[chassis]

Originally Posted by 2000cs

That is a thesis I’ve read many times, but not one I support as you may infer from the last paragraph. I’m a long term bull, but expect some bumpiness as many factors sort out. Bumpiness translates to buying opportunities if I can watch closely.


I sold a house last fall and bought another (moved to a different state). To make that work I sold a lot of stocks in the fall - stocks I no longer wanted to own so won’t buy back. That put me at about 1/3 cash in the total portfolios, excluding my house (no mortgage). I’ve been sitting on that cash anticipating the market would be weak/volatile through Feb/Mar, but it firmed up earlier than I had expected so I’m late getting back in (but happy with my positions, just not optimized).

I also took on a full-time consulting gig starting Jan and have been really busy with that, so I haven’t had the time to look closely at stocks and put in the buy orders - I’m just watching at a high level. So I may delay getting back in a few more months. At that time I’ll go to about 85% stocks and 15% cash (I’m retired so that cash is next year’s expenses plus a cushion). I don’t like bonds because they typically have poor real yields, and I think we are in a long-term rising interest rate cycle (18 more years to go, or so), which will deflate their values. I’d rather have a dividend stock or fund with some growth potential if I was looking for a cash generator. All of that reflects my risk tolerances and very long term outlook/horizon. (“Cash” in this context is money markets and other short-term stuff, it is all earning, just poorly).

Thanks, I am generally in agreement. 85/15 with cash as the 15 is a good allocation imo.

Short term Treasuries and some MM funds are paying 5% and I am using those vehicles.

Some of my portfolio is at ATH and recent stock purchases I have made in the past three months are doing OK for now.

[antzcrashing]

1 year gain my brokerage: -12.7%
1 year gain SP500: -9.2%
1 year gain SP500 (avg): 10%
1 year (Aug22) hedge fund (avg): 7.2%

YTD gain my brokerage: 13.3%
YTD gain SP500: 5.7%

Verdict: you can make money if you have a good brain. Dont let them tell you otherwise. Come at me if you like

Disclaimer: investing is risky, consult your best judgement, or a financial advisor if you’re into that

[BayMoWe335]

Originally Posted by sspade

Lots of good info on here and much wiser investors, Im sure.

That being said... I CAN PRETTY MUCH GURANTEE YOU WILL MAKE MONEY...

Buying into ACB as soon as possible. Im holding 1500 shares and am upside down currently but recommend doing a bit or research and making an educated decision for yourself!

Whats the worst that could happen. Really? If someone has insight, please share.

ACB is now worth $0.83, down from $125 in 2018.

[BayMoWe335]

Originally Posted by antzcrashing

1 year gain my brokerage: -12.7%
1 year gain SP500: -9.2%
1 year gain SP500 (avg): 10%
1 year (Aug22) hedge fund (avg): 7.2%

YTD gain my brokerage: 13.3%
YTD gain SP500: 5.7%

Verdict: you can make money if you have a good brain. Dont let them tell you otherwise. Come at me if you like

Disclaimer: investing is risky, consult your best judgement, or a financial advisor if you’re into that

The verdict there is your performance was higher on a very short YTD timescale of 2 months?

See you in 40 years.

[antzcrashing]

Originally Posted by BayMoWe335

The verdict there is your performance was higher on a very short YTD timescale of 2 months?

See you in 40 years.

Yes you will see me, we still be driving BMs and using Bimmerpost at that time but with more AI and metaverse, and I will be retired (age 75)

[LuvMyE92]

Originally Posted by sspade

Lots of good info on here and much wiser investors, Im sure.

That being said... I CAN PRETTY MUCH GURANTEE YOU WILL MAKE MONEY...

Buying into ACB as soon as possible. Im holding 1500 shares and am upside down currently but recommend doing a bit or research and making an educated decision for yourself!

Whats the worst that could happen. Really? If someone has insight, please share.

You must be high.

. See what I did there?

The worst that could happen is that you lose all of your money invested in a small company with no earnings in a competitive market.

[antzcrashing]

Word of caution: be very skeptical and careful with robinhood or other tech company masquerading as a stock brokerage (or crypto bank) these companies play dirty, keep your holdings with them to low levels of your overall portfolio.

[antzcrashing]

Enough is enough, buy when there is blood in the water. Market sentiment is absolute trash. I bought a small amount of TQQQ, lets good

Not investment advice

[BMW F22]

I feel like market will go up tomorrow and then dip quite a bit Friday with labor numbers. Been up and down day to day but up over the last 6 months.

[antzcrashing]

Big market day today

[BMW F22]

Originally Posted by BMW F22

I feel like market will go up tomorrow and then dip quite a bit Friday with labor numbers. Been up and down day to day but up over the last 6 months.

