My pension pot is taking a big hit

kinger101

Rattusnorvegicus said:

I buy stuff in my pot that has fallen in value by 60%. I dont really care about whether it returns anything over the next 5 years.  Just so long as it makes me my 250% return by going back to the previous high in a decade timeframe eventually. A (5% usually but halfprice so dividend doubled) 10% dividend along the way sweetens the deal for me.

What would make me giggle alot is if we're in a bear mini cycle until 2029 with 3 bears and 3 failed bulls, as we recover from MMT.

My plan is just to save cash, and buy opportunities hard every bear market, and sell the bulls.  Because right now the FTSE-100 shows a 4% compound future return , and the s&p 500 a 3.53% forward return. Which tells me both are overpriced until inflation drops under 5.5%, or theres more P/E deflation. So not sure where the wishful thinking about 5% comes from.

Of course people should do their own price discovery. People who look at their nominal return need to subract inflation, and look at the real return.

Theres still too much optimism in this thread for the future. Another year of negative real returns hopefully will make people gloomier, and give me hope for a clearly defined bottom. 2023 needs a nice 20% capitulation event, so i can fetch the wheelbarrow and load up.

That's not a good strategy.  Share prices have no memory of what they once were.  Take Lloyds for example....

Rattusnorvegicus

I beg to differ. Its how people get rich, buying as much stock as they can during bear market bottoms. Its true share prices have no memory. But things become very oversold during market panics. The 2009 one is returning 100% ROI YOY if you invested well during it.

Lets use your Lloyds example. it was 16p in 2009.Its now 45.41p, and has paid 17.1p (62.51p). I make that 390% of its original value.

The dividend was 2.13p this year or 13.31%.... In 2019 it paid 3.26p or 20.375%. Lloyds is a real dog. But even those returns blow most investors out of the water this year, making a real terms gain even counting 10% inflation...

Or we could use Persimmon at £1.90 in 2009, is now around £12 (600%) (2021 high of £32 or 1600%) paid out £15.76 (829% of invested value) since then, paying a £2.35 divi last year over 100% of invested value.

Or Rio Tinto, or any one of dozens of stocks.

The evidence is clear. Its an excellent strategy. Ask william the conquerors mates who got nice cheap land, and passed it on through the generations. Buying when others are running around with their hair on fire is the best strategy.

Brie

Rattusnorvegicus said:

Lets use your Lloyds example. it was 16p in 2009.Its now 45.41p, and has paid 17.1p (62.51p). I make that 390% of its original value.

only if you sell

kinger101

Rattusnorvegicus said:

I beg to differ. Its how people get rich, buying as much stock as they can during bear market bottoms. Its true share prices have no memory. But things become very oversold during market panics. The 2009 one is returning 100% ROI YOY if you invested well during it.

Lets use your Lloyds example. it was 16p in 2009.Its now 45.41p, and has paid 17.1p (62.51p). I make that 390% of its original value.

The dividend was 2.13p this year or 13.31%.... In 2019 it paid 3.26p or 20.375%. Lloyds is a real dog. But even those returns blow most investors out of the water this year, making a real terms gain even counting 10% inflation...

Or we could use Persimmon at £1.90 in 2009, is now around £12 (600%) (2021 high of £32 or 1600%) paid out £15.76 (829% of invested value) since then, paying a £2.35 divi last year over 100% of invested value.

Or Rio Tinto, or any one of dozens of stocks.

The evidence is clear. Its an excellent strategy. Ask william the conquerors mates who got nice cheap land, and passed it on through the generations. Buying when others are running around with their hair on fire is the best strategy.

But you said you buy when the share price has fallen by 60%.  The 1999 peak was around 470.  Which means you'd have bought in July 2002 when they were priced at 188.  

We can all pick historic dates when it was a good time to buy shares and later sell them.  Just like we can all pick last week's winning lottery numbers or place a 12-race accumulator after the horses have all passed the post.

You've mistaken identifying value with catching falling knives.

Rattusnorvegicus

Why would you sell shares you bought at 16p, that paid out 2.13p or 13.31% in 2022. You'd stash the cash and wait for the next market panic, and buy more. Inter-generationally its likely lloyds will be around for the next 200 years. Wealth creation is a slow process unless you like to gamble.

You should never sell shares you buy in the bottom of a bear. Thats where all the wealth is created for the future.

Rattusnorvegicus

kinger101 said:

Rattusnorvegicus said:

I beg to differ. Its how people get rich, buying as much stock as they can during bear market bottoms. Its true share prices have no memory. But things become very oversold during market panics. The 2009 one is returning 100% ROI YOY if you invested well during it.

Lets use your Lloyds example. it was 16p in 2009.Its now 45.41p, and has paid 17.1p (62.51p). I make that 390% of its original value.

