OT - Dow plunges 1,175 - worst point decline in history

[oldpotatoe]

Originally Posted by Mzilliox

rank capitalism finds its limits eh? the emotions of humans are fragile, and so is the dow. perhaps its time to remove priority from that metric? perhaps its time to consider new values?

Or perhaps time to see how 'democratic socialism' works...

that I have an extremely generous defined-benefit retirement plan. I don't worry about the market at all.

Mee too..called USN pension and social security...I don;t do anything with the $ in various investments, via a FA, except watch it go up and down..I don't rely on it at all..

[oldpotatoe]

Originally Posted by adub

This is the media sensationalizing an already serious issue. It's all about the %, when comparing historical moves.

Reminds me when CNN was covering Hurricane Dorian, they were referring to the rainfall in mm's.

Yup, along with the fed and china and europe and the dems(did I leave anybody out?), it's a conspiracy

So...what's going on now is less of an emergency that some thousands of people at the southern border seeking asylum from the dangers of mexico and central american countries??

WHAT is he waiting for? I know, november 3rd...

[CNY rider]

For those who can't wait to throw money at the market here's a trade I would put on:

Check the S&P at 1530 today.
If it is +/- 2% from where it closed yesterday buy SPY. Any further up or down, skip it.
Then sell it Monday at 0935.
Note: No matter what, sell it Monday morning. It's a speculative trade not an investment.

[fmradio516]

pardon the sidetrack, but I have a question that i am having trouble find an answer to, and i should probably start a separate thread but i think the people on this one will be able to give me some sort of answer as this has to do with the federal cut.

We are going to be doing renovations(probably 150k worth) on our house(connecticut) and I called bank of america the other day for a home equity loan(house is worth double that at least). We dont have a mortgage. I am waiting for a call back to hear how much the rates are going to be.

What is a "good range" of a rate to look for? I dont have a clue when it comes to this stuff. My father in law said 3% but im guessing thats not going to happen since demand is high and everyone is refi'ing right now. What is the max number that borders the line when i should tell BOA to go screw?

[MattTuck]

Originally Posted by ORMojo

Wow, I am just beyond happy - today even more than most days - that I have an extremely generous defined-benefit retirement plan. I don't worry about the market at all. It is one of the reasons I took this job 31 years ago, and the peace of mind, and near-freedom from retirement planning, ever since has been almost as valuable as the benefit will be when I retire.

I don't know the details of where you work or your particular pension, but I do think there is a non-zero chance that many pensions will fail to meet their obligations.

Originally Posted by Louis

A more serious response:

I just submitted an online request to change my current purchases in my 401k so 40% of my future purchases will now be company stock (up from 0%, and the same will automatically happen to the company match).

It will end up being a teeny portion of the whole account (last I checked company stock was less than 3% of my 401k) but I figured I'd try it out for a while and see what happens. The stock has been absolutely hammered lately, and it's now down to less than 50% of a recent high. We were joking today that it can't possibly go negative...

That is only because of limited liability associated with that type of ownership. The value of the equity could certainly go negative.

[C40_guy]

Originally Posted by Louis

A more serious response:

I just submitted an online request to change my current purchases in my 401k so 40% of my future purchases will now be company stock (up from 0%, and the same will automatically happen to the company match).

It will end up being a teeny portion of the whole account (last I checked company stock was less than 3% of my 401k) but I figured I'd try it out for a while and see what happens. The stock has been absolutely hammered lately, and it's now down to less than 50% of a recent high. We were joking today that it can't possibly go negative...

It's generally recommended to keep no more than a minimum investment in your company stock. You've already got a huge investment (your time) in the company, and if the company fortunes go south, you may be out of a job. This would be a double whammy.

That having been said, it can be useful to have a small holding in the company. Helps give you a sense of ownership. But I'd keep the total to less than 10% of your portfolio, more likely 5%.

The key question is what stocks are available to you through your 401K, that might represent potential higher rates of return and provide some balance?

[Tony T]

Originally Posted by fmradio516

pardon the sidetrack, but I have a question that i am having trouble find an answer to, and i should probably start a separate thread but i think the people on this one will be able to give me some sort of answer as this has to do with the federal cut.

We are going to be doing renovations(probably 150k worth) on our house(connecticut) and I called bank of america the other day for a home equity loan(house is worth double that at least). We dont have a mortgage. I am waiting for a call back to hear how much the rates are going to be.

What is a "good range" of a rate to look for? I dont have a clue when it comes to this stuff. My father in law said 3% but im guessing thats not going to happen since demand is high and everyone is refi'ing right now. What is the max number that borders the line when i should tell BOA to go screw?

The var rate at BoA for a HELOC is about 4.5%
There is a break for the 1st 12 mo @ about 2.8%
There may be an option to convert to a fixed rate after drawdown.
This is from the BoA website: https://www.bankofamerica.com/home-equity/

.

[echappist]

Originally Posted by fmradio516

pardon the sidetrack, but I have a question that i am having trouble find an answer to, and i should probably start a separate thread but i think the people on this one will be able to give me some sort of answer as this has to do with the federal cut.

We are going to be doing renovations(probably 150k worth) on our house(connecticut) and I called bank of america the other day for a home equity loan(house is worth double that at least). We dont have a mortgage. I am waiting for a call back to hear how much the rates are going to be.

What is a "good range" of a rate to look for? I dont have a clue when it comes to this stuff. My father in law said 3% but im guessing thats not going to happen since demand is high and everyone is refi'ing right now. What is the max number that borders the line when i should tell BOA to go screw?

