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You're a true optimist if you believe any of the following::
1. There's any chance that we'll stay in the green channel long-term.
2. There's a reasonable chance that we'll stay well above the red channel long-term.
3. Entering the blue channel ever again would be absolutely, totally, and in all other ways inconceivable.
I'm not saying that you would necessarily be wrong to be a true optimist, and that the future we will find ourselves in truly could be the best of all possible worlds. However, I am saying that if you are a true optimist right now, at this moment, then I'd sure like to be smoking what you're smoking!
I am not an optimist. You can try to pry the shares of TLT from my cold dead fingers, but I'm not dead yet. Might seem that way as I patiently wait for trends to break though! Trends break. That's what they do. And each time the Fed raises rates, it puts us one step closer to the edge.
19 comments:
Great summary of where we are:
https://twitter.com/MacroAlf/status/1573331218804125696?s=20&t=CYEEMSYB-uSAA8fQoq6ixQ
Dollar milkshake theory is in high gear. That vast sucking sound is Euros turning into USD.
Who Struck John,
Vastly sucking sounds abound!
https://twitter.com/SoberLook/status/1572524015608279040?s=20&t=Z_uzg5uNzgomyWisGJMYkg
Germany’s producer price report was a shocker, as wholesale electricity prices climbed 175% (2nd chart).
US LNG exports to Europe passed Russian natural gas exports to Europe in June. So instead of all of the money going to Russia, half now goes to the US. That's why the Euro has fallen. The interest rate differential is just icing on the cake.
I'm hesitant to use the "R" word...
"R"ubicon, that is.
S&P 500 to 1200 anyone?
Anonymous,
My thought process as I was reading your comment:
Hesitant to use the “R” word? I don’t think we’re quite in a recession yet, but that’s open for debate. Further, the odds seem very high that we’re heading in that direction at a high rate of speed.
RUBICON???? HOLY #%^*!!!
If we go there, it really is Great Depression again.
For those just tuning in, the Rubicon has been mentioned many timed on this blog and became an inside joke.
http://illusionofprosperity.blogspot.com/2010/04/crossing-s-500s-rubicon.html?m=1
When it comes to crossing the Rubicon, never say never. *cringe*
I'm confident if we have five or six more 3/4% Fed rate hikes we can get there.
https://twitter.com/tradorpage/status/1572518806521806848?s=20&t=LxEEqduyrSNjoOcc3ZzEqg
Octagon
Hexagon
Pentagon
Portfoliogone
Rubigon
*cringe*
I’m going to try to buy a little EDV in the morning, so we can safety assume it’ll gap up on the open..
Best to check where you stand in the universe beforehand.
It’s pretty easy to do. Drop a slice of buttered toast on a carpet with a shedding German Shepherd in the house. If it lands buttered side up, you’re having a very lucky day and it’s therefore probably safe to buy.
I should warn you that this approach isn’t foolproof though. You risk using up all your luck just testing it, so there might not be any left. I’ve tried ro come up with a foolproof system using toast repeatedly to verify, but it’s always ended in tragedy. At some point, the luck always runs out. ;)
Lol. I’m not feeling particularly lucky, but I’ve always found that it’s best to dollar-cost average down when I least feel like doing so. It could easily fall another 10%. At which point, I’ll add again. Rinse, repeat. Should it continue down, then my losses in this part of the portfolio will be the least of my worries!
https://www.youtube.com/watch?v=A732Cuuo2tI
I’m more of a see something on sale, back up the truck before others do or the sale goes away kind of person. I never dollar cost average. Sometimes it works in my favor, sometimes it doesn’t. This time it definitely didn’t. Going all in on that TIPS bond quite a few years ago did, as did selling all of it when real yields went negative, as did going all in on the stock market last year, as did moving entirely to cash in January. So, no complaints. :)
I wish I could have leveraged up my best “sure thing” trade of recent years. When Costco dramatically raised their prices on canned chicken, I immediately looked for alternatives. Walmart hadn’t raised their prices yet, so I bought about 100 cans. Shortly thereafter, Walmart raised their prices about 70%.
I eat a lot of soup. I’m got enough chicken for 3 years. And if you are what you eat, I’m definitely chicken, when it comes to our economy! Badum-ching. *cringe*
I am VERY tempted right now to sell TLT and buy individual TIPS bonds with intent to hold to maturity. Just lock in the real yields and not worry about rates. As bad as TLT has done since I bought, LTPZ has done even worse. TIPS are my preferred investment over the long-term.
It was my intent to hold TLT until TIPS were more of a bargain. This is not how I saw it happening though. TIPS are becoming a relative bargain compared to TLT, but mainly because TIPS prices have crashed even more than TLT.
Horrible investment environment. Roubini is predicting hard landing, more stagflation, or a combination of the two. That really explains why it’s so horrible. Hard to brace for inflation, stagflation, and deflation simultaneously.
Since I already have a lot of exposure to TIPS (being held to maturity) and even safer I-Bonds outside my retirement account, having TLT exposure is more tolerable, if not being outright greedy. It’s the latter I might regret. I can lose a lot with TLT, even from here. I would not if I moved to individual TIPS and held to maturity. Losing money when there was a safer alternative may remind me of the hubris of it all. May definitely regret it.
I just saw this tweet and it reminded me of our comments.
https://twitter.com/philbak1/status/1539368470869164033?s=20&t=guqpIiYBJXppmh5b9yPAMg
You can dollar cost average w vanguard funds, you can angel-invest in visionary founders, you can hodl bitcoin, you can market-make options, you can yolo or swing trade or btfd or smart-beta or keep cash under the mattress.
Just as long as your investments express who you are ✌️
Agreed. There’s no right or wrong way, for if there were we could always make money going long the right way and shorting the wrong way.
You prefer to dollar-cost average. I don’t. We’re both just doing what makes us both comfortable.
I understand. I’ve just reached the conclusion that I have no idea what will happen so I make my bets incrementally. I’m content to buy a little of something and watch it go up as opposed to buying a lot of something and watching it fall. I try to never chase an asset as it goes up in price.
If one asset shoots up before I get my preferred allocation, then there will always be some other asset that is a good potential investment.
PS. That’s a lot of canned chicken!
PS. That’s a lot of canned chicken!
https://www.youtube.com/watch?v=zgw9LfX4Zso&feature=share&si=ELPmzJkDCLju2KnD5oyZMQ
The three Ps of life insurance are:
1. Poultry
2. ’Pocalypse
3. Pantry
Throughout history, food has been shown to be pretty good life insurance. Just sayin’. ;)
Time to try out inflationary depression.
60% of the time, inflation works every time.
https://youtube.com/watch?v=pjvQFtlNQ-M&feature=share&si=EMSIkaIECMiOmarE6JChQQ
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