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...just speculating at this stage...but, could this become my last great "buying opportunity", before i kick the bucket?....
to do the things I coulda, woulda , shoulda over the years....like buying google when I thought the $80 share price was crazy, like buying netflix & starbucks years ago, like buying apple when i saw that apple store buzzing, like not buying shares in RBC instead of opening a savings acct. in RBC when i started working....etc
 

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...just speculating at this stage...but, could this become my last great "buying opportunity", before i kick the bucket?....
to do the things I coulda, woulda , shoulda over the years....like buying google when I thought the $80 share price was crazy, like buying netflix & starbucks years ago, like buying apple when i saw that apple store buzzing, like not buying shares in RBC instead of opening a savings acct. in RBC when i started working....etc
I bought some Bank stock instead of paying my mortgage 10 years ago, that was a great idea.
I think we're in for a rough ride, but this should be a great buying opportunity.
 

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The primary unknown is going to be the depth and severity of the global virus crisi and thus investor sentiment/speculation about GDP growth, or lack thereof. A global recession is not outside the range of possibilities. I am neither a buyer nor a seller, so I don't care, but I think it is still early days in a downward trend.
 

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Discussion Starter #104 (Edited)
...just speculating at this stage...but, could this become my last great "buying opportunity", before i kick the bucket?....
to do the things I coulda, woulda , shoulda over the years....like buying google when I thought the $80 share price was crazy, like buying netflix & starbucks years ago, like buying apple when i saw that apple store buzzing, like not buying shares in RBC instead of opening a savings acct. in RBC when i started working....etc
Stocks are only down about 10% (less in Canada!) from their recent peak price. This is actually NOT a very low stock market. Stocks have fallen rapidly, but haven't fallen very much.

Stocks are still very high in absolute terms. So I would not describe today as a 'great buying opportunity'.

Example: S&P 500 closer to 2000 (meaning the index, not the year) would be a great buying opportunity. We are nowhere near that now.

Today this looks like a pretty normal level to me. Could go higher, could go lower.
 

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Stocks are only down about 10% (less in Canada!) from their recent peak price. This is actually NOT a very low stock market. Stocks have fallen rapidly, but haven't fallen very much.

Stocks are still very high in absolute terms. So I would not describe today as a 'great buying opportunity'.

Example: S&P 500 closer to 2000 (meaning the index, not the year) would be a great buying opportunity. We are nowhere near that now.
The only problem with that is that for that index to ever trade at 2000 again, a very, very large number of people will need to be absolutely sure that the future direction of the stock market, from there, will be much lower. If that is the case, will you be able to buy it. Remember at that point, only sellers have looked smart. Buyers have been brutalized.

The fear has to be higher at 2000 then it is at 3000. If one is nervous now, good luck buying then.
 

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Discussion Starter #106 (Edited)
The only problem with that is that for that index to ever trade at 2000 again, a very, very large number of people will need to be absolutely sure that the future direction of the stock market, from there, will be much lower. If that is the case, will you be able to buy it. Remember at that point, only sellers have looked smart. Buyers have been brutalized.

The fear has to be higher at 2000 then it is at 3000. If one is nervous now, good luck buying then.
I'm not sure it would require ongoing fear; it would only require a growing distaste for stocks, or less willingness to over-pay.

Look at the CAPE value, the market currently sits at a 28x multiple. Earnings could actually stay the same -- no business impact at all -- and the multiple could shrink down towards a historical average such as 17x.

The CAPE has sit at such levels for very long stretches of time in the past, many decades, and basically all of 1940 - 1960 and then again 1970 - 1990. Were those bad times full of constant fear? Of course not. Pretty normal decades.

It's the recent period with chronically high CAPE which is the anomaly. Analysts had shrugged off these high multiples and said, well I guess we just live in a new era where people are willing to pay more for stocks.

The market's P/E multiple is one of those things that's totally psychological, and it has a huge impact on stock levels. In other words you can have the same earnings forecasts as today, no deterioration in business conditions, and the multiple could shrink if people just don't feel like paying as much for stocks. If it shrinks all the way to historical averages, that would be a 40% decline in the S&P 500.

People's feelings and moods affect the P/E multiple, which turn can add volatility onto the stock index... even while corporations remain profitable and the index continues trending upward over time. It does not mean the end of businesses nor the end of economic growth. It just means people aren't willing to pay as much for stocks.

I have no idea whether the era of chronically high CAPE is coming to a close, but it's a possibility. For many years, I've written my theory on this forum that we have been in a period with inflated stock valuations due to stimulus from the central banks.
 

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I'm not sure it would require ongoing fear; it would only require a growing distaste for stocks, or less willingness to over-pay.
It would require more fear.

In order for that index to go from 2100 to 2000 a boat load of investors would have to be worried that it was going to go a lot lower. Why else would they sell. It's not like a bell will go off at any level for investors to know it is the bottom. A bottom is formed when the fear is greatest and the lion's share of investors have sold as much as they have or as much as they ever will. That is called the point of maximum pessimism and it is what forms stock market bottoms.

It is very difficult to go against that since it must be accompanied by some amount of logic or reasonableness to get so many people to behave like that.

