# Oh no!! Stock market



## MrMatt

So I'm being somewhat "flooded" with people concerned about the market.
I don't work in finance.

Are people really that freaked out by a small shift in the market? 
They happen all the time, we just had one a few months ago.

Does anyone else think there are too many people watching a bit too closely?


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## OneSeat

Supermarket or stockmarket - buy when there is a sale on.


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## AltaRed

OneSeat said:


> Supermarket or stockmarket - buy when there is a sale on.


Depending on where one is in life. "Stay the course" is the more common phrase.


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## Eder

This market is a dream for those living off of or intending to live off of dividends.


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## Mechanic

Eder said:


> This market is a dream for those living off of or intending to live off of dividends.


Not sure I follow that. I am living off dividends and interest but have suffered a huge "paycut" this year, along decrease of value of holdings. Fortunately, I have cash wedges to sustain us but it is very uncomfortable.


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## AltaRed

Mechanic said:


> Not sure I follow that. I am living off dividends and interest but have suffered a huge "paycut" this year, along decrease of value of holdings. Fortunately, I have cash wedges to sustain us but it is very uncomfortable.


A big interest cut is well understood but could you explain a bit more about a 'huge' dividend cut, if in fact that is what you meant? I am only down circa 5% on dividends YTD vs same period last year. Granted my portfolio is not designed to be exceptionally dividend heavy in the first place @ about 3% yield.


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## like_to_retire

Mechanic said:


> Not sure I follow that.


I think he's saying that his income from dividends has remained constant or risen along with the share prices of his stocks going on sale in case he wants to buy more. How could you not enjoy that?

Myself, my dividends are up 4.7% YTD. No reductions.

ltr


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## AltaRed

Mechanic has not said that at all. S/he has said s/he has taken a huge "paycut". I am trying to understand that, if that is the case.


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## like_to_retire

AltaRed said:


> Mechanic has not said that at all. S/he has said s/he has taken a huge "paycut". I am trying to understand that, if that is the case.


My response was to Mechanic not understanding why Eder said it was a dream situation. I explained why it was a dream situation. I have no idea why Mechanic doesn't understand.

ltr


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## nathan79

I always assume the stock market can drop ~30%, especially the overvalued US market.


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## OptsyEagle

nathan79 said:


> I always assume the stock market can drop ~30%, especially the overvalued US market.


The only problem I find is that the stock market can only drop 30% when the majority of investors are absolutely sure it is going to drop a lot more. I mean why else would they have sold. That is what becomes the bigger problem, not the -30% drop.

My dividend income is up this year but that is only because I was selling a fair amount of stuff over 2019 and got lucky enough to reinvest it all after the pandemic hit. I think I have had a small number of dividend cuts but the new dividends payors I have bought have more then made up for those.


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## AltaRed

Not very difficult to be up with Cdn dividends this year (via blue chip large caps) but that is out of one's control with ex-Canada broad market ETFs.


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## MrMatt

OptsyEagle said:


> The only problem I find is that the stock market can only drop 30% when the majority of investors are absolutely sure it is going to drop a lot more. I mean why else would they have sold. That is what becomes the bigger problem, not the -30% drop.
> 
> My dividend income is up this year but that is only because I was selling a fair amount of stuff over 2019 and got lucky enough to reinvest it all after the pandemic hit. I think I have had a small number of dividend cuts but the new dividends payors I have bought have more then made up for those.


No, only when there aren't enough buyers.

Lets say there are 1 million shareholders holding 100 shares of a stock at $100.
lets say 10 people have orders to buy 100 shares at 70,80,90.
If someone tries to sell 1000 shares, it drops to $90.
If they sell 2000 shares, it's $80, 3k shares, to $70, even though only a small number of shareholders wanted to sell.


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## OptsyEagle

MrMatt said:


> No, only when there aren't enough buyers.
> 
> Lets say there are 1 million shareholders holding 100 shares of a stock at $100.
> lets say 10 people have orders to buy 100 shares at 70,80,90.
> If someone tries to sell 1000 shares, it drops to $90.
> If they sell 2000 shares, it's $80, 3k shares, to $70, even though only a small number of shareholders wanted to sell.


Yes and all that happened in order to get it to go down 30%. 

In order to get someone to sell something at a lower price they must be motivated to do so. If they did not sell yesterday at the higher price, why would they sell today at a lower price. Something is motivating them. Obviously there is a buyer for every seller but when a market has gone down 30% you find that the ones with the negative arguments (the sellers) tend to yell them louder and for some reason they tend to sound more correct, then the other arguments (the buyers) that are more positive. It is just the way it is.


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## OptsyEagle

as for the stock market. I am hoping, with every fibre of my being, that today's downturn is followed by identical amounts on Thursday, Friday and hopefully a little more uglier on Monday. It can start going back up on Wednesday.

I imagine a few will know where I am going with this, but with C-19 infections going straight up and the stock market plunging, at the same time, it might be just what US voters need to make the right choice on Tuesday.


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## AltaRed

I suspect most everyone has already made up their minds albeit having another weekend to stew over their Oct month end financials may swap some votes.


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## Pluto

Interestingly, Oct 28 is historically the best day for the stock market. Didn't pan out this year. 

But I agree about dividend income - its a dream. my income continues to inch up, and my growth stocks snapped back after the spring drubbing. No worries here.


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## MrMatt

OptsyEagle said:


> as for the stock market. I am hoping, with every fibre of my being, that today's downturn is followed by identical amounts on Thursday, Friday and hopefully a little more uglier on Monday. It can start going back up on Wednesday.
> 
> I imagine a few will know where I am going with this, but with C-19 infections going straight up and the stock market plunging, at the same time, it might be just what US voters need to make the right choice on Tuesday.


My point was that a small minority of traders control stock prices.

I would not bet the stock market is going to rocket up Wednesday.
The US election will likely be undecided, or protests will spring up, I'm expecting chaos on Wednesday.

Early polls suggest US voters are making the wrong choice, but it's going to be close.


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## james4beach

MrMatt said:


> So I'm being somewhat "flooded" with people concerned about the market.
> I don't work in finance.
> 
> Are people really that freaked out by a small shift in the market?
> They happen all the time, we just had one a few months ago.
> 
> Does anyone else think there are too many people watching a bit too closely?


Yes, people really do get freaked out very easily. I'm going to generalize here. Obviously there are very astute and experienced investors who are different, know the risks they take, and can tolerate it.

This anxiety about stocks is why I argue that many investors should have a small % equity allocation. The mainstream advice is something like 60% or 80% equities but I think this is crazy, for most people. Most people can't handle that kind of volatility. People lack faith or trust in stocks and Wall Street and no amount of charts or statistics will make them relax. They get talked into aggressive allocations like 60% equities, then naturally freak out the _moment_ stocks fall sharply. It happens because they *never were comfortable* with taking that much stock risk.

My perspective is that the right % equities is the amount you are comfortable and at peace with, because then, you can actually stay invested long term. The theoretical returns of say 80% equities don't turn into reality if you can't stay invested for multiple decades. The investor who makes money in the long term is the one who can stay invested according to their plan.

So the plan has to be something the person can tolerate and actually be comfortable with. This means that an investor has to be honest with themselves... they can't follow a plan which goes against their their own instincts, or which fails to address their own fears and concerns.

There are many investors who are pretty nervous about stocks even during good times. Obviously someone who is nervous about stocks at normal times, is going to absolutely lose it when stocks start crashing.



AltaRed said:


> Depending on where one is in life. "Stay the course" is the more common phrase.


Yes, I think the key thing is for everyone to be clear on their plan, and stick with their plan. To some extent it doesn't really matter what the plan is (assuming it's reasonably sane). But one has to stick with it.


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## Mechanic

My big dividend hit was mostly due to the fact that I have a fairly large investment in VET and some of my other holding also cut/lowered dividends. Made me realize that I have some changes to make. Added to a couple of banks yesterday. Sorry for the confusion. Dividends are a big part of our retirement income.


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## james4beach

One has to be a bit careful with dividends. They actually are somewhat correlated with stock prices. Dividends tend to increase when stocks are strong, and tend to decrease when stocks are weak.

Sadly this fact isn't fully appreciated and people sometimes have the idea the dividends are somehow disconnected from stock strength. But dividends *and* prices are both driven by the same fundamentals: business health


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## AltaRed

Mechanic said:


> My big dividend hit was mostly due to the fact that I have a fairly large investment in VET and some of my other holding also cut/lowered dividends. Made me realize that I have some changes to make. Added to a couple of banks yesterday. Sorry for the confusion. Dividends are a big part of our retirement income.


Strictly my opinion and how I operate, but here goes.....

