Operation Blood in the Streets

The Heretic

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Considering what an unmitigated dumpster-fire 2020 has been, that might not be too far off the mark. :eek:
The market is coming back though - for now. I know I have said this before, but I am basically holding my breath hoping it will come back to what I had in Jan/Feb and then sometime soon after, I will got to mostly cash and wait for the other shoe to drop.

Right now I think I am 15-20K away from that happening. There have been days when it goes up $3-5K, then down a couple $K, then back up. Slowly averaging up though. I will wait until even when it goes down it is more than what I had before, then I will put in the request to move most of it to cash in a money market fund.

I will leave some of it in stocks and bonds, but enough in cash so that I can jump back into it in a significant way.

If the market doesn't tank by early 2021 then I will maybe get back in slowly and carefully.

We'll see. But I do think we have more to ride out this year. Once people go back to work, and we get a second wave of CV, and it becomes apparent how many people won't get their jobs back.

Consumer spending is down, unemployment is way up. Businesses are still laying people off. Not good.
 

The Heretic

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Interesting that later in the article they say:

"People are afraid of a Democratic sweep. They're afraid of a Republican sweep, and there is literally no election outcome that isn't seen as creating more risk."

Emanuel said the market had been fearing the move toward a progressive agenda, but Biden is seen as the most moderate Democrat.

"There is a concern literally regarding any political outcome here. Given the fact that both sides see value in keeping tensions high with regard to China, I don't expect the hedging to diminish at all over the election,"


Meanwhile, the market keeps going up. I am keeping my fingers crossed that it does for the next few weeks at least, hopefully for the rest of June as people go back to work/etc.

Once most everybody goes back to work that will be going back to work, then it will become apparent that about half of the unemployed now, will remain unemployed, and that some businesses will not reopen. At that point, combined with election uncertainty, we will see a dip - not sure how much, but we will probably see a dip? :s0092:
 

USMC1911

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IMO lots of firms and people hedge. Not new by any means as its cheap (for now) to do and an easy way to cover potential loss for a known upfront cost. Kinda like buying a lottery ticket. I think it has as much to do with the possibility of a resurgence of covid as much as a change in the president. Not hard to see that the market could take a dive if one or both come to fruition.
 

The Heretic

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Agreed. It is likely that we will have a second wave of CV-19 as people start to gather in groups again and especially as the weather turns and people are inside more and more.

Combine that with continued unemployment, people not spending money, businesses closing (for whatever reason), then top that off the election (regardless of which way it goes) - we have a recipe for a pullback from a market recovery (not to mention the economy, which is more important - but I will stick to the stock market in this thread, except as to how the economy affects the market).

For me, it is less of a question as to whether we will have another dip/correction/etc., but rather as to when and by how much. I want to maximize my retirement earnings (in part because I lost any earning opportunity the first two quarters, and in the future, when I pull back to cash I won't have earnings then either, plus however long the bottom stays low) so I have to watch things carefully, not get too "greedy", but not pull out so soon I lose a lot of earnings as the market continues up.
 

The Heretic

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I read that about 42% of those currently unemployed won't get their jobs back. That means a 12%+ unemployment rate ongoing once most people go back to work. That kind of unemployment takes years to get back to where we were at the beginning of the year - if ever.
 

RicInOR

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It appears we're at the start of an economic collapse similar to that of 1929 and into the 1930s. What we're seeing in Minneapolis and art-link-camera.gif elsewhere appears to add the danger of organized violence.

A widespread decampment from big cities began some time ago and appears to be accelerating. Bloomberg reports RV sales are up 30% art-link-symbol-tiny-grey-arrow-only-rev01.gif in some urban places. The causes are fascinating but in the end what matters is how their migration to the "flyover country" they so despise may affect your personal plans.

As I said here last week:

art-link-symbol-tiny-grey-arrow-only-rev01.gif July will tell the truth about the economy. I've chosen November as the month of general truth, whether the years following will be of manageable coping, of unexampled disaster, or something in between.
July, when the long term direction of the economy will be plain to see, may be your last opportunity to shape your preparations more exactly, meaning food, shelter and protection. November is the month of the presidential election, when all sides reveal their intentions and one is chosen. It's also when winter weather begins. Time is running out.
 

The Heretic

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I don't think July will show much of anything. We are still in the first phases of "reopening" and everybody will still be waiting to see what will happen and hoping for a quick recovery. The $600 expansion of UI benefits does end until the end of July, and then we may see some people having problems. We may also see some more stimulus after July, maybe August retroactive to end of July. Maybe another one time stimulus check - not saying I want that, just saying it is possible - they are talking about it.

We will still have the 13 week extension of UI benefits to the end of the year, maybe more into next year.

But from August or so people will be going back to work, maybe as soon as July, some are now.

By September/October on, it will be apparent that a lot of the currently unemployed won't have a job to go back to. Then it will set in.

Today I got about another $2K back in my IRAs. I don't know how my 401K did - it always lags in their calculation (different orgs) - they seem to only update once a day, maybe as a batch job at night, so I will learn more tomorrow. Still about $10K down, but I calculated pretty much exactly what each account needs to get to now.
 

USMC1911

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I really looked at pulling some off the table today in my Boeing and Lam Research positions but the short-term outlook is positive right now. Just couldn't pull the trigger. That could all change at any moment though.
 

The Heretic

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I am hoping I am right and that I am not letting the desire to accumulate more earnings and let it ride for a while doesn't cost me in the long run. I am impressed with the way the "managed" accounts I have seem to be able to earn more even when the market goes down some for the day. I was really disappointed in March when I was down $40-$50K even though I had gone to mostly bonds in December, but now that is all water under the bridge and I am almost back to where I was and it looks like I might make up for some lost earning opportunity.

I do have an upper limit though at which point I will cash in my chips and go to money market funds and stop off the roller coaster for a while. I am thinking my 401K might stay in the game, but my big IRA will be held in cash until spring or the market crashes (at which point I would jump back in).
 

USMC1911

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Looking like a booming day. Glad I held off as Boeing is pushing the $200 mark this morning. Going to keep a close eye and possibly back off some of my current positions that have really recoverd quickly. Going to look into something that has been lagging in the recovery to see if a different opportunity exists.
 

The Heretic

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Good news.

However, I believe that once everybody goes back to work that will be going back to work, that the unemployment rate will bottom out at no lower than 10%. That will be a drag on the economy. Even if it bottoms out a bit below that - say 7-8% - that is still twice what we had before the pandemic.

Those 4% to 7% of unemployed will take much longer to erase, and some will never get their jobs back (e.g., me). We were headed to a recession before the pandemic. That hasn't gone away, it has been exacerbated and it will take months if not years for us to get past this.

Add on to that, Trump won't be re-elected.

The stock market doesn't look at long term results, it has a short attention span - more so in recent history than ever before. The next panic we have, there will be another significant selloff.

I am glad it is coming back. I am glad some people are going back to work. But 2.5 million is less than 10% of the people who were laid off. As this progresses, that rate of people going back to work will maybe speed up or remain the same for a little while, then slow down, then become a trickle.

When that is realized, and there is a rise in CV-19, and the stimulus fades, and small businesses go bankrupt - then there will be a selloff.

FWIW - heard from my SIL that he is the only remaining person doing his particular job duties where there were about 4 doing those duties before. He is working double the hours he was before - which is good for $, but he can't keep those hours up forever. Will his employer be able to get the people back when they decide they need them? Maybe, maybe not.
 

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