patrick.net

Hircus says

1 month later - nice call.

I was thinking the same thing yesterday...

Bought some XOM...not happy that I did not buy more!!! Ca 20% rise in a month. Logic behind buying was the expected cold spell.

Patrick says

The last three days have each been my greatest loss in the market ever, each larger than the previous day.

Percentage or $ volume? My funny money portfolio has been doing well. 401K for the wife and I is fucking insane. I know it will come down at some point, but we max out and reinvest the dividends, so we'll just keep going. Also have 10-15yr before we could legitimately retire and not worry about finances, so a medium to big dip would be amazing right now if we repeat a similar cycle since the housing bust. I kind of wish for it.

Some countries are expecting a bit more interest on loans taken by US in plain language (aka purchasing bonds!) on devauated $s. There's cut in oil production, not sure how much it adds up.

Patrick says

I was also wondering if there could be some scenario under which inflation surges

The price of gasoline has gone up a lot in recent weeks. I usually get it at Moe's on McKee & 33rd St in San Jose, whose prices are the lowest in the area. Usually about $0.20 lower than Arco. On February 5, 87 octane was $2.799 per gallon. Today (March 5) $3.219 per gallon. It's a 15% increase in one month.

But I don't think this is inflation. It's higher prices for gasoline. Folks will pay what they must for gasoline so that they can show up for their obligations, like their jobs or whatever. So it will be less spending on other stuff. So overall not inflationary.

I have a spreadsheet with the prices I paid at grocery stores for every time at the different stores here, going back to Q4 of 2017. It includes all the food items, kitchen and bathroom cleaning supplies, personal stuff they sell at grocery stores like soap, toilet tissue, etc. Always compare the same-store / same-item / same-brand prices, with careful attention to sizes so that the spread sheet reflects stuff like the incredibly shrinking portions due to hedonics (Mariana sauce at Trader Joe going from 32 to 30 ounces with the same "nominal" price).

Going back to Q4 of 2017, the price increase for all items from all stores is an annualized 0.67% (ie, nominal 1.0067). For 465 different line items.

Higher fuel costs inflationary! Oh no! The Sky Is Falling Down! Run For The Hills! The higher petrol prices will pass through from diesel for farmers and freight to the retail cash register!

Heard that before in the summer of 2008 when the crude oil hit $150 per barrel and 87 octane at Moe's was approaching $4.50 per gallon.

But the higher oil and gasoline prices were not inflationary. Because people had to make a choice: gas up in order to show up for work, and not spend on something else. Like the HELOC or "Pick Your Payment" mortgage (Wachovia). We know what happened next.

Consumers won't spend more because they can't. I'm not talking about the Silicon Valley Work-From-Home-Hipsters. Maybe there are some of those even in my own household. But they are a privileged niche in the economy that only affect the pricing for housing in the Bay Area and stuff like Status Symbols, Tesla cars, Tesla stocks, and crypto whatever. I'm talking about the rest of us over whom the retailers have no pricing power.

Unless it's Different This Time then the higher petrol prices means the retailers must either find some new methods of Cost Reduction, or accept Lower Margins.

We shall find out.

HunterTits says

B.A.C.A.H. says

But I don't think this is inflation. It's higher prices for gasoline

That's what people...including morons with Ph.Ds in Economics...do not get.

Inflation...is purely a monetary phenomenon.

AFTER that inflation happens do prices go up. And some items are more more inflation sensitive that way than others. Gold is one of them. So has (historically) the price of a new suit (which often hovered around the same price as one oz of gold in most epochs).

Before FDR and the courts fucked over every gold owner with the debasement in '32, you could buy a new suit for $20. You could also go the bank and get a $20 gold coin first to pay for the suit.

Afterwards, suits went for the deflation adjusted equivalent of $35. Later in the decade they went up to actually selling for $35. Of course, you couldn't pay in gold because it was a federal crime to own gold...

Also localized goods and services inflate much more on demand, wage and weak-supply pressure, as they can't easily be substituted with foreign goods/services. That's why measuring inflation by the price of electronics is a joke. With most of the globalized world developed enough to host child slave labor and silicon factories you can produce electronics pretty much anywhere and import them cheaply, even if locally minimum wage bs drives everything else up. What inflates easily are locally grown foods, healthcare, childcare, education and housing and local services as those can't be replaced with supply from foreign imports.

HunterTits says

But we have a lot of morons with Ph.Ds go up on TV and insist on calling that 'price inflation',

"Price Inflation" is a propaganda term, designed to scare common folks about rising prices. "Don't do "X" or we will get "price Inflation." Now if you said "wage Inflation," the common folks may like that, as they think their paychecks will increase. "If we do "Y" we will get "wage inflation."

WookieMan says

Patrick says

The last three days have each been my greatest loss in the market ever, each larger than the previous day.

Percentage or $ volume?

Absolute dollars. It was a bit over 7% down.

But then yesterday erased that day's loss by the end, so now I'm only about 5% down from my peak I think.

Patrick says

The last three days have each been my greatest loss in the market ever, each larger than the previous day. On the other hand, they have just unwound gains that I made fairly recently. Somehow I'm not terribly worried.

