Talking Stocks 2.0

[Kowaco]

Originally Posted by SMD

It took a lot longer than that. S&P peaked in October 2007, took until March 2009 to bottom out (down 54%) and then took until 2013 to get back to 2007 levels. So 6 years. We are at most in the top of the second inning on this.

You are correct.

One mistake I made was being afraid to invest during that period 2008-2013. In my case the money going into my 401K went into cash or bonds. If I had continued to put money into the market I would have broken even much sooner. Right now my 401K is fully invested in equities. I can’t predict the future but my cost basis goes down every 2 weeks.

Best of luck to everyone


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[Doc Savage]

Originally Posted by SMD

Lasted longer than that. Took 6 years to get back even and 18 months to bottom.

https://www.rolexforums.com/showpost...&postcount=775

This is going to go a long time until we get back where we started. Every single state and municipality is severely underwater on their pension obligations. They will need to raise taxes or cut spending. This will be a slow bleed that will take years to come to fruition. Massive layoffs. Mortgage defaults MBS’s defaulting and on and on. Entire industries are being decimated. And we are now drilling into people’s heads to avoid public spaces, avoid large gatherings, busy restaurants, be fearful, etc. This will continue for months and months. And then what, people will just jump back and go to large festivals like lolla? Everyone will go back to pre-corona days with no change in behavior? This is going to be years to climb out of the hole we are digging.

Way too much happy talk in here.

Edit: My numbers are for S&P as it is more reflective of the market than the Dow.

Good catch. I ran a quick chart review today and somehow transposed dates. 17 months from Market top to bottom in the Dow. Long (unnecessarily long) recovery for sure.

The only reasons for hope right now for a faster recovery than the one that started in 2009 are two-fold: 1) The last one was created by widespread systematic banking fraud that ran deep into our financial sector; this one is not. 2) the Fed government seems to recall how poorly the recovery went when the majority of the financial bailouts went to the financial sector. The rumblings in Washington right now are much more oriented toward providing financial relief to workers, in addition to providing liquidity to credit markets. Done properly, these efforts have a real chance at ameliorating the pain and suffering of this crisis. There are political challenges in this approach from the elected officials who don't believe in helping working people at times like this, but there is hope they will do it right this time.

I'm not saying it will work for sure, but I am much more positive on the recovery outlook than I was in 2009.

As far as municipalities with undercapitalized pensions - that existed before Covid-19. I'm not sure how that is going to worsen what we have going right now. Mortgage defaults might well be largely avoided, depending on how the personal bailout packages unfold. This particular tragedy is avoidable if we can get Washington to step up.

[RyanO]

Appreciate everyone’s insights. I think an important question to ask right now is what the current equities market is pricing in in terms of a recovery in the pandemic.

Curious to hear everyone’s thoughts on this. Have we priced in 2 months before things begin to return to normalcy, or 6 months? Or are we priced as if we’ll be back to business as usual in 2 weeks and when that doesn’t happen, the bottom is going to fall out?


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[bryan13]

The fed is relaunching the primary dealer credit facility.

[enjoythemusic]

Originally Posted by bryan13

The fed is relaunching the primary dealer credit facility.

Shocking, totally unheard of, and very surprising given the banks are in great shape! Banks have plenty of reserves and capital, even better than the 2008 market situation says CNBC... and you know they always give accurate data to benefit their viewers (can you sense the sarcasm?)

PDCF, AMLF and MILF... i mean MMIFF.

https://www.federalreserve.gov/newse...y20200318a.htm


Still need more, much more... directly into consumers' hands. About 5k minimum, 10k per considering the eventual duration of this event.


The next question is, how fast will the FDIC burn through their mere 1.41% reserves, which is below the tiny 2% reserve threshold?
https://www.fdic.gov/bank/analytical...chartdif1.xlsx

https://www.fdic.gov/deposit/insurance/fund.html

[beshannon]

Originally Posted by RyanO

Appreciate everyone’s insights. I think an important question to ask right now is what the current equities market is pricing in in terms of a recovery in the pandemic.