I would suggest if one is going to be primarily a 'dividend investor', it is best to stay with the larger stocks that are more mature, OR in the case of growth or mid-caps, those that have a low percentage yield (because growth has to be funded somehow). My rule of thumb is NOT to own a stock longer term that has the lesser of: 1) a dividend yield percentage more than about 4-5% and/or 2) a yield that is not more than 50% of a stock's total return (dividend + capital appreciation). Why those numbers? Because most successful dividend paying businesses have a Total Return on Capital of mid-to-high single digits (as compared to double digits) as evidenced by decades of analysis of the TSX and S&P500. Dividend payout exceeding about 50% of Total Return can't be good for long term business growth simply because no good can come from excessive yield distribution. Albeit in a bear market, clearly dividend yield percentages will rise for the duration due to share price declines.

In the short term however, even blue chips can run into trouble, e.g. ENB with its current high yield percentage. This is a case of ENB making too much commitment to dividend growth and distributing too much of its income/cash flow to dividends rather than paying down debt. It works for awhile until it doesn't....and then it can take years to get out of the penalty box (upwards of 2 more years potentially for ENB - longer if they do something stupid like increase the dividend again in 2021). Lots of Canadian blue chips are doing just fine with a 4-5% yield and I am also fond of ones like ATD.B and CNR with dividend yields <2%.

If you start thinking of dividends as Return of Capital from your investment, you will be more hesitant about emphasizing yield so much. Many will scoff at the concept of "dividend as Return of Capital" but it is actually true because to the extent earnings are not re-invested into the business to grow earnings and thus capital value, then it is capital being returned to you. Ultimately, don't try to get much more yield than what the market overall is willing to deliver, don't stray much from the Dividend Aristocrats for yield, and by all means be skeptical of the value traps in the list of Dividend Aristocrats (about a third of them in my opinion).


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## james4beach

AltaRed said:


> If you start thinking of dividends as Return of Capital from your investment, you will be more hesitant about emphasizing yield so much. Many will scoff at the concept of "dividend as Return of Capital" but it is actually true because to the extent earnings are not re-invested into the business to grow earnings and thus capital value, then it is capital being returned to you. Ultimately, don't try to get much more yield than what the market overall is willing to deliver, don't stray much from the Dividend Aristocrats for yield, and by all means be skeptical of the value traps in the list of Dividend Aristocrats (about a third of them in my opinion).


I agree completely with AltaRed

And to get some ideas of which stable large cap companies are good candidates for this, look at the top holdings of XIC and CDZ ... the giant, well established companies which tend to have moderate dividend yields.


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## AltaRed

I've never liked CDZ because it contains too many high yield traps. Just looking at the table of recent distributions, CDZ paid out 9.4 cents/unit for the first 3 months of this year, then 10.4 cents for 3 months, then 7.4 cents for the following 3 months, only recovering to 8 cents for September. While that doesn't tell the whole story, it directionally tells me there are too many high yield entities (relative to investment quality) in their 90+ holdings. There is no way there should be a ~25% cut in distributions even in a debacle year like 2020 if all it held was quality companies.

I think some of the other dividend ETFs with filters on some other metrics would most likely have been a better choice, e.g. market capitalization thresholds, D/E ratios, dividend payout ratios, etc.


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## MrMatt

I think for a mature company, dividends are a great way to return.
Really at some point companies run out of opportunities.

I don't think there are many organizations capable of running several different divisions in different industries, it's a recipe for lack of focus and lack of expertise.

That being said, for a large holding company where they're run independantly that's fine. I just don't think a company like Samsung, which makes literally everything is a good idea.

When you run out of opportunities to invest in your core market, a bit of expansion is okay, but simply giving earnings back to owners is just fine.

Typical bank, or a company like Ford makes sense. They have their market, they do invest and return the excess in a sustainable way.


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## AltaRed

MrMatt said:


> I think for a mature company, dividends are a great way to return.
> Really at some point companies run out of opportunities.


I don't disagree. Remember Bell Aliant? It had no real growth opportunities so it gave its capital (earnings) back in a hefty dividend. No one expected more from it. Like clipping coupons on a bond. Eventually it got taken out because its multiples couldn't offer shareholders anything else.

No one buys our banks, telecoms, utilities, rails, pipelines et al on the assumption they don't have growth opportunities....because there would be little to no dividend growth either.


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## james4beach

AltaRed said:


> I've never liked CDZ because it contains too many high yield traps. Just looking at the table of recent distributions, CDZ paid out 9.4 cents/unit for the first 3 months of this year, then 10.4 cents for 3 months, then 7.4 cents for the following 3 months, only recovering to 8 cents for September. While that doesn't tell the whole story, it directionally tells me there are too many high yield entities (relative to investment quality) in their 90+ holdings. There is no way there should be a ~25% cut in distributions even in a debacle year like 2020 if all it held was quality companies.


Interesting. For comparison, we can look at XIU which is the TSX 60, and tends to have the largest / best established companies. Its cash dividend stream looks pretty steady:

Nov 2019: $ 0.193
Feb 2020: $ 0.194
May 2020: $ 0.207
Aug 2020: $ 0.189


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## Eder

XIU also has many of the worst companies to its detriment.


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## AltaRed

Eder said:


> XIU also has many of the worst companies to its detriment.


That is always going to happen in any particular grouping of holdings, however the index is defined for that grouping. It is also the way to capture the best that one may not have considered buying in the first place. By buying the market, there is no FOMO. Dividend investors could do a lot worse than buying XIU or a well defined Dividend ETF with some well defined filters/rules... not just Dividend Aristocrats with a multi-year history of increasing dividends as I commented on earlier.


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## james4beach

AltaRed said:


> That is always going to happen in any particular grouping of holdings, however the index is defined for that grouping. It is also the way to capture the best that one may not have considered buying in the first place. By buying the market, there is no FOMO. Dividend investors could do a lot worse than buying XIU or a well defined Dividend ETF with some well defined filters/rules... not just Dividend Aristocrats with a multi-year history of increasing dividends as I commented on earlier.


I know that stock-pickers will disagree with this, but I still think XIU or XIC are the best "dividend investments" in Canada. The management fees are insanely low and the long term returns have been just as good as the US index, while also having a heftier dividend payout... a pretty amazing combination.

Here's a 20 year chart showing XIU (red) versus the S&P 500 (black), both in CAD. They provided the same return.


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## AltaRed

That answer won't cut it for folks looking for 3+% yield. FWIW, dividend investors who mght be better looking at a more passive approach should at least look at the ETFs mentioned in AdvisorSavvy and StockTrades though I know nothing about either sites. 

I'd like to see DividendEarner update this article post-pandemic as well. I think I have mentioned in the past that my ex has an all ETF portfolio and her Cdn holdings are primarily XIU and XDIV.


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## james4beach

AltaRed said:


> That answer won't cut it for folks looking for 3+% yield.


XIC has a 3.4% dividend yield


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## AltaRed

james4beach said:


> XIC has a 3.4% dividend yield


Okay, but only since the markets have declined recently (as is true for XIU). Point is taken though that any ETF yield approaching 3% is pretty decent. Spouse has about a 25% weighting of XIC in her RRIF that is serving her well.


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## OneSeat

AltaRed said:


> Dividend investors could do a lot worse than buying XIU or a well defined Dividend ETF with some well defined filters/rules... not just Dividend Aristocrats.





james4beach said:


> I still think XIU or XIC are the best "dividend investments" in Canada.


You guys have me convinced - _and I now have someone to blame if it turns out wrong_ 😊
But what does anyone think about adding some HiDiv ETF in say a 75/25 ratio?
XIU Div is 3.33% and XEI is 5.42%.
Is it worth the "complexity" ?


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## AltaRed

I would compare how a few dividend ETFs have done over the past 3 years against the TSX in general. Each dividend ETF has different 'rules' which results in different sector weightings relative to each other due to the valuation metrics being applied. 2020 is an especially interesting year because they likely is considerable differences in how each of the dividend ETFs weathered the March downturn and how they recovered. Ultimately, no one dividend ETF is likely the 'best'. Market conditions at the time will determine which horse is leading at various points around the track.

I gave you a link to the Dividend Earner article that discusses each of the dividend ETFs briefly, albeit returns would all be pre-pandemic. I can't really suggest one in particular though I can tell you I don't like CDZ (too many income funds/trusts, high MER, number of holdings) and don't like XDV/VDY/XDIV due to high MER and high financial weighting.

Added: A quote from Ian McGugan in GlobeInvestor Oct 28


> Many Canadians regard dividend investing as gospel. If so, they might want to start investigating alternative faiths, writes Ian McGugan. Over the past three years, investors who selected Canadian stocks on the basis of their dividend yields have received little in return for their trouble. Perhaps this represents a temporary aberration. But anyone who wants to practise dividend investing in Canada today has to face an inconvenient truth: The two sectors that produce the bulk of Canadian dividends are confronting challenges. (for subscribers)


Without looking at the actual article, those two sectors would be financials and energy. That said, the performance issues may be temporary, e.g. 1-2 years until those sectors rebound. But a good reason why to pick a broader based dividend ETF.... and even XIU or XIC itself. Who would have thunk?


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## OneSeat

AltaRed said:


> - - - - compare how a few dividend ETFs - - - - against the TSX in general.


