Anybody Buying Yet? Where’s the Bottom?

[stealthy_bowman]

Thought about it this for much of the weekend and in the end decided that I'll continue to buy additional significant dips of 3%+, admittedly having no idea where the bottom will be. What I do know though, is that in ten years the market is virtually guaranteed to be much higher than today. So who cares if not buying the absolute bottom. If that prediction is wrong, then we will have much bigger problems to worry about than the stock market. I'm betting though that it isn't the end of the world and that the US will continue to proposer in the long-term, it's just what we do!

 

[Elkmagnet]

US will continue to proposer in the long-term, it's just what we do!

I agree with your assessment but when I ask myself why I feel the urge to bring this up.

Gambler's fallacy - Wikipedia

en.m.wikipedia.org

The gambler's fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the erroneous belief that if a particular event occurs more frequently than normal during the past it is less likely to happen in the future (or vice versa), when it has otherwise been established that the probability of such events does not depend on what has happened in the past.

 

[stealthy_bowman]

I agree with your assessment but when I ask myself why I feel the urge to bring this up.

Gambler's fallacy - Wikipedia

en.m.wikipedia.org

The gambler's fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the erroneous belief that if a particular event occurs more frequently than normal during the past it is less likely to happen in the future (or vice versa), when it has otherwise been established that the probability of such events does not depend on what has happened in the past.

Except that the USA isn't at all a roll of the dice. I would say that betting against it, in the long-term, is a much, much, bigger gamble. Unless of course it's the end, but you can only bet on the end of the world once

 

[Elkmagnet]

Except that the USA isn't at all a roll of the dice. I would say that betting against it, in the long-term, is a much, much, bigger gamble. Unless of course it's the end, but you can only bet on the end of the world once

One could also argue that the inverse is true and that because we have always pulled through we are due for failure and the more times that we pull through the more we are due.
The reality is that the past doesn't affect the future as much as we would like to think.
Fortunately most people think it does and our feelings drive us to invest during lows this mentality is what keeps the bottom from falling out.

Also the same mentality could be used to predict a recession as in (we are due for a major recession based on the 8-12 year recession cycle the U.S. has been following)
The reality is that that is not a predictor but it does affect investors feelings and they drive the market.
For the record I have no clue where its going

 

[grizzly_]

I'm guessing the sun only has a 50/50 shot of coming up tomorrow too. It either will, or it won't!

 

[jeff_gibbons]

My experience ($thousands) with playing market forecaster has affirmed a few truths I didn’t listen to.
- time in the market beats timing the market
- I get cut every time I try to catch falling knives
- index funds are my friend

 

[Elkmagnet]

I'm guessing the sun only has a 50/50 shot of coming up tomorrow too. It either will, or it won't!

The us economy and the sun might be an apple and orange comparison.
One day the sun will fail its guaranteed and every day it doesn't the odds of it happening the next day increases or maybe not
Ask the Roman empire if they saw it coming?

 

[grizzly_]

The us economy and the sun might be an apple and orange comparison.
One day the sun will fail its guaranteed and every day it doesn't the odds of it happening the next day increases or maybe not
Ask the Roman empire if they saw it coming?

Agreed, just saying that applying "chance" to the success of the United States is an oversimplification of something with infinite possibilities, outcomes, man-made inputs, variabilities, and interpretations.

One thing we know for sure is time marches on. And if it doesn't, stocks don't matter anyway!

So we might as well assume long term success, whatever that may mean.

 

[Gr8bawana]

The vaccines will be unnecessary because we're in good hands now with Dr. Pence in charge.

 

[SAJ-99]

Agreed, just saying that applying "chance" to the success of the United States is an oversimplification of something with infinite possibilities, outcomes, man-made inputs, variabilities, and interpretations.

One thing we know for sure is time marches on. And if it doesn't, stocks don't matter anyway!

So we might as well assume long term success, whatever that may mean.

Japan's Stock market peaked in 1989
The MSCI Emerging Market index peaked in 2007
Stocks still matter (I hope), but those are still looking to capture new highs. The risk is real. On the other hand, maybe these biases are a benefit. We essentially have an entire generation of investors that has been told to buy and hold. These people had no problem putting money into US stocks until Jan 2020 and paying 20x forward earnings, which is historically pretty expensive. The saying that sticks with me is "Markets will do whatever hurts the most people." Depressing but true.

SPX futures rallied over 1.0% in the final 15 minutes Friday that the futures market trades after the regular market closes. That is a good sign because it showed a lot of traders were positioned negative. The bad sign is that the news is pretty ugly - China's manufacturing index hit an all time low in Feb, virus is spreading in US - and we have a lot of US economic data this week. Whatever you choose to do for your own portfolio, make sure you wear your seatbelt because it is going to be a wild ride.

 

[VikingsGuy]

I think some "smart money" is waiting for Wednesday. Monday will get more drop after the weekend worries and then a Sanders Super Tuesday win will add stress. S&P 20% off peak by Wed mid-day is my guess (which is worth nothing).

 

[Pucky Freak]

Buy low, sell high. Do the opposite of what everyone else is doing. Greedy people see a long running bull market and want in on the spoils, so they buy. Scared people see the market tanking and want out before they “lose more”, so they sell. The vast majority of investors follow these two backwards principles, and if want You want to profit on their idiocy, do the opposite of what they do. This is not gambling. This is not rocket science. It’s a very elementary understanding of human psychology, and if you can live by it you can profit by it. Have been doing it myself for decades. No one can predict the market, but anyone can look in the rear view mirror and see if prices have tanked in the short term.

Of course you can just invest on a schedule and ignore the market completely and this works great too.

I know many people who lost millions in investments driven by fear and/or greed - there are an equal # of persons out there who profited proportionally off of them.

 

[Nick87]

The vaccines will be unnecessary because we're in good hands now with Dr. Pence in charge.

View attachment 129644

Who would have predicted you would go there?

 

[VikingsGuy]

Of course you can just invest on a schedule and ignore the market completely and this works great too.

^^^this^^^

For the average investor, no real chance to "time the market"

 

[NEWHunter]

I think some "smart money" is waiting for Wednesday. Monday will get more drop after the weekend worries and then a Sanders Super Tuesday win will add stress. S&P 20% off peak by Wed mid-day is my guess (which is worth nothing).

Not looking to turn my own thread in to a political debate, but can he win? I don’t see him as the most viable challenger on that side. But I do agree with your premise that Bernie wins Tuesday and the markets don’t like it. Time will tell I guess.

Back to the topic at hand, futures are pointing down just over a percent right now. Bought some Friday, I’ll wait for a bigger drop before buying more.

 

[schmalts]

Who would have predicted you would go there?

No kidding. Save your stupid posts for the politics cartoon thread.

 

[schmalts]

Not looking to turn my own thread in to a political debate, but can he win? I don’t see him as the most viable challenger on that side. But I do agree with your premise that Bernie wins Tuesday and the markets don’t like it. Time will tell I guess.

Back to the topic at hand, futures are pointing down just over a percent right now. Bought some Friday, I’ll wait for a bigger drop before buying more.

I am done buying more for now. Having some cash is not a bad thing at the moment.

 

[Trial153]

Good body bonce today

 

[NEWHunter]

Good body bonce today

Yeah, somebody was buying

 

[Trial153]

Yeah, somebody was buying

Wasnt this guy .....