401 K took a beating!

[PimTac]

Originally Posted by ZeeOSix

Originally Posted by PimTac

Futures are green this morning.

Obviously not a good indicator for today. It was positive for about 30 min.

Yep it sure changed after the Fed lowered rates by 50 basis points. In my opinion the rate cut was based on emotion and not fundamentals. They could have done a 25 basis points cut. 50 may have signaled investors that the Fed was worried thus exacerbating the reaction downwards. It doesn't leave the Fed with much room to work with when the inevitable economy downturn happens. When that will occur will not be known until after the fact.

 

[Mr Nice]

Rate cut and still down almost 3%.... Something doesn't seem right. Everything not all sunshine and roses. Sometimes greed is bad especially if you can dump right now and head for the EXIT.

 

[PandaBear]

Originally Posted by Mr Nice

Rate cut and still down almost 3%.... Something doesn't seem right. Everything not all sunshine and roses. Sometimes greed is bad especially if you can dump right now and head for the EXIT.

A lot of company, including mine, started travel ban to epic center / ground zero since Feb 2020. Today we got news that we are banning domestic travel as well starting immediately. So business (manufacturing, sales, R&D, etc) will be impacted big this year. Rate cut helps business survive bankruptcy but it will not stimulate a fear driven economy or a production line disruption. Plus we are finally seeing a correction since the repatriation tax holiday a few years ago. That has been a long rally and a lot of people are cashing out.

 

[JeffKeryk]

I was surprised to see the rate cut given the already low rate. Down 75 basis points last year and 50 more... Kinda makes me scared and I am not one to easily scare. Scared is the wrong word, but it seemed like an odd move that did not help.

 

[Mr Nice]

Originally Posted by JeffKeryk

I was surprised to see the rate cut given the already low rate. Down 75 basis points last year and 50 more... Kinda makes me scared and I am not one to easily scare. Scared is the wrong word, but it seemed like an odd move that did not help.

Jeff, Sell at least 50% (preferably 70%) and sleep well. Exit before the house of cards come crashing down. Bank repo hit $108 billion.... but everything is perfectly OK. Very strange some folks are unable to log onto their accounts and sell. Very interesting.... 🤔

 

[JeffKeryk]

Originally Posted by Mr Nice

Originally Posted by JeffKeryk

I was surprised to see the rate cut given the already low rate. Down 75 basis points last year and 50 more... Kinda makes me scared and I am not one to easily scare. Scared is the wrong word, but it seemed like an odd move that did not help.

Jeff, Sell at least 50% (preferably 70%) and sleep well. Exit before the house of cards come crashing down. Bank repo hit $108 billion.... but everything is perfectly OK. Very strange some folks are unable to log onto their accounts and sell. Very interesting.... 🤔

Thanks for the advice; I am staying put. Selling incurs taxes and I pay plenty... Ha! By scared, I am referring to the government decision to cut the interest rate. If things aren't so bad, why did they take this step? Doesn't add up. This is not meant to be alarmist, rather just a question.

 

[JOD]

Originally Posted by JeffKeryk

Thanks for the advice; I am staying put. Selling incurs taxes and I pay plenty... Ha! By scared, I am referring to the government decision to cut the interest rate. If things aren't so bad, why did they take this step? Doesn't add up. This is not meant to be alarmist, rather just a question.

Well, despite a lot of "head in the sand" and "fake news" comments, I think people in the know understand that the Covid 19 thing is a real issue in terms of how it's going to affect the global economy. I'd agree with you that pulling this lever this early into the game is odd, and doesn't leave much room down the road--which is even more concerning. I mean, it's great that Apple is up and running--but factories all over China are still struggling to open or running at a fraction of capacity.... never mind, all of the sourcing issues from places outside of China. Domestically, schools closing and people not going out starts putting pressure on lower-wage folks already at the margins, service industry jobs start to dry up and goods start becoming more expensive due to supply issues. All of the sudden, people remember the word "stagflation"... I'm not saying "that's going to happen", but I think it's one scenario that has many folks concerned. I also think that it's "the unknown" that has investors spooked. Everyone knows the flu will infect roughly x number of people each year, and .01% of them will die. With this, no one really knows how severe it will get, and what the impact will be. That uncertainty scares people as well.