Alta - thanks for your always interesting reply - but it was doing such exercises that made me ask.
Asking a more open question often elicits wider ranging replies.
I will put together a summary and re-ask my question.


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## :) lonewolf

james4beach said:


> One has to be a bit careful with dividends. They actually are somewhat correlated with stock prices. Dividends tend to increase when stocks are strong, and tend to decrease when stocks are weak.
> 
> Sadly this fact isn't fully appreciated and people sometimes have the idea the dividends are somehow disconnected from stock strength. But dividends *and* prices are both driven by the same fundamentals: business health


 The highest dividend yield for the DJI was in 1932 over 15% which was the year of the low after 89% drop from 1929 high when the yield was 3.1%


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## AltaRed

FWIW, I don't think XEI is a bad choice...but it was how you said it that caused me to challenge you, rather than acknowledge it. You appeared to show a bias in decision making using "yield percentage" as your priority. That criteria would be pretty low on my list. I'd be looking at the 'design' of the ETF (objectives, goals, rules, criteria) on how holdings are selected, MER, sector allocation, P/E of aggregated assets being held. Yield percentage then becomes an outcome/result of the effort, not the criteria.


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## OneSeat

Sorry for slow reply. My priorities today were prostate, then leaf-raking, then investment - and I ended up doing more analysis on that than originally intended. But here I am - and I think we basically agree even if we express ourselves differently. One difference is that I do think "dividend$/yield%" is one very useful quick check on overall performance, but not the only one.

I have had those 5 or 6 Dividend ETFs that are mentioned all over the web these days on a special page in my investment spreadsheet for several months now. No voluminous numeric analyses - just a generalised overview covering - 
- MER minus yield (I never use yield without MER)
- TSX price history and % change over six periods from 1mth to 5 yrs (about 1" deep by 4" wide)
- % holdings of each ETF by Finance, Energy, etc etc.

That led me to XIU (large holding) and XEI (smaller holding) and then my question to the forum.

My more detailed analysis on those two from Jan 2019 showed - 
- until Covid - XUI gained 16% - 8% TSX, 8% DRIP
- XEI did almost as well in a different way - gaining 14% - mostly on DRIP.

Since the Covid collapse XUI was recovering well until this last week. 
But XEI - I want to say "forget it" - $10,000 in Jan 2018 is now worth only $8900 - mainly TSX but also DRIP.
I guess my questions on XEI should be "Is the low market price a buying opportunity?"
and "Will its future performance justify buying it now?" 

I also did the same analysis on bond ETFs - XBB and XSB.
What I expected - the shorter bonds offer slightly less reward for slightly less volatility. 

In case it matters my "long" range planning is now about 10 years.

Happy Halloween - we didn't have any kids calling.


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## OneSeat

Huh - correction - I meant Yield minus MER - not the other way round -


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## AltaRed

The one thing to recognize is you are generating conclusions over a short period of time, when you make comments like XIU was recovering nicely until last week, and XEI is only worth $8900 now versus $10,000 in Jan 2019. That analysis is only useful in observing how various sectors and stock types on the TSX have behaved in a short period of time. It tells you nothing about a 5 year rolling average, or more appropriately a 10 year rolling average. Anyone who makes investment decisions on what has happened in the past year (or two) is simply responding to 'recency bias'. 

It is well understood by pretty much everyone that TSX dividend blue chip stocks have not responded nearly as well coming out of the March 2020 debacle as have growth (momentum) stocks such as Shopify. Why is that? Market psyche I suspect with investors stuck at home looking too closely at markets and itching for something to do. No one knows why market psyche is what it is during any period of time. One has to tune out that noise and simply stick to a plan for the longer term. 

What will happen someday is dividend stocks will be popular again and they will outperform the growth stocks for a period of time. It will happen when it happens. Maybe pretty soon if we have another 10% downturn in the equity markets in the next month or two and all those growth investors bail. 

What you have found out in your analysis is that high(er) yielding dividend stocks behave differently than low(er) yielding dividend stocks depending on market psyche at the time. If you are in retirement, I'd suggest you may want to be 'mostly' market neutral with a bias towards investment income (dividend yield) but not so far as to compromise the Total Return of your portfolio. My view would be to simply hold XIU for your Cdn equity, but if you want to reach for yield just a bit more, then perhaps a mix of XIU and XEI will help you sleep better at night....perhaps being a bit less volatile over 5-10 years than XIU alone.


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## OneSeat

Once again thank you for your reply. I did those 3-year analyses at your suggestion - they were interesting but can't say I learned anything worthwhile - certainly not any "conclusions".

My investment approach remains the same as my business approach was - make enough to pay the rent then respond to other opportunities that one might come across. Can't digitally analyse those opportunities - just have enough confidence and make commitments (buy or sell) that one is comfortable with. I never tried to analyse my choice of career, nor which girlfriend to marry - but they were both very good "investments".

Others examples have been - 
- get out of stagnating Japan and into expanding China (about 2005)
- sold same (approx 2008, after the peak) - about 300% profit!!!!!
- simplify my pay-the-rent investments from worldwide to VOO only (several years ago)
- add growth ETFs (VUG etc) to VOO (soon afterwards)
- take profits - sold my growth ETFs (late 2019) 70% profit
- buy them back after Covid (late March)
- sold them again (August) 50% profit.

None of those were "analysed" - and not all them were winners!


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## OneSeat

(clicked SEND too soon)

Back to XEI - 
Question to people who own XEI - are you keeping it?
Question to people thinking of buying XEI - are you going to at current lower price?
Question to people who decided not to buy XEI - why not?

Thanks.


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## AltaRed

For myself, I have never considered XEI because I stock pick Canada and ETF everything ex-Canada. 

That said, I provide recommendations to my ex-spouse and she is all passive ETF. Her Cdn equity component is primarily XIU supplemented by XDIV (likely poor choice) and ZRE (hit hard in 2020). In her case, XDIV was selected due to low MER, stated goals and objectives, and not excessive number of holdings. It's down side this year especially is its heavy weighting to financials. This is not the time to sell it (low) so she will wait it out for the 1-2 years it may take to rise again and be a winner. No single one of the dividend ETFs will be a winner all/most of the time relative to the others.


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## james4beach

Curious if Monday will have much of a decline. The news out of Europe on the weekend was pretty bad.

Late night, I see oil down 4%, gasoline down 5%, but stock futures are about flat.

The US Dollar is strengthening against every currency, which is _usually_ bearish (sign of broad deleveraging). Looks like USD/GBP is up 2%, a spectacular move in a major currency.


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## james4beach

Things are getting more interesting now.

Oil down 6%
EU stocks down 2% to 3%
US futures are down but not by much
USD/CAD up 1.3%
USD/GBP up 2.5%
Absolutely crazy to see the pound move that sharply! Friday was quadruple witching, which might add instability to markets around that expiration event.


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## MrBlackhill

I'm down -1.75% with my most volatile stock down -8.80% and my best up +2.35%.

Fun times, it won't last.


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## Calgary_Girl

My best stock is up over 300% in 2 months. Luckily, it’s making up for the decline in everything else 🤦🏻‍♀️


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## MrBlackhill

Calgary_Girl said:


> My best stock is up over 300% in 2 months. Luckily, it’s making up for the decline in everything else 🤦🏻‍♀️


I was curious if AT.TO would drop during this day of market panic, but it seems like the momentum is too strong. I was about to enter the stock last Monday at $9, missed my entry point because is suddenly decided to soar and never got in. It's unfortunate, but such things happens.


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## MrBlackhill

james4beach said:


> Things are getting more interesting now.
> 
> Oil down 6%
> EU stocks down 2% to 3%
> US futures are down but not by much
> USD/CAD up 1.3%
> USD/GBP up 2.5%
> Absolutely crazy to see the pound move that sharply! Friday was quadruple witching, which might add instability to markets around that expiration event.





MrBlackhill said:


> I'm down -1.75% with my most volatile stock down -8.80% and my best up +2.35%.
> 
> Fun times, it won't last.


Just a normal day, the market this year is just a joke, it's always positive. I'm now positive at +0.18% for my portfolio today with my worst stock for today at -2.82% (total +120% since June) and my best for today at +5.44% (total +40% since May).


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## doctrine

james4beach said:


> Things are getting more interesting now.
> 
> Oil down 6%
> EU stocks down 2% to 3%
> US futures are down but not by much
> USD/CAD up 1.3%
> USD/GBP up 2.5%
> Absolutely crazy to see the pound move that sharply! Friday was quadruple witching, which might add instability to markets around that expiration event.


I slept in. The DOW is up, and oil is back to $48, which is about where it was on Thursday. Panic selling aside, underlying fundamentals haven't changed.


----------



## Tostig

MrMatt said:


> So I'm being somewhat "flooded" with people concerned about the market.
> I don't work in finance.
> 
> Are people really that freaked out by a small shift in the market?
> They happen all the time, we just had one a few months ago.
> 
> Does anyone else think there are too many people watching a bit too closely?


