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Stock Market Crash! (merged) Pt. 22

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stock Market Crash! (merged) Pt. 22

Unread postby AdamB » Sun 26 Sep 2021, 13:19:49

vtsnowedin wrote:I see little point in holding any great amount of cash. I can liquidate losing stocks or index fund shares quite easily if and when a better buy appears so I might as well have that cash in the market somewhere where it has some chance of profit instead of in a bank earning zero.


Same here. I can see how it might be useful during a Lehman Brothers moment, but for all of the standard doomer porn scenarios to kick off, the event has to be serious enough that cash, gold bullion, silver coins won't matter too much either.

The Boy Scouts and Mormons seem to have the normal BAU interruption scenarios covered pretty well, with their respective philosophies.
StarvingPuutyTat says: I'm so confident in my TOTAL COLLAPSE is IMMINENT prediction that I stake my entire reputation on it. It will happen this year. - Aug 3-2020

Mustang19 says: Mods, I am just here to troll the trolls. I mean no harm.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Outcast_Searcher » Mon 27 Sep 2021, 00:43:15

AdamB wrote:
vtsnowedin wrote:I see little point in holding any great amount of cash. I can liquidate losing stocks or index fund shares quite easily if and when a better buy appears so I might as well have that cash in the market somewhere where it has some chance of profit instead of in a bank earning zero.


Same here. I can see how it might be useful during a Lehman Brothers moment, but for all of the standard doomer porn scenarios to kick off, the event has to be serious enough that cash, gold bullion, silver coins won't matter too much either.

The Boy Scouts and Mormons seem to have the normal BAU interruption scenarios covered pretty well, with their respective philosophies.

There is no right or wrong answer, but knowing yourself is a good thing.

Some cash holdings reduces the volatility of one's portfolio. For me, I like sleeping at night. During a mess like the great recession, I slept just fine while the market lost over 50%. I was also comfortable buying some S&P 500 index near the bottom, when it yielded about 4.3%. Without a nice cash cushion, I'd have been less comfortable.

MANY people panic and pull lots of funds OUT during a big downturn and are afraid to invest more after a big downturn due to all the volatility.

Again, no right or wrong, but having a plan and the ability to stick to it through thick or thin is very helpful, and having enough cash to live on for years if the markets get very ugly works well for me. It's not about "doom" at all -- just about dealing with very bad markets when they come, which IMO isn't predictable.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby evilgenius » Wed 29 Sep 2021, 05:00:06

I have been thinking that maybe a certain number of shares to get into a position is a good idea. I have been experimenting with 20 shares, to begin positions. The idea is that some things get away from you. If they do, if they run, you want to have had enough of an initial position to benefit from it in a material way. 20 isn't really enough, but it may be enough for these sorts of situations. More than 20, I think, and it leaves me vulnerable to my old problem of getting too fixated upon what I am doing and thinking I have chosen to get in at the right price. More than 20 and it can be hard to buy lower and lower one's average cost per share, should one have been mistaken and jumped in too quickly while prices were still going down.

Ideally, what I am looking for is to have enough shares in all of my positions so that I can sell some of them when I think that the market is signalling a peak. Yes, when I think it is. That way, I can be wrong and I am not destroying my real long term position in the stock. I am only sacrificing the marginal amount above what I need for my future, should it not be the top. I do not want to sell what I consider the position I need, but if I have more shares than I need, I can experiment. If I am right, I can keep playing that marginal number through ups and downs.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Outcast_Searcher » Wed 29 Sep 2021, 16:50:22

evilgenius wrote:I have been thinking that maybe a certain number of shares to get into a position is a good idea. I have been experimenting with 20 shares, to begin positions. The idea is that some things get away from you. If they do, if they run, you want to have had enough of an initial position to benefit from it in a material way. 20 isn't really enough, but it may be enough for these sorts of situations. More than 20, I think, and it leaves me vulnerable to my old problem of getting too fixated upon what I am doing and thinking I have chosen to get in at the right price. More than 20 and it can be hard to buy lower and lower one's average cost per share, should one have been mistaken and jumped in too quickly while prices were still going down.