Shows how much I know. It happened the opposite as of about noon EST. Market is recovering from yesterday’s sell off.

[Tyga11]

Can someone explain to me how the 15th largest bank in the country can just go under overnight????

[dradernh]

Originally Posted by Tyga11

Can someone explain to me how the 15th largest bank in the country can just go under overnight????

https://www.nytimes.com/2023/03/10/b...ank-stock.html

[Tyga11]

Originally Posted by dradernh

https://www.nytimes.com/2023/03/10/b...ank-stock.html

I read that article earlier. Still doesn't make any sense to me

[kscarrol]

Good old run on the bank. Lots of large dollar accounts (above the $250,000 FDIC cover) and when they started withdrawing money the bank could not cover those withdrawals.

[dradernh]

Originally Posted by Tyga11

I read that article earlier. Still doesn't make any sense to me

The gist of it is that SVB suffered a bank run.

This was for two reasons: 1) it was paying too-low rates on deposits, having placed a substantial portion of those deposits in low-rate, long-dated US Treasuries and mortgage bonds BEFORE the Fed started inexorably raising rates; and, 2) the bank's depositors were heavily skewed towards Silicon Valley startup founders who wanted their deposits back, either to get higher returns elsewhere or to deal with business issues in an economy no longer as enamored of tech startups as it recently was (esp. from mid-2020 to early 2022).

-----------------------------

"Silicon Valley Bank’s...troubles have been brewing for more than a year. Founded in 1983, the bank, based in Santa Clara, Calif., was a go-to lender for start-ups and their executives."

"Though Silicon Valley Bank advertised itself as a 'partner for the innovation economy,' it was being shaken by decidedly old-fashioned decisions. To compete with bigger names, it had long boasted of looser lending standards for fledgling companies, and offered to pay higher interest rates on deposits than its larger rivals."

"Flush with cash from high-flying start-ups, it bought huge amounts of bonds more than a year ago, just before the Federal Reserve began to raise interest rates. Like its peers, Silicon Valley Bank kept just a fraction of the deposits on hand and invested the rest with the hope of earning a return."

"In particular, the bank put customer deposits into long-dated Treasury bonds and mortgage bonds which, while interest rates were low, promised modest, steady returns."

"That had worked well for years."

"When the Federal Reserve began raising rates last year, however, those holdings became less attractive because newer government bonds paid more in interest. That might not have mattered so long as the bank’s clients didn’t ask for their money back."

"But at the same time as interest rates were rising, the environment for start-up funding dried up, putting pressure on the bank’s clients — who then began to withdraw their money. To pay those redemption requests, Silicon Valley Bank had to sell off some of its investments at exactly the wrong time. In its surprise disclosure on Wednesday, the bank admitted that it had lost nearly $2 billion when it was all but forced sell some of its holdings."

“'It’s the classic Jimmy Stewart problem,' said Sheila Bair, former chair of the Federal Deposit Insurance Corporation, a primary bank regulator... 'If everybody starts withdrawing money all at once, the bank has to start selling some of its assets to give money back to depositors.'”

[Tyga11]

Originally Posted by dradernh

The gist of it is that SVB suffered a bank run.

This was for two reasons: 1) it was paying too-low rates on deposits, having placed a substantial portion of those deposits in low-rate, long-dated US Treasuries and mortgage bonds BEFORE the Fed started inexorably raising rates; and, 2) the bank's depositors were heavily skewed towards Silicon Valley startup founders who wanted their deposits back, either to get higher returns elsewhere or to deal with business issues in an economy no longer as enamored of tech startups as it recently was (esp. from mid-2020 to early 2022).

-----------------------------

"Silicon Valley Bank’s...troubles have been brewing for more than a year. Founded in 1983, the bank, based in Santa Clara, Calif., was a go-to lender for start-ups and their executives."

"Though Silicon Valley Bank advertised itself as a 'partner for the innovation economy,' it was being shaken by decidedly old-fashioned decisions. To compete with bigger names, it had long boasted of looser lending standards for fledgling companies, and offered to pay higher interest rates on deposits than its larger rivals."

"Flush with cash from high-flying start-ups, it bought huge amounts of bonds more than a year ago, just before the Federal Reserve began to raise interest rates. Like its peers, Silicon Valley Bank kept just a fraction of the deposits on hand and invested the rest with the hope of earning a return."

"In particular, the bank put customer deposits into long-dated Treasury bonds and mortgage bonds which, while interest rates were low, promised modest, steady returns."

"That had worked well for years."

"When the Federal Reserve began raising rates last year, however, those holdings became less attractive because newer government bonds paid more in interest. That might not have mattered so long as the bank’s clients didn’t ask for their money back."