Curious to hear everyone’s thoughts on this. Have we priced in 2 months before things begin to return to normalcy, or 6 months? Or are we priced as if we’ll be back to business as usual in 2 weeks and when that doesn’t happen, the bottom is going to fall out?


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All of the above

I do not think anyone is able to price anything in at this point.

When Is the Right Time to Buy Stocks?

https://theirrelevantinvestor.com/20...to-buy-stocks/

All I know is that I have been trying to selectively add high quality stocks with yields and fortress balance sheets. This will get better and when it does, then someone will be able to better adjust guidance.

[mountainjogger]

I just posted this in the CV Outbreak thread. It is an article from MIT Technology Review which discusses application of the measures advocated in the the Imperial College report and possible recurring societal changes during the next 18 months, and then possible permanent changes like we saw with 9/11.



Edit link for typo: https://www.technologyreview.com/s/6...ing-18-months/

I am not an investor. Having gotten out safely twice by luck, I made a personal decision not to go back.

But I find the subject interesting and important to where the world goes from here. As such, I assume at some point successful businesses, government intervenors in the economy and investors will be taking these potential cycles into account.

Thoughts?

[beshannon]

Originally Posted by mountainjogger

I just posted this in the CV Outbreak thread. It is an article from MIT Technology Review which discusses application of the measures advocated in the the Imperial College report and possible recurring societal changes during the next 18 months, and then possible permanent changes like we saw with 9/11.

https://www.technologyreview.com/s/6...ing-18-months/

I am not an investor. Having gotten out safely twice by luck, I made a personal decision not to go back.

But I find the subject interesting and important to where the world goes from here. As such, I assume at some point successful businesses, government intervenors in the economy and investors will be taking these potential cycles into account.

Thoughts?

Link does not work

[mountainjogger]

Originally Posted by enjoythemusic

Still need more, much more... directly into consumers' hands. About 5k minimum, 10k per considering the eventual duration of this event.


The next question is, how fast will the FDIC burn through their mere 1.41% reserves, which is below the tiny 2% reserve threshold?
https://www.fdic.gov/bank/analytical...chartdif1.xlsx

https://www.fdic.gov/deposit/insurance/fund.html

Very good points. May be looking at an 18 month period of up then down disruptions. And then a changed landscape.

Stay safe.

[mountainjogger]

Originally Posted by beshannon

Link does not work

Sorry. Try this.

https://www.technologyreview.com/s/6...ing-18-months/

[beshannon]

Originally Posted by mountainjogger

Sorry. Try this.

https://www.technologyreview.com/s/6...ing-18-months/

Well I am not sure what to say.

Social distancing is only having nominal effects given how many people are simply ignoring the directive.

As long as someone has the virus . . . from the article, yes I think it will always be around

Testing, vaccinations who knows how long?

Change will come but I suspect most things will go back to the way they were or close to it.

Anyone remember 9/11 and DROC plans? I know of several organizations who never prepared or updated them and now they are in a quandry.

Bottom line, you cannot change behavior and most people will do whatever they want.

[mountainjogger]

Originally Posted by beshannon

Well I am not sure what to say.

Social distancing is only having nominal effects given how many people are simply ignoring the directive.

As long as someone has the virus . . . from the article, yes I think it will always be around

Testing, vaccinations who knows how long?

Change will come but I suspect most things will go back to the way they were or close to it.

Anyone remember 9/11 and DROC plans? I know of several organizations who never prepared or updated them and now they are in a quandry.

Bottom line, you cannot change behavior and most people will do whatever they want.

Good points Brian.

My question is whether government intervention will take these possible up and down cycles into account with economic inventions. And whether the market will have similar cycles.

As to long term changes, get your point and agree on changing human behavior.

But, 9/11 has given us lasting airport screening, travel document requirements and data collection that we would have all scoffed at in the 1990's. And it has placed limits on financial transactions. And we have added bureaucracy to implement this and whole industries have developed in the private setting to carry the work.

