Stock Market what do you think
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesStock Market what do you think
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Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
6yI'm still relatively new at RE...so can't give advice there... but I spend a lot of time in the stock market (many hours per day writing about stocks/options/gold etc.)
Right now is NOT a good buying time for stocks for small-time investors. This is a good trading environment because of the high volatility. (options especially)
Currently, we just hit the highest volatility EVER RECORDED...even higher than in 2008. Volatility records the expected movement of stocks. The higher it is, the wider the range. Right now, we're still above 60 on the volatility meter. And today, we saw something major...
Volatility went down...and stocks ended 3% down. That hasn't happened in over 10 years. Usually, volatility has gone down when stocks went up (because we were in a bullish market).
Right now, you're "catching a falling knife" as they say.
Everyone right now says "oh, stocks are cheap, buy now." And some are cheap.
Here's the issue...take Delta Airlines. They're in the hole...down over 70% in over a month. Sounds like a good buy? Well, airlines are highly leveraged industries...even if they do get bailed out...they could still go through bankruptcy (again). If you look at the last time they went bankrupt...their stock went from $20 down to $5 (a 75% drop).
Well...they recovered...but they never hit that $20 price point again until 2013. (4 years later from the drop)
And that came with some heavy stock buybacks which propped their stock price up. (Congress won't let that happen again).
As RE investors, we want a return on our money every year. Well, if history happens again...with some of these industries that need recovery...you could be sitting on dead money for a few years waiting for a return.
***
During a bear market, there's an initial 'shock' drop. Then a rapid advancement back.
Then...there's another drop that goes even deeper. It happened in 2018 (a correction), 2008, 2000...
We are still in the shock drop. We'll see a 10%+ rebound soon. Another drop will follow that's deeper. It's at that last drop you want to buy the companies that will bounce back fast.
Yes, buy the companies in travel and entertainment (like Las Vegas), of course bank stocks, at that time too...invest in the ones that have the solid foundation to continue again. Last time airlines crashed, there was a lot of consolidation. Same with banks.
Watch and wait for that to play out.
We all want to 'get in at the bottom'...the stock market isn't going to pop 100% in a day.
You'll get a sense when the bottom is in once the shock is gone...and you start seeing positive economic signs. You'd rather be 3 months late from the bottom than 12 months early.
Also, you'll want to wait until the VIX is below 35 because then you know the markets have calmed. (You can go to CNBC.com and it's on the very top to see it)
134 Replies
- Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes6y
Originally posted by @Jay Hinrichs:
Originally posted by @Chris Martin:
Invesco Mortgage Capital (IVR) failed to make a margin call today, so blindly hopping into REITs without a good understanding of their collateral could cost people a lot. I am a CAN-SLIM type investor so I try not to catch the falling knife.
Chris i just bought companies i use and like and expect to make it through.. Like Alaska air lines been flying them 28 years and just about to million miler status and lifetime premier status :) so I sure hope they continue on .
This makes total sense. And they are buying a business that they understand. They might not be so worried about this year or next. They are looking 10 + years down the line. Multiple cycles. They can always change their minds and in two seconds they are out. DCA is commonly how they approach it. Good luck!
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes6y
Originally posted by @Matt R.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris Martin:
Invesco Mortgage Capital (IVR) failed to make a margin call today, so blindly hopping into REITs without a good understanding of their collateral could cost people a lot. I am a CAN-SLIM type investor so I try not to catch the falling knife.
Chris i just bought companies i use and like and expect to make it through.. Like Alaska air lines been flying them 28 years and just about to million miler status and lifetime premier status :) so I sure hope they continue on .
This makes total sense. And they are buying a business that they understand. They might not be so worried about this year or next. They are looking 10 + years down the line. Multiple cycles. They can always change their minds and in two seconds they are out. DCA is commonly how they approach it. Good luck!
kInd of nice to talk about something other than what will I do if my tenants cant pay :)
- Lender · Central Florida Markets · Member since 2017 · 137 posts · 135 votes6y
@Frank Wong BA is not going to Zero,, BA is one if the primary’s govt defense contrcator . It is not just another company like GM , ford or sears , its critical to self defense and source for many global defenses.
It will find a bottom and financing and head back up as it keeps ranking in profits as it has down for the last 50 years
- Lender · Central Florida Markets · Member since 2017 · 137 posts · 135 votes6y
@Jhon Restrepo Iv been buying shares in buys Indexes like DIA , SPY, QQQ , over the long term indices always head higher with less risks of individual companies.
I bought some ROKU at 67 last week , it was way oversold.
