Is the stock market going to tank?

[Lindahl]

Here is your mix. You’re buying large cap international off a lot with a strong dollar. I like it for the long term. Dollar is doomed as single reserve:

Vanguard Total Stock Market Index Fund Investor Shares54.30%

Vanguard Total International Stock Index Fund Investor Shares35.60%

Vanguard Total Bond Market II Index Fund Investor Shares**7.00%

Vanguard Total International bond 3.100%


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FWIW the Developed Markets fund has lower fees and exposes you to international markets also.

[4matic]

FWIW the Developed Markets fund has lower fees and exposes you to international markets also.

No EM in that one. Tencent and Alibaba for example.


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[Lindahl]

No EM in that one. Tencent and Alibaba for example.


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The gains are pretty comparable, regardless? Just invest in those companies directly if you want exposure to specific companies?

[Bunion 2020]

Try not to attribute to malice what can be explained by incompetence. It seems like we're in a period of expanding volatility, increasing uncertainty, historically significant political risk and deteriorating macro data (mostly ex-US now, but increasing in the US as well). So velocity or the speed of change in data is going up and the direction is down with a lot of variance. Every industry that's affected will see uneconomic firms under pressure. Depending on how many fail it'll determine how far down we go.

Spot on, I was being more than a little facetious.

OTOH, if you could influence the markets with just a few words and had someone acting in your behalf how much $$$ could you make? I would say the upside is without limit.

https://www.nytimes.com/interactive/...gtype=Homepage

[4matic]

Another lower high. Need 2600 or so to hold.


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[4matic]

The wealth affect

[4matic]

FANG stocks vulnerable to big declines from here.

NFLX has a H&S top forming on the hourly chart.


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[Stu Gotz]

PG&E. Ooof. Lotsa big names gonna take a beating with this one.

Even the bottom feeders gonna get wrecked over the past week.

[4matic]

PCG has doubled off its low. An expensive option at this point.


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[Stu Gotz]

PCG has doubled off its low. An expensive option at this point.

They are filing for bankruptcy tomorrow.

[iceman]

It's a good thing for them to do, right? Their liabilities are potentially catastrophic, so they need to protect themselves somehow. They got the go-ahead to get financing for operations tonight, it's gonna be business as usual at least for a while I believe.

[The Suit]

advice for stock pickers: buy the one that will go up, and if it doesn't, don't have bought it.

[4matic]

They are filing for bankruptcy tomorrow.

Up 16% today.


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[summit]

The wealth affect

can you help me interp?

[retirwntm]

advice for stock pickers: buy the one that will go up, and if it doesn't, don't have bought it.

Buy low sell high! Duh.


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[iceman]

Nobody seems to believe Lockheed about the whole fusion thing, but they did have a key patent issued last year and the Skunk Works has had some notable successes in the past. If they get it to work it will be the most valuable company on the planet, seems like it might be worth buying a few shares on a flyer.

[4matic]

can you help me interp?

Asset ownership is at record high relative to GDP growth historically. If asset prices fall then households will will not feel as well off and will likely spend less. It's called the wealth affect and is the reason asset prices are critical to continued growth at this time.

The economy is good right now so it is being boosted by non-asset rich households but if you get a combination of falling asset prices and an increase in unemployment it will be a difficult recovery. That is why the fed needed to get rates back up. So they have some ammunition when that happens.

[summit]

Asset ownership is at record high relative to GDP growth historically. If asset prices fall then households will will not feel as well off and will likely spend less. It's called the wealth affect and is the reason asset prices are critical to continued growth at this time.

The economy is good right now so it is being boosted by non-asset rich households but if you get a combination of falling asset prices and an increase in unemployment it will be a difficult recovery. That is why the fed needed to get rates back up. So they have some ammunition when that happens.

Thank you!

So is this vulnerability likely to be realized? I would assume the Fed must think it likely if it is preparing for the possibility with rate increases beyond what it might otherwise do in order to have dropping rates as a defense?

