Open Discussion - The Bear Market

[RetireJapan]

Worry wart?

Way above my pay grade. If US interest rates come down the issue goes away. I have no idea how likely that is to happen though.

Unless you are a decision maker at a central bank, not much use in worrying about it

Every time I have tried to do something clever based on my reading of what might happen in the markets I have gotten it completely wrong and lost money

[sutebayashi]

My guess is (not even) as good as the next person’s, but personally I don’t think the US is going to see lower interest rates for at least another year. FOMC’s Powell was talking about how they are going to tame inflation, and there will be “pain” as a result of this. Inflation will likely be above target for many months to come. I think the pain is still mostly in front of us.

It might be years before US stocks reach new highs.

But even if that’s the case, sticking with a strategy of low cost diversified (both in time and portfolio allocation) investment will produce good results.

The way to guarantee poor results is to sell when the market is already in a bear market, eg now.

(I am not impressed with the Japan direction either, and think the central bank and government have made a big pickle of things. If one lives in Japan, at least one can reduce ones risk by investing overseas though.)

[Gulliver]

I don’t know, this bear has really got my back up.

Unlike the 2009 Great Recession which had the relatively simple impetus of a deregulated financial industry, there’s a lot more going on here that needs to be sorted out than subprime mortgages or, as folks have been alluding to, currency fluctuations and interest rates. Such as:

We are still in the middle of the fallout from a historically unprecedented pandemic, the specter of an expanded and prolonged war looms over Europe with active threats of nuclear strikes coming from an unaccountable dictator, the drums of war also beating in Asia as leaders there try to find a scapegoat for their failed policies, natural disasters on the rise only adding to the mayhem, fossil fuel cartels scurrying for profits and stoking conflict at the global and local level, food shortages bringing starvation to some and poverty to others, shortages of natural resources needed to fuel industry and growth, inflation coming at us from multiple angles, social media dumbing down once healthy democracies giving rise to populist autocrats…

So I guess you could say I’m feeling a bit risk-averse right now.

In answer to the OP’s questions:
1) It’s down about 10%. I sold a large stake for USD near the top of the market.
2) Thinking about transferring A bit USD to Yen (for living expenses of course).
3) Keeping powder dry. Watching and waiting. I feel like investing now would a self-defeating gamble.
4) If we can get some of the above sorted out there’s a lot of pent-up demand. But that’s a big IF!

[mighty58]

I don’t know, this bear has really got my back up.

(snip)

You may have already seen it as it was in Ben's Monday links, but having a read over Morgan Housel's latest piece might be useful for some perspective.
https://collabfund.com/blog/little-rule ... ig-things/

[Gulliver]

I don’t know, this bear has really got my back up.

(snip)

You may have already seen it as it was in Ben's Monday links, but having a read over Morgan Housel's latest piece might be useful for some perspective.
https://collabfund.com/blog/little-rule ... ig-things/

Appreciate your concern and the link. It sounds like you like this guy’s writing so I’ll try to be nice.

When I first read this I thought it was surely a satirical piece from something like The Onion. Then I googled his name and found out he’s actually a published rich venture capitalist.

I will give him some points for originality in trying to find a link between psychology, spirituality and investing. In the end, however,it ends up being diffuse and ineffectual in the real world.

When I say spirituality i’m alluding to his thinly veiled plagiarism of Buddhist tenants. Did he really think nobody would catch that? His talk of needing to experience extremes, letting go of ego, embracing humility, etc to find truth (read Sidhartha).

Some of the statements he makes are ridiculously obvious. Other statements use tortured logic in an attempt to find some psychological truism: This is that because that is this + an aphorism or red hearing quote or historical cite. Therefore, we should take the path of the the Middle Way to achieve our enlightened investment goal. This formula is repeated over and over ad nauseam perhaps in the attempt to make his premise ring true if he repeats it enough times. One eventually wonders who he is trying to convince, the audience or himself.

A play on our subconscious wish for this spiritual/psychological state be true or maybe just a smart man making money pushing his new book?

[captainspoke]

...

Yeah, a lot of guru-like stuff in that one. That's one reason I never look at videos/podcasts, since they don't allow you to scan on thru if there are too many things I find irrelevant.

