Investing in the Age of the Chinese Virus

[Nick1911]

Highest unemployment numbers in history, by 4 fold.  Stocks rally!

[Ben]

Highest unemployment numbers in history, by 4 fold.  Stocks rally!

Yeah, I'm trying to figure that one out. I was expecting to bargain shop again today.

[makattak]

Highest unemployment numbers in history, by 4 fold.  Stocks rally!

Markets are forward looking. This isn't surprising news and was (some of) the cause of the previous drops.

They are expecting bailouts and Fed actions to prevent the next month from looking the same. Thus, the market is rising.

[Jamisjockey]

Markets are forward looking. This isn't surprising news and was (some of) the cause of the previous drops.

They are expecting bailouts and Fed actions to prevent the next month from looking the same. Thus, the market is rising.

Bailouts, consumer bailouts, and even bad news when it’s predicted is good news for the market.

[brimic]

Money printers go brrrrtt, stocks go up.

[brimic]

http://thezman.com/wordpress/?p=20130

A different take on the stimulus bill.

That is spot on correct.

The big money (market makers, hedge funds) can’t move very fast because of inertia. The Fed has been buying them time at first, to pull out, and now to save them from the imminent crash.

Market Makers usually have deep enough pockets to ‘pin’ stocks at price most advantageous to them on options expirations date, or even manipulate prices and trends to sucker retail investors into buying or selling, but they don’t have the type of power the Fed has when things get really bleak.  The Fed just stopped another dozen firms from going bankrupt (remember Lehman bro’s?).

[Brad Johnson]

House sale funded late Tues. Got all the transfers in place yesterday and they processed overnight. Aside from what was used to pay off the truck, Vanguard now has it all.

Ended up distributing monies equally across three funds, one each small-, mid-, and large-cap (VTMSX, VMVAX, and VWNDX, respectively). They all had a minimum ~10% lifetime return over at least 30 years and are down significantly in the last 30 days (the least was 27%, the highest, 32%). It's more risk than I had initially intended but we decided to go that route since we both also have employer-based 401K and SWMBO has a significant amount in more modest risk categories from another firm.

Brad

[makattak]

House sale funded late Tues. Got all the transfers in place yesterday and they processed overnight. Aside from what was used to pay off the truck, Vanguard now has it all.

Ended up distributing monies equally across three funds, one each small-, mid-, and large-cap (VTMSX, VMVAX, and VWNDX, respectively). They all had a minimum ~10% lifetime return over at least 30 years and significantly on the year (the least was 27%, the highest, 32%). It's more risk than I had initially intended but we decided to go that route since we both also have employer-based 401K and SWMBO has a significant amount in more modest risk categories from another firm.

Brad

This was quite a fortuitous time to have such a windfall to invest in the market. Good job.

[K Frame]

Nicely done, Brad. Talk about great timing.


I've been keeping my eye on Marathon Petroleum Corporation (MPC).

Before the spit hit the spam they were trading in the mid to high 60s.

They dropped back as low as the mid teens week before last. I picked up on them a bit late. They've been trading in the low 20s the last few days. I set up a 60-day limit order for it at $18.50 a share with Vanguard.

It's up today given the general rise in oil prices and the monkey chattering that happened when Trump said he'd try to get a three way chat going between the US, the Saudis, and the Commies to work out an end to the oil war that's going on right now.

I don't expect that sentiment to last very long before it collapses and the price comes back down.

If it sticks in the low $20s for the next couple of weeks I may cancel my limit order and just make the buy.

[K Frame]

AND *expletive deleted*ck!

It's coming across CNBC that Trump is saying that the Saudis and Commies have reached an accord of some type. MPC is jumping.

[Ben]

Some info from Zacks Investments on potential bear market length:

How Bad are Event-Driven Bear Markets?

Generally speaking, there are three types of bear markets: structural, cyclical, and event-driven. Every bear market has a unique set of drivers, of course, but throughout history most of them fall into one of these three categories:

    Structural – These are bear markets like the 2008-2009 downturn, which are driven by financial bubbles, too much leverage, credit market dislocations, and other structural imbalances.
    Cyclical – Cyclical bear markets happen more as a function of the business cycle, when growth leads to inflation, interest rates go up too fast, the yield curve flattens or inverts, loan activity declines, demand wanes, etc.
    Event-Driven – These bear markets are triggered by an exogenous event, like an energy crisis, political instability, war, or in the case of the current bear market, a global pandemic.

Looking back at data going back to the 1800’s, here’s what we know about the relative magnitude and duration of each category of bear market:

[Ben]

Just caught this on the teevee: Trump has ordered the TSP (fed.gov 401k) to remove Chinese investments from the funds.

It will be interesting to monitor my account and see how/if this affects it. I can kinda agree with it, just as we've talked here about buying less Chinese stuff. On the other hand, maybe I'm being a bit of a hypocrite, because I've gone on tirades when it has been suggested to "green" the TSP (or Vanguard, or whoever) with "socially responsible" funds, which I am very much against, because I don't want undefinable "social justice" from mucking up my retirement..

