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  #1451  
Old 09-15-2018, 06:45 AM
jas66Kent jas66Kent is offline
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Originally Posted by redprinceton View Post
Closing out my AAPL position and going back into indexes.

20% gain pre-tax in a bit over a month. It's kinda irrational because I think AAPL will continue to outperform. But gotta lock in those gainzz bruh!
I'm not sure going into index funds now is the best idea.

While I appreciate that the stock market is pushing upwards, the risks are also increasing. My general feeling is that US Equties are over-valued, and with the discount rate going up, you are going to see companies that borrowed at super low IRs run into cash flow problems. This then combines with very high consumer debt levels, to create some pretty serious risks for the US economy.

I am in cash/bonds with some long-term individual equities that I think will survive the coming recession.
I am focusing now on buying up as much as possible when the crash inevitably happens.
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  #1452  
Old 09-15-2018, 12:05 PM
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Originally Posted by jas66Kent View Post
I'm not sure going into index funds now is the best idea.
Yes, better to just stay there.
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While I appreciate that the stock market is pushing upwards,
Brownian motion has no direction nor momentum.
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the risks are also increasing.
Why don't you believe that this is priced in already?
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My general feeling is that US Equties are over-valued, and with the discount rate going up, you are going to see companies that borrowed at super low IRs run into cash flow problems. This then combines with very high consumer debt levels, to create some pretty serious risks for the US economy.
Why do you believe your assessment of the future is better than the dollar-weighted consensus?

Quote:
I am in cash/bonds with some long-term individual equities that I think will survive the coming recession.
I am focusing now on buying up as much as possible when the crash inevitably happens.
Maintaining a constant risk level (assuming that your personal situation doesn't change) is more prudent than betting that you are smarter than the market and/or more nimble than other traders (some of whom are collocated with the exchanges).
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  #1453  
Old 09-15-2018, 01:21 PM
jas66Kent jas66Kent is offline
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Yes, better to just stay there.Brownian motion has no direction nor momentum.Why don't you believe that this is priced in already? Why do you believe your assessment of the future is better than the dollar-weighted consensus?

Maintaining a constant risk level (assuming that your personal situation doesn't change) is more prudent than betting that you are smarter than the market and/or more nimble than other traders (some of whom are collocated with the exchanges).
I'll get back to this post later this weekend, but would first like to point out that using BM as a proxy for short-term market movements is simplistic, specially given that we are now in an environment where markets are operating at the tails of a fairly heavy-tailed distribution, with ample time for non-normal shocks due to increasingly correlated risks.
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  #1454  
Old 09-15-2018, 02:55 PM
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I'll get back to this post later this weekend, but would first like to point out that using BM as a proxy for short-term market movements is simplistic, specially given that we are now in an environment where markets are operating at the tails of a fairly heavy-tailed distribution, with ample time for non-normal shocks due to increasingly correlated risks.
Yes, Brownian Motion is a simplification, but in an efficient market it is an excellent proxy (*). Are risks correlated 20%? 90%? Somewhere in between? If your estimate is better than the market consensus, perhaps you can find a bet with positive risk-adjusted EV because you are smarter than, or have better knowledge than, or are more nimble in your trades than your counterparty --- of course, on the other side of the trade is your clone (and he thinks the same about you.)


(*) More sophisticated models also allow sigma to vary over time. No arbitrage is the real assumption here, not specifically Brownian Motion. No arbitrage also implies that there is neither momentum nor direction to the market that can be profitably exploited.
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  #1455  
Old 09-17-2018, 10:50 AM
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I'd like to point out we're 2% below the January peak, in terms of the DJIA. The S&P is just about 1% over the January peak. Seems pretty reasonable.
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  #1456  
Old 09-17-2018, 03:26 PM
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Originally Posted by jas66Kent View Post
I'm not sure going into index funds now is the best idea.

While I appreciate that the stock market is pushing upwards, the risks are also increasing. My general feeling is that US Equties are over-valued, and with the discount rate going up, you are going to see companies that borrowed at super low IRs run into cash flow problems. This then combines with very high consumer debt levels, to create some pretty serious risks for the US economy.

I am in cash/bonds with some long-term individual equities that I think will survive the coming recession.
I am focusing now on buying up as much as possible when the crash inevitably happens.

When do you think ECB will start buying equities like BOJ and SNB?
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  #1457  
Old 10-02-2018, 11:49 AM
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Originally Posted by jas66Kent View Post
I'm not sure going into index funds now is the best idea.

While I appreciate that the stock market is pushing upwards, the risks are also increasing. My general feeling is that US Equties are over-valued, and with the discount rate going up, you are going to see companies that borrowed at super low IRs run into cash flow problems. This then combines with very high consumer debt levels, to create some pretty serious risks for the US economy.

I am in cash/bonds with some long-term individual equities that I think will survive the coming recession.
I am focusing now on buying up as much as possible when the crash inevitably happens.
I don't really disagree with any of your reasoning, but holding significant cash or fixed income is a blatant attempt to time the market, which, while that's what we're all about in here, I'm just not comfortable doing with my life's savings. To paraphrase myself from the very second post in this thread, we've been lamenting the coming onslaught of IR policy for years now.
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  #1458  
Old 10-02-2018, 11:53 AM
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I'd like to point out we're 2% below the January peak, in terms of the DJIA. The S&P is just about 1% over the January peak. Seems pretty reasonable.
What happened in January? Tax cut profit taking?
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  #1459  
Old 10-03-2018, 03:24 PM
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Oil will be $80 by labour day.
Close enough, imo.
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  #1460  
Old 10-03-2018, 03:25 PM
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There's some resistance at $78, probably a pull back. If the Iran sanctions get too dumb though, you could see a spike above $100, and that could be just the recession trigger needed to shave 20% off the Dow.
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