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goodheart |
Jim Allen's advice earlier was the best. You haven't lost a penny on your investments unless you actually sell them. _________________________ “ What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.”— Lord Melbourne | |||
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eh-TEE-oh-clez |
Yeah, today was brutal. | |||
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Member |
Wait until tomorrow's close. | |||
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| Shit don't mean shit |
Back to where we were Nov 20, 2017. Down 3.75% for the day. | |||
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quarter MOA visionary |
Now that hurts.  | |||
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Member |
I sold most all of my stock index funds on Monday morning before the open, to salvage gains. I'm not going back in until things settle down a bit. I think Dick Bove put out some valid points this morning, and I am heeding his advice to be cautious: "I think the markets are starting to realize that the supply of cheap money is falling and the demand for money is rising “A fundamental change is underway in the financial markets, and it will not be pleasant
"Be very cautious as to how you invest your money at this time.” Link to full short article at CNBC.com | |||
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| Get busy living or get busy dying!  |
An oft repeated line, but wrong. The fact is the value of your account has gone down. The number of shares you own is the same, but the value is down. Don't believe me? Give your buddy the amount of money before his investment value went down and you take the current value. Some investments never get back to their previous highs. | |||
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Alienator |
Dang, almost down to what it was on 12/31. Sucks. SIG556 Classic P220 Carry SAS Gen 2 SAO SP2022 9mm German Triple Serial P938 SAS P365 FDE Psalm 118:24 "This is the day which the Lord hath made; we will rejoice and be glad in it" | |||
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Member |
WOW, that was fast. Officially at correction level now on Down and S&P 500 I believe. If this keeps up we will be in a bear market by end of next week LOL. | |||
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| I believe in the principle of Due Process  |
What does that have to do with anything? You aren’t likely to sell at the high anyway. The “value” of the shares we own in Realty Income is down to $47.56 at the close. The high some months back was $70.10 or so. Given the number of shares we own, that’s a bunch of money. Do I care? Nope. Do I wish I had sold back when it was $70? Nope. If I had sold, I wouldn’t keep getting the dividends. I have no intention of selling, no plan in the foreseeable future, so what does it matter? Next week, I will receive a dividend for each and every one of those shares, as I have every month for a couple of decades, on a varying number of shares of course, as I added mostly. There is a number on the bottom of the statements representing the total value as of the date of the statement of the holdings. It varies month by month, up, down, back forth, in part as I withdraw money. While I can’t say it is of no importance, I think it is not very important, as long as the bipusineses are doing acceptably well. The businesses whose shares I own are doing just as well today as they were last month. The interest rate environment is changing, so that will impact values some. BFD. Luckily, I have enough willpower to control the driving ambition that rages within me. When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown | |||
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Now in Florida |
I agree with Jallen entirely...with further explanation on something Jallen subtly alluded to but didn't quite make explicit. The value of the companies whose shares he owns - which is determined by its potential for generating future cash flows - has not changed. The price of acquiring a piece of those cash flows is what has changed. There is a huge difference. Just ask Warren Buffett, who says "price is what you pay...value is what you get." The value of the future streams of cash flows generated by the businesses is not impaired simply because the market price of the companies' shares declines. You simply have the chance to acquire some fraction of those cash flows for less than you could yesterday. Happy day for any investor. | |||
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| Get busy living or get busy dying! |
When the value of the investments decline, the value of the position declines. You may believe that you have not lost any money, but when the securities will bring a lower amount, NO ONE in their right mind will pay you more than the lower new market price. So if you can only sell them for less than they were worth a week ago, you have lost money. You may not have realized it yet (accounting wise), but the loss is there. What if the security never comes back up to the higher value, is it still worth the higher previous value? If you say yes, I have some stocks to sell you and I'm sure you will pay the higher previous value if you are a so strongly principled........ | |||
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| I believe in the principle of Due Process |
Sorry, no sale. Let’s be careful to not confuse price and value. As ChicagoSigMan rightly points out, they are different concepts. I accept Buffett’s succinctly worded expression of Ben Graham’s teaching, that “price is what you pay, value is what you get.” The price varies from day to day, minute to minute, but the value varies with the present value of future cash flows, and can usually be estimated only. The very best statement of what we are trying to do as investors is found in Chapter 8 of The Intelligent Investor, by Benjamin Graham, a parable about Mr. Market.