Ideally, what I am looking for is to have enough shares in all of my positions so that I can sell some of them when I think that the market is signalling a peak. Yes, when I think it is. That way, I can be wrong and I am not destroying my real long term position in the stock. I am only sacrificing the marginal amount above what I need for my future, should it not be the top. I do not want to sell what I consider the position I need, but if I have more shares than I need, I can experiment. If I am right, I can keep playing that marginal number through ups and downs.

Agree completely with the principle.

Respectully, disagree completely with using 20 shares as the yard stick.

Roughly, 1 share of Tesla, 6 shares of ABBV or CVX, 3 shares of NVDA, or 24 shares of FCX, AMLP, or CVX all represent (round numbers) the same amount of capital.

As investors with limited funds to put into stocks, we're ALL constrained by the same thing: limited amounts of capital.

So, I'd (again, respectfully) suggest instead of using a number like 20 shares, use a yard stick of X capital like $1000 (or whatever unit you prefer) as your fundamental unit.

Far less chance of doing yourself huge damage in a bad market if you keep buying in a steep selloff. And a far more realistic way of keeping balanced with purchase decisions.

Again, just IMO, and in my 40 years of trading experience.

The good news is that with many modern brokerages like Ally Invest, TD Ameritrade, etc. with zero commissions on ordinary stock trades, the fees don't get unreasonable (or even nonzero) if you buy or sell in small amounts. (I only wish those conditions had existed when I was in my 20's, 30's, or even 40's).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby vtsnowedin » Wed 29 Sep 2021, 18:40:04

Outcast_Searcher wrote:
The good news is that with many modern brokerages like Ally Invest, TD Ameritrade, etc. with zero commissions on ordinary stock trades, the fees don't get unreasonable (or even nonzero) if you buy or sell in small amounts. (I only wish those conditions had existed when I was in my 20's, 30's, or even 40's).

I most totally agree with that.
I am a small potatoes investor and a lot of my buys are just $100 not $1000. But a percent gain is a percent gain -or loss.
Not having extra cash to inflow at present. (Wife had a knee replaced) I might try to sell a few shares of a stock when I think it is on a high end of a cycle (or manipulation) and hold the cash ready to buy those same shares back at their next low. Never tried that before so will make a very small bet on it just to see.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby evilgenius » Tue 05 Oct 2021, 06:26:44

Yes, zero commissions. It's the thing that zero commissions has done for me that has made me think about 20. I'm still thinking about it. Thanks for that advice. It sounds right on.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Outcast_Searcher » Tue 05 Oct 2021, 14:02:49

vtsnowedin wrote:
Outcast_Searcher wrote:
The good news is that with many modern brokerages like Ally Invest, TD Ameritrade, etc. with zero commissions on ordinary stock trades, the fees don't get unreasonable (or even nonzero) if you buy or sell in small amounts. (I only wish those conditions had existed when I was in my 20's, 30's, or even 40's).

I most totally agree with that.
I am a small potatoes investor and a lot of my buys are just $100 not $1000. But a percent gain is a percent gain -or loss.
Not having extra cash to inflow at present. (Wife had a knee replaced) I might try to sell a few shares of a stock when I think it is on a high end of a cycle (or manipulation) and hold the cash ready to buy those same shares back at their next low. Never tried that before so will make a very small bet on it just to see.

Always happy to try and help. Zero commissions are just awesome for folks who like to take small whacks at a time at the market.

It's unfortunate that this site (and many others) can't be more about diverse people trying to help each other (as we all have different spheres of expertise due to luck, circumstance, experience, etc) than fighting with each other.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Newfie » Tue 05 Oct 2021, 21:21:32

Seems a relevant story, disruptions in the global supply chain.

https://gcaptain.com/christmas-maritime ... -disaster/
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby evilgenius » Thu 07 Oct 2021, 05:18:04

I think that the tentative number, 20, is a sweet spot. It is obvious that either end of the argument, having only a few really expensive shares or thousands of penny value shares, won't work.

The idea is to have enough shares to be able to do something with them. I want to watch them grow. Others may want to buy low and sell high. It is because we can't know where we are in that buy low and sell high cycle that having a number of shares becomes important.

