

Sometimes you need to be lucky AND smart.