Stock Market Watch, President-Elect Trump

[likebikes]

Down 1000 points this week. :eek:

[verbs4us]

Not down. "A correction" by 1000 points.

[cinema]

well i thought a correction was technically 10% of average. wasn't the dow at around 17k before this happened. YANG and DWTI have been good to folks these past few months.

[54ny77]

it's not bad if you don't look at it.

kind of like my winter training schedule thus far.

[shovelhd]

Opportunities.

[cinema]

it's not bad if you don't look at it.

kind of like my winter training schedule thus far.

dow lost a few hundred this season and i've gained about 10

[54ny77]

short the paceline weight loss index and go long a triple levered inverse sector-specific etf.

what could possibly go wrong?

dow lost a few hundred this season and i've gained about 10

[Ken Robb]

It's a buying opportunity! :D

[54ny77]

Are you saying the S&P is the Bike Nashbar closeout sale of financial indices?

:p

It's a buying opportunity! :D

[scho74]

It's already a rough year! Bears are out in full force screaming recession. My portfolio has been getting clobbered and I may have to move some money around.

[SoCalSteve]

It's already a rough year! Bears are out in full force screaming recession. My portfolio has been getting clobbered and I may have to move some money around.

Seriously? Jobs report just came out and it's the lowest unemployment in many years. That my friend, is no recession!

The money you should move around is buying more. Not selling.

[gomango]

Seriously? Jobs report just came out and it's the lowest unemployment in many years. That my friend, is no recession!

The money you should move around is buying more. Not selling.

Correct.

When to buy is the only question.

[scho74]

Yeah I don't agree with the whole recession thing and I'm not selling right now. But I did dip my feet in some UWTI...uh oh. :eek:

[MattTuck]

Seriously? Jobs report just came out and it's the lowest unemployment in many years. That my friend, is no recession!

The money you should move around is buying more. Not selling.

wages up. part time jobs up. also, any sign of economy being "good" means that rates are going up (they're not by the way), and that means asset values are going down. This is the flip side of driving interest rates to near zero to juice the stock market.

[54ny77]

contango will make you more sad than a flat during a 100 miler in middle of nowhere with no cell coverage, no spare tube or pump.

Yeah I don't agree with the whole recession thing and I'm not selling right now. But I did dip my feet in some UWTI...uh oh. :eek:

[Tony T]

The old saying is "As goes the 1st week of Jan, so goes the month, and as goes Jan, so goes the year"

Keep an eye on China Sunday night. They turned off the "circuit breakers" after the 7％ drop in 30 min on Thur, so there is no limit on the drop (or rise)

(BTW if the DOW dropped 7%, that would be 1,100 points)

[notsew]

Correct.

When to buy is the only question.

I've been thinking that maybe there is a Paceline Indicator. Every time there is a downturn, this post happens. Maybe this is the sign that it is time to buy!

[seanile]

to buy bike stuffs or cheap stock...:(

[Tony T]

wages up. part time jobs up. also, any sign of economy being "good" means that rates are going up (they're not by the way), and that means asset values are going down. This is the flip side of driving interest rates to near zero to juice the stock market.

So, you think the Fed will step-in and say that ' about that 1% rate increase in 2016 "never mind" '

"Don't fight the Fed", last meeting was not a "one and done" rate increase. When the Fed starts to raise rates, they continue to raise rates. Look for 4 more increases in 2016 (which will still only get us just above 1％)

Good news is that gas is now below $2

[scho74]

to buy bike stuffs or cheap stock...:(

Buy GOOD cheap stock then buy bike stuffs with the profit!

[laupsi]

Good news is that gas is now below $2

Many don't think this is good news

[Tony T]

Yeah, those who are long WTI and energy stocks, but I'm long a Jeep Wrangler ;)
http://www.fuelgaugereport.com

[zap]

Seriously? Jobs report just came out and it's the lowest unemployment in many years. That my friend, is no recession!

The money you should move around is buying more. Not selling.

Participation rate is still not very good.

Interesting times.

[PSC]

I agree, good buying opportunity, past couple of days have been throwing a few thousand dollars into the S&P(I like indexes). I like to remind my friends you only lose if you sell, hang in there the market will come back. IMO the US is the strongest market in the world and has been for sometime.

[oldpotatoe]

Many don't think this is good news

Can't be anything but for the consumer. Like getting a pay raise. Which equals more spending elsewhere, which is good for economy-yes? Not an ekonomist, BTW-can't even spell it.

[laupsi]

Can't be anything but for the consumer. Like getting a pay raise. Which equals more spending elsewhere, which is good for economy-yes? Not an ekonomist, BTW-can't even spell it.

as it turns out Americans have begun saving again. for the most part any cost margin left over from lower gas prices are being plowed into bank accounts. this is a good thing, but compared to stagnant wages, limited longer term reinvestment potential from alternative energy sources and keeping folks dependent upon big oil, the savings gain do not amount to much in the long run.

the old adage stands when economic parameters do not bode well for the long term; you can pay now or you can pay later. paying later is always more costly.

[1centaur]

Super warm winter, super surprising jobs number. Manufacturing is suffering; retail is spotty. Oil prices will stay low for most of this year at least (excepting Middle East war) so Texas growth will be poor. Fed rate increases will work into the valuation thoughts of some dividend discount models and a strong dollar which will continue to hurt emerging markets. China will continue to devalue, making dollar-denominated commodities even more expensive for their manufacturing sector.

The stock market has long been trading at cash flow multiples that are too high for the companies' prospective growth. 20% out of the market will only get many companies back to something fair. Neither the US nor Europe has leaders that are willing to (or maybe even know how to) prioritize growth over (other) social goals, and no prospects of such. Demographics are getting worse (too many old people). Earnings are disappointing left and right.

It does not have to be a recession to make the stock market a bad place to be for a while. Upside surprises are FAR harder to imagine than the opposite right now.

In a 2% growth world, a 5% return is an excellent thing, especially if you don't have any -20% or -40% names in your portfolio.

[Look585]

Participation rate is still not very good.


<rant>

"Labor Force Participation Rate" gets tossed around way too often (usually with political overtones) and very few people even know how it is calculated. Lower is not necessarily bad, higher not necessarily good.

Two examples:

1) If old people are living longer in retirement, labor force participation rate goes down (ceteris paribus) as retirees (not in an assisted living facility) count as part of the labor force but aren't participating. Is that a good or bad thing?

2) If more young people are in school, labor force participation rate goes down (again, ceteris paribus) as students (16 and over) count as part of the labor force but aren't participating. Is that a good or bad thing?

Lies, damn lies, statistics...

</rant>

[saab2000]

People who think markets will go up 10% per year every year are delusional.

My plan is to keep on keeping on. Dips are natural and good times to buy.

[93legendti]

Hard to imagine people believing that more expensive gas prices are good for the economy ( that's the "we need $8/gallon gas" people who want us to be like Europe ) -how does everything you buy get to the store, glider plane? More expensive to make and to deliver equals more expensive to buy. More money spent on fuel means less money to spend on other things.

When gas prices were higher I couldn't get a free estimate for work on my houses- everyone wanted trip charges ("I can't drive around all day giving for estimates!") and/or estimate charges. And people refused to go certain houses of mine: " that's too far on $4/gallon gas", or " I won't go for just one tiny repair, it's not worth my time and expense" I heard too many times.


Now, with gas at 2008 prices, I don't have that anymore. Ymmv.

"Lower gas prices are good for the economy," said Mark Zandi, chief economist at Moody's Analytics."

http://www.latimes.com/topic/business/moodys-corporation-ORCRP010209-topic.html

[zap]

<rant>

"Labor Force Participation Rate" gets tossed around way too often (usually with political overtones) and very few people even know how it is calculated. Lower is not necessarily bad, higher not necessarily good.

Two examples:

1) If old people are living longer in retirement, labor force participation rate goes down (ceteris paribus) as retirees (not in an assisted living facility) count as part of the labor force but aren't participating. Is that a good or bad thing?

2) If more young people are in school, labor force participation rate goes down (again, ceteris paribus) as students (16 and over) count as part of the labor force but aren't participating. Is that a good or bad thing?

Lies, damn lies, statistics...

</rant>

Economists look at labor participation rates as it affects growth. Whats interesting is that the participation rate in the US among prime age (25-54) workers has also fallen, down around 2% since the start of the last recession.

[tigoat]

I am losing my butt right now. Was short late last year and then went long for the Santa Clause and New Year rally, which didn't happen. AAPL and TWTR are big killers right now.

[fiamme red]

I just had the courage to look at my 401(k). I think I'll have to add five years to my projected retirement date. :help:

[Steelman]

The "TSX" Toronto Stock Exchange is down 20% from its high in 2014. The Canadian dollar is trading at 70cents US, a level not seen since 2003.

If you have US dollars, I would consider shopping north of the border, especially when there is an indication that oil is recovering.

[Steelman]

I am losing my butt right now. Was short late last year and then went long for the Santa Clause and New Year rally, which didn't happen. AAPL and TWTR are big killers right now.

I'm discouraged by Apple too, but the valuation is reasonable, and they have billions in cash. That is without taking into account what products/technologies are coming.

People are selling their winners, looking for a source of cash. When the correction is over, like last time, people will be scrambling to get back in to AAPL.

