stock market stupid prices?
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Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
6yIf you buy on emotion...you'll sell on emotion --- i.e. likely sell for a loss later on.
We're seeing a bear market rally and so many are feeling the "oh, I missed the bottom, I need to buy now." I know that based on the low volume in the markets on this up days. Low volume = average joe buyers.
I also get texts from family members and see posts on social about "what stocks to buy right now" from people who've never bought stocks before (or were serious).
Same thing happened with crypto...tech bubble.
Those folks will get slaughtered (again).
Think about it...
We spend all this time analyzing real estate deals. We spend 0 time deciding on what to stock to buy.
But just buying a stock because it "looks" on sale right now is a terrible strategy.
Airlines and cruise stocks for example...we've heard nothing about the numbers they're experiencing. We don't know when people will start flying/cruising again...
Would you buy a house if you didn't know have full info on its value?
Worst...you don't know which companies could go bankrupt from it all or get bought out at a low price.
Why?
Because most companies overleveraged the past 10 years due to low interest rates. (airlines being one) And now the heat is coming.
"Oh, but I plan to hold for the long-term so it's okay if stocks go down again."
Doubt it.
Buy on emotion, you'll sell on emotion. (I write, market and invest in the stock market for my full-time income)
44 Replies
- Real Estate Agent · Santa Barbara, CA · Member since 2016 · 518 posts · 283 votes6y
@Kirk R. The publicly traded real estate investment trusts are looking very attractive today relative to private real estate. I'm buying up most of the cell tower and data center REIT's. Also the retail and hotel REIT's with the strongest balance sheets why they're at these fire sale prices.
- 6yKirk R.Peoria, IL · Member since 2013 · 967 posts · 383 votesOP
Originally posted by @Nick Barlow:
@Kirk R. the dollar value of 401(k) and Roth IRAs fluctuates daily. In most cases the last few years, lenders view 401(k) loans and Roth’s as your reserves, and count them as cash equivalents for your debt to income ratio. My personal view is that equities haven’t completed their fall, and just like 2008, it will take about 12 months or so to reach the “bottom” of the Corona virus market. I have used these instruments as cash equivalents in the past, but no longer wish to due so as volatility has returned.
I also don’t want to put money into the stock market, which I feel is still headed down, knowing I need cash to make it through the next few months, and want cash to continue growing my RE portfolio once Corona virus is behind us.
Good luck to you and the rest of BP
Think I'll move one of traditional IRAs to a Roth. Pay the taxes now. looks like highest tax rate has been 39.6%.
Real estate should hold value. Although lot of boomers going to nursing home eventually (reduce demand).
if i buy a nursing how many doors does that count for :)? .
Seems like growing the US population would increase house values. Think we're only growing by 0.6%.
7. 73% Dow went up on Friday!!??
- Real Estate Broker · Hartsville, SC · Member since 2015 · 174 posts · 69 votes6y
Originally posted by @James De Stefano:
Good discussion. Also remember, the real movers in the market are managers of 10's and 100's of millions of dollars, not someone like me who has "play" money who will buy 5 of 10 shares of Amazon.
And the Stock market can be heavily driven by emotions. Real estate deals with purchases that take 30-40 days, instead of 2 seconds on the computer w/ stocks.
All that being said... I still like buying shares of Carnival cruise line at $8 or 9 / share, when they were at $60 !!! about a month ago.
Either they completely got out of business (possible..) or they will be back and raring to go in 1 year or so. Ppl love those freaking buffets!
I'm with you on Carnival :) I went hard on them. We'll see if it was a good play or not soon! I was buying on the way down, so I'm in at 12.52 avg. It hurt when I was watching it sitting at 8, but I just bought more, and it's already back to 10.64 as I type this. I think it'll recover quickly once all this passes and they get rolling again. I'm ready to hit their buffets again myself!
- Flipper/Rehabber · USA · Member since 2020 · 6 posts · 2 votes6y
@Sam Josh
I lost 30k with apple.at the time they had enough cash to buy back all shares.. I had to sell for a real estate deal, that covered the loss. Equities are controlled and it's sad because there are no good easy investment tools to safeguard retirements. Cash loses value, equity markets readjust, real estate readjust long term ordinary po people are in a bad spot.
- Contractor · San Diego, CA · Member since 2018 · 432 posts · 221 votes6y
@Kirk R. Stocks are usually considered “overpriced” after excessive rallies or after being overhyped. This is the most backwards statement I’ve seen, as stocks or much more likely to be underpriced and oversold at this time technically speaking. This would be considered the epitome of the market you want to buy in (or at least a week or so ago). If there’s ever been a case of being greedy when others are fearful, I’ve never seen more exaggerated fear! With that being said, certain industries will feel the effects of the red tape for longer, and those should be evaluated (eg. airlines).
- Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes6y
If you buy on emotion...you'll sell on emotion --- i.e. likely sell for a loss later on.
We're seeing a bear market rally and so many are feeling the "oh, I missed the bottom, I need to buy now." I know that based on the low volume in the markets on this up days. Low volume = average joe buyers.
I also get texts from family members and see posts on social about "what stocks to buy right now" from people who've never bought stocks before (or were serious).
Same thing happened with crypto...tech bubble.
Those folks will get slaughtered (again).
Think about it...
We spend all this time analyzing real estate deals. We spend 0 time deciding on what to stock to buy.
But just buying a stock because it "looks" on sale right now is a terrible strategy.
Airlines and cruise stocks for example...we've heard nothing about the numbers they're experiencing. We don't know when people will start flying/cruising again...
Would you buy a house if you didn't know have full info on its value?
Worst...you don't know which companies could go bankrupt from it all or get bought out at a low price.
Why?
Because most companies overleveraged the past 10 years due to low interest rates. (airlines being one) And now the heat is coming.
"Oh, but I plan to hold for the long-term so it's okay if stocks go down again."
Doubt it.
Buy on emotion, you'll sell on emotion. (I write, market and invest in the stock market for my full-time income)
- 6yKirk R.Peoria, IL · Member since 2013 · 967 posts · 383 votesOP
Originally posted by @Jonathan W.:
@Kirk R. You should really re read your whole OP and ask yourself if you could be missing anything obvious here?
Like in 2008-2019 did he companies do anything? Anything at all? Like grow their customer base? Scale their operations? I mean, why are they suppose to go to 2008 prices....
This is like reading, hey Mother’s Day is coming up next week, buy hallmarkh
1 company in the Dow Boeing is worth 4 times its value from
2008 Boeing $40
2020 Boeing $150
i got tired researching, but seems Boeing should go bankrupt.
So do you think they're worth 4x as much? Or just greeting cards as normal?
- Los Angeles, CA · Member since 2019 · 512 posts · 301 votes6y
@Kirk R. If you think so then good luck and short the stock. Prices speak volume, I think you should pay more attention.
Companies that lost millions of customers from all this or are going to lose customers from all this, are still project to be way higher then the number of customers then had 2008 before or after the recession. That and along with 12-13 years of other developments here you come along saying the stock should be 40$.
Ok buddy.
Some people say the stock market is gambling. Well then your gambling on people’s efforts and hard work and results from all that compared to the expectations of the market and others to me, isn’t really gambling. But the way you see it, man come visit me in Vegas, i like to watch people gamble like cray cray
- 6yKirk R.Peoria, IL · Member since 2013 · 967 posts · 383 votesOP
Originally posted by @Jonathan W.:
@Kirk R. If you think so then good luck and short the stock. Prices speak volume, I think you should pay more attention.
Companies that lost millions of customers from all this or are going to lose customers from all this, are still project to be way higher then the number of customers then had 2008 before or after the recession. That and along with 12-13 years of other developments here you come along saying the stock should be 40$.
Ok buddy.
Some people say the stock market is gambling. Well then your gambling on people’s efforts and hard work and results from all that compared to the expectations of the market and others to me, isn’t really gambling. But the way you see it, man come visit me in Vegas, i like to watch people gamble like cray cray
do you get upset at craps table when people bet on the don'ts? ha always a hot table just depends how you play :)
Im not confident or set up to short. other than an etf in retirement accounts.
the game is kind of rigged towards the dos with the Fed/casino. hopefully fed doesn't throw the chips everywhere & totally break things.
I'm hoping to Get back to "normal". & hopefully technology/science will pull through.
I'm gonna book a cruise for March 2121 out of Florida. 70ish Parents are in FL. Not even confident I'd visit them with risk of giving them something.
- Los Angeles, CA · Member since 2019 · 512 posts · 301 votes6y
"do you get upset at craps table when people bet on the don'ts? ha always a hot table just depends how you play :)"
Nope...lol, in fact i'm use to calming people down when they do get upset.
- Rental Property Investor · Centralia, WA · Member since 2017 · 75 posts · 85 votes6y
@Kirk R.
