Rod's Account Talk

[Rod]

I must admit, I did not expect this much of a post-election rally. But, I know I'm not the only one surprised by the action over the past couple of months. Since the election, there has been only a handful of days when we've had a selloff. A few days at best, really. I don't like it when Mr. Market ignores "events" going on around it. And that's all I will say as far as "events" are concerned. From my experience, however, this usually signals a major shift in the market that is about to occur. I don't know what the catalyst will be, or when it will occur. But, I believe it is coming sooner rather than later.

As a day/swing trader who is usually flat by the end of the day, this doesn't really concern my investments. It is more of a concern for folks like yourself who manage a TSP with extremely limited trading options. Some of you will likely get caught up in this correction (or crash) when it finally does commence. But, let the past be a reminder of how quickly Mr. Market rebounds and recovers from such an event. Don't be so quick to sell at a loss, unless, of course, it is part of your risk management. Just don't do it on a whim... on a knee jerk reaction. Have a plan now for when this eventual correction/crash occurs. Good luck with your investments!

God Bless :smile:

 

[jonfresno]

Well, so much for that... for now. But, those RSI's are get'n up there. Any day now...

Lord know I don't ask for much.. If you could please just let me know which day, preferably at least one day in advance..

 

[James48843]

I got news for you, Rod. I’m think UP, not down.

The market isn’t going down any time soon. In fact, I think it’s going to melt UP for at least the next six months, as:

1. The new President gets settled in.

2. Congress passes, very quickly, a new round of stimulus cash to individuals. I see that happening by the end of February, as soon as they figure out what to put in the package. It may take until March if they have to tie other things into it, but no later than March. Likely February.

3. A new bridges/roads/infrastructure bill will be big, and early. I’m thinking by March or April. That will put lots of money into states!

4. The $15 minimum wage bill will pass. That’s a Spring/summer project, although I don’t know the timing on the increase. It may be a five-year bill to get us there- but it is coming. That will lead to optimism, it will lead to some inflation,too. But the market will take it all in stride, because any hiccups from a minimum wage increase won’t come until months AFTER the wages go up.

5. The Fed will leave interest rates alone until at LEAST the fall, maybe longer.

6. The vaccines will start lowering Covid numbers by mid-summer. Between now and then it’s going to be bad- but by the fall, October-November will be below 2020 November Covid numbers, IF enough people get vaccinated.

We just need to survive until then. Which IS going to be hard.

I could be wrong. But I think I’m right.

Let’s keep our fingers crossed. And stocks climbing.



Sent from my iPhone using TSP Talk Forums

 

[Boghie]

Well, something has to give.

I'm going to try avoiding political biases and knee jerk reactions. I lost too much in gains by equating market = politics during an earlier Presidency. I shall trust, but verify. The market has boomed. Tremendously. Even without politics or potential unrest or potential tax code changes the market seems frothy. Is it 2006 frothy, I don't think it is quite that stupid, but. So, just watch. And, accept normal market corrections - corrections like a -7% to -10% adjustment.

Regardless, my current holdings and my expected contributions can support a nice retirement at age 65 with a 5.5% average annual return. My current allocation has an expected return of 8% - with an expected risk of 8%. In a 2008 style collapse my max drawdown in this allocation would have been -32%. That would be ugly, why would I accept it. That drawdown took seven months - from September 2007 to March 2008. We at TSPTalk will not likely sleep our way through that, so an allocation like 30/30/17/13/10 would limit the max drawdown to -20%. And, then there is the full panic allocation of 100/0/0/0 which has no drawdown. I think I can limit a potential flop to 10% or so by watching folks here and paying attention to the trends.

 

[Boghie]

I got news for you, Rod. I’m think UP, not down.

The market isn’t going down any time soon. In fact, I think it’s going to melt UP for at least the next six months, as:

1. The new President gets settled in.

2. Congress passes, very quickly, a new round of stimulus cash to individuals. I see that happening by the end of February, as soon as they figure out what to put in the package. It may take until March if they have to tie other things into it, but no later than March. Likely February.

3. A new bridges/roads/infrastructure bill will be big, and early. I’m thinking by March or April. That will put lots of money into states!

4. The $15 minimum wage bill will pass. That’s a Spring/summer project, although I don’t know the timing on the increase. It may be a five-year bill to get us there- but it is coming. That will lead to optimism, it will lead to some inflation,too. But the market will take it all in stride, because any hiccups from a minimum wage increase won’t come until months AFTER the wages go up.