"But at the same time as interest rates were rising, the environment for start-up funding dried up, putting pressure on the bank’s clients — who then began to withdraw their money. To pay those redemption requests, Silicon Valley Bank had to sell off some of its investments at exactly the wrong time. In its surprise disclosure on Wednesday, the bank admitted that it had lost nearly $2 billion when it was all but forced sell some of its holdings."

“'It’s the classic Jimmy Stewart problem,' said Sheila Bair, former chair of the Federal Deposit Insurance Corporation, a primary bank regulator... 'If everybody starts withdrawing money all at once, the bank has to start selling some of its assets to give money back to depositors.'”

Thank you for explaining. That actually makes sense. That article was poorly written.

I really think this is the first shoe to drop...I wonder which bank is next?

[Tyga11]

Originally Posted by kscarrol

Good old run on the bank. Lots of large dollar accounts (above the $250,000 FDIC cover) and when they started withdrawing money the bank could not cover those withdrawals.

I was under the impression banks had to be able to cover all of the money invested...if that's not the case, I really have no idea how that's legal.

So who is going to prison? This is like FTXX?

[Tyga11]

Originally Posted by antzcrashing

1 year gain my brokerage: -12.7%
1 year gain SP500: -9.2%
1 year gain SP500 (avg): 10%
1 year (Aug22) hedge fund (avg): 7.2%

YTD gain my brokerage: 13.3%
YTD gain SP500: 5.7%

Verdict: you can make money if you have a good brain. Dont let them tell you otherwise. Come at me if you like

Disclaimer: investing is risky, consult your best judgement, or a financial advisor if you’re into that

I was down 40% last year but I'm up around 20% this year...so what are we proving? I'm still down 20%.

[RickFLM4]

Originally Posted by Tyga11

I was under the impression banks had to be able to cover all of the money invested...if that's not the case, I really have no idea how that's legal.

So who is going to prison? This is like FTXX?

It’s not possible for a bank to cover all the money deposited at the same time. Those funds are part of what they use for lending and investing. They have minimum capital and liquidity requirements.

[dangerus_car]

Originally Posted by dradernh

https://www.nytimes.com/2023/03/10/b...ank-stock.html

Paywall

[dradernh]

Originally Posted by Tyga11

Thank you for explaining. That actually makes sense. That article was poorly written.

I really think this is the first shoe to drop...I wonder which bank is next?

1) Yes, it was poorly written; it also assumes a degree of familiarity with the banking business that most of us do not possess.

2) That's always possible in an environment of steadily increasing interest rates. However, SVB, and I don't know how many of them are out there (it can't be many), while a conventional bank in most respects, had a very distinct customer base and lending environment.

This time around, the best argument against a wider banking crisis is that the employment market continues to be strong and Americans continue to have over $1 trillion in so-called excess savings left over from the pandemic years. Most Americans will continue making their loan payments on time and without undue difficulty.

While that strength in the economy will lead the Fed to continue raising rates, I suspect the end is in sight on that front. Unemployment will have to rise, but it's so low now that even a modest but sustainable rise will lead the Fed to end raising its policy rate.

-----------------------------

That's a lot of speculation and, as always, just my 2¢ on a very complicated matter.

Originally Posted by Tyga11

I was under the impression banks had to be able to cover all of the money invested...if that's not the case, I really have no idea how that's legal.

The Fed has a reserve requirement for deposit-taking institutions. That requires those institutions to hold aside a Fed-mandated percentage of deposits so as to be able to defend the institution against all sorts of eventualities, including that which SVB has just experienced. This reserve is held in the bank's own vaults and/or in an account at the Fed.

What is the Fed's reserve requirement, you might ask. It's zero. Yes, the Fed has no reserve requirement at the present time. In order to deal with the extraordinary challenges presented by the pandemic, the Fed, in its wisdom, chose to permit banks, et al. to, at their discretion, lend and otherwise invest up to 100% of their deposits. Almost three years later now, the Fed has not changed its position. My expectation is that it will do so sometime after it's done raising interest rates.

While it's unlikely any institution has left itself with no reserve with which to honor withdrawal requests from its depositors, it has given them a remarkable degree of freedom in how they manage the last 10% or so of their deposits (10% being the Fed reserve requirement in force until March 15, 2020).

This page offers what I think is a useful explanation of the Fed's reserve requirement and its effects: https://www.thebalancemoney.com/rese...rement-3305883.

Originally Posted by dangerus_car

Paywall

I don't think so. Last I checked, the New York Times allows you 10 free articles before it cuts you off. Blow away cookies, and you've got 10 more free articles available to you.

But maybe that's changed - I got tired of blowing away cookies and got a subscription for a small fraction of what my Wall Street Journal costs me. They do say you get what you pay for, though, don't they?