All about Investments!

[DireWolfSpirit]

I have a workmate who left his coin on FTX.

He was not sucessful at completing any of his transfer attempts, which were all met with NSF (No Such Funds) messages.

With the exchanges bancruptcy he's well on the path to being an unsecured creditor, left holding a bag of confetti.

Watching this guy eschew any prudence warnings and his general arrogance over the last several months, has been gratifying for me as I've feined surprize and concern with his stories of how "China has stole his marbles!"

[DireWolfSpirit]

Ron Insana on his lack of surprize at the FTX collapse-

https://www.cnbc.com/amp/2022/11/10/insana-the-manic-speculation-behind-the-fall-of-ftx-is-as-old-as-the-markets-themselves.html?recirc=taboolainternal

"Crypto, in my humble — but seasoned — opinion has been a Ponzi scheme all along. There is no there there."

 Whether it's manias in Sumerian grain markets, Dutch tulip bulbs, railroad bonds and everything from internet service providers to digital currencies, leveraged speculation is as old as markets themselves.

[Kalnak the Magnificent]

I thought this was an excellent, funny indepth analysis of what ftx did and why it was so incredibly shaky. It reminded me a lot of the Big Short and how that walked through how sketchy it all is. And yeah, it is super sus. Come for the approachable explanation, stay for the Visage of a bloody clippy warning you of the eldritch horrors you committed on the balance sheet.

https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-balance-sheet-was-bad?leadSource=uverify wall

[Paxter]

The market rally is starting to run out of steam now as earnings season concludes and investors start to look forward to next year. We are hitting the key technical upper bound (around 4,000 on the S&P) and just sort of sitting there. 

While inflation is easing a little, most economies are still performing well (even Germany has surprised a little to the upside recently). I wouldn't be surprised if we are a year away from seeing the full impact of all this tightening. 

[Jeor]

Well, there was a big rally on Wall Street based on Powell's comments but I don't know what the fuss was about. He basically said that they would probably look to have a smaller hike in December but I thought that was already baked into expectations, so the rally seems a bit silly to me - people are desperate for good news, I guess.

I think the consensus is that there will be a Christmas type of rally over the next month but things will get decidedly bearish next year. A contrarian might still buy in but valuations are not looking as cheap now. The big unknowns are how the oil price is going to go in the future (in the face of EU cap on Russian oil) and how China deals with its constant lockdowns.

Everyone assumes that China is going to eventually reopen, but the timing is quite uncertain, and if they botch the reopening and have lots of deaths and political unrest, that will be lethal for stocks. 

I'm mostly sitting tight for now. The core part of my portfolio is unchanged as its a fairly defensive mix anyway (telco, bank, mining, energy, global ETF), has slightly lagged the market in the past two gangbuster months but if there's a drawdown or sideways move to quality it should perform well. The core represents about 70%, cash is 15% and the remaining 15% are small holdings (consumer discretionary, gold, small cap fintech, small cap miner).

[Paxter]

These face-ripping rallies after Fedspeak are always a good laugh.

You can see that the market is still trying to price in the odds of a soft vs. hard landing for the global economy. Any time a soft landing seems more likely (like today), people pile back in. My view is that, even with a soft landing, we will still see a material slowdown in the economy and some sort of associated market adjustment. And as you say, if oil/energy and China don't co-operate, there are plenty of other perils outside of core inflation. 

Edited December 1, 2022 by Paxter

[Jeor]

It's the old investor conundrum, investing on the basis of fundamentals or investing based on expectations and crowd psychology, because the two can have very different outcomes. The crowd can be "wrong" for a long time like Wile E Coyote running off a cliff before they fall, and there's every chance they can run onto another piece of solid ground so they don't have to fall at all.

Personally I've worked out that I would have the most regrets if I followed the crowd and then the fundamentals proved me wrong rather than the other way around. And at least in the short term, I'd much rather miss out on a rally than buy into a correction. So the current time is probably a textbook case (at least for me) for remaining mostly cautious and not chasing things too much.