[rounder]

When I was in graduate school in the mid-80s, people thought that DOW at 2,000 was the magic number. That was before the internet and so long ago.
l

[verticaldoug]

I'm discouraged by Apple too, but the valuation is reasonable, and they have billions in cash. That is without taking into account what products/technologies are coming.

People are selling their winners, looking for a source of cash. When the correction is over, like last time, people will be scrambling to get back in to AAPL.

Apple is basically a one product company- Iphone. 70% of revenues and an even higher percentage of profits is driven by this product. The ramp of rumors and buildout for Iphone7 will start this summer, and ultimately decide the direction of the stock price.

[MattTuck]

So, you think the Fed will step-in and say that ' about that 1% rate increase in 2016 "never mind" '

"Don't fight the Fed", last meeting was not a "one and done" rate increase. When the Fed starts to raise rates, they continue to raise rates. Look for 4 more increases in 2016 (which will still only get us just above 1％)

Good news is that gas is now below $2

Tony, Over the last couple weeks, I believe the rate has dropped below the fed's target on multiple occasions, and by not insignificant amounts. Unwinding this situation is not as simple as just pulling a comically large lever on the wall at the Fed. The chain of linkages to get the rates to raise in the market is not perfect, and honestly, not full understood after all the crazy stuff they've done in the last 8 years (reverse repos, and all sorts of weird stuff to mess with bank reserves) and a weak economy is going to pressure rates lower, not higher.

Also, this past week, the probability of a January rate CUT is higher than before the rate hike. I'm not saying there will be a rate cut, I'm saying that the Fed has gotten itself in a pickle, and its playing out in the capital markets and the real economy in ways that no one really can fully predict; because so much of the Fed's actions were unprecedented.

[happycampyer]

Tony, Over the last couple weeks, I believe the rate has dropped below the fed's target on multiple occasions, and by not insignificant amounts. Unwinding this situation is not as simple as just pulling a comically large lever on the wall at the Fed. The chain of linkages to get the rates to raise in the market is not perfect, and honestly, not full understood after all the crazy stuff they've done in the last 8 years (reverse repos, and all sorts of weird stuff to mess with bank reserves) and a weak economy is going to pressure rates lower, not higher.

Also, this past week, the probability of a January rate CUT is higher than before the rate hike. I'm not saying there will be a rate cut, I'm saying that the Fed has gotten itself in a pickle, and its playing out in the capital markets and the real economy in ways that no one really can fully predict; because so much of the Fed's actions were unprecedented.
An apt analogy I read recently is that the Fed is like a cat up a tree--it was much easier getting up than it will be getting down. The massive misallocation of capital that has taken place over the last six or seven years is starting to reverse itself (it's surprising that it has taken so long since QE3 ended). And with wild cards like the Saudis continuing to contribute to a glut in oil, the Chinese regulators destroying credibility in their financial markets, tensions in the Middle East, Korea, etc. it's going to be a very bumpy ride.

[oldpotatoe]

I just had the courage to look at my 401(k). I think I'll have to add five years to my projected retirement date. :help:

And in 5 years you will be saying you'll get the retire 5 years earlier. ;)

[Tony T]

..or not

[saab2000]

I just had the courage to look at my 401(k). I think I'll have to add five years to my projected retirement date. :help:

Or we could have a killer week and your estimate comes down. These things fluctuate.

[jlwdm]

I saw an article on yahoo finance the other day that I recall said the average stock in the s&p 500 is down over 20% from its high in the last year.

It is a weighted average and a small number of companies make up a lot of value.

Jeff

[PFSLABD]

Down 1000 points this week. :eek:

It's like a downhill bike ride. What goes down, inevitably goes back up, again.

[laupsi]

Investing and saving should be very simple. One of the first rules in personal ifinance is to make time work for you, the second is to minimize risk. Dollar cost averaging is not complicated and if done early in one's working life, is a very successful means to a comfortable outcome. Regardless of the economic conditions, save/invest often and consistently. And if at all possible start early.

Don't make it complicated!

[Look585]

Economists look at labor participation rates as it affects growth. Whats interesting is that the participation rate in the US among prime age (25-54) workers has also fallen, down around 2% since the start of the last recession.

Lumping "Economists" into one homogeneous group is folly. Often, individual economists can't even agree with themselves!!! "on the one hand..., on the other hand..."

Harry S. Truman famously requested a "one handed economist" for just this reason.

:beer:

Anyway, yes, Labor Force Participation Rate is an interesting statistic, but, in my opinion, one often misused and misunderstood. How and *why* is it changing is the key. The recent decline noted above has been attributed in part (by some economists) to two income families becoming single income families, by choice. "Bad" or "Good"?

[Tony T]

It's like a downhill bike ride. What goes down, inevitably goes back up, again.

Unless when you reach the bottom you decide to go to your home by the sea ;)

[MattTuck]

I think this question sums up some of part of this debate quite well: Are Stocks Short-Term Oversold Or Long-Term Overbought?

[verticaldoug]

I think this question sums up some of part of this debate quite well: Are Stocks Short-Term Oversold Or Long-Term Overbought?

if you did not own AAPL MSFT GE FB GOOG the last 6 mo, and instead only owned the SPX495. You are down another 22% or so... A lot of concentrated performance is disguising the real damage.

[Tony T]

China down another 5%
US Markets are trying to look the other way, but looks like there is some "sell on the blip" today.

[Tony T]

…interesting trading day.

[Tony T]

Well, since most of the new posts are only made when the market is down,
I'll be a contrarian and post that the DOW is looking at a 150 point gain this morning (S&P 20, NAZ 50)

[cinema]

Oil is getting a little bump too as it tends to do on up days. could be another opportunity to get some dwti. Still early in the day

[PSC]

Sold off one of my bond funds and put everything in the S&P. I was looking for a reason to sell this fund for the past six months or so and with the drop in the market, it gave me a good excuse to move around stuff in my portfolio.

[Tony T]

Oil is getting a little bump too as it tends to do on up days. could be another opportunity to get some dwti. Still early in the day

And WTI is down again, may close ⬇30 today

[scho74]

Man it's getting ugly.

[Tony T]

I can't remember when oil was last below $30, must have been in the late`80's or early `90's

[54ny77]

it's not often one makes ~280% return in 6 months.....unless one was triple levered inverse to the index.....

wow.

Oil is getting a little bump too as it tends to do on up days. could be another opportunity to get some dwti. Still early in the day

[cinema]

i bought in at 95 something.

[bikerider888]

Been a fun time to go long volatility, via vehicles such as UVXY and TVIX.

Gut-wrenching moves. 10, 20, 25% in either direction daily.

Not for the faint of heart.

[scho74]

i bought in at 95 something.

You're a stud :hello:

[Tony T]

Looks like Monday redux. (⬆,⬇,⬆,⬇,⬆)

[bostondrunk]

Stop all this useless banter and TELL ME WHAT TO BUY!!!!!!!!!!!

[Tony T]

Stop all this useless banter and TELL ME WHAT TO BUY!!!!!!!!!!!

A $2 Powerball ticket ;)

[bostondrunk]

All joking aside, anyone 'day trade' ETF funds? I've been doing this for the past year, kind of for fun, with a very small account, about 15k at the moment. Over the past year I've probably made about 20%. I'd never risk big money doing it, then I'd screw up...lol. But lately I just bounce between NUGT and DUST, watch for one to drop 10+% (they have big swings each day), buy in and immediately place a sell order at roughly .5% to 1% higher than my buy. More often than not it gets executed and I then sign off for the day and walk with my $100.... :)
Again, it's just for fun on the side, and there have definitely been a few days where I was stupid and lost big...lol.
Outside of that, I stopped doing market type investments a while ago and invested in rental properties over the past 12 years, which have done nicely. :)

And yes, powerball would be rather nice.....!

[Hank Scorpio]

Probably a stupid question but where did most people get their start in the market. Obviously some people in this thread work in finance and have a vast knowledge of the market but is there a resource or resources where I can start to learn. I recently inherited a small amount of stocks and bonds and want to know if what I have is appropriate.

[MattTuck]

Probably a stupid question but where did most people get their start in the market. Obviously some people in this thread work in finance and have a vast knowledge of the market but is there a resource or resources where I can start to learn. I recently inherited a small amount of stocks and bonds and want to know if what I have is appropriate.

Appropriate for what? My dad introduced me to banks and the stock market and compound interest, back when I was a teenager. I've taken many academic courses on capital markets, finance, valuation, etc. since then. I don't work in finance, but I worked with some very bright financial minds.

For MOST people, the best thing they can do is to hold a passive index fund that is broadly diversified across asset classes. You can do this with a series of low cost index ETFs for domestic and international (both emerging markets and developed markets), equities (stocks), fixed income (bonds), real estate and commodities (if you believe commodities belong in your portfolio).

Diversification is the only free lunch in finance. and if these inherited assets are the basis for your retirement/security, I'd definitely make sure that you are diversified.

[RonW87]

Probably a stupid question but where did most people get their start in the market. Obviously some people in this thread work in finance and have a vast knowledge of the market but is there a resource or resources where I can start to learn. I recently inherited a small amount of stocks and bonds and want to know if what I have is appropriate.

