Market Megathread: Down Jones and Others in Turmoil↓

[Green Line]

Its way too soon to say that this is anything more than a much needed correction.  There's really no reason to believe we're on the brink of a recession, to the dissapointment of a lot of Democrats it would seem.  The fundamentals of the economy are strong!

[OSR stands with Israel]

I was at over plus 15 percent this year at this point last week now I am at plus 4.8 percent

[DINGO Joe]

I did see some yeegawing about the Transportation sector taking a whooping too and that always creates some technical thing that portends a bigger correction, but I don't know whether that's always true or just one of those old adages. 

[○∙◄☻¥tπ[╪AV┼cVê└]

I shudder to think of the consequences if the October surprise turns out to be a market crash.

Well, the crashes of 1929, 1987, and 2008 were all in October.

[True Federalist (진정한 연방 주의자)]

I did relatively well yesterday, down only a little over 1% as my portfolio is more value-oriented than growth.

[Crumpets]

Dow down nearly 500 currently.

[Person Man]

Dow down nearly 500 currently.

#TrumpSlump

[BBD]

Dow down nearly 500 currently.

The more the merrier. Keep on at it!

[Ebsy]

Prayers for jaichind's brokerage accounts.

[Person Man]

Prayers for jaichind's brokerage accounts.

[DINGO Joe]

I'd jump out my window, but I'm at home and on the first floor.

[GeorgiaModerate]

I'd jump out my window, but I'm at home and on the first floor.

Well, that would give you the 'soft landing' that the Fed keeps shooting for.

[Tintrlvr]

Blech. S&P is net negative YTD now again. Really I don't quite understand why the market is so jittery this year, but I suppose it's creating room for the market to catch back up to the economy next year given that the economy is still going strong. No one is talking about a valuation bubble anymore...

[jaichind]

Prayers for jaichind's brokerage accounts.

Thanks for your concern.  Yes, there were losses but I will manage.  This is nothing when compared to the June-Sept 2011 and June-Sept 2015 correction let alone the mega June-Nov 2008 correction.  If anything the impact of this correction is about the same as the Fen-March 2018 correction.  All things equal I welcome this correct as it is driven by the market belief that the Fed fund rates will continue to rise in 2019 which I very much support.  I made a lot of fixed income bets a few years back which pretty much said "No recession until early 2020 at the earliest" which worked out but leaves me with a lot of reinvestment risk for the fixed income part of my portfolio as I start to rotate into less risky fixed income assets in 2019.  Rising interest rates in 2018 and 2019 is music to my years. 

[emailking]

Rising interest rates in 2018 and 2019 is music to my years. 

And to those of us who don't buy stocks. (high yield savings accounts)

[jaichind]

Rising interest rates in 2018 and 2019 is music to my years. 

And to those of us who don't buy stocks. (high yield savings accounts)

Which is actually correlated by age.  People in the 40s and 50s and for sure in retirement rotate their assets to be more fixed income intensive.  The financial repression of 2008-2015 was crushing on those which are fixed income based.  Now finally we are entering normalization.  If that means a market correction then so be it. 

[pbrower2a]

Beware stagflation, when everyone loses!

[jaichind]

Another winner if this correction becomes longer lasting and significant would be hedge fund managers.  The post 2009 period has been a disaster for hedge fund managers, especially the last few years.  A simple 60/40 portfolio would have beaten most hedge funds in terms of return last few years.  Only the June-Sept 2015 correction seems to generate more risk-adjusted return of hedge investments versus the passive amateurish 60/40 portfolio.   The end of cheap money might actually breath life back into the hedge fund industry by giving them a chance to earn higher  risk-adjusted returns than the generic passive portfolio.   Does not matter that much for me as I rotate more and more into fixed income land where the end of cheap money cannot end soon enough.

[jaichind]

Beware stagflation, when everyone loses!

All the more reason to raise fed fund rates aggressively to head off inflation.  Not what Trump wants but as much as I back Trump our interests here are not aligned. 

