Sell

[scaredyclassic]

[quote=Reality][quote=Rich Toscano]Are you guys also going to share your returns if davelj turns out to be right in the end? :-)[/quote]

Fat chance.[/quote]
Its painful to even look at longterm losses let alone discuss.
I held on to some in the red gold shares for 5 years before breaking even.
This hasnt happened with the normal indices.
.we alk think we could withstand 5 to 7 years down. That we have a longterm outlook.
If we had to look at our 401k balance at 30,40, 50 percent down, year after year, says its 2026, and your a third down and inflation is wild, no one would want to talk about whether they were 38 or 44 % down in terms of better performance.

hell, no one, self included, is even sure of this is possible anymore, with the fed backstopping losses.

talk is cheap when things are good, painful in bad times. that’s why therapists charge so much.

[ltsddd]

Mark Cuban on trading stocks:

https://www.marketwatch.com/story/mark-cuban-says-he-doesnt-trade-stocks-like-he-used-to-but-hes-still-loading-up-on-some-of-his-favorites-2020-08-26?siteid=yhoof2&yptr=yahoo

[plm]

[quote=Coronita][quote=plm][quote=Reality][quote=plm]
Actually I think that selling and buying back later at a lower prices is a way to have even better returns but much riskier since you have to time the market properly. Isn’t it safest to buy and hold and just don’t sell when they market crashes?[/quote]

What if when you need retirement income coincides with the crash?[/quote]

Well this last crash only lasted for a few months… But seriously, I have enough cash for a couple years worth of expenses and I have rental and significant dividend income as well so its unlikely I will have to sell at the bottom.[/quote]

I think Reality was referring to not just the brief crash that happened due to covid.

I think Reality was referring to a real crash like the one in 2001 which lasted for several years and which a lot of overspeculated or just nonsense high flyer companies ended up crashing to oblivion and never recovered. Many of us remember.

Index fund investments survived and recovered..Many individual stocks didn’t and many people who thought they could outsmart the indexes only thought so because they never really experienced a real life crash.

If you look at how the indexes are performing right now, it’s sort of misleading. It’s not that most of the companies that make up those indexes are all doing well this year Most of them are still negative. It’s just a few select companies in those indexes have went beserk and those few companies are making the entire index look good. Companies like AMD which is trading around $86/share even though it absolutely makes no sense.

Regarding protection. I can only speak of a large company issued stock options grant. Back then, one thing we did do to protect from a big crash was to buy out of money out options regularly. I worked for a company that priced there IPO at $30/share and opened at $217, and within that first 6 months went as high as $415/share even though we were still unprofitable. Our valuation was a $6 billion software company even though are revenue was around $50million. Made no sense whatsoever. I remember the moment put options were available, many of us were buying them when the stock price was still above $300/share just so it could protect all the unvested employee stock options that had a $30 strike price that we needed to wait 4 years to fully vest

It wasn’t long after the company stock fell to $7/share.

Retail speculators lost their shirts.

Employees got laid off.

Some employees that got laid off had a big grin on their face because suddenly their out of money put options that was insurance for their unvested company issued stock options was worth a lot of money, and they didn’t need to wait for 4 years of vesting to get that money which was almost the same as how much their company issued options would have been…

Since then, companies have gotten a lot smarter. Many have a company policy against you or a family member owning derivatives of the company stock….

Whenever things really get frothy, individual stock ownership gets a lot more risky. I think for some of these speculation, there has to be an exit strategy because it is almost impossible to be consistently have the winning hand all the time. Once you’ve reached a point of a lucky windfall that matters, it’s imho an equal amount of effort to try to preserve and prevent losing most of it, and that means finding a way to shift that money somewhere else that is less likely to lose as much as fast as you can in individual stocks.