Buy "The Wealthy Barber".

[bostondrunk]

Buy "The Wealthy Barber".

Well, I read that years ago, and it was great, but it is horribly outdated now!! There are no guaranteed 10% investment returns.... :)
I guess its still a good read... :)

[Tony T]

Down 10% from the recent high, so it's officially a correction.

[seanile]

All joking aside, anyone 'day trade' ETF funds? I've been doing this for the past year, kind of for fun, with a very small account, about 15k at the moment. Over the past year I've probably made about 20%. I'd never risk big money doing it, then I'd screw up...lol. But lately I just bounce between NUGT and DUST, watch for one to drop 10+% (they have big swings each day), buy in and immediately place a sell order at roughly .5% to 1% higher than my buy. More often than not it gets executed and I then sign off for the day and walk with my $100.... :)
how much are your transaction fees?

[SoCalSteve]

how much are your transaction fees?

Merrill Edge charges me $6.95 a transaction with no yearly fees. Seems reasonable.

[biker72]

how much are your transaction fees?

Vanguard and Schwab charge nothing for their own ETF's.
Schwab charges $7.95 for any other ETF.
Vanguard probably charges the same. Always bought just Vanguard from them.

[bostondrunk]

how much are your transaction fees?

6.95

[Llewellyn]

It's been an ugly start to the year and I don't expect it to be any different for the rest of the year. There are going to be plenty of buying opportunities for those who are brave and patient.

[Tony T]

It's been an ugly start to the year and I don't expect it to be any different for the rest of the year.

"As goes January, so goes the year (https://en.wikipedia.org/wiki/January_barometer)"

[saab2000]

It's been an ugly start of 2016, that's for certain. But I'm looking forward to my first 401(k) contributions for 2016 being made at a lower price.

I only started getting religion on this about 10 years ago and even then I wasn't as big a follower as I am today. The huge dip in 2008 and 2009 barely registered with me but I do remember thinking that I should increase my contributions. A buddy of mine started to cash out his 401(k) because he was worried about his future. It is my strong opinion that he made a mistake then and people who do the same now are making a similar mistake.

Don't make the market your sole source of retirement income and these dips are easier to take.

One thing that does have me curious is that everyone seems to be blaming the collapse in oil prices as the source of the fall in the overall market. And yet anything having anything to do with transportation is loving the cheap fuel prices. I work in the airlines and I can promise anyone who is interested that the lower fuel prices are a big, big deal to my industry. Fuel purchases are a significant portion of the annual budget of any airline, trucking company, shipping firm, etc. Everything we buy is transported to market using fuel of some sort. That will change eventually, but it's not changing yet. So I'm surprised that lower fuel costs aren't in some ways driving a rise in these industries.

[Tony T]

You won't see a sudden rise in these industries as they hedge with futures contracts.

[54ny77]

I blame Al Gore, since he invented program trading.

[SlackMan]

Appropriate for what? My dad introduced me to banks and the stock market and compound interest, back when I was a teenager. I've taken many academic courses on capital markets, finance, valuation, etc. since then. I don't work in finance, but I worked with some very bright financial minds.

For MOST people, the best thing they can do is to hold a passive index fund that is broadly diversified across asset classes. You can do this with a series of low cost index ETFs for domestic and international (both emerging markets and developed markets), equities (stocks), fixed income (bonds), real estate and commodities (if you believe commodities belong in your portfolio).

Diversification is the only free lunch in finance. and if these inherited assets are the basis for your retirement/security, I'd definitely make sure that you are diversified.

Yeah, what Matt said...except that I would omit the equities (assuming that means individual stocks), and stick with domestic and individual ETFs for equity investments. I'm a big fan of the Vanguard Total Stock Market ETF and the Vanguard Total International Stock ETF.

[saab2000]

You won't see a sudden rise in these industries as they hedge with futures contracts.

I wouldn't expect a sudden rise, but the airlines at least have been highly profitable in the past few years. Don't let their crocodile tears fool anyone. They're making bank.

[Llewellyn]

I wouldn't expect a sudden rise, but the airlines at least have been highly profitable in the past few years. Don't let their crocodile tears fool anyone. They're making bank.

Qantas has gone from an absolute dog to one of the outstanding performers in the Aussie market over the last couple of years, thanks in no small part to the fall in oil prices. Anyone who took a punt on them a few years ago has probably tripled their money by now. But you would have had to have balls of steel to do it.

[happycampyer]

<snip>

One thing that does have me curious is that everyone seems to be blaming the collapse in oil prices as the source of the fall in the overall market. And yet anything having anything to do with transportation is loving the cheap fuel prices. I work in the airlines and I can promise anyone who is interested that the lower fuel prices are a big, big deal to my industry. Fuel purchases are a significant portion of the annual budget of any airline, trucking company, shipping firm, etc. Everything we buy is transported to market using fuel of some sort. That will change eventually, but it's not changing yet. So I'm surprised that lower fuel costs aren't in some ways driving a rise in these industries.One of the problems with the collapse in oil prices is that, if oil prices stay where they are (or go even lower) for a prolonged period, a lot of companies in the energy sector (which contributed significantly to the growth in the economy over the last several years) are going to default on their debt. So yes, consumers and transports benefit from lower energy costs (consumers more so since they don't hedge their commodity costs), but having the energy sector implode is like a strong undertow. I think we are just beginning to see the great unwind of the massive misallocation of capital that has taken place as a result of the Fed's unprecedented accommodative fiscal policy. All of the places investors chased yield (commodities, China, emerging markets, etc.) are under pressure. I'm cynical enough to wonder whether, in order to prop up the economy going into the election, the Fed reverses course, starts another round of QE, and we end up with negative interest rates like in Europe. It's not normal when banks are paying mortgagors on floating rate mortgages.

[seanile]

I wouldn't expect a sudden rise, but the airlines at least have been highly profitable in the past few years. Don't let their crocodile tears fool anyone. They're making bank.

unless like some airlines they hedged on rising oil costs and bought fixed price contracts for future years' fuel purchases and now that price is higher than reality.

[cloudguy]

I wouldn't expect a sudden rise, but the airlines at least have been highly profitable in the past few years. Don't let their crocodile tears fool anyone. They're making bank.

Yeah, and there stickin' it to their customers, while prolly' colluding with their competitors on pricing. Remember when we didn't have to pay for carry-ons? Those were the good old days.

[verticaldoug]

Money is like Heroin

Market was addicted to easy money. Dr Janet took the syringe away. Now like an addict, the market is threatening to harm itself unless Dr Yellen gives him some more. . . Dr Yellen is afraid if she does, the market will keep asking until it eventually OD.

[saab2000]

Yeah, and there stickin' it to their customers, while prolly' colluding with their competitors on pricing. Remember when we didn't have to pay for carry-ons? Those were the good old days.

Everyone talks about the 'good old days' when talking about airlines. The reality is that airline travel is safer and more reliable than it has ever been. Additionally, only one or two airlines charge for carry ons and those airlines sell their tickets at dirt cheap prices.

My airline does not charge for carry on bags and people try to bring enormous bags on board to avoid checking them in. It's absurd.

Remember the good old days when we heard about crashes every couple months and epic delays and tickets cost thousands of dollars? But those were the good old days because people wore a suit to travel.

Airline travel has never been nice unless you could afford First Class and I would opine that this continues today.

[superbowlpats]

One of the problems with the collapse in oil prices is that, if oil prices stay where they are (or go even lower) for a prolonged period, a lot of companies in the energy sector (which contributed significantly to the growth in the economy over the last several years) are going to default on their debt. So yes, consumers and transports benefit from lower energy costs (consumers more so since they don't hedge their commodity costs), but having the energy sector implode is like a strong undertow. I think we are just beginning to see the great unwind of the massive misallocation of capital that has taken place as a result of the Fed's unprecedented accommodative fiscal policy. All of the places investors chased yield (commodities, China, emerging markets, etc.) are under pressure. I'm cynical enough to wonder whether, in order to prop up the economy going into the election, the Fed reverses course, starts another round of QE, and we end up with negative interest rates like in Europe. It's not normal when banks are paying mortgagors on floating rate mortgages.

I was thinking about this on the way into work this morning (didn't win PB). Thank you for that informative response.

[oldpotatoe]

Everyone talks about the 'good old days' when talking about airlines. The reality is that airline travel is safer and more reliable than it has ever been. Additionally, only one or two airlines charge for carry ons and those airlines sell their tickets at dirt cheap prices.

My airline does not charge for carry on bags and people try to bring enormous bags on board to avoid checking them in. It's absurd.

Remember the good old days when we heard about crashes every couple months and epic delays and tickets cost thousands of dollars? But those were the good old days because people wore a suit to travel.

Airline travel has never been nice unless you could afford First Class and I would opine that this continues today.

Isn't it also true the airlines are in a modernization program(expensive), kinda like when the 707/727/747 aircraft got long in tooth and needed large scale replacement. Even the 757/767/777 aircraft are a fairly old design and 737 really old? Same with older gen of Airbus?

As for right above and oil prices. I think the places that produce oil cheaply(SA, for instance) tried to put the hurt on the US more expensive to produce, oil producers, did that. I'll bet OPEC decides to reduce production, to at least stabilize prices. Russia gets hurt, Venezuela gets hurt, the US gets hurt..SA gets happy.