[Torie]

Another winner if this correction becomes longer lasting and significant would be hedge fund managers.  The post 2009 period has been a disaster for hedge fund managers, especially the last few years.  A simple 60/40 portfolio would have beaten most hedge funds in terms of return last few years.  Only the June-Sept 2015 correction seems to generate more risk-adjusted return of hedge investments versus the passive amateurish 60/40 portfolio.   The end of cheap money might actually breath life back into the hedge fund industry by giving them a chance to earn higher  risk-adjusted returns than the generic passive portfolio.   Does not matter that much for me as I rotate more and more into fixed income land where the end of cheap money cannot end soon enough.

You might find this slide show prepared by Gus Sauter at the Bogleheads conference a couple of weeks ago of interest. He basically documented that the bloom is off the alternative investment rose. Of particular interest is that there is now over a trillion dollars of "dry powder" in private equity funds, looking for an investment home, suggested that the future for private equity funds in particular will be rather grim as too much money chases too few good investment opportunities. The least oversaturated area in the world of alternative investments ((i.e. not stocks, bonds or the money market) is infrastructure investments, as spendthrift municipalities sell off their key assets like airports to raise cash to bail themselves out of unsustainable debt loads. Even some public highways are being sold off and converted into toll roads.

And thus the guru who runs the Yale University endowment fund, who became the alternative investment superstar when the Yale Endowment fund that he runs beat the market by a very substantial margin prior to the music stopping now says this:



I have been more or less doing that my entire investing life. These days I don't even look at my portfolio for months on end.

[jaichind]

Another winner if this correction becomes longer lasting and significant would be hedge fund managers.  The post 2009 period has been a disaster for hedge fund managers, especially the last few years.  A simple 60/40 portfolio would have beaten most hedge funds in terms of return last few years.  Only the June-Sept 2015 correction seems to generate more risk-adjusted return of hedge investments versus the passive amateurish 60/40 portfolio.   The end of cheap money might actually breath life back into the hedge fund industry by giving them a chance to earn higher  risk-adjusted returns than the generic passive portfolio.   Does not matter that much for me as I rotate more and more into fixed income land where the end of cheap money cannot end soon enough.

You might find this slide show prepared by Gus Sauter at the Bogleheads conference a couple of weeks ago of interest. He basically documented that the bloom is off the alternative investment rose. Of particular interest is that there is now over a trillion dollars of "dry powder" in private equity funds, looking for an investment home, suggested that the future for private equity funds in particular will be rather grim as too much money chases too few good investment opportunities. The least oversaturated area in the world of alternative investments ((i.e. not stocks, bonds or the money market) is infrastructure investments, as spendthrift municipalities sell off their key assets like airports to raise cash to bail themselves out of unsustainable debt loads. Even some public highways are being sold off and converted into toll roads.

And thus the guru who runs the Yale University endowment fund, who became the alternative investment superstar when the Yale Endowment fund that he runs beat the market by a very substantial margin prior to the music stopping now says this:



I have been more or less doing that my entire investing life. These days I don't even look at my portfolio for months on end.

Yeah. I learned that the hard way.  When I got out into the real world in the mid 1990s I started with pretty high income right away so ended bunch of money to play with.  The impetuousness of youth in me tried to beat the market with some astounding great as well as disastrous results.  It all added up in a wash after the 2000-2002 market correction.  I pretty much missed out on the bull market in the late 1990s in the part of my portfolio that I actively managed.  I then noticed that my passive dollar cost average part of my portfolio did much better.  So after 2002 I mostly went into a passive dollar cost average investing mode with heavy use of ETFs.  But my arrogance of the 1995-2002 period meant I lost out on a boatload of money.   What I noticed is that "smarter" and "financially savvy" segment of my friends pretty much made the same mistake and made the same correction as I did.

[Person Man]

Another winner if this correction becomes longer lasting and significant would be hedge fund managers.  The post 2009 period has been a disaster for hedge fund managers, especially the last few years.  A simple 60/40 portfolio would have beaten most hedge funds in terms of return last few years.  Only the June-Sept 2015 correction seems to generate more risk-adjusted return of hedge investments versus the passive amateurish 60/40 portfolio.   The end of cheap money might actually breath life back into the hedge fund industry by giving them a chance to earn higher  risk-adjusted returns than the generic passive portfolio.   Does not matter that much for me as I rotate more and more into fixed income land where the end of cheap money cannot end soon enough.

