General Markets Talk

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Pulled out of everything on Tuesday morning - missed the initial Monday sell off but you get that :) Going to buy back today depending on what the US market does for another heavy discount.

Almost ready to pull the trigger on trades in the US...just waiting for a day of the market going up and the VIX drops down below 30. This is the weekly performance of the spread trades I've been looking at:

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Week 17 is this week, up until the open today. Most of the people who are selling right now are retail traders who are scared about losing money - the institutions and hedge funds aren't selling at all. The question I have is the same that Warren Buffett has - if you're buying a company, which is what you are doing when you are buying stocks, exactly what is it about a virus that makes you go 'Oh s**t, this company that I've invested in isn't a good buy anymore!'

Now, some of them I wouldn't bother with at all (or might take the reverse position)...I'm only looking at the top four performers...but even if you bought into all 28 trades, do you think you'd take 1.07% increase when the market has plunged 10%?

This is why hedge traders make money in a bear market while retail traders provide the liquidity to get into great deals for later on. Remember when people were saying how hedge funds under-performed the index?

They're singing a different tune now :D
 
Looks like the inevitable major pullback in the markets is underway. Rather than trying to time the market I'm keeping my super in my 70% US/30% Aus high growth stocks allocation and will weather the storm however long it lasts. Seriously debating putting off buying my first home in April and instead dumping the saved deposit into the stock market in a couple of months time instead.
 
Moved my industry super to cash as that seemed a pretty safe move for a well overdue correction, wouldn't be surprised for us to enter into a bear market. Stocks holding as I don't think the mining stocks I hold will be as affected. Lots to play out yet.
 

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What has the solution to this problem of wild speculation by retail traders jacking up prices to levels far beyond earnings, and then everyone is disappointed when they don't meet expectations? Trash their guidance on earnings due to COVID-19. This way, whatever they post in their earnings call the same time next year will be seen as being great.

You can see it from a mile away, especially when Goldman is calling for zero growth this year when the consensus is 7%.

There's still a way to go with it though - 30 day and 90 day moving averages haven't crossed back over yet.

What you are seeing happening now...reverse it for next year. Especially when everything gets back to normal in the second half.

Stocks you'd be looking to go long in are the ones that actually did meet or beat on earnings but are still getting hammered like the rest of them i.e. Apple, Facebook, Google and Amazon, because they are actually have solid business plans.
 
Well kind of spooked here I hope someone can have some advice.
I am no stock market expert but concerned as to what may happen.
So basically I wish to move my fund to cash or perhaps gold until this is resolved?
Am I panicking?
Sure I may miss out on some returns but rather have the safety of not seeing the sum diminished.
Any advice will be great.
Cheers,
Marty
 
magpie_marty said:
Well kind of spooked here I hope someone can have some advice.
I am no stock market expert but concerned as to what may happen.
So basically I wish to move my fund to cash or perhaps gold until this is resolved?
Am I panicking?
Sure I may miss out on some returns but rather have the safety of not seeing the sum diminished.
Any advice will be great.
Cheers,
Marty
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If you didn't bail out by now, there's no point taking a loss when it will be back to where it was in 6 months time. It's probably nearing the end of the correction if we're being honest...the S&P 500 has almost hit the 200 day moving average.

You're only making a profit or a loss on paper - it becomes a real profit/loss when you cash out. So unless you've been trading on margin and are in danger of receiving a margin call, I'd probably just leave it where it is (as long as you're in blue chip stocks).

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This is the daily return of the ASX 200 since inception to Christmas of last year. The past 5 days have been 1.53% of the historical total, going back to 1984.

It's going to go back up and then some. It always does, because if there's one emotion that overrides fear, it's greed.
 
Janus said:
If you didn't bail out by now, there's no point taking a loss when it will be back to where it was in 6 months time. It's probably nearing the end of the correction if we're being honest...the S&P 500 has almost hit the 200 day moving average.

You're only making a profit or a loss on paper - it becomes a real profit/loss when you cash out. So unless you've been trading on margin and are in danger of receiving a margin call, I'd probably just leave it where it is (as long as you're in blue chip stocks).

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This is the daily return of the ASX 200 since inception to Christmas of last year. The past 5 days have been 1.53% of the historical total, going back to 1984.

It's going to go back up and then some. It always does, because if there's one emotion that overrides fear, it's greed.
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Janus thanks,
I am no where re retirement and to be honest hardly look at my super,Obviously something I need to do to be honest.
Thanks for your honest reply.
Marty
 
Big Cox 88 said:
The only time I would be playing it safe would be if I was under 5 years to retirement.
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Even then, if you’re born in 88 like myself (as your alias would suggest), then our super should be well topped up by then. No harm in taking a risk to either live very comfortably compared to comfortably!
 
