Gregmal Posted July 11, 2022 Share Posted July 11, 2022 7 minutes ago, Sinbius said: From the start of the year can we agree you would have lost more having equity than cash (on average)? ( and of course you have to account for the lose of value due to inflation also on the value of stocks...if a stock lose 20% in real term, accounting for inflation, it has lost 28,6% or whatever it is...) (You probably mean that in the long term equity is a good edge against inflation and of course it is true...) In theory, practice is like theory, in practice it is not. Same as the question to the other guy…from any given point we can draw whatever conclusion we want to. Why is January 1 the starting point? If you think inflation is a problem then holding cash is fundamentally opposed to that idea. The only basis otherwise is if you believe in the efficient market hypothesis. In which case there is no point to anything. There are currently plenty of businesses that have not been impacted one iota that have sold off. If your business is not impacted and is growing value, is there a point to worrying about the daily stock market quotes? Or conversely, if the only thing that matters is the daily market quotes, what’s the point in owning anything? Link to comment Share on other sites More sharing options...
Sinbius Posted July 11, 2022 Share Posted July 11, 2022 (edited) 18 minutes ago, Gregmal said: Same as the question to the other guy…from any given point we can draw whatever conclusion we want to. Why is January 1 the starting point? If you think inflation is a problem then holding cash is fundamentally opposed to that idea. The only basis otherwise is if you believe in the efficient market hypothesis. In which case there is no point to anything. There are currently plenty of businesses that have not been impacted one iota that have sold off. If your business is not impacted and is growing value, is there a point to worrying about the daily stock market quotes? Or conversely, if the only thing that matters is the daily market quotes, what’s the point in owning anything? I don't believe in efficient market hypothesis. I don't believe in trying to time the bottom. I don't believe that the only thing that matters is the daily market quotes. I believe that we have a material probability that we are at peak margins, that the FED fuc3ed up, that due too inflation there is no pumping money to save the day, I believe we are in a RECESSION ...I believe that valuations are generally high, I believe that consumer confidence is low, I believe people are cutting spending...I believe companies are freezing hiring and laying off and they will keep doing it... Edited July 11, 2022 by Sinbius Link to comment Share on other sites More sharing options...
Gregmal Posted July 11, 2022 Share Posted July 11, 2022 Inflation last year was significantly worse than the inflation we ve seen this year(unless you believe the CPI junk), the market did OK and some individual stocks did wonderful. If the approach is that no downward volatility is acceptable then it’s going to be hard to ever invest. And I’m not looking for a debate on inflation but keep in mind oil was negative in March 2020 and housing prices 30% lower and CPI, which is the measure of choice for the sheeple; will tell you March 2022 was worse than 2021! Not in the real world. Link to comment Share on other sites More sharing options...
Parsad Posted July 11, 2022 Author Share Posted July 11, 2022 46 minutes ago, Sinbius said: From the start of the year can we agree you would have lost more having equity than cash (on average)? ( and of course you have to account for the lose of value due to inflation also on the value of stocks...if a stock lose 20% in real term, accounting for inflation, it has lost 28,6% or whatever it is...) (You probably mean that in the long term equity is a good hedge against inflation and of course it is true...) In theory, theory and practice are the same, in practice they are not. Fully agree that Greg has been wrong since the beginning of the year, and I've told him so hundreds of times now! But you're probably going to be equally wrong when the bottom does come, and you end up missing the rebound. And I fully agree with your quote...in theory, theory and practice are the same, in practice they are not. You are being theoretical now after a 20% plus drop...not practical...just like Greg was theoretical at the beginning of the year. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted July 11, 2022 Author Share Posted July 11, 2022 32 minutes ago, Sinbius said: I don't believe in efficient market hypothesis. I don't believe in trying to time the bottom. I don't believe that the only thing that matters is the daily market quotes. I believe that we have a material probability that we are at peak margins, that the FED fuc3ed up, that due too inflation there is no pumping money to save the day, I believe we are in a RECESSION ...I believe that valuations are generally high, I believe that consumer confidence is low, I believe people are cutting spending...I believe companies are freezing hiring and laying off and they will keep doing it... These are all trailing indicators. We were in recession before statistics actually proved we were. We saw inflation before the CPI started indicating it. We knew consumers would get hit as rates started to rise and CPI indicators showed that inflation was present. The market reacts well before the recession is actually proven. The market also rebounds well before the bottom of the economy is proven. Don't get sucked into the hype and miss out on opportunities. Cheers! Link to comment Share on other sites More sharing options...