What I am saying is whether the market goes down more or starts rising on Monday, it is very, very difficult to make money off of predicting the direction in advance. We all like to think that we can think independantly but almost none of us can or do. Many that have are mistaking luck for brilliance, 9 out of 10 times.
 

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What I am saying is whether the market goes down more or starts rising on Monday, it is very, very difficult to make money off of predicting the direction in advance. We all like to think that we can think independently but almost none of us can or do.
Like many older investors here I have lived through many of these pullbacks and it always seems that, "it's different this time". Except it's not.

I find a great indicator to buy is yield. I won't point out any specific stock, but many of the blue chips can be considered a buy when they're yielding a certain figure. So if there's a well run blue chip stock that historically yields 4% and during a market pullback the yield moves to 5%, then that's a good trigger to buy.

Generally the market is an ***, resulting in the market price of this particular stock (that is now yielding 5%) dropping along with every other stock because of some situation that has nothing to do with that company's fundamentals, but it's price is down and subsequent yield is up because the market is crazy.

Buying on that dip gets you a solid blue chip stock that pays 5% for the long term. If you had purchased in the past during normal times, you would have gotten a solid company, but only at 4%.

So whether we think the market is at a bottom or not, I usually rely on yield to tell me when it's a decent time to buy.

ltr
 

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Discussion Starter #109
What I am saying is whether the market goes down more or starts rising on Monday, it is very, very difficult to make money off of predicting the direction in advance. We all like to think that we can think independantly but almost none of us can or do. Many that have are mistaking luck for brilliance, 9 out of 10 times.
Totally agree. I have no clue if it's going up or down.

Some factors are business conditions + emotion + irrationality + herd behaviour + Federal Reserve + ECB + virus contagion + virus mutation + other unknowns

Obviously, no way to predict such wildcards. I've given up trying... sticking with my predefined allocation plan. At least it's consistent and always gives me clear guidance on what to do next.
 

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The most likely scenario by December 2020 is that we have:
-Coronavirus totally gone or subsided. As a side note hate how the media reports total cases while ignoring the 45K who have now already recovered. They should be reporting the net number
-Trump re-election and Tax Cut 2.0
-Fed rate at 1.0% along with all other Central Banks pumping like crazy on this "threat"
-All factories going 24/7 gangbusters to catch up on any remaining supply chain issues.
-Massive China stimulus to get the economy going again. Ghost cities galore!!
-All this against a 10 year Fed treasury yield under 1% probably....stock market looks pretty good then

There will be a rip your face off rally never before seen in history...mark my words

Now if Sanders gets in........look out below
 

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The Bank of Japan is lowering interest rates in response and Nikkei is up 1 %. China is bailing out an airline , their index is up ~ 3%. S&P futures up 1%. FRC Powell said Friday they are monitoring and may need to cut rates to boost the economy. Some optimism out there finally
 

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The Breakeven Fallacy.

Many investors forget about simple mathematics and take in losses that are greater than they realize.

They falsely believe that if a stock drops 20%, it will simply have to rise by that same percentage to break even.

Note how the recovery % becomes wider as the initial losses deepen.

% Loss % Rise To Break Even
15% 18%
20% 25%
25% 33%
30% 43%
 

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Told you guys this would happen. Definitely more volatility coming up but this thing is gonna be up huge end of year
I say you have a 50% chance of being right and a 50% chance of being wrong. If you have a fix, a loaded coin or a crystal ball please do tell.
 

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I say you have a 50% chance of being right and a 50% chance of being wrong. If you have a fix, a loaded coin or a crystal ball please do tell.
I posted my reasons for a massive runup into Dec 2020. Today is nothing, just wait. Which of my points do you disagree with?
 

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I posted my reasons for a massive runup into Dec 2020. Today is nothing, just wait. Which of my points do you disagree with?
I disagree with the fact that you can predict the near future with any degree of certainty. How things transpire over the remainder of the year is nothing more than a coin toss. Long term, if the past is any predictor of future events (and this is somewhat questionable) earnings should grow, the stock market should rise, etc. But, short term / over the next 8-10 months, the market performance is just a gamble.

Trying to time the market is a waste of time. 50% of the time you'll be right and 50% of the time you'll be wrong...
 

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Discussion Starter #118
It's happening again. I'm feeling nervous about perpetual, unrelenting gains without corrections. No fear, no corrections, no disappointment. That makes me nervous.

The day I started this thread -- saying I felt nervous -- was actually the stock market PEAK of February 19 preceding the crash. I only noticed this today when I found the old thread.

I hope I'm wrong. One would think that the volatility of the last few months would flush out speculators and greedy investors, but my worry is that they are back. I think people have short memories, plus we might have a new crop of greedy investors now.
 

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For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
VCNS.TO - Vanguard Conservative ETF Portfolio

Same with US and world as seen in AOK, which is a similar conservative asset allocation ETF
AOK - iShares Core Conservative Allocation ETF

Does this make anyone else nervous? I actually felt more comfortable seeing some volatility in 2018 since that's normal.

View attachment 19938
Its all good investors get burned when they get complacent. The complacency can be seen of late in the trust of Government. Some people trust government so much that they wear masks.
 
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