Preparing for the Crash

Prism

bd10 said:

Whether this is a mere 10-20% correction or an 70-80% correction, only time can tell. What actually triggered Monday's sell off? There were no real data releases aside from the usual suspects in the calendar, no fluke Fed speech, perhaps the Tesla/Bitcoin hangover story? Don't know. I doubt rates really triggered it, the curve steepening and 10's selling off (inflation expectation, Biden stimulus) was way too obvious and it has been going on for weeks and months. If we cannot point to a specific event that caused this, I would venture to speculate that this sell off is more serious than we might think.

What sell off would that be? The markets have dropped between 1 and 2%. Hardly a correction yet. I'm not sure there is anything to see here.

Thrugelmir

Prism said:

bd10 said:

Whether this is a mere 10-20% correction or an 70-80% correction, only time can tell. What actually triggered Monday's sell off? There were no real data releases aside from the usual suspects in the calendar, no fluke Fed speech, perhaps the Tesla/Bitcoin hangover story? Don't know. I doubt rates really triggered it, the curve steepening and 10's selling off (inflation expectation, Biden stimulus) was way too obvious and it has been going on for weeks and months. If we cannot point to a specific event that caused this, I would venture to speculate that this sell off is more serious than we might think.

What sell off would that be? The markets have dropped between 1 and 2%. Hardly a correction yet. I'm not sure there is anything to see here.

Depends which "market" you are trading. The more concentrated the stock selection the  greater the pain. 

bd10

Prism said:

bd10 said:

Whether this is a mere 10-20% correction or an 70-80% correction, only time can tell. What actually triggered Monday's sell off? There were no real data releases aside from the usual suspects in the calendar, no fluke Fed speech, perhaps the Tesla/Bitcoin hangover story? Don't know. I doubt rates really triggered it, the curve steepening and 10's selling off (inflation expectation, Biden stimulus) was way too obvious and it has been going on for weeks and months. If we cannot point to a specific event that caused this, I would venture to speculate that this sell off is more serious than we might think.

What sell off would that be? The markets have dropped between 1 and 2%. Hardly a correction yet. I'm not sure there is anything to see here.

Nasdaq on Monday & Tuesday. Valuations in other sectors or markets have not been that stretched. Best case it could be a little breather like on Sep 3rd and 4th.

[Deleted User]

Thrugelmir said:

ZingPowZing said:

Also, it’s worth stating that those holding good gains are best placed to face a prospective crash. 

Prefer cash myself. 

Yes, you keep saying. That and top-slicing, taking a profit, reversion to the mean, fang overvalued, long experience, rebalancing, late stage economic cycle etc  etc.

But if you invest on the assumption that we are in bubble territory where a correction is always just round the corner, that comes with an opportunity cost that doom-mongers are shy to acknowledge, let alone quantify. The “stopped clock” brigade are never wrong, just waiting to be proved right.

Long term, it’s a losing strategy.

Thrugelmir

ZingPowZing said:

Thrugelmir said:

ZingPowZing said:

Also, it’s worth stating that those holding good gains are best placed to face a prospective crash. 

Prefer cash myself. 

Yes, you keep saying. That and top-slicing, taking a profit, reversion to the mean, fang overvalued, long experience, rebalancing, late stage economic cycle etc  etc.

But if you invest on the assumption that we are in bubble territory where a correction is always just round the corner, that comes with an opportunity cost that doom-mongers are shy to acknowledge, let alone quantify. The “stopped clock” brigade are never wrong, just waiting to be proved right.

Long term, it’s a losing strategy.

Invest on the basis of assumption? Long term, it’s a losing strategy? The “stopped clock” brigade are never wrong, just waiting to be proved right? 

What complete twaddle. Sounds as if you've an awful lot to learn and experience yet. 

[Deleted User]

Thrugelmir said:

ZingPowZing said:

Thrugelmir said:

ZingPowZing said:

Also, it’s worth stating that those holding good gains are best placed to face a prospective crash. 

Prefer cash myself. 

Yes, you keep saying. That and top-slicing, taking a profit, reversion to the mean, fang overvalued, long experience, rebalancing, late stage economic cycle etc  etc.

But if you invest on the assumption that we are in bubble territory where a correction is always just round the corner, that comes with an opportunity cost that doom-mongers are shy to acknowledge, let alone quantify. The “stopped clock” brigade are never wrong, just waiting to be proved right.

Long term, it’s a losing strategy.

What complete twaddle. Sounds as if you've an awful lot to learn and experience yet. 

Hopefully. And some lessons no doubt will be painful. Still, better than sounding like you made up your mind about everything years back. Then waiting for the world to conform to your view.

For example, Thrugelmir has cautioned against Apple shares, deeming them overvalued for quite a while, thus foregoing (at least) the last 700% appreciation (plus dividends) since this thread: 
https://forums.moneysavingexpert.com/discussion/4279851/apple-shares-invest-or-not-invest/p1

There's nothing wrong with stating and restating a position in definite terms - and one day it may be proved right - but there is a cost to sitting out the dance.

thegentleway

bd10 said:

Whether this is a mere 10-20% correction or an 70-80% correction, only time can tell.

70-80% wouldn't be a correction; that's a collapse, which is very unlikely to happen. I think 40-50% is a more reasonable worst case.

Thrugelmir

ZingPowZing said:

Thrugelmir said:

ZingPowZing said:

Thrugelmir said:

ZingPowZing said:

Also, it’s worth stating that those holding good gains are best placed to face a prospective crash. 

Prefer cash myself. 

Yes, you keep saying. That and top-slicing, taking a profit, reversion to the mean, fang overvalued, long experience, rebalancing, late stage economic cycle etc  etc.

But if you invest on the assumption that we are in bubble territory where a correction is always just round the corner, that comes with an opportunity cost that doom-mongers are shy to acknowledge, let alone quantify. The “stopped clock” brigade are never wrong, just waiting to be proved right.

Long term, it’s a losing strategy.

What complete twaddle. Sounds as if you've an awful lot to learn and experience yet. 

Hopefully. And some lessons no doubt will be painful. Still, better than sounding like you made up your mind about everything years back. Then waiting for the world to conform to your view.

  

 Funnily enough I don't hold fixed views. Just been around long enough to hear the same mantra's being recited over and over.  You can always tell newbie's. As it all becomes emotional and try to make it personal, i.e. throwing mud by digging up the past in a attempt to belittle. A post from 2012?  Would have thought that you had better things to do with your time as a serious know it all well informed investor. In fact I'd suggest that your the one with fixed views and inflexible attitude. 

Thrugelmir

thegentleway said:

bd10 said:

Whether this is a mere 10-20% correction or an 70-80% correction, only time can tell.

70-80% wouldn't be a correction; that's a collapse, which is very unlikely to happen. I think 40-50% is a more reasonable worst case.

Depends on how long the casino type attitude to the stock market , particularly in the USA, prevails. Ultimately companies have to generate revenues , and most importantly cash. Without which current price levels of certain stocks become totally meaningless. Following social media trends could result in a lot of burnt fingers. Institutional players can game the system too. 

[Deleted User]

While playing the superior experience card does tend to predictability; I think you have *some* good advice, Thrugelmir.

It's not personal. It's calling attention to the fact that, in the main, those why cry wolf get a very easy ride in the world of financial news consumption because they are rarely called to account for the opportunity cost of their positions but when, finally, markets turn, they are generally treated like mystics. And, of course, it's a short hop from predicting a correction to hoping for one.