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I've probably become biased but it feels like the last ~6 years has been accompanied by a substantial (or vocally substantial) contingent of people predicting a market crash "any time now". I guess you can find that contingent of people at any point in history, but I'm also jaded and feel it's more abundant this time because it's further fueled by a secret wish fostered by some folks for an armageddon to occur on obama's watch so as to prove them right about...something. The bailouts, Europe's varied economic calamities, inflation, obamacare, all of the above... I think there is a bit more of a rift between economic factors like the point in an above post that there are large pools of cash looking for entry that will make it harder for the market to drop and stay down, versus "real life" economic factors like the fact that I know a lot of educated, competent people who had better, more stable employment 10 years ago. I know that's anecdotal but feels like a common theme as a lot of our unemployment stats are papered over with short term or part time work moreso than in the past. I guess that's what the R vs. G thing was all about in that Capital book that came out a couple years back. Anyway, I'm still a newbie at all this but it seems to me that market wise we would have to see a pretty big shock to have a crash in the next decade or so. Trump getting in, while it's far (but not far enough) into the margins of likelyhood, wouldn't even be enough IMO if he actually got elected. The market would feel it for sure but I don't think it would be much in the long run. I assume he wants the job for the vanity and access to backroom deals for personal gain, which would still be anomalously bad, but honestly this country is used to it so the system can probably weather another leader like that---so long as he doesn't try to make good on all the rhetoric. Maybe the water shortage out west, if it became acutely worse, and of course I'd rather not think of the scenario where Ogallala starts to accelerate its depletion. Maybe if some large financial sector collapsed like a bad soufflé. If Mt Rainer popped, or mountains of ice slid off the antarctic shelf. I just don't see the market coming down the way it has been going without something big to precipitate it. I don't know though, things can get weird when you have giant financial institutions holding and trading piles and piles of highly leveraged assets. Bhaal fucked around with this message at 00:20 on Sep 13, 2016 |
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Sep 13, 2016 00:08
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First of all, there is a difference between a "crash" and a bear market. I don't expect a cataclysmic event like in 2008. I expect a gradual flattening and eventual decline of the stock market as rates rise. There is too much money out there right now and nowhere to put it. The market needs to rebalance. All this talk about Trump, global warming, volcanoes and other potential derails are all CNBC fodder. Interest rates are the deciding factor here. Until rates are normalized, the market is going to have a hard time making any sustained downward motions.
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Sep 13, 2016 00:48
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Dwight Eisenhower posted:Funny that you mention these two things in the same breath; most people are pouring money into index funds and are not gambling on individual stocks, but the money dumped into those index funds ends up propping up individual stock prices. With a constant inflow of demand as people buy up index funds and contribute to their retirement accounts which are significantly invested in index funds, there's a consistent demand pressure that ramps up indiscriminately across all constituents of an index. If you have indiscriminate demand across the market that is continually reinforced with additional capital what would happen? I think you're getting at something interesting, individual stock prices are definitely being propped up by index investing. What i'm curious to see tested is that in just about every bear market you can study, one constant is that people pull money out of stocks on the way down and either move to more conservative asset classes or sit in cash. Now that a much higher percentage of equity risk assets are in indices rather than individual stocks will people keep doing this? I strongly suspect the answer is yes and that people won't all of a sudden act less emotional because their 401(k) is nosediving in an index rather than nosediving in some stocks. Now, if we take that as a given and combine it with the fact that more and more people own the index than individual names, would it not follow that in a bear market as outflows hit index funds, some of the smaller cap, boring names in, say consumer staples or industrials, things that generally have a beta near one and don't normally attract much retail attention or investment, will all of a sudden become much more volatile and decline way more than would be expected? I'd really like to go through and try and identify which S&P 500 names have the highest concentrations of their float held by index funds because I suspect when things start to hit the fan this is going to happen and you could craft a really efficient market hedge for relatively cheap
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Sep 13, 2016 01:12
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R.A. Dickey posted:Now, if we take that as a given and combine it with the fact that more and more people own the index than individual names, would it not follow that in a bear market as outflows hit index funds, some of the smaller cap, boring names in, say consumer staples or industrials, things that generally have a beta near one and don't normally attract much retail attention or investment, will all of a sudden become much more volatile and decline way more than would be expected?