5. The Fed will leave interest rates alone until at LEAST the fall, maybe longer.

6. The vaccines will start lowering Covid numbers by mid-summer. Between now and then it’s going to be bad- but by the fall, October-November will be below 2020 November Covid numbers, IF enough people get vaccinated.

We just need to survive until then. Which IS going to be hard.

I could be wrong. But I think I’m right.

Let’s keep our fingers crossed. And stocks climbing.

Unless President Biden waves the Social Security clawback folks are going to take a massive hit in their take home income starting this month...

If he, and Congress, want to spend on Bread and Circuses they will need that casholla!!! Can he continue to sell Social Security as the greatest retirement package in history if he doesn't fund it? It will look kinda optional at that point, wouldn't it. The GenXers and Millenials will really jump on that band wagon. They know Social Security is not fully funded with anything but a promise. However, they don't understand that it will remain funded at about 75% even if the politicians welch on their promises - they think it will go to 0. It might be a hard sell, eh. BTW, those tax changes are going to be difficult to sell as well - how many of you want to give a tax break to someone with State and Local taxes exceeding $10K? Maybe some, not me. I don't live in a high tax state and I know Bread and Circuses require mullah so I can guess where it will come from.

Any of you figure out what your net income will be in a couple of pay period2? Ooo, that first clawback will be a shocker!!!

This is going to be fun to watch.

GLHF

:smile:

 

[Bullitt]

I love how bright and rosy the future is when markets are going up. No consideration to any tail risks.

What happens when this administration decides to subsidize bankrupt states of NY, CA, IL with federal taxpayer money? There goes that big spending bill.

What happens if Biden dies or has to step down?

A new round of stimulus being passed is all but certain. Not all dems are on board with it.

What if more of these massive IPO's end up as sham companies? What about the massively high P/E's for some tech companies when offices open again?

 

[Boghie]

Uh, the Federal Gubmint just ran a $3.132 Trillion deficit for FY2020.

Is this good???

And, Social Security was expected to be in surplus by a measly $10 Billion in 2020 - thus, it can no long fund a politician's Bread and Circuses.

I'm guessing the 'design margin' - otherwise known as a slush fund - has vanished.

The grinding you will hear is gubmint falling apart.

It will be dog eat dog.

A static pie.

Bye

 

[Rod]

Of all the times I've cried, "wolf", a correction (and even crash) showed up shortly the majority of those times. I am now crying wolf again. Now, you might instead "cry foul." But, I would not want my TSP exposed to Mr. Market between now and 20 Jan, and perhaps even the remainder of January. The risks outweigh the rewards. At any rate, I wish you the best with your investments!

God Bless :smile:

 

[grimmjsg123]

When was your last post precrash in the prior postings?

 

[Rod]

When was your last post precrash in the prior postings?

I began sounding the alarm in Dec 2019. Post #957:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-80.html

I then began to sound the alarm on COVID on 27 Jan 2020. Post #970:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-81.html

Post #975 on 28 Jan 2020:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-82.html

Post #992 on 1 Feb 2020:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-83.html

Post #1014 on 12 Feb 2020:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-85.html

Post #1020 on 20 Feb 2020... when I mentioned a crash on the horizon, essentially agreeing with the news article:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-85.html

Post #1022 on 20 Feb 2020:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-86.html

Post #1040 on 23 Feb 2020:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-87.html

Just to name a few. You can see all of my warnings leading up to the crash. Just go through the pages.

 

[wavecoder]

Uh, the Federal Gubmint just ran a $3.132 Trillion deficit for FY2020.

Is this good???

And, Social Security was expected to be in surplus by a measly $10 Billion in 2020 - thus, it can no long fund a politician's Bread and Circuses.

I'm guessing the 'design margin' - otherwise known as a slush fund - has vanished.

The grinding you will hear is gubmint falling apart.

It will be dog eat dog.

A static pie.

Bye

Yep. There's a reason why people my age aren't counting on ever collecting Social Security. It probably won't be there when it's my turn

 

[rangerray]

I think the second part of Rod's post has a lot of merit: be on your toes and have a plan to make a safe exit when the market turns. And...it will turn eventually. Sooner or later is anybody's guess.

 

[Boghie]

I'm going to keep my powder dry and attempt to keep politics (and my emotions) out of my financial planning. I could have retired now had I just stuck to a 60/40 (equities/bonds) split from 2010 through 2016. I let my emotions and my politics roll through my decisions.

On the other hand, the market does seem a bit frothy - disregarding emotions and politics. It feels like a correction is necessary - regardless of who is in office. It doesn't seem as frothy as 2006, but why simply accept a 20% loss like some dumb drone.