Are these people old enough to have lived through the financial crisis of 2008? What did they do with their investments at that time? They have to know themselves before you can console them now. Bubbles burst and markets recover - over and over again. You can't convince them to stick it through if they watch Epic Economist on Youtube all the time and are determined that this time is different.


----------



## MrMatt

Tostig said:


> Are these people old enough to have lived through the financial crisis of 2008? What did they do with their investments at that time? They have to know themselves before you can console them now. Bubbles burst and markets recover - over and over again. You can't convince them to stick it through if they watch Epic Economist on Youtube all the time and are determined that this time is different.


These things happen every few years.
It's completely normal.


----------



## Just a Guy

When the general population starts getting into the market, the bubble is soon to burst. Uneducated and lazy investors think it’s easy money, so they jump in and ride the bandwagon...remember the dot bomb years, everyone owned stocks which had no income, no plan to generate an income and we’re going up, up, up...the “new economy” it was called...easy money. Until really reared it’s ugly head. people lost their shirts.

Lots of people today have investments again, not understanding any of them. A little volatility and they’ll all panic sell, adding to the fear. Just an excellent buying opportunity for real investors picking the babies that get thrown out with the bath water.

theres a big difference between stock owners and investors.


----------



## james4beach

doctrine said:


> I slept in. The DOW is up, and oil is back to $48, which is about where it was on Thursday. Panic selling aside, underlying fundamentals haven't changed.


I think the only panic selling I saw was in early am futures. Just 2 hours into regular market trading, everything seemed pretty normal again.



MrBlackhill said:


> Just a normal day, the market this year is just a joke, it's always positive. I'm now positive at +0.18% for my portfolio today with my worst stock for today at -2.82% (total +120% since June) and my best for today at +5.44% (total +40% since May).


My overall portfolio (stocks/bonds/gold) ended 0.2% higher than Friday.

My growth stock picks are 1.3% higher today.

Unbelievable! Market participants are fearless. People think there is no risk in markets.


----------



## MrBlackhill

Last Monday, SPY spiked during less than one second due to international sweep orders.

Read the Bloomberg article


----------



## MrMatt

MrBlackhill said:


> Last Monday, SPY spiked during less than one second due to international sweep orders.
> 
> Read the Bloomberg article
> 
> View attachment 20996


This is why I'd like to leave some "way outside" limit orders, like 30-60% above current value.
But not all brokers like that.


----------



## MrMike

Eder said:


> This market is a dream for those living off of or intending to live off of dividends.


How so? I'm not necessarily disagreeing; just wondering why you say that.


----------



## MrMatt

MrMike said:


> How so? I'm not necessarily disagreeing; just wondering why you say that.


Yields are awesome.


----------



## MrMike

MrMatt said:


> Yields are awesome.


Just to be more specific, the market is a dream for those putting money in now, and getting that high yield.

If I've been retired for a year, living off dividends, the current market does nothing for me. They put money in and got the yield was it was at the time. The current market means nothing to them (unless they need to sell, they it the market is a nightmare).


----------



## MrBlackhill

So... is this an exceptional year for smaller caps?

On TradingView Stock Screener, I see 678 stocks which currently have a market cap over $100M.

0 stock have a YTD performance above or equal to +5000%
4 stocks have a YTD performance above or equal to +2000%
10 stocks have a YTD performance above or equal to +1000%
28 stocks have a YTD performance above or equal to +500% (28 out of 678 means 4% of the stocks)
44 stocks have a YTD performance above or equal to +300%
72 stocks have a YTD performance above or equal to +200%
136 stocks have a YTD performance above or equal to +100% (136 out of 678 means 20% of the stocks)
220 stocks have a YTD performance above or equal to +50%
263 stocks have a YTD performance above or equal to +40%
294 stocks have a YTD performance above or equal to +30%
326 stocks have a YTD performance above or equal to +20%
372 stocks have a YTD performance above or equal to +10%
429 stocks have a YTD performance above or equal to +0%
185 stocks have a YTD performance below or equal to -10%
137 stocks have a YTD performance below or equal to -20% (137 out of 678 means 20% of the stocks)
81 stocks have a YTD performance below or equal to -30%
49 stocks have a YTD performance below or equal to -40%
29 stocks have a YTD performance below or equal to -50% (29 out of 678 means 4% of the stocks)
19 stocks have a YTD performance below or equal to -60%
9 stocks have a YTD performance below or equal to -70%
1 stock have a YTD performance below or equal to -80%
0 stocks have a YTD performance below or equal to -90%
Let's see it this way: 4% of the stocks would cut your money in half or worse while 20% of the stocks would double your money or better. 1 stock dropped about -80% while 28 stocks soared more than +500%.

Now let's say I don't like small caps in my pool of stocks. I see 70 stocks which currently have a market cap over $10B.

0 stock have a YTD performance above or equal to +200%
1 stock have a YTD performance above or equal to +150%
5 stocks have a YTD performance above or equal to +50%
6 stocks have a YTD performance above or equal to +40%
11 stocks have a YTD performance above or equal to +30%
14 stocks have a YTD performance above or equal to +20%
21 stocks have a YTD performance above or equal to +10%
35 stocks have a YTD performance above or equal to +0%
17 stocks have a YTD performance below or equal to -10%
9 stocks have a YTD performance below or equal to -20%
4 stocks have a YTD performance below or equal to -30%
2 stocks have a YTD performance below or equal to -40%
0 stock have a YTD performance below or equal to -50%

Let's see it this way: 9 stocks dropped by -20% or worse while 11 stocks soared +30% or better.

For reference, XIC has a YTD performance of +4%.

Note: All those stats are for share price performance, it does not include dividends, it's not a total performance.

Note: TradingView (as many other stocks screeners) may glitch on reporting the performance of a stock.

Note: I know this is biased by the fact that my screener for market cap is at the year end, so some of the stocks that currently fit the market cap criterion would've been excluded if the screening would've been done at the beginning of the year. But there's one thing I can point out for sure. The TSX Venture Composite Index currently have a 52-week performance of +52%.










To be fair though, here's the chart for TSX Venture Composite Index (5 years and 20 years) which underperformed from 2018 to 2020 (beginning of year). That index performed pretty badly since 2008

















Against TSX Composite Index for 5 years and 20 years.

















Based on the TSX Venture Composite Index, I see the smaller caps soar after a crash... but then drop hard during the next crash and never recover. I'm wondering though how TSX Venture Composite Index is build.









Real-time Stock Market Index Values


Intraday Pricing for all TSX Canada - Composite, 60 & more. Updated Dow Jones, NASDAQ & S&P 500. News & Research.




www.theglobeandmail.com


----------



## MrMatt

Big companies have less price volitility.

For a very small company a contract of a few million dollars can drastically alter the corporate finances.
For large companies, even billion dollar contracts might not have a huge impact.


----------



## james4beach

MrMatt said:


> Big companies have less price volitility.
> 
> For a very small company a contract of a few million dollars can drastically alter the corporate finances.
> For large companies, even billion dollar contracts might not have a huge impact.


Yes. There is more stability in these big businesses... they are more diversified, have more momentum and ongoing business/contracts that are less likely to change in the short term. The other important factor is because the equities are so well established, the stocks are very *widely held*. In comparison the smaller companies, like the growth stocks and small caps, will have concentrated ownership among fewer people. As those owners place trades, the stock can swing around wildly... so those equities are inherently more volatile.

So even if a small company (small cap) has a very stable business, the equity will still be more volatile due to the ownership structure.

The stability both of the businesses, and the stability of very widely owned equities, are the reasons I prefer very large caps for the core part of my Canadian stock picks, the 5-pack [ RY, CNR, ENB, BCE, FTS ]

The TSX 60 is a pretty good place to look. These are the largest companies in the country, and if you look at the first 10 or 20 holdings, you will find the biggest and best established companies. With a few weird exceptions like Shopify, which has become the largest market cap in Canada, but is actually very volatile.


----------



## james4beach

While everyone's eyeballs are on the gambling stocks, is anyone noticing what the broad market is doing today?

The S&P 500 is down 2.5% and TSX (looking at XIC) is also down a whopping 2%
The NASDAQ is down even more.

The US Dollar is up strongly, which usually happens during bearish moves.

VIX has made a sharp move up to 32, the highest "fear" reading in nearly 3 months.


----------



## MrBlackhill

james4beach said:


> While everyone's eyeballs are on the gambling stocks, is anyone noticing what the broad market is doing today?
> 
> The S&P 500 is down 2.5% and TSX (looking at XIC) is also down a whopping 2%
> The NASDAQ is down even more.
> 
> The US Dollar is up strongly, which usually happens during bearish moves.
> 
> VIX has made a sharp move up to 32, the highest "fear" reading in nearly 3 months.


Yup, and I'm pretty happy. We were due for a correction. I'm also happy seeing that my portfolio is less affected by this correction than S&P 500 and NASDAQ. I hope NASDAQ will continue going down for the remaining of the week.


