Investment Thread

[YmoBeThere]

There might have been more Sanders concern than you realize. Mr. Sanders and Mr. Market would not have played nice together. I bought March insurance, in late ‘19, when Sanders appeared most probable. It ended up being Covid insurance.

Perhaps. Sitting here in the most "liberal" of Texas' big 4 cities, based on my limited political interactions, I never saw Bernie as a viable candidate to defeat Trump. Even if he did manage to secure the Democratic nomination. Again, varying views are what makes markets.

[YmoBeThere]

Well, one trade I didn't talk about here has been Goodyear Tire. I've traded in and out of it for a couple years and made decent money with it. I dumped most of my holdings in late February and early March and didn't buy back in because I wanted to use the losses for my 2020 tax return. I did manage to get back in at 5.35 and 5.75. Perhaps I should have taken advice from upthread because I just rounded out my position in the mid 7s. Still have a nice gain but what could have been.

[Jeffrey]

Perhaps. Sitting here in the most "liberal" of Texas' big 4 cities, based on my limited political interactions, I never saw Bernie as a viable candidate to defeat Trump. Even if he did manage to secure the Democratic nomination. Again, varying views are what makes markets.

I agree, Sanders was unlikely to beat Trump. However, it was certainly possible and Mr. Market no longer has to worry about the possibility.

[bundabergdevil]

If we can go into a three day weekend with the S&P above 2700, does that mean that the market bottomed out in March? A lot of the technicians have 2700+ as a key resistance point and I am not sure that fundamental evaluation is worth a darn anymore. All the stocks go up on these moves. I mean... stocks that I would think would be really hurting: Six Flags, Darden, Simon Property Group, etc.

I will admit to not fully understanding how the Fed's announcement this morning will impact the economy/stock market.

I have some stocks that I bought speculatively and want to sell because I don't even think they are close to the value that they are at now, for example AAL and APA. I am enjoying the ride for now, but I will be annoyed if they fall back below where I bought them. I did not anticipate they would jump up in value like this.

Is this just all your machines again?

The Fed and Congressional responses have been extraordinary but I’m still pessimistic that this is a V-shaped recovery. I think consumer behavior is going to stay altered for some time and make the recovery slower. That’ll create opportunities for certain businesses but keep pressure on others. Also think state finances are going to have to be reckoned with at some point. Finally, I see business rehiring being VERY cautious.

[Jeffrey]

If we can go into a three day weekend with the S&P above 2700, does that mean that the market bottomed out in March? A lot of the technicians have 2700+ as a key resistance point and I am not sure that fundamental evaluation is worth a darn anymore. All the stocks go up on these moves. I mean... stocks that I would think would be really hurting: Six Flags, Darden, Simon Property Group, etc.

I will admit to not fully understanding how the Fed's announcement this morning will impact the economy/stock market.

I have some stocks that I bought speculatively and want to sell because I don't even think they are close to the value that they are at now, for example AAL and APA. I am enjoying the ride for now, but I will be annoyed if they fall back below where I bought them. I did not anticipate they would jump up in value like this.

Is this just all your machines again?

I sent you a PM for a move that I think would greatly benefit your unique situation long-term. If you like the idea, then many of these positions would probably be liquidated (recognizing your gains) in the process.

Big picture... I'm selling index funds today, not buying index funds. However, there are a few individual stocks I still find attractive today. I still like (at its current price) the one I told you about in a PM.

[budwom]

I strongly agree. In the darkest hour, the most hypocrites are revealed.

I think current events will hasten the arrival of U.S. socialism. I also believe U.S. investors, particularly under 50, need to make substantial changes in their personal investment plan due to current events.

Yes on the under 50 folks, for sure it should be apparent to them now, if it hasn't been, that relying on 401-k plans for your retirement is going to require a whole lot of saving and good planning...the days of pensions are well behind us, retiring without them is a gigantic challenge for most people.

[bundabergdevil]

Yes on the under 50 folks, for sure it should be apparent to them now, if it hasn't been, that relying on 401-k plans for your retirement is going to require a whole lot of saving and good planning...the days of pensions are well behind us, retiring without them is a gigantic challenge for most people.

I am shocked by the number of people my age say they have raided their plans for this or that, don’t get employer matches, or have much of a sense of why retirement savings vehicles are more beneficial than, say, a savings account.

I thank my parents for giving me the bare minimum education so I didn’t do dumb things early but this all should be hammered in HS through college graduation.

Some people also just like seeing stuff in their house more than their accounts.

[budwom]

I am shocked by the number of people my age say they have raided their plans for this or that, don’t get employer matches, or have much of a sense of why retirement savings vehicles are more beneficial than, say, a savings account.

I thank my parents for giving me the bare minimum education so I didn’t do dumb things early but this all should be hammered in HS through college graduation.

Some people also just like seeing stuff in their house more than their accounts.

