Stock market chatter

[TexasHusker]

I do not ordinarily invest or trade in the equities markets. Instead I tend to plow free dollars into building my current businesses or buying real estate. But with the coronavirus and the markets reaching recent all time highs, I am fascinated about potential once-in-a-generation macro financial events such as this.

The current circumstances are as follows:

- worldwide pandemic with no vaccine in sight as of yet
- oil that could reach in the $20s per barrel in the coming weeks
- a Fed that could conceivably cut short term rates to zero in the coming weeks or months.
- a Dow that reached an all time high just months at 29,500 and change, but is now below 26,000.

I'd love to chat and hear about current opinions. Feel free to post even intraday during the markets.

I see that the Dow futures for Monday, at 7pm CST on Sunday evening, are just shy of -1100, indicating an opening in the high 24,000s for the Dow. That's a 20 percent correction and indicates bear market. I see the down breaking through 20,000 before we see any sort of leveling off, due simply from profits being cut to the bone in Q1, 2, and even 3.

OK, and we are off!

[disneysteve]

Discussing stocks is fine but PLEASE keep political commentary out of this. Yes, I realize that politics has a lot to do with the economy, good or bad, but if this turns into a political thread it will get shut down.

As for stocks, I don't typically buy individual stocks, though I own a few. However, I am keeping an eye on the cruise lines and airlines. They're getting hammered by the virus situation. Hundreds of thousands of flights have already been cancelled with more to come, I'm sure. And cruises are getting cancelled as well.

I have a pretty large cash allocation at the moment (about 175K including our EF) so I've got a good chunk of change available to invest if I feel there's an opportunity too good to pass up.

I have no doubt that once things settle down, people will go right back to cruising and flying the same as always. A lot of travel cancellations are business-related as companies are replacing in-person meetings with video conferences but as soon as things are clear, it will be business as usual.

Along with the drop in air travel has been a drop in the price of jet fuel. I'm not quite sure how one goes about investing in that.

And, of course, there's always plain old index funds, transportation funds, and other funds that have taken a big hit.

[TexasHusker]

Duly noted and post edited.

[TexasHusker]

The 10 year treasury yield went below .5% tonight. I think we are going to see some history in the next few days that will be in text books.

[disneysteve]

The 10 year treasury yield went below .5% tonight. I think we are going to see some history in the next few days that will be in text books.

I’m afraid you’re right.

i was starting to think the other day that we probably have time to ride out one more crash and recovery before retirement. What we do the next few days and weeks is going to have a big impact on our future situation. I can play it safe and just let everything ride or I can get more aggressive and buy more into the market and hopefully get a greater benefit from the eventual recovery.

[TexasHusker]

The oil melt down is simply shocking. West Texas Intermediate was in the $65 bbl range just two months ago. It could go below $30 bbl tomorrow. Of course, that’s 100% manipulation by Putin, refusing to agree with OPEC+ on production cuts.

Cheap oil is a huge problem for our country, as we are now a major producer and exporter.

[disneysteve]

Of course, that’s 100% manipulation by Putin, refusing to agree with OPEC+ on production cuts.

See, it isn't just our government that messes with the "free" market. Every country does that to some extent.

[disneysteve]

Cheap oil is also lousy for the renewable fuel industry, electric cars, etc. People don't care about efficiency and economy when gas is cheap. That's when they all want their 10mpg SUVs. It's only when gas hits $4 or $5 that suddenly everybody is out shopping for a Prius.

[TexasHusker]

See, it isn't just our government that messes with the "free" market. Every country does that to some extent.

There is no such thing as a free world market. Governments are heavily involved. When I refer to a “free market”, I am referring to a free market economy.

The United States has historically operated a free market economy, whereby the prices for goods and services are self-regulated by consumers.In a free market, the laws and forces of supply and demand are free from any intervention by the government (or other authority) and from all forms of economic privilege, monopolies and artificial scarcities.

Our free market economy has provided a “land of opportunity” for individuals from all walks of life to improve their standard of living throughout our history. Here’s hoping my grandchildren enjoy the same opportunity.

[cypher1]

Several days ago some friends were advising me to rebalance my 401K to focus on more bonds, as they believe the CV to be the catalyst of the next recession. While I agree anything is possible, I smiled and told them I'd rather take advantage of these buying opportunities with equities dropping.

I don't see myself retiring for another 26yrs at least, so I can run with it. I'm sure I'm going to eat my words later, but I'm actually excited about watching the market and possibly buying more funds.

[Singuy]

Shopping for more stock deals this week. High demand for bonds driving interest rate down is just bullish for a bounce back. Currently with interest rate dropping like a rock, the best place to invest is still equities. Historically there has never been a market crash when interest rates are this low.

Also there's one more lever Trump can pull that will cause a massive bounce back, which is to eliminate all tariffs imposed on all countries. A problem he created, and he can always take it back since the market is tied to his re-election very closely.

Also by no vaccines in sight you mean vaccine already in safety clinical trials.

https://www.livescience.com/us-coronavirus-vaccine-trial-recruiting.html

Job market still healthy, and yes many industries will suffer q1 and q2, but no way will a little suffering (which causes pent up demand afterwards) reduce the Dow to under 20k. Even if it does it'll bounce back within a month.

China is under control, and business wise it's all that matters.

[TexasHusker]

I don’t think that traders believe China is under control.

[Singuy]

I don’t think that traders believe China is under control.

Oh god traders are emotional freaks who are modeling what happens if deaths double every 7 days from this virus (spoiler, kills everyone on the planet after a few months).

It's never about what day to day traders think. Hell if I were to go on what traders think then my returns will be no better than the average monkey like the 86% of them out there.

But since you want proof, just after typing this CNBC just reported China closed down 11 hospitals because new infections slowed to only 40 new cases in Wuhan.

https://www.cnbc.com/2020/03/09/coronavirus-latest-updates-china-skorea-impact-on-markets-and-economy.html

If you look back on my posts, I have been making the same argument every time under these "recession is incoming" posts(mostly by you btw). And the market has consistently outperformed your return if you were to stay bearish. My argument has never changed either. The ONLY time I felt some kind of financial crash was incoming was during the BTC craze. I get nervous when everyone and their mothers are buying into equities they don't understand simply because it's "easy money". Good thing that crashed before more people got doped into it. Besides that, all of this is just short term noise.

After this recovers, I'll see you during the next "recession is for real this time" post after a few years.

[rennigade]

Im not sure how this is "once in a lifetime" event? Wasnt the tech bubble much worse than this? What about the 2008-09 bubble? Maybe in a couple weeks/months this will be on par with those events, we'll see. Ill continue buying index funds. Id like to scoop up some american airlines stock but I prob wont.

[disneysteve]

Id like to scoop up some american airlines stock but I prob wont.

American Airlines is off 48% from a month ago.
Carnival Cruise is off 38%.
Royal Caribbean is off 45%.

Those are the 3 I've got my eye on. I think AAL is the safer investment as air travel will bounce back faster than the cruise business. I may jump in.