The dividend was 2.13p this year or 13.31%.... In 2019 it paid 3.26p or 20.375%. Lloyds is a real dog. But even those returns blow most investors out of the water this year, making a real terms gain even counting 10% inflation...

Or we could use Persimmon at £1.90 in 2009, is now around £12 (600%) (2021 high of £32 or 1600%) paid out £15.76 (829% of invested value) since then, paying a £2.35 divi last year over 100% of invested value.

Or Rio Tinto, or any one of dozens of stocks.

The evidence is clear. Its an excellent strategy. Ask william the conquerors mates who got nice cheap land, and passed it on through the generations. Buying when others are running around with their hair on fire is the best strategy.

But you said you buy when the share price has fallen by 60%.  The 1999 peak was around 470.  Which means you'd have bought in July 2002 when they were priced at 188.  

We can all pick historic dates when it was a good time to buy shares and later sell them.  Just like we can all pick last week's winning lottery numbers or place a 12-race accumulator after the horses have all passed the post.

You've mistaken identifying value with catching falling knives.

2002 was before my time. I got into the stock market because of warren buffet. Its not about historic dates, its about when theres a bear, waiting for the bottom and buying hard. You dont even have to find the absolute bottom, someplace within 20% is close enough over 2,3 or 4 decades. Its got nothing to do with picking historic dates, its about when people are fearful being greedy.

Trust me go back and look at the Dow Jones since 1896. Highlight every bear market. And then calculate how much value there was 20,30 or 40 years later. Try the dow high of 380 in 1929. Lets suppose you caught the falling knife at 190, 50% off the high.... 30 years later , thats 300% at 580. and thats ignoring buying all the other bears in between. Your welcome to try this with any index us bear in history, and see if you can find a point where the stock market was lower than the bear 20,30 or 40 years later.

Unless of course you actually believe the Dow is coming back to its 2009 low of 6500ish.

Even if you caught the knife at 8000 from the 14,000 high.... the dow is still at 33,147 today or more than 400%...

So from a multi-decade pension viewpoint, even catching a falling knife isnt bad once you hit 50% down. What matters is the destination, and the starting point. The rest is just choppy ocean.

kinger101

Rattusnorvegicus said:

kinger101 said:

Rattusnorvegicus said:

I beg to differ. Its how people get rich, buying as much stock as they can during bear market bottoms. Its true share prices have no memory. But things become very oversold during market panics. The 2009 one is returning 100% ROI YOY if you invested well during it.

Lets use your Lloyds example. it was 16p in 2009.Its now 45.41p, and has paid 17.1p (62.51p). I make that 390% of its original value.

The dividend was 2.13p this year or 13.31%.... In 2019 it paid 3.26p or 20.375%. Lloyds is a real dog. But even those returns blow most investors out of the water this year, making a real terms gain even counting 10% inflation...

Or we could use Persimmon at £1.90 in 2009, is now around £12 (600%) (2021 high of £32 or 1600%) paid out £15.76 (829% of invested value) since then, paying a £2.35 divi last year over 100% of invested value.

Or Rio Tinto, or any one of dozens of stocks.

The evidence is clear. Its an excellent strategy. Ask william the conquerors mates who got nice cheap land, and passed it on through the generations. Buying when others are running around with their hair on fire is the best strategy.

But you said you buy when the share price has fallen by 60%.  The 1999 peak was around 470.  Which means you'd have bought in July 2002 when they were priced at 188.  

We can all pick historic dates when it was a good time to buy shares and later sell them.  Just like we can all pick last week's winning lottery numbers or place a 12-race accumulator after the horses have all passed the post.

You've mistaken identifying value with catching falling knives.

2002 was before my time. I got into the stock market because of warren buffet. Its not about historic dates, its about when theres a bear, waiting for the bottom and buying hard. You dont even have to find the absolute bottom, someplace within 20% is close enough over 2,3 or 4 decades. Its got nothing to do with picking historic dates, its about when people are fearful being greedy.

Trust me go back and look at the Dow Jones since 1896. Highlight every bear market. And then calculate how much value there was 20,30 or 40 years later. Try the dow high of 380 in 1929. Lets suppose you caught the falling knife at 190, 50% off the high.... 30 years later , thats 300% at 580. and thats ignoring buying all the other bears in between. Your welcome to try this with any index us bear in history, and see if you can find a point where the stock market was lower than the bear 20,30 or 40 years later.

Unless of course you actually believe the Dow is coming back to its 2009 low of 6500ish.

Even if you caught the knife at 8000 from the 14,000 high.... the dow is still at 33,147 today or more than 400%...

So from a multi-decade pension viewpoint, even catching a falling knife isnt bad once you hit 50% down. What matters is the destination, and the starting point. The rest is just choppy ocean.

So 2002 was before you time, but not 1929 (or 1066 for that matter).

I've disproven your hypothesis that shares bought at 60% lower than their peak will return at some point to their original value.