Sinbius Posted July 11, 2022 Share Posted July 11, 2022 1 minute ago, Parsad said: Fully agree that Greg has been wrong since the beginning of the year, and I've told him so hundreds of times now! But you're probably going to be equally wrong when the bottom does come, and you end up missing the rebound. And I fully agree with your quote...in theory, theory and practice are the same, in practice they are not. You are being theoretical now after a 20% plus drop...not practical...just like Greg was theoretical at the beginning of the year. Cheers! 1: You are wrong in thinking that I am trying to time the bottom (as I have told numerous time I am not...I can't...) 2: About the phrase "You are being theoretical now after a 20% plus drop...not practical..."...I don't get your point...the theory vs practical was about that even if in the long term equities on average is an hedge vs inflation in practice could make sense setting the bar higher at the cost of having some cash...so I did in practice... Link to comment Share on other sites More sharing options...
Parsad Posted July 11, 2022 Author Share Posted July 11, 2022 1 hour ago, Sinbius said: Not trying to time the bottom...I just think cash have more value...I am just setting the bar higher... Good for you! Just make sure you put that cash to work when you think the opportunity is there. Otherwise you'll be kicking yourself if you miss the bulk of the rebound of the next bull market. Remember, it could very well be a sideways market where the market has now dropped 20% plus and stays in a range for the next 2-5 years with slight upward and downward movements. Holding cash when there are quality stocks out there paying 3-6% dividends with potential 50% upside on stock price and 10-15% downside, is a hell of a lot better than zero downside risk and near zero interest income in a highly inflationary environment. You could even move to 50% equities and 50% cash and hedge your bets. That would be far better than near 100% cash in this environment. Cheers! Link to comment Share on other sites More sharing options...
Gregmal Posted July 11, 2022 Share Posted July 11, 2022 3 minutes ago, Parsad said: Fully agree that Greg has been wrong since the beginning of the year, and I've told him so hundreds of times now! But you're probably going to be equally wrong when the bottom does come, and you end up missing the rebound. And I fully agree with your quote...in theory, theory and practice are the same, in practice they are not. You are being theoretical now after a 20% plus drop...not practical...just like Greg was theoretical at the beginning of the year. Cheers! Eh Greg’s top position did 40% ytd and got bought out. Second biggest is PSTH which is modestly higher. Greg was on the short tech trade back when you banned him in Jan ‘21 where everyone swore “you just couldn’t short this market”, and yes, Greg was on the futures and options for oil and gas summer 2021 when everyone said $100 oil wasn’t possible and was sitting around with their thumbs up their butts worrying about Deltacron or Omicron or whatever stupid variant caught everyone’s attention at the time. True story! Link to comment Share on other sites More sharing options...
Sinbius Posted July 11, 2022 Share Posted July 11, 2022 (edited) 10 minutes ago, Parsad said: Good for you! Just make sure you put that cash to work when you think the opportunity is there. Otherwise you'll be kicking yourself if you miss the bulk of the rebound of the next bull market. Cheers! I have never ever being shy to push money...just picky... ...and I repeat because it seems it is not clear if I had found at least 1 or 2 other extremely good opportunities I would be all invested right now...I just didn't... Edited July 11, 2022 by Sinbius Link to comment Share on other sites More sharing options...
Parsad Posted July 11, 2022 Author Share Posted July 11, 2022 8 minutes ago, Sinbius said: 1: You are wrong in thinking that I am trying to time the bottom (as I have told numerous time I am not...I can't...) 2: About the phrase "You are being theoretical now after a 20% plus drop...not practical..."...I don't get your point...the theory vs practical was about that even if in the long term equities on average is an hedge vs inflation in practice could make sense setting the bar higher at the cost of having some cash...so I did in practice... Greg felt that cash was a horrible holding regardless of environment...even when markets were at historical levels and various areas had huge speculative valuations. You feel that cash is better in this environment even though opportunities are now presenting themselves after a 20% plus drop in the S&P500 and 30% plus drop in the Nasdaq. Some areas are down 60-90%...even some stocks that are fully profitable, have little debt and generate steady cash flows. Yet you think there is still superior optionality in cash. That's what I mean that Greg was being theoretical previously...that equities would be superior going forward...and you are now being theoretical...that cash will be superior going forward. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted July 11, 2022 Author Share Posted July 11, 2022 9 minutes ago, Gregmal said: Eh Greg’s top position did 40% ytd and got bought out. Second biggest is PSTH which is modestly higher. Greg was on the short tech trade back when you banned him in Jan ‘21 where everyone swore “you just couldn’t short this market”, and yes, Greg was on the futures and options for oil and gas summer 2021 when everyone said $100 oil wasn’t possible and was sitting around with their thumbs up their butts worrying about Deltacron or Omicron or whatever stupid variant caught everyone’s attention at the time. True story! Sure. But you were wrong on cash at the beginning of the year. I believe that's 101 times now that I've said that! Cheers! Link to comment Share on other sites More sharing options...