 

[alarmguy]

We already knew the world economy was cooling off a bit, still strong but the talk was out there to the point that 2021 was starting to look like the long overdue correction would take place. Well, enter Corona, as much as we want to deny it and know, how stupidly overblown the whole thing is, mass media has the public at large in a panic, and the public, not world government controls the economy so there is some validity in looking at what the public and how the public is reacting, not other investors. Me personally? Im holding and actually like a crazy person increased my 401K purchases but in no way would I tell someone like my son or daughter to jump into the market right now, why too many unknowns but the key is really back to basics and lets face it, the PE ratios are quite high right now and only will be higher after the economy falters a little bit. Just to many unknowns that only the coming weeks will answer, such as will this thing die out towards the spring, so the public feels at ease again. Is Is China lying that its new cases have leveled off, if they are not lying, my god, that is amazing. 1.5 billion people and only 100,000 infected, but I dont believe those numbers, if it was an ordinary flu those numbers should be more like 180 million sick people in China instead of the reported 100 thousand. As far as Apple, for me personally, I cant believe that Tim Cook is lying, not for a second, he said last week that production was back to or now near normal again in China for the iPhone.

 

[JOD]

Originally Posted by alarmguy

Is China lying that its new cases have leveled off, if they are not lying, my god, that is amazing. 1.5 billion people and only 100,000 infected, but I dont believe those numbers, if it was an ordinary flu those numbers should be more like 180 million sick people in China instead of the reported 100 thousand. As far as Apple, for me personally, I cant believe that Tim Cook is lying, not for a second, he said last week that production was back to or now near normal again in China for the iPhone.

I doubt the actual numbers coming out of China, but I don't doubt that the cases are declining rapidly. For good or bad, their totalitarian rule has some advantages in combating stuff like this. Since they track everyone's whereabouts and have little regard for people's rights, they're pretty effective stopping the spread of the virus.... I don't know anyone in Hubei, but I know a lot of folks in Zhejiang, and the lock-down procedures there and the steps they had to go through to get back to work were pretty nuts. So yeah, I do actually believe that the number of cases there are dwindling. I also don't think there's another country in the world that could pull that off. I mean, they don't have to ask if anyone has traveled to infected areas--they just go to the database that houses people's every move (they collect all travel information, payments made, along with facial recognition cameras everywhere). You can't even use cash or credit card at an increasing number of places. You have to pay via wechat--and this is so the government can track your spending. This level of control does help reigning in a pandemic... As far Apple, I'm willing to believe their factory is up and running, as it's a huge priority. I wonder about all of their suppliers ,though--many of which are in Zhejiang, which is just getting back to work now.

 

[gfh77665]

If you need your money in the next year or two, it should not have been in the market anyway. Be opportunistic. How often can you buy in with the VIX north of 40?? Also, one of two things will happen. The Covid 19 will go away in the next few months, and the market will surge, OR, the Covid 19 will kill us all anyway. I am betting on the former!

 

[Wolf359]

Originally Posted by gfh77665

If you need your money in the next year or two, it should not have been in the market anyway. Be opportunistic. How often can you buy in with the VIX north of 40?? Also, one of two things will happen. The Covid 19 will go away in the next few months, and the market will surge, OR, the Covid 19 will kill us all anyway. I am betting on the former!

Corvid-19 doesn't have a history of killing everyone. Just somewhere between 2-4% depending on the medical care. Also depends on the age and if you're in good heath. So worst case, about 2-4% dead. I can still do a head stand push up at the gym so I'm hoping I'm still good for a little while longer, but also running a half marathon soon so hope I don't catch anything from such a large group. Anyway, I think the last two days you can either call it a head fake or the dead cat bounce.

 

[gfh77665]

Originally Posted by Wolf359

Originally Posted by gfh77665

If you need your money in the next year or two, it should not have been in the market anyway. Be opportunistic. How often can you buy in with the VIX north of 40?? Also, one of two things will happen. The Covid 19 will go away in the next few months, and the market will surge, OR, the Covid 19 will kill us all anyway. I am betting on the former!

Corvid-19 doesn't have a history of killing everyone. Just somewhere between 2-4% depending on the medical care.

Yes I know that. I just drew an illustration for those in panic mode. This too will pass.

 

[nickaluch]

My daughter working for Morgan Stanley in NYC. Her teams client's are the 1 percent. They are buying.

 

[Mr Nice]

Originally Posted by nickaluch

My daughter working for Morgan Stanley in NYC. Her teams client's are the 1 percent. They are buying.

That's great for them, not for the small investor.

 

[cjcride]

The bottom could be a number of weeks away.

 

[Amkeer]

The bottom could be a year and a half out. Short term bottom could be in place now. I still see 14000 to 16000 on the DJIA.

 

[bubbatime]

Originally Posted by Amkeer

The bottom could be a year and a half out. Short term bottom could be in place now. I still see 14000 to 16000 on the DJIA.