It really should be addressed in high school, since a lot of kids don't make it to college...just some important, basic concepts. Probably needs to be addressed more in college as well...tons of smart kids, but I'm not sure where they're doing to learn this stuff if they don't get some basics in HS or college. A life skills course...could also learn what not to flush down the toilet...I wish a girlfriend of mine had known that!

Unfortunately, many homeowners can pick up the phone and get a home equity loan without leaving the kitchen...using the home as an ATM...

[elvis14]

I am shocked by the number of people my age say they have raided their plans for this or that, don’t get employer matches, or have much of a sense of why retirement savings vehicles are more beneficial than, say, a savings account.

I thank my parents for giving me the bare minimum education so I didn’t do dumb things early but this all should be hammered in HS through college graduation.

Some people also just like seeing stuff in their house more than their accounts.

Years ago my brother in law and his Dad were both working for a cotton mill in Greenwood, SC. They switched from a pension to a 401k. When the first statement for the 401k came out, they had lost money. They both pulled out of the plan immediately. Knowing my brother in law, he will have replaced his 401k contributions with...nothing.

I don't even know if his Dad, in his 70's, has retired yet.

I read this thread to learn. I'm an engineer and not good with investing but even I know that at the very least you use the 401k and make sure your contribution level is at a minimum to the point where your company matches.

[budwom]

Years ago my brother in law and his Dad were both working for a cotton mill in Greenwood, SC. They switched from a pension to a 401k. When the first statement for the 401k came out, they had lost money. They both pulled out of the plan immediately. Knowing my brother in law, he will have replaced his 401k contributions with...nothing.

I don't even know if his Dad, in his 70's, has retired yet.

I read this thread to learn. I'm an engineer and not good with investing but even I know that at the very least you use the 401k and make sure your contribution level is at a minimum to the point where your company matches.

Indeed...and people need to know what kinds of 401-k investments are good or bad at particular ages...equities, bonds, the perils of company stock, etc...I've seen smart people make very bad decisions on this..

[Jeffrey]

It really should be addressed in high school, since a lot of kids don't make it to college...just some important, basic concepts. Probably needs to be addressed more in college as well...tons of smart kids, but I'm not sure where they're doing to learn this stuff if they don't get some basics in HS or college.

I've tried to motivate many Superintendents to add a basic finance course to their required HS courses. IMO, it's more valuable, for most students, than a required geometry course. I've volunteered to do many grade 3-12 presentations and it's extremely easy to engage students on this subject. I've had great success even with 3rd graders. Financial independence changes lives and financial knowledge is extremely valuable.

[budwom]

I've tried to motivate many Superintendents to add a basic finance course to their required HS courses. IMO, it's more valuable, for most students, than a required geometry course. I've volunteered to do many grade 3-12 presentations and it's extremely easy to engage students on this subject. I've had great success even with 3rd graders. Financial independence changes lives and financial knowledge is extremely valuable.

My wife voluntarily ran a life skills course for groups like high school dropouts, former prisoners, etc...how to deal with a checking account, etc...should be a part of education from early on thru college.
I learned a lot at Duke, but nothing about finance.

[duke79]

The Fed and Congressional responses have been extraordinary but I’m still pessimistic that this is a V-shaped recovery. I think consumer behavior is going to stay altered for some time and make the recovery slower. That’ll create opportunities for certain businesses but keep pressure on others. Also think state finances are going to have to be reckoned with at some point. Finally, I see business rehiring being VERY cautious.

Totally agree with you here! Even if the spread of the virus begins to slow down (and, IMO, that will take a while in a country as geographically big as the United States), it's going to take a long time (IMHO) for many people to go back to their previous way of life. How many people will go out to a crowded restaurant for dinner? How many people will jump on a crowded plane for a vacation? How many people will be booking cruises to the Bahamas? I don't see getting back to "normal" for, at least, 12 to 24 months (and it may depend largely on whether an effective vaccine can be developed for this virus). So much of our GDP is based on people working and then spending money and, with millions of people suddenly unemployed (and probably not being re-hired for quite a while), consumer spending, especially discretionary consumer spending, is going to tank big-time. This will cascade through out the entire economy and then all consumers and all businesses begin to cut back on how much they spend because they are fearful of the loss of their own incomes and revenues. This is partly what happened during the Great Depression.
And this episode is going to be a disaster for many local communities and states - many of whom were already on the verge of municipal bankruptcy - as tax revenues plunge and the need for ongoing social services explode. No doubt the states will be looking to the federal government to back stop their finances (and this has already begun) but where are the Feds going to get all the money for all of the new emergency programs??

I hope I'm wrong in my analysis!

[duke79]

It really should be addressed in high school, since a lot of kids don't make it to college...just some important, basic concepts. Probably needs to be addressed more in college as well...tons of smart kids, but I'm not sure where they're doing to learn this stuff if they don't get some basics in HS or college. A life skills course...could also learn what not to flush down the toilet...I wish a girlfriend of mine had known that!

Unfortunately, many homeowners can pick up the phone and get a home equity loan without leaving the kitchen...using the home as an ATM...

