Very oversold short term - hang in guys

From our market call this morning..

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Rule Number One: no one has any idea what the market will do and when it will do it. And timing the market always means you have to be right twice: when you sell and when you buy back in.

I've only tried to time the market twice. First time was in the late 90s. I thought valuations were crazy. Sold everything and didn't get back in until 2001. While I missed getting clobbered by the tech bubble, I also missed a LOT of gains that led up to the bubble burst and then held through it. By the time I bought back in, everything was probably higher than when I sold out.

Second time I timed the market was February of 2020. I saw the news from China about Covid 19. Sold everything just two weeks before the market dropped 30%. So I was right once.

BUT... I wasn't right twice. The market rebounded faster than expected and, frankly, a hell of a lot faster than it should have because we were shut down and the economy went on life support. So I waited a few months and by the time I bought back in... I was basically even with where things were when I sold out.

In 2020 I started subscribing to Motley Fool. Big. Fucking. Mistake to listen to them. Now I'm so far in the hole thanks to Motley Fool I can't sell because I lock in losses. Just trying to wait it out. Growth stocks lead the market down. And growth stocks lead the market up. Just trying to be patient. Might take another five years - or more - before I'm back to where I was in January '21. But that's investing.

That seems like solid advice there.

Motley Fool has screwed over more people than (insert joke here). Timing the market is hard. Agreed. I do feel like I have some inside knowledge on rare occasions when it comes to government shutdowns just due to working in the government contracting environment. Depending on how I feel leading up to the November 15th CR I may take my money out a week or two, but thats it. I'm not betting against the market, just moving my money from the S&P to TBILs. I did have money out on the way down, so even though the market is down again today I still sold my stock and bought back in about a percent cheaper than I sold out at... so I will have more stock when the market recovers.

It's sooooo delicious

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Just yummy.

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We only need 50 more days like this one to restore proper value to the "market".

And hopefully a few more interest rate hikes along the way.

Super sneaky making you think markets were gonna rip on no govt shutdown and then just rug everyone. Markets spare no one! lol

Well, the House of Reps is now in total chaos (Speaker McCarthy ousted this afternoon) and 44 days until the budget runs out again. It may be a crazy ride economically and politically through the end of the year. That said, I bought in today a little.

This didn’t age well

https://www.businessinsider.com/how-to-invest-stock-market-rally-strategy-bank-of-america-2023-10

I know I'm in the minority here, but I might add some gold on the recent weakness

Markets really don't care. Watch the bond market.

No rush at all but probably a good buy here somewhere.

kool1 Any thoughts on the oil/refinery stocks taking hits? This looks like it can be a "seasonal low" for FANG and DVN but am thinking of taking my losses in DVN and chalk it up to fear and impatience . Currently in DVN and T-bills but not FANG. I am hoping DVN and FANG will recover in the next month for early November (and earnings) but not a fan of several thousand dollars more in losses and then having to wait for it to recover. They are oversold already but nothing indicates to me that there will be a recovery at this time.

William DeVane approves this move.

So what's everyone's fav dog of a stock?

I'll list two dogs:

1. TUP. Love the product, knew they were very close to being BK for a long time.... and then months later it's in the news it's a meme stock now. WTF? Take a peek: sure enough, some loser pumped and dumped a ton of people. Hey, great for the company - I wish they had issues more shares into it and saved themselves (don't think they did)..... but look at that filthy mangy dog of a stock. Yuck!!! Dead man walking..... but I wish it wasn't.

2. PTON. Also love the product - not a sustainable business at the quality of output they had before. Look at that dog..... it'll be neck and neck with TUP before long.

3. Casino stocks MGM/CZR. Not dogs right now, and lots of fun...... but dogs someday since they sold all their real assets (stupid). Super fun to play

4. Theme park stocks DIS/SIX/FUN. Not dogs, just fun..... although you can always trust SIX to go bankrupt every decade or so.

Any guilty pleasure fun stocks you have?

I liked Rath dogs, but they went under back in the 80s.

Had LVS for a while… got in low and sold around 58. Picked up some DIS.

Buy the pullback somewhere. Inventories have not changed. It's probably some forced selling feeding itself due to the equity markets. Bond market is creating havoc.

All true... what happened in 2020 was a unicorn event that you had to have a fair level of macroeconomics to anticipate. For most of us it defied basic logic of supply and demand. Then the Fed stimulated the economy 6 months too long for no justifiable reason, then had to raise rates over a long period of time because they wanted to keep up their 100% track record of overreaction.

