[carlsbadworker]

[quote=flu]Buy bitcoin instead.

If you’re trying to get rich quick by timing the market, speculate on bitcoin. It’s so volatile that the price wildly swings by +-1 $1000 almost each day…So it’s perfect for people who try to time the market.

On the other hand, if you plan on doing a long term buy and accumulate and actually invest, drip a few hundred/thousand into an S&P500 index every month for the next 5-10 years and forget about it.[/quote]

It looks like bitcoin is preparing a comeback. Any previous bubble burst pattern would say it should be below $5K by now, but instead it went above $8K again today.

[carlsbadworker]

US direct ownership in China is about $40 billion, in a country with $11 trillion GDP and $120 billion annual outward investment in other countries itself. China would be happy to exile U.S. capital. Its domestic consumption is projected to take over U.S. this year so it has a huge internal market, and definitely is not an export driven economy.

Chinese’s government’s biggest fear is its own citizens not foreign countries. It spends more money on “social stability” than on military each year.

[carlsbadworker]

[quote=kev374]I did not invest the bulk of my assets in Jan, I invested a large amount at the bottom of the Feb correction and have been investing in chunks all the way up to now.
[/quote]

You know that the site has logs, right?

I put in my buy order today,
Submitted by kev374 on January 6, 2018 – 9:54am.
I put in my buy order today, VOO @ 251.25 for 1094 shares, total value ~$275,000. I am going to take a bet that the market will be higher end 2018. Even though it’s crazy I think the market has solid momentum.

[carlsbadworker]

FlyerInHi, I am in similar situation as kev374 that I am also looking in buying a house in Irvine, but have not pulled the trigger.

The difference is that I did rush to buy at the bottom in Temecula, as we were living there at that time. So in theory, we could just “upgrade” but I couldn’t convince myself to sell a high rental-yield property to trade for a low rental-yield property even it is for my family’s use. In addition, I am a good saver so I can again afford the 20% down so I see no point selling my rental property.

We shopped last year after moving to Irvine, but I find that buying costs maybe $500-$1000 more each month even after 20%, which makes it really hard for me to part my money into a property. Like kev374 said, not everyone has rich Chinese parents that they can care nothing about ROI in face of biggest purchase one can make in life.

For us, Irvine is primarily because we have school age kids…and it has one of the best public school district.

My investment strategy is different than kev374. I DCA my extra “savings” each month into stocks (primarily mid-cap growth stocks, hoping they will yield more in a possible “melt-up” market), but I leave the down payment in CDs waiting for possible “melt-down” market (either in stock or house, but I don’t see it happen anytime soon).

What’s your suggestion for my situation?

[carlsbadworker]

[quote=kev374] Most people are idiots who did exactly that and lost it all in 2008 but they will never learn and make big bets that they cannot sustain and then think they are doing great… wait till all of them lose their homes.[/quote]

I find the key thing of life is not to worry about whether other people are idiots but rather whether myself is an idiot because it has far greater consequence to my life.

But how could an idiot know that he is an idiot?

The only trick that I find is that one has to make testable predictions that can be calibrated with reality. Most people don’t make measurable predictions which I think is a terrible mistake. One recent examples that I find is Trump supporters. Trump always surprises them with his actions but since they never predicted what a good president should do, but only try to make sense from it after the fact, they will never find inconsistency and therefore their belief in Trump can never be shattered.

If no matter what happened, it will never prove you wrong, then you never learn even when you are wrong.

Learning is mentally harder therefore people are relying all kind of belief systems (including value is better, which is kind of motto of Rich’s site). But I personally don’t want to be religious about anything, as all my theory should be subject to verification.

[carlsbadworker]

Of course, I don’t know anything about what’s going to happen in the future, but I am just trying to make a more educated guess.

I completely agree with you that if the trade war happens, stock market will crash from here. The discussion is ONLY to assume that it won’t happen, as both China and US do not really want escalation in the trade war.

With that, I quote Jeremy Grantham in one of his recent writing:

The fundamentals are improving. The global economy is in sync for the first time in a dozen years and global profit margins are at a high; in the US, a corporate tax cut is on the way, which in today’s sticky, more monopolistic world, is unlikely to be quickly competed away as theory suggests, but very likely to further fatten the corporate share of the GDP pie.