[Paxter]

1 hour ago, Jeor said:

It's the old investor conundrum, investing on the basis of fundamentals or investing based on expectations and crowd psychology, because the two can have very different outcomes. The crowd can be "wrong" for a long time like Wile E Coyote running off a cliff before they fall, and there's every chance they can run onto another piece of solid ground so they don't have to fall at all.

Personally I've worked out that I would have the most regrets if I followed the crowd and then the fundamentals proved me wrong rather than the other way around. And at least in the short term, I'd much rather miss out on a rally than buy into a correction. So the current time is probably a textbook case (at least for me) for remaining mostly cautious and not chasing things too much.

I agree. This is more an occasion to just dollar-cost average rather than try to time the market. 

Things could get very ugly if we get a hard landing.

[Wade1865]

On 11/2/2022 at 10:26 PM, Wade1865 said:

TOTAL. Higher, -14% to -2%.

TOTAL [100%]. Higher, -2% to +0.2%. I'm once again barely one asthmatic nostril above water; though, I'm confidently (and intently) expecting to return underwater during 2023. I feel like I'm on a roller coaster (experiencing butterflies in the stomach), nearing a peak, just before the plunge. This is me now, the center image; however, given the anxiety on Wall Street, I'll eventually resemble the bottom image.

***

T [29%]. Higher, -2% to +2%.

MMM [19%]. Lower, 0% to -1%.

KHC [18%]. Higher, +6% to +11%. Like XOM, before realizing capital gains, KHC is now primarily (albeit more moderately) responsible for keeping me above water. I suppose it represents flight from tech to safety. I don't know, but if so, it's been informative.

AMZN [13%]. Lower, -6% to -7%.

DOW [8%]. Higher, 0% to +2%.

WBD [2%]. Lower, -32% to -43%.

CS [1%]. Lower, 0% to -4%. This bank has been decimated as a result of scandals and bad practices. I'm expecting it to recover as something being too big to fail (e.g., BAC, BP, et al.). Still, I consider it my biggest risk and won't be surprised if I lose the entire holding.

CASH [10%]. Almost depleted after adding DOW, MMM, and CS. The intent is to restore CASH to 45-50%, ready to exploit a potential stock market crash during 2023. Unfortunately, liquidating real estate hasn't been a quick process given how everyone seems to be holding their breath while anticipating a housing crash. Thus, with time running out, I may have to retain the bulk of my assets in real estate, sacrificing the certainty of greater stock market gains.

***

TWR. Despite approximately a decade and a half of reckless exposure, I'm still technically a noob and probably misunderstood my cumulative return. And to be honest, I'm not sure if my updated reading is correct: all-time high at +36%; now lower, +29%.

STRATEGY. I've come to accept that I may not actually have a concrete investing strategy, hahaha. My understanding of stock fundamentals is negligible beyond dividend yields and P/E ratios. More, my actions are based mostly on global events and the crowd, though I have a reliable understanding of social behavior especially when there's chaos. I suppose my investing strategy is nothing more than winging it by jumping in when conditions are so bad that recovery will result in gains no matter what; of course, this prevents me from realizing maximum profits. Pray for me.

[Jeor]

On 12/8/2022 at 4:27 PM, Wade1865 said:

STRATEGY. I've come to accept that I may not actually have a concrete investing strategy, hahaha. My understanding of stock fundamentals is negligible beyond dividend yields and P/E ratios. More, my actions are based mostly on global events and the crowd, though I have a reliable understanding of social behavior especially when there's chaos. I suppose my investing strategy is nothing more than winging it by jumping in when conditions are so bad that recovery will result in gains no matter what; of course, this prevents me from realizing maximum profits. Pray for me.

The starting place for a strategy would be to determine your investment goals and your risk appetite, and then the rest tends to write itself. I have a one-page summary that I revisit each year. In investing terms I'm still relatively young (36) so I'm prepared to dabble in equities which tend to be the riskiest of assets (I'm not counting crypto as an asset!).

