On the count of three, everyone panic...Or???

[Saluki]

I managed to not look at the market at all until after the close so that I wouldn't get stressed out and make a bad decision. In order to keep me busy and not be tempted to log in to my brokerage account I was doing a bunch of research on facts and figures, because "math is truth."  I pulled a lot of the stuff into a video and posted it because I was done before 4pm and the markets were still open.  

 

FYI I haven't looked at the markets today either. 

[Malmqky]

Watched the video, I like it. Good work and congrats(?) on FIRE.

 

Markets are finally exciting again, volatility is a good thing for us younger folks with a few decades of work left.

[Hektor]

Good one. Thanks @Saluki

[Parsad]

So we panic when the valuation goes down and the opportunity increases?  If so, you are manifesting the exact type of psychology that should worry a person in such a market.

 

I've been through four of these dramatic falls now...each one felt like Christmas morning to me!  If that isn't how you feel, be very calculated in the decisions you make right now...it may be better to just still and do nothing.

 

Cheers!

 

 

[SharperDingaan]

12 minutes ago, Parsad said:

So we panic when the valuation goes down and the opportunity increases?  If so, you are manifesting the exact type of psychology that should worry a person in such a market.

 

I've been through four of these dramatic falls now...each one felt like Christmas morning to me!  If that isn't how you feel, be very calculated in the decisions you make right now...it may be better to just still and do nothing.

 

Cheers!

 

+100. This is when experience matters, along with class; it's great to know what you're doing, but there are many for whom this will be a very negative and life changing experience. Take 10-20% of your after tax gains, and quietly give it away to animals/people who could really use it. 

 

SD

   

 

 

[Parsad]

9 minutes ago, SharperDingaan said:

 

+100. This is when experience matters, along with class; it's great to know what you're doing, but there are many for whom this will be a very negative and life changing experience. Take 10-20% of your after tax gains, and quietly give it away to animals/people who could really use it. 

 

SD

   

 

 

 

Yup agree!  It will give me more money to give to our local foods banks in the next 24 months...there are a lot of people who will need it.  Already demand had increased post-pandemic by nearly 100% over the last 2 years.  Can you imagine that...if there were 5,000 people using the Vancouver Food Bank monthly, that has increased to 10,000.  They have been at the breaking point if they didn't receive additional support from people and corporations.  What will it be like now with massive layoffs across the board and country?  Cheers! 

[Ver]

Agreed. If you own great companies who have the resilience to adapt and thrive to a rapidly changing world, what's the need to panic? The stock price moving lower doesn't determine their intrinsic value. If your owned companies were private, couldn't be sold for 10 years, and you couldn't see their stock price, would you still care? If so that's more a reflection on the companies themselves than the market.

 

All that matters now is finding great companies at juicy prices. The rest is just noise.

 

 

[Gregmal]

Yup. 2 days of stock market trading action has started the process of outing who’s pants are down and who’s in distress emotionally. It’s fun watching. 

[Parsad]

3 minutes ago, Ver said:

Agreed. If you own great companies who have the resilience to adapt and thrive to a rapidly changing world, what's the need to panic? The stock price moving lower doesn't determine their intrinsic value. If your owned companies were private, couldn't be sold for 10 years, and you couldn't see their stock price, would you still care? If so that's more a reflection on the companies themselves than the market.

 

All that matters now is finding great companies at juicy prices. The rest is just noise.

 

 

 

Yup, or own an extremely cheap, quality ETF and ignore everything.  For most people, if they did just that, they shouldn't be watching the stock market, but enjoy a nice walk in the park or go fishing!

 

Even I'm doing that now.  I'm at the point where I don't need homeruns anymore, although they are fun!  I just need singles and doubles.  I have more and more in a simple, cheap ETF...my Berkshire...my Fairfax...periods like this are just so I can put a bit of cash into some homeruns!  Cheers!

[drzola]

1 hour ago, Parsad said:

 

Yup, or own an extremely cheap, quality ETF and ignore everything.  For most people, if they did just that, they shouldn't be watching the stock market, but enjoy a nice walk in the park or go fishing!

 

Even I'm doing that now.  I'm at the point where I don't need homeruns anymore, although they are fun!  I just need singles and doubles.  I have more and more in a simple, cheap ETF...my Berkshire...my Fairfax...periods like this are just so I can put a bit of cash into some homeruns!  Cheers!

 

[drzola]

Would you be willing to name your favorite cheap ETF?

[Parsad]

13 minutes ago, drzola said:

Would you be willing to name your favorite cheap ETF?

 

Yup...VOO.  3 basis points expenses...represents the S&P500.  Most of those companies have global reach, dominant players, and with 500 stocks...diversification isn't an issue.  Cheers!

[drzola]

I was pretty sure it was VOO from past posts you mentioned owning it Sanjeev.  Would you add to it at current price?

Thank you.

[Paarslaars]

2 hours ago, Parsad said:

I've been through four of these dramatic falls now...each one felt like Christmas morning to me!  If that isn't how you feel, be very calculated in the decisions you make right now...it may be better to just still and do nothing.

In Dutch we have a saying: when you're getting shaved, you need to sit still.