That either means Warren Buffet is wrong, or you've misunderstood him.

Rattusnorvegicus

And yes i am looking at whether we get below the cloud on the monthly SPX at 3,500-4,000 before 2025. Anything under it and i will start buying hard. Its only happened 6 times since 1929. And every single time the gains have been stellar on a multi decade timeframe.

Kissing the cloud isnt enough like the 1962 case. So is there opportunity? no. Will opportunity come? No idea. Its why we wait and watch the chart. Its win win for me. Either the bull continues, or i get to double down on my portfolio.

As far as i'm concerned if the bottom is 3,200. Then anything under 3,520 is fine. And if the bottom is 2,800, anything under 3,360 is fine. And what if the chart shows we bottomed already then anything under 3,900 is fine. My personal destination for the SPX is 400% of wherever the bottom is (11,200 to 14,000 in 2042). Because i'm not greedy. i just like to buy bears, and sell bulls.

NoMore

Worlds Greatest (and Worst) Market Timer ® - The Big Picture (ritholtz.com)

Rattusnorvegicus

kinger101 said:

Rattusnorvegicus said:

kinger101 said:

Rattusnorvegicus said:

I beg to differ. Its how people get rich, buying as much stock as they can during bear market bottoms. Its true share prices have no memory. But things become very oversold during market panics. The 2009 one is returning 100% ROI YOY if you invested well during it.

Lets use your Lloyds example. it was 16p in 2009.Its now 45.41p, and has paid 17.1p (62.51p). I make that 390% of its original value.

The dividend was 2.13p this year or 13.31%.... In 2019 it paid 3.26p or 20.375%. Lloyds is a real dog. But even those returns blow most investors out of the water this year, making a real terms gain even counting 10% inflation...

Or we could use Persimmon at £1.90 in 2009, is now around £12 (600%) (2021 high of £32 or 1600%) paid out £15.76 (829% of invested value) since then, paying a £2.35 divi last year over 100% of invested value.

Or Rio Tinto, or any one of dozens of stocks.

The evidence is clear. Its an excellent strategy. Ask william the conquerors mates who got nice cheap land, and passed it on through the generations. Buying when others are running around with their hair on fire is the best strategy.

But you said you buy when the share price has fallen by 60%.  The 1999 peak was around 470.  Which means you'd have bought in July 2002 when they were priced at 188.  

We can all pick historic dates when it was a good time to buy shares and later sell them.  Just like we can all pick last week's winning lottery numbers or place a 12-race accumulator after the horses have all passed the post.

You've mistaken identifying value with catching falling knives.

2002 was before my time. I got into the stock market because of warren buffet. Its not about historic dates, its about when theres a bear, waiting for the bottom and buying hard. You dont even have to find the absolute bottom, someplace within 20% is close enough over 2,3 or 4 decades. Its got nothing to do with picking historic dates, its about when people are fearful being greedy.

Trust me go back and look at the Dow Jones since 1896. Highlight every bear market. And then calculate how much value there was 20,30 or 40 years later. Try the dow high of 380 in 1929. Lets suppose you caught the falling knife at 190, 50% off the high.... 30 years later , thats 300% at 580. and thats ignoring buying all the other bears in between. Your welcome to try this with any index us bear in history, and see if you can find a point where the stock market was lower than the bear 20,30 or 40 years later.

Unless of course you actually believe the Dow is coming back to its 2009 low of 6500ish.

Even if you caught the knife at 8000 from the 14,000 high.... the dow is still at 33,147 today or more than 400%...

So from a multi-decade pension viewpoint, even catching a falling knife isnt bad once you hit 50% down. What matters is the destination, and the starting point. The rest is just choppy ocean.

So 2002 was before you time, but not 1929 (or 1066 for that matter).

I've disproven your hypothesis that shares bought at 60% lower than their peak will return at some point to their original value.

That either means Warren Buffet is wrong, or you've misunderstood him.

That doesnt make any sense whatsoever. Lloyds isnt in capitulation in 2002 at 53% under the cloud. 2020 was a bigger discount under the cloud 60%+.

I'm looking at the lloyds chart.I dont see a capitulation event in 1999.In fact i dont see one until 2008.It drops under the cloud at 230...

The buying opportunity is sub 34p, which again happened in 2020. Buffet said buy GOOD companies not dogs that inflate their number of shares insanely every year.

The time to sell lloyds was 1998 when it was above the cloud in the bull. It didnt enter any purchase point of mine until 2009.

So your example is bad. You should go find another extreme dog. You cant just claim someone would buy at  the top end of a bull to fit your argument. You have to look at the chart, and ask have we likely hit bottom? Right now i wouldnt buy lloyds at all until it addresses its rapid expansion in number of shares outstanding.and even if it did i'd only be in at 21p, 27p at a push if there wasnt a hundred other BETTER companies out there. Clearly you've misunderstood me.