DOW 20k!!! - the investing thread

I dumped all major positions mid January . Kept all my speculative stuff.
With all the political BS , election year,poor world economy and as high as the US market was I figured it would be a no gain year. Glad I did. What bothers me is the total liquidation to straight up cash. It’s not even a move to safety of gold silver or commodities. I’m not an expert but sure seems odd .
There’s more than flu fears behind this move . 4500 points in 2 weeks !!!!
I’ll wait to get back in.

 

There does seem to be something unnatural/odd about these markets. Everything deflated over the last week. Housing held up due to low interest rates which have also distorted prices. Gold/silver sold off to cover margin. Some speculated that China may have sold as well due to their ongoing difficulties. Bonds and the yield curve are signaling deflation and recession soon. Jerome Powell came out on the airwaves when the dow had just breached another 900pts down (!) and said the Fed would do everything and anything necessary to prop up markets, hence the 650 pt move up within minutes. You can be they will try to inflate paper assets beyond the current daily repo injections. They will fire their proverbial bazooka at these markets if they think that is what it takes to prevent them from finding their true value. This only makes it worse in the long run, at least for savers, those without financial assets, first time home buyers, those facing extensive medical procedures, and those on fixed incomes. The dynamics that set up the last big run up in gold/silver may be setting up again. I am watching that for some more buying in this space, as I haven't bought any gold since it was at $1250. Not sure of my target yet.

 

I appreciate your commentary. Keep it coming! I've been in cash/CD's for years, I'm very risk-averse. However, at 20% down, if we get there, I'll probably put some money in an index fund.

 

Stock-market expert says what many are thinking as Dow sheds 3,600 points in a week: ‘This market is not normal’

Permabull Tom Lee is someone I read for perspective. He notices something unusual as well. I guess personally I find it somewhat immoral the more I think about it.

I remember talking to my dads stock guy about gold about 3 years ago. The first thing he told me was that he would not want to be in gold or bonds at that time. He is a stock market permabull and told me a story of his cousin who worked in the financial industry, sold out of the stock market, bought gold and moved off grid to a small cabin the mountains. To me it sounded like a good plan, but he was noticeably disdainful about it all. I commented "maybe he was free and truely happy." He had to agree that this was a possibility. It all comes down to different strokes for different folks which ultimately is what makes the world go around.

 

If you stick your head outside right now you can hear the stock market falling.
Might put my whole 2020 roth contribution in early this year.

 

Got just about half my losses back today lol.

 

Only if you sell.

 

Wow FED just cut rates 50bp

 

Feds rarely lower rates for just one reason. But in general lower rates are to support economic recovery. While lower rates can be a positive influence on future recovery they can also raise the fear(s) that there is concern about that same future economic recovery.
News about the coronavirus also was mostly not positive today. Lots of fodder for fear.

 

I agree Bill 100%
The market can not deal with fear, confusion, uncertainty or surprises very well.

 

wildwest The federal reserve rate, The one that is dropped, is generally used to determine home-equity lines of credit and loans.. If you have or use those items your payment will probably go down. HELOC are generally listed as fed rate + xx% for example

 

The last emergency Fed rate cut before this one was 2008.

This occurred on top of a several rate decreases since the reversal last year away from a few meager rate hikes, the injection of billions of dollars a day into the repo market and lower growth expectations even before the Covid 19 scare. The timing of the cut today apparently was a troubling signal to many investors and algos. It smacked of desperation, hence another sell off.

Since Friday's reversal right after Jerome Powell signaled more debt stimulation, and yesterday's dramatic 5% rise, today's action seemed like a "sell the news" type of dynamic.

Here are a couple perspectives on todays Fed action:





Sri Kumar has been right for awhile now:

 

DOW futures for Monday morning are opening down -1230 points. It looks like its going to be another major selloff due to worldwide coronavirus concerns.

Brent Crude Oil down $13.07 to $34.43 per barrel which is a 28.73% drop.

Oil futures tumbled 31% in a matter of seconds overnight on Sunday, their sharpest decline since the Gulf War in 1991. The losses are being fueled by sinking demand due to coronavirus concerns, which has in turn sparked a series of price cuts.

I wonder just how bad things can get!

 

Oil decline is due to Saudi Arabia striking back at Russia and dropping prices of crude by as much as $10 a barrel Sunday after not coming to any sort of agreement on curbing productions on Saturday's meeting with Opec+.
Saudi Arabia may open up the spigots soon as well.

I don't know what planet BusinessInsider is on but they're not paying attention.

 

Knothead Just for reference, the reason the futures are only down that is because they have a stop loss. Maybe they can only drop 5%. Expect the Dow to be lower