Author Topic: Did we just here a bell?  (Read 6665 times)

longlake95

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Did we just here a bell?
« on: March 13, 2020, 04:24:04 AM »
A friend was in a local TD branch in our town yesterday, apparently people in the line were yelling at tellers to call their ( the people in the line) investment advisors, to get all of their investments sold. Sounds like, the maximum point of pessimism.



Read the Footnotes

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Re: Did we just here a bell?
« Reply #1 on: March 13, 2020, 04:41:19 AM »
That's good data, and I agree that a bell rung say it is now finally time to start buying.

However, I wouldn't be too confident in saying today or yesterday or Monday will be the bottom. The problem is that the assessments of the risks for most people are likely still not completely in line with reality.

Here's one possible progression:

1. On average people have been underestimating the risks for the next four months
2. On average people are probably about to be accurate in their assessments of the risks for the next four months
3. Any day people will start to overestimate the risks for the next four months, followed by relief that things didn't turn out so bad
4. At which point they will start to realize that we probably won't be completely done with SARS 2.0 for fifteen months.

Even if you accept that narrative as fact, I would say it will be hard to anticipate the point at which most people hit those inflection points and what their response will be. Plus there will be a random element thrown in all this.

Uccmal

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Re: Did we just here a bell?
« Reply #2 on: March 13, 2020, 05:32:47 AM »
There is no way we are at the bottom.  The ripple effects of all the cancellations are only starting this week.  Earnings warnings will come next.  Millions of events are being cancelled.  Big money making events. 

I have been buying and have had some “higher”  priced fills, but the bulk of my bids look like this: (just a few examples)
CDN Last Close    my  Bid
Ry.    79                  50
Bam.  65.               53

US:     
Hd.    190.           140
Fb.      154.          110
Goog. 1115.          900
Costco. 280.         230

These bids are for small numbers of shares each and cover 15 or so companies.  When these get filled I will reset new bids lower.  I have them set to March 20.  I am removing as much emotion from the decision process as I can.  Even slow, I was so wound up yesterday that I had trouble sleeping.  But that’s the business I chose.

A little context. I am more than fully invested in great companies, all of which I would buy more.  So, I don’t need to rush this, and really don’t care all that much if I get fills.  I have bids on the best multinationals in the world that I have had as targets  for years. 

Out of context:  Dead bounce bounce today?
GARP tending toward value

stahleyp

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Re: Did we just here a bell?
« Reply #3 on: March 13, 2020, 05:51:20 AM »
has the market ever dropped 25% and not had any bankruptcies?
Paul

chrispy

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Re: Did we just here a bell?
« Reply #4 on: March 13, 2020, 06:06:14 AM »
Besides cancellations we really haven't had 'bad' news. Political leaders becoming ill, retailer or restaurant going under, food and hospitality industry raising hell

Wife's friend was on hold for 3.5 hours trying to cancel their stay in Hawaii. I don't think they are the only ones...
« Last Edit: March 13, 2020, 06:08:03 AM by chrispy »

stahleyp

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Re: Did we just here a bell?
« Reply #5 on: March 13, 2020, 06:45:12 AM »
I'll say that for our personal experience we're cancelling a stay in CA for a wedding (3 flight tickets and 1 hotel for a few nights). I was going to get my wife on a trip for her birthday and that'll be delayed (and make not happen at all).
« Last Edit: March 13, 2020, 11:01:45 AM by stahleyp »
Paul

TwoCitiesCapital

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Re: Did we just here a bell?
« Reply #6 on: March 13, 2020, 06:45:29 AM »
We're still @ like 16x trailing earnings. When has a bear market and a recession EVER ended @ 16x earnings? And those earnings haven't even really been revised down yet.

S&P 2000 and the announcement of the recession will be the time to start buying. Each rally is a selling opportunity until then.

Also, for what it's worth, I also work w/ retail investment clients. For the most part, they're doing as they should and staying the course and some are even adding. The "buy-the-dip" mentality has not been sufficiently punished for this to be the end of the selling.
« Last Edit: March 13, 2020, 06:47:13 AM by TwoCitiesCapital »

longlake95

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Re: Did we just here a bell?
« Reply #7 on: March 13, 2020, 06:50:32 AM »
16X at 0.9% on the 10 yr... that might be cheapish, considering the market for the past 100 years has averaged 16x but with a 6% 10 yr.

hyten1

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Re: Did we just here a bell?
« Reply #8 on: March 13, 2020, 06:54:14 AM »
not saying its the bottom, i have no idea, but remember market bottom before the real economy does

TwoCitiesCapital

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Re: Did we just here a bell?
« Reply #9 on: March 13, 2020, 06:55:33 AM »
16X at 0.9% on the 10 yr... that might be cheapish, considering the market for the past 100 years has averaged 16x but with a 6% 10 yr.

Yes, but I've hammered on and on again about how low interest rates do NOT support high multiples b/c they also imply low growth.

Just like Europe and Japan weren't trading @ 20x earnings even with lower rates. But people were allowed to conveniently ignore that b/c U.S. stocks kept rising and we had to find a way to justify it. Every bubble has a grain of truth - me thinks the "low interest rates = higher equity multiples" will be the main contributor to this one.