Retirement balance with the current market?

Big moves in Aluminum today
And cyber security companies have been moving upwards also..
hmm.. these are conflict moves.. building airplanes? and internet security.. wartime moves
 
And cyber security companies have been moving upwards also..
hmm.. these are conflict moves.. building airplanes? and internet security.. wartime moves
It’s not about wartime. When you send a major chunk of your workforce to work from home, they’re outside of the corporate IT security blanket. They’re working through the Internet. Suddenly, Internet security becomes really important. ;)
 
We're a long way from the bottom.

Things will not go back to normal until we either achieve herd immunity or a vaccine is found.

Herd immunity requires over 50% of the world’s population to become infected. That means tens of millions will die. Economic chaos.

A vaccine is 12-18 months out at best. In the interim we have to “shelter in place” sporadically. Economic chaos.

We’re headed for a global depression. Things are even worse than I predicted. I predicted 250K cases by the end of March. We’ve blown right past that number and are headed for 1M cases. Which means probably 10M+ by the end of April. As soon as they try to restore things to normal the virus will just start spreading again and then it’s back to shutting things down.

The government doesn’t get it either and thinks throwing money at large corporations and special interests will fix things. As though forgiving student loans and reducing airplane emissions will somehow destroy a highly contagious virus. Bunch of idiots. It’s not until someone famous dies that the gravity of the situation will be understood. If Pelosi or McConnell or one of those other morons dies from it then maybe, just maybe, they’ll understand how dire things are. The public won’t get it until a Kardashian or Vin Diezel dies.

Probably all the major airlines will go bankrupt unless the government rescues them. The restaurant industry will be decimated. Car sales will plummet. Housing will crash. The velocity of money will slow to a crawl. Investment will crater.

The bright spots in the market will be specialized companies that service the new work-from-home paradigm. Internet providers in the long run. Food delivery services. Teleconferencing. But a LOT of people can’t work from home. They’ll be unemployed. They won’t buy things so those that can work from home will start losing their jobs too. We’ve become a society that doesn’t really add much value anymore. We don’t make anything. We just consume cheap Chinese junk that breaks after a few months and then we buy it again. The US is just one big shopping mall. With people out of work the mall will close.

It’s bleak man. This is just the beginning. I’m not pessimistic by nature but the maths on this thing are really scary. And humans are too stupid now to understand.
 
Last edited:
We're a long way from the bottom.

Things will not go back to normal until we either achieve herd immunity or a vaccine is found.

Herd immunity requires over 50% of the world’s population to become infected. That means tens of millions will die. Economic chaos.

A vaccine is 12-18 months out at best. In the interim we have to “shelter in place” sporadically. Economic chaos.

We’re headed for a global depression. Things are even worse than I predicted. I predicted 250K cases by the end of March. We’ve blown right past that number and are headed for 1M cases. Which means probably 10M+ by the end of April. As soon as they try to restore things to normal the virus will just start spreading again and then it’s back to shutting things down.

The government doesn’t get it either and thinks throwing money at large corporations and special interests will fix things. As though forgiving student loans and reducing airplane emissions will somehow destroy a highly contagious virus. Bunch of idiots. It’s not until someone famous dies that the gravity of the situation will be understood. If Pelosi or McConnell or one of those other morons dies from it then maybe, just maybe, they’ll understand how dire things are. The public won’t get it until a Kardashian or Vin Diezel dies.

Probably all the major airlines will go bankrupt unless the government rescues them. The restaurant industry will be decimated. Car sales will plummet. Housing will crash. The velocity of money will slow to a crawl. Investment will crater.

The bright spots in the market will be specialized companies that service the new work-from-home paradigm. Internet providers in the long run. Food delivery services. Teleconferencing. But a LOT of people can’t work from home. They’ll be unemployed. They won’t buy things so those can work from home will start losing their jobs too. We’ve become a society that doesn’t really add much value anymore. We don’t make anything. We just consume cheap Chinese junk that breaks after a few months and then we buy it again. The US is just one big shopping mall. With people out of work the mall will close.

It’s bleak man. This is just the beginning. I’m not pessimistic by nature but the maths on this thing are really scary. And humans are too stupid now to understand.

The analogy I like to use is the "traffic snake" - somebody already applied the breaks up ahead and you can see the red break lights turning on up head in your line - in due time, the driver looking up ahead will also have to apply the brakes and stop.

As for the stimulus - this is Ben Bernanke's take on it (not agreeing or disagreeing, just posting info):
https://www.marketplace.org/2020/03/23/former-fed-chair-bernanke-covid19-downturn/
 
We're a long way from the bottom.

Things will not go back to normal until we either achieve herd immunity or a vaccine is found.

Herd immunity requires over 50% of the world’s population to become infected. That means tens of millions will die. Economic chaos.

A vaccine is 12-18 months out at best. In the interim we have to “shelter in place” sporadically. Economic chaos.