Maybe don't listen to me since your buy and hold may yield larger gains than anything else once you have a winner like shop or vcel, but I would have taken the money and ran when shop hit almost 1500, at the minimum I'd have sold 25%. Then again, I would have sold early at 1200 last time as well, and maybe the Fed will throw the kitchen sink at this ailing toppy market, but I think most tech stocks will not see their higs again for a long time. Called it on tsla, it almost got cut by 40% within weeks and could easily lose more. The bubble may not have burst but it definitely has been pricked. I went 20%-25% into money a few weeks ago. Whenever I want to buy a dip now I use margin which has its own risks but I'm steadfast leaving that cash untouched, also for a possible house buy. I'm calling that we've seen the top here, esp. with this administration and inflation can only do so much. Maybe take 10% off on the next oopportunity. We'll see lol

Another thing to consider is that tech stocks are extremely vulnerable to rate hikes.

I did freak out about TSLA and sold with a good profit, but then it tripled from there I think.

I plan to do nothing. Especially after reading about how dead investors are typically the most successful.

If stocks fall, OK. If they rise, OK. I have enough other assets that it's no immediate problem.

Patrick says

I did freak out about TSLA and sold with a good profit, but then it tripled from there I think.

I plan to do nothing. Especially after reading about how dead investors are typically the most successful.

If stocks fall, OK. If they rise, OK. I have enough other assets that it's no immediate problem.

Long term this should always work. But let's be fair, obviously dead investors do best because alive investors often sell for other reasons, they want to buy a car or house, kids education,
there's a costly divorce or healthcare expenses, so it's not always that they try and time the market, but simple necessity to liquidate.

I'm aware that most investors don't get the results of the mutual funds themselves.
This is because often people buy a fund after it has a good return and it's touted in magazines like Money.
It doesn't usually get the same return and the impatient investor may sell it.
Either way, the investor didn't get the same return as the fund. He bought it too late.
There are some excellent fund managers however; Primecap in Pasadena, Wellington in Boston, William Danoff at Fidelity come to mind.
Get out of stocks when you have 5 years to live and you want to spend it all.

mell says

Long term this should always work. But let's be fair, obviously dead investors do best because alive investors often sell for other reasons, they want to buy a car or house, kids education,
there's a costly divorce or healthcare expenses, so it's not always that they try and time the market, but simple necessity to liquidate.

I've heard the same about long term multi decade buy and hold investors, not necessarily dead investors, that they outperform active investors. I've read that a few times, and it was always stated like it was some long established fact.

I've thought a lot about why this may be. One thought is that the majority of price movement is just too difficult to predict, making market timing and/or stock selection a losing proposition for most.

Another thing that sticks out to me is w/ buy and hold, noob or pro, they will perform the same, because the strategy is mostly fixed. But, for active investing, while maybe pros outperform by some margin, the underperformance of noobs yolo'ing may drag the group average down enough to be worse than buy and hold. If you have more noob dollars than pro dollars, that can easily drag the group down.

I can also say that I've yet to meet an active trader who actually correctly tracks their CAGR (its difficult). I'm sure pros do, but every retail investor I've spoken with who claims to smoke the s&p ignores the time they spend in cash, and instead only calcs gains when invested, which isn't right.

Hircus says

only calcs gains when invested

How else losers can claim their bragging rights!

clambo says

Get out of stocks when you have 5 years to live and you want to spend it all.

That's a big problem though. How to tell how much time you have left to live?

mell says

I would have taken the money and ran when shop hit almost 1500

That's a similar problem. How to know that that was the best recent point to sell?

Maybe timing is the biggest problem for all investment questions.

Patrick says

clambo says

Get out of stocks when you have 5 years to live and you want to spend it all.

That's a big problem though. How to tell how much time you have left to live?

I'm gonna blow it all on fixodent!

i bought a shit ton of stocks....hoping for a rebound

Patrick says

clambo says

Get out of stocks when you have 5 years to live and you want to spend it all.

That's a big problem though. How to tell how much time you have left to live?

mell says

I would have taken the money and ran when shop hit almost 1500

That's a similar problem. How to know that that was the best recent point to sell?

Maybe timing is the biggest problem for all investment questions.

That may be true, but once you made a multibagger, say 10x or more on a stock it becomes harder and harder to double. People who buy aapl, shop or tsla today will never experience the appreciation you had when you bought shop or tsla early on. So it makes sense to sell and move to another newcomer or simply low valued "undiscovered" stock. Of course if there are dividends it's not that straightforward and the risk of losing is more significant with a newcomer. But why would you buy 1 share of shop at 1500 when you "only" make 1500 once it reaches 3000 and its already high valuation has to double for that.

Investment firms do not sell people on what is good for them. They sell what is easy to sell. The financial press has been touting Index funds for the last couple of decades. There are now more index funds than there are stocks trading on the NYSE.

In the US, the household sector of the economy saves/invests about $1 trillion per year, With a GDP of about $20 trillion (that declined about 4% last year), the sheer amount of malinvestment is staggering. The record breaking additions to the stock market based on rising margin balances puts this even more outta wack.