[cordex]

My investing strategy has been to just let my 401k and Roth 401k contributions be pulled from my paycheck.  My boss decided to buy out my vacation time for the rest of the year so I made a nice chunk of extra contributions a few weeks ago.  Would have been nice to make that extra contribution closer to the bottom, but whatever.

As of yesterday my current 12 month rate of return is 20.94%.  I'm about 50/50 in a Vanguard S&P 500 Index and a Vanguard US Growth.  Measuring from a peak in mid February I'm down a few grand (all in my S&P 500 index fund) but measuring from just about anywhere outside that peak and I'm doing okay.

[Ben]

Yeah, I'm doing pretty okay too. I'm almost kicking myself for being timid during the big drop. I could have thrown double the cash into my Vanguard funds than I did, but was afraid it might be too soon.

I did take a gamble on Norwegian Cruise Lines with my "play money", buying 1000 shares at an average of ~$9. I'll probably sell a third pretty soon to recover some of my principal and let the profit ride for a year or so.

[Ben]

Surprising jobs numbers yesterday, Dow up nearly another thousand. The MSM is scrambling to address the jobs numbers, including claiming that the administration falsified and manipulated data to make the numbers look good.

Also, this old video of Obama is making the rounds. I didn't catch it at the time, but it looks like Obama was one of the punks who refused to say Trump's name. I also notice this occurred on "unbiased" PBS. PBS has, since Trump, become one of the most biased "news" organizations out there.

https://youtu.be/BRTGQUISjI0?t=19

 Also, man, do I wish I wasn't such a "toe dipper" during the big drop. It's killing me that I didn't throw more dough into NCLH.

[K Frame]

My Marathon stock has doubled since I purchased it.

Another one I'm looking at throwing a chunk of money into is Occidental Petroleum (OXY). It's also hugely undervalued right now.

[Ben]

My Marathon stock has doubled since I purchased it.

Another one I'm looking at throwing a chunk of money into is Occidental Petroleum (OXY). It's also hugely undervalued right now.

I was actually looking at that one myself. Though my regular oil stock, BP, is still pretty low and has that juicy dividend, so I might just bolster my position there.

[Devonai]

A couple of months ago I noticed that my TSP was losing money (12 month performance was in the negative).  Last week it is once again in the black.

[Brad Johnson]

Through sheer luck of timing, I'm up 36% on the Vanguard funds I puchased with house sale proceeds back in early April. In actual dollars it's the rough equivalent of two-thirds of my annual salary. Not bad for a 60-day return. The funds I'm in are noticeably volatile and bounce around significantly, sometimes as much as ten percent per day, but it's still on a net upswing.

Brad

[MillCreek]

IRA values in 2020:

1/2/2020 starting 2020:    $ 699,000

High point on 2/21/2020:  $ 718,000

Low point on 3/23/2020:   $ 556,000

Current on 6/5/2020:        $ 702,000

Mid February to mid March was sporty.

[zxcvbob]

My 401(k) is still underwater but not by much.  The funds are all up slightly now except the little bit of money I have in REITs, and that fund hasn't recovered at all yet so it's dragging my return down.  Overall return is -2% for the year.
 
I really wish I had doubled-down on my ARCC stock when it was around $8, but I was in "don't sell anything, don't buy anything" mode at the time.

[MillCreek]

https://www.npr.org/sections/coronavirus-live-updates/2020/06/08/872336272/its-official-scorekeepers-say-u-s-economy-is-in-a-recession?utm_campaign=npr&utm_term=nprnews&utm_medium=social&utm_source=facebook.com&fbclid=IwAR0fv7kOSklQUwJ70kKV8b3oEjFsnCoxJRR9VUlLB-KSGOamt47jdsmq0QQ

The Feds say we are officially in a recession as of February this year.

[Ben]

https://www.npr.org/sections/coronavirus-live-updates/2020/06/08/872336272/its-official-scorekeepers-say-u-s-economy-is-in-a-recession?utm_campaign=npr&utm_term=nprnews&utm_medium=social&utm_source=facebook.com&fbclid=IwAR0fv7kOSklQUwJ70kKV8b3oEjFsnCoxJRR9VUlLB-KSGOamt47jdsmq0QQ

The Feds say we are officially in a recession as of February this year.

From the link:

At the same time, the committee noted the recession could be short-lived. The U.S. added 2.5 million jobs last month after losing more than 22 million in March and April. Many forecasters said they expect economic output to begin growing again in the third quarter.

I'm not real worried. The virus reaction was overblown and unprecedented. The above quote is pretty much what has been said all along by the "experts": First and (especially) second quarters will look brutal, but third quarter will be a positive pop. Last week's job numbers were already an unexpected good sign.

[Kingcreek]

A 3rd quarter market orgasm would be good for trump.
Look for Democrats to do anything possible to prevent that one.

[makattak]

A 3rd quarter market orgasm would be good for trump.
Look for Democrats to do anything possible to prevent that one.

What do you think burning down cities is?