I find this concept extremely helpful, and wish I had followed it unswervingly since I was exposed to it in college 50 years ago. Not everyone looks at it this way. No problem. Luckily, I have enough willpower to control the driving ambition that rages within me. When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown | |||
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| Get busy living or get busy dying! |
If you aren't selling, then you have not taken a loss, but then the entire statement "It's not a loss until you sell" is a null statement. When a security price declines (and I'm choosing price and value carefully) then one can buy a portfolio of X shares at Y*price = total$ Also, if a price declines by $5/share), one can buy the same portfolio for X shares * (Y-5)price = less $ than Total $ When EVERY brokerage house prints a statement showing the market value of the publicly traded portfolio has gone down (basic accounting) the market value of the portfolio has decreased. There is NO ONE who will buy it at the higher price you believe (or feel, or whatever) it is worth. I realize you are a savvy investor, but when the market value goes down, you can deny it all you want, but you can't sell it for more than it will bring (market price). Market price is market price, that differ from how you value the investment, but good luck selling it at a price above market. | |||
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| I believe in the principle of Due Process |
I think I mentioned at the outset that I didn’t care about selling, so it didn’t matter. Price only matters when you are buying, or selling. If you are doing neither, who cares? When I want to sell, it will. Whether prices go up or down in the meantime is of no importance. Do I feel poorer because of the recent declines? Not especially. Luckily, I have enough willpower to control the driving ambition that rages within me. When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown | |||
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| Now in Florida |
I know Jallen doesn't need my help here, but the disconnect is that you are equating market value with intrinsic value, and a decline in MV does't necessarily equate with a decline in IV. Of course it is true that at any given time, you can't sell an asset for more than its current market price. It's so obvious that it doesn't even need stating. But just because the market price of an asset has declined doesn't mean its owner has lost money because he still has the ownership of the cash flow generated by the asset. In the case of the stock, the security is not the real asset. The real asset is the fractional piece of a stream of cash flows to which the security entitles the holder. The value of that stream of cash flows is wholly independent of the market price of the security that evidences its ownership. So unless you plan to sell the security, you only lose money if the decline in market price was due to a decline in the earning potential of the business. | |||
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| Member |
another wild ride today?? maybe some bounce-back? ---------------------------------- Proverbs 27:17 - As iron sharpens iron, so one man sharpens another. | |||
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Member |
JAllen is right... IF you’re buying and holding for the long term. If, on the other hand, you’re just a few short years from retirement and you’ll need your money at that time, the activities of the market Near term matter... and the underlying value of your investment can be cold comfort. Some of the best advice I’ve read in the past few years was in the Journal: “When you’ve won the game, STOP PLAYING!” IOW, once you’ve made your number, get transitioned to an asset allocation that will primarily preserve your holdings and thereby ensure a semi-comfy retirement. Sur, we could all use a few more bucks. But, for me at least, not at the cost of being able to buy food when I’m 80. | |||
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| I believe in the principle of Due Process |
Very few have an idea about risk. I look it as the possibility of loss of your investment. I have some experience in this line, and the scars to prove it. Buffett says if you can’t stand to see a 50% decline in your portfolio, you should not be in the market. He supposes that the stocks in your portfolio are of sound businesses, conservatively financed, and purchased as reasonable prices. This excludes what many prople do, buying high fliers, at hideous P/E multiples, or even companies that have never reported a profit, in business for only a few years. That is not investing, but speculating. For every Qualcomm, or Apple, or Google et al there are hundreds of companies which do not live up to the hype. Risk happens! To make money you don’t have and don’t need, you risk what you do have and need, and that’s foolish. Luckily, I have enough willpower to control the driving ambition that rages within me. When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown | |||
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| Member |
I realize we're effectively agreeing here. You're saying "If you need it, you shouldn't be investing it." OK, I agree whole-heartedly. But, in terms of this: With respect, JAllen... Few people have a 401(k) that can take a 50% decline. And given the way retirement savings works today, fewer people still can afford to NOT be in the market. Mr. Buffett may be the Oracle of Omaha, but that quote does not sound to ME like practical wisdom one can live by. AH! I bet he SPECIFICALLY means the EQUITIES market. Ahhhh... OK. So, to re-write that quote: "If you can't stand to see a 50% decline in the portion of your portfolio that's dedicated to equities you should not be invested in equities ." Even then, I'm having trouble agreeing. One can choose sufficiently carefully to avoid a 50% loss. But, now I'm quibbling with the Oracle. | |||
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