Investing General Discussion

Jysin · Jan 6, 2022

^^ This ^^

Timing the markets is tough. We could see another 50%+ upside over the next few years. Then "crash" and wipe 30% off and you'd still be 20% lost gains. The markets are forward looking. So the fact the news came out yesterday about rate hike pace, the current market sell is pricing that in. It may take a few more days / week to shake out, but the bitter pill is being swallowed. The day the hikes actually come shouldn't be some earth shattering shock now. It's not like come March, the Fed hikes rates 0.25% and the entire market crashes.

There's going to need to be some other catalyst(s) to bring this market down. Fed hikes and taper alone are simply not going to do it. Good luck trying to guess what / when this will happen.

Hateyou · Jan 6, 2022

Masakari said:
Not sure if this is the right thread for this but with the inevitable rapid Fed rate hikes, the market is going to crash at the end of the year or next. It's unavoidable. Doing it under Biden is an easy out for these folks.

Currently, my Roth 401k portfolio managed by Fidelity is heavily invested in Chinese stocks. Would it be wise to trust them to manage my portfolio through a collapse, or should I pull my money out before the tipping point? I know bonds are typically safe during a downturn but I want to avoid taking a major hit.

Do you think China is somehow insulated from a US financial collapse, or even just a crisis? Trading in Chinese stocks is nuts IMO. Their companies lie their asses off and are susceptible to the whims of an insane communist government, which is why you saw several of us telling

Sanrith Descartes he was nuts for riding BABA for a while there. He kept saying it was China’s crown jewel, no way would they fuck with it. Well they didn’t care, they went and fucked with it. We can’t wrap our heads around what they give a shit about.

Masakari · Jan 6, 2022

Hateyou said:
Do you think China is somehow insulated from a US financial collapse, or even just a crisis? Trading in Chinese stocks is nuts IMO. Their companies lie their asses off and are susceptible to the whims of an insane communist government, which is why you saw several of us telling Sanrith Descartes he was nuts for riding BABA for a while there. He kept saying it was China’s crown jewel, no way would they fuck with it. Well they didn’t care, they went and fucked with it. We can’t wrap our heads around what they give a shit about.

I'll provide an update later today on what my positions are, but aside from the China side of things, would it be better to pull 401k funds out ahead of a collapse if you knew when it would happen.

Hypothetically speaking.

Borzak · Jan 6, 2022

Fogel said:
Its not the market crash I'm trying to keep you safe from. China is a massive ponzi scheme at this point. When that house of cards collapses, as it'll have world wide implications on all indexes, obviously chinese stocks will be hit hardest. 18-24% return doesn't justify the risk

No idea how debt works in China. Read the other day their high speed rail project was a trillion dollars in debt they can't pay. Making Evergrande seem pretty small.

Oil is approaching $80 barrel again. Just a mental thing attached when it hits 80. On China, doesn't matter if China is getting paid at the start of a shipment or when it's complete. Result is with the bog down in shipping they have serious cash flow problems I would assume. They need flow of US Dollars I would assume.

Hateyou · Jan 6, 2022

Masakari said:
I'll provide an update later today on what my positions are, but aside from the China side of things, would it be better to pull 401k funds out ahead of a collapse if you knew when it would happen.

Hypothetically speaking.

No I wouldn’t pull them out. Move them to a cash fund within the 401k, wait for your crash. Then move it back. Cashing it out incurs penalties that you don’t get back if you pull it out. I got lucky and moved funds right before the big crash in 2020 and ended up making 45% that year. I absolutely in my gut knew it was about to happen though due to supply chains being completely cut but the news wasn’t reporting it. I didn’t have a nebulous feeling of “I think the markets are too high” like I do now. I had a feeling of “holy shit this is huge news that is going to hit soon and it will cause a giant fast crash” I would not recommend doing it because if you’re wrong you miss out on a lot of gains that as you know, 20 years from now, will be a lot of lost $. I got very lucky my info was correct is all.

Masakari · Jan 6, 2022

Hateyou said:
No I wouldn’t pull them out. Move them to a cash fund within the 401k, wait for your crash. Then move it back. Cashing it out incurs penalties that you don’t get back if you pull it out. I got lucky and moved funds right before the big crash in 2020 and ended up making 45% that year. I absolutely in my gut knew it was about to happen though due to supply chains being completely cut but the news wasn’t reporting it. I didn’t have a nebulous feeling of “I think the markets are too high” like I do now. I had a feeling of “holy shit this is huge news that is going to hit soon and it will cause a giant fast crash” I would not recommend doing it because if you’re wrong you miss out on a lot of gains that as you know, 20 years from now, will be a lot of lost $. I got very lucky my info was correct is all.

Thank you sir!

Jysin · Jan 6, 2022

Masakari said:
I'll provide an update later today on what my positions are, but aside from the China side of things, would it be better to pull 401k funds out ahead of a collapse if you knew when it would happen.

Hypothetically speaking.

This is a long read, but please hear me out!

Of course, but that is far easier said than done. What crystal ball is going to tell you exactly when this will take place?

