Man, today was a wild ride.

quote:

Originally posted by PeterGV:
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:

quote:

Buffett says if you can’t stand to see a 50% decline in your portfolio, you should not be in the market

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.

I think his meaning was adequately explained in the following sentences, which I repeat here.

quote:

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!

Even so, individual stocks are often much more volatile than the DJIA or S&P.

quote:

Few people have a 401(k) that can take a 50% decline.

You may be able to take it but you don't have to like it.

quote:

another rollercoaster drop day for sure...

yeah, the last week has been brutal.

been a bit of a roller coaster but I am about 10 years from retirement so I am not panicking

yet..its still early

I quit checking at this point. Just going to ride it out. Still up for the year so that's a bonus.

I haven’t paid my 457 account any mind since it’s inception 11 years ago until last week. I happened to call the fellow at MassMutual to begin the process for moving an old account into the current one and I asked what the rate of returns have been looking like. He told me I’m down a few points for this calendar year but everybody is (his words) but that my 5 year return is 39% and my since inception is 89%. I didn’t know that sort of thing was possible. Sure would be nice if that holds up for the next 15 years too!

FBN talking "experts" say it is fear of what China will do. Piss on them, how about they fear what we do!

All of my retirement calculations are based on a 5% average return. I'm not even counting on the long term 7% that is so often quoted.

NOT too good today

I am hoping my more conservative (balanced) approach is paying dividends now. I did not do "off the charts" on the run up like many did. But my plan was to not loose a bunch in the correction periods. As I am going to need funds sooner than later. Will see I guess.

Better if my Amazon stock wasn't under Twittersault!

Rough day... but think long haul.

We import more Chicom crap than any one hemispehere needs. I look about my home and see my kids' stuff is mostly made over there.

Slowing down the imbalance would be wonderful, long term, in my un-educated opinion.

quote:

Originally posted by PeterGV:
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:

quote:

Buffett says if you can’t stand to see a 50% decline in your portfolio, you should not be in the market

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.

I do not think the distinction of "equities" is all that important. We are coming off the lowest interest rates in history. If for any reason we see moderate inflation, we could easily see longer duration bond prices off 50%.

I dumped all nasdaq and stocks that were over 20+% 2 weeks ago and should have listened to myself to dump facebook when I was up 7%. Made it out even at least. so I got half my portfolio into cash before the drop. We'll see if I catch the preverbial knife or not.

quote:

Originally posted by tha1000:

quote:

Originally posted by PeterGV:
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:

quote:

Buffett says if you can’t stand to see a 50% decline in your portfolio, you should not be in the market

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.

I do not think the distinction of "equities" is all that important. We are coming off the lowest interest rates in history. If for any reason we see moderate inflation, we could easily see longer duration bond prices off 50%.

In 50 years of semi pro investing, I have never owned a bond, either in my own accounts or those I had responsibility for. I did not sell any bonds when I was briefly a stockbroker. In that time, I have seen several declines of about 50% in “the market.” When I was a broker, the Dow went from ~930 to ~620!

There was another later in the ‘70’s, where the DJIA went even lower. There was the big tech sell off in 2000 or so.

The biggest defense against such disasters is to avoid paying wild prices. When a stock is selling for hundreds of times book value, several hundred times earnings, or never made a profit in several years of business, maybe you should not be owning it. Amazon was like this for a number of yesrs. The more business it did, the more it lost. In this case, it eventually turned a profit and worked out OK, but that was by no means certain in the early days.

Is buying cheap stocks the answer? Not necessarily. I have had several go to zero, real bargains that got to be even bigger bargains before going out of business. The consternation, and anguish, this causes is anesthetized largely by others that increased in value 500-1000% or more.

Another point. Unless you own the 30 stocks in the Dow in the same percentages as the Index, your results are going to be different than that measure. Same with S&P. You are comparing their apples to your oranges. Be sure your comparisons are appropriate.

quote:

Originally posted by thumperfbc:
I haven’t paid my 457 account any mind since it’s inception 11 years ago until last week. I happened to call the fellow at MassMutual to begin the process for moving an old account into the current one and I asked what the rate of returns have been looking like. He told me I’m down a few points for this calendar year but everybody is (his words) but that my 5 year return is 39% and my since inception is 89%. I didn’t know that sort of thing was possible. Sure would be nice if that holds up for the next 15 years too!

I'm not trying to make you feel bad or to make you have to justify anything. But just for comparison sake, I looked up the 5 year S&P return including today's dump and the return is 66%.

And I don't know what your portfolio make up at Mass Mutual is either and what return is appropriate for you.

I was a subscriber to Investors Business Daily for years.

It wasn’t my cup of tea, but I often looked at their CANSLIP technique and wondered if it could produce acceptable results with appropriate risks.

Does anyone follow it? I see they have local meetings around the country, so it must be reasnably popular.

Any impressions, experience, etc?

quote:

Originally posted by JALLEN:
I was a subscriber to Investors Business Daily for years.

It wasn’t my cup of tea, but I often looked at their CANSLIP technique and wondered if it could produce acceptable results with appropriate risks.

Does anyone follow it? I see they have local meetings around the country, so it must be reasnably popular.

Any impressions, experience, etc?

Do you mean CANSLIM?

https://www.investopedia.com/terms/c/canslim.asp