[4matic]

Likely I’d estimate. Inevitable. Has to be.:



Continued sturdy consumer spending is critical to the ongoing strength of the U.S. economic expansion, and this study suggests that the wealth effect is critical to the consumer.
Given that households’ stock holdings and housing wealth have increased by over $25 trillion since the start of the economic expansion, a near doubling in wealth,
the wealth effect has lifted real consumer spending by over $600 billion during this economic expansion. An impressive ap- proximately one-fourth of the increase in consumer spending during the expansion is due to the wealth effect

The wealth effect’s contribution to over- all GDP growth has thus been significant. Real GDP has expanded at close to a 2.2% per year pace during the eight years of the recovery. Of this growth, almost half a per- centage point per year is due to the wealth effect alone, according to our analysis. That is, without the positive wealth effect, real GDP growth during this expansion would have been a paltry 1.7% per annum.

https://www.moodysanalytics.com/-/me...lth-effect.pdf


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[retirwntm]

There are no wealth affects.


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[summit]

Likely I’d estimate. Inevitable. Has to be.:



Continued sturdy consumer spending is critical to the ongoing strength of the U.S. economic expansion, and this study suggests that the wealth effect is critical to the consumer.
Given that households’ stock holdings and housing wealth have increased by over $25 trillion since the start of the economic expansion, a near doubling in wealth,
the wealth effect has lifted real consumer spending by over $600 billion during this economic expansion. An impressive ap- proximately one-fourth of the increase in consumer spending during the expansion is due to the wealth effect

The wealth effect’s contribution to over- all GDP growth has thus been significant. Real GDP has expanded at close to a 2.2% per year pace during the eight years of the recovery. Of this growth, almost half a per- centage point per year is due to the wealth effect alone, according to our analysis. That is, without the positive wealth effect, real GDP growth during this expansion would have been a paltry 1.7% per annum.

https://www.moodysanalytics.com/-/me...lth-effect.pdf


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Hmmm... how do you play with that knowledge in hand?

[4matic]

Hmmm... how do you play with that knowledge in hand?

The takeaway is to expect lower returns from assets.

Define your time frame and risk tolerance. My risk tolerance is low.

[406]

Oct 25, 2017:

Tempted to get back in the game and buy some CMG at the 52 week low...if jack in the box can recover, seems like chipotle could.

ya, i wouldnt seems incredibly over valued

Chipotle has definitely slipped the last few years. Panera is another. The same PE firm that owns KK recently bought out Panera so maybe it gets revitalized before it goes to shit.

I wouldnt buy it anywhere north of $200 at this point. Growth appears dead.

Went in a Chipotle the other day for the first time in over a year (I was starving and my other option was 7-11). Store was dirty. Needed to be swept. Tables dirty. Bathroom dirty. Doors and sneeze guards smudged and dirty. If there was a place that could benefit from appearing clean it's Chipotle. Clearly they don't get it or don't care. Very limited sample size obviously but I'd keep my money in my pocket on that one.

I should not have listened to you guys, I could have doubled my money and almost covered the cost of a new mountain bike!
Attachment 269343

[SkiCougar]

Seems to me we're witnessing the 2nd phase of a dysfunctional global equity selloff. Worldwide it started in Jan 18, US started formally in Oct 18. If you can maintain sanity & your overall net worth for the next 36 months I say you're doing extremely well. Now's a time to reduce exposure to markets, payoff debt, optimize cash flows, & manage expectations.

bold statement considering the market just cleared it's last level of resistence and may go for new ATHs. it certainly looked like that last year but all the fedsters seem to have decided to keep the game going

[Stu Gotz]

Seems to me we're witnessing the 2nd phase of a dysfunctional global equity selloff. Worldwide it started in Jan 18, US started formally in Oct 18. If you can maintain sanity & your overall net worth for the next 36 months I say you're doing extremely well. Now's a time to reduce exposure to markets, payoff debt, optimize cash flows, & manage expectations.

I just read today that 7 million+ Americans are more than 3 months delinquent on their car payments. A record.

Things are not copacetic.