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- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes6y
Originally posted by @Keith C.:
@Frank Wong BA is not going to Zero,, BA is one if the primary’s govt defense contrcator . It is not just another company like GM , ford or sears , its critical to self defense and source for many global defenses.
It will find a bottom and financing and head back up as it keeps ranking in profits as it has down for the last 50 years
that was my thought they are far more than just an airliner manufacturers. But two things happen and Boeing can Soar once again.
they get the MCAS auto pilot issue fixed in the 737 max and they have the 787 which is quite popular and now the 777X airbus A 380s are being retired it seems..
- Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes6y
Originally posted by @Keith C.:
@Frank Wong BA is not going to Zero,, BA is one if the primary’s govt defense contrcator . It is not just another company like GM , ford or sears , its critical to self defense and source for many global defenses.
It will find a bottom and financing and head back up as it keeps ranking in profits as it has down for the last 50 years
People said the same thing about Lehman Bros and Bear Sterns. The fact is no one knows. We are in unprecedented times anything can happen. I believe in BA and its important to our country.
- Member since 2020 · 4 posts · 3 votes6y
I don't buy individual stocks much anymore. I just keep buying VTI (Total Stock Market ETF) from Vanguard. I much prefer index funds for long term buy and hold. Right now, my dilemma is whether to keep buying VTI or start saving more cash for real estate. I'm not sure if real estate prices will drop much, and I'm afraid I'll miss out on good deals trying to "time the market", like some do in the stock market.
- Rental Property Investor · Hawthorne, CA · Member since 2018 · 655 posts · 900 votes6y
@Michael P.
I agree with @Michael P.
It’s hard to beat buying at a 30% discount. I have no doubt that the market will rebound.
Now is the time to buy!!
- Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes6y
I have learned over the years that, the only strategy that makes good money AND keeps me sleeping at night in this market is to Dollar cost average ETFs, following the Dogs of the Dow approach. I buy at consistent intervals regardless of the news. I'm planning to hold for a few years.
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes6y
Originally posted by @Henri Meli:
I have learned over the years that, the only strategy that makes good money AND keeps me sleeping at night in this market is to Dollar cost average ETFs, following the Dogs of the Dow approach. I buy at consistent intervals regardless of the news. I'm planning to hold for a few years.
Back in the GFC we bought some stock in our small bank ( they would have gone out of business if they did not raise capital) and held it until last year when the bank got bought.. we did very well on that move.. its the only stock I had bought though and I did not really think of it as a stock buy more of investing in my bank so they could keep loaning me money for my projects LOL
I really appreciate everyones chiming in I have been taking notes and I am learning something.. I did not know what EFTs were or vanguard or any of that stuff.. so its fun to learn something other than real estate related subjects..
- 6yGabriel GraumannPro MemberReal Estate Broker · Phoenix, AZ · Member since 2019 · 165 posts · 100 votes
@Jay Hinrichs As several have shared, there is opportunity to be found in every market cycle. And the greatest opportunities tend to come in down markets if you have cash and/or the ability and fortitude to buy at the right price. Stocks are no different. They have taken a beating over the past couple of weeks, going from record highs to dramatic selloffs in a matter of days. Once a vaccination is found and mass produced, and the people get back to work and moving forward with life, certain elements will bounce back quickly. People will keep buying iPhones, buying their Starbucks, ordering items off Amazon, and have a desire to drive the country again. Strong companies will weather this storm and when it passes, confidence will be restored and the up wave of their stock prices will follow. Certainly not all, but many will experience significant increases quickly, while other less essentials may move more sluggishly. If you want to play lower money but be on the cutting edge, buy a handful of biotech stocks that are all working towards a vaccine. Whoever gets that figured out first should see a windfall. Plenty will miss. I don't play the futures game like some have suggested as I don't see the value in rooting for a market to tank or rise without sanity in play. That's just me though.
- Investor · Fort Pierce, FL · Member since 2014 · 94 posts · 46 votes6y
These market conditions certainly offer some buying opportunities Jay. I've been focused on the companies that will be the saviors of this crisis like Amazon, Zoom, GM(for converting some of the manufacturing over to make ventilators. I bought GE both last week and this week because their healthcare division is best positioned to ramping up to meet the demand for ventilators and Medtronics (MDT) has been in discussions to work with GE. I bought the XLF- the EFT that tracks mainly banks and financials on Friday last week and that has paid off. The banks have their act together and are working together without guidance from the administration since there really is none.
