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

[Tony T]

Originally Posted by kppolich

FB, NFLX, GOOG all aren't going anywhere, but they are also all at or near their all time highs. If you think they can continue to monetize your attention then that is a nice place to park some money.

Reminiscent of the Nifty 50

[sitzmark]

Originally Posted by kppolich

...

FB, NFLX, GOOG all aren't going anywhere, but they are also all at or near their all time highs. If you think they can continue to monetize your attention then that is a nice place to park some money.

...

I cringe when reading/hearing definitive statements about "fail-proof". I lost substantial amounts of money with major can't-fail investments like WorldCom and Washington Mutual (as well as startups like Northfield Labs and other tech plays). Thankfully they weren't major shares of my portfolio, but enough to still hurt. There is nothing in the investment world that I consider failsafe ... the "market" and FANG (which is wholly dependent on mass consumer demand/confidence) included.

Overall the market has been berry berry good to me. Know others for whom it has not. There's a bit of ponziness to the market these days - people (around the world) needing to invest for retirement and fund managers being required to invest that money regardless of fundamentals and historic valuation considerations, which drives overall market prices up. Companies need customers with the ability to pay and advantageous tax policy that has been extended to continue the growth supporting (what IMO are) unreasonable valuations. Governments (state and federal) have expanded debt to build a business climate that is strong. In past times those measures produced economies that returned on the investment to curtail debt. We're at the top of a business cycle with exploding debt and no solution in sight for how the debt gets sucked back out. QE and all that was needed, but is not being followed up with responsible fiscal policy. Uncharted territory. Don't throw away the economics books yet.

[echappist]

the one FAANG constituent that should worry people is Netflix. Massive amount of corporate debt borrowed to finance expansion.

[kppolich]

Originally Posted by echappist

the one FAANG constituent that should worry people is Netflix. Massive amount of corporate debt borrowed to finance expansion.

Agreed here with debt being a risk factor to consider, but NFLX is spending money on producing original content. That will hit their goal of having at least 50% off all content be home brewed. That will eventually save them money in the long term around paying others to license their content.

[Tony T]

June 19, 2019
WASHINGTON — Federal Reserve officials left rates unchanged at their June meeting but signaled that they were prepared to cut if trade tensions worsen and risks to the American economy intensify.

[MattTuck]

Originally Posted by kppolich

Agreed here with debt being a risk factor to consider, but NFLX is spending money on producing original content. That will hit their goal of having at least 50% off all content be home brewed. That will eventually save them money in the long term around paying others to license their content.

Content creation is a diabolical treadmill -- once you get on, you have to keep running. I wouldn't be so sanguine about their challenges.

Future growth is going to be mostly international, and the ARPU there is lower than domestic. So, going forward, they're going to have to figure out how to spread content costs out as much as possible. Some of their efforts are on dubbing so that they can make a film in one language, and then basically show it in all of their key markets as if it were a natively made film. Cool stuff, but not easy.

[Spoker]

Many of you manage their own portifolio's versus having an IRA doing it for you?

[summilux]

As the spouse of a former big-institution stock broker/financial advisor working on commission, my personal advice is not to use a commission-based advisor unless your portfolio is >$1M. However, managing your own portfolio is usually a bad choice. Without a professional coach, most individual investors underperform because they make decisions that are far too emotional: FOMO (Fear Of Missing Out: buy high) and FUD (Fear, Uncertainty & Despair: sell low). Yes, there are those who make big money on their own but IME these people are in the minority. With portfolios in the <$250K range, most people do better in a managed fund since this mitigates risk but with the proviso that upside potential is limited. I think the safest strategy is to use the services of a fee-based advisor. A good one will analyze your financial goals, risk tolerance and personality to give you a portfolio that suits your needs. This will only cost a few hundred dollars. Think of your advisor as a personal trainer, they will celebrate your victories and hand hold you through inevitable market cycles.

[hokoman]

I have to ask the question..... if the markets are breaking records, and the economy is so strong, why?

'U.S. stocks climbed Thursday, extending gains after Federal Reserve officials signaled they would be willing to ease monetary policy to help prop up the economy.'

The next recession/depression should be fun.

[saab2000]

Originally Posted by Spoker

Many of you manage their own portifolio's versus having an IRA doing it for you?

I'm not sure exactly what you mean by this. An IRA doesn't 'manage' your portfolio. You can pick and choose what exists within an IRA, whether those are individual stocks or actively managed or passive index mutual funds or ETFs.

You could have financial manager or someone do stuff for you but mostly I've heard that's a bad idea as they take far too much in fees.

I follow Warren Buffet's advice and generally put my savings into very low cost passive index funds that track the S&P 500, or something similar. Some goes into other funds but they are invariably low cost funds from reputable, low-cost firms like Schwab or Vanguard.

These funds exist within a Roth IRA I have and a traditional IRA, as well as within my 401(k) from my employer.

This is not advice and if it were it is worth what it cost you.

[bcroslin]

Originally Posted by hokoman

I have to ask the question..... if the markets are breaking records, and the economy is so strong, why?

'U.S. stocks climbed Thursday, extending gains after Federal Reserve officials signaled they would be willing to ease monetary policy to help prop up the economy.'

The next recession/depression should be fun.

The Trump administration is officially cooking the books and Powell is running scared.

[kppolich]

Originally Posted by hokoman

I have to ask the question..... if the markets are breaking records, and the economy is so strong, why?

'U.S. stocks climbed Thursday, extending gains after Federal Reserve officials signaled they would be willing to ease monetary policy to help prop up the economy.'

The next recession/depression should be fun.

The goal is to get people to spend money. Lower rates make it easier to borrow money and pay it back successfully. Not that hard to pay back 3.5%.

But also, because it's 2019 and the U.S. doesn't rely on factory jobs and minimum wage to drive growth. Basically everyone has 4G LTE or computer, access to running water, healthcare, and a job (lowest unemployment rate is what they say). People spend $100 on shoes and don't think anything of it.

People are working, more people are getting an education, more people are spending money, economy goes up. The interest rates stay low so more people are borrowing more money at lower rates and spending that.

Growth is not difficult. Managing expectations of how much growth is 'OK' by random people on the internet is not possible-- which is where the scare tactics come in.

"Oh No! Only 2% growth, the world is ending, blah blah blah"
-get over it, it's 2019 and you can get a McDonalds Cheeseburger delivered by a stranger for a dollar. Gas is cheap, rates are low, and you probably have a ~$750.00 smart phone.

[Tony T]

Using a $750 smart phone to buy a $1 burger?

[Tony T]

50 DOW points away from Oct record high 26,828

Edit: DOW at 26900, passing closing record, and 50 points away from intraday record.

[saab2000]

Originally Posted by Tony T

50 DOW points away from Oct record high 26,828

Edit: DOW at 26900, passing closing record, and 50 points away from intraday record.

I was going to watch "Closing Bell" on my VCR tonight. I had the timer set to record. We need to put "Spoiler" in the title of these threads.