[Parsad]

25 minutes ago, drzola said:

I was pretty sure it was VOO from past posts you mentioned owning it Sanjeev.  Would you add to it at current price?

Thank you.

 

Every time it corrects 10% or more, I keep adding slugs...I added a large slug today.  Again, I'm going for singles and doubles now...not homeruns.  If you want homeruns with VOO...buy after it falls 20% and keep adding as it goes down.  Cheers!

[Milu]

6 hours ago, Parsad said:

I've been through four of these dramatic falls now...each one felt like Christmas morning to me!  If that isn't how you feel, be very calculated in the decisions you make right now...it may be better to just still and do nothing.

Agreed. These are the moment where I really come alive. When the markets are just ticking along making new high after new high I tend to lose a bit of interest even though my wealth would be growing nicely. But when these drawdowns happen I start to awake from my slumber and get seriously engaged in how best to put my money to work to create great fortunes over the coming 5-10 years. Haven’t yet began to purchase (with exception of small add to existing LVMH in my pension). I’m hoping this drawdown continues for a couple of months at least, even better if it was a year or two. I’m still in the accumulation stage of life (41 year old with at least another decade before consider quitting job) so cheaper prices are a huge benefit to me. We aren’t anywhere close to cheap yet, maybe exception for some retail but maybe we will get there soon.

Edited April 5, 2025 by Milu

[CharlesMunger]

5 hours ago, Parsad said:

 

Every time it corrects 10% or more, I keep adding slugs...I added a large slug today.  Again, I'm going for singles and doubles now...not homeruns.  If you want homeruns with VOO...buy after it falls 20% and keep adding as it goes down.  Cheers!

 

+1. I am following the same strategy but with an internationally diversified ETF (VT - https://investor.vanguard.com/investment-products/etfs/profile/vt). Is there a reason why you only want to cover the US market? 

Edited April 5, 2025 by CharlesMunger

[Blake Hampton]

I feel like volatility used to bother me, but I've weathered so much of it in just the last couple of years that it sort of became meaningless. It's always seemed funny to me how a company can trade at two massively different price points without a single piece of news in the interim—this inherently makes zero sense.

 

Edited April 5, 2025 by Blake Hampton

[Milu]

13 minutes ago, Blake Hampton said:

I feel like volatility used to bother me, but I've weathered so much of it in just the last couple of years that it sort of became meaningless. It's always seemed funny to me how a company can trade at two massively different price points without a single piece of news in the interim—this inherently makes zero sense.

 

People are the ones that buy and sell stocks. People are irrational emotional beings. Makes perfect sense if you view things through that lens.

 

‘Mr Market’ as Ben Graham eloquently put it.

 

The volatility of the last 5 years is child’s play compared to a extended drawdown of 50% over a multi year period a la dot com crash and subprime crisis.

[Blake Hampton]

I once bought stock in a company with almost zero volume and single-handedly made it drop 20%, and I already owned shares in it. I gave myself a loss.

 

Unfortunately the family that owned the company sucked.

[Parsad]

15 hours ago, CharlesMunger said:

 

+1. I am following the same strategy but with an internationally diversified ETF (VT - https://investor.vanguard.com/investment-products/etfs/profile/vt). Is there a reason why you only want to cover the US market? 

 

It's been the most consistent and greatest engine for 100 years.  I don't think that will change in my lifetime.  Cheers!

[Parsad]

15 hours ago, Blake Hampton said:

I feel like volatility used to bother me, but I've weathered so much of it in just the last couple of years that it sort of became meaningless. It's always seemed funny to me how a company can trade at two massively different price points without a single piece of news in the interim—this inherently makes zero sense.

 

 

Yup...and the only area you ever see such a thing is in the markets.  Doesn't really happen elsewhere.  Only on listed markets do you get two wildly varied valuations of exactly the same asset...sometimes on the very same day!

 

It's why volatility has zero correlation to risk...contrary to modern finance!  Cheers!

[Parsad]

15 hours ago, Milu said:

 

The volatility of the last 5 years is child’s play compared to a extended drawdown of 50% over a multi year period a la dot com crash and subprime crisis.

 

Hmmm...primarily because of the outcome of the pandemic.  If 20M people had died in the U.S., it would be totally different.  Cheers!

[Gregmal]

3 minutes ago, Parsad said:

It's why volatility has zero correlation to risk...contrary to modern finance!  Cheers!

Soooo money. If there’s anything young folks like Blake should study up on, it’s that! 
 

Volatility is not risk. There’s no point screaming or reverting to long winded pontifications about the perils of the markets simply because of volatility. 
 

I remember vividly, maybe 7-8 years ago asking our firms compliance officer what he viewed as more risky and speculative, in the context of account management; being long Berkshire at 1.5x leverage or having 50% cash with a 50% position in a pre rev biotech? He gave me pushback and I laughed because permanent impairment risk on the later is wayyyy greater. But to each their own.

[villainx]

20 hours ago, Milu said:

But when these drawdowns happen I start to awake from my slumber and get seriously engaged in how best to put my money to work to create great fortunes over the coming 5-10 years.

 

Historically, been opposite.  Rather just forget password to brokerage account and hope and pray.  I would say as a young investor I was pretty horrible, not liquidate to sit in cash horrible, but not optimal horrible.