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Sep 13, 2016 01:16
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Josh Lyman posted:No, the exact opposite would occur. The boring names with beta~=1 would decline along with the market as a whole since they are primarily owned by index funds relative to individual investors. No sorry, maybe I wasn't clear. Take PerkinElmer (PKI), they are a "provider of products, services and solutions to the diagnostics, research, environmental and laboratory markets" and I don't know a single thing about them beyond that and the fact that PKI has a beta of .99. Now, say 20 years ago a company like this would be held predominantly by institutions, some targeted mutual/hedge funds, and a handful of insiders. Today, a company like this is held by the same group plus a huge chunk of retail investors via the Vanguard equity index fund or whatever. In a bear market while it used to move with the market, in this scenario it would see selling pressure that it previously wouldn't have as retail investors bail out en masse. Would it not?
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Sep 13, 2016 01:28
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Fidelity has a nice tool that exhibits something like it. This is for PG: From the explaination: quote:The Ownership Summary indicates the percentage breakdown of a company's equity ownership by investor type, and is derived from multiple sources. Institutional ownership data is derived from filings of Form 13F, which investment managers must file quarterly if they manage at least $100,000,000 in equities. Institutional Mutual Funds are those funds that are connected with or a part of another 13F filer. Other Funds are those mutual funds that are not associated with a 13F filer. Mutual fund information is derived from forms NQ (quarterly) and NCSRs (annually). In addition, where possible, holdings information is obtained directly from mutual funds on a more frequent basis. Insider Ownership data, which reflects changes in ownership by directors, officers, and principal stakeholders, comes from filings of Forms 3 and 4. A Form 3 filing is an initial statement of ownership, whereas a Form 4 must be filed within two business days following a change in ownership by officers, directors and beneficial owners of a given company. Cheesemaster200 fucked around with this message at 01:32 on Sep 13, 2016 |
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Sep 13, 2016 01:29
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It is funny, if you look at any big name S&P 500 stock, there is usually 40-50% ownership in the "other" category, representing shares not owned by funds reporting a 13F or otherwise. Presumably this represents the portion of shares owned by independent investors. However when you look at most mid-cap stocks, that percentage drops precipitously. Small caps are mixed, but most have one category that has proportionally excessive ownership (mutual fund, institutional investor, other). It is funny though, CSIQ's ownership is dominated by a 5th category: idiots.
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Sep 13, 2016 01:41
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R.A. Dickey posted:I think you're getting at something interesting, individual stock prices are definitely being propped up by index investing. What i'm curious to see tested is that in just about every bear market you can study, one constant is that people pull money out of stocks on the way down and either move to more conservative asset classes or sit in cash. Now that a much higher percentage of equity risk assets are in indices rather than individual stocks will people keep doing this? I strongly suspect the answer is yes and that people won't all of a sudden act less emotional because their 401(k) is nosediving in an index rather than nosediving in some stocks. Now, if we take that as a given and combine it with the fact that more and more people own the index than individual names, would it not follow that in a bear market as outflows hit index funds, some of the smaller cap, boring names in, say consumer staples or industrials, things that generally have a beta near one and don't normally attract much retail attention or investment, will all of a sudden become much more volatile and decline way more than would be expected? There's been a huge chase for yield recently, and I'd expect any crash to hit those first. People were piling into REITs and the Vanguard REIT Index fund is sitting at 36.5x P/E.
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Sep 13, 2016 01:48
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ohgodwhat posted:Why is it different from the lottery? Because we can pick some higher probabilities and control the amount of gains and losses?
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Sep 13, 2016 04:33
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If you look at p/e when evaluating REITs, you need to read a book or two and keep your money in index funds in the meantime.