Of important note, there are two sides of that coin. Say you theoretically time it just right and move to safe havens before the crash? Congrats.
Now, part 2 which is equally as important:
When is the actual bottom? When do you jump back in? Do you see a slight turn, jump in and there's still more fall to be had? Do you see a turn, give pause, it reclaims half of its move and then you've minimized all of that stress and effort? Do you become completely skeptical of the bounce and then it runs away without you and it's then higher than where you sold?

It is a very complex picture and you need to keep in mind, you're not just trying to time the top, but also the bottom!

Case study:
2020 I was all over the covid china news in January and watching like a hawk what was going on. I wasn't following our bs news, but pictures and reality on the ground in China. "Pay attention to what they do.. not what they say" I was telling investor friends. No one knew it was going to be some worldwide full blown pandemic at this point, but the news started trickling out about city quarantines and more importantly, Chinese mega port closures.

I took this information and decided the supply chain fuckery is going to hit us sometime soon 100%. Also at risk is this virus getting out and causing further issues. The supply chain risk was enough for me to pull the trigger. On February 11th, 2020 I moved about $750k worth of 401k from various ETFs into 100% bonds. I quite literally timed the market top 1 week early. Yay me!

Come March, we are something crazy like 33% overall drop? Then we got the Fed money printer, which I completely underestimated. On top of this, Covid was now hitting and we were entering our first worldwide lockdowns. I had no faith to buy back in. Forward over summer of 2020 and the markets are on a monster bounce. In my head, we are still in the middle of a pandemic and there are 0 vaccines yet on the horizon. I think to myself "markets have come too far too quick, they are ahead of themselves".

Markets are well into their bounce recovery and nearly at my sell point come September of 2020. I completely fucked part 2.

Take the advice of myself, and others in this thread.. and the investing greats like Buffett. "Time in the market is far more important than timing the market."

I hope my failure is a lesson to all.

Hateyou · Jan 6, 2022

Jysin said:
This is a long read, but please hear me out!

Of course, but that is far easier said than done. What crystal ball is going to tell you exactly when this will take place?

Of important note, there are two sides of that coin. Say you theoretically time it just right and move to safe havens before the crash? Congrats.
Now, part 2 which is equally as important:
When is the actual bottom? When do you jump back in? Do you see a slight turn, jump in and there's still more fall to be had? Do you see a turn, give pause, it reclaims half of it's move and then you've minimized all of that stress and effort? Do you become completely skeptical of the bounce and then it runs away without you and it's then higher than where you sold?

It is a very complex picture and you need to keep in mind, you're not just trying to time the top, but also the bottom!

Case study:
2020 I was all over the covid china news in January and watching like a hawk what was going on. I wasn't following our bs news, but pictures and reality on the ground in China. "What what they do.. not what they say" I was telling investor friends. No one knew it was going to be some worldwide full blown pandemic at this point, but the news started trickling out about city quarantines and more importantly, Chinese mega port closures.

I took this information and decided the supply chain fuckery is going to hit us sometime soon 100%. Also at risk is this virus getting out and causing further issues. The supply chain risk was enough for me to pull the trigger. On February 11th, 2020 I moved about $750k worth of 401k from various ETFs into 100% bonds. I quite literally timed the market top 1 week early. Yay me!

Come March, we are something crazy like 33% overall drop? Then we got the Fed money printer, which I completely underestimated. On top of this, Covid was now hitting and we were entering our first worldwide lockdowns. I had no faith to buy back in. Forward over summer of 2020 and the markets are on a monster bounce. In my head, we are still in the middle of a pandemic and there are 0 vaccines yet on the horizon. I think to myself "markets have come too far too quick, they are ahead of themselves".

Markets are well into their bounce recovery and nearly at my sell point come September of 2020. I completely fucked part 2.

Take the advice of myself, and others in this thread.. and the investing greats like Buffett. "Time in the market is far more important than timing the market."

I hope my failure is a lesson to all.

I was scared of that when I did mine. When we hit the bottom mid March and started having green day’s I just started moving my money back in, like 10-20% at a time. It was scary to do but I knew I had just avoided a monster loss, so kept reminding myself I won, be happy with it. I think I was fully back into the market within 3-4 weeks. I could have timed it better if I had a crystal ball but I was really happy with what I ended with. My friend in the same indexes trailed me by like 25% the rest of the year.

Jysin · Jan 6, 2022

Hateyou said:
I was scared of that when I did mine. When we hit the bottom mid March and started having green day’s I just started moving my money back in, like 10-20% at a time. It was scary to do but I knew I had just avoided a monster loss, so kept reminding myself I won, be happy with it. I think I was fully back into the market within 3-4 weeks. I could have timed it better if I had a crystal ball but I was really happy with what I ended with. My friend in the same indexes trailed me by like 25% the rest of the year.

This is exactly what I should have done. For some reason, I was hell bent on trying to perfect it. Keep in mind, we had rolling lockdowns, no vaccines, and complete uncertainty in what was going on with the pandemic at the bounce in March. I had very much credible reason to be skeptical. The real answer is, if you are sitting on a pile of cash to invest during a big correction / bear market, scale yourself in. Don't try and be precise. Just scale in on the way down.