I have a double goal, (1) to beat the returns of the ASX200 and (2) to beat my mortgage rate, the latter of which is kind of obvious given the opportunity cost of investing in stocks means I'm not paying down the mortgage as much. This second goal is going to get tougher in the future, I think. And in terms of the first, in order to beat the ASX200 that tends to indicate stock-picking as the main strategy.

There are a lot of tactics after that - how you make investment decisions, allocate your capital, what other investing rules you might have. But I reckon start with a goal, examine your risk appetite, and then go from there.

[Paxter]

I think if your investment horizon is long, this is a pretty good time for anyone to cost average into the market.

For anyone with liquidity needs, this is a complete stinker and I would be allocating mainly to cash or short duration fixed incomes. 

These fast tightening cycles are rare and rarely good. 
 

Edited December 10, 2022 by Paxter

[Wade1865]

A day after Jerome's 50 bp hike, the markets dropped 2.25%, DJIA; 2.49%, S&P; and 3.23%, NASDAQ. And my overall holdings dropped around 3.25% (!!!). This reaction seems overly dramatic given that 1) it wasn't 75 bp and, 2) it should have been expected. Tomorrow should be interesting.

Given the now steadily declining inflation, I'm sure the next few hikes will be 25 bp, and (as warned), there will be more of them. Unless the war in Ukraine expands / intensifies, or a new one flares in the Pacific, 2023 could realize a softer landing than I anticipated ...

Edited December 15, 2022 by Wade1865
bad at math; dropped lower, from a positive 1% to a negative 2.25%

[Wade1865]

On the FTX scandal -- earlier this month, Caroline was spotted back in the US, and likely to have had assisted the USG against Sam, which explains how quickly this case has progressed. Nearly two weeks later, he was charged and arrested; then denied bail, locked up in Nassau's only prison while continuing to fight against extradition.

Rumor has is that these two will star in the next great financial movie 

[Wade1865]

If I wasn't more than 3 points in the hole and effectively broke, I'd have bid on this. It's made by a famous French designer, Marquette de Cline; a new fragrance, for men.

[Wade1865]

Me (15JAN22): I can't believe it, after 40 years of hard work, I can finally retire by the end of this year!

Me (15DEC22): hey boss, do you want some Starbucks? Do you like homemade cookies? Hahaha, your jokes are soo funny. How come you're so smart, boss? I'm so grateful to be working here. Of course I can work this weekend!

[Jace, Extat]

11 minutes ago, Wade1865 said:

Me (15JAN22): I can't believe it, after 40 years of hard work, I can finally retire by the end of this year!

Me (15DEC22): hey boss, do you want some Starbucks? Do you like homemade cookies? Hahaha, your jokes are soo funny. How come you're so smart, boss? I'm so grateful to be working here. Of course I can work this weekend!

"The worker of the world has nothing to lose, but their chains, the workers of the world unite."

[DireWolfSpirit]

Dow slides 400 points Friday, bringing three-day losses to more than 1,300 points

Seems like theres plenty of room below for stocks to find.

[Wade1865]

Straddling 500, now. I have no idea if Power Hour will realize more of the same or an upswing -- short-term movements make no sense to me (yet)!

The CNN Business Fear & Greed Index is leaning towards a fear-driven market. A week ago, people were neutral. A month ago, greed. Anecdotally, I don't feel panic, but there's anxiety.

And I'm down another point, overall holdings now at -3.33%  

[Wade1865]

Bitcoin holding at a bit under $17K USD! Ethereum, less than $1200. These major coins could weather the exchange fiascos! They could survive and thrive sometime in the future.

Dogecoin at $0.81

[Wade1865]

16 hours ago, Fire and Jace said:

"The worker of the world has nothing to lose, but their chains, the workers of the world unite."

Fire and Jace -- SBUX workers are still pursuing this. 100 stores (110 during the 1-day strike back in NOV) plan a 3-day strike. As a point of reference, there's 9000 company-run stores. Uncle Joe (known to be the biggest supporter of unions) and I will pray for them!

"So far, the labor disputes haven’t appeared to dent Starbucks’ sales. Starbucks said in November that its revenue rose 3% to a record $8.41 billion in the July-September period."