I guess I am going to have to allow for my normal fluctuation model to tell me what to do. If it dumps 7% than I move more conservative, if it gains 7% I might move more aggressive. I am in a 60/40 split so I will see a tempered gain or a tempered loss. I should have time to adjust, I don't need to make the call now.

 

[Rod]

Of all the times I've cried, "wolf", a correction (and even crash) showed up shortly the majority of those times. I am now crying wolf again. Now, you might instead "cry foul." But, I would not want my TSP exposed to Mr. Market between now and 20 Jan, and perhaps even the remainder of January. The risks outweigh the rewards. At any rate, I wish you the best with your investments!

God Bless :smile:

As inferred, my "spidey senses" are off at times. But, the last time they were spot on was the last time I sounded the alarm. That was on 26 Aug 2020, post #1820:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-152.html

A pullback (and correction in the Naz) then commenced within 6 trading days on 3-8 Sep. In 3 trading days, the Dow lost 5.59%. The S&P lost 7.10%. The Naz lost 10.34%.

God Bless :smile:

 

[Rod]

Posted last Friday on 8 Jan:

Since the election, there has been only a handful of days when we've had a selloff. A few days at best, really. I don't like it when Mr. Market ignores "events" going on around it. And that's all I will say as far as "events" are concerned. From my experience, however, this usually signals a major shift in the market that is about to occur. I don't know what the catalyst will be, or when it will occur. But, I believe it is coming sooner rather than later.

Posted on Monday, 11 Jan:

Of all the times I've cried, "wolf", a correction (and even crash) showed up shortly the majority of those times. I am now crying wolf again. Now, you might instead "cry foul." But, I would not want my TSP exposed to Mr. Market between now and 20 Jan, and perhaps even the remainder of January. The risks outweigh the rewards. At any rate, I wish you the best with your investments!

When I made the above posts (especially on 8 Jan) we were essentially in the midst of a 4-week winning streak. Every week since 14-18 Dec through 8 Jan was a winning week for the indices except for the S&P during 21-24 Dec when it finished down @ 0.17%.

We end this week with the highest weekly loss since 26-30 Oct. Of course, more pain is needed for Mr. Market to fully digest this post-election rally. Therefore, I expect more pain. We shall see how this plays out. Good luck with your investments!

God Bless :smile:

 

[Rod]

Although Mr. Market had its worst week (11-15 Jan) in 3 months the same week I sounded the alarm on 11 Jan, it took 11 trading days for the selling to truly commence. Digestion of this post-election rally is what the doctor ordered, and will make Mr. Market more healthy in the long term. In the meantime, tread lightly.

God Bless :smile:


Posted on 13 Jan:

As inferred, my "spidey senses" are off at times. But, the last time they were spot on was the last time I sounded the alarm. That was on 26 Aug 2020, post #1820:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-152.html

A pullback (and correction in the Naz) then commenced within 6 trading days on 3-8 Sep. In 3 trading days, the Dow lost 5.59%. The S&P lost 7.10%. The Naz lost 10.34%.

God Bless :smile:

 

[Boghie]

Although Mr. Market had its worst week (11-15 Jan) in 3 months the same week I sounded the alarm on 11 Jan, it took 11 trading days for the selling to truly commence. Digestion of this post-election rally is what the doctor ordered, and will make Mr. Market more healthy in the long term. In the meantime, tread lightly.

God Bless :smile:


Posted on 13 Jan:

Yeah, the Talking Heads were yammering about the FED talk. Then the FED talked and the market kept declining. I really don't like market declines in the last hour.

It might be around the time smart money makes it's move. Why not sell now? You have large gains and all you can look forward to is additional regulation and increased taxes. Take your mullah and 'Go Gault'.

 

[Rod]

Hopefully you positioned yourself for the recent tech correction, and are now reaping the rewards. I know I am! :fing02:

God Bless :smile:


Posted on 13 Jan:

As inferred, my "spidey senses" are off at times. But, the last time they were spot on was the last time I sounded the alarm. That was on 26 Aug 2020, post #1820:

https://www.tsptalk.com/mb/members-account-talk/349-rods-account-talk-152.html

A pullback (and correction in the Naz) then commenced within 6 trading days on 3-8 Sep. In 3 trading days, the Dow lost 5.59%. The S&P lost 7.10%. The Naz lost 10.34%.

God Bless :smile:

 

[rangerray]

I don't know if you call it a reward where I'm concerned. I rode the correction down and now I'm hoping to ride it up again :smile:

 

[pmaloney]

Congratulations! You bought the Monday dip and won the Turn Around Tuesday POP! :smile: