Where are we at in this downturn?

[gfp]

27 minutes ago, Saluki said:

 Here is the bid/Ask for Taylor Devices:

 

Bid x size/exchange

$12.70 x 2/NASD

Ask x size/exchange

$50.42 x 1/NASD

 

Well the market is closed.  I don't see a bunch of opportunity in that bid/ask anyway, unless you want to sell 200 shares at $12.70 or buy 100 shares at $50.42?  What's to like about that?

 

I did get a small fill on some PCHM today and that company doesn't usually have much liquidity.  

Edited April 7, 2025 by gfp

[brobro777]

Oh man it would be so cool if NQ hits 20000 this week

 

that would be totally awesome 

[brobro777]

On 4/7/2025 at 12:04 PM, Red Lion said:

I was putting all my bills on credit cards so I could buy as many stocks as possible at that time. That’s why I see young people talking about losing 20% on a 100k setting them back and I fundamentally see these times as a great opportunity if you either have a bunch of cash on the sidelines or earnings/savings potential. 

I always wondered who went long at SPX 666. Maybe it was you!

 

haha

 

[Red Lion]

16 minutes ago, brobro777 said:

I always wondered who went long at SPX 666. Maybe it was you!

 

haha

 

Not me I was buying garbage value stocks at ridiculous multiples. Still made good returns but not nearly as much as I would have with some higher quality names. 

[Kizion]

14 hours ago, Pellom said:

Although some will argue the market is forward looking and pricing for 6-12-18 months from now, my guess is there will be more pain ahead once companies actually report slowing growth due to tariffs and uncertainty. 

 

I'm a huge fan of using reverse DCF/Intrinsic value models to see what's priced in. Currently, even after the sell-off, not many stocks are priced for declining earnings. 

Maybe these models have significant flaws (probably because it assumes market rationality) but if you look at Apple, I don't see why it should be, theoretically, valued above 140 USD/share (I'm short as from 240 USD). 

Edited April 8, 2025 by Kizion

[mattee2264]

Yeah I would be very surprised if the lows were already in. 

 

There is a limit to how much you can expect markets to fall in a very short period of time. Forced selling and deleveraging comes to an end. Those with dry powder are attracted to the fact that stocks are selling at 20% or more discounts to prices prevailing only a month or two ago (recency bias). Talking heads and brokerages get the message through that markets always recover and time in the market is the most important thing. And the intensity of the negative news flow eventually peaks or no longer catches investors by surprise. 

 

In this case the market panic was caused by a policy shock. Everyone figured Trump would just announce 10% tariffs that would get diluted quickly. Instead he comes out with these crazy and illogical rates which amount to the declaration of a trade war. 

 

There will be a short term relief rally because Trump has made it clear everything is open to negotiation and most countries will try to negotiate. 

 

But it is difficult to imagine a V shaped recovery without a hard policy reversal which seems unlikely as tariffs are a fundamental part of Trump's policy agenda and he will lose face if he scraps the policy entirely.

 

Even the 10% offered to friendly nations e.g. the UK that might be the eventual end point of most negotiations and end the trade war is significantly higher than rates prevailing before Trump got elected and will have a negative impact on global economic growth. And I don't think we will get there too quickly because Trump will want to extract maximum concessions before he grants those rates to countries and most countries have vested interests that make it difficult for them to offer significant trade concessions. 

 

And in the interim period which could stretch for months there will be a lot of uncertainty and many companies and consumers will front wait and postpone buying and investments and where companies cannot do so will try to pass higher prices on to consumers and consumers may cut back on domestic consumption and spending as more of their budget goes on imports and there will be supply chain disruptions and lower consumer and business confidence and all of this is more than enough to push economies into recession and cause bankruptcies and layoffs and once these chain of events are set into motion they are difficult to reverse. And the economic recovery will only come when there is more certainty about the eventual resolution. 

 

In the background Trump is also trying to cut spending and the US economy has been buoyed over the last few years by multi-trillion dollar deficits run by Biden. So that is also going to be a negative to corporate earnings as well and it is a fantasy that tariff revenue can fill the gap.

 

 

 

 

Edited April 8, 2025 by mattee2264

[dealraker]

Time to mimic Chief Dan George/Lone Watie in OUTLAW JOSIE WALES: "Endeavor to Persevere."   When you are in business with Donald John Trump it is best that you think clearly as it is certain that many will not.

 

Life.....so damn great if you can stand it!

[Gregmal]

It's important to continue evaluating the big picture. This sort of drunken price action induced stupor is indeed very reminiscent of the early covid days. Remember when the frauds and attention seekers, IDK maybe it was April or May 2020, would proudly state "just wait til you see what Q2 GDP is" as if they were on to something? Like one quarter meant anything to 20-30 year priced assets? It was so dumb and THIS was the consensus for a bit! Everyone raved about uncertainty, and also "the market is obviously so overvalued because how can we only be 10-15% below ATHs with the economy shut down?" They were fools and just couldn't think beyond the moment.

 

This? Small potatoes compared to that. I ran the Nike exercise... 30% off the market cap because shoes might increase $10-15 a pair? LOL nah...and that's one of the worst case ones! Even the stooopid simp Lutnick has matter of factly stated that tariffs will not be removed "for days or weeks"! And many of you are hook, line, and sinker all in on trying to forecast bottoms and bounces? Let's say everyone gets a Vietnam style tariff rate...and it lasts for more than "days/weeks", heck a quarter or two? How much should that impact your thinking in acquiring a decent asset? Or is it "more long term than that" and say the Nike tariff effect for the next 10 years translates to an extra $3 per pair of shoes...SPY 3000? Resist the urge to think like sensationalist bozos guys. 

 

There's also the qualitative stuff Ive mentioned too. Whenever certain COBF specific signs start showing up, pattern recognition should automatically kick in. Happy hunting. 

[John Hjorth]

Greg [ @Gregmal ],

 

Have you by the above posted by you given it some kind of thought, that you perhaps have a great deal of 'homebias' [<- perhaps a very wrong term to use here by me, and certainly not meant in a critical way, but] meant in a way, that it is just a fact, that - as far as I understand - your two largest positions are US companies [JOE and the MSGs], doing business inside USA, so, that your personal investment decisions and stockpicking, thinking in first order, has to more or less degree isolated you from all this mess? 

[Gregmal]

5 minutes ago, John Hjorth said:

Greg [ @Gregmal ],

 

Have you by the above posted by you given it some kind of thought, that you perhaps have a great deal of 'homebias' [<- perhaps a very wrong term to use here by me, and certainly not meant in a critical way, but] meant in a way, that it is just a fact, that - as far as I understand - your two largest positions are US companies [JOE and the MSGs], doing business inside USA, so, that your personal investment decisions and stockpicking, thinking in first order, has to more or less degree isolated you from all this mess? 

The avoidance of international is not by accident but because Ive found smaller local companies easy to analyze, so there's merit to that. One of the pillars of what I look to invest towards is stuff that's unbreakable. Knicks and Rangers are still sold out with waiting lists for season tickets and suites and the best artists in the world will still be playing at the Garden this summer, to obscene ticket prices and sold out shows. Just like they did during the GFC and tech crash. 

 

But I think that largely most of this stuff is self correcting. So let's say Trump goes off the rails, mid terms are 6 Qs away and his agenda is done. Bad enough and he can probably even get impeached for a third time. All it'll take is someone running on "how's youre retirement under Trump"...we've even seen how the short term pro Trump WS crowd has started getting nasty...even though its been like 3 days. The same way Biden came in and ripped up most of what Trump did the previous 4 years, can easily be done again. That everyone gets their wish and we're back to deficit spending and the status quo....

 

One of the other things that ALWAYS happens when the market goes down, the valuation crowd ALWAYS thinks its because of valuation and now, because things are going down(a common and frequent aspect of the stock market, but hey!) now we need to factor in "stocks are expensive"...a clear bias activator if Ive ever seen one. Same as the fervent buying of Google because "its cheap"...Google has ALWAYS traded "cheap" relative to FAANG/MAG7/whatever..why is it cheap now lol? Which isn't even to say it's not a good investment, I just recently added a little back, but cheap is wholly dependent on context. And if we use cheap interchangeably or applied to incorrect underpinning, or for that matter, substitute the word "expensive" while incorporating the same process, the faults are the same. 