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Sep 13, 2016 04:37
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I think it's an interesting hedge concept but it's going to be really speculative. The only real bear we've had in the timeframe of indexing being popular was following the 2008 crash. The only piece of data to try and get at index ownership is going to be indirect from legal entity ownership. Might be the kind of thing that a team of researchers in full time employment could divine out, but I doubt a bunch of hobbyists on SA are going to.
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Sep 13, 2016 14:29
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Bhaal posted:I've probably become biased but it feels like the last ~6 years has been accompanied by a substantial (or vocally substantial) contingent of people predicting a market crash "any time now". Many non US markets are now only getting back to the level they were in 2007 or even 2001. I honestly think all the doom and gloom that people were predicting 20+ years from now is going to happen in the near future. Maybe even starting today.
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Sep 13, 2016 15:32
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greasyhands posted:If you look at p/e when evaluating REITs, you need to read a book or two and keep your money in index funds in the meantime. P/FFO is also pretty high historically. Good luck easily finding that on M* though. You can find yield information easily enough, which is lower just because of share price appreciation.
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Sep 13, 2016 15:35
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Dwight Eisenhower posted:I think it's an interesting hedge concept but it's going to be really speculative. The only real bear we've had in the timeframe of indexing being popular was following the 2008 crash. Those are all fair points. I don't think it would take as long as you do to figure out but it's probably more in the realm of interesting idea than executable trade. The whole concept reminds me of the 1987 portfolio insurance crash.
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Sep 13, 2016 17:48
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Market down, AAPL up? How is this possible?! How is everyone doing? Down days quiet these threads down, but surely someone was short today?
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Sep 13, 2016 18:20
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I'm losing less then most and I am happy I cashed out some of my positions when I did. How are you?
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Sep 13, 2016 18:24
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I mean the most obvious implication of everyone just owning index funds is a decrease in liquidity for any given individual security right? Does that mean they eventually become overly deflationary investments? Or does the stock market just become this massive population demographics stats graph where any time a wave flows through the market drops by 50% as all those retirees demand their index fund money back, only to surge back up when the next wave of babies/immigrants produces enough to drive it back up? What the gently caress even is the stock market in that situation, just a slow predictable social security contract? Why even have individual companies any more, just to reward some level of entrepreneurial activity through equity acquisition into the S&P500 index fund borg nightmare? Goddamn I've been sober too long.
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Sep 13, 2016 18:25
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I'm just hunkered down right now, staying long in the various things I posted in here. I'm off about 8% from my peak this year, mostly due to getting really reamed in solar. Don't see any meaningful crash or decline in equities, if anything there is going to be a bond scare and some more money will inevitably pour into equities. The 'stocks have never been this overvalued' crowd is really off base. There is a lot of money out there chasing return, and that isn't going to change any time soon. edit: oh and interest rates arent going up any more than .5% or so. There will be another couple of quarter point rate hikes and the accompanying screaming and yelling, then equities will continue marching up greasyhands fucked around with this message at 18:33 on Sep 13, 2016 |
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Sep 13, 2016 18:27
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I sold AAPL the morning of the iPhone event It's now higher I am bad at trading
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Sep 13, 2016 18:28
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Agronox posted:Market down, AAPL up? How is this possible?! Shorting VIX, probably.
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Sep 13, 2016 18:28
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Waiting for XIV to drop below 30 so I can buy.
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Sep 13, 2016 18:29
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I covered some spy bear spreads but I'm just sitting on nothing. I had some strangle things going in FCX a few months ago, maybe that'll pick up again.
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Sep 13, 2016 18:32
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Wage gains came in high; which is subsequently pushing yields past psychological resistance levels. Might get a bit of a sustained correction here.