A few green shoots in the US (stocks that finished higher than the previous close) means that we might be seeing the end of the sell off.
 
juss said:
Wish I sold a few weeks ago to rebuy now, but regardless I'll be buying again soon for a few on my watch list.
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A few weeks ago, most of the stocks I’m in on hit year highs not two weeks ago. Oh well, we’re foolish if we think we can pick the top and bottoms!
 
All the stocks in the US bridged the gap (finished higher than the previous day’s close) on Friday, mainly due to Powell saying that the Fed will act sooner rather than later.

The bond markets have already priced in a 100% chance of a rate cut this month.

The first death in both the US and Australia from COVID-19 will probably tank the markets in the Monday morning session. If it goes to break even again, it’s time to buy, because there is literally no more bad news to be announced except for something that would make investing completely redundant (I.e a massive outbreak that completely shuts down the economy).
 

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As with all market movements, it's very hard to be honestly confident about where the market and economy is moving.

On the ground, talking to people who work directly with Chinese manufacturing, they're very worried, a lot of plants are operating at half capacity while towns and cities are in total lockdown, this has to trickle into the wider economy.

I am confident however that central banks and governments will act, interest rate cuts and an injection of capital must surely be around the corner.

As an investor nowhere near retirement, I certainly won't be selling and may slowly trickle money in with each major drop.

I think the biggest take away from events like this is to never sell in a falling market and as we get closer to retirement, we should be actively and slowly move a portion (vary's depending on risk tolerance) of our investments to bonds and other less volatile investments. It'll make significant drops like the one we are experiencing less of concern.
 
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It's over. S&P 500 is up 1.6%.

No one gives a * about coronavirus or Chinese production, because they know that it will eventually get back to normal.
 
ash_1050 said:
Looks like the inevitable major pullback in the markets is underway. Rather than trying to time the market I'm keeping my super in my 70% US/30% Aus high growth stocks allocation and will weather the storm however long it lasts. Seriously debating putting off buying my first home in April and instead dumping the saved deposit into the stock market in a couple of months time instead.
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Hold off. Not to be too morbid, but if Coronavirus does take hold, plenty of old people will die and the market will be flooded with deceased estates. Just a shame those dickheads dropped the interest rates again. Will do * all for the economy, but continue the property boom. APRA should've acted instead of the RBA.
 
An emergency U.S fed rate cut, which will result in most other fed's following suit.

Gold and gold companies are up and running, while the US markets are taking a bit of hit.

I assume governments will also announce fairly large stimulus packages as there isn't too much room for federal banks to cut further.

You should never time the market, but if there is a chance the cash will be needed in the next 2-3 years, I'd hold off from buying.
 
Deliverance said:
Hold off. Not to be too morbid, but if Coronavirus does take hold, plenty of old people will die and the market will be flooded with deceased estates. Just a shame those dickheads dropped the interest rates again. Will do fu** all for the economy, but continue the property boom. APRA should've acted instead of the RBA.
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I did have that thought that if we loose a couple hundred thousand boomers the market will definitely be flooded. Next month or so should provide a good idea of whether that happens or whether things are contained.
 
Janus said:
Well, I just transferred $50k into the US trading account. Will transfer more later.

Time to have some fun :)
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Interesting.
With the dollar low, I'm avoiding the US atm.
With cash so cheap I started back into the ASX today with a 20k buy of an ETF and am looking to invest a further 200k/300k over coming days/weeks, maybe months depending on volatility and bargains.
Interested as to why are you going for US over Aus at this time.
 
Grin said:
Interesting.
With the dollar low, I'm avoiding the US atm.
With cash so cheap I started back into the ASX today with a 20k buy of an ETF and am looking to invest a further 200k/300k over coming days/weeks, maybe months depending on volatility and bargains.
Interested as to why are you going for US over Aus at this time.
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Cause you can easily short stocks in the US so it’s possible to do spread trades and it’s about opportunity cost - all the best AI companies are in the US, and I’m all in on that being the industry of the future.

I’ve got ASX stuff too, but the problem with the ASX is the same reason why the dollar is low - the AUD is a commodity backed currency, and the ASX is a commodity backed exchange.

ETFs are cool but I’ve been through the performance of the stocks a lot of them have - there’s quite a few dogs in there that you always knew were going to be dogs. I’d rather have the control and hedge out market risk myself.
 
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Opened higher on the S&P today.

In typical fashion, you'll find that bears will fight with bulls all the way back up to where the index was at the start of the correction. However, a few investment banks are advising clients to buy now.

There will be days where it goes up, and days where it goes down. If you are able to day trade, or aren't stupid and use all your margin, this is the market to make a lot of money.

Guy Johnson on Bloomberg just asked an analyst if Friday was the bottom. The analyst replied that with the interest rate cut and other factors, he can't see it falling that much anymore unless there is some massive piece of news.
 
Opened the US portfolio last night.

Up 1.36% on a day when the S&P 500 dropped 3.39%. That's a 4.75% swing.

We can trade like this for the entire year and it will suit me juuuust fine.
 
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