Liquidate entire portfolio until virus is over?

Prism

blue_max_3 said:

Prism said:

So Warren Buffet hasn't sold anything but airlines and still has the vast majority of his (and Berkshires) wealth invested in companies and equities. 

But has a fortune in cash, which makes no sense unless you think there is likely to be an opportunity ahead.
https://www.marketwatch.com/story/heres-the-real-reason-warren-buffett-is-sitting-on-a-record-128-billion-in-cash-according-to-one-strategist-2020-03-02

He prefers in general to own full companies rather than investing in equities. So when he is looking for an opportunity he isn't predicting some sort of market crash but is looking for the right company to buy at the right price. That isn't to say he wouldn't use some of that cash to buy equities if there was a crash but I'm not sure you could say he thinks there will be one.

EdGasketTheSecond

blue_max_3 said:

Thrugelmir said:

blue_max_3 said:

I was tempted to invest after the crash, but didn't think we'd bottomed out. Now it's just risen and risen. That makes it an easy decision for me to stay out for now. My view is there is a significant problem getting back to work and every area of business is being effected. The government is surely propping the market up and that will come to an end at some point. 

In what way is the Government propping the market up?

If you see what is happening in the States - google 'is the government propping up the stock market'. And it's clear we are hugely influenced by the States. Much happens behind the scenes and I'm sure our government will do what it can. I don't know this is the case, just suspect.
But there is no way all this devastation is 'factored in' any more. Surely no-one believes that?

That is definitely the case; no doubt whatsoever blue_max_3; markets are being supported by government policy of 0 interest rates, QE causing excessive liquidity driving up markets into a bubble, purchase of junk bonds, purchase of mortgage-backed securities, in fact purchase of just about anything. The FED has about a dozen bailouts going on right now, starting with the Repo market last autumn. That doesn't fix the economy however; people need to be producing goods and services for a thriving economy and I don't see any sign of that.

Blue_max_3, you might like to consider gold while you wait for an opportunity to buy equities back. Gold is cheap relative to equities as per equity / gold ratio chart will show. Gold will also do well due to  the fiat currency debasement which will end in tears probably quite soon; within 2 years is my guess until a currency reset.

blue_max_3

Appreciate the support EdGasketTheSecond. Thought I was the only voice against the masses for a minute!
To be clear, I'm not an economist or clever, but hope I can make a case for taking a different view. I'm not just in denial or plain dumb.
I think it would be cool to actually own a gold bar, but might be a bit stressful as I live in a rented flat
I'm probably going to gravitate to what I know and that is property. I need a place to live, so it's a win, win.
But may dabble if an opportunity presents itself. Depends on how much I have to part with for a place to live...
I certainly want to owe money when the currency devaluation starts to impact though.

EdGasketTheSecond

You don't have to buy a bar of gold to keep in your flat. There are other options such as Gold-backed ETFs, Gold mining stocks or an ETF of gold miners, and also BullionVault where you own vaulted gold outside the banking system if you have a healthy distrust of the banking system.

Property will be coming down in price over the next couple of years so don't jump in too soon, Ed

Alexland

blue_max_3 said:

I think it would be cool to actually own a gold bar, but might be a bit stressful as I live in a rented flat

If you go to the Bank Of England museum they have one you can hold secured in a perspex box (a bit like a Crystal Maze challenge). Last time I was there it was worth £3m but it's probably more now minus what I managed to smuggle out under my fingernails.

EdGasketTheSecond

JP Morgan economist says we are heading for Weimar Republic style inflation:

https://news.maketiplace.com/2020/05/10/former-jpmorgan-economist-we-are-heading-towards-a-weimar-republic-inflation-setup/

bowlhead99

EdGasketTheSecond said:

JP Morgan economist says we are heading for Weimar Republic style inflation:

https://news.maketiplace.com/2020/05/10/former-jpmorgan-economist-we-are-heading-towards-a-weimar-republic-inflation-setup/

No, someone who isn't a JP Morgan economist says that. Someone who claims they once were a JP Morgan economist but won't say what they are now and wishes to remain anonymous when they write their articles.

Rather than giving us the link to their high quality editorial directly on the Zerohedge site (anonymity is a shield from the tyranny of the majority) you instead gave us the Maketi published version.

Maketinews is the Kingdom of Tonga's non-commercial independent news aggregator site for local and international news stories. Purpose: to provide easy and quick access to daily news headlines from Tonga and from around the world all at one site.  

You're really scraping the bottom of the barrel to keep coming up with people who agree with you about Weimar inflation being imminent.

Thrugelmir

EdGasketTheSecond said:

JP Morgan economist says we are heading for Weimar Republic style inflation:

https://news.maketiplace.com/2020/05/10/former-jpmorgan-economist-we-are-heading-towards-a-weimar-republic-inflation-setup/

Certainly a broad suggestion that induced inflation is the only way out of the current printing press frenzy. 

blue_max_3

Thrugelmir said:

Certainly a broad suggestion that induced inflation is the only way out of the current printing press frenzy. 

I wonder how many will cope if interest rates rose to even 5%. Given I have paid 16.25% when I bought my first property, it amuses me that people could never imagine it rising. It's going to catch a lot of people out if the value of their property falls at the same time.
If this plays out Stateside, it could weigh heavily on the stock market too.

kuratowski

blue_max_3 said:
I wonder how many will cope if interest rates rose to even 5%. 

If your theory is right and there is a big conspiracy, that won't happen.  Governments will be hoping to keep interest rates low but inflation rates high and therefore make the debt smaller in real terms without paying high servicing costs.  The name for this is financial repression, and it's how the UK and US escaped from the debt burden of the second world war.