There is just no sign of corporate future earnings to decline, excluding a big external shock such as trade war. Therefore, I am just presenting the argument that the decline may not be sustainable.

Yes, interest rate is rising, but the corporate debt to equity is at its lowest level in the past decade (the data itself, however, doesn’t prove anything, as 2007 corporate debut to equity level is also very low but we all know what happened in 2008).

What’s your side of argument of corporate earning decline except the trade war? Trump’s tweet on FANG stocks isn’t going to have a long-lasting effect.

[carlsbadworker]

[quote=kev374]very bearish sentiment around here when it comes to stocks and very bullish on housing.. seems strange to me as I think if equities do poorly it will affect housing but this is a housing forum so…[/quote]

Supply and demand. The housing demand may decline rapidly, but its supply is very limited. So it is easier to balance. Stock on the other hand has much bigger supply as most people are holding stocks only because it is trending up. The tide could turn easily, as someone sees that 200 dma is crossed and turning it into a self-fulfilling prophesy. Just ask bitcoin.

[carlsbadworker]

[quote=flu]I’d say we are finished for the rest of the year. trade war looms. s&p ends negative this year[/quote]

Unless the trade war indeed materializes, I find it hard for S&P to trend negative continuously if the corporate earning still trends upward. Not that they don’t deserve to go lower based on its sky-high PE10 ratio.

[carlsbadworker]

[quote=kev374]nothing to worry as long as it’s over the 200 dma, s&p500 2585.[/quote]

Did you say that 2585 was a resistance level?

[carlsbadworker]

[quote=harvey]
If you don’t like the current forecast on CNBC, just keep watching. It won’t be long before another guest analyst/expert/guru/psychic tells you what you want to hear.[/quote]

LOL.

[carlsbadworker]

[quote=flu]still think folks would have been better off buying a home to live in so they don’t need to pay rent instead of speculating in the stock market starting in January of this year.[/quote]

Rental yield in coastal area is pretty low right now.

If you really just care about the return of your money, I think it would be better to buy multiple properties in the middle of the country and use the rents to pay for a rental house to live in coast area. Trump tax plan sets limit on what is deductible on primary residence, but everything is deductible in rental units.

Therefore, I would think buying a house is more of a lifestyle choice rather than ROI.

[carlsbadworker]

[quote=spdrun]Up and down we go… WHEEEEEE! Fun ride. Massive rally on Monday as well, then Crashius Cray smacked the markets…
https://www.youtube.com/watch?v=ACQtzWEzWLE%5B/quote%5D

It looks like it doesn’t matter whether you buckle or unbuckle your seat-belt. Since the title of the movie is Alive, I guess some lucky guys on the plane survived?

[carlsbadworker]

[quote=kev374]200 dma is holding on the S&P500 despite tech being down, impressive! The bulls are not backing down.[/quote]

I added some stocks recently but just found that my equity exposure was actually lowered because of the decline, maybe time to a little bit more if tomorrow is still a down market.

Growth stocks are declining more in the past week, which is usually the characteristic of the end of bull market though. However, last 4 times when large growth vastly outperform large values are: 1998, 1999, 2007, 2009. Only two of the events resulted in the start of the bear market, so it is not a sufficient leading indicators for the bear market.

[carlsbadworker]

[quote=FlyerInHi]If a debt crisis comes, as fiscal conservatives predicted for decades, real estate should be a better hold than stocks.

https://www.washingtonpost.com/opinions/the-debt-crisis-is-on-our-doorstep/2018/03/27/fd28318c-27d3-11e8-bc72-077aa4dab9ef_story.html?utm_term=.b3dd517dbb15%5B/quote%5D

I blame it all on Bernanke. 08-09 was supposed to be the golden opportunity to learn fiscal responsibility, but these guys think bubble burst is a crisis instead of bubble itself as a crisis (that Americans have to spend a large proportion of income on housing, rather than to find more productive use of that capital).

I was actually fine with them buying residential mortgage…but why propping up the stock market so that it was only below the trend line for a few months? It is not FED’s responsibility to rescue stock investors.

[carlsbadworker]

[quote=FlyerInHi]Fed raises rates. I feel economic headwinds.[/quote]

You mean some pigs would finally not able to fly anymore?

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