I’ve been focusing on oil and gas companies right now. They’ve been pretty hammered from the Saudi/Russia feud but they’ll recover (eventually). I’m going long term on this bet and waiting. Good to have cash on the side.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes6y
Originally posted by @William Coet:
There have been six 10-year periods since 1900 when equity returns were negative or low (below 3%). Three of those 10 year periods were negative. The most recent era of low returns was 2002-2011 where the average return was 2.9% for the period. My conclusion is that timing and stock selection is important.
Absolutely.
A quick example: I looked at one of my Vanguard accounts yesterday, one of the index funds I just fool around with. They have a tool where you can fool around to see what your purchases and returns were in a given period. On one account, since 2015 I have made $15,800 in purchases and as of yesterday had made $1750 in returns. That's 11% in 5 years, or a little better than 2% per year. Barely better than inflation, though of course all of that wasn't 2015 money. What else could I have done with that money? Well, it's hard to say that I would have come out better or worse since I am speculating on what I might have bought. Perhaps another cheap rental? Maybe a Kid Rock blowout? A bank CD?
Timing is everything. A share is a share. If you own 100 shares of Boeing at $100/share in 2020, you have $10k invested. If it climbs to $400/share by 2025, you have $40k invested. If it falls back to $100/share by 2030, you have $10k invested.
Too often people fail to consider a) the purchase of stocks/shares as a huge driver of overall savings, and b) the opportunity costs associated with sinking that money into stocks. I'm not saying buying stocks are bad - I have them, in accounts (mostly Vanguard) - but return timing matters.
Skyline Properties - 6yKirk R.Peoria, IL · Member since 2013 · 967 posts · 383 votesOP
Originally posted by @Tim Rostro:
@Kirk R.
I’ve been focusing on oil and gas companies right now. They’ve been pretty hammered from the Saudi/Russia feud but they’ll recover (eventually). I’m going long term on this bet and waiting. Good to have cash on the side.
Recently, I saw gas for $1.50. Another forum, I posted a question of how I could essentially buy 4,000 (16,000 miles/year on my prius) gallons of gas to be used over the next 10 years. I essentially wanted to lock in the $1.50 price for 10 years.
Maybe buying gas company essentially does that. Which are you looking at?
- 6yKirk R.Peoria, IL · Member since 2013 · 967 posts · 383 votesOP
Originally posted by @Joe Cassandra:
If you buy on emotion...you'll sell on emotion --- i.e. likely sell for a loss later on.
I know that based on the low volume in the markets on this up days. Low volume = average joe buyers.
I also get texts from family members and see posts on social about "what stocks to buy right now" from people who've never bought stocks before (or were serious).
Same thing happened with crypto...tech bubble.
Those folks will get slaughtered (again).
Think about it...
We spend all this time analyzing real estate deals. We spend 0 time deciding on what to stock to buy.
But just buying a stock because it "looks" on sale right now is a terrible strategy.
Airlines and cruise stocks for example...we've heard nothing about the numbers they're experiencing. We don't know when people will start flying/cruising again...
Would you buy a house if you didn't know have full info on its value?
Worst...you don't know which companies could go bankrupt from it all or get bought out at a low price.
Why?
Because most companies overleveraged the past 10 years due to low interest rates. (airlines being one) And now the heat is coming.
"Oh, but I plan to hold for the long-term so it's okay if stocks go down again."
Doubt it.
Buy on emotion, you'll sell on emotion. (I write, market and
Good
Good Post Joe. Pretty much articulates what I've been feeling.
We're seeing a bear market rally and so many are feeling the "oh, I missed the bottom, I need to buy now."
I had this same fear. Oh my money is gonna get eaten by inflation. I missed the bottom. I need to get my money in there. There are only so many good companies out there. I was thinking more fear that i missed run up.
lWe spend all this time analyzing real estate deals. We spend 0 time deciding on what to stock to buy.
Yes! Looking at average p/e is my favorite metric. I'm lazy & don't read/analyze the numbers. Yet I'll analyze a house deal to death.
we've heard nothing about the numbers they're experiencing. We don't know when people will start flying/cruising again...
hRight buying stock market is liking betting at roulette. Although going long stock the game historically has positive expected returns. Too many unknowns. I was sposed to go on back to back cruises march 15. i canceled & got future cruise credit. I'm not sure cruise companies don't bankrupt before i get to use my credits.
Oh, but I plan to hold for the long-term so it's okay if stocks go down again."
Doubt it.
Buy on emotion, you'll sell on emotion.
^^^THIS!
