Market Crash Looming?

[UNC71-00]

a lot of signs are pointing to a market crash and that it will be more severe than the 08-09 one.

Anyone else nervous? I moved absolutely every investment we have into cash today- I'm gonna sit out until after the first full fed meeting after Inauguration Day.

 

[prlyles]

a lot of signs are pointing to a market crash and that it will be more severe than the 08-09 one.

Anyone else nervous? I moved absolutely every investment we have into cash today- I'm gonna sit out until after the first full fed meeting after Inauguration Day.

It's your money but trying to time the market never works unless you have inside information.

 

[tarheel0910]

Anyone else nervous?

No. Markets always go up and down. It's always better to invest for the long term. Trying to time the market is a bad game to play.

 

[UNC71-00]

It's your money but trying to time the market never works unless you have inside information.

I wouldn't really call this an example of trying to time the market. Basically, I'm scared of a big crash, although I allow for the good possibility that I might be wrong. So I am pulling everything out and will look again after the Fed meets in 2017.

To me, timing the market would be trying to invest on ebbs and flows whereas I'm taking out an insurance policy against a Cat 5 hurricane.

 

[prlyles]

I wouldn't really call this an example of trying to time the market. Basically, I'm scared of a big crash, although I allow for the good possibility that I might be wrong. So I am pulling everything out and will look again after the Fed meets in 2017.

To me, timing the market would be trying to invest on ebbs and flows whereas I'm taking out an insurance policy against a Cat 5 hurricane.

Like I said, it's your money but I do have a vested interest in 100 bucks of it...lol Unless you plan on staying in cash for the rest of your life, you are in a sense trying to time the market. Good luck.

 

[UNC71-00]

Like I said, it's your money but I do have a vested interest in 100 bucks of it...lol Unless you plan on staying in cash for the rest of your life, you are in a sense trying to time the market. Good luck.

Actually, after this thread I am worried about your $100 if you stay in the market. I really would prefer the cash as opposed to running some health food store where a bunch of Prius driving Democrats shop.

Sure- if you want to call exiting the market for a predefined period timing the market, then I am timing the market. You and I have different definitions of timing the market though.

 

[prlyles]

Actually, after this thread I am worried about your $100 if you stay in the market. I really would prefer the cash as opposed to running some health food store where a bunch of Prius driving Democrats shop.

Sure- if you want to call exiting the market for a predefined period timing the market, then I am timing the market. You and I have different definitions of timing the market though.

We are not a health food store, we are a bulk food store, though we do sell healthy food.

 

[UNC71-00]

We are not a health food store, we are a bulk food store, though we do sell healthy food.

Do you give discounts to people who drive Priuses or use their own hemp shopping bags?

 

[prlyles]

Actually, after this thread I am worried about your $100 if you stay in the market. I really would prefer the cash as opposed to running some health food store where a bunch of Prius driving Democrats shop.

Sure- if you want to call exiting the market for a predefined period timing the market, then I am timing the market. You and I have different definitions of timing the market though.

I have not been completely out of the market in 40 years.

 

[tarheel0910]

as opposed to running some health food store where a bunch of Prius driving Democrats shop

We are not a health food store, we are a bulk food store, though we do sell healthy food.

 

[UNC71-00]

I have not been completely out of the market in 40 years.

Just do me a favor and pull a $100 out of the drawer and put it behind the Budweiser for safe keeping. It will be safe there- no way any of those granolas are going to buy a 6 pack of America.

 

[gunslingerdick]

Just do me a favor and pull a $100 out of the drawer and put it behind the Budweiser for safe keeping. It will be safe there- no way any of those granolas are going to buy a 6 pack of America.

lol

 

[UNC71-00]

Lyles- I hope you know I'm joking. I'm wearing a pair of Birkenstocks as I type and am heading down to the Burlington Co-Op to pick up dinner.

Just want to make that clear before I go back to throwing chia seeds on your parade.

 

[UNC71-00]

No. Markets always go up and down. It's always better to invest for the long term. Trying to time the market is a bad game to play.

Well, it would have been a great game to play if you pulled out to cash in Sept 2007.

Warren Buffett has been moving to cash big time. Is he making a mistake?

Bottom line is that in times of turmoil, cash is king. We are in some serious times of turmoil.

 

[HeelFan58]

Buy and hold is dead.

from HSBC Bank and not some blogger in mom's basement:

http://www.businessinsider.com/hsbc...for-a-severe-fall-in-the-stock-market-2016-10

http://www.informationclearinghouse.info/article37475.htm

Markets are grossly over valued

http://www.marketwatch.com/story/th...y-ugly-mess-and-it-could-get-worse-2016-10-13

Fed keeping interest rates low keeps money in the market but it's starting to peter out.