I would think you could get a better rate elsewhere. Aggregators such as bankrate.com should have the relevant info. None of the big banks offer competitive rates, for that matter

Originally Posted by MattTuck

That is only because of limited liability associated with that type of ownership. The value of the equity could certainly go negative.

I know that shareholder values can get wiped out or diluted in bankruptcy, but under what circumstance could it go negative?

Originally Posted by C40_guy

It's generally recommended to keep no more than a minimum investment in your company stock. You've already got a huge investment (your time) in the company, and if the company fortunes go south, you may be out of a job. This would be a double whammy.

That having been said, it can be useful to have a small holding in the company. Helps give you a sense of ownership. But I'd keep the total to less than 10% of your portfolio, more likely 5%.

The key question is what stocks are available to you through your 401K, that might represent potential higher rates of return and provide some balance?

+1. Corollary of "don't keep one's eggs all in one basket" (aka diversify)

[bigbill]

Originally Posted by oldpotatoe

Mee too..called USN pension and social security...I don;t do anything with the $ in various investments, via a FA, except watch it go up and down..I don't rely on it at all..

Me too as well. I've seen my IRA tank pretty hard as well as my 401K. I'm in it for the long run anyway, but the that run should end before I'm 60. I'm counting on retirement accounts and savings to get me a place to live and an RV to travel. The pension pays the bills.

At this point, I'm sitting on a lot of cash and living well below my means.

[Ozz]

Originally Posted by fmradio516

...We are going to be doing renovations(probably 150k worth) on our house(connecticut) and I called bank of america the other day for a home equity loan(house is worth double that at least). We dont have a mortgage. I am waiting for a call back to hear how much the rates are going to be.

What is a "good range" of a rate to look for? I dont have a clue when it comes to this stuff. My father in law said 3% but im guessing thats not going to happen since demand is high and everyone is refi'ing right now. What is the max number that borders the line when i should tell BOA to go screw?

Right now demand is so high that major banks are not dropping rates as much as you would think...

You probably have a couple options;
Home Equity Line of Credit - this lets you draw as needed. Usually a floating rate, but often has options to let you term out (convert to fixed with fixed monthly payment).

You could also look at a cash out refi. This might get you a better rate and a longer term.

Talk to a couple banks....the big ones (BofA, Wells, US Bank) will probably be the most expensive, but offer more options and expertise (maybe).

I am not a lender, but have been in commercial banking for 30+ years.....

[cnighbor1]

https://www.merriman.com/how-we-invest/

I use Merriman's timing program system. Today has markets have plunged I am at least 50% out of the market
For an example say has market drop a lot the system gets me 50% out and keeps rest in the market. Say there is a 25% drop. For the 50% in I am down 50% x .25 % equals a 12.5% loss But rest out of the market has no loss
So I am down 87.5 % not 75%
To make up a 75% loss it takes a 33% gain
Yes and I can sleep a lot better knowing the above
Charles

[MattTuck]

Originally Posted by echappist

I know that shareholder values can get wiped out or diluted in bankruptcy, but under what circumstance could it go negative?

I am making a distinction between the stock price and and general idea of equity. Stock prices can't go negative because of the limited liability nature of them.

The accounting identity for assets is: Debt + Equity = Assets

There could be times when assets are worthless (recently a local business burned down, having decided to cancel their insurance coverage for fire a few years ago due to cost), and you still have outstanding debt.

Alternatively, you could imagine a situation where the present value of the cash flows of a business would not cover their debt. In this case, bond holders might seize the company's assets, but when they do, they're unlikely to recoup the full value of their loans. That difference is essentially a negative equity.

I'm glossing over things like market value of debt vs. book value of debt which is why if you look at something like Enterprise Value (Enterprise Value = Market Value of Debt + Market Value of Equity), you'd see equity have a minimum of zero.

In practice, equity usually maintains SOME value even in very bad situations, because their is option value associated with it. So, when the price is very low, it acts as a call option on future cash flows.

[echappist]

Originally Posted by MattTuck

I am making a distinction between the stock price and and general idea of equity. Stock prices can't go negative because of the limited liability nature of them.

The accounting identity for assets is: Debt + Equity = Assets

There could be times when assets are worthless (recently a local business burned down, having decided to cancel their insurance coverage for fire a few years ago due to cost), and you still have outstanding debt.

Alternatively, you could imagine a situation where the present value of the cash flows of a business would not cover their debt. In this case, bond holders might seize the company's assets, but when they do, they're unlikely to recoup the full value of their loans. That difference is essentially a negative equity.

I'm glossing over things like market value of debt vs. book value of debt which is why if you look at something like Enterprise Value (Enterprise Value = Market Value of Debt + Market Value of Equity), you'd see equity have a minimum of zero.

In practice, equity usually maintains SOME value even in very bad situations, because their is option value associated with it. So, when the price is very low, it acts as a call option on future cash flows.

Of course; thanks for the primer

[Tony T]

Originally Posted by tomato coupe

Yes, percentage is better when discussing gains and losses, but it's the volatility we're seeing that is so incredible.

Today: Up 1,000+, Down 1,000+, Up 1,000+
…and still 2hrs to go

[MattTuck]

Originally Posted by CNY rider

For those who can't wait to throw money at the market here's a trade I would put on:

Check the S&P at 1530 today.
If it is +/- 2% from where it closed yesterday buy SPY. Any further up or down, skip it.
Then sell it Monday at 0935.
Note: No matter what, sell it Monday morning. It's a speculative trade not an investment.

I am not sure I'd want to own this market over the weekend as a speculative trade. Yikes! Barring finding a miracle cure, it seems the news could only get worse in the time between Friday and Monday.