Sinbius Posted July 11, 2022 Share Posted July 11, 2022 (edited) 16 minutes ago, Parsad said: ...and you are now being theoretical...that cash will be superior going forward. Cheers! I never said or imply that...(and going forward without a time frame does not make sense...)... It is probably me, that english is not my language I guess... I said that I set the bar higher...because the probabilities that some great opportunities is coming is higher...peak margins...so I want to be conservative in the valuations...earnings power, or owner earnings or whatever we want to call it and growth rates are probably lower of what are represented and what consensus is ... (...if I put the security belt on before driving it is not because I think I will have an accident...not trying to time the bottom of my life...) Edited July 11, 2022 by Sinbius Link to comment Share on other sites More sharing options...
james22 Posted July 11, 2022 Share Posted July 11, 2022 6 hours ago, Sinbius said: ...and I repeat because it seems it is not clear if I had found at least 1 or 2 other extremely good opportunities I would be all invested right now...I just didn't... Do you believe it coincidence you can't find extremely good opportunities when the market is off? When they should be more likely found than when the market is doing well? Link to comment Share on other sites More sharing options...
Sinbius Posted July 11, 2022 Share Posted July 11, 2022 (edited) 39 minutes ago, james22 said: Do you believe it coincidence you can't find extremely good opportunities when the market is off? When they should be more likely found than when the market is doing well? No...the more time pass the more I am extremely picky...and I don't have immense knowledge about anything...so it is hard for me... Market is off but it is still extremely overvalued according to shiller pe Shiller PE Ratio (multpl.com) ...also according to p/s... S&P 500 Price to Sales Ratio (multpl.com) also according to the Buffett indicator for the Buffett fans!!!! Buffett Indicator: The percent of total market cap relative to Gross National Product? (gurufocus.com) Aren't you all Buffett fans?...wait...you don't pick and choose what he says to suit you, do you? Edited July 11, 2022 by Sinbius Link to comment Share on other sites More sharing options...
james22 Posted July 11, 2022 Share Posted July 11, 2022 Yet you were less picky (found more opportunities) before the market was off (more overvalued)? Link to comment Share on other sites More sharing options...
Sinbius Posted July 11, 2022 Share Posted July 11, 2022 (edited) 10 minutes ago, james22 said: Yet you were less picky (found more opportunities) before the market was off (more overvalued)? No, I didn't sold now when the market was off...I sold a bit when prices where higher and I am not buying back the same staff at lower prices still... (Rhetoric mode on): I follow Buffett advice be greedy when other are fearful and whatever... Now everybody is greedy because we had some sell off and everybody is short term memory and trade mainly based on prices not valuations (Buffett indicator remember)...so they buy greedy greedy greedy expecting the usual bump like there could be the FED put or some other put to save the day... I follow Buffett advice...I zig when people zag... How Buffett invented a macro indicator to spot if market is overvalued if he never look at macro?...it is a mystery... Edited July 11, 2022 by Sinbius Link to comment Share on other sites More sharing options...
Longnose Posted July 11, 2022 Share Posted July 11, 2022 Quite a pissing match this morning. I personally value everyone's opinion on this board. We have quite a group of very talented and intelligent people. I make very few macro oriented bets. From a macro perspective I think we are still a little over valued but certain sectors of the market are getting overpulled down from the macro pull down. I have been sinking more and more money into a few companies that I believe are getting pummeled harder than they should be. Link to comment Share on other sites More sharing options...
Gregmal Posted July 11, 2022 Share Posted July 11, 2022 (edited) 7 hours ago, Parsad said: Sure. But you were wrong on cash at the beginning of the year. I believe that's 101 times now that I've said that! Cheers! Pick your starting points however you’d like. I am a firm believer that cash is overrated in a world where one is able to have liquidity. Especially if you have an earnings stream/income. Cherry picking start stop points is generally dangerous because it can produce whatever result you want. Remember Hussman or whatever during COVID? “Ay made like 3000% in a month!”, and it’s like dude you’ve sucked a big one for a decade shut up. Of course having been in different situations as well, I’ll say that when running other peoples money, cash may be more necessary because you can’t always rely on having additional buying power. But for my own personal money, I’ve never seen a reason to hold much of it because there is overwhelming evidence, spanning decades, that cash is inferior to pretty much anything. What is $1 of cash vs $1 of index vs $1 of land starting in 1940, 1960, 1980 and 2000 worth today? Edited July 11, 2022 by Gregmal Link to comment Share on other sites More sharing options...