IMHO, don't really know zip about this stuff. Like less than $2 diesel tho..less than gas again around here.

Same in Europe...but about $1.10 per liter, not gallon.

http://autotraveler.ru/en/spravka/fuel-price-in-europe.html#.VpeajpMrIW0

[tigoat]

There are a certainly requirements to be classified as day-trader from SEC. If you buy a stock today and sell it tomorrow, that's not day-trading. Nonetheless, having 15K is nice to do some day-trading. ETFs are for boys:D, go for those individual stocks, as they are more heart pounding to play. I play short, long and options. This would be a good time to short some stocks if you have the guts.

All joking aside, anyone 'day trade' ETF funds? I've been doing this for the past year, kind of for fun, with a very small account, about 15k at the moment. Over the past year I've probably made about 20%. I'd never risk big money doing it, then I'd screw up...lol. But lately I just bounce between NUGT and DUST, watch for one to drop 10+% (they have big swings each day), buy in and immediately place a sell order at roughly .5% to 1% higher than my buy. More often than not it gets executed and I then sign off for the day and walk with my $100.... :)
Again, it's just for fun on the side, and there have definitely been a few days where I was stupid and lost big...lol.
Outside of that, I stopped doing market type investments a while ago and invested in rental properties over the past 12 years, which have done nicely. :)

And yes, powerball would be rather nice.....!

[verticaldoug]

It is easy to blame the FED for the easy money and misallocation of capital, but the truth is good old fashion GREED. (The FED did not make you buy the 5 yr 6% bond for the small E&P producer in Texas, GREED did that because you did not the 1.5% 5yr UST which was safer) Speculation is as old as the hills, and just like the money rushed into silicon valley during internet 1.0, the wall of money rushed into the shale producers.

We had the boom. Now we get the bust. Afterwards, we should get shale 2.0

If you picked through the roadkill of the dotcom bust , you ended up doing quite well. You should start doing the homework to identify survivors or takeover candidates in u.s. shale. The upside to all of this, is the technological advances driven by the 'misallocation' means the US has a cheap supply of domestic oil for the foreseeable future. The shale producers worked hard and simultaneously increased the ultimate recoverable per well while reducing costs.

The big losers here are the corrupt state owned producers- Rosneft, Petrobras, PDVSA, and even Saudi Aramco. (My guess is if the Saudi's do IPO part of Aramco, it is the bottom)

The established producers really underestimated how quickly the US Shale producers could increase efficiencies. (It depends on the area, but well costs have dropped substantially) Oil is not going back to 100, but it doesnt have to. These guys will probably do fine at 40-50 . Production hedges are running out this year, so the end should be in sight.

[saab2000]

Isn't it also true the airlines are in a modernization program(expensive), kinda like when the 707/727/747 aircraft got long in tooth and needed large scale replacement. Even the 757/767/777 aircraft are a fairly old design and 737 really old? Same with older gen of Airbus?

As for right above and oil prices. I think the places that produce oil cheaply(SA, for instance) tried to put the hurt on the US more expensive to produce, oil producers, did that. I'll bet OPEC decides to reduce production, to at least stabilize prices. Russia gets hurt, Venezuela gets hurt, the US gets hurt..SA gets happy.

IMHO, don't really know zip about this stuff. Like less than $2 diesel tho..less than gas again around here.

Same in Europe...but about $1.10 per liter, not gallon.

http://autotraveler.ru/en/spravka/fuel-price-in-europe.html#.VpeajpMrIW0

Yup. Airliners are very, very expensive and maintaining them is very expensive.

As to Europe, it's a bit of an apples and oranges comparison. I lived there for a long time and yes, gas and diesel are expensive, but the distances travelled by car are shorter. And Europe has viable mass transit options like trains that we just don't have in the US. So folks don't need to drive 1500 miles to their vacations or other things they do. Flying is inexpensive there and trains are great. Most people use their cars for short trips or vacations of a few hundred miles.

[zap]

One thing that does have me curious is that everyone seems to be blaming the collapse in oil prices as the source of the fall in the overall market. And yet anything having anything to do with transportation is loving the cheap fuel prices. I work in the airlines and I can promise anyone who is interested that the lower fuel prices are a big, big deal to my industry. Fuel purchases are a significant portion of the annual budget of any airline, trucking company, shipping firm, etc. Everything we buy is transported to market using fuel of some sort. That will change eventually, but it's not changing yet. So I'm surprised that lower fuel costs aren't in some ways driving a rise in these industries.

Don't be......fewer goods to transport.

[Tony T]

Looks like a bottom was reached this morning, market ⬆ 1.25+%
(although it could be short-covering)

[Ken Robb]

Airline travel has never been nice unless you could afford First Class and I would opine that this continues today.

My first airline flights were in 1964. I had a summer internship between my JR/SR years at Northwestern. I flew Chicago to Cincinnati in a DC-6 with 4 piston engines. I was wearing my "good blue suit" and the cabin was a little hot but I was served a pretty good steak on ceramic dishes with stainless cutlery for lunch. I even got a small pack of cigarettes to round out the meal.

After a brief training period I flew to NYC on a Convair 880 jet. What a difference! It was smoother, quieter and the A/C was terrific. Another nice meal for a poor college student. My return flight from NYC to Cincy and then on to Chicago were all on jets so this was really the end of piston aircraft on most flights of any distance.

During this time "stewardesses" were all required to be youngish, good-looking and charming and the stew-to-passenger ratios allowed them time to spoil passengers.

I enjoyed flying Coach into at least the 1970s. A few times while flying in my Army Class A uniform in the late 1960s I got free upgrades to First Class and that was a special treat indeed.

Now I do my best to avoid air travel because coach is worse than 1966 Greyhound Bus travel and I'm too cheap to pay for Business or First Class.

[cinema]

I am wondering if it's a bounce or a real recovery. I don't think $26 barrel is impossible

[Tony T]

We'll know more as more companies release earnings.
Tonight, INTC:
"Intel's fourth-quarter earnings fell 1% amid continued weakness in the personal computer market, still the chip maker's main business."

[gngroup]

Time to diversify and buy hard assets - investment real estate.

[dancinkozmo]

Time to diversify and buy hard assets - investment real estate.

im diversifying as well...i buried half my money in the backyard and put the other half under the floorboards

[akelman]

I've converted all of my vast holdings into alpacas, livestock of the future.

[gngroup]

im diversifying as well...i buried half my money in the backyard and put the other half under the floorboards

And where do you live???
;)

:banana:

[Tony T]

WTI ⬇ 5.5% @ 29.50
China ⬇ 3.5% (⬇ 20% in 20 trading days)
Europe ⬇ 2.3%
US Market looks to open ⬇ 2.5%

[scho74]

This is getting scary. Wish I had some cash on hand to buy more though.

[Tony T]

This is getting scary. Wish I had some cash on hand to buy more though.

You have all your cash on hand in the market? Not a good idea.

[Tony T]

I'm surprised that the financials are getting hit this hard. The earnings reported today by C and WFC were not that bad.

[azrider]

....................

[cinema]

sure but oil down 6%. markets will follow. rig count in 1 min let's see

[Tony T]

I would guess that only the US market being closed Monday is not helping.

[Tony T]

http://fortune.com/2016/01/13/analyst-here-comes-the-biggest-stock-market-crash-in-a-generation/?xid=inc&cid=sf01002&sr_share=facebook

Albert Edwards: Here Comes the Biggest Stock Market Crash in a Generation

"It should be pointed out that Edwards has been making similar calls for years. Back in 2010, he called for the S&P to collapse to 450."

[azrider]

........

[Tony T]

Market ⬇ 8% in 10 trading days.

[biker72]

Time to buy. I did just that today.

[Tony T]

Thur was the time to sell when the DOW was ⬆ 300 pts

[cnighbor1]

I use there timing system Out of market at least 50% for past month

[shovelhd]

"It should be pointed out that Edwards has been making similar calls for years. Back in 2010, he called for the S&P to collapse to 450."

He must have got his weed from Chandler Jones.

[rounder]

I asked a guy I work with how his 401 k was doing.

He said...my 301k?

I believe that (hope) that a lot of the drop is due to panic selling and hope it comes back. Bloomberg radio describes unfavorable Chinese conditions, etc., but they do not seem to be in panic mode.

[Tony T]

Well, actually his "369k" as the market is only down 8% YTD. When the market drops 25% he can call it his 301k ;)

There wasn't any panic selling today. The market was down less than 4% at it's worst.
Any panic selling is occurring in the oil market (at least we get gas @ < $2/gal).

[oldpotatoe]

Well, actually his "369k" as the market is only down 8% YTD. When the market drops 25% he can call it his 301k ;)

There wasn't any panic selling today. The market was down less than 4% at it's worst.
Any panic selling is occurring in the oil market (at least we get gas @ < $2/gal).

I saw $1.59 here.

[verticaldoug]

If you keep trying to catch falling knives, you eventually will run out of hands.

The mistake was the IMF naming the YUAN as a reserve currency at end of November. (Effective 10/2016). Almost immediately after the announcement the YUAN starting weakening. If you are a wealthy Chinese, you are trying to get money out of the country. This probably explains why the Chinese firms want to do cross border M&A. They don't care about price, they just want the money out of China. Capital flight should remind you of Russia.