 

[prlyles]

Well, it would have been a great game to play if you pulled out to cash in Sept 2007.

Warren Buffett has been moving to cash big time. Is he making a mistake?

Bottom line is that in times of turmoil, cash is king. We are in some serious times of turmoil.

I still bet Buffett has quite a bit more in the market than he does in cash.

 

[prlyles]

Lyles- I hope you know I'm joking. I'm wearing a pair of Birkenstocks as I type and am heading down to the Burlington Co-Op to pick up dinner.

Just want to make that clear before I go back to throwing chia seeds on your parade.

We sell a lot of chia seeds to people who do a lot of running.

 

[prlyles]

Buy and hold is dead.

from HSBC Bank and not some blogger in mom's basement:

http://www.businessinsider.com/hsbc...for-a-severe-fall-in-the-stock-market-2016-10

http://www.informationclearinghouse.info/article37475.htm

Markets are grossly over valued

http://www.marketwatch.com/story/th...y-ugly-mess-and-it-could-get-worse-2016-10-13

Fed keeping interest rates low keeps money in the market but it's starting to peter out.

Buy and hold has never been a good idea. I try to re-balance every 6 months or so.

 

[UNC71-00]

I still bet Buffett has quite a bit more in the market than he does in cash.

What is "quite a bit"? What do you think his ratio of equities to cash and fixed maturities is?

 

[prlyles]

What is "quite a bit"? What do you think his ratio of equities to cash and fixed maturities is?

I have no idea but he's not the kind of guy that will let money sit around and do nothing.

 

[UNC71-00]

Warren Buffett has the kind of money problem most people would envy: a growing mountain of cash.

Nearly $73 billion piled up at Berkshire Hathaway by mid-summer, more than Buffett's conglomerate has ever held before.

http://abcnews.go.com/Business/wireStory/cash-piling-faster-warren-buffett-invest-42726501

 

[prlyles]

Warren Buffett has the kind of money problem most people would envy: a growing mountain of cash.

Nearly $73 billion piled up at Berkshire Hathaway by mid-summer, more than Buffett's conglomerate has ever held before.

http://abcnews.go.com/Business/wireStory/cash-piling-faster-warren-buffett-invest-42726501

Sounds like he's not letting it just sit around. Sounds like he has plans for it.

 

[UNC71-00]

Sounds like he's not letting it just sit around. Sounds like he has plans for it.

He never says what his plans are or what he has looked at and turned down.

But cash don't lie and he is accumulating.

Just put that $100 in a safe place.

 

[tarheel0910]

Well, it would have been a great game to play if you pulled out to cash in Sept 2007.

Hindsight is always 20/20.

Nearly $73 billion piled up at Berkshire Hathaway by mid-summer, more than Buffett's conglomerate has ever held before.

Having that much cash in his company is an entirely different thing than his personal accounts. There could be many reasons he's letting the cash sit there for now.

 

[tarheel0910]

Markets are grossly over valued

True, but when are they not? The only place more irrational than the stock market is DC.

 

[Hark_The_Sound_2010]

It's your money but trying to time the market never works unless you have inside information.

Absolutely. Everything that is publicly available knowledge is priced into equities. The only way you could know what the price of a stock should be better than the market does is if you have more information than the market (i.e. inside info).

Buy and hold is dead.

Buy/hold/rebalance is alive and well.

from HSBC Bank and not some blogger in mom's basement

Large asset managers are financially motivated to sell the belief that the market is about to skyrocket, or plummet. Every time you move money around they get a piece of it (via transaction fees) - whether you were right or wrong.

Markets are grossly over valued

I'm assuming you mean the US stock market. I don't know (and almost no one does) whether it's over valued or not. I agree that the current valuations (price/earnings) are on the higher end of the historical spectrum. They could go up or down from here though. Also - you have several more options than just US stock market or cash. You can invest in Developed International markets, emerging markets, US bond markets, international bond markets, real estate, etc. All of these have higher expected returns than cash. You can invest in those if you don't want to invest in the US stock market.

*I'm not advocating moving the money from one market to another constantly, it's best to pick an allocation and stick with it.

 

[UNC71-00]

Hindsight is always 20/20.

Sure is and accurate foresight is worth a lot more,

[QUOTE="tarheel0910, post: 725439, member: 32458"
Having that much cash in his company is an entirely different thing than his personal accounts. There could be many reasons he's letting the cash sit there for now.[/QUOTE]

Considering he owns 30% of the stock in BH, I am pretty sure it is his personal account.

 

[UNC71-00]

Absolutely. Everything that is publicly available knowledge is priced into equities. The only way you could know what the price of a stock should be better than the market does is if you have more information than the market (i.e. inside info).