At least that’s how I was able to afford to buy a primary SFH down here when I moved back in 2004, when housing was already pretty expensive and also getting frothy.[/quote]

Well your example implies a price/sales of 120. My highest two are Fastly and Okta which are high in the 30s and 40s. Okta just popped another 7 percent today probably because Salesforce popped 25 percent after great earnings yesterday. When these momentum stocks I own keep going up, blind greed takes over and I can’t sell. I’m even selling the few loser dividend stocks I own like CVS and buying growth tech instead, screw diversification.

[ltsddd]

I get this weird feeling that the number of stocks-related posts on this forum is a good indicator of an impending market correction.

Here’s my prediction – we’re not going to make it past election day unscathed.

[plm]

I think there may be a correction too but high tech growth should be hurt less since they work in the stay at home economy. It’s the retail/travel that’s recovered somewhat that will probably head down.

Just don’t see a vaccine taking effect yet and you got schools opening. Incumbents no longer boosting the economy to get re-elected.

[Coronita]

[quote=plm]I think there may be a correction too but high tech growth should be hurt less since they work in the stay at home economy. It’s the retail/travel that’s recovered somewhat that will probably head down.

Just don’t see a vaccine taking effect yet and you got schools opening. Incumbents no longer boosting the economy to get re-elected.[/quote]

Good luck to you. For your sake, hopefully, this time it really is different.

[ltsddd]

My head spins like crazy seeing a handful of companies marching up in double, triple digits day in/out. I too unloaded my dead money in UBS that I have held since 2017. I put all proceeds into aapl @455 and already getting >10% returns in less than two weeks. The market is acting really stupid. If the crash in March was a train-wreck in slow motion as scaredy was saying. I think this train-wreck is happening in front of our eyes in SUPER slow motion.

I think in the end, the house always win. In this case the house are those big institutions. The gamblers are the robinhood crowds. It’s not going to end well for the robbing hoods.

[Coronita]

I moved my trading account back to more of a cash holding again by selling half of everything.

I guess I’m just thinking with all the social media i-gen stars now talking about the stock market and how easy it is to make money, and anyone can do it… Reminds me of old times when a financially illiterate receptionist could be heard talking about how easy it is to make money in the stock market during coffee breaks back in 2000.

If we see a correction, maybe I’ll slowly move things back in. Otherwise, I’m contend with things this year.

Less greedy, more caution.

[svelte]

[quote=ltsddd]I get this weird feeling that the number of stocks-related posts on this forum is a good indicator of an impending market correction.

Here’s my prediction – we’re not going to make it past election day unscathed.[/quote]

History tells us that October can be an ugly month for stocks.

Sometimes even August “Sell in August and go away” (a take-off on the old Sell in May and go away) but looks like not this year.

[The-Shoveler]

I predict mayhem no matter who thinks they won IMO only.

choose your intolerant leader, any descent from official message will not be tolerated.

[Coronita]

Party like it’s 1999. Deja Vu.

I think we are at the point of Round 2 of euphoria.
Back in the late 90ies, this happened too.

I distinctly remember there was a stock run up while I was still in college with companies like Netscape, Spyglass, and a few other dot.coms

And then there was a medium correction where the first way of these dotcom companies crapped out… And then there was a second wave of euphoria for a second wave of dot.com companies starting late 1998 early 1999 that was even more crazy than the first wave. This second wave included companies like WebVan, eToys, MySimon, pets.com, Vitria, Ariba, CommerceOne, and all the enterprise software companies supporting all this shit….BEA, Tibco, JD Edwards, Peoplesoft, IONA, etc,etc,etc Somewhere buried in that mess was also Sun Microsystems, Nortel Networks, Worldcom, Ascend Communications, USRobotics, 3COM, and a bunch of DSL companies.

[plm]

[quote=Coronita]I moved my trading account back to more of a cash holding again by selling half of everything.

I guess I’m just thinking with all the social media i-gen stars now talking about the stock market and how easy it is to make money, and anyone can do it… Reminds me of old times when a financially illiterate receptionist could be heard talking about how easy it is to make money in the stock market during coffee breaks back in 2000.

If we see a correction, maybe I’ll slowly move things back in. Otherwise, I’m contend with things this year.