Trillions of dollars have been spent to fight the threat and perceived threat of terrorism. And behaviors have been modified.

Question whether CV will bring the same. But I am pretty sure at least some businesses will model these possibilities and try to position themselves.

Stay safe.

[JParm]

For those still looking to buy, W and PINS appear to be interesting prospects to me, along with the aforementioned USO.

Not giving advice by any means (I am the FURTHEST thing from an expert around these parts), but just wanted to share things that have caught my attention.

[jaisonline]

Pretty good thread you all have here. Ample excellent content,

The recession / depression (& bull vs. bear ) charts and tables I’ve seen on past pages are awesome for research.

I'm also watching a list I bought together last month. Did some searches here and saw NVAX was a company people loved to hate for years.

Anyway, just waiting to see a more realistic floor like I was lucky enough to do w/ some companies in 2009.

[RyanO]

Originally Posted by beshannon

All of the above

I do not think anyone is able to price anything in at this point.




https://theirrelevantinvestor.com/20...to-buy-stocks/

All I know is that I have been trying to selectively add high quality stocks with yields and fortress balance sheets. This will get better and when it does, then someone will be able to better adjust guidance.

Thanks for sharing mate.


“One last chart I want to leave you with is a long-term look at the Dow. Bear markets all have one thing in common, they end.”

I have been adding too, but the headlines sure are gut wrenching.


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[beshannon]

Originally Posted by RyanO

Thanks for sharing mate.


“One last chart I want to leave you with is a long-term look at the Dow. Bear markets all have one thing in common, they end.”

I have been adding too, but the headlines sure are gut wrenching.


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Agreed and there is one thing I do know.

It will get worse before it gets better

[RyanO]

Originally Posted by beshannon

Agreed and there is one thing I do know.



It will get worse before it gets better

Everyone has been saying that, and I agree, but do you mean the markets? Or the health crisis situation? Have the markets priced in the end of the world? Just thinking out loud ..


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[vman]

I am a veteran of several depressions, major monetary crises, and so on. "Keep calm and carry on" has always been my motto.

My investments continue on schedule. If things get better, I will probably make a penny or two. If the markets dive and our civilization enters a new permanent age of chaos, depression, and panic, the monetary losses will not matter that much.

The bottom line: investments are a game. The broader question is: can you live with yourself after losing it all?

[beshannon]

Originally Posted by RyanO

Everyone has been saying that, and I agree, but do you mean the markets? Or the health crisis situation? Have the markets priced in the end of the world? Just thinking out loud ..


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Both, IMHO

Infections have not peaked and selling has not stopped

Fear is ruling decision making for most people at this point, only you can decide how to manage your life

[beshannon]

Here is one way I am looking at this entire situation:

This is NOT a stock recommendation, do you own homework.

I own ABBV

AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV)

https://www.cnbc.com/quotes/?symbol=ABBV&qsearchterm=

The stock has an HIV drug that was tested against COVID-19

AbbVie (ABBV) – AbbVie’s Kaletra HIV treatment did not prove effective against the coronavirus, according to a study released by the New England Journal of Medicine.

The stock is down 3% in the premarket after this announcement. Why? At this price the current yield is 6.65%, just doing what they were already doing.

Is their business going to be hurt? Possibly but people still need the drugs they make, likely getting them with insurance. The stock is being sold on fear and disappointment with the announcement.

If I did not already own ABBV I would be looking at this stock to add, again this is NOT a recommendation just showing some of the stocks I analyze to get through this

[77T]

Eerie NYSE silent trading open a minute ago. Just so used to hear that clinging bell...almost somber with its absence.


