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No. of Recommendations: 3
A lot of the high growth, limited/no earning stocks have gotten whalloped. Depending on your view it is either a correction and buying opportunity or reality setting in. I tend to view it as the latter based on going through this in the late 90s but I'm sure many will say "it is different this time".

And if you got in early and made 100%+ you can afford to lose some of that profit but I had a lot of coworkers in the 90s use the drops as buying opps only to see them throw away huge profits and end up with losses.

I'm too close to retirement to gamble on those stocks and only hold token amounts.

Investing now seems to be "find the latest craze/fad and jump on board" whether it is tech stocks, GME, NFTs, crypto currencies, baseball cards, housing, etc. Almost like surfing, if you catch the wave right you can make serious money, if not then you'll crash.

Might be an interesting year or two.
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No. of Recommendations: 2
Optimism is high that the economy is recovering