The market is putting pressure on the HKD peg which has been sacrosanct for a long time. If that goes, the markets get interesting. (Financial euphemism for scary).

[yakstone]

If you keep trying to catch falling knives, you eventually will run out of hands

Unless your really good.

[rccardr]

...or lucky.

Many years ago, my formal education was in international economics, and at a fairly prestigious school. They really drilled the basics into us, and it's amazing how those basics still hold true, even when everyone is saying "this time it's different".

That education, along with a large dose of luck, enabled me to call the peak of the dot com era, convert to cash before the drop, and jump back in before the market came back (REITs paying a 16% dividend at the time also helped). Did it again in 2007 just before the crash, and held cash instruments until early 2009. All of that helped us to build the kind of nest egg that resulted in retirement at a relatively young age.

Would never try to do that a third time. Now we're in a broad based portfolio that goes up a little or down a little, but is relatively stable. Not as exciting at times like these, but makes it easier to sleep at night.

Just remember: it's a marathon, not a sprint.

[Tony T]

While the market is reacting to the drop in WTI, IMO, the effect of China on the US economy will have a larger impact. What the effect is will be known in the coming weeks as US companies report earnings (and give forward guidance).

China is releasing it's GDP Tues, but their Premier spoke to the 4th Qtr GDP today. (Official info is being released Tues, but this could be a reason for the selling Fri as US markets are closed Mon)

China's Economy Grew Nearly 7% in 2015, Premier Says (http://www.wsj.com/articles/chinas-economy-grew-nearly-7-in-2015-premier-says-1452951549)
Pace would be weakest annual growth in quarter century
Jan. 16, 2016 8:39 a.m. ET

BEIJING's Chinese Premier Li Keqiang said China's economy grew nearly 7% last year, with employment and household income holding up despite weaker domestic and global demand.

Mr. Li's comments, made Saturday at the launch of the Beijing-led Asian Infrastructure Investment Bank, affirms that the Chinese economy is slowing while allowing the government to say it hit the growth target of about 7% for 2015.
The government is due to release official data for the fourth quarter and all of 2015 on Tuesday. A pace of 7% or lower would be the weakest annual growth for China in a quarter century.

[Tony T]

Oil continuing to fall
WTI ⬇ 0.9% @ 29.15
BRENT ⬇ 1.2% @ 28.60

[cinema]

the crude futures were up a bit from friday. feb futures closed at 29.70 then. march future contracts seem to be at 29.80 now. a bit of contango i'm guessing

[Tony T]

Oil below $29 now (Iran now can export)
Didn't think it could fall this far this fast.

[Tony T]

Oil⬆, approaching 30.
Market looks to be recouping 75% of Friday's losses.

[Tony T]

Couldn't hold, WTI closes ⬇ 3.26% @ $28.46, dragging the market down.

[cinema]

markets ended slightly green could be a rally sign for tomorrow but it's too risky. sometimes it pays to have guts. for ex i have yet to let go of dwti. the price of that note has astonished me.

[buddybikes]

Still can't understand why one industry crashing (oil) and EVERY one else benefits including the war on terror and this is bad. Yes it is a big industry, but big trucks/cars production going 24x7, airlines will skyrocket (not exactly going in any price wars or roomier seats). So what's good for Saudi is what is good for the US economy?

[Tony T]

The drop in the price of oil is due not only to increased production, but also to decreased demand for oil, not only from China, but from all economies (including ours), which in an indication of slowing worldwide production.

Oil gets into everything.

[Anarchist]

The issue is not that 1 industry is suffering (oil) it is that essentially all industries are suffering.

The US economy appears to be strong at present, but that cannot be maintained in isolation.

The Baltic Dry Index is a useful leading indicator of economic activity, worldwide. The BDI has been registered as high as approximately 11,500 points. It is currently threatening to set a new all time low at approximately 369 (I looked first thing this morning, so may be off a bit). This is an index of the cost of shipping (demand) on the major worldwide shipping routes.

If the Index is as low as it is, it means there is no demand for shipping capacity, which means no demand for commodities.

Worldwide.

[happycampyer]

My understanding is that it's much more of an oversupply issue than a declining demand issue. In the past, if demand started to wane, OPEC could/would reduce supply to maintain pricing. OPEC members haven't been cooperating with each other for some time, so the spigot is basically on everywhere. The glut is (most likely deliberately) putting the squeeze on less wealthy OPEC producers (e.g., Venezuela), the US producers and now Iran, who finally wants to get back into the export game now that sanctions are being lifted. The energy sector in the US is getting hammered. Companies are cutting (relatively well-paying) jobs and, if the glut continues, will start defaulting on their debt in the coming quarters. A looming question is whether a bubble bursting in high yield would be like the subprime bubble bursting in 2008, or the tech bubble bursting in 2000.

Maybe the Fed will start another round of quantitative easing, but instead of buying Treasuries or MBS, they'll buy junk bonds and oil...

[fa63]

2000 - tech bubble burst
2008 - housing bubble burst
2016 - oil bubble burst?

Anything burst in 1992? :D

[Tony T]

I hear they're starting filming on "The Big Short 2" ;)

[happycampyer]

2000 - tech bubble burst
2008 - housing bubble burst
2016 - oil bubble burst?

Anything burst in 1992? :DTechnically, the recession started in 1990, but enemplyment continued to rise in 1992. The housing bubble seemed pretty bad then, but was nothing compared to 2008.

https://en.m.wikipedia.org/wiki/Early_1990s_recession_in_the_United_States

[cinema]

March futures just dipped below 28.80

China going timber

[Tony T]

WTI ⬇ again. ⬇2% @ 27.87.
Asia falls 3.8% Europe falling 2.5%,
US looks to open ⬇ 1.5%

[moose8]

This horror show just won't end. I've gotten clobbered this month.

[bikerider888]

Not enough capitulation this morning, imo. Now if the down 400pts futures read at 4AM turned into 700 or 800 this could have been a bottom. Not enough blood.

Same with oil, we need a whoosh to 22 or 23, then a face-ripping snap back as shorts run to cover. Until then it's a 1000 cuts.

Just my opinion

[MattTuck]

A couple interesting thoughts I've heard in the past couple days.

1. This price move is just the market pricing in a Bernie Sanders or Donald Trump presidency.

2. That some economists think this is an over reaction to China's perceived slow down, which is not really that big of a deal.

3. Ray Dalio said this morning that if assets remain correlated, and keep going down, that we're in for a depression -- and that more QE is almost guaranteed.

[txcid05]

Pretty solid article I just saw at Seeking Alpha:

http://seekingalpha.com/article/3818866-late-panic-moment

I've been into holding dividend yielding companies lately, and staying the course is part of the plan....but boy is is ugly at the moment! :crap:

[Tony T]

1. Too large a decline in too short a period to be a reaction to upcoming Nov elections.
2. Only an overreaction to China's decline in GDP if it's contained in China.
3. This could be the start of a recession, which could trigger QE, which could be the reason for the drop in Financials.

(All IMO, of course)

[fa63]

I also wonder what the role of high frequency trading is in all the volatility we have been seeing lately.

[cinema]

not much. hft affects small movements in price. this is a world economic downturn fueled by oil

[bikerider888]

not much. hft affects small movements in price. this is a world economic downturn fueled by oil

You might want to read up on "momentum ignition" then

[Tony T]

not much. hft affects small movements in price. this is a world economic downturn fueled by oil

I agree, but when the market is this volatile, HFT may be reluctant to participate (as they never hold a position overnight), and this may be adding to the decline.

[cinema]

You might want to read up on "momentum ignition" then

look at wti and shanghai composite since november. factor in december lift of the ban on oil exports. russian+ukraine. SA economic cold war w/iran. this has been quite a long/hard movement based on cold hard facts (or red herrings depending on your pov).

[Tony T]

Wti @ $26.40 ⬇ 7.25%

[MattTuck]

The market is like Darth Vader. More machine than man, now.

http://cdn.meme.am/instances/500x/20346659.jpg

Sorry, couldn't resist.

[Tony T]

Not enough capitulation this morning, imo. Now if the down 400pts futures read at 4AM turned into 700 or 800 this could have been a bottom. Not enough blood.

May happen before the day is out :(

[Tony T]

(Another) last hour rally (NAZ is now ⬆ 0.50%)

[cinema]

This could have been the bottom.

[Tony T]

This could have been the bottom.

We'll know if it is in about 30 days ;)

[cinema]

look at that V chart. I got stopped out of dwti at 450. i'm definitely going to sit back for a couple days and observe. yes oil is still down for the day. but with inventory coming up let's just sit tight. amazing reversal today by the markets. just incredible

[Tony T]

Time will tell. IMO, too early to call a bottom.

[summilux]

250 point drop in the DJI and 22 point drop in S&P almost seems like good news.

[saab2000]

I'm gonna buy a few more shares of my S&P500 fund.

[gomango]

I'm gonna buy a few more shares of my S&P500 fund.

So are we.

Trying to figure out how many $$$$ we can use for this opportunity.

[likebikes]

at what point is the sky officially falling?

[cinema]

About now.