The Motley Fool thing is spot on... They pretend to make timely buys, but all their buys lack the context of when to get in and out... the "always buy" mindset has proven to be ineffective unless you are lucky enough to by the right handful of stocks... I have a long trail of promising but now dead companies I invested in. And thus timing the market both ways remains impossible... options are like that in a way you have to get both the price and the time correct, and most people are only right about one of those. And we go full circle into buy-and-hold? smh

Gold has been flat for a decade... maybe in another decade it'll go up a little, but it's proven to be a horrible inflation hedge

Umm ok

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Gold has performed quite well over the long run - we don't buy it really unless clients ask though.

I think if you can buy in the 1700-1800 range you will be happy in 10 years.

Gold is a commodity that, like any other, responds to supply and demand. Unlike other commodities, though, metals are not consumables. They simply get mined, used and recycled. So the amount of gold in the marketplace and in people's possession is always increasing because mining adds to the total each year. The increase in median income across Asia the last two decades has really put demand on gold, as well as it's industrial uses for high tech wiring. While those trends are likely to continue, gold mining production has also ramped up to keep pace and to make $. We have not seen it yet, but at some point gold is going to be a bubble like anything else. What would cause it to burst?
1. Decline in pop growth
2. Increase in recycling efforts
3. Increase in gold mining operations
4. Elderly populations dying and leaving gold to descendants who then seek to liquidate it - or, at least, stop buying more of it themselves
5. Declining use in tech
6. An improvement in global market currency stabilization
7. Increased use of cryptocurrency as actual currency

Of those risks, which I list off the cuff and probably forget something, only numbers 5, 6 and 7 (speculatively) are unlikely. At some point, gold prices will level off and stay there for a very long time. Will that be below current prices, at current prices or above current prices? Place your bets.

But I'm not buying gold.

US dollar is a big influence.

Like I said we don't buy it and FYI I don't own it. I'm only stating facts - no reason to not like the 20 year chart even more.
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What’s your guys overall macro take though? Do you guys see a systemic event happening somewhere from rates being this high or do your guys think we just keep climbing the wall of worry through 2024 etc?

Does anyone have an updated stat for the amount of cash/bonds in private equity firms as a ratio of their equity in investments? That stat tends to track very closely to market valuations.
Put another way, when firms have a lot of cash on the sidelines the market tends to be in a trough. When they have over 90% in the market, the market is usually enjoying a peak.

Hey kool1 (and anyone else that has an opinion) C is trading at roughly a 5 year low, pays 5.4% dividend that appears to be well covered, passes all it's stress tests fine, and is one of the Big 4.

I've been long since 2020 when I picked up shares for what was then cheap avg $45/share. Now it's even cheaper at $39. What am I missing here? Time to bail or pick up more? Is the dividend safe? It pays way more than the other 3 big banks right now.

Have you noticed C hasn't really done anything since Pandit was CEO (2009)? It's just not liked very much by WS. But, with that said, I've been reading a lot of positive news about the current CEO lady, she's been doing a lot of house cleaning, still tho, I'd rather be in WF or BA....Heck, the gold standard is JPM for banks (As long as Dimon is there).

Edit: I'm just thinking...if we're to have a hard landing, wouldn't banks be the first casualty?

Here is the latest summary from strategy. Keep in mind it's not a static outlook, this is as of the end of September.

Equities
ƒ We continue to recommend a Market Weight position in global equities for
now. We believe the S&P 500 and perhaps other developed markets may be
able to reach new highs in the next few months if faith in an economic soft
landing for the U.S. can be supported by some plausible rationale.
ƒ However, we note that below the surface, U.S. consumers’ spending power
and confidence appear to be under pressure, compressed by depleted
savings, high interest rates, a growing reluctance of banks to lend, and rising
energy costs.
ƒ We think 2024 is likely to feature a more challenging landscape for the
economy and equity markets.

Fixed income
ƒ Global yields again achieved fresh highs in September with the average yield
on the Bloomberg Global Aggregate Bond Index peaking at 4.3%, the highest
level since 2008. This comes at a time when most central banks are likely at,
or near, the end of their respective rate hike cycles as policymakers attempt
to balance the economic risks of doing too much against the inflationary
risks of doing too little. We think the policy prescription will be to keep rates
steady, but elevated, while convincing markets that rate cuts are nowhere on
the horizon. As a result, the window to put money to work at attractive levels
may be open for longer.
ƒ We remain Market Weight U.S. fixed income with yields remaining near multi
year highs. While economic risks have subsided in the U.S., global recession
risks remain elevated. Therefore, we broadly remain Underweight corporate
credit with a slight bias toward government bonds.