20 is probably too few to think about selling some if prices went that far up, but is is a number, for most stocks that fall within a range of prices between, say, $5 and $40 that might reasonable grow to a significant amount if left alone over time. That is, assuming some kind of growth over time. There is a conceit buried in the endeavor that I will seek stocks with some sort of thesis. Like, I have as my current thesis, the switchover to EV's. Not every speculative stock will grow. There is, however, a greater chance because of a secular reason for investing. Maybe somebody else has been thinking this way about chips?
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Outcast_Searcher » Thu 07 Oct 2021, 14:31:47

evilgenius wrote: That is, assuming some kind of growth over time. There is a conceit buried in the endeavor that I will seek stocks with some sort of thesis. Like, I have as my current thesis, the switchover to EV's. Not every speculative stock will grow. There is, however, a greater chance because of a secular reason for investing. Maybe somebody else has been thinking this way about chips?

First, to the extent there's a conceit there, it's a conceit a huge proportion of investors have, re investing in an idea and hoping it grows. If that's too risky, then just sticking money in a broad based index fund, etc. makes sense, the default safety "no brainer" approach.

Second, that you are AWARE of the conceit, bias, what have you, puts you FAR ahead of a large proportion of investors (and speculators). The percentage of posts on any major stock on investment sites where posters are CERTAIN that THEIR stock will appreciate at 10X the market rate in the next year or less is massive. And telling, IMO, as the world is NOT Lake Woebegone, where everyone is (far) above average.

Third, you have a lot of enthusiastic company re the conversion to EV thesis, and for good reason. The difficult thing, IMO, is that it's so popular that the obvious EV auto stocks are generally VERY expensive (re valuation, like price to earnings ratios, etc). As usual, I have NO idea how that pans out, but it's why I grit my teeth and am long some Tesla, even though that might end up being massively stupid in a decade, despite the rapid growth scenario for the next few to several (or maybe more) years. (I've done both fairly "smart" and VERY "stupid" things re investing, in 20-20 hindsight over the years. If one is honest about it, I think that inevitably comes with the territory).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby vtsnowedin » Fri 08 Oct 2021, 18:56:50

I do not see sorting stocks into a price range per share as a good way to look at it. P/E ratios are a much better measure of a stocks profit potential. It used to be a P/E of 10 or less was what you were looking for but today the market as a whole is trading at something above P/E= 27. That would tell old school investors that the whole market is now over priced and they may well be right. As to the EV stocks Ford has a P/E of 17.52 and GM is at 6.33 while Tesla is at 413 :razz: . One I like and own is Ruger (RGR) at 9.77 with a 4.9% dividend and then there are some large caps like Dell at 22.16, Cat at 24.56, Apple at 28 and google at 30.16.
I don't let a high share price scare me as today you can buy and sell slivers of a share for as little as $5.00 so a stock selling above $1000 a share is something I can invest in and whatever percentage gain or loss will be based on how much I put into it.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby vtsnowedin » Fri 08 Oct 2021, 19:19:20

Outcast_Searcher wrote:As usual, I have NO idea how that pans out, but it's why I grit my teeth and am long some Tesla, even though that might end up being massively stupid in a decade, despite the rapid growth scenario for the next few to several (or maybe more) years. (I've done both fairly "smart" and VERY "stupid" things re investing, in 20-20 hindsight over the years. If one is honest about it, I think that inevitably comes with the territory).

I must painfully agree with you on that. But with some hard lessons learned I can hope to at least not lose my shirt to the Wall street sharks going forward.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby evilgenius » Sat 09 Oct 2021, 06:09:26

Yeah, the thesis thing. It doesn't always work. I think a person has to keep asking themselves if they are onto something, and be honest. Math is not my enemy. Fees used to kill most of the math, no matter what the opportunity. I am a small timer. I feel empowered by the end of fees.

Getting in ahead of something takes effort. Nobody is going to have that sort of thing handed to them. I think a lot of that effort lies in looking at the world as many different ways as possible, and trying to put the pieces together into a cohesive whole. The twenty share thing goes along with that.

I'm grateful for the other ways of looking at the general problem of how to organize these things. Total capitalization is how I look at some things. I was looking at my position in Cisco, and realizing that is how I view that holding. Then I thought, there goes Outcast, telling me something I already know, but I am grateful to be reminded of. Those sorts of reminders are how we can pull ourselves out of whatever states of minds we need to get into for thinking this or that way. Like how I can leave my razor in the shower if I don't ask myself whether I have everything, it is a good reminder.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Outcast_Searcher » Sat 09 Oct 2021, 15:00:00

evilgenius wrote:Yeah, the thesis thing. It doesn't always work. I think a person has to keep asking themselves if they are onto something, and be honest. Math is not my enemy.