Parsad Posted July 11, 2022 Author Share Posted July 11, 2022 9 hours ago, Sinbius said: No...the more time pass the more I am extremely picky...and I don't have immense knowledge about anything...so it is hard for me... Market is off but it is still extremely overvalued according to shiller pe Shiller PE Ratio (multpl.com) ...also according to p/s... S&P 500 Price to Sales Ratio (multpl.com) also according to the Buffett indicator for the Buffett fans!!!! Buffett Indicator: The percent of total market cap relative to Gross National Product? (gurufocus.com) Aren't you all Buffett fans?...wait...you don't pick and choose what he says to suit you, do you? Actually Buffett said that if he were managing small sums of money...less than $50M...he would be invested 100% all of the time. That on small sums of money, he could easily generate 50% per annum. So the truth is, that as much as I'm a Buffett fan, I'm never going to do 50% per annum and likely never even half that! I'm more of a distressed investment investor. If I can't find enough distressed stuff, I hold cash...Ben Graham's process more than Buffett's process. So the fact that you have cash at all, unless you have well over $50M in assets, you aren't following Buffett either. Cheers! Link to comment Share on other sites More sharing options...
Sinbius Posted July 12, 2022 Share Posted July 12, 2022 (edited) 4 hours ago, Parsad said: Actually Buffett said that if he were managing small sums of money...less than $50M...he would be invested 100% all of the time. That on small sums of money, he could easily generate 50% per annum. So the truth is, that as much as I'm a Buffett fan, I'm never going to do 50% per annum and likely never even half that! I'm more of a distressed investment investor. If I can't find enough distressed stuff, I hold cash...Ben Graham's process more than Buffett's process. So the fact that you have cash at all, unless you have well over $50M in assets, you aren't following Buffett either. Cheers! I don't follow Buffett investment style...I am not a Buffett fan...too much hypocritical and fake for my taste... And I don't sympathize for his lifestyle neither... And words are cheap... Of course he makes me some money so in a way he is welcome I like Peter Lynch way more, as a person too, I would like to be good enough to "follow" him (his investment style) and being fully invested...I am not that good right now (but I have my strong points too..)... I know he doesn't ever look at macro .... And everybody has to find his investment style...looking at others is good only as a starting point... Edited July 12, 2022 by Sinbius Link to comment Share on other sites More sharing options...
Spekulatius Posted July 13, 2022 Share Posted July 13, 2022 Oooff, probably the top for inflation, but watch out for core inflation data: https://finance.yahoo.com/news/june-cpi-preview-inflation-likely-surged-to-new-40-year-high-last-month-215233961.html “Core” CPI, which excludes the volatile food and energy components of the report, rose 5.9%, compared to 6.0% in May. Roughly 6% core inflation suggests 6% risk free interest rates if it becomes entrenched. Link to comment Share on other sites More sharing options...
Sinbius Posted July 13, 2022 Share Posted July 13, 2022 (edited) Don't be a perma-bear!!! Look from 6.0% to 5.9% ....getting lower...it is transitory, US government can pay 6% on his debt, just print more what bad could come from? ...never bet against America!!! they are great savers, with a great democracy and great politicians... (I tried to refrain myself from trolling and tried to act like a mature adult human being...I couldn't...) Edited July 13, 2022 by Sinbius Link to comment Share on other sites More sharing options...
Gregmal Posted July 13, 2022 Share Posted July 13, 2022 27 minutes ago, Spekulatius said: Oooff, probably the top for inflation, but watch out for core inflation data: https://finance.yahoo.com/news/june-cpi-preview-inflation-likely-surged-to-new-40-year-high-last-month-215233961.html “Core” CPI, which excludes the volatile food and energy components of the report, rose 5.9%, compared to 6.0% in May. Roughly 6% core inflation suggests 6% risk free interest rates if it becomes entrenched. Yup. They’re probably do one more 75, maybe another 50 hike and then it’s a job well done. Last week someone asked me why we re so laser focused on the inflation reports when they tell us what happened LAST month and I just shrugged. Anyone with eyes can see what’s happened recently on prices of just about everything. It’s funny watching the 10 year though. Recession. Inflation. Recession. Inflation! Red light. Green light. Fed light. The brokerages must love this. Link to comment Share on other sites More sharing options...
Sinbius Posted July 13, 2022 Share Posted July 13, 2022 (edited) Dont' worry about inflation...we have a plan!!! Relief checks: At least 20 states are sending cash to their residents this year — and more could be coming (yahoo.com) Can someone explain it?...I don't get it... Edited July 13, 2022 by Sinbius Link to comment Share on other sites More sharing options...
Gregmal Posted July 13, 2022 Share Posted July 13, 2022 I would have thought it'd be only red states doing that, trying of course to make shit worse ahead of elections. Link to comment Share on other sites More sharing options...
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