[Steelman]

If the S & P can go through 1920 or so, and hold it, the bottom may very well be in.

If one has cash on the sidelines, now is the time to begin to nibble, IMHO.

[Steelman]

We'll know if it is in about 30 days ;)

That could very well be, but in 30 days, it may become difficult to discipline yourself to buy if prices are higher.

[akelman]

now is the time to begin to nibble

Probably not, I'm guessing. I dumped a bunch of money into equities as of close of market today. That's pretty much a guarantee that the bottom is nowhere in sight. Still and all, I'm in it for the long term, so I'm not too concerned about timing things perfectly.

[Tony T]

That could very well be, but in 30 days, it may become difficult to discipline yourself to buy if prices are higher.

What I meant was that there is no way to know where the bottom is.
We will only know where is was.

[biker72]

If the S & P can go through 1920 or so, and hold it, the bottom may very well be in.

If one has cash on the sidelines, now is the time to begin to nibble, IMHO.

Totally agree. My nibbling started about 2pm today.

[Steelman]

Probably not, I'm guessing. I dumped a bunch of money into equities as of close of market today. That's pretty much a guarantee that the bottom is nowhere in sight. Still and all, I'm in it for the long term, so I'm not too concerned about timing things perfectly.

If thats what it takes to get you into the market, you did exactly the right thing. Nothing worse than being stuck, trying to pick that perfect bottom, when stocks begin to grind higher.

We have begun to average in, unless they is a day of obvious capitulation, will continue to do so.

[echappist]

So are we.

Trying to figure out how many $$$$ we can use for this opportunity.

trying to do the same here (interfund transfer and allocations). out of curiosity, does anyone take into account P/E ratios when looking at the trends and determining when to buy more?

[akelman]

If thats what it takes to get you into the market

Oh, we were already in. We just decided to get in a bit deeper. Again, it's all very long term for us, so timing, beyond a certain point, is nearly irrelevant. Which is to say, better to buy near a valley than a peak. But given that our time horizon is years or maybe decades, it's not the end of the world either way.

[Tony T]

Oil above $30
DOW just recouped all of yesterdays losses (⬆ 260+ 1.7%).

[biker72]

The ETF I bought yesterday is up almost 20% today......:D

Time to sell.

[saab2000]

The ETF I bought yesterday is up almost 20% today......:D

Time to sell.

I know you're probably being facetious but many charge a 2% fee for holding of less than 60 days and of course you'll be hit with a short term capital gains tax.....

My time horizon is measured in years and even a couple decades, so these fluctuations, while painful to watch, aren't that big a deal.

It's hard to time dips but I did put a few bucks into an S&P fund yesterday.

[cinema]

don't think he's being facetious after taxes he'll net like 13% of that 20% many people make their money this way. and regarding leveraged etfs. most long term 2x or 3x ETF is a suckers game, they decay. i'm betting 20% means he was in a leveraged etf. lots of people short term etfs and day trade etfs.

[Tony T]

I think he was, note the: :D
Anyway, not knowing his situation, if he had some "losers" that he wanted to dump, he could sell to offset any gain.
And he doesn't have to sell it all, he could sell, say 25% to lock in some gains.

(and as I type this, the DOW is down 188 points from today's high)
.

[cinema]

yep sp bout to go red. it's not over till it's over. personally i think the market could go through another correction and still be overvalued.

[bikerider888]

The VIX has been the gift that keeps on giving this week. Trading via UVXY.

up down up down...

[saab2000]

don't think he's being facetious after taxes he'll net like 13% of that 20% many people make their money this way. and regarding leveraged etfs. most long term 2x or 3x ETF is a suckers game, they decay. i'm betting 20% means he was in a leveraged etf. lots of people short term etfs and day trade etfs.

Can you explain?

I've invested in some ETFs just because they have very low expense ratios. These are broad market ETFs and I do plan to hold them long term, as in years.

I'm thinking 'leveraged' in that an investor is borrowing money to invest is what you're meaning here?

I'm investing my own cash, not borrowed money. Not sure about others. Not casting judgement either, but I'm just doing my own money.

[cinema]

no a leveraged ETF multiplies daily gains or losses in any given index, commodity, sector, etc. you get exposure to exponential return or loss with a smaller amount of capital. sounds like you're in a regular tracking etf like spy. they are fine. the 20% thing happens daily in some leveraged etfs with major news regarding their underlying assets. that's been happening all week and last.

[bikerider888]

I know you're probably being facetious but many charge a 2% fee for holding of less than 60 days and of course you'll be hit with a short term capital gains tax.....

My time horizon is measured in years and even a couple decades, so these fluctuations, while painful to watch, aren't that big a deal.

It's hard to time dips but I did put a few bucks into an S&P fund yesterday.

Uhm, ETFs that trade like stocks do not charge a 2% holding fee. Maybe some crappy mutual fund does.

Taxes? Maybe he's using qualified funds. Easily the most tax efficient place to trade.

[saab2000]

Uhm, ETFs that trade like stocks do not charge a 2% holding fee. Maybe some crappy mutual fund does.

Taxes? Maybe he's using qualified funds. Easily the most tax efficient place to trade.

Don't know.

When I placed my small order with Schwab it indicated a 2% fee on funds held for less than 60 days. Since I have no intention of selling in less than 60 days it's irrelevant to me.

I don't think Schwab's S&P 500 fund qualifies as crappy, but maybe it does.

[bikerider888]

Don't know.

When I placed my small order with Schwab it indicated a 2% fee on funds held for less than 60 days. Since I have no intention of selling in less than 60 days it's irrelevant to me.

I don't think Schwab's S&P 500 fund qualifies as crappy, but maybe it does.

That one is pretty good, but it's not an ETF. Mutual funds can charge fees like the short term thing, but not ETFs. 0.09% is about as cheap as they get.

[biker72]

I know you're probably being facetious but many charge a 2% fee for holding of less than 60 days and of course you'll be hit with a short term capital gains tax.....

My time horizon is measured in years and even a couple decades, so these fluctuations, while painful to watch, aren't that big a deal.

It's hard to time dips but I did put a few bucks into an S&P fund yesterday.

ETF's, at least the ones I buy are traded like stocks. I can buy and sell in a 5 minute span with no penalty. But like stocks there is a $7.95 transaction fee.

95% of my portfolio is in index mutual funds or index ETF's. The other 5% I gamble with in volatile ETF's. This particular one has a tremendous upside potential.

[Tony T]

Oil above $31, world markets rally (NIKKEI ⬆ 6%, 950pts)
WTI ⬆ 5% @ 31.03

[oldpotatoe]

Oil above $31, world markets rally (NIKKEI ⬆ 6%, 950pts)
WTI ⬆ 5% @ 31.03

yeehaw, weeee,

[Tony T]

and WTI back below $30 ⬇ 7.5% (and pulls the market down 1.5%)
Looks like this may be the "worst January in history" (as CNBC likes to say),
and soon they will be repeating the oft-told saying: "As January goes, so goes the year"

"Big Banks" are down 20% for the year (…that's 15 trading days)
"Big Tech" reporting this week, so buckle your seatbelt…


.

[cinema]

looks like we'll be retesting last weeks crude/market lows sometime soon

[likebikes]

the stock market has been more entertaining as of late than the presidential race.

[Llewellyn]

the stock market has been more entertaining as of late than the presidential race.

As Pierpont always said "it's the best game in town"

[Tony T]

Japan goes negative (http://www.nytimes.com/2016/01/30/business/international/japan-interest-rate.html?ref=business&_r=0) with interest rates
US Markets ⬆ 2.5% today (this was the worst January since 2009)
.

[likebikes]

looks like another drubbing today, although it ain't over til its over.:bike:

[Tony T]

http://forums.thepaceline.net/attachment.php?attachmentid=1697913831&stc=1&d=1453472409

[fiamme red]

Another interesting day so far...

[verticaldoug]

Another interesting day so far...

Interesting is a Wall Street Euphemism for losing money.

Next stop on the express elevator is usually called scary.

[MattTuck]

So, you think the Fed will step-in and say that ' about that 1% rate increase in 2016 "never mind" '

"Don't fight the Fed", last meeting was not a "one and done" rate increase. When the Fed starts to raise rates, they continue to raise rates. Look for 4 more increases in 2016 (which will still only get us just above 1％)

Good news is that gas is now below $2

Still confident in this prediction?

Top Federal Reserve policymakers are leaving little doubt the financial turbulence and souring of the global economy could have significant implications for U.S. monetary policy, but they are loathe to draw too many conclusions about the appropriate path of interest rates at this juncture.

One thing is for certain: The tightening of financial conditions that has taken place since the Fed began raising short-term rates in mid-December is a matter of considerable concern to the Fed, New York Federal Reserve Bank President William Dudley said in an exclusive interview with MNI Tuesday.

[likebikes]

at what point is the sky officially falling?

^ elephant in the room, IMO

[54ny77]

shorting takes major cajones.

easier mentally/emotionally to just buy on dips and hope for the long term best.

if you're at retirement age and still major chunk of assets in equities, well that just plain sucks and welcome back to 2008/9.