How about this version? (and I've seen others)

https://www.fool.com/investing/2020/11/ ... you-money/

[mighty58]

I don’t know, this bear has really got my back up.

(snip)

You may have already seen it as it was in Ben's Monday links, but having a read over Morgan Housel's latest piece might be useful for some perspective.
https://collabfund.com/blog/little-rule ... ig-things/

Appreciate your concern and the link. It sounds like you like this guy’s writing so I’ll try to be nice.

When I first read this I thought it was surely a satirical piece from something like The Onion. Then I googled his name and found out he’s actually a published rich venture capitalist.

I will give him some points for originality in trying to find a link between psychology, spirituality and investing. In the end, however,it ends up being diffuse and ineffectual in the real world.

When I say spirituality i’m alluding to his thinly veiled plagiarism of Buddhist tenants. Did he really think nobody would catch that? His talk of needing to experience extremes, letting go of ego, embracing humility, etc to find truth (read Sidhartha).

Some of the statements he makes are ridiculously obvious. Other statements use tortured logic in an attempt to find some psychological truism: This is that because that is this + an aphorism or red hearing quote or historical cite. Therefore, we should take the path of the the Middle Way to achieve our enlightened investment goal. This formula is repeated over and over ad nauseam perhaps in the attempt to make his premise ring true if he repeats it enough times. One eventually wonders who he is trying to convince, the audience or himself.

A play on our subconscious wish for this spiritual/psychological state be true or maybe just a smart man making money pushing his new book?

Had to admit I had a bit of a chuckle at your take, but yeah, that one was perhaps a bit too new-agey. For what it's worth, Morgan Housel is one of the leading writers on behaviourial psychology when it comes to investing, and your sentiments in the post above this echoed a lot of what he has written about previously in terms of typical self-defeating investor psychology. Perhaps I should have referred you to his book instead (The Psychology of Money), or the innumerable number of podcasts he's done as a guest on virtually every investment podcast of repute. Sprry if I've turned you off of him, because he is good.

[Gulliver]

...

Yeah, a lot of guru-like stuff in that one. That's one reason I never look at videos/podcasts, since they don't allow you to scan on thru if there are too many things I find irrelevant.

How about this version? (and I've seen others)

https://www.fool.com/investing/2020/11/ ... you-money/

Ha ha, I see what you did there. A completely opposite analytical style that comes to a similar conclusion. I’m gonna have to start charging extra for my literary critiques .

Other than the shameless click-bait title, I concur with most of the article’s content.

A couple of minor criticisms: He mentions CBOE volatility but leaves us hanging on what to do with the information. Also, the whole article is based on 20 year rolling returns- a time horizon which may or may not meet your investment goals.

I think people may have gotten the wrong idea with my reply to the OP. I believe in the past I’ve said elsewhere on this form that the S&P 500 is really the only place to put your money. The index has already breached my buy signal price and under normal circumstances I would’ve already been gobbling it up. My point was that these are not normal circumstances. So I am watching and waiting for now. Yes, this is also a risk but it’s a calculated one. I am lucky enough to have this kind of discretion.

Don’t worry I haven’t given up hope. I’ve got my finger hovering over the buy button. If I had a long enough time horizon I would’ve already been mashing it.

[mighty58]

What kind of situation are you in where your investment horizon is less than 20 years? Are you in your 70's/80's already? Or have you been diagnosed with a terminal illness of some sort? Genuinely interested why you seen so resistant/dismissive of the general wisdom around long term investing. Maybe you're playing a different game altogether?

[Gulliver]

What kind of situation are you in where your investment horizon is less than 20 years? Are you in your 70's/80's already? Or have you been diagnosed with a terminal illness of some sort? Genuinely interested why you seen so resistant/dismissive of the general wisdom around long term investing. Maybe you're playing a different game altogether?

Hmm. I’m pretty sure I’ve never discouraged long-term investing. I’m not sure where you’re getting that. In fact, that’s how I acquired most of my wealth. I am in the retirement phase of my portfolio allocation, however. Maybe that’s what’s confounding you? Wealth preservation is relevant to me at this point. Long-term investing is not incompatible with allocation adjustments. Maybe reread my above posts I think I explained my reasoning fairly thoroughly.