We’re headed for a global depression. Things are even worse than I predicted. I predicted 250K cases by the end of March. We’ve blown right past that number and are headed for 1M cases. Which means probably 10M+ by the end of April. As soon as they try to restore things to normal the virus will just start spreading again and then it’s back to shutting things down.

The government doesn’t get it either and thinks throwing money at large corporations and special interests will fix things. As though forgiving student loans and reducing airplane emissions will somehow destroy a highly contagious virus. Bunch of idiots. It’s not until someone famous dies that the gravity of the situation will be understood. If Pelosi or McConnell or one of those other morons dies from it then maybe, just maybe, they’ll understand how dire things are. The public won’t get it until a Kardashian or Vin Diezel dies.

Probably all the major airlines will go bankrupt unless the government rescues them. The restaurant industry will be decimated. Car sales will plummet. Housing will crash. The velocity of money will slow to a crawl. Investment will crater.

The bright spots in the market will be specialized companies that service the new work-from-home paradigm. Internet providers in the long run. Food delivery services. Teleconferencing. But a LOT of people can’t work from home. They’ll be unemployed. They won’t buy things so those can work from home will start losing their jobs too. We’ve become a society that doesn’t really add much value anymore. We don’t make anything. We just consume cheap Chinese junk that breaks after a few months and then we buy it again. The US is just one big shopping mall. With people out of work the mall will close.

It’s bleak man. This is just the beginning. I’m not pessimistic by nature but the maths on this thing are really scary. And humans are too stupid now to understand.
I pretty much stated the same thing as a small business owner up until 2009-We have become a nation of consumers. Doesn't take a lot to break your economy when you're shelling out way more than you're taking in. It's all been smoke & mirrors for some time now. The people that helped build this country would kick our asses if they could see what we have done.
 
The analogy I like to use is the "traffic snake" - somebody already applied the breaks up ahead and you can see the red break lights turning on up head in your line - in due time, the driver looking up ahead will also have to apply the brakes and stop.

As for the stimulus - this is Ben Bernanke's take on it (not agreeing or disagreeing, just posting info):
https://www.marketplace.org/2020/03/23/former-fed-chair-bernanke-covid19-downturn/
He seems to underestimate the pandemic ("if we can get help on the public health side, and tackle this problem...") and overestimate the strength of the economy ("the U.S. economy was in the longest expansion in its history and was just doing great")...?
I told my broker yesterday I was expecting 2M jobless claims this morning. Even I'm shocked at the number: 3.3M.
Is your broker calling you and asking for market predictions? :p
 
The damage to the real economy is certainly baked in. Global depression as well but the question remains, "For how long?" I'm actually a bit surprised that the unemployment numbers weren't worse. E.g., there are just north of 15M employees in the restaurant industry alone and though they won't all show up in the stats a substantial portion of them will before this is over. Across all non-critical sectors the numbers will be staggering. If early reports on the Senate bill are accurate it'll help as it apparently includes up to $1M in loans per small business that will be forgiven if they're used to keep employees on the payroll (up to 2.5x monthly payroll) plus deferral of payment of payroll taxes until next year. Those won't solve small business' problems but they're more than I expected if true.

I'm still worried about the credit markets. Tom Barrack of Colony Capital has a pretty good take on one aspect of the problem (like many others in this country it's regulatory). The Fed, as they did last time, has done yeoman's work propping the financial system up but they're not remotely out of the woods yet. How do we know? Well one data point comes from the FDIC who, in the midst of a liquidity crisis that has morphed into a financial crisis amidst the most significant meltdown of the real economy in a century all while we're enjoying a global pandemic, is telling us, "Don't take your money out of the bank. Don't stuff it in your mattress, it's not safe there." In light of that you can bet the only safe place for your cash is in your mattress. On a personal note I called early Monday to change a number of sweep accounts from "government" MM to "treasury" MM. Usually the option is available online but it wasn't. Usually the trade shows up immediately and the position changes after close, it took until Wednesday evening. Usually the front-line folks can do garden-variety moves, she had to speak with a supervisor. That tells me that the Fed likely hasn't even stabilized the MMs yet despite a couple weeks plus of trying. The difference between the two is ~40% agency MBS exposure in the former, just the sort of thing Barrack discussed above.

Even in the worst markets there are substantial rallies that provide folks who didn't exit chances to re-evaluate. So far the S&P has been down what, 36% from the recent top, and up just under 18% from the recent bottom. Heck, even a simple reversion to mean argues for the S&P to fall into the 1200-1300 range and, from a pure mean-reversion perspective, we'd expect it to go substantially lower in these sorts of extraordinary times. If things are as bad as we believe in the real economy we could hit historic norms below trend and see mid-500s. Will we given all that new liquidity sloshing around the global financial system? I seriously doubt it, there's just too much money chasing too few assets. I do expect this cycle in the markets to be rather extraordinarily compressed though, things are moving at incredible speed.