For banks - I would go to the stronger names like JPM and BAC. C is super cheap but if you are waiting for a recovery in banks go to the best names as they will recover faster.

I'm in all 4 of the bigs, all bought around the same timeframes in 2020, but C just hasn't kept up at all. JPM I've owned since 2008, but added in 2020.

The 2020 purchases are all up except C. WFC +50%, JPM +43%, BAC +9%, C -16%

I typically hold quality companies through good and bad, don't frequently sell stuff. I have trouble being right once, forget about twice!

What should I be getting into right now in my IRA? Funds are sitting there waiting to invest.

SPY (S&P500 ETF) or TBIL (3 month treasury ETF... guaranteed 5% right now).

Agreed TBILs is where I have temporarily most of my money and rolling it in as I see it. SPY is good and look at the oil stocks if you can stomach the ups and downs - but only a small part of your portfolio.

Depending on how cold of a winter we have, energy stocks may do well. Personally expecting a pop towards beginning of November for oil stocks (like DVN, FANG etc) when earnings and forecasts for next year come around.

Banks will hover over the next year along with interest rates and expect more of them to have layoffs and yet hire people for risk management.

If flu, COVID and sickness prevail this winter maybe something in the pharm or medical sector but I have no idea .

Long term growth stocks, start picking away. Tech, industrials, health, energy. You aren't going to pick the bottom, but you are buying the pullback.

A note on this energy pullback

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Alignment for acceleration to the downside

how about that FANG today - leading the energy pack

I'm just watching this market and shaking my head, I don't know who is crazier here, me or them. Stronger job report means rates stay higher, longer...which leads to a tougher economic environment, but they rallied because of lower wages for those said jobs (probably due to covid savings dwindling and people needing money). Still, no rate cuts, weaker consumer and we're 42 days away from a potential govt shut-down. So, like crack addicts, they rally for the next couple of weeks and then they sell off by the end of the month.

Very nice reversal.

The PPT is back in business.

It's a back test of the support break. Totally normal.

I parked a bunch of my house sale money in TBIL this week while I wait to see what the Market does. Also some SPY and MOAT. Nothing exciting.

Not on my stock/inflation/economy bingo card, but the new weight loss drugs are having measurable impacts on the economy. Walmart says people are buying less food. Airlines have even said they may use less fuel.

Maybe inflation can be tamed with drugs?

https://www.nbcnews.com/news/amp/rcna119000

https://finance.yahoo.com/video/weight-loss-drug-seen-save-041734045.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAF0sRZsUS7VSpok2y7CnFauZ9KknZFmG5DIG77t_eBS_9eBH8B40BZbRUvyvykOap4-f9F_xuxgACCJQx9C2gYNEIPqfoO-4UfXH7YvS5LXLwYs19Dcof4eV78SdKRWYCHZKiIwuW6829VNlsRgvzdIf2mDE07maPQR_z2JHkr

Thought I’d chime in here. You guys do realize it’s mainly because XOM is buying PXD. Pioneer for the Permian assets.

FANG has the best Permian assets and XOM just set the price at a $60 billion valuation for PXD. A 20% premium.

FANG, based on the XOM long term play should trading higher.

XOM certainly set a PUT floor for FANG.

Enjoy as PXD leads the pack today along with the predicted reversal T Lee called this am

I have no idea what I was looking at when I made that 10 year comment... lol. Gold hit a ceiling the past 3 years, so you'd just be trading chop that whole time. I suppose my original point was this: When inflation was cranked up with expansion of money supply starting March 2020 to today, inflation-adjusted gold is DOWN. Yes, it defies common sense, so it's officially either completely decoupled from inflation, or it's a great buy. Pick your poison. The massive increase in physical gold doomsday marketing over this period has done nothing to bump up the price.

GLP1s are absolute miracle drugs and unless there's some long term side effects found they will continue to grow. I had a bunch of medical devices stocks that are getting crushed because their devices are projected to be needed so much less.

A bit longer term outlook from Kolanovic:

https://x.com/carlquintanilla/status/1710286806577553691?s=20

Will more instability in the middle east lead to a red market at opening? Tune in Tuesday at 0930 est to find out.

Only if the conflict widens, pulling in other countries.

If free from side effects or if side effects are ‘neutral’ compared to side effects of the underlying condition they have the potential to affect sales of snacks, medical devices, some other drugs, alcohol, tobacco, restaurant sales, beverage companies, confectionery sales, and probably stuff we haven’t thought about yet.