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[RyanO]

Originally Posted by beshannon

Both, IMHO



Infections have not peaked and selling has not stopped



Fear is ruling decision making for most people at this point, only you can decide how to manage your life

I found this perspective interesting


https://www.cnbc.com/2020/03/18/stoc...art-hogan.html


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[beshannon]

Originally Posted by RyanO

I found this perspective interesting


https://www.cnbc.com/2020/03/18/stoc...art-hogan.html


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Yes I saw that and I agree with him

[beshannon]

Slow steady grind down, seems like people are in full capitulation mode, willing to sell at any price, even taking losses to try and prevent more losses.

This is usually a sign of base building

If you ignore the major indices (Dow, S&P) many stocks are green at the moment, AMZN, MSFT, AVGO, GILD, WMT, A/D line is only 3/1 on the down side. Number of new 52 week lows through yesterday shrank.

Some positive signs

[enjoythemusic]

Originally Posted by mountainjogger

Very good points. May be looking at an 18 month period of up then down disruptions. And then a changed landscape.

Imagine the loan defaults to MANY banks both major, regional, and credit unions. Seems some are only focussing on right now, and not the ACTUAL long-term ramifications and what companies won't survive this. This is a 'game' of 3D chess folks, not checkers.


This Just In
on Thursday morning (that's today) the Federal Reserve announced the establishment of temporary U.S. dollar liquidity arrangements (swap lines) with:

the Reserve Bank of Australia
the Banco Central do Brasil
the Danmarks Nationalbank (Denmark)
the Bank of Korea
the Banco de Mexico
the Norges Bank (Norway)
the Reserve Bank of New Zealand
the Monetary Authority of Singapore
and the Sveriges Riksbank (Sweden).

According to the release, "these facilities, like those already established between the Federal Reserve and other central banks, are designed to help lessen strains in global U.S. dollar funding markets, thereby mitigating the effects of these strains on the supply of credit to households and businesses, both domestically and abroad."

How much dollars will be available? As per the release, the Fed will release up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank and $30 billion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank of New Zealand.


https://www.zerohedge.com/markets/fe...d-dollar-short

[beshannon]

Originally Posted by enjoythemusic

According to the release, "these facilities, like those already established between the Federal Reserve and other central banks, are designed to help lessen strains in global U.S. dollar funding markets, thereby mitigating the effects of these strains on the supply of credit to households and businesses, both domestically and abroad."

How much dollars will be available? As per the release, the Fed will release up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank and $30 billion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank of New Zealand.


https://www.zerohedge.com/markets/fe...d-dollar-short

This is a very good thing!

[beshannon]

Up 700 from the bottom, buyers looking for value and finding it

[Patton250]

You shut down the world economy then a whole crap load of loans aren’t going to be paid. Then banks collapse. After that..........

We had better get back to work and quick or all these conversations you gentlemen have been having over the past few days about stocks will be the least of your concerns.

[JParm]

Originally Posted by beshannon

Up 700 from the bottom, buyers looking for value and finding it

That's what I'm doing.

[Bearxj86]

Originally Posted by Patton250

You shut down the world economy then a whole crap load of loans aren’t going to be paid. Then banks collapse. After that..........

We had better get back to work and quick or all these conversations you gentlemen have been having over the past few days about stocks will be the least of your concerns.

I think the 2-3 week quarantine is all we can do for the economy. After that I think the following should/would happen, an 18 month long periodic shutdowns would kill the world economy and take us to the stone ages:

1) Massive response to build respirators - the key bottleneck between 2 million and 4 million deaths in the US
2) Isolation and self-quarantine of 65+ years old and immuno-compromised where death rate is predicted between 8-15%
3) Do what is happening in China/Asia - EVERYONE wears at least a surgical grade mask everywhere and practices safe hygiene to mitigate transmission. Trust me, everyone in Asia is laughing at people like Dr. Oz and WHO who say not to wear masks.
4) Continue sanitation and prevent large gatherings of high risk transmission (Gyms/Yoga Studios).
5) Mandatory periodic sanitation of "high touch areas" - Gas stations, public restroom door handles, door handles. Heck you may even want to replace them with copper or a material that is less Virus friendly.