Great point. Self-delusion is something humans are often very good at. Persistent hard work and recognizing when things change soon enough, not so much, very often.
Getting in ahead of something takes effort. Nobody is going to have that sort of thing handed to them. I think a lot of that effort lies in looking at the world as many different ways as possible, and trying to put the pieces together into a cohesive whole.

In the modern internet world, I think that great thought about looking at the world from many angles is VERY difficult. (I try, with varying levels of success, and it's easy to get lazy and not keep at it). I have to confess to reading books less often than I should, as there's so much free or cheap internet content, though the quality varies wildly, of course.

I often wonder how younger folks manage to put their phones down long enough to focus and get their work done -- and that's NOT an insult, it's an observation re the way constant access to the internet changes our thinking over time.

If there's one common sketchy thing I see on internet investment board discussions, it's herd thinking or complete unwillingness to even CONSIDER information that doesn't fit one's current world view. Year after year after year, even when the world has CLEARLY changed quite a bit.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby Outcast_Searcher » Sat 09 Oct 2021, 15:08:24

evilgenius wrote:Then I thought, there goes Outcast, telling me something I already know, but I am grateful to be reminded of.

Aside from luck and hard work, I owe virtually all my success from people and books which told me what I know, again, but often enough, and maybe some valuable lessons actually sink in, even for my rock hard head. LOL

Oh, and the work ethic wouldn't have happened without that being repeatedly pounded into me many times a year, from both my parents, and quite a few teachers.

I used to be a fairly strong tournament chess player, and read about the great players. I was fascinated that some of the top chess grandmasters focused most on things that ALL decent chess players know (or should) -- fundamentals that improve positions and help keep you out of trouble. That, vs. endless work on new opening theory, flashy attacks, etc.

Even for the best in the world at X, focusing on "doing what you know already", and doing that consistently, is often key to success.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby evilgenius » Sat 16 Oct 2021, 10:55:53

Write what you know. Spot on.

Oh, I meant to say about the 20 share thing, not to belabor it, that if I have fewer shares than that in a position with a share value in some affordable range, I will feel anxious until I get a certain number of shares.

Forgetting about them isn't really what you do. It is that, in order to properly diversify, I can't just pay attention to them. While something else is a better opportunity, I will still, however, feel the emotional drive telling me I should have been concentrating like that Rich Guy person says we should. It is easy to doubt the wisdom of diversification. All you have to do is get greedy.

It says something about how important our states of mind are sometimes, to our own understanding of ourselves.
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Re: Stock Market Crash! (merged) Pt. 22

Unread postby rangerone314 » Wed 27 Oct 2021, 15:16:54

Outcast_Searcher wrote:OTOH, pretending the entire world runs on set X of conspiracy theories has never been credible.

And yes, tax laws and the system do favor the super rich. And yes, I'd prefer to help fix that with something like the "FAIR" tax system. But of course, since the politicians want re-election above all, THAT isn't happening, at least not in the US.

But just because the system is flawed, assuming you have a good handle on the key conspiracy theories because you believe in meme X doesn't make it so.

How much economics training re books and classes have you had? Microeconomics largely WORKS. The theory matches reality, in the main, at least in terms of being able to make reasonable predictions about economic entities like businesses and investors and workers and customers.

And now behavioral economics works like a standard science, doing experiments on groups of people to verify and improve theories.

Just claiming all that is "a house of lies" doesn't make it credible.

For example, are you going to claim that the theory of supply and demand doesn't work at all? (If so, that's pretty much lunacy, given all the evidence).

I took macroeconomics AND microeconomics in the late 80's, while pursuing an accounting degree until my junior year. Supply and demand does work. Funny though, that cartels and politicians can control supply, and that demand can be manipulated. (Edward Bernays has entered the chat)

And its not a conspiracy to say that a bunch of corrupt people with economic control and power will act in their best interests against other people. They don't need to have meetings in Davos to engineer conspiracies, anymore than a hundred thousand mice in a grain silo or a flock of locusts in a field need to conspire in order to eat all the grain.

Also, Libor manipulation is a thing.
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