Discussion ***Official*** 2020 Stock Market Thread

[ponyo]

Hmm. Just took a quick peak at the Target 2020 fund in my mother's TIRA, remains 49% stock. She's considering retirement next year at 67, trying to decide if it's worth reducing that further now to avoid some of what may be coming in terms of a correction. I'm usually not one to speculate much, just kinda a "hmm" moment today.

Is she going to begin withdrawing money next year? My mom is going to turn 65 and she's retired. But she's not going to start taking money out of her IRA until she's 71 when it's mandatory. I moved her entire IRA into TSLA shares last year at $192. I did the same for my sister's IRA and rollover 401k. I had her sell all her index funds and put it all in TSLA at $192. Yes, I'm crazy. And yes, it has worked out beautifully for both of them. And no, I don't recommend people do this unless you're crazy like me and willing to guarantee their return or lack of.

 

[TheVrolok]

Is she going to begin withdrawing money next year? My mom is going to turn 65 and she's retired. But she's not going to start taking money out of her IRA until she's 71 when it's mandatory. I moved her entire IRA into TSLA shares last year at $192. I did the same for my sister's IRA and rollover 401k. I had her sell all her index funds and put it all in TSLA at $192. Yes, I'm crazy. And yes, it has worked out beautifully for both of them. And no, I don't recommend people do this unless you're crazy like me and willing to guarantee their return or lack of.

Probably not next year no, she may hold off until RMD age. New mandatory age is 72 as of this year btw, so your mom could hold off another year.

That was a pretty insane gamble you took, paid off incredibly well in this particular case but damn man.

 

[jpiniero]

The Fed Rate odds are now 95% for a double cut next time. Just a week ago it was 89% no change. Now trending 4-5 cuts by the end of the year.

 

[ponyo]

Probably not next year no, she may hold off until RMD age. New mandatory age is 72 as of this year btw, so your mom could hold off another year.

That was a pretty insane gamble you took, paid off incredibly well in this particular case but damn man.

It sounded like a crazy gamble but it really wasn't. I was simply playing the odds and the real risk/reward. TSLA shares had fallen more than 50% off its high, and crazy shorts and Adam Jonas of Morgan Stanley were trying to push for Tesla bankruptcy false narrative. But because I followed Tesla so closely, I knew BK was very low risk and all the FUD being spun at the time was incorrect and wrong. So I looked at it as once in a lifetime opportunity to buy into what's going to be once in a generation growth company at a fantastic undervalued price. And since my mom had like 6+ years before she needed the money and my sister probably like 30 years, I felt it was the best risk/reward setup I've seen in a long time. So I moved all their portfolio and mine into Tesla shares. I know the conventional wisdom is to diversify, but I also hold similar views as Buffett on diversification. He said "diversification is protection against ignorance." Buffett has all his wealth in Berkshire Hathaway. All the mega wealthy became extremely wealthy by owning just stock in their own company. I want what they have. And I felt I knew Tesla better than most analysts and the general investing public which got their Tesla news from the biased mainstream media.

I believe TSLA will be the next Apple, Microsoft, Amazon, etc. Companies that made their long term shareholders fabulously wealthy over time. Most average people will never get mega rich buying index funds. People who contribute regularly to index funds will retire rich but most will never be super wealthy. Just like most people never invested in Apple, Microsoft, Amazon, Google, etc early on. So it was my moonshot gamble but I 100% believe we're still in the early stages of true greatness with Tesla. Tesla story is just getting started. They will become the dominant transportation, energy, and AI company and completely dominate their space. And they're going to generate insane amount of money in 5-10 years for themselves and their shareholders. I have no doubt Tesla is going to be the next trillion dollar company.

 

[TheVrolok]

It sounded like a crazy gamble but it really wasn't. I was simply playing the odds and the real risk/reward. TSLA shares had fallen more than 50% off its high, and crazy shorts and Adam Jonas of Morgan Stanley were trying to push for Tesla bankruptcy false narrative. But because I followed Tesla so closely, I knew BK was very low risk and all the FUD being spun at the time was incorrect and wrong. So I looked at it as once in a lifetime opportunity to buy into what's going to be once in a generation growth company at a fantastic undervalued price. And since my mom had like 6+ years before she needed the money and my sister probably like 30 years, I felt it was the best risk/reward setup I've seen in a long time. So I moved all their portfolio and mine into Tesla shares. I know the conventional wisdom is to diversify, but I also hold similar views as Buffett on diversification. He said "diversification is protection against ignorance." Buffett has all his wealth in Berkshire Hathaway. All the mega wealthy became extremely wealthy by owning just stock in their own company. I want what they have. And I felt I knew Tesla better than most analysts and the general investing public which got their Tesla news from the biased mainstream media.

I believe TSLA will be the next Apple, Microsoft, Amazon, etc. Companies that made their long term shareholders fabulously wealthy over time. Most average people will never get mega rich buying by index funds. People who contribute regularly to index funds will retire rich but most will never be super wealthy. Just like most people never invested in Apple, Microsoft, Amazon, Google, etc early on. So it was my moonshot gamble but I 100% believe we're still in the early stages of true greatness with Tesla. Tesla story is just getting started. They will become the dominant transportation, energy, and AI company and completely dominate their space. And they're going to generate insane amount of money in 5-10 years for themselves and their shareholders. I have no doubt Tesla is going to be the next trillion dollar company.

Indeed. "Invest in what you know" to quote another giant of investing history.

Certainly it's not a sound retirement strategy by any wisdom of sorts, but it's working well for you thus far!

I don't necessarily disagree with you either, I'm just far too risk averse for that. I already live quite comfortably and should be able to very comfortably retire in my early 50's so I'm happy to hold the course!

 

[FelixDeCat]

With 3 rate cuts priced in for this year I'd imagine you can expect some capital gains from moving to bonds.

The Fed Rate odds are now 95% for a double cut next time. Just a week ago it was 89% no change. Now trending 4-5 cuts by the end of the year.

This selloff is based on the negative impact of a virus induced reduction in economic activity. Lowering rates will only have a limited impact. Rate cuts wont instill confidence when people are fearful of getting sick.

This crises will require an effective medical response to restore public confidence. People must believe its "safe to go outside". There are numerous stories of events being limited or cancelled in Europe and Asia to prevent cross contamination. Trips overseas are also being cancelled for fear of possibly getting sick.

While the market may stabilize based on Fed actions short term, what we also need are daily updates from the government to help calm nerves and start to see a drop off in the amount bad news regarding the virus.

 

[FelixDeCat]

Besides, this November is what you really need to worry about. If Trump does not win re-election, will he acknowledge the results? Will he refuse to step down? Trump has shown a proclivity towards the unexpected. How will the market react?

Also if the dems take the White House and both houses of Congress, the market will also have a very negative reaction.

 

[s0me0nesmind1]

Besides, this November is what you really need to worry about. If Trump does not win re-election, will he acknowledge the results? Will he refuse to step down? Trump has shown a proclivity towards the unexpected. How will the market react?

Also if the dems take the White House and both houses of Congress, the market will also have a very negative reaction.

Count on one or the other happening.

Wallstreet is well aware that democrats are very much in the pants of wallstreet (albeit, different industries typically).

I don't think Wallstreet really cares about tax increases on the middle-class (which is inevitably what would have to occur in order to pay for the ludicrous programs being touted).

 

[TheVrolok]

Wallstreet is well aware that democrats are very much in the pants of wallstreet (albeit, different industries typically).

I don't think Wallstreet really cares about tax increases on the middle-class (which is inevitably what would have to occur in order to pay for the ludicrous programs being touted).

Agreed. Uncertainty is a bigger problem then policial leaning. This country is run by big business/money no matter which party is in power. "The economy" did just as well under Obama for 8 years as it has under Trump up until the virus.