I'd stay away from BA even though they are down so much, but based on what? Stocks are valued based on EPS and EBITA but that who analysis is being rewritten as we speak. Just because a stock is down 7--80% doesn't mean its a good investment if they won't have positive earnings for 2-3 years. The conservative estimate for BA in Q2 is a $330mil loss. And if they have to get on their knees and ask the government for a bailout do you really want to own a stock that now the government is auditing their financials. I read somewhere that AA's cash burn right now is $50 million a day! That's crazy! The airlines that always had great balance sheets are DAL and LUV and they probably stand the best chance to sustain the least financial damage. Southwest was very good at negotiating gate fees at all their airlines so based on one Goldman analyst they have the lowest cash burn rate.
But to answer your question- this is a great time to invest for the long-term but with the currently political climate markets will continue to be prone to uncertainty.
To play Amazon w/o buying it for $1900 a share, purchase VTSMX (Vanguard Total Stock Market Index Fund), they have just under 133 million shares of AMZN in their portfolio- the EFT version is (VCR) and was up $11.97 today or about 9.7%. Both are usually free to trade and have super low expense ratios.
Good Luck!
- Rental Property Investor · SF Bay Area, CA · Member since 2014 · 352 posts · 543 votes6y
First reported case of Covid19 in the USA was Jan 21, 2020. I looked at SARS as a comparison at that time and saw the stock market drop for 3 months before complete recovery in 6-9 months later.
So I made the move to sell 20% of all my stocks on Jan 24,2020.
Then the market continue to go up steadily up until mid Feb, 2020! So I felt like I sold too soon. Then by end of Feb, the market is finally dropping. I sold all my rest of my stock in late feb (tesla at $730/share).
Now as the cases are rising rapidly in the USA at more than 10,000 a day and we will eclipse Italy in a few more days as 2nd highest count of covid19 cases, the stock market rallies on news of a bailout bill.
The way I see it. It's like your house is on FIRE and the first thing you think about is calling the insurance company to get paid. You have to PUT OUT the fire - call 911, call the firefighters, call the neighbors to get out of their homes because fire is coming.
PUTTING out this fire of Covid19 requires us to massive focus on making test kids, masks, PPE (personal protective equipment), ventilators and the like to PUT out the fire. To stop the spread.
Lockdown? It totally works. But the whole country has to do it quickly and once we start testing people - we can bring people out of lockdown safely.$500 billion dollars is insurance money for the economy. But the economy is only the symptom of a disease.
What are we doing to combat the disease???? Not enough, and very late, absolutely poor leadership (last month) and currently.
Open the country back up by Easter April 12?? That's magical thinking in a fairytale. - Rental Property Investor · Enterprise, AL · Member since 2019 · 137 posts · 85 votes6y
@Jay Hinrichs
Cash out stocks. Buy more real estate. You’re welcome 😉☺️
- Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes6y
@Jay Hinrichs. I have lost over $200k in 30 days. If I had massive cash, I would dive in head first based on every other stock market crash! Easy money
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes6y
Originally posted by @Heath Jones:
@Jay Hinrichs
Cash out stocks. Buy more real estate. You’re welcome 😉☺️
I have plenty of real estate LOL I am locked up here in Vegas and this gives me something new to focus on..
- 6yJoseph ODonovanPro MemberProperty Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes
@Jay C. I'm far from a stock market guru but TVIX is an extremely risky investment. You must have impeccable timing consistently. TVIX is down 99 % from 5 years ago. I would recommend roulette at your local casino before investing $1 in TVIX
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes6y
Originally posted by @Joe Kim:
First reported case of Covid19 in the USA was Jan 21, 2020. I looked at SARS as a comparison at that time and saw the stock market drop for 3 months before complete recovery in 6-9 months later.
So I made the move to sell 20% of all my stocks on Jan 24,2020.
Then the market continue to go up steadily up until mid Feb, 2020! So I felt like I sold too soon. Then by end of Feb, the market is finally dropping. I sold all my rest of my stock in late feb (tesla at $730/share).
Now as the cases are rising rapidly in the USA at more than 10,000 a day and we will eclipse Italy in a few more days as 2nd highest count of covid19 cases, the stock market rallies on news of a bailout bill.
The way I see it. It's like your house is on FIRE and the first thing you think about is calling the insurance company to get paid. You have to PUT OUT the fire - call 911, call the firefighters, call the neighbors to get out of their homes because fire is coming.
PUTTING out this fire of Covid19 requires us to massive focus on making test kids, masks, PPE (personal protective equipment), ventilators and the like to PUT out the fire. To stop the spread.