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Sep 13, 2016 18:40
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I wrote two put spreads open on DIA and SPY that are making me nailbite but aren't ITM yet. Hoping they expire worthless Friday. My naked FSLR put is in the money and I probably won't just be touching the poop, I'll be taking a bite. But 37.5 was a comfortable entry and it still is. All my other positions are boring and not doing much. I think there's some substantial WF fallout that could happen, but I'm cautiously optimistic we won't know until after Friday
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Sep 13, 2016 18:42
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I quit paying attention to FCX a while ago, but I see they just sold their deep water oil stuff to Anadarko for $2bil. If memory serves me correctly they paid like $18B for it. Now theres a return on investment
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Sep 13, 2016 18:43
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MCZ is up today you cocks
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Sep 13, 2016 18:49
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Bought some more Tin
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Sep 13, 2016 18:53
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Cheesemaster200 posted:Wage gains came in high; which is subsequently pushing yields past psychological resistance levels. Why do you interpret it that way? Do you have some kind of market psychic connection that allows you to determine 'psychological resistance levels'? Wage growth is coming at the low end due to a lot of minimum wage hikes across the country and that is money that will cycle straight back into the economy. Wage growth is great news at this stage- its been needed for a long time and its in a low inflation environment and happening in a way that is very favorable for the US long term.
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Sep 13, 2016 18:54
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quote:How is everyone doing? Down days quiet these threads down, but surely someone was short today? I'm down hundreds here and hundreds there on solar (CSIQ) and random lol stuff like Tesla puts (:fistshake:). But I've done OK on normal investments (indexes and VIG) and am up real money on serious trades: Canadian bank preferred stocks. I honestly can't figure out why they go up and down as much as they do, but they just keep doing it. And, even when they stay low for a while, I'm happy to hold them (as the yields are pretty good for the current market/this risk level).
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Sep 13, 2016 18:54
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greasyhands posted:Why do you interpret it that way? Do you have some kind of market psychic connection that allows you to determine 'psychological resistance levels'? Wage growth is coming at the low end due to a lot of minimum wage hikes across the country and that is money that will cycle straight back into the economy. Wage growth is great news at this stage- its been needed for a long time and its in a low inflation environment and happening in a way that is very favorable for the US long term. I watch bond yields and the 5-year has been bumping up to 1.25% for the last couple of weeks now? Not a proponent of technical analysis by any means, but I do give credit to the laws of round numbers and their effect on limit orders.
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Sep 13, 2016 18:57
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Got into AMD at 2 and sold at 6.75. Put that into SDS yesterday. Blind luck I call it because I'm a gambler
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Sep 13, 2016 18:59
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I want off Canadian Solar's wild ride.
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Sep 13, 2016 19:30
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Lysandus posted:I want off Canadian Solar's wild ride. Feeling... seasick?
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Sep 13, 2016 19:33
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Agronox posted:Feeling... seasick? 
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Sep 13, 2016 19:55
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greasyhands posted:. Don't see any meaningful crash or decline in equities, if anything there is going to be a bond scare and some more money will inevitably pour into equities. The 'stocks have never been this overvalued' crowd is really off base. There is a lot of money out there chasing return, and that isn't going to change any time soon. Been saying this for a while. Prime brokerage business was non existent the first half of this year and funds flows are still barely coming back in. Historical P/E noobs are just as bad as interest rates must rise noobs (because history).
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Sep 13, 2016 20:02
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Agronox posted:Feeling... seasick? Stealing my material  flowinprose posted:This thread is making me sea sick
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Sep 13, 2016 20:30
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Agronox posted:Feeling... seasick? 
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Sep 13, 2016 22:37
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greasyhands posted:I'm just hunkered down right now, staying long in the various things I posted in here. I'm off about 8% from my peak this year, mostly due to getting really reamed in solar. Don't see any meaningful crash or decline in equities, if anything there is going to be a bond scare and some more money will inevitably pour into equities. The 'stocks have never been this overvalued' crowd is really off base. There is a lot of money out there chasing return, and that isn't going to change any time soon. Why would you get spooked from bonds and go to stocks versus sitting in cash?
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Sep 13, 2016 23:59
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Christobevii3 posted:Why would you get spooked from bonds and go to stocks versus sitting in cash? I'm not really making an 'it happened like that in the past, so its going to continue happening like that' argument, but I dont know why you *wouldn't* expect that to happen. http://www.barrons.com/articles/goldman-how-do-stocks-act-when-rates-rise-1438794968
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Sep 14, 2016 00:08
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Lysandus posted:I want off Canadian Solar's wild ride. 
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Sep 14, 2016 02:02
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