Re: cheap shit from China. Sure. I used to sit at a desk in the Silicon Valley and write code. Everyone around me then, as do many of my friends who still do that sort of thing now, cheered on every new restriction & regulation imposed on businesses that touch & concern physical goods in the name of climate, diversity, the environment, etc., etc., etc. After all the coders, lawyers, accountants and the like produce no physical goods so they have no skin in the game if the regulatory state they cheer on kills blue collar America and moves production to China (or so they thought). To them food comes from the grocery store, clothing from the department store, medications from the pharmacy, fuel from the gas station, cars from the car dealer, electricity from wall outlets, etc. Small businesses in the US, particularly those that produce physical goods, exist in the midst of a constantly-worsening legal and regulatory nightmare. Best case scenario: we trade cheap shit from China for cheap shit from India, Vietnam, Thailand and the like because no one wants what's necessary to repatriate physical industries.
 
It's interesting that when I talked to my FI guy, he asked me if I wanted to get out or stay? I told him I would stay w/my current, conservative investment plan...he said "I and one other person had said this out of all his clients.". My feeling is the market is a long-term game and he confirmed this and said that all the predictions are that it will be a "V" shaped recovery...in other words, if you aren't in it, you will miss the rebound! I experienced this in Oct. 2018 when it fell quickly and I got out...within a few weeks it recovered and I missed the rebound.... :(
 
Well typically that's the thing, wait it out, but we're so far from normal it can get scary.

I'm in for the long haul; I'm in my mid fifties, retired a few years ago on my investments, and I REALLY don't want to go back to my old profession. But the longer it takes the economy to get back on it's feet, the longer and harder everyone is going to be hit. Europe was already faltering with barely any growth and they are being hit harder than anyone right now, they have like 200k active cases now. So definitely a bad recession coming along.

Although as I said last week, if you have a few grand sitting around it's a great time to get into options. I was staring a Boeing in disbelief last week when it was in the $90s but I stuck to my plan of not budging yet. It crossed $180 today. Oh well, I'm still losing my bet on Apple.

But more importantly I hope and pray that an end comes to this virus soon, that those afflicted will heal, and we can all live a long happy life, that we'll look back and mostly have stories about missed financial opportunities and not about pain and suffering.
 
I can't add much to the discussion other than to say I'm deliberately not looking at my 401K (TSP from govt service), and don't plan to for several months or longer depending on what I hear in the news. It's already in one of those lifecycle funds so each year it becomes more conservative until my predicted retirement in the 2030s. It took a huge hit in 2008, but eventually recovered everything and more. Fortunately for me and my wife, I'm retired Army with a couple of pensions that ensure we won't go without any essentials. However, I did get laid off from my primary income source, so we're dialing everything back to nearly zero.

It's funny to think people always advise for the "emergency fund" and I would argue most of us are there, especially if we lost our primary income source. Now, what happens if we lay another emergency on top of this one - natural disaster, someone in the family contracts the serious version of COVID, etc.? I hope Cliff's prediction that a significant death (I'm not wishing on anyone to die, just assume it'll eventually happen to someone significant within the government) will be enough to convince those in charge to take appropriate action at the appropriate scale.
 
In two weeks all the gains of the past few days will be wiped out and a lot more. Wall St. is underestimating the severity of the problem.

Will probably be largely sold off today. End of the week and nobody wants to leave any gains in the market watching the # of cases rise over the weekend. I think the bump was part stimulus and part mutual funds end of quarter rebalance. Traders will take profits.

My options trading statement is referring to very short term trades. Typically less than two weeks, in the last few days,, with the current volatility, they are same day trades.

EDIT: actually, I think the MF rebalance may just be the last three days of the quarter? So they may be starting today. I don't trade that much. It's too stressful for me most of the time and I think I'd end up broke quicker.
 
Last edited:
I can't add much to the discussion other than to say I'm deliberately not looking at my 401K (TSP from govt service), and don't plan to for several months or longer depending on what I hear in the news. It's already in one of those lifecycle funds so each year it becomes more conservative until my predicted retirement in the 2030s. It took a huge hit in 2008, but eventually recovered everything and more. Fortunately for me and my wife, I'm retired Army with a couple of pensions that ensure we won't go without any essentials. However, I did get laid off from my primary income source, so we're dialing everything back to nearly zero.

It's funny to think people always advise for the "emergency fund" and I would argue most of us are there, especially if we lost our primary income source. Now, what happens if we lay another emergency on top of this one - natural disaster, someone in the family contracts the serious version of COVID, etc.? I hope Cliff's prediction that a significant death (I'm not wishing on anyone to die, just assume it'll eventually happen to someone significant within the government) will be enough to convince those in charge to take appropriate action at the appropriate scale.

Sorry to hear that you were laid off but I'm glad that you have other sources of income. As far the government taking action, it's all taking a backseat to optics and gaslighting. I want to be wrong so people won't die unnecessarily but we're way past that.
 
My stock is now at the level it was 3,5 years ago when I stepped in. In other words: all gains from 3,5 years have vanished.
 
Back
Top Bottom