 

My main point and observation is to simply think rationally and remain level headed and heck maybe 30% down is the bottom, China probably retaliates after new Trump tariffs sometimes this week and off come another 1500 points, but I mean, Ive never seen this sort of gamblers investment philosophy show it has long term beneficial effects to ones wealth. 

[Blake Hampton]

This economic stuff is bigger than Trump. If the democratic party were to consolidate both executive and legislative power tomorrow, I would have largely the same concerns. Of course, some of the smaller risks would change, some quite dramatically, but the systemic ones are just that — they're systemic. @dealraker has often said that events will soon control Trump rather than the other way around. I also believe this is true.

 

Systemic: relating to a system, especially as opposed to a particular part.

 

Edited April 8, 2025 by Blake Hampton

[boilermaker75]

1 hour ago, dealraker said:

Time to mimic Chief Dan George/Lone Watie in OUTLAW JOSIE WALES: "Endeavor to Persevere."   When you are in business with Donald John Trump it is best that you think clearly as it is certain that many will not.

 

Life.....so damn great if you can stand it!

 

@dealraker that is one of my favorite movies. I've seen it a dozen times.

[Castanza]

7 minutes ago, Blake Hampton said:

This economic stuff is bigger than Trump. If the democratic party were to consolidate both executive and legislative power tomorrow, I would have largely the same concerns. Of course, some of the smaller risks would change, some quite dramatically, but the systemic ones are just that — they're systemic. @dealraker has often said that events will soon control Trump rather than the other way around. I also believe this is true.

 

Systemic: relating to a system, especially as opposed to a particular part.

 

 

What year do you think debt became a real issue for the US?

[Gregmal]

12 minutes ago, Blake Hampton said:

This economic stuff is bigger than Trump. If the democratic party were to consolidate both executive and legislative power tomorrow, I would have largely the same concerns. Of course, some of the smaller risks would change, some quite dramatically, but the systemic ones are just that — they're systemic. @dealraker has often said that events will soon control Trump rather than the other way around. I also believe this is true.

 

Systemic: relating to a system, especially as opposed to a particular part.

 

So then Trump "announcing tariffs" has nothing to do with your greater thesis, and you've largely been reacting simply to "the market going down" because you have an inherent believe that its overvalued and the system is going to collapse so therefor the market "should be going down" vs "its going down because people are "panicking over tariffs"? 

[John Hjorth]

22 minutes ago, Gregmal said:

The avoidance of international is not by accident but because Ive found smaller local companies easy to analyze, so there's merit to that. One of the pillars of what I look to invest towards is stuff that's unbreakable. Knicks and Rangers are still sold out with waiting lists for season tickets and suites and the best artists in the world will still be playing at the Garden this summer, to obscene ticket prices and sold out shows. Just like they did during the GFC and tech crash. 

 

But I think that largely most of this stuff is self correcting. So let's say Trump goes off the rails, mid terms are 6 Qs away and his agenda is done. Bad enough and he can probably even get impeached for a third time. All it'll take is someone running on "how's youre retirement under Trump"...we've even seen how the short term pro Trump WS crowd has started getting nasty...even though its been like 3 days. The same way Biden came in and ripped up most of what Trump did the previous 4 years, can easily be done again. That everyone gets their wish and we're back to deficit spending and the status quo....

 

One of the other things that ALWAYS happens when the market goes down, the valuation crowd ALWAYS thinks its because of valuation and now, because things are going down(a common and frequent aspect of the stock market, but hey!) now we need to factor in "stocks are expensive"...a clear bias activator if Ive ever seen one. Same as the fervent buying of Google because "its cheap"...Google has ALWAYS traded "cheap" relative to FAANG/MAG7/whatever..why is it cheap now lol? Which isn't even to say it's not a good investment, I just recently added a little back, but cheap is wholly dependent on context. And if we use cheap interchangeably or applied to incorrect underpinning, or for that matter, substitute the word "expensive" while incorporating the same process, the faults are the same. 

