Chronicles of fat years [2024-2027 Edition]

Investing / Others
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The autist in me wants to say “priced FOR (evergreen) perfection”, as “to perfection” would mean that they were priced at “Goldilocks just right” levels. I can see myself out.

Edit: and yes, on the hiccups, it’s what I’ve been writing here for a while about people throwing their toys out the pram. More seriously though, Bogle’s (and Vanguard’s, Blackrock’s etc) glide paths and Target Date Funds make perfect sense in my opinion, especially in times like now. I’d made a post here, pasting a table from reddit where someone collected and summarized the stock/bond recommended allocations by all the big asset managers, I can’t find it now but can link it much later in the evening. What’s mildly irritating me is that all the optimizers out there totally miss the HUMAN element in all of this. Kids 20 years old saying “yeaholol all in in TQQQ, I’m good for 40 years from now”, I want to tell them “hey, kid, there’s great chance you won’t be the same person at 25, 30, 35, 40, 50, 60 so have some humility and accept your ignorance about life, and listen more, talk less”.

Again, the latest data (eg shown here, in Ramin Nakisa’s excellent channel) claim that in theory 100% stocks are “the best” at any and all times, yet theory on the screen is different when it comes to us humans behind the screen :wink:

I am very puzzled by all the selling talk on fora and reddit though (not here), enforces my thinking that most people aren’t cut out for this, didn’t do the due diligence, lack critical thinking, didn’t think it through… Selling locks in any loss, why on earth sell now unless one has no money to pay for food? And if they don’t then it’s clear they didn’t plan ahead/think it through.

Reddit seems awash with questions about MMFs, bonds etc fixed income - and, yes, dividends - I’d want to go in and type “if you have to ask the question now it’s already too late”, but I won’t because being a smartass when someone’s scared of hurting is not on in my book.

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316

Because most people say they are long term investors but they are really not :slight_smile:

I am trying my best to be one. And will do my best to „do nothing different“ vs what I was doing for last 3 years.

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317

What is actually the hiccup in this case?
US job news alone can’t be it (in this measure).

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318

As far as I could read

  • jobs report in US on Friday showing unemployment of 4.3% triggering so called Sahm Rule
  • Manufacturing report last week
  • Iran Israel conflict
  • Rise of YEN which is impacting something called „carry trade“
  • Already higher valuations in US markets and stocks priced for perfection
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  • Japan carry trades unwinding, due to BOJ raising rates, Yen jumped 10% compared to USD, this is blowing up in people’s faces. Many now sell USD assets to cover their positions.
  • US in a recession by the Sahm rule triggering
  • Tech companies have been burning lots of cash on AI, but no clear sign of a path to ROI yet, this becomes problematic during times like this.
  • Israel - Iran looks a lot like full-on war coming up since a few days
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320

Recession fears in the US are no big Problem. Butvwhat happens in Japan is a big Problem. Loads of JPI dept that was invested in USD Assets will be unwound. This will keep pushing JPI up, US assets down - and it has the potential of drowning hedge funds and banks. Watch Japan, this is where history is written these days.

If we are lucky, the JPY FX won‘t move much tomorrow. If it goes further up (lets say more than 2%), we are in deep shit.

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321

That’s likely be catastrophic for both countries, it’s unimaginable for me that in 2024 we haven’t evolved a bit more than apes in the jungle that they can’t talk shit through. These are not two tribes of warlords in some mountains, somewhere, these are two advanced countries. Israel is stronger, that’s for sure, but Iran is not a joke of a country either.

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322

Yes Israel / US war will be catastrophic, but shouldnt have a manor impact on shares. Its just a tragedy amd to be honest - I think kt is tile for a regime change in both countries. But lets stay away from politics…

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323

It‘s like most of the times with these kinds of wars: at first big impact on the market, until it‘s clear it‘s regionally constrained and markets are relaxing.

It will however have a bigger impact on oil prices, which will be bad for inflation, is my guess.

324

“Die ganze Börse hängt nur davon ab, ob es mehr Aktien gibt als Idioten oder mehr Idioten als Aktien.” - André Kostolany

classic read for the summer :wink:

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325

Unless you are leveraged or overexposed: Just keep buying!

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326

Please notify us the next time you buy stocks so we know what to short.

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327

Nope, I didn’t. Although I’m thinking of asking my father if he has some cash lying around he won’t need until end of September. Although I can see this drawdown lasting well into autumn so maybe holding off lump summing might prove advantageous.

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328

For those of us who are actually in panic now, here’s your required reading for the day: This is Normal - A Wealth of Common Sense

Summary:

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329

Thanks. Just Keep Crying Buying™ then.

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330

I wanted to simulate how real life investing tests the investor’s grit.

Case 1 -: Investor achieves 5% real growth without corrections over a period of 120 months
Case 2 -: Investors achieves 5% real growth but with 10% correction every 18 months and 20% corrections every 54 months. So in reality growth is 14.75% in general but getting hit by corrections which results in 5% growth.

In each case, 1000 CHF were invested every month.
We can see that even though 5% Real growth for Equities is achievable based on history, the investor would realize drawdowns. Their first bear market would bring them back to invested capital (which means 0% realized return) but if they continue, things would get better.

Final result is same. But I think investors grit is tested very hard. And if they stay invested for longer period, the eventual drawdowns still keep them net positive versus invested capital and thus making it a bit better experience .

Of course this is over simplified because sometimes recovery can take much longer. But I just wanted to simulate the experience

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331

My literally most recent buy from Friday – Power Corp of Canada – is completely unfazed by the markets correcting today.

:tada:

(It trades on the Toronto Stock Exchange and today is a Canadian holiday. :wink:)

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332

The mainstream media are starting to talk about the current stock market slump, mentioning in particular the Asian markets, which are in the red with Japan at -12% and the SMI at -2.60%. The networks start talking about a collapse and, as usual, about the capitalist system being evil, crying about their poverty of spirit.

In all this torrent of negativity, I’m checking my cryptos in the red, my SLI ETF in the red, my VT in the green (for now) and sipping a nice Yuzu syrup, concentrating on what’s important: my health, my girlfriend, my work and my friends, whom I’ll be meeting tonight to play online.

Have a good Monday and buy the dip if you can. I will, as usual, wait the 25th for my monthly DCA :wink:

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333

I know your comment was tongue in cheek but just in case: I would advise picking up the phone in case of margin call. It is a courtesy of the broker, giving you an opportunity to inject more cash to sustain your position. The alternative is liquidation.

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334

Had to look up Yuzu … sounds tasty — where do you get the syrup?*

So … anyone buying the dip today?

I’m bravely** doing my part in catching the falling knives:

  • spent mid four figures so far to buy additional yearly income of ~$270
  • spread this across BTI, GPN and OXSQ***

I’ll now humbly wait for the market to show me tomorrow and during the rest of the week that today’s falling knives were only pocket knives …

Crocodile Dundee Comedy GIF by Laff

* Bonus points for locally available stuff.

** A grand total of two positions are green in my entire portfolio today:

  • TSN (Tyson Foods, reporting earnings today).
  • A US government note, up 0.01% :sweat_smile:
    Even my bond ETFs (BND, BNDX) have turned into (very slight) correction territory

Oh, and daily P&L is approaching 6 figures … :star_struck: … but I won’t tell you which color. :wink:

** OXSQ was an automatic purchase via a corporate action that I accepted a while ago.

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