I have taken this scaling lesson into my swing trading. Thankfully my day / swings have been on point in 2021 and I have minimized my lost theoretical gains during the crash. Hell, my IRA is already up 10% realized in 2022 (thanks NCLH call options).

But I am now doing this full time. This is my job and I put in far more energy and effort into this than the typical trader.

Unless you have the skill, time, and energy to be a full time trader.. do not try and time the markets. There is a ton of info out there already on this.

Sanrith Descartes · Jan 6, 2022

Masakari said:
Currently, my Roth 401k portfolio managed by Fidelity is heavily invested in Chinese stocks.

The first thing I would do is go back and read the last 500 or so pages of this thread.
tldr: Dont pay someone to manage your money. Dump it all in the large cap mutual fund/ETF they offer and look at it once a year. You wont pay anyone and your returns will be better.

Leaving these quote here from earlier this week:

Sanrith Descartes said:
This will make everyone feel better. There are hedge funds run by professionals that get PAID to put out returns worse than we did. Three on the list beat the SP500.

Sanrith Descartes said:
All investing firms have a fiduciary duty to their clients. The problem is they own the SEC. The #1 reason I did not end up on Wallstreet was I couldn't bring myself to fuck people over every day for a buck.

Sanrith Descartes · Jan 6, 2022

Tmac said:
@Blazin Sanrith Descartes what do rate hikes mean for bonds?

As I understand it, healthy portfolio's should be weighted (high/low depending on the trend) for bonds, but I don't think I've ever seen anyone here talk about bonds.

While we spend 99% of this thread discussing equities, bonds are an almost entirely different animal. Think of a bond a loan you made someone who is paying you back interest monthly on the loan and then the principle at the end of the loan. The interest is fixed at the beginning and doesn't change (not discussing TIPS right now). The challenge with this investment is as inflation rises, your interest rate payment is fixed. So if you get a bond paying you 2.5% interest a year, but inflation is 5% you are losing money owning that bond.

Currently owning bonds is no bueno. Now, if we get a real Fed and then run interest rates up to 4% or 5%, then owning debt might be worth something. Currently yhe US 10 year Treasury is yielding 1.73% interest. Now look at the current inflation rate.

Sanrith Descartes · Jan 6, 2022

Masakari said:
Given current conditions and the speed at which they will increase the rate, it's a given at this point to taper inflation.

Im not sure if you are up to speed or not, but Paul Volcker is no longer the Fed Chairman, Janet Powell is. This the same guy and same Fed who spent the last year telling us inflation was "transitory".

Sanrith Descartes · Jan 6, 2022

Hateyou said:
Do you think China is somehow insulated from a US financial collapse, or even just a crisis? Trading in Chinese stocks is nuts IMO. Their companies lie their asses off and are susceptible to the whims of an insane communist government, which is why you saw several of us telling Sanrith Descartes he was nuts for riding BABA for a while there. He kept saying it was China’s crown jewel, no way would they fuck with it. Well they didn’t care, they went and fucked with it. We can’t wrap our heads around what they give a shit about.

You sir, have obviously never studied the 1-year chart of BABA.

Sanrith Descartes · Jan 6, 2022

Even Cramer taking a piss on Cathy today...

Sanrith Descartes · Jan 6, 2022

Looking at certain big Tech names in the pre-market, it doesnt look like another big flush is coming. MSFT, CRM, NVDA etc hit their pre-market lows less than 1% from yesterday's close. Best we can hope for is some controlled selling as money shifts into value names. Or put another way, I don't see panic selling going on.

Sanrith Descartes · Jan 6, 2022

Blazin said:
Then I think the roll to the Feb options may be better choice

I thought this through overnight. IV is just under 100. Think I am going to hold off and let theta do its work. If it stays below the strike and doesnt crash to like $10 I can roll out on/near expiry and have the Feb time value to collect with the Jan time value exhausted. It also gives me a few weeks to see if Janet Powell calls the plunge protection team.

Jysin · Jan 6, 2022

The ideal situation would be another quick volume sell at the open and then a bounce. This establishes a stronger low to work off of with real buyers stepping up to the plate. If we just drift lower or open sideways, it is far harder to guage safe entries. A big move up out of the gate is equally as risky, as we don't know how long that could actually last. (Run out of buyers and then move lower).

Just sitting and eyeing critical levels. QQQ has been riding the 100D in premarket for support.

Sanrith Descartes · Jan 6, 2022

Jysin said:
The ideal situation would be another quick volume sell at the open and then a bounce. This establishes a stronger low to work off of with real buyers stepping up to the plate. If we just drift lower or open sideways, it is far harder to guage safe entries. A big move up out of the gate is equally as risky, as we don't know how long that could actually last. (Run out of buyers and then move lower).

Just sitting and eyeing critical levels. QQQ has been riding the 100D in premarket for support.

It being Jan 6th and the press/gubmint running fullbore isnt helping with market stability.

Sanrith Descartes · Jan 6, 2022

MTTR +2% premarket

Borzak · Jan 6, 2022

$80/barrel oil broken.

Investing General Discussion

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