 

My main point and observation is to simply think rationally and remain level headed and heck maybe 30% down is the bottom, China probably retaliates after new Trump tariffs sometimes this week and off come another 1500 points, but I mean, Ive never seen this sort of gamblers investment philosophy show it has long term beneficial effects to ones wealth. 

 

Awesome, wonderful post, Greg [ @Gregmal ],

 

Yeah, it's a fools errand trying time anything, both generally, and in this particular situation.

 

While I'm mentally trying to apply your line of thinking to my local market, as a Dane, I get frustrated, the only thing that comes up in my mind, is small regional / community banks, some with some hair, some without. I would likely end up as an - not old - but older! and grumpy man. So much small cap and mid cap crap listed here, not worth even 5 mins of anyones time.

 

So much for living in a tiny country. *sigh*

[Blake Hampton]

26 minutes ago, Castanza said:

What year do you think debt became a real issue for the US?

 

I don't know about "became," but I'd say that it largely started around 2008-2009. The government had to step in and bail out the entire system, and that's also when a lot of unsustainable practices began. Think Fannie/Freddie going into conservatorship, ZIRP delaying the pain of running perpetually large deficits, etc.

COVID exacerbated the issue quite a bit.

 

Edited April 8, 2025 by Blake Hampton

[Blake Hampton]

19 minutes ago, Gregmal said:

So then Trump "announcing tariffs" has nothing to do with your greater thesis, and you've largely been reacting simply to "the market going down" because you have an inherent believe that its overvalued and the system is going to collapse so therefor the market "should be going down" vs "its going down because people are "panicking over tariffs"? 

 

Of course it changes things; it simply means more inflation.

 

When Buffett talks about big banks getting wiped out, and Jamie Dimon explicitly states that deficits are coming close to causing "real problems," there is some serious shit going on. Don't listen to me, listen to them.

 

Edited April 8, 2025 by Blake Hampton

[cubsfan]

52 minutes ago, Gregmal said:

The avoidance of international is not by accident but because Ive found smaller local companies easy to analyze, so there's merit to that. One of the pillars of what I look to invest towards is stuff that's unbreakable. Knicks and Rangers are still sold out with waiting lists for season tickets and suites and the best artists in the world will still be playing at the Garden this summer, to obscene ticket prices and sold out shows. Just like they did during the GFC and tech crash. 

 

But I think that largely most of this stuff is self correcting. So let's say Trump goes off the rails, mid terms are 6 Qs away and his agenda is done. Bad enough and he can probably even get impeached for a third time. All it'll take is someone running on "how's youre retirement under Trump"...we've even seen how the short term pro Trump WS crowd has started getting nasty...even though its been like 3 days. The same way Biden came in and ripped up most of what Trump did the previous 4 years, can easily be done again. That everyone gets their wish and we're back to deficit spending and the status quo....

 

One of the other things that ALWAYS happens when the market goes down, the valuation crowd ALWAYS thinks its because of valuation and now, because things are going down(a common and frequent aspect of the stock market, but hey!) now we need to factor in "stocks are expensive"...a clear bias activator if Ive ever seen one. Same as the fervent buying of Google because "its cheap"...Google has ALWAYS traded "cheap" relative to FAANG/MAG7/whatever..why is it cheap now lol? Which isn't even to say it's not a good investment, I just recently added a little back, but cheap is wholly dependent on context. And if we use cheap interchangeably or applied to incorrect underpinning, or for that matter, substitute the word "expensive" while incorporating the same process, the faults are the same. 

 

My main point and observation is to simply think rationally and remain level headed and heck maybe 30% down is the bottom, China probably retaliates after new Trump tariffs sometimes this week and off come another 1500 points, but I mean, Ive never seen this sort of gamblers investment philosophy show it has long term beneficial effects to ones wealth. 

