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Panicked about a stock-market crash?

tommyguns2

tommyguns2

Senior Moderators
Staff Member
Dec 25, 2010
4,480
1,722
#37
this is the same way people acted in 2008 right before the crash. no one saw that coming. not too many people see this one coming either.

why would a recession NOT happen in the near future?
In 2008 we had a real estate bubble driven my mortgage backed securities that were fraudulently rated as investment grade debt. What is the mechanism to trigger a recession right now? Employment is strong and the market is not overpriced, at least not by historical standards.

I suppose a full blown trade war could tip things in that direction, but China really needs a deal to be cut sooner rather than later, so I don't predict a trade war is going to happen. In fact, while I think Trump can be a blowhard at times, his unpredictability has been exactly what we needed to get the Chinese to move, and I think they're going to.
 
Swiper

Swiper

VIP Member
Jan 8, 2011
659
312
#38
In 2008 we had a real estate bubble driven my mortgage backed securities that were fraudulently rated as investment grade debt. What is the mechanism to trigger a recession right now? Employment is strong and the market is not overpriced, at least not by historical standards.

I suppose a full blown trade war could tip things in that direction, but China really needs a deal to be cut sooner rather than later, so I don't predict a trade war is going to happen. In fact, while I think Trump can be a blowhard at times, his unpredictability has been exactly what we needed to get the Chinese to move, and I think they're going to.
refer back to my previous post. the low interest rates caused massive bubbles in the housing, auto, stock market, bond market.

The construction industry just layoff the most on record.

The labor market is not strong. people having two part time jobs instead of one full-time job is not a healthy economy. most of jobs being created our part-time and low-paying.
 
JR Ewing

JR Ewing

VIP Member
Nov 9, 2012
1,329
420
#39
Ignore Peter Schiff's constant doomsday predictions - we will eventually see another big recession and bear market, but he's been predicting that it's going to happen any day now for the last decade. He desperately wants to sell off his massive precious metals stake he's been accumulating ever since the last recession.

Ignore the MSM fantasies of a Trump impeachment and jail time for everyone in the Trump family - you can only kick a POTUS out of office and jail his entire family when they've committed actual crimes, and even then only when their rights were not violated during the investigations / trials of any such crimes. And even if all of this happened, the effects on the market would not likely be as great as many might think.

If you're a longterm investor investing for retirement decades away, continue to add $100-400 a week (or month) to your diversified retirement accounts, knowing that you're buying more shares of your investments when the markets sell off and those investments get cheaper.

If you're a more tactical trader / investor, view dips/corrections/bear markets as buying opportunities, and rallies as opportunities to perhaps take some profits. Add $ to your accounts each payday. Keep some cash onhand, and consider carefully hedging if you're so inclined. Be more "bottom-up" - you cannot control the market, but you can control which investments you choose.

IF we were to see the Dow at 11-12k in a year, consider how cheap good stocks would be at that level. Since we don't know for sure if that will happen (probably won't),many stocks are pretty cheap at 22-23k, and would be even more attractive at 17-18k. Much of the volatility in the markets these days is due to the automated HFT funds basically overreacting to whatever is occurring on a day to day basis.

Interest rates are higher and rising from where they were for much of the last decade, but underlying fundamentals are quite solid - which of course is why rates are rising. I tend to buy more as investments become cheaper, and take some profits (not necessarily all) when they tend to become overpriced.

High beta investments such as the FAANGs, Tesla, etc are going to usually get hit the hardest in bad times. Having some lower beta high quality stocks in your portfolio is probably a good idea. Bonds on average tend to have 20-25% of the beta that stocks do, but they will also decline in a rising rate environment.
 
SAD

SAD

TID Board Of Directors
Feb 3, 2011
3,034
1,186
#41
Just to put all of this in perspective for those in this thread, if you are “losing” and “earning” 50-70k in a slight roller-coaster market quarter, you have SIGNIFICANTLY more in savings than even the average middle-upper class American.

I think I read somewhere that upwards of 60% of all Americans have ZERO savings. Not sure how close that is but I’ve talked with many many people in their mid30s and 40s who plan on getting rich somehow or working until death or inheriting, etc.

So if you’re saving and have been, you’re already halfway intelligent and way ahead of the game.
 
C

Cabo Jo

Thick n Wide VIP
Jun 26, 2011
921
214
#44
that's what i thought LK you can help the poor im taking donations. the only thing i have for retirement is lead lots of it.
 
C

ceo

VIP Member
Oct 12, 2010
487
131
#47
“A record 7 million Americans are 3 months behind on their car payments, a red flag for the economy”

https://www.washingtonpost.com/busi...economy/?noredirect=on&utm_term=.22d66a0ea506
I guess those subprime borrowers with poor credit and shaky job history should have bought a cheaper used car instead of more expensive newer cars, which were financed through auto dealerships.

The article explains these are the folks having the problems. So the economy gets stronger and some people who didn't have jobs before get jobs now, and auto companies' lending practices get more lax, and people with either poor or little financial prowess overextend themselves. No big surprises there unfortunately.

People who finance through credit unions have less than 1% default rates. Also explains the % of defaults are actually down although more people are in default, since more people are buying due to lax lending policies of auto finance companies.

Just another shock headline to get people stirred up, but no real news.


“The stunning drop in retail sales leaves Wall Street’s economists skeptical. Very skeptical”

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/5CF03004-306D-11E9-BA55-F17E8F3B0CE1
But Amazon reported a record fourth-quarter earnings of $6.04 a share on revenue of $72.4 billion.

People are just continuing to change the way they buy things. No more going out to retail stores. Online is the way of the future.

Sent from my SM-G955U using Tapatalk
 
mugzy

mugzy

Administrator
Staff Member
Aug 11, 2010
4,788
1,657
#48
I'm really liking Pinterest. Keep an eye on it, market cap is only 1.8 B with much upside.
 
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