You might find this slide show prepared by Gus Sauter at the Bogleheads conference a couple of weeks ago of interest. He basically documented that the bloom is off the alternative investment rose. Of particular interest is that there is now over a trillion dollars of "dry powder" in private equity funds, looking for an investment home, suggested that the future for private equity funds in particular will be rather grim as too much money chases too few good investment opportunities. The least oversaturated area in the world of alternative investments ((i.e. not stocks, bonds or the money market) is infrastructure investments, as spendthrift municipalities sell off their key assets like airports to raise cash to bail themselves out of unsustainable debt loads. Even some public highways are being sold off and converted into toll roads.

And thus the guru who runs the Yale University endowment fund, who became the alternative investment superstar when the Yale Endowment fund that he runs beat the market by a very substantial margin prior to the music stopping now says this:



I have been more or less doing that my entire investing life. These days I don't even look at my portfolio for months on end.

I just tell them to put my money in the most aggressive instrument they have at Wells Fargo and hope it eventually makes money. My assets are still very modest, so I see it as a potential loss of a few grand or the potential to "earn" tens of thousands of dollars above and beyond what I am saving and perhaps hundreds of thousands in the long run.

[Torie]

Another winner if this correction becomes longer lasting and significant would be hedge fund managers.  The post 2009 period has been a disaster for hedge fund managers, especially the last few years.  A simple 60/40 portfolio would have beaten most hedge funds in terms of return last few years.  Only the June-Sept 2015 correction seems to generate more risk-adjusted return of hedge investments versus the passive amateurish 60/40 portfolio.   The end of cheap money might actually breath life back into the hedge fund industry by giving them a chance to earn higher  risk-adjusted returns than the generic passive portfolio.   Does not matter that much for me as I rotate more and more into fixed income land where the end of cheap money cannot end soon enough.

You might find this slide show prepared by Gus Sauter at the Bogleheads conference a couple of weeks ago of interest. He basically documented that the bloom is off the alternative investment rose. Of particular interest is that there is now over a trillion dollars of "dry powder" in private equity funds, looking for an investment home, suggested that the future for private equity funds in particular will be rather grim as too much money chases too few good investment opportunities. The least oversaturated area in the world of alternative investments ((i.e. not stocks, bonds or the money market) is infrastructure investments, as spendthrift municipalities sell off their key assets like airports to raise cash to bail themselves out of unsustainable debt loads. Even some public highways are being sold off and converted into toll roads.

And thus the guru who runs the Yale University endowment fund, who became the alternative investment superstar when the Yale Endowment fund that he runs beat the market by a very substantial margin prior to the music stopping now says this:



I have been more or less doing that my entire investing life. These days I don't even look at my portfolio for months on end.

I just tell them to put my money in the most aggressive instrument they have at Wells Fargo and hope it eventually makes money. My assets are still very modest, so I see it as a potential loss of a few grand or the potential to "earn" tens of thousands of dollars above and beyond what I am saving and perhaps hundreds of thousands in the long run.

Do you happen to know what that "instrument" is? I assume it is not lottery tickets.

[True Federalist (진정한 연방 주의자)]

I just tell them to put my money in the most aggressive instrument they have at Wells Fargo and hope it eventually makes money. My assets are still very modest, so I see it as a potential loss of a few grand or the potential to "earn" tens of thousands of dollars above and beyond what I am saving and perhaps hundreds of thousands in the long run.

If you use Wells Fargo you definitely need hope. Their fees aren't exactly the lowest around.

[DINGO Joe]

I just tell them to put my money in the most aggressive instrument they have at Wells Fargo and hope it eventually makes money. My assets are still very modest, so I see it as a potential loss of a few grand or the potential to "earn" tens of thousands of dollars above and beyond what I am saving and perhaps hundreds of thousands in the long run.

If you use Wells Fargo you definitely need hope. Their fees aren't exactly the lowest around.

There may actually be a class action lawsuit he's eligible to join.