----------



## james4beach

MrBlackhill said:


> Yup, and I'm pretty happy. We were due for a correction. I'm also happy seeing that my portfolio is less affected by this correction than S&P 500 and NASDAQ. I hope NASDAQ will continue going down for the remaining of the week.


Can you share your current portfolio? I thought you were pretty heavy in the NASDAQ.


----------



## MrMatt

My portfolio is up 10% and change compounded over the last decade and a half. (Hooray annual review).

My initial point when I started this thread is people have such small windows they're overreacting.


----------



## MrBlackhill

james4beach said:


> Can you share your current portfolio? I thought you were pretty heavy in the NASDAQ.


It's funny to say this, but today it's my contrarian energy stocks that hedged my portfolio. And my big position in BYD.TO.

I'm down as much as TSX. Wrong, I did worse actually... I did -2.05% today.

I'm still all TSX. And beating NASDAQ with TSX.

For the first time though, I'm below 60% XIRR on my 9-month old portfolio. I'm at 59.50% XIRR.

Once I have 6 figures in my portfolio I'll start buying US stocks. At the moment I don't want to split into two currencies. I'm still happy with what TSX has to offer, even if there's definitely more opportunities in US stocks. I'll just buy global ETFs, but I'm still doing better than those ETFs so I'll wait a bit. I'm just having fun, anyways.

I'm not stressed by the market because I barely have any money on the table. Less than 6 figures. All my money went - and is currently going - in my duplex. Currently spending 6 figures in renovations to make it worth 7 figures pretty soon.


----------



## james4beach

MrBlackhill said:


> I'm not stressed by the market because I barely have any money on the table. Less than 6 figures. All my money went - and is currently going - in my duplex. Currently spending 6 figures in renovations to make it worth 7 figures pretty soon.


Congrats on the duplex and congrats on the BYD position



MrMatt said:


> My portfolio is up 10% and change compounded over the last decade and a half. (Hooray annual review).
> 
> My initial point when I started this thread is people have such small windows they're overreacting.


Very nice... yeah it's easy to over react with small time windows.

I've only kept solid data on this for about 5 years, but mine has been performing at 7.5% CAGR overall. I have no complaints.


----------



## peterk

james4beach said:


> I've only kept solid data on this for about 5 years, but mine has been performing at 7.5% CAGR overall. I have no complaints.


Uhg. You've reminded me to add things up again. My XIRR for the past 8 years of investment contributions has been 8.0%. This is in accounts with stocks only (cash and pensions in other accounts that I don't track).

Pretty abysmal. I've managed to turn ~$305,000 in contributions over those 8 years into only ~$420,000, at these all-time-highs. It shoulda/coulda been double or triple if I behaved right.


----------



## james4beach

peterk said:


> Uhg. You've reminded me to add things up again. My XIRR for the past 8 years of investment contributions has been 8.0%. This is in accounts with stocks only (cash and pensions in other accounts that I don't track).
> 
> Pretty abysmal. I've managed to turn ~$305,000 in contributions over those 8 years into only ~$420,000, at these all-time-highs. It shoulda/coulda been double or triple if I behaved right.


8% return is pretty amazing. I don't see what's disappointing about that.


----------



## MrBlackhill

james4beach said:


> 8% return is pretty amazing. I don't see what's disappointing about that.


Maybe because a fixed monthly contribution into something like XWD.TO has led to a MWRR of 11.63% over the past 8 years. And SPY has led to a MWRR of 14.55%. He is talking about the stocks only.


----------



## MrBlackhill

MrBlackhill said:


> Yup, and I'm pretty happy. We were due for a correction. I'm also happy seeing that my portfolio is less affected by this correction than S&P 500 and NASDAQ. I hope NASDAQ will continue going down for the remaining of the week.


I got what I wanted but also what I deserved. I'm down -2.99% today. Maybe my worst day. Still beating NASDAQ YTD though, even if I underperformed this week. I don't care about volatility as long as my volatility has more upside.


----------



## MrBlackhill

Nice, I'm learning synonyms in English. An article was written with different verbs/words for every stock and index.

Stumbled
A decline of
Fading
A loss of
Surrendered
Dozed off
Let go of
Was grounded
Handed back
Dropped
Down
Sliding
Cratered
A fall of
Endured a descend of
Crumbled
Dipped

Great summary of the week, nice keywords, haha!


----------



## james4beach

MrBlackhill said:


> I got what I wanted but also what I deserved. I'm down -2.99% today. Maybe my worst day. Still beating NASDAQ YTD though, even if a underperformed this week. I don't care about volatility as long as my volatility has more upside.


I'm seeing all my positions hit quite hard today as well.


----------



## james4beach

Bloomberg is reporting that many brokerages, not just Robin Hood, are having their collateral requirements increased by the Depository Trust & Clearing Corp (DTCC), the clearinghouse for stock trades.

The issue is that every trade (both long and short) takes two days to settle. There is a risk that a brokerage becomes insolvent in the mean time, which means they wouldn't be able to deliver the cash. The risk is especially high when brokerage customers are using margin loans on extremely volatile stocks, like everyone is doing these days.

To mitigate this risk, DTCC requires collateral from brokerages. DTCC increased their collateral requirements by a few billion $ a couple days ago, apparently.

What's kind of interesting is that this is like an industry-wide "margin call". They all have to scramble to find a few billion $ cash.

I'm sure it's nothing that can't be fixed with even more free money from the Federal Reserve! This is kind of their expertise.

The real issue though is that lessons aren't learned when the Federal Reserve just gives free cash to everyone, all the time. This kind of "margin call" *should be scary* to the market, and should scare brokerages and investors. That fear should induce more conservative behaviours, like not giving as many margin loans, or keeping more capital around.

But in this current environment, with so much free money, even a margin call isn't as scary. Everyone knows the Federal Reserve will just provide it. So no lesson is learned, nobody is scared, and the normal corrective feedback loop doesn't kick in.


----------



## MrBlackhill

MrBlackhill said:


> I got what I wanted but also what I deserved. I'm down -2.99% today. Maybe my worst day. Still beating NASDAQ YTD though, even if I underperformed this week. I don't care about volatility as long as my volatility has more upside.


Total crazy volatility. My portfolio is currently up +3.26% (I'll update if it cools off). That's what I mean when I say I don't care about volatility as long as it has more upside.

But anyways, the shares in my employee share purchase plan just popped a +40% today. So I'm up +35% since I started in mid-January, or should I say +170% because half of those shares were free to me, therefore doubling my return on investment. Sure, two weeks means absolutely nothing, but it's a nice surprise to have all that profit right from the start. It gives me a boost to my engagement towards the company because if we can all do a great job to have some reconnaissance from the market, then I'll retire pretty happy sooner than later.


----------



## MrBlackhill

Everybody currently moving from growth to value. That's my understanding.

My portfolio is up due to my beaten down energy play which is recovering while tech is lagging.


----------



## doctrine

MrBlackhill said:


> Everybody currently moving from growth to value. That's my understanding.
> 
> My portfolio is up due to my beaten down energy play which is recovering while tech is lagging.


This trade has been alive since the Pfizer vaccine announcement in early Nov. I positioned last summer, but I did not foresee conditions as excellent as they are now. Vaccines are more effective and coming as fast or faster than I thought, and commodity prices and underlying pent-up demand is just huge because of stimulus. I think there is a lot of room to go on the value trade and especially given its starting to become more mainstream. Financials are catching up, but energy and materials have a long way to go with 100% upsides still possible.

Of course if cyclicals stay booming and classic defensive stocks like utilities, consumer staples, and even gold continue to move down, it might be time to start looking at transferring profits into those sectors. I'm not one to stick with a strategy to the bitter end.


----------



## Numbersman61

My entire assets are due to my employment in the energy industry, I only own one energy related stock - Enbridge. Took some losses in other energy stocks. Have owned it and it’s predecessors for many, many years. I know the energy industry very well having been a senior executive (CFO and/or CEO) of a number of junior E & P companies and a director of various companies in the energy service sector. My view is that it’s best to stay on the sidelines until we can see some stability in this sector.


----------



## scorpion_ca

Numbersman61 said:


> I know the energy industry very well having been a senior executive (CFO and/or CEO) of a number of junior E & P companies and a director of various companies in the energy service sector. My view is that it’s best to stay on the sidelines until we can see some stability in this sector.


What is your thought of Clean Energy companies in North America?


----------



## james4beach

scorpion_ca said:


> What is your thought of Clean Energy companies in North America?


Just FYI, the stocks in this sector seem to be in somewhat of a bubble (there's a hype and mania around them)


----------



## Numbersman61

scorpion_ca said:


> What is your thought of Clean Energy companies in North America?


I have done minimal research on this sector so have no opinion


----------



## MrMatt

scorpion_ca said:


> What is your thought of Clean Energy companies in North America?


I've done awesome with BEP.
I think they're a bit pricey, however there is a HUGE politicial push to "Green" energy, and "Green" jobs.

There is a huge amount of political pressure to go "Green", and they'll dump whatever they can in it.








Text - H.Res.109 - 116th Congress (2019-2020): Recognizing the duty of the Federal Government to create a Green New Deal.


