So I just bailed out of this market

Discussion in 'Trading' started by kmiklas, Nov 5, 2019.

  1. dozu888

    dozu888

    #31     Nov 5, 2019
  2. vanzandt

    vanzandt

    From a PM I received from someone who no longer posts here....

    "Fund managers are all light right now because of the volatility the last few months, they are basically fucked if they dont buy this breakout in the market.

    They cant go back to clients and tell them that they underperformed the market for the last few months and then a break out happens and they missed it. The SPYs will get chased up hard until Christmas, trade accordingly."
     
    #32     Nov 5, 2019
    yc47ib, Nobert and beginner66 like this.
  3. dozu888

    dozu888

    isn't that the very definition of 'timing the market'? a practice that is so tempting, yet failed by 95% of the fund managers compared to SPY, or 99.9% compared to QQQ?

    you can have a million reasons to exit... the very definition of 'not timing the market' is you staying in come hell or high water..

    and 'my friend' (lol) marching up really isn't that big a factor, comparing to the WSJ cash article you mentioned.... those are real cold hard cash that will fuel the market once the sentiment changes.

    bull markets don't die this way... when short/long ratio is 80/20, AAII is neutral, household participation rate is below historical average, sideline cash at all time high, when earning yields are significantly higher than bond yields, when computer speed is doubling every 18 months, Fed cutting rates and doing not-QE, when central banks around the world are buying stocks...

    so many tail winds... and people are exiting ??
     
    #33     Nov 5, 2019
  4. gaussian

    gaussian

    I'm holding high grade corporate issues, so I would expect to lock in a higher rate eventually. Moreover, I'm fairly well diversified over the yield curve so I'm not THAT panicked. I don't expect it to be Powell calling up and says "surprise we're jacking the rates to infinity LOLOLOL". I'll have plenty of time to adjust. But these issues will be safer than their stock equivalent in the case of market instability.

    https://www.wsj.com/articles/ready-...rd-11572958800?mod=searchresults&page=1&pos=1

    The interpretation is that "it's ready to pounce on good deals" but having trillions in cash in a deeply overvalued market seems pretty bearish. Feels a lot like the Tulip Mania and not a great market.

    Market will rise until Christmas, and then the slaughter begins. Window dressing will need to happen by underperforming fund managers. Just like last time, I expect December to be miserable for everyone. Whatever Cramer says, just do the opposite.
     
    #34     Nov 5, 2019
    vanzandt likes this.
  5. RRY16

    RRY16

    I thought you had Surf on ignore.
     
    #35     Nov 5, 2019
  6. themickey

    themickey

    Which leads to another thing, going flat in the market because 'you think this is a good idea' is one thing.
    But going long again, often there is no compelling reason (no strong buy signal) once the upmove gets underway.
    Those flat traders then say when it's too late, "Damn, missed the boat, I'll await a pullback". But it never comes.

    My observation over many years, the best bull markets are those which rise on fear, because they just keep on going up.
    Exhuberance is the danger signal, not fear.
     
    #36     Nov 5, 2019
    raVar likes this.
  7. Real "greed" is not investing in diversified ways with a long term focus. Real "greed" is buying triple etfs against trend in the best performing sectors. Real "greed" is expecting 50-60% crashes every couple of years. Ironically, you could have just reversed most of your trades and convert your appetite for extreme risk and make some decent profits from it.
     
    #37     Nov 6, 2019
    Nobert likes this.
  8. gaussian

    gaussian

    There's no such thing as too late. Once there's some actual value in the market anyone with two remaining brain cells will rub them together and figure out it's time to buy. The folly of nearly every trader I know is trying to call tops and bottoms. All people are looking for a significant pullback caused by shitty earnings, and then it's just a waiting game for all the margin calls to get hit and the market settles back down to somewhere where things are actually valued appropriately.

    Market capitalization is not a good indicator of market health with as many stocks as there are. The S&P could keep going up but that doesn't mean there's anything left in the market worth owning. Same goes for every other popular index.


    Consider the problem of being here in the longest bull market in history.

    1. Prices rise irrationally soaking up the last bits of actual value in the market. This effects investors (the normal people kind) greatly - the kinds of people who don't trade on tea leaves with 25x leverage.
    2. Small investors, such as new graduates, people getting their first real job, people making enough money to finally buy in, etc are priced out indefinitely because the market is basically inflating. Value is dropping, yet costs are going higher and higher.
    3. From (2) the market gets dominated by speculators driving up volatility further until panic sets in.
    4. Finally, we come crashing all the way down when the only people not priced out get out, speculators, panic and everything goes short. Bread line time!

    Suppose it doesn't die at (3) and continues in an alternative universe:

    1. From (3) the last boomers begin to retire and the market continues to go up.
    2. The next generation (the tail-end now nearing their 40s) is getting less and less per dollar put into the market because normally when a generation begins drawing heavily on their pensions and 401ks we see some movement downwards as a ton of people (and their financial advisors) begin liquidating.
    3. Go to (3) in the other universe.

    Call it pessimism but there are very good reasons for modest pullbacks and recession-like environments. It provides smaller investors a chance to buy in to companies and create capital gains for themselves. Imagine the problem of buying BRK.A as a junior accountant with a 401k. Now magnify this problem to every popular stock and mutual fund.
     
    Last edited: Nov 6, 2019
    #38     Nov 6, 2019
  9. S2007S

    S2007S

    Interesting facts about ipo market









    The number of unprofitable companies going public has hit 'tech bubble levels,' BAML says

    Daniel Strauss
    Oct. 14, 2019, 11:21 AM


    [​IMG]Peter Macdiarmid/Getty Images






    • The number of unprofitable companies going public has surged to "tech bubble levels," according to Bank of America Merrill Lynch.
    • The firm's strategists say the percentage of companies going public that have yet to generate positive earnings has reached 70%.

    https://markets.businessinsider.com...it-tech-bubble-levels-baml-2019-10-1028596996
     
    #39     Nov 6, 2019
    Nobert likes this.
  10. orbit23

    orbit23

    I was thinking exactly the same thing. Only a few weeks ago everyone was calling for recession prior to the breakout, the fear was high. And that was great confluence for longs. Everyone was calling tops too, now sentiment seems to be slowly shifting - which you can see on this thread too.

    Looking at the apple chart, shit is moving way too fast. The volatility looks like it could kick in at any time. I agree with you. It's time to bail here. The risk is just too high.
     
    #40     Nov 6, 2019