I agree 1000%. I posted something similar somewhere else and I believe I was laughed out of there. Anyone 110 years old around that remembers exactly how bad a pandemic flu can be that kills many millions of people? People have their head in the sand and don't understand exactly how bad it's about to get. There is no recovery in sight. And no bottom in sight. If your financial adviser says that he expects it to hit bottom in a few weeks, fire him. This is a two year plus event of daily worsening news with no optimism in sight. Mathematical models show the virus growing at a rate of ten about every 16 days. So today we have 100,000 cases. Expect there to be a million cases in 16 days. In 32 days, expect that number to be ten million cases. After that, govt is overwhelmed and they stop counting cases. They have war gamed this stuff for years and years due to the threat of bio-warfare. They know what is happening and likely to happen. The US govt has already thrown in the towel and they just expect almost everyone to get it at this point. A poster above said that the media was blowing things out of proportions and causing panic. In my view the media is under reporting the threat and should be doing more to inform the public what the next two years look like. China, an authoritarian, communist country with massive manufacturing capabilities, is perhaps the best country on the planet to handle this pandemic. They can institute quarantines and measures that would never fly in a free western society. What can be expected to happen: 1) rationing and limited care. Hospitals will be overwhelmed. The non thinkers say "we have the best health care in the world". Hospitals today are ALREADY at 95% capacity. Add in millions of pneumonia cases, it will collapse. 2) Hospitals did not stock up on personal protective gear. They have a 20-40 day supply worth of mask and gowns. Once they run out, health care workers will not endanger themselves to come to work. Expect a mass exodus of perhaps 80% of the nurses/doctors in US healthcare to quit and stay home. 2a) millions of cases and only 20% health care work force to care for them? A disaster scenario of epic proportions. 3) supermarkets will begin having shortages of supplies , food, and water. They will restock it, but panic buying will cause people to buy way more than needed. So shelves will be perpetually empty and when new stock hits the shelves it will be cleaned out in minutes. This could last for weeks or months. 3a) stores are stocked and managed by...people. The same people that will likely be quarantined , sick, and told to stay home. Most stores, IF they can open, will only have a very limited staff of perhaps 10-30% of normal. Don't expect shelves to be stocked. They likely will just move the pallets out to the store and set them in the aisles, at which point the pallets will be stripped bare in minutes by hungry hordes. 3b- Stores will have a hard time staffing so many will not open. It's hard to get supplies to people when the stores are closed. If civil unrest becomes a thing, managers will not endanger their staff and open to violent or desperate people. 3c- stores not open, people desperate for supplies? They will smash the store entrances and loot. And then you have a store that is damaged and unable to open or supply people any longer. 4) The military is the only workforce that can be required to go to work. With many millions of important civilian jobs not getting done, expect the military to be fully deployed to communities to take up the slack. Soldiers can be used to for law and order, public safety, guarding and distributing supplies, digging mass graves and burying the dead. They will probably supplement some civilian hospitals with military doctors and nurses, or use them to staff field hospitals which will be set up in communities. Normal civilian nurses and doctors can quit and stay home. Military doctors and nurses cannot quit or face court martial and jail time. 5) China and India make perhaps 95-98% of the antibiotics and medicines that are used in America. They have stopped shipping medicines to the western world because they need those medicines at home. Pharmacies will be out of life saving drugs for a very, very long time before being re-supplied, or best case, American manufacturing comes online. But building this capacity from scratch takes a long time and many billions of invested dollars. There are many more facets but I left you with a small thinking exercise to chew on.

 

[PimTac]

I'm guessing you have plenty of gold and silver stashed away along with food and other supplies. Don't forget that third precious metal, lead. You will need plenty to defend your stash.

 

[Mr Nice]

Bubbatime, Maybe the American government (not political statement) realizes pharmaceutical industry needs to manufacture here in the USA and not rely on China. Look at the cruise ship off the coast of California that is not allowed to dock. Basically that ship is like a gigantic Petri dish with thousands of people packed in like sardines. 🤔 A few passengers tested positive. What's next ???????? I work in healthcare and they are having meetings daily to discuss hospital protocols for visitors and patients entering the facilities. The masks inside the hospitals are being rationed (no joke) because employees and visitors are stealing boxes of masks.

 

[Astro14]

Originally Posted by PimTac

I'm guessing you have plenty of gold and silver stashed away along with food and other supplies. Don't forget that third precious metal, lead. You will need plenty to defend your stash.

Lead and brass. Key elements of any balanced portfolio!