Text for H.Res.109 - 116th Congress (2019-2020): Recognizing the duty of the Federal Government to create a Green New Deal.



www.congress.gov





With that, and the other political issues they're attaching to Green initiatives, I don't think that an economic argument against these programs will be very popular. 

I think Green energy is a bit overvalued on the merits, but undervalued due to the insane levels of political support.
I think there is a HUGE opportunity in the politics, and Brookfield is one of my picks for their ability to exploit it


----------



## MrBlackhill

A couple of friends of mine have just panic-sold all of their stocks. I'm waiting to buy more. My YTD just entered the slightly negative.


----------



## james4beach

MrBlackhill said:


> A couple of friends of mine have just panic-sold all of their stocks. I'm waiting to buy more. My YTD just entered the slightly negative.


Yes, people are already selling, even though markets have barely dropped at all yet.

If even these tiny drops are enough to scare people, can you imagine the tsunami of selling that happens during a 20% or 30% drop? This is what I mean when I say that (many) people just find it impossible to stick with long term 100% stock exposure in practice. Everyone starts off thinking they are a long term, stock-heavy investor who can brave anything... but then the moment something bad happens, they sell sell sell.

The current correction is nothing, yet. SPY drawdown of barely 6%.

Even in the context of a bull market, we could easily see stocks drop 20% and stay low for a while before the rally continues.


----------



## MrBlackhill

james4beach said:


> Yes, people are already selling, even though markets have barely dropped at all yet.
> 
> If even these tiny drops are enough to scare people, can you imagine the tsunami of selling that happens during a 20% or 30% drop? This is what I mean when I say that (many) people just find it impossible to stick with long term 100% stock exposure in practice. Everyone starts off thinking they are a long term, stock-heavy investor who can brave anything... but then the moment something bad happens, they sell sell sell.
> 
> The current correction is nothing, yet. SPY drawdown of barely 6%.
> 
> Even in the context of a bull market, we could easily see stocks drop 20% and stay low for a while before the rally continues.


Yeah well I think they saw bigger drops because they were in... highly volatile and speculative stocks...

I mean, I didn't think that my KXS would behave like this. I bought it at $125, then it soared +70% to over $200 and now it dropped -35% in a week back to $130.

When someone doesn't have a lot of holdings and all their stocks behave like this, they experience bigger drops and drawdowns.

I must admit... I knew it was the fate of that coupe of friends. They kept texting me for the past few months "do you think the market will crash?" and "ouch -5% today". Yup, their portfolio could move -5% in a day. I think my portfolio is highly volatile and risky, yet I barely ever experienced a drop of more than -3% (even though my individual stocks would have +15% to -15% moves at their best/worst).


----------



## scorpion_ca

This year we haven't seen any circuit breaker yet and people already started selling....What would they do once markets drop another 10%-20%?


----------



## MrMatt

MrBlackhill said:


> A couple of friends of mine have just panic-sold all of their stocks. I'm waiting to buy more. My YTD just entered the slightly negative.


Buy high, sell low, what could go wrong?


----------



## james4beach

scorpion_ca said:


> This year we haven't seen any circuit breaker yet and people already started selling....What would they do once market drop another 10%-20%?


They will lose their g-damn minds, for sure.

Think of how many people are new to stocks. There is a cohort of new investors who began after the Covid crash, and have never seen market pain before.


----------



## Tostig

MrBlackhill said:


> A couple of friends of mine have just panic-sold all of their stocks. I'm waiting to buy more. My YTD just entered the slightly negative.


My low Price Limits have triggered a bunch of buy orders. I've been waiting for this pull back since the US election when I was expecting a bunch of anti-Biden panic selling. However, what is happening looks a lot like Feb to March 2020.


----------



## OptsyEagle

MrBlackhill said:


> A couple of friends of mine have just panic-sold all of their stocks. I'm waiting to buy more. My YTD just entered the slightly negative.


An interesting exercise is to go back on sites like these and read the posts. Start in January of 2020. Pay careful attention with the posts between Feb. 22 and Mar 23, etc., and then watch how slowly these terrified investor figured out they were wrong. The world was not going to end.

My point is, these investors are the same ones giving fantastic advice on investing and it can be easily seen how useless they were in navigating one of the best market timing events ever offered. This is not to say they are bad investors. It is to say that it cannot be done consistently, looking just at markets. Most success stories are either singular in their occurrence, rendering the result more due to luck then skill or these people are not measuring success properly. For example if you sell a 1000 shares of a stock at $10 and it goes down to $5 and you buy it again with 500 shares at $20, when things are better, and ride it to $25, you did not actually make money from trading, but many investors will believe they did.

Anyway, you can see this in real time with these forums. I have not reviewed this one but I remember quite well how negative everyone was around the end of March of 2020...and they were dead wrong.


----------



## Thal81

Investing forums are full of people panicking because of the "correction". It's hilarious, this is barely a dip. Those with heavy tilt in tech stocks are getting pounded though, and tech stocks were quite the trend with all the newbie investors of 2020...


----------



## MrMatt

scorpion_ca said:


> This year we haven't seen any circuit breaker yet and people already started selling....What would they do once markets drop another 10%-20%?








List of largest daily changes in the S&P 500 Index - Wikipedia







en.wikipedia.org





I'd ask them what they did on the 9,12 & 16th in March of last year.
And what they didn't do for the 13th & 24th

Short answer they'll freak. I yawned.
Even with those drops I was up TTM through those dips (TTM= trailing 12 months)


----------



## fstamand

Must be doing something right, green all week here. mostly bluechips


----------



## scorpion_ca

I am a member of several investing related groups on Facebook. The topics have changed significantly since last year. Now the new members are asking the same questions-


I have $400, what should I buy?
My portfolio is red today. Should I sell or buy?
Last six months' profits are gone and etc.
Nothing wrong with these questions. Many of my acquaintances have started to invest since last year and hoping to gain a lot.


----------



## Eder

OptsyEagle said:


> Anyway, you can see this in real time with these forums. I have not reviewed this one but I remember quite well how negative everyone was around the end of March of 2020...and they were dead wrong.


Most of the posters whose investing opinions I respect (I won't name them) were getting bullish last March and only concerned about which day to load up the truck.


----------



## Tostig

fstamand said:


> Must be doing something right, green all week here. mostly bluechips


Must be Canadian banks.


----------



## Tostig

1:27 EST

S&P500 +1.13%
Dow +1.13%
Nasdaq +0.82%
TSX +0.95%


----------



## MrBlackhill

Tostig said:


> 1:27 EST
> 
> S&P500 +1.13%
> Dow +1.13%
> Nasdaq +0.82%
> TSX +0.95%


Exactly, seems like some people just couldn't stand the intraday volatility. NASDAQ just had a day range spreading 500 pts. Dropping to -3% and currently soaring to +1%.

The girl in my couple of friends is happy with her decision because she learned that she couldn't stand the volatility of the individual stocks she picked. She's happy with her ETFs now. Wise decision. Her boyfriend though is currently mad at himself because he panic-sold and now it's back up. Maybe tomorrow it'll be back down and he'll be happy. Maybe not. Who knows. That's why I decided I would diversify enough for my risk tolerance and never panic-sell.


----------



## OptsyEagle

Eder said:


> Most of the posters whose investing opinions I respect (I won't name them) were getting bullish last March and only concerned about which day to load up the truck.


That has similarities to what I was saying. It is never obvious, especially when the time is right.

In any event, I find when taken in entirety, the bullishness is usually loudest at the beginning of the downtrend. Then the arguments between bulls and bears starts around -10% or so, and by the time you move past -30% the largest group are very bearish and the others, at best agree they would like to make money from it but are not too sure how to do it.

Without a good strategy created BEFORE the big stock market moves, an investor will most likely fail miserably when they attempt to add performance with these types of market timing trades.


----------



## Eder

You can't buy the bottom obviously, the important thing is to pay less, buy the stock at a discount. Many investors can't do this and their returns are poor. Those that never pay retail do pretty well.
Nothing wrong with buying at a 10% drop (my goal) then watch things drop further.

OK I'll list one poster that makes my ears perk up

Buying everything last March. Nobleea.