Because I thought p/e was too high, I was 95% cash when it hit its all time high. I was" regretting " not being invested on run up. I'm still 95% cash. If the market goes up a bunch, I'll still be happy to have my cash. If CV not around p/e would be a buy right now. With cv & unemployment I think p/e too high to buy stocks. aka stock market stupid prices
- Rental Property Investor · Centralia, WA · Member since 2017 · 75 posts · 85 votes6y
I'm looking at Continental Resources (CLR), Patterson-UTI Energy (PTEN), and Chevron (CVX). I already bought shares in PTEN yesterday (very long position there), and waiting for a price point to get in on CLR. CLR was $7.00-$7.50 last week and now its hovering over $11.00 less than a week later. I knew I should have bought it last week but wanted to wait a little bit longer. I may just pull the trigger and buy it soon. Both stocks I plan on selling within a year or two, I don't plan on holding for too long.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes6y
Originally posted by @JD Martin:
A quick example..since 2015 I have made $15,800 in purchases and as of yesterday had made $1750 in returns. That's 11% in 5 years, or a little better than 2% per year. A bank CD?Timing is everything. A share is a share. If you own 100 shares of Boeing at $100/share in 2020, you have $10k invested. If it climbs to $400/share by 2025, you have $40k invested. If it falls back to $100/share by 2030, you have $10k invested.
interesting points, JD. The last couple months have essentially wiped out a few years of gains.
Timing does matter and it goes both ways. I was talking to a Fidelity executive recently that reminded me that if you missed out on the 5 biggest gain days over the last 33 years (since '87), your returns would have been squat. As a sort of timer I found that Interesting. I wonder how it would look if you missed the 5 largest down days?
In these times, I like tradeable indexes like ETFs vs mutual fund indexes that only get end of day pricing.
I waded out of QQQ a bit yesterday when Dow was up 1000. I'm not always right, but I waded out of a mutual fund as well and the price was down .6% as the market fell over the the remaining hours of trading but I executed the orders at the exact same time.
Being able to mid-day trade earned me an extra 3.5% and had less uncertainty. I was ok with missing further gains to lock in. I don't only have ETFs, but I like them in uncertain environments like these. Cheers!
- Real Estate Agent · Houston, TX · Member since 2017 · 292 posts · 233 votes6y
Market Update....
And this STILL doesn't make any sense.
While it's good that stocks aren't spinning out of control downward, It just seems so early to price to be climbing back upwards while we're in the middle of this madness.
Emotions are a powerful drug
- 6yKirk R.Peoria, IL · Member since 2013 · 967 posts · 383 votesOP
I was 90% out of market when this started. Now im 100%.
doesnt make sense to me so I'm not playing :) Taking my ball/money & going home!
I was reinvesting dividends. So i have partial shares. Is there a way to sell partial shares? i have 0.92 of one stock left.
- Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes6y
Originally posted by @Cameron Price:
Originally posted by @James De Stefano:
Good discussion. Also remember, the real movers in the market are managers of 10's and 100's of millions of dollars, not someone like me who has "play" money who will buy 5 of 10 shares of Amazon.
And the Stock market can be heavily driven by emotions. Real estate deals with purchases that take 30-40 days, instead of 2 seconds on the computer w/ stocks.
All that being said... I still like buying shares of Carnival cruise line at $8 or 9 / share, when they were at $60 !!! about a month ago.
Either they completely got out of business (possible..) or they will be back and raring to go in 1 year or so. Ppl love those freaking buffets!
I'm with you on Carnival :) I went hard on them. We'll see if it was a good play or not soon! I was buying on the way down, so I'm in at 12.52 avg. It hurt when I was watching it sitting at 8, but I just bought more, and it's already back to 10.64 as I type this. I think it'll recover quickly once all this passes and they get rolling again. I'm ready to hit their buffets again myself!
A person I know who works for NCL said they don't think cruising will open back up again until October. I said I wasn't planning to buy cruise stocks for another few months until they bottom out and she said the stocks already hit bottom and they're going back up now, so the dip is over. I think that is the general mentality now and that is the reason they're going up right now. People think the virus is almost over, so America will open back up and things will go back to normal. There is ZERO chance of that. People are now going to have to catch up on rent, mortgages, credit card payments, etc and have much less disposable income for a while even in the best case scenario. I think best case for cruise stocks is they dip back down to their lows or just under, one of them goes out of business or has to merge in order to consolidate their routes and be profitable and then go back up to their previous profitability in 3 years. It will be incredible returns if that is how it works out, I think it takes longer to come back from what will turn out to be a long depression though and the returns will still be great but with a much longer payoff. I am also spreading money across all the cruise stocks as a hedge against picking one that goes out of business. They should all have great returns but if one fails, it is still a great return.
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