 

[FelixDeCat]

But what if Trump refuses to leave? How will the market react then? Will it be a calamity? As mentioned before, I voted for him as I have always vote Republican since 1988. And while Trump has done well for the economy and helped rebalance trade with China, Mexico and Canada, the American people get to decide who leads the country.

Here is a good article on the scary scenario of Trump refusing to leave:

What Would Happen If Trump Refused to Leave Office?

A peaceful transfer of power is necessary for American democracy to survive.

www.theatlantic.com

And yes, the election of Bernie or Bloomberg will cause serious market disruption if the dems take everything in November, whether you agree or not. Their taxaction focus has not been the middle class but the "1%". Bloomberg wants a special tax on all market trades you make. They got rid of commissions, but you will now pay a percent of the dollar value of all the trading you do whether you make a profit or not. That is scary. Every time a transaction tax like that is proposed, markets crash.

November will be a time for more market volatility.

 

[TheVrolok]

But what if Trump refuses to leave? How will the market react then? Will it be a calamity? As mentioned before, I voted for him as I have always vote Republican since 1988. And while Trump has done well for the economy and helped rebalance trade with China, Mexico and Canada, the American people get to decide who leads the country.

Here is a good article on the scary scenario of Trump refusing to leave:

What Would Happen If Trump Refused to Leave Office?

A peaceful transfer of power is necessary for American democracy to survive.

www.theatlantic.com

And yes, the election of Bernie or Bloomberg will cause serious market disruption if the dems take everything in November, whether you agree or not. Their taxaction focus has not been the middle class but the "1%". Bloomberg wants a special tax on all market trades you make. They got rid of commissions, but you will now pay a percent of the dollar value of all the trading you do whether you make a profit or not. That is scary. Every time a transaction tax like that is proposed, markets crash.

November will be a time for more market volatility.

Yes, if Bernie takes the WH and the Dems take the house and senate the market will likely shake. The odds that the Dems take control of the government? 0.

Trump refusing to leave office? Do you think your party would grow a back bone (finally) and make him cut his nonsense? That would certainly be the best thing for the market, no?

 

[dasherHampton]

I think people in general don't understand how few true allies Bernie has among traditional democrats. All of the media attention AOC and her cronies get make it seem like the dems will automatically fall in line with whatever he wants to do.

lol - that's not the case at all. A Bernie government will be a huge clusterfuck, at least initially.

 

[s0me0nesmind1]

But what if Trump refuses to leave? How will the market react then? Will it be a calamity? As mentioned before, I voted for him as I have always vote Republican since 1988. And while Trump has done well for the economy and helped rebalance trade with China, Mexico and Canada, the American people get to decide who leads the country.

Here is a good article on the scary scenario of Trump refusing to leave:

What Would Happen If Trump Refused to Leave Office?

A peaceful transfer of power is necessary for American democracy to survive.

www.theatlantic.com

And yes, the election of Bernie or Bloomberg will cause serious market disruption if the dems take everything in November, whether you agree or not. Their taxaction focus has not been the middle class but the "1%". Bloomberg wants a special tax on all market trades you make. They got rid of commissions, but you will now pay a percent of the dollar value of all the trading you do whether you make a profit or not. That is scary. Every time a transaction tax like that is proposed, markets crash.

November will be a time for more market volatility.

Trump leaving office - I don't think the military like him enough to conduct a coop. They will drag his ass out as he will no longer legally be commander in chief.


As far as the economy - as mentioned with taxation - even Bernie knows and has admitted that even if you tax the top 1% at 100% (which is fully impossible because no one would work if every dollar was taxed), it STILL wouldn't be enough to have his ludicrous plans. Thus, the middle class (and even lower class in all likelihood) will need to have tax increases. To be honest the best means of that (IMHO) is a VAT tax at the consumer level instead of at the income level.

The fact is I sympathize with Bernie bros (to a certain extent). For example, I think we should invest in kids and provide college for free.... I also think that what would coincide with that, is instead of anyone with a pulse being able to go to college - if you want the citizens to pay for it then you have to meet much more strict guidelines. Otherwise, people need to simply be told "I'm sorry, you're too stupid for college. Consider a trade-school instead". Same can be said for degree majors that are statistically likely to result in low poverty wages, government shouldn't support the major unless it's in a demand. Otherwise, they can pay for it themselves or get a random bank to finance them (lol - would at minimal require cosigning)... but this would at least get us out of the problems of federal backing of loans that is a huge problem.

Reduction in school attendance would also drastically drive down the ridiculous rates schools are charging today... which is only done through artificial demand system that our government created in the first place. Think about it. Without federal backing liberal art's schools tuition and such would plummet. They are the price they are because anyone can go there - and even if they don't have the funds (or brains for that matter) the federal government will still loan the money. It's nuts.

 

[njdevilsfan87]

It sounded like a crazy gamble but it really wasn't.

If TSLA didn't have its crypto-like pump before this black swan event, those accounts would be back near break-even and maybe even looking to go in the red soon if the markets keeps dumping. There are things you cannot control and being all-in on any investment will always be a gamble. The part that makes it crazy is that you did it with retirement accounts for a near retiree. I'm glad it worked out, "but damn" as TheVrolok said.

 

[ponyo]

If TSLA didn't have its crypto-like pump before this black swan event, those accounts would be back near break-even and maybe even looking to go in the red soon if the markets keeps dumping. There are things you cannot control and being all-in on any investment will always be a gamble. The part that makes it crazy is that you did it with retirement accounts for a near retiree. I'm glad it worked out, "but damn" as TheVrolok said.

I don't know better or safer place to park the money for the next 7 years than TSLA. By 2027, TSLA is likely to be worth 1 trillion or like 28 times her money. It was perfectly rational move IMO since she still had 6-7 years.

 

[FelixDeCat]

Futures are pointing to more selling for the markets at the open.

Like I said, be careful buying any dips right now. Prices can always go lower.

 

[Roger Wilco]

I’m honestly wondering how many investors are legitimately concerned about their own mortality, rather than just market speculation. I don’t know much about stocks, but I did sell my two shares of AMD at ~$60 a share like an absolute boss. I can get like 20 gourmet ice cream cones with that.

 

[jpiniero]

It's pretty much inevitable now that the Fed will hold an emergency meeting soon to cut rates.

 

[FelixDeCat]

It's pretty much inevitable now that the Fed will hold an emergency meeting soon to cut rates.

While helpful, thats just a panacea for credit markets and it takes time to work its way into the economy. To be honest, we dont need rate cuts, we need containment - and lots of it.

 

[s0me0nesmind1]

It's pretty much inevitable now that the Fed will hold an emergency meeting soon to cut rates.

That (IMHO) is sad and pathetic... that they are altering the market based on a random event that is based on irrationality.

Maybe I'm wrong though, I just don't believe in it myself...

 

[jpiniero]

While helpful, thats just a panacea for credit markets and it takes time to work its way into the economy. To be honest, we dont need rate cuts, we need containment - and lots of it.

It's not to help the economy, it's to help the stock market. I'm sure we they will accelerate Not QE if this selloff persists.

 

[FelixDeCat]

Gold is going up so fast right now, I would not be surprised to see it retake its recent highs. Current price $1596, up $30/oz.

 

[dasherHampton]

Down 300? Thats like a weak bitch slap.

Luckily I'm not that exposed. My dividend stocks are way down but they'll recover over time.

 

[ponyo]

Futures are pointing to more selling for the markets at the open.

Like I said, be careful buying any dips right now. Prices can always go lower.

#1 rule of trading. Never trust red futures the night before. Because by morning, it's usually green. Because 9 times out of 10, it's green by the morning open.

Don't fight the Fed. You're going to lose.

 

[alcoholbob]

#1 rule of trading. Never trust red futures the night before. Because by morning, it's usually green. Because 9 times out of 10, it's green by the morning open.

Don't fight the Fed. You're going to lose.

Futures are green again, so relying on those numbers a day before market opens isn't really that reliable data for trading.