Stock market is looking very bubbly, but it doesn't matter.

Discussion of the Stock portion of the Permanent Portfolio

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StinkyToes
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Stock market is looking very bubbly, but it doesn't matter.

Post by StinkyToes » Wed Jan 27, 2021 7:59 am

NASDAQ has roughly doubled since March 20, 2020. Shiller PE is 35 -- among the highest in history. Gamestop is up 7-fold in two weeks. The signs of speculative excess are everywhere. And so I think we are due for a big correction, probably within the next few weeks. Of course those of us with a PP are well-positioned to weather even the deepest bear market in stocks. I'll rebalance, but otherwise am standing pat.
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mathjak107
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by mathjak107 » Wed Jan 27, 2021 8:03 am

What investors forget is that each day we keep our money in play we actually are buying in at the current prices ....

If markets fall and you are down 25k , you are down 25k regardless if new money or old money.

So many times you see investors say they won’t buy at such lofty levels yet that is exactly what we all do in effect each day we recommit our money
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I Shrugged
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by I Shrugged » Wed Jan 27, 2021 9:10 am

mathjak107 wrote:
Wed Jan 27, 2021 8:03 am
What investors forget is that each day we keep our money in play we actually are buying in at the current prices ....

If markets fall and you are down 25k , you are down 25k regardless if new money or old money.

So many times you see investors say they won’t buy at such lofty levels yet that is exactly what we all do in effect each day we recommit our money
In my case as a taxable investor, the calculus includes the huge tax cost of selling. This changes the uncertainty model for me.
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mathjak107
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by mathjak107 » Wed Jan 27, 2021 10:17 am

I never ever let the tax tail wag the tax dog
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I Shrugged
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by I Shrugged » Wed Jan 27, 2021 11:44 am

mathjak107 wrote:
Wed Jan 27, 2021 10:17 am
I never ever let the tax tail wag the tax dog
Perspective might depend on the number of digits involved.
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mathjak107
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by mathjak107 » Wed Jan 27, 2021 1:55 pm

Well I have multiple 7 figure portfolios, half of which are in my taxable accounts ...I never make decisions based on taxes ...you can can watch gains evaporate over a tax bill that is pale in comparison
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jhogue
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by jhogue » Thu Jan 28, 2021 9:54 pm

I rebalanced out of stocks on Monday.

It seemed like the right thing to do, given the frothy activity in the equity markets. There were no tax consequences because it was within my Roth IRA.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by dualstow » Fri Jan 29, 2021 7:07 am

mathjak107 wrote:
Wed Jan 27, 2021 10:17 am
I never ever let the tax tail wag the tax dog
wag the trading dog, you mean.
RIP Marcello Gandini
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Kriegsspiel » Fri Jan 29, 2021 7:28 am

jhogue wrote:
Thu Jan 28, 2021 9:54 pm
I rebalanced out of stocks on Monday.

It seemed like the right thing to do, given the frothy activity in the equity markets. There were no tax consequences because it was within my Roth IRA.
I trimmed some stocks (VP) this week too. Stocks have had a good run in general, and I bought a lot in late March so my VP has done really well.

The stocks in my PP bucket are still on-balance.
You there, Ephialtes. May you live forever.
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by jhogue » Fri Jan 29, 2021 10:48 am

Likewise, I sold TLT and bought stocks (ITOT) back in March of 2020.

Reducing stock exposure (30.8% --> 25.0%) in the midst of the mania over GameStop feels good right now, doesn't it?
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Kriegsspiel
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Kriegsspiel » Sat Jan 30, 2021 6:13 am

jhogue wrote:
Fri Jan 29, 2021 10:48 am
Likewise, I sold TLT and bought stocks (ITOT) back in March of 2020.

Reducing stock exposure (30.8% --> 25.0%) in the midst of the mania over GameStop feels good right now, doesn't it?
I swear, if I sold at the top again, I'm getting out of the PP and going fully into day trading ;D
You there, Ephialtes. May you live forever.
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Kriegsspiel
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Kriegsspiel » Sat Jan 30, 2021 10:08 am

They're talking about stocks on bodybuilding podcasts.

This has to be the end.
You there, Ephialtes. May you live forever.
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Smith1776
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Smith1776 » Sat Jan 30, 2021 10:17 am

Kriegsspiel wrote:
Sat Jan 30, 2021 10:08 am
They're talking about stocks on bodybuilding podcasts.

This has to be the end.
Totally. I read an article about this on... I want to say BNN? Where the author was talking about how he had his own 1929 shoeshine boy moment. His kid son was recommending Dogecoin.
I still find the James Rickards portfolio fascinating.
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jhogue
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by jhogue » Sat Jan 30, 2021 10:23 am

I'm not even sure how to pronounce "Dogecoin."

"dog-gy-koyn"?

"doze-koyn"?
Last edited by jhogue on Sat Jan 30, 2021 10:25 am, edited 1 time in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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l82start
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by l82start » Sat Jan 30, 2021 10:24 am

"dodgy coin" ;)
-Government 2020+ - a BANANA REPUBLIC - if you can keep it

-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by jhogue » Sat Jan 30, 2021 10:29 am

"dodgy" sounds like a financial product no thinking person would want to buy.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by dualstow » Sat Jan 30, 2021 1:44 pm

Kriegsspiel wrote:
Sat Jan 30, 2021 10:08 am
They're talking about stocks on bodybuilding podcasts.

This has to be the end.
As all the news outlets say, investing has been democratized. Robinhood, reddit, etc. A good crash will separate the __ from the ___. (The words aren’t coming to me. The Israelites from the Egyptians-drowning-in-the-Red-Sea? )
RIP Marcello Gandini
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Mark Leavy » Sat Jan 30, 2021 2:14 pm

dualstow wrote:
Sat Jan 30, 2021 1:44 pm
Kriegsspiel wrote:
Sat Jan 30, 2021 10:08 am
They're talking about stocks on bodybuilding podcasts.

This has to be the end.
As all the news outlets say, investing has been democratized. Robinhood, reddit, etc. A good crash will separate the __ from the ___. (The words aren’t coming to me. The Israelites from the Egyptians-drowning-in-the-Red-Sea? )
The men from the boys.
It's an older meme, sir, but it checks out.
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Xan » Sat Jan 30, 2021 2:32 pm

Wheat from the chaff could also fit. Not as well as men and boys though.
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Kriegsspiel
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by Kriegsspiel » Sat Jan 30, 2021 5:01 pm

"The long from the short."

lol
You there, Ephialtes. May you live forever.
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by dualstow » Sat Jan 30, 2021 6:47 pm

That’s funny. Men from boys and wheat from chaff did come to mind, but I felt like writing something more visual. O0
RIP Marcello Gandini
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by mathjak107 » Sun Jan 31, 2021 3:20 am

To funny , I went the other way ...I trimmed equities and added more gold and bonds .... maybe it’s the contrarian in me ..

But with both Gld and tlt being the red headed step children since august, I figured thursday and Friday were good days to start to cut back equities , take profits and buy the unloved
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Re: Stock market is looking very bubbly, but it doesn't matter.

Post by dualstow » Sun Jan 31, 2021 9:20 am

mathjak107 wrote:
Sun Jan 31, 2021 3:20 am
To funny , I went the other way ...I trimmed equities and added more gold and bonds .
......
I think Tom is being sarcastic. I can’t always tell.

Vinny

Oops, i mean me.
RIP Marcello Gandini
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