Read em & weep









What are you buying? 2020


Put in a stink bid for Toilet Paper. But no takers so far :(




www.canadianmoneyforum.com


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## OptsyEagle

Eder said:


> You can't buy the bottom obviously, the important thing is to pay less, buy the stock at a discount. Many investors can't do this and their returns are poor. Those that never pay retail do pretty well.
> Nothing wrong with buying at a 10% drop (my goal) then watch things drop further.
> 
> OK I'll list one poster that makes my ears perk up
> 
> Buying everything last March. Nobleea.
> 
> Read em & weep
> 
> 
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> 
> What are you buying? 2020
> 
> 
> I'm still not buying anything. Increased my cash reserve policy due to the potential for extended unemployment in a recession/depression. So I'm not buying or selling anything these days.
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> www.canadianmoneyforum.com
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> What are you buying? 2020
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> 
> I'm still not buying anything. Increased my cash reserve policy due to the potential for extended unemployment in a recession/depression. So I'm not buying or selling anything these days.
> 
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> www.canadianmoneyforum.com
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> 
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> 
> What are you buying? 2020
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> 
> I'm still not buying anything. Increased my cash reserve policy due to the potential for extended unemployment in a recession/depression. So I'm not buying or selling anything these days.
> 
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> www.canadianmoneyforum.com
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> 
> 
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> 
> What are you buying? 2020
> 
> 
> I'm still not buying anything. Increased my cash reserve policy due to the potential for extended unemployment in a recession/depression. So I'm not buying or selling anything these days.
> 
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> 
> 
> www.canadianmoneyforum.com
> 
> 
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> 
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> 
> What are you buying? 2020
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> 
> Put in a stink bid for Toilet Paper. But no takers so far :(
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> www.canadianmoneyforum.com
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> What are you buying? 2020
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> 
> Added to Western Forest Products today at $1.29. Reasons for purchase can be further explored here. https://www.canadianmoneyforum.com/showthread.php/16529-Western-Forest-Products-(WEF)/page7
> 
> 
> 
> 
> www.canadianmoneyforum.com


Every stock sold will have a buyer so I was pretty sure someone was buying on those days in March. We also don't know what these people sold and when they sold it to come up with the money for the purchases, so the important question was, was it really making them money when all their moves, not just the ones in March, are added up. Many of the same people were buying heavily in January as well.

In any case, it is not a debate where one will win and one will lose, but my opinion is more of a warning for those that want to try. That said, I doubt anyone will truly take heed. Market timing always looks so easy and lucrative, looking back, that everyone eventually has to learn their lessons the old fashion way...by trying it.


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## Eder

Not trying to be difficult but buying the dips is hardly timing the market. I know hboy was also loading up as were many astute investors. Those selling were using alternate strategies lol.


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## MrBlackhill

Any technical trader here? I'm not a technical trader, but I think it's important to have knowledge of every kind of strategy in order to have more tools to "understand" the market.

I currently see NASDAQ having lower highs and lower lows since mid-February. That's usually bearish but... How do you know that the trend breaks into bullish? When the next high/low is suddenly higher than the previous high/low, I guess?

I'm not trying to time the market, but at the moment I have no money available to buy more stocks and even though the market just had a single-day V-shape recovery (Haha! The market just went from -3% to +2%!), I expect there is more to come and I want to buy those lows!

Intraday of one of my stocks:

Previous close: $5.16
Day low: $4.56 (-12%)
Day high: $5.78 (+12%)
Currently: $5.75 (+11%)
That means someone just made +26% for that intraday swing.


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## Tostig

OptsyEagle said:


> Every stock sold will have a buyer so I was pretty sure someone was buying on those days in March. We also don't know what these people sold and when they sold it to come up with the money for the purchases, so the important question was, was it really making them money when all their moves, not just the ones in March, are added up. Many of the same people were buying heavily in January as well.
> 
> In any case, it is not a debate where one will win and one will lose, but my opinion is more of a warning for those that want to try. That said, I doubt anyone will truly take heed. Market timing always looks so easy and lucrative, looking back, that everyone eventually has to learn their lessons the old fashion way...by trying it.


I was one of those people who were buying between February and throughout March when the market was dropping. Catch a falling knife, as some would say. Most of what I was purchasing were market ETFs (QQQ, VFV, HXT). There was a handful of stocks but they turned out to be mistakes which I recovered five months later. I didn't sell anything to raise the money for the purchases. I usually have 20% in cash reserves for this purpose. In another thread about cash, a lot of members didn't like the idea of holding cash because it's a drag on the overall performance. True but without any cash to buy the dips, one would be watching opportunities slip by you. You have to have the stomach for it.


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## OptsyEagle

Eder said:


> Not trying to be difficult but buying the dips is hardly timing the market. I know hboy was also loading up as were many astute investors. Those selling were using alternate strategies lol.


I did not say buying the dips was a bad idea. If I recall we were talking about selling stocks today because of an impending decline. That was what I was saying was an idea that is difficult to make money on.

If I recall Hboys strategy is selling as it goes up and buying as it goes down and I imagine a few other pre-thought out strategies along the way. If you reread my post, that was precisely what I was advising. You need to have a plan, in advance, that addresses the fact that stocks fluctuate and not one that relies on when precisely those fluctuations are going to happen and to what percentage they are going to happen.


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## OptsyEagle

Tostig said:


> I was one of those people who were buying between February and throughout March when the market was dropping. Catch a falling knife, as some would say. Most of what I was purchasing were market ETFs (QQQ, VFV, HXT). There was a handful of stocks but they turned out to be mistakes which I recovered five months later. I didn't sell anything to raise the money for the purchases. I usually have 20% in cash reserves for this purpose. In another thread about cash, a lot of members didn't like the idea of holding cash because it's a drag on the overall performance. True but without any cash to buy the dips, one would be watching opportunities slip by you. You have to have the stomach for it.


As was I. Why wouldn't you? My post was about timing the darn thing, not taking advantage of a decline, when it happens and you happen to have some cash, at the time, to do so.


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## OptsyEagle

OK. Let's end this. Timing the market is a good money making strategy to anyone that successfully can do it. Maybe you guys are the ones that can do repeatedly. Good luck with it. Let us know how it turns out.


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## Eder

Since this is Oh No Stockmarket thread I was interested that when Gamestop was about $4 the short position was almost 130%....over bets it was going to zero.

Now that its at $138 you would think the shorts that make the market efficient would have increased if possible that position.

Not so much lol...shorts are down to 30% and dropping. Smart money... short low/ buy high.


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## Tostig

MrBlackhill said:


> ...
> 
> Intraday of one of my stocks:
> 
> Previous close: $5.16
> Day low: $4.56 (-12%)
> Day high: $5.78 (+12%)
> Currently: $5.75 (+11%)
> That means someone just made +26% for that intraday swing.


Not necessarily.
Someone or some people made purchases at $4.56.
Someone or some people sold at $5.78.

Between the two groups, there may be zero people from both. It's even possible that the $5.78 was a short seller on an uptick.


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## MrBlackhill

Tostig said:


> Not necessarily.
> Someone or some people made purchases at $4.56.
> Someone or some people sold at $5.78.
> 
> Between the two groups, there may be zero people from both. It's even possible that the $5.78 was a short seller on an uptick.


The outcome after I posted was the stock closing the day at $5.76, so the one who bought at $4.56 made +26% unrealized gains (unless he sold).

But I agree that intraday low and high doesn't mean someone got lucky enough to buy at the lowest and sell at the highest. Though in this case someone bought at the lowest and the stock ended near its highest.


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## andrewf

Eder said:


> Since this is Oh No Stockmarket thread I was interested that when Gamestop was about $4 the short position was almost 130%....over bets it was going to zero.
> 
> Now that its at $138 you would think the shorts that make the market efficient would have increased if possible that position.
> 
> Not so much lol...shorts are down to 30% and dropping. Smart money... short low/ buy high.


As it turns out, the reason why GME didn't issue shares during the pump and dump was because of the awkwardness of timing and need for financial disclosure if they issued shares. I'm not sure I completely buy the rationale.









GameStop Missed All the Fun


Also buybacks, Bitcoins and Elon Musk proximity pricing.




www.bloomberg.com


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## MrBlackhill

MrBlackhill said:


> Any technical trader here? I'm not a technical trader, but I think it's important to have knowledge of every kind of strategy in order to have more tools to "understand" the market.
> 
> I currently see NASDAQ having lower highs and lower lows since mid-February. That's usually bearish but... How do you know that the trend breaks into bullish? When the next high/low is suddenly higher than the previous high/low, I guess?


Interestingly, it's exactly what happened. NASDAQ had lower highs and lower lows until March 8th and 9th where it had higher low and higher high and now NASDAQ is moving back up.

I still believe that NASDAQ should move below 12,000 to stay healthy and avoid the bubble territory.

S&P 500 is safe but should stay below 4,000.


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## doctrine

S&P 500 at another all time high. Uh oh stock market!


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## james4beach

doctrine said:


> S&P 500 at another all time high. Uh oh stock market!


Though, it's coming with incredible weakness in the US dollar.

I think more impressive is that the TSX is at an all time high, even with the CAD very strong. Canadian investors have much wealthier over the last year.


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## MrBlackhill

james4beach said:


> TSX is at an all time high


This year, TSX beats S&P 500, and S&P 500 beats NASDAQ.


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## james4beach

MrBlackhill said:


> This year, TSX beats S&P 500, and S&P 500 beats NASDAQ.


Yup. Year to date numbers in Canadian $

*+8.7% TSX Composite*
+3.0% S&P 500
-1.0% NASDAQ-100

Among the Canadian sectors, the champs are, YTD

+39.4% XEG
+13.3% XFN

@MrBlackhill previously you were very interested in tech-heavy investing, like buying QQQ. Is recent performance making you rethink this?