Lockdown? It totally works. But the whole country has to do it quickly and once we start testing people - we can bring people out of lockdown safely.$500 billion dollars is insurance money for the economy. But the economy is only the symptom of a disease.
What are we doing to combat the disease???? Not enough, and very late, absolutely poor leadership (last month) and currently.
Open the country back up by Easter April 12?? That's magical thinking in a fairytale.As someone who currently owns 2 Tesla's and had a 3rd one.. I sure missed that one.. I looked at it at 180.00 all the guys on my pilots forums were like you got to buy it.. and some did I think I said above one guy bought 1 mil worth at 180..
wild times that's for sure..
- 6yJoseph ODonovanPro MemberProperty Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes
@Jay Hinrichs I dabble in the stock market. If you are looking for income stocks, some really nice returns out there right now. COTY, CODI and/or MO all paying dividends between
9 - 12% at todays prices. If you're looking for a little risk, I play around with some pharma's who are close to FDA approval for a drug or who have a hot drug in their pipeline. Risky but high return potential.
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes6y
Originally posted by @Joseph ODonovan:
@Jay Hinrichs I dabble in the stock market. If you are looking for income stocks, some really nice returns out there right now. COTY, CODI and/or MO all paying dividends between
9 - 12% at todays prices. If you're looking for a little risk, I play around with some pharma's who are close to FDA approval for a drug or who have a hot drug in their pipeline. Risky but high return potential.
this is a great thread i was a little nervous admitting my total lack of knowledge of the stock market I am learning a bunch.
Question with a 9 to 12% dividend i take it that will fluctuate through the years. its not like buying a Muni bond that has a set interest rate right.. I will do as you suggest and throw a few bucks at some of the pharma in hope of a homerun.. nothing crazy of course. nothing more than i would take to the craps table LOL
- 6yJoseph ODonovanPro MemberProperty Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes
@Jay Hinrichs If the company continues to pay the same dividend year after year then your return rate is consistent based on purchase price. But if the company decides to reduce its dividend then your rate of return is now reduced. No guarantees with dividends as the company must generate profits and decide to reward shareholders as opposed to reinvesting back into the company.
- Rental Property Investor · Grand Haven, MI · Member since 2015 · 71 posts · 108 votes6y
Nibbling the past week on select Vanguard ETFs, particularly Small Cap(VIOV) & Mid Cap (IVOV)Value ETFs. Also added Utilities (VPU). Small & Mid Cap funds were nearly off 50% from All Time highs before they bounced. Been fortunate to sell a couple properties at full value and roll some of that money into the market. Tremendous opportunities in single stocks as well but I have just been trading them. Vanguard buys are LT. FYI - Old stock and options trader turned Rae investor. Good luck to all and stay safe.
RP
- Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes6y
Originally posted by @Joseph ODonovan:
@Jay Hinrichs If the company continues to pay the same dividend year after year then your return rate is consistent based on purchase price. But if the company decides to reduce its dividend then your rate of return is now reduced. No guarantees with dividends as the company must generate profits and decide to reward shareholders as opposed to reinvesting back into the company.
A 9 to 12% dividend is most likely a REIT or BDC or other type of entity that is obligated to distribute 90% or more of its earnings in the form of dividends as opposed to rolling into the company's retained earnings. Agree with everything else though. Some BDC's and REITS which were all under 10% are now paying 20 to 30% by virtue of their lower cost to entry. However, that is assuming they will be able to generate the same dividend yields as before.... probably not a safe assumption. ARCC, TCPC, BRMK, GBDC....all yielding great now that their prices have been battered.
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes6y
Originally posted by @Jay Hinrichs:
Originally posted by @Chris Martin:
Invesco Mortgage Capital (IVR) failed to make a margin call today, so blindly hopping into REITs without a good understanding of their collateral could cost people a lot. I am a CAN-SLIM type investor so I try not to catch the falling knife.
Chris i just bought companies i use and like and expect to make it through.. Like Alaska air lines been flying them 28 years and just about to million miler status and lifetime premier status :) so I sure hope they continue on .
10-4 to that. I was on the last Midway Air flight. The date was 9/11/2001 and my flight was about 10 minutes in the air (RDU to ATL) when the first WTC event happened. Probably not related, but it so happens I have never owned stock in an airline. I've had shares in lots of other industry groups... just never air transportation.
- Investor · Saint Louis, MO · Member since 2020 · 9 posts · 2 votes6y
There are some real steals out there right now! Airline stocks, oil, retailers, and value equities such as Nike, Uber and McDonalds to name a few!
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