[Tony T]

looks like another drubbing today, although
it ain't over til its over.
:bike:

DOW ⬆ 1%, S&P ⬆0.5%, NAZ ⬇ 0.25%

http://i01.hsncdn.com/is/image/HomeShoppingNetwork/prodfull/steiner-sports-yogi-berra-with-catchers-mask-vertical-d-20100915121806583~6191008w.jpg

[Tony T]

Another "interesting" day (and if you look at the S&P futures from last night, even more so).
Looks like this market is being dragged by it's nose by oil.

[oldpotatoe]

Another "interesting" day (and if you look at the S&P futures from last night, even more so).
Looks like this market is being dragged by it's nose by oil.

Ain't bitching about $1.65 diesel and $1.68 gas...Broomfield shell, hwy 287.,

[Tony T]

Gas is at $2 in CT (at most stations), looking forward to the drop below $2

[BobO]

Gas is at $2 in CT (at most stations), looking forward to the drop below $2

Tucson, $1.59. It's been consistently falling $0.10 every two weeks.

[Tony T]

CT has high gas taxes (and high property taxes, and high income taxes)

[BobO]

CT has high gas taxes (and high property taxes, and high income taxes)

I know your pain, I grew up there, Colchester born and raised.

[Saxon]

Sam's was at $1.88 today in Sacramento. I never thought the CA gas would drop below $2.00 a gallon.

[54ny77]

It's probably about a buck. The rest are taxes.

Wouldn't doubt if the "Temporary" Loma Prieta quake repair fund/tax is still in place.....:bike:

Sam's was at $1.88 today in Sacramento. I never thought the CA gas would drop below $2.00 a gallon.

[Tony T]

.

U.S. Economy Added 151,000 Jobs in January; Unemployment at 4.9% (http://www.nytimes.com/2016/02/06/business/economy/jobs-report-unemployment-january-fed-interest-rates.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news)

American employers eased up on the gas last month, but still added jobs at a healthy enough pace to help calm fears that the economy is on the verge of falling into a recession.

The Labor Department said Friday that payrolls rose by 151,000 in January, a falloff from the year-end sprint that helped make 2015 the second-best year for job creation since the late 1990s.

Given those outsize gains, as well as much colder weather last month after the warmest December on record, some payback in January was to be expected.

The latest figures on the job market plus a slight fall in the unemployment rate to 4.9 percent, from 5 percent in December suggest some modest strength persists. January was the first time since February 2008 that the unemployment rate fell below 5 percent, just before the collapse of Bear Stearns set the stage for the financial crisis.

To be sure, markets are famously mercurial, foreseeing recessions that never come to pass and assuming the good times will go on right up until the music stops.

But for all the talk of recession on Wall Street, or at least anemic growth in 2016, the Main Street economy appears to be on a fairly solid footing.

[likebikes]

https://49.media.tumblr.com/02cfe937377a2d592c25424e15f176c3/tumblr_nd1b0sOAoh1r9o4rzo1_500.gif

[Tony T]

.
Global stocks fall after U.S. jobs report muddles Fed outlook (http://www.reuters.com/article/us-global-markets-idUSKCN0VE01R)

Global stock markets slumped and the U.S. dollar rallied on Friday after a key U.S. jobs report painted a mixed picture of the labor market and left investors with a muddled view on interest rate hike prospects.

Oil prices dipped, ending the week lower after two weeks of gains.

Wall Street ended lower, led by plunging technology shares after poor results from data company Tableau Software (DATA.N) and networking platform LinkedIn (LNKD.N). The S&P 500 information technology sector fell 3.4 percent, while the Nasdaq Composite Index slumped to its lowest close since October 2014.

While U.S. non-farm payrolls increased by just 151,000 jobs last month, well below forecasts of 190,000, the unemployment rate fell to 4.9 percent, the lowest since February 2008, and a sharp rise in wages suggested the labor market recovery remained on track.

Despite the weak headline figure, markets took the rest of the payrolls report hawkishly. Fed funds futures contracts showed traders boosted their view of the chances of a Fed rate hike in December to about 40 percent. Before the report, they expected the Fed to wait until well into next year before raising rates again.

The Fed's own forecasts, meanwhile, still suggest four increases by year-end, a pace many consider unlikely, which is likely to be addressed by Fed Chair Janet Yellen next week when she appears before Congress for semi-annual monetary policy testimony.

[Tony T]

WTI back below $30, stocks indicated to follow down.

[fiamme red]

If the S & P can go through 1920 or so, and hold it, the bottom may very well be in.

If one has cash on the sidelines, now is the time to begin to nibble, IMHO.Looks like a 22-month closing low for the S&P. :crap:

[Tony T]

China (and other Asian Markets) were closed today for a holiday — they have 2 days of catching up to do tonight.

[jimcav]

learned some things, but overall still feel I lack understanding to take advantage
For example, I retire from active duty this July, and fully expect to be employed before that happens, but, there is the chance I won't. So when VW tanked, I was tempted to buy, but didn't (fear of short time horizon if needed to pull it out).
Today I see some energy stocks hammered, and wonder about ETE--is it truly a huge gamble, or is there any way to better assess when it might be ok to jump in on something like VW or ETE when there is uncertainty on the horizon?

I am guessing a tracking stock is probably better, but once I know for sure I have a job post-military, I will want to invest again and like the idea of buying something beaten down (but not sure how to separate an over-reaction, like maybe the initial drops due to bad press (like Toyota few years ago, VW now, Chipotle, vs something maybe more fundamental like ETE)?
thx
jim

[Tony T]

.
Wall Street falls on economic worries; financials down (http://www.reuters.com/article/us-usa-stocks-idUSKCN0VH119)

Dow halves losses to close down less than 200 points, Nasdaq drops nearly two percent

U.S. stocks dropped on Monday as concern over global growth hit banks and other economically sensitive shares, but a late rally in energy shares left the market well above its lows of the day.

European banks led a global selloff in financial shares as signs of stress in the sector mounted.

Uncertainty over whether the U.S. Federal Reserve will raise rates this year also dragged down U.S. bank stocks, pushing the S&P financial index .SPSY down 2.6 percent. It is now off 14.6 percent for the year, making it the worst-performing of the 10 major S&P sectors.

The Dow Jones industrial average .DJI closed down 177.92 points, or 1.1 percent, to 16,027.05, the S&P 500 .SPX lost 26.61 points, or 1.42 percent, to 1,853.44 and the Nasdaq Composite .IXIC dropped 79.39 points, or 1.82 percent, to 4,283.75.

Falling oil prices along with concern over a worsening global growth outlook have caused a sharp selloff in stocks this year.
The S&P 500 is down 9.3 percent.

[1centaur]

learned some things, but overall still feel I lack understanding to take advantage
For example, I retire from active duty this July, and fully expect to be employed before that happens, but, there is the chance I won't. So when VW tanked, I was tempted to buy, but didn't (fear of short time horizon if needed to pull it out).
Today I see some energy stocks hammered, and wonder about ETE--is it truly a huge gamble, or is there any way to better assess when it might be ok to jump in on something like VW or ETE when there is uncertainty on the horizon?

I am guessing a tracking stock is probably better, but once I know for sure I have a job post-military, I will want to invest again and like the idea of buying something beaten down (but not sure how to separate an over-reaction, like maybe the initial drops due to bad press (like Toyota few years ago, VW now, Chipotle, vs something maybe more fundamental like ETE)?
thx
jim

It is best to invest when you have an advantage of some sort over the market consensus. ETE has very specific considerations related to its Williams acquisition and the way MLPs can be undone that experts are going to understand way better than you. The one advantage you MIGHT have is a different time tolerance for your return on investment. If the professional consensus is focused on the next 12 months and you care about the next three years, then maybe your instinct to buy beaten down names will work. But if that is your only advantage, that you are not afraid of a longer recovery path for energy, then why make that bet with ANY specific name when you can make that bet across many names (in an ETF or Fund) and thereby be sure that the specific risk of any given name does not mess up your bet or your advantage.

[unterhausen]

I would never buy a stock like VW at a time like this. Who knows what's going to happen? My only play on a stock like VW is to look for some other stock that unfairly gets dragged down by their bad news. Not sure there is any unfairness to be had in the automotive sector though.

[jimcav]

It is best to invest when you have an advantage of some sort over the market consensus. ETE has very specific considerations related to its Williams acquisition and the way MLPs can be undone that experts are going to understand way better than you. The one advantage you MIGHT have is a different time tolerance for your return on investment. If the professional consensus is focused on the next 12 months and you care about the next three years, then maybe your instinct to buy beaten down names will work. But if that is your only advantage, that you are not afraid of a longer recovery path for energy, then why make that bet with ANY specific name when you can make that bet across many names (in an ETF or Fund) and thereby be sure that the specific risk of any given name does not mess up your bet or your advantage.
that makes great sense. my time frame (assuming i don't have a gap in getting employment) is 9 years. In hindsight money spent on bikes (which was much of my disposable income) would probably better served in ETFs, but i had a pretty bad experience when i first started investing in 1998 in stocks (before that i used T Rowe Price mutual funds, but sold them to start investing when a guy i worked with had a buddy who had just gotten out of the marine corps and was working at morgan stanley--he got me in all sorts of crap: enron, aol-time warner, and other dot.coms that disappeared; in fact nothing good except amazon.

thanks
jim

[likebikes]

I don't think it's best to buy individual stocks other than small nominal amounts for entertainment value only. Unless you have some insider info.