I've tried to motivate many Superintendents to add a basic finance course to their required HS courses. IMO, it's more valuable, for most students, than a required geometry course. I've volunteered to do many grade 3-12 presentations and it's extremely easy to engage students on this subject. I've had great success even with 3rd graders. Financial independence changes lives and financial knowledge is extremely valuable.

Probably a discussion point for another thread, but I think you're both right here. In general, I think we need to have a societal discussion about educational priorities - both at the elementary and high school levels (and even at the college level and beyond). We spend a huge amount of money on education in this country, with very little to show for it (IMHO). But certainly everyone should graduate from HS with at least some semblance of financial literacy - balancing a checkbook, basics of investing and savings, the importance of a credit score, etc.

[Jeffrey]

...where are the Feds going to get all the money for all of the new emergency programs??

Look in a mirror and at younger generations. IMO, tax rates are heading north, for a long time, and prudent investors should modify accordingly. If corporate rates also head north, then more portfolio adjustments are prudent.

[CrazyNotCrazie]

Years ago my brother in law and his Dad were both working for a cotton mill in Greenwood, SC. They switched from a pension to a 401k. When the first statement for the 401k came out, they had lost money. They both pulled out of the plan immediately. Knowing my brother in law, he will have replaced his 401k contributions with...nothing.

I don't even know if his Dad, in his 70's, has retired yet.

I read this thread to learn. I'm an engineer and not good with investing but even I know that at the very least you use the 401k and make sure your contribution level is at a minimum to the point where your company matches.

My employer is a large financial services firm so people should theoretically know something about personal finance, though I have found that just because you are an expert on the minutia of a particular subsector of finance means you know anything about personal finance. The default is for all new hires to have 6% of their salary put into their 401k, with a 6% match kicking in at a later date. I think it defaults to a retirement-date based target fund - there are about 20 investment options but this makes sense as a default. You have to actively change your contribution rate in order to make this go away (or to increase or decrease it). Others might disagree, but I think this is a great idea as it encourages good savings habits but making you opt-out rather than opt-in.

[YmoBeThere]

balancing a checkbook

Do they use checks any more?

Yes, yes, I get the point, just pointing out there will be the additional step of teaching them about the app they are using to send money and the implications of using a CC versus their checking account, etc.

[bundabergdevil]

Perhaps. Sitting here in the most "liberal" of Texas' big 4 cities, based on my limited political interactions, I never saw Bernie as a viable candidate to defeat Trump. Even if he did manage to secure the Democratic nomination. Again, varying views are what makes markets.

I thought you lived in San Antonio. Been a while since I called Texas home but isn't Austin the most liberal --- and by a lot. Heck, I wouldn't be surprised if Austin is among the 10-15 most liberal cities in America.

[YmoBeThere]

I thought you lived in San Antonio. Been a while since I called Texas home but isn't Austin the most liberal --- and by a lot. Heck, I wouldn't be surprised if Austin is among the 10-15 most liberal cities in America.

Austin likes to think so, but it if you ask us here in San Antonio... They also claim to have better breakfast tacos which is nice. They may have better barbecue. I'm sure there are Austinites on this board that would beg to differ with those points. I could elaborate but any city in Texas being among the most liberal doesn't seem possible. Except maybe Marfa. And by defining the Big 4 I do tend to leave out El Paso which I probably shouldn't.

[bundabergdevil]

My wife voluntarily ran a life skills course for groups like high school dropouts, former prisoners, etc...how to deal with a checking account, etc...should be a part of education from early on thru college.
I learned a lot at Duke, but nothing about finance.

I believe I've posted before (maybe even on this thread) that my wife did a year of service with a non-profit that supported financial literacy and job skills with ultra-low-income and marginal society types. I had really never been exposed to the payday loan industry and all the ways the working poor are preyed upon. Lots of folks in transition from halfway homes, rehabs, jails, etc. I volunteered with their VITA free tax program and got the opportunity to chat with a lot of folks who didn't have enough trust/knowledge to have ANY bank accounts, let alone retirement accounts.

Not sure what you do about that population in the context of the overall financial literacy discussion other than preach it early and often in school. I agree w/ Jeffrey and other posters on the stunning lack of HS teaching about one of the single most personally useful topics. Surely that should be in the state/national ed standards or something. I'm not sure I received ANY formal personal finance education...ever. Maybe how to balance a check book in 7th grade home economics? That seems wrong.

Austin likes to think so, but it if you ask us here in San Antonio... They also claim to have better breakfast tacos which is nice. They may have better barbecue. I'm sure there are Austinites on this board that would beg to differ with those points. I could elaborate but any city in Texas being among the most liberal doesn't seem possible. Except maybe Marfa. And by defining the Big 4 I do tend to leave out El Paso which I probably shouldn't.

I appreciated this post ---- and, I have been to Marfa. This was a little before the art boom (circa 2005). Hung around enough to see the ghost lights, have a meal, and spend the night before scooting south to Big Bend. Would be very interested in seeing it now with all the changes.