 

+1 - the value add from your insights are invaluable here.

[Blake Hampton]

Is it possible for our government to be more financially imprudent than they are right now? Huge sums are being spent with little in taxes to offset it, and wild lending practices exist for both student loans and mortgages. They're seriously considering cutting taxes even more—so, I guess it is.

 

This madness eventually has large implications for the U.S. dollar. Pull one out of your wallet. Look at it. Notice how it's just a little piece of paper. The degradation of something so important to the world as the dollar is an extreme event, to say the least.

 

A lot of you think that Bitcoin offers some kind of escape. That a lot of these equities trading at extreme valuations can be an escape. That cash is simply trash—and that one day, that same cash will be worth 10% of what it is now, your equities will be worth 10x, and the world will keep functioning as it always has.

 

I hate to say it, but it just isn't that simple. There can be a lot of carnage in the interim between cash as it is today and its future state.

 

Jamie Dimon said he believes that events during the next decade will define our lives.

 

Think about that.

 

Edited April 8, 2025 by Blake Hampton

[frommi]

1 hour ago, Gregmal said:

My main point and observation is to simply think rationally and remain level headed and heck maybe 30% down is the bottom, China probably retaliates after new Trump tariffs sometimes this week and off come another 1500 points, but I mean, Ive never seen this sort of gamblers investment philosophy show it has long term beneficial effects to ones wealth. 

Maybe this is a one in a century thing and you of course couldn't have seen it before?
The last time it was tried 4 years were enough time to destroy the whole world economy and ended with unemployment rates of 25%. The drawdown from similar valuations as today was 80%.

Theres a huge liquidity drain going on by the government if the tariffs aren't stopped and the FED has its hands behind the back. 

Edited April 8, 2025 by frommi

[Ulti]

45 minutes ago, Gregmal said:

So then Trump "announcing tariffs" has nothing to do with your greater thesis, and you've largely been reacting simply to "the market going down" because you have an inherent believe that its overvalued and the system is going to collapse so therefor the market "should be going down" vs "its going down because people are "panicking over tariffs"? 

I think what is missing in the discussion ( or maybe not) is risk tolerance, age and hedges…much easier to hold into positions that are under 30+ % if your hedges with say 20-40 % cash….im curious as to how you look at risk management G at your age.. and has it changed over the years with wealth accumulation .

[Gregmal]

1 minute ago, frommi said:

Maybe this is a one in a century thing and you of course couldn't have seen it before?
The last time it was tried 4 years were enough time to destroy the whole world economy and ended with unemployment of 25%. The drawdown from similar valuations as today were 80%.

Theres a huge liquidity drain going on by the government if the tariffs aren't stopped and the FED has its hands behind the back. 

The answer to that is always the same. Far OTM VIX futures options LOL

[Blake Hampton]

I'll also add that almost nobody thinks the way that everyone on this board does; we are certainly the exception and not the mean. A lot of people can't even spell "monetary policy," let alone understand it.

When events happen and those same people eventually react, that's when I believe you'll see something real.

 

Edited April 8, 2025 by Blake Hampton

[Gregmal]

1 minute ago, Ulti said:

I think what is missing in the discussion ( or maybe not) is risk tolerance, age and hedges…much easier to hold into positions that are under 30+ % if your hedges with say 20-40 % cash….im curious as to how you look at risk management G at your age.. and has it changed over the years with wealth accumulation .

Nah I try to keep it simple and I used to do a ton more trading, but once a certain financial threshold is hit, pinching every penny off every volatility event was just no longer worth the time it takes to be good at that. I still got it; just hit the C calls for like 40% in 2 trading days, but generally I just make sure what I own is sound and then try to be efficient in terms of the time and effort I'm devoting to life. You can control what you invest in, and how you invest in it, which should mesh and be synthesized with your investing capabilities and mental skillset/emotional tolerance levels. 

[frommi]

4 minutes ago, Gregmal said:

The answer to that is always the same. Far OTM VIX futures options LOL

It will take a lot of time to reach the bottom if the great depression replays, i doubt VIX options are a good idea for that scenario.