Misc says

Investment firms do not sell people on what is good for them

Why should investment firms be any different than sugary drink companies, junk food companies, tobacco, etc.?

the dip in stocks wont last long....glad I grabbed stocks at a discounted price....with the stimulus package approved, I would expect stocks to go up

G36 says

.with the stimulus package approved, I would expect stocks to go up

Because your typical stock investor is eligible for the stimulus???

zzyzzx says

G36 says

.with the stimulus package approved, I would expect stocks to go up

Because your typical stock investor is eligible for the stimulus???

You think people earning less than $75K don't invest? I bet the majority of RH "investors" fall into that bracket.

money printing inflates asset prices. If you havent understood this one yet, I cant help.

You gotta be crazy to put your money at the top into stocks like tsla with a pe of 100000000000000000000000, just be careful pls. I'd only go for value and inflation proof stocks here. Rising rates will bring down tech even more. This may "only" be a correction, but I don't expect much besides sideways trading for a while from this market.

tesla was one of the stocks i bought on the dip :) we'll see if i lose out on this one.

G36 says

tesla was one of the stocks i bought on the dip :) we'll see if i lose out on this one.

It was a great stock to get in early and destroyed many shorts. I don't think even now that many shorts are left so this may be genuine selling. But it dipped quite hard and may be able to sustain from here on, a lot of it will also depend on whether rates will stay relatively low. Everyone now piling into Dow stocks.

GME🚀
I wish I had gambled big money.
I would buy more AAPL but I have too many shares already.

clambo says

I would buy more AAPL but I have too many shares already.

thats the right mindset though....buy the dips

G36, I had a little old lady neighbor who was richer than god from stock investing.
She was 97 the last time I saw her, she fell and passed away in the hospital.
Anyway, she would not sell on dips. She said that dips were temporary at least for the stocks she owned.

If I had balls, I would buy more AAPL using my margin and sell after it goes up 20 bucks/share.

There are probably other strategies that I can use, but I’m lazy to study the subject.
I was thinking about Apple LEAPS, and other calls etc.

I told my brother (has cash) about GME when it was like 50 bucks “buy GME. Do it today.”
He chickened out and now he has pussy remorse, he says he will not wait the next time.
He’s watching GME all day long 🤑

I told him to buy ROKU after the IPO and then GME a week ago.
He thinks I have a crystal ball, but both are one time opportunities.

FuckCCP89 says

zzyzzx says

G36 says

.with the stimulus package approved, I would expect stocks to go up

Because your typical stock investor is eligible for the stimulus???

You think people earning less than $75K don't invest? I bet the majority of RH "investors" fall into that bracket.

The one share of Apple or GME, or anything else is insignificant. I own shares, including Apple by the thousands.

you own a few thousand of shares of Apple and other tech companies? Nice! In your 401k or investment account?

I have been buying into this dip. If this corrects further, I have to keep buying.

clambo says

Anyway, she would not sell on dips. She said that dips were temporary at least for the stocks she owned.

exactly what I tell myself.

I only buy tech stocks on red days and I love corrections like this.

But, life changing money is made with higher risk plays. (not mention the B word here.......*Bitcoin*)

All my stocks holdings are long term plays. I cannot see a scenario where Tesla, Apple, Nvidia are trending down for 5-10 years.

Nvidia is part of pretty much every aspect of EV's. The EV market is going to explode within the next 2-3 years. Considering marketcap etc., I wouldnt be surprised if Nvidia hits 750 dollars in the next 1-2years.

I’m more excited about Apple than Tesla.
People actually buy a lot of Apple products and Apple makes a lot of money, while it crushes the competition.
$500/month/33 years is a million bucks, but it’s getting rich slowly using mutual funds.

I get it. Apple is a sure bet IMO.

I love buying my wife (and myself) Apple products. The last apple phone (pro max) has a mind blowing cam.

It's hard to argue with people who made a lot of money on Apple. I know several of them.

But personally I would not buy Apple because it's already the most valuable company on earth. Well, maybe second to Saudi Aramco now.

Like, is Apple going to go from $2.2 trillion to $4.4 trillion?

Apple went from about $800 billion to $2.2 trillion with declining sales and profits.

With the way income taxes have been going for major corporations, there is just no ruling out a negative income tax for corporations

Add in negative interest rates, and anything can go.

holy crap.....Tesla up 19% today :)

glad i bought tech stocks on the dip....thanks for the gift!

G36 says

All my stocks holdings are long term plays. I cannot see a scenario where Tesla, Apple, Nvidia are trending down for 5-10 years.
Nvidia is part of pretty much every aspect of EV's. The EV market is going to explode within the next 2-3 years. Considering marketcap etc., I wouldnt be surprised if Nvidia hits 750 dollars in the next 1-2years.

I never thought about the chip demand from self driving / high tech cars. That's a good point.

While I think the risk is pretty low near term, if some influential countries like the usa were to take a stance against crypto, I'd imagine this would crush nvidia and amd because they wouldn't be selling gpu's at anywhere near their current rates and forecasts.