[Tony T]

Not a good idea to buy with "insider info" (and to let everyone know that thats the only time you would buy an individual stock ;))

[Climb01742]

Maybe it's because when it comes to managing my money, my historical record suggests that I'm an idiot, something Warren Buffett is doing makes a great of sense to me. The estate he's leaving his wife will be 10% Treasury notes and 90% index funds.

Even the greatest investor ever doesn't seem to believe that beating the market over time is all that likely. Man do I wish I'd simply started putting away money monthly into low cost index funds when I got my first post-college job.:crap::beer:

[Tony T]

WTI under $27.50 ,⬇ over 6%
Banks in Europe (and to a lesser extent US) getting crushed.
Not sure what to make of the EU Banks, smells of 2008.

[likebikes]

How low will it go!:crap:

[Tony T]

Well, can't go below 0.

[cinema]

if api and inventory is even slightly bearish wti will test 26 lows

[Tony T]

.
Wall Street ends slightly lower after late rally (http://www.reuters.com/article/us-usa-stocks-idUSKCN0VI14Q)

U.S. stocks ended a volatile session barely lower on Tuesday as a late-day rally led by materials and healthcare shares offset another big drop in oil prices.

Energy was the day's weakest sector, with the index .SPNY falling 2.5 percent as U.S. crude settled 5.9-percent lower.

But the late-day rally was fairly broad-based, suggesting a possible reversal in sentiment.

[verticaldoug]

Tony

You understand the guys that write that crap just try to earn their keep by being entertaining? There is no informational value.

As a well known strategist says 'They don't care what I think, they just want me to hold their hand and tell them it will be okay'

[seanile]

But the late-day rally was fairly broad-based, suggesting a possible reversal in sentiment.what the heck is this supposed to mean? basing long-term projections on a few hours of trading is so foolish.

[Tony T]

Tony

You understand the guys that write that crap just try to earn their keep my being entertaining? There is no informational value.

Knowing that there was a big drop in oil today is informational.
And yes, a lot of what these guys write is crap.

[verticaldoug]

Knowing that there was a big drop in oil today is informational.
And yes, a lot of what these guys write is crap.

the drop is the 'what', but you need to know the 'why'

[Jeff N.]

Seems like forever since there was a positive day on Wall Street.

[saab2000]

Seems like forever since there was a positive day on Wall Street.

There have been good days, just not so many good weeks in the past 6 months or so. Traditionally these things have dips and peaks.

Thankfully, I've been crazy, crazy busy of late so I haven't seen the carnage. I'm just continuing to plug away at the contributions and only look on good days.

But yeah, I'm down tens of thousands of dollars in total value since my high sometime in mid-2015. But I have a lot more shares. So when it comes up it will come up much further. I just hope it does indeed come back up!

[Tony T]

the drop is the 'what', but you need to know the 'why'

The 'why' (oil is tanking) is reduced demand without an appropriate decrease in production.

[Tony T]

NIKKEI was down 900 points last night, down another 400 tonight.
China closed this week for New Years. Will be interesting when they open next week.

[Tony T]

Another failed rally. When even Yellen can no longer pump the market, all hope is lost :crap::crap:

[verticaldoug]

Another failed rally. When even Yellen can no longer pump the market, all hope is lost :crap::crap:

Your comment is essentially this:

I'm a smoker, I know it kills me, but as long as I get cigarettes, I'm happy.


The doom-loop quote courtesy of the Telegraph.

[Tony T]

And what happens when the smoker has his cigarettes taken away?
DOW ⬇ 100 (was ⬆ 180), S&P flat (was ⬆ 30) NAZ ⬆ 15 (was ⬆ 60)

[Jeff N.]

And what happens when the smoker has his cigarettes taken away?
DOW ⬇ 100 (was ⬆ 180), S&P flat (was ⬆ 30) NAZ ⬆ 15 (was ⬆ 60)
Un- frickin-believable.

[Llewellyn]

In the midst of all this doom and gloom, the people who are buying the shares that others are selling must see some potential upside. Otherwise they wouldn't buy.

[likebikes]

guys that write that crap try be entertaining? There is no informational value.'

you just described this entire thread imo.

[CNY rider]

Quoted from an outstanding market technician with decades of experience:

"The "squiggles" continue to deteriorate without any signs of a sustainable bottom (one that would accommodate more than a three day bounce). There seems to be a reluctance to face the realities of a bear market, simply because the vast majority of the "players" (including the robots) have never experienced one, nor bothered to learn from the experience of others who have. That's what makes the current one so interesting. If one were to believe in "symmetry", the purge of "excessive-leverage-going-up" will be met with "excessive-unwind-on-the-way-down". The genius who described markets as riding the escalator "up" but the elevator "down" really nailed it."

[Tony T]

In the midst of all this doom and gloom, the people who are buying the shares that others are selling must see some potential upside. Otherwise they wouldn't buy.

Unless they're covering shorts.

[Tony T]

Quoted from an outstanding market technician with decades of experience:

"There seems to be a reluctance to face the realities of a bear market, simply because the vast majority of the "players"
(including the robots) have never experienced one, nor bothered to learn from the experience of others who have."

The "Flash Boys" may be playing a major part in this. While it might be easy in a rising market to "step-in the middle" when there is someone ready to buy, however not as easy when there are less buyers.

Hopefully the market will regain some losses in the next 2 days, otherwise China will have a hangover when they re-open on Monday after a week-off.

[Tony T]

WTI ⬇ 75¢, 2.75% Markets indicated to open ⬇ 1.8%

[akelman]

Are you going to keep doing this every day? And if so, why? Like, is it therapeutic or something? I seriously don't care either way. But I am totally curious about what's motivating you.

[zap]

More riding, less watching. :bike:

:beer:

[Tony T]

Are you going to keep doing this every day? And if so, why? Like, is it therapeutic or something? I seriously don't care either way. But I am totally curious about what's motivating you.

Was hoping to get some discussion going, but obviously not working.

[MattTuck]

Well, hoping to get some discussion going, but obviously not working.

Trying to interpret the machinations of the market day to day is a tough one. Basically, we're living in a fantasy world created by central banks, and markets are finally realizing that reality is much less pleasant. Fed policy makers have been the only show in town as the fiscal authorities have done NOTHING in the last decade to create a more dynamic economy for the average person. You see people fed up with the status quo, the system is not working for them. They are supporting Donald Trump and Bernie Sanders. These are not 'stupid' people gravitating to non traditional candidates. They are rational people saying, "hey, the republicans and democrats have not been fighting for me" and so they go and find another option (not saying that is right or wrong).

The reality is that the Fed's easy money policies have created massive distortions in the financial markets and the real economy and we're going to have to deal with that sooner or later. The more they try to to use monetary policy to prop up the economy, the worse the eventual unwind is going to be.

[Tony T]

Thank you.
I'm finding the new "negative interest rate policy" by Japan last week and Sweden today troubling.

[saab2000]

Was hoping to get some discussion going, but obviously not working.

What's to discuss? By most accounts stock prices were grossly inflated the past few years. That type of bubble cannot help but deflate. We are experiencing that deflation. For short term investors it's painful but for a long term (decades) saver/investor it's less of a problem.

Yeah, it sucks to watch the value of my 401(k) account deflate by tens of thousands of dollars. But it sucks less when I know that each contribution I make is buying more shares than it did a month ago.

[MattTuck]

Thank you.
I'm finding the new "negative interest rate policy" by Japan last week and Sweden today troubling.

It bears pointing out that I don't really 'blame' the fed in the US. That institution has one set of policy levers at its disposal, and in the absence of the fiscal authority doing anything, the Fed has had to do its best with what it has. Congress should be ashamed of itself. The idea that our elected representatives are "leaders" is laughable at this point. They have done nothing to tackle the increasingly tenuous position that this nation finds itself in. We're at the same median real income from 30 years ago, and more than half the population has less than $1,000 in savings. The median American does not own stocks or bonds. In fact, for most Americans, the largest 'asset' they have is the equity in their house.

It is no wonder then, that policy makers like to see rising home prices. More FHA, 1% down loans! Lower interest rates! yeehaw. Hey, here's an idea. These are short term, quick fix 'solutions'. Hey, what about the fact that virtually no one is out there on the sidelines saying, "boy, I'd love to buy a house, but interest rates are just too high!". How about focusing on policies to grow the real economy? Let's phase out policies that artificially inflate house prices, and instead focus on policies that can grow incomes so that houses become more affordable for young people and we can get household formation up again, and fertility rates back to normal. To everyone who is on, or will soon be on, social security or medicare, we need a vibrant economy for young people so they can contribute to your retirement and medical care payments.

[Jeff N.]

Are you going to keep doing this every day? And if so, why? Like, is it therapeutic or something? I seriously don't care either way. But I am totally curious about what's motivating you.I don't know. I don't know why it's necessary to point out a global market sell-off and that my IRA portfolio has lost thousands and thousands. Not sure what the motivation is. Maybe it IS therapeutic. Maybe it's the "misery loves company" thing. I also don't know why some folks find it necessary to question the motivation of the folks who point these things out.

[verticaldoug]

if you won't give me a cigarette, can I at least have a nicotine patch or some gum?