Less greedy, more caution.[/quote]

I suppose the question really is given the strong demand for stocks (there really isn’t anything else to invest in), how high does it go before it breaks down. I think it can go up alot more before it crashes. And if it does crash earlier, I’ll just ride it out. I don’t think my main holdings like Apple, Amazon, Nvidia, Microsoft and AMD are going to go bankrupt. Well maybe AMD could go down alot if Intel performs better. But at that point I’ll be playing with house money.

[Coronita]

[quote=The-Shoveler]I predict mayhem no matter who thinks they won IMO only.

choose your intolerant leader, any descent from official message will not be tolerated.[/quote]

Well, some folks wants to severely cripple 401k plans for anyone that isn’t poor.

https://www.forbes.com/sites/ebauer/2020/08/25/joe-biden-promises-to-take-away-401k-style-retirement-savings-whats-that-mean/#3f9385214eb0

Wanting it and doing it are two different things, but I think things will get reeled in.

Old savers with something like 7 figures in it already will probably be grandfathered in. New savers trying to accumulate wealth, it’s going to get tougher. Not my problem.

[Coronita]

[quote=plm][quote=Coronita]I moved my trading account back to more of a cash holding again by selling half of everything.

I guess I’m just thinking with all the social media i-gen stars now talking about the stock market and how easy it is to make money, and anyone can do it… Reminds me of old times when a financially illiterate receptionist could be heard talking about how easy it is to make money in the stock market during coffee breaks back in 2000.

If we see a correction, maybe I’ll slowly move things back in. Otherwise, I’m contend with things this year.

Less greedy, more caution.[/quote]

I suppose the question really is given the strong demand for stocks (there really isn’t anything else to invest in), how high does it go before it breaks down. I think it can go up alot more before it crashes. And if it does crash earlier, I’ll just ride it out. I don’t think my main holdings like Apple, Amazon, Nvidia, Microsoft and AMD are going to go bankrupt. Well maybe AMD could go down alot if Intel performs better. But at that point I’ll be playing with house money.[/quote]

I think it’s tough to guess the absolutely bottom or top. For me, taking a step back, the way to look at it is….Is 40% YTD really typical, or way out of the norm? If so, why be greedy and try to go after an additional 10, 20, 30%? It was a total fluke and total luck that when covid hit, that the markets didn’t crater any further than it did. Things could have gone really bad the other way for everyone that jumped back into the markets into individual stocks.

I was already content if I could see 4-6% in a year I thought the markets would have gotten trashed after covid. You already beat most of the people that thought covid would have taken the entire markets down and either sat out this year, or god forbid shorted the markets when they thought covid would have made things much worse. You already beat all the folks that were hoping for that big crash to get back in the markets but didn’t think the covid correction was big enough. And you also beat all the people who lost their job who had to either cash out the 401k or didn’t have any additional disposable income to speculate, because they were worried about putting food on the table and paying for rent or their mortgage. (some empathy for those folks because who got hit and who didn’t because of covid was also some random luck thing…plenty of workers plenty of business owners got hit pretty hard in the same exact way.) Relatively speaking, anything else from this point on is just icing on the cake, and personally one needs to seriously consider the risk versus reward from here on out imho.

The way for me to self discipline is to put that money to another use that is way less risky, even if it loses some money or stays flat. Eventually, you’re luck is going to run out. And you won’t know when.

[sdrealtor]

[quote=Reality][quote=plm]
Actually I think that selling and buying back later at a lower prices is a way to have even better returns but much riskier since you have to time the market properly. Isn’t it safest to buy and hold and just don’t sell when they market crashes?[/quote]

What if when you need retirement income coincides with the crash?[/quote]

Thats why I buy for total return including growth and income. If they maintain/grow their dividends I’ll never have a need to sell anything. I also have solar (no electric bill), drought tolerant landscape (minimal water bill and no landscaper), house close to paid off w/ 1999 tax basis (minimal housing expense), tesla (no gas bill) etc. Oh and I have a very full wine cellar:)

[Author]

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