Buy/hold/rebalance is alive and well.



Large asset managers are financially motivated to sell the belief that the market is about to skyrocket, or plummet. Every time you move money around they get a piece of it (via transaction fees) - whether you were right or wrong.



I'm assuming you mean the US stock market. I don't know (and almost no one does) whether it's over valued or not. I agree that the current valuations (price/earnings) are on the higher end of the historical spectrum. They could go up or down from here though. Also - you have several more options than just US stock market or cash. You can invest in Developed International markets, emerging markets, US bond markets, international bond markets, real estate, etc. All of these have higher expected returns than cash. You can invest in those if you don't want to invest in the US stock market.

*I'm not advocating moving the money from one market to another constantly, it's best to pick an allocation and stick with it.

I hear you on all of this, but it didn't cost me a penny to reallocate from Vanguard S&P 500 to Vanguard Federal Treasuries

 

[tarheel0910]

Considering he owns 30% of the stock in BH, I am pretty sure it is his personal account.

The stock of BH is different than the cash that BH has on hand.

 

[UNC71-00]

The stock of BH is different than the cash that BH has on hand.

Yes I know this. He is invested in a company that is heavy in cash.

You have been hanging around with Ignored Member a bit too much, me thinks.

 

[tarheel0910]

Yes I know this. He is invested in a company that is heavy in cash.

You do realize how big BH is right? Heavy in cash is relative to the size of the company. Regardless, the man isn't selling off parts of the company to get the cash. Just because he isn't investing all of the money today doesn't mean he's nervous about a market crash.

 

[prlyles]

I hear you on all of this, but it didn't cost me a penny to reallocate from Vanguard S&P 500 to Vanguard Federal Treasuries

If you are investing in index funds (and I think everyone should), there is none better than Vanguard.

 

[UNC71-00]

If you are investing in index funds (and I think everyone should), there is none better than Vanguard.

My entire portfolio up until this morning was index funds. Now it's federal tbills and money market

 

[UNC71-00]

You do realize how big BH is right? Heavy in cash is relative to the size of the company. Regardless, the man isn't selling off parts of the company to get the cash. Just because he isn't investing all of the money today doesn't mean he's nervous about a market crash.

Sure- heavy in cash is relative to the size of the company. Do you know his ratio of cash to equity positions? I do.

No, he isn't selling off companies which are held by BH. But he also is stockpiling cash.

You are right that because he isn't investing cash, he isn't necessarily nervous. But you are wrong in assuming that he's not hedging against a crash as that may be exactly what he is doing.

 

[prlyles]

My entire portfolio up until this morning was index funds. Now it's federal tbills and money market

Why did you decide to cash all at one time?

 

[tarheel0910]

You are right that because he isn't investing cash, he isn't necessarily nervous. But you are wrong in assuming that he's not hedging against a crash as that may be exactly what he is doing.

I guess I should have said I doubt that is what he is doing. Nobody can know for sure what his exact intentions are, but he hasn't said or done anything (at least in my opinion) that indicates he is guarding against some impending market crash.

 

[UNC71-00]

Why did you decide to cash all at one time?

I meant to do it this summer and never got around to it. Then was listening to business radio yesterday and it prompted me to get this done.

My reasoning:

• P/E is very high
• Global economy seems to be getting worse
• Our economy is still stagnant
• Lots of political unrest
• Banks are under capitalized again- Deutsch Bank is in dire straits
• Which leads to bubble caused by all of the quantitative easing has to burst at some point and given everything else going on, seems likely to me to be sooner rather than later.

 

[prlyles]

I meant to do it this summer and never got around to it. Then was listening to business radio yesterday and it prompted me to get this done.

My reasoning:

• P/E is very high
• Global economy seems to be getting worse
• Our economy is still stagnant
• Lots of political unrest
• Banks are under capitalized again- Deutsch Bank is in dire straits
• Which leads to bubble caused by all of the quantitative easing has to burst at some point and given everything else going on, seems likely to me to be sooner rather than later.

I think IF you're going to cash out it is best to dollar cost average it out over a time period. I just don't have the balls to cash out all in one day.

 

[UNC71-00]

I think IF you're going to cash out it is best to dollar cost average it out over a time period. I just don't have the balls to cash out all in one day.

What is the downside? That the market goes on a bull run and you miss it?

 

[prlyles]

What is the downside? That the market goes on a bull run and you miss it?

You are trying to level out the day to day market swings. By selling it all in one day you are risking losing several months or years worth of growth. Same goes for buying into the market, you want to average it out over time. You don't want to buy all the stock on a day that the stock is selling for more than it's worth.