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## depassp

james4beach said:


> Canadian investors have much wealthier over the last year.


Except for those of us still holding the bag on as yet unrecovered energy stocks


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## james4beach

depassp said:


> Except for those of us still holding the bag on as yet unrecovered energy stocks


They seem to be rapidly gaining now, though


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## MrBlackhill

james4beach said:


> @MrBlackhill previously you were very interested in tech-heavy investing, like buying QQQ. Is recent performance making you rethink this?


I'm bullish on tech stocks in general, but at the moment I certainly wouldn't buy any NASDAQ-indexing ETF as I believe it's currently an overheated aggregation of tech stocks. (It may have bottomed its recent correction, but I continue believing that it's overheated)

I'm currently happy seeing TSX outperform S&P 500 and NASDAQ because that was my prediction from the beginning due to TSX having a big exposure to the beaten down energy sector that has to recover throughout 2021. Meanwhile, I knew that tech had to cool off and that's what we saw. That's also why I wasn't touching tech recently.

In fact, at the moment, my portfolio is 27% energy, 25% tech. In the next few months, I'll certainly move some of my big gains in energy to buy some of tech stocks that went through a correction. I may wait for this summer, though.


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## doctrine

depassp said:


> Except for those of us still holding the bag on as yet unrecovered energy stocks


TSX at record highs with the Cdn dollar at close to 6 year highs means Canadians are truly wealthier in real world terms. I have energy stocks up from 50-300% now. Quite enjoying the ride. I don't think there's another 350% in CNQ ($11 bought 19 Mar 2021), but there certainly could be 70-100% in many names still.


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## MrBlackhill

doctrine said:


> Cdn dollar at close to 6 year highs


It's the USD which is near its 6-year low. The JPY also lost power against the CAD.

Otherwise the CAD is simply back to normal against EUR, GBP, CHF, AUD.


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## kcowan

The C$ is in sync with the cost of oil in spite of out-of-control government spending.

If we ever get an honest budget, it will decline.


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## Tostig

Recent correction/scare:

S&P500: -5.75%
Nasdaq: -12.54%

Not out of the ordinary - unless the rise in the past four days will reverse and continue back lower or sideways. Who knows until it comes.


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## Tostig

kcowan said:


> The C$ is in sync with the cost of oil in spite of out-of-control government spending.
> 
> If we ever get an honest budget, it will decline.


Time to use your high value CAD to buy some US stocks, 'cause they're cheap.


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## james4beach

Tostig said:


> Time to use your high value CAD to buy some US stocks, 'cause they're cheap.


Charlie Munger had a recent interview which was quite revealing (transcript). I normally don't care much what personalities say, but @Jimmy has been making such a point of famous personalities lately that I thought I would share this important one. Apparently we should be listening to them and trading based on what they tell us (not something I believe in though).

In a recent interview, Charlie Munger strongly suggested that the US market is currently in a speculative boom or bubble. Here, an interviewer asks Munger about broad market conditions. The question was

_Many observers see market behavior that reminds them of the Dot Com bubble: wild speculation, endless SPACs, and IPOs soaring on their first day of trading. Do you agree that there is a close parallel to the late 90s and that this, therefore, “must end badly?”_​
Munger agrees with the bubble parallel of the broad market, and responds: "*Yes, I think it must end badly but I don’t know when."*

And here, Munger basically says the stock market is in a crazy speculative boom. Speaking about the broad market again:
​"I think everybody is willing to hold stocks at higher price-earnings multiples when interest rates are as low as they are now. And so I don’t think it’s necessarily crazy that good companies sell at way higher multiples than they used to. On the other hand, as you say, *I didn’t get rich by buying stocks at high price-earnings multiples in the midst of crazy speculative booms.*"​​
Now as for me, I follow a passive investing approach, so I maintain my equity allocation whether Munger thinks we're in a bubble or not. But I think that active investors like @Jimmy may want to exit stocks. If someone really believes that listening to these personalities will be profitable, then the action is clear: get out of the bubble stock market.


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## Jimmy

james4beach said:


> Charlie Munger had a recent interview which was quite revealing (transcript). I normally don't care much what personalities say, but @Jimmy has been making such a point of famous personalities lately that I thought I would share this important one. Apparently we should be listening to them and trading based on what they tell us (not something I believe in though).
> 
> 
> Now as for me, I follow a passive investing approach, so I maintain my equity allocation whether Munger thinks we're in a bubble or not. But I think that active investors like @Jimmy may want to exit stocks. If someone really believes that listening to these personalities will be profitable, then the action is clear: get out of the bubble stock market.​


For context , this off topic post James felt so compelled to 'share' is just in response to Ray Dalio advising people to get out of bonds and the portfolio he designed that @james4beach  however still follows.

You can tell he didn't take the news very well. Perhaps instead of the hubris, he should just heed his own master's advice. When the ' personality ' who designed the program you blindly follow is abandoning it, it is wise you consider to as well.

Here again then is that 'important' article from Ray Dalio now refuting the principles of this old portfolio designed for and back in 1995 that is so important it should also be shared . Apparently 'personalities' like Warren Buffet and Gordon Pape are also not to be listened to on bonds either now their opinions have soured lol









Why in the World Would You Own Bonds When…


…Bond markets offer ridiculously low yields. Real yields of reserve currency sovereign bonds are negative and the lowest ever.




www.linkedin.com


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## MrMatt

james4beach said:


> Charlie Munger had a recent interview which was quite revealing (transcript). I normally don't care much what personalities say, but @Jimmy has been making such a point of famous personalities lately that I thought I would share this important one.


I don't think Charlie Munger is a "personality" in the same vein as all those shameless self promoters.
I think he's a well regarded expert, who presents insightful observations.


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## james4beach

MrMatt said:


> I don't think Charlie Munger is a "personality" in the same vein as all those shameless self promoters.
> I think he's a well regarded expert, who presents insightful observations.


Sure, not a self promoter. I actually take Munger's opinion more seriously than anyone I'll see on CNBC or read about in the media.

Clearly, Munger is concerned about a bubble situation. I share his concern, as American P/E's are clearly sky high. At the same time, I think it's better to stick with an existing plan (such as indexing or asset allocation) instead of trying to trade in & out.

My guess is that the down side of this bubble is going to separate the men from the boys.


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## MrBlackhill

james4beach said:


> Munger agrees with the bubble parallel of the broad market, and responds: "*Yes, I think it must end badly but I don’t know when."*
> 
> And here, Munger basically says the stock market is in a crazy speculative boom. Speaking about the broad market again:
> "I think everybody is willing to hold stocks at higher price-earnings multiples when interest rates are as low as they are now. And so I don’t think it’s necessarily crazy that good companies sell at way higher multiples than they used to. On the other hand, as you say, *I didn’t get rich by buying stocks at high price-earnings multiples in the midst of crazy speculative booms.*"


Yeah well that's bad news for the passive investors because they are holding ETFs which are an aggregate of stocks which will drop at some point and they just have to ride it.

But then as he said he didn't get rich by buying expensive stocks, so that means active investors have the advantage of selecting undervalued stocks.


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## MrMatt

james4beach said:


> Sure, not a self promoter. I actually take Munger's opinion more seriously than anyone I'll see on CNBC or read about in the media.
> 
> Clearly, Munger is concerned about a bubble situation. I share his concern, as American P/E's are clearly sky high. At the same time, I think it's better to stick with an existing plan (such as indexing or asset allocation) instead of trying to trade in & out.
> 
> My guess is that the down side of this bubble is going to separate the men from the boys.


To be fair Munger and Buffet run one of the larger investment funds, they care about the health of the overall economy.
If the economy is healthy they'll make good money, if the economy is bad, well, they have cash and they'll make even more money.


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## Eder

james4beach said:


> My guess is that the down side of this bubble is going to separate the men from the boys.


Didn't we just get separated a year ago?

I remember CMF members buying, most holding ...not selling.


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## Tostig

Eder said:


> Didn't we just get separated a year ago?
> 
> I remember CMF members buying, most holding ...not selling.


And probably several times every year when the markets take a 5% dip.


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## MrBlackhill

I've already said it with a detailed analysis, but I'll repeat it and I'm very curious to see what will happen in the next months/years.

We are either in a new era or a bubble, but either way it's a very uncertain time.

And I'm talking about NASDAQ here.

I keep saying NASDAQ shouldn't go higher than 14,000 this year and so far it's listening to me, yet it's trying hard to break that level. A healthier value would be 12,000.

We've been talking about the great bull market of the past decade (2010-2019), but since last year we are currently trending much higher and also much higher than NASDAQ's historical trend. We are also witnessing two times more volume than previously. In the past 20 years, the weekly volume was always around 10B. It's now over 20B.

Last time that NASDAQ kept pushing higher and had increasing volume was...1995-2000, especially 2000.

This could be an opportunity as rising bubbles can last a few years, but I would be cautious with short-term investments.


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## MrBlackhill

Let's add this NASDAQ chart.


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