Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

I'm wondering how much of this stuff is "priced in" and how many stocks are going to gap down bigly after earnings a few months from now

 

I think a worst case scenario is priced in. That’s all I can make of this quick drop.

 

I think the market is swinging so wildly because it doesn't know how to price it in. The wild card, IMO, is if there is an event that causes boomers to start moving their 401ks out of stocks. Let's see how well the public can stay the course in the next six months.

But I'm not a stock picker, I have over 80% of my $ in a total stock market ETF, I just find the market fascinating. I'll take my 7% a yr avg over 35 yrs while never selling in-between... I'm boring lol.

 

The worst case is definitely not priced in, like worldwide recession. This price drop was factoring in the best case scenario of the virus.

The market was way over bought at the begining of the year and evaluations of company's price to earnings was way to high. We were starting to see over 24 years earnings to price evaluations in S&P stock prices. It's now at 22.

I personality think it needs to come down to 16 or 17

 

That P/E would be another 27% drop, on top of the 15% or so already. You think the market needed a 42% correction? Maybe, that seems drastic to me though.

 

That's just my opinion on fair company evaluations. They should be somewere between 15 and 20 years and not any higher

 

I've held vanguard index funds for well over 20 years my return has been close to 10%. Works for me

 

As a 24 year old who just invested half his savings into index funds for the first time a couple months ago, it's the shit like that that keeps me confident and not bothered by whats going on in the market

 

Your 24 no matter what happens That money is going to grow over 20 years.

Warren buffet says " I can't predict what happens in the market today, next week, or next year. But I can predict what will happen in 20 years"

 

IMO and random thoughts on what I think ,have heard /read and have seen before -

This a great time for any company that has skeletons in the closet to dump everything from the books and blame it on the virus/no visibility . Low guidance will set them up for earnings beats when this blows over , they can say things are pretty bad and most will not sell because stock owners will give them a pass because it's not the company's fault. .

Staple goods that people are stocking up on now are taking sales from the future and these products sales will drop when this virus scare is over . home delivery of food/supplies , streaming services will all be good places to find stocks to buy . I think this will get even better after this is over as people will just like it for the convenience and its has been going that way anyways .

I agree with what you guys have said about air travel and hotels and cruise lines etc. They will come back but I think the lost sales will be lost forever .

I do not see anything but solid knowledge and understanding of how the virus will play out before we can get back to new highs .
The markets will spike and drop all on the virus news because all data on past earnings job creation ,etc, were before and are no longer relevant .Sad but most of this trading is done by programmed algorithms via computers .

This is all a traders dream for all the volatility . Watch for stocks that no longer go down on bad news .

This whole oil /carbon thing seems to be the younger generations outright hate of fossil fuels .
I think they almost believe that if nobody buys the oil stocks oil will no longer be used and it will save the planet. Energy use is not going to go down , it is only going to increase unless the population drastically drops . I agree that we should get off oil too but switching to Nat gas /LNG is a better solution even they are still fossil fuels , but face it natural gas is there in huge abundance , it burns much cleaner than oil or coal ,and might as well be used rather than just burning it off at the wells lol. Wind turbines kill birds and bats etc., how is that better ?
Liquified hydrogen might be best ? Electric cars are not going to work in rural areas unless the ranges are dramatically improved and charging times fall to 10 or 15 mins.

Look for a retest of the SPX lows and a bounce up or a drop below . As long as the 10 yr keeps falling the market will keep falling too . Even a 10 to 1 down day with what seems as capitulation cannot signal a bottom untill there is a clear understanding of - if this virus lives through summer weather , or comes back in fall , or mutates , if people really do recover and do not get it again , or a cure or vaccine can be readily be available .

TRADERS do not like to hold long or short stocks into the weekends , Futures can be and are manipulated ! 401K funds are put to work on the first of the month . Most European market monies stop coming into the US markets when they close at 10:30 AM Central time ,Margin calls come the day after a big selloff , Margin calls / forced selling after noon and ends by about 2:30 central time . It is a good sign if the market reverses after the forced selling is done , if it continues down . look out below . Money traded in the first 1/2 hour of the day is said to be dumb money so we really do not always know where it is going until after 9:00 AM central time . Down markets rarely bottom on a Friday . End of the months and end of quarters have fund managers playing games for window dressing for their reports by selling bad investments before and buying winners before the month ends , then if they truly believe the bad ones are going to get better will buy them back after the month begins .Year ends are the worst for this as most people may only read the year end results for fund rankings and that is where the managers want to shine .
These things are not all exact but do hold pretty true .

If you are still reading this rambling of mine it may not be as boring as I think it may be ..-------------------------------------

Anyone else have any fun facts to add ?

IMO , wash hands , do not touch your face or shake hands , stop watching the markets ,or take some cash and play the news ,the charts , even if it is with index funds

Bad news this weekend could be a Monday morning retest of lows 2854ish ,and a bounce up could mean a couple days up if the news is not too bad . If it does not test the lows , I believe it will some time soon . If it goes lower and closes below I can see 2750 and the next MAJOR stop at 2350 to 2400 over the next several months .
Buckle up , it may be a bumpy ride .

 

LOL people still thinking the Coronavirus is the only thing whipping the markets.

 

its the big money banks and hedge fund computer programs most likely like it always is during volatile times since the obscene trading volume picked up sometime in the past

 

Wasnt the market at about these prices overall last summer, I know it's not good to go backwards, but it's also only a year. Not like it's at 1996 prices. Not good but also not horrible.
Also who thinks it should be trading around 17 or 18x its p/e ratio. I think that's close to the long term average and that would put the sp500 at 2400. Are the higher valuations the new normal due to low interest rates causing people to buy into riskier investments to get a return?

 

If its does go down to around 2350 like taco16lb said I'll definitely up my 401k contributions to around 20% of my pay and maybe even stick some cash I've been saving into the market also.

 

If it goes to 2,350 going on margin probably wouldn’t be a bad idea. I wouldn’t, but it would pay off if anyone did it.

 

Yea that's still a "things aren't horrible" price level it'll most likely go back up pretty quickly when this blows over and people stop buying hand sanitizer and start back buying margaritaville blenders.

How do you buy a stock on margin? is that something you do through your broker account or do you go to a bank and ask for a loan? Do they have high interests rates and is the stock you purchase the only collateral for the loan?

 

I don’t know how to use margin, I would imagine you have to pay some interest rate to use it. It’s too risky for me, I’d rather buy when I can.

 

before you use margin its advisable to study up on the risks involved, margin calls, etc.

 

I know right?? The rest of the worlds economy has been in the shitter for quite awhile, we have been kind of behind an inflated stock market veil here.

I said it last week, things were going to start going down soon, then this popped up and it's a convenient excuse. Easier to blame a virus than abolstultely horrific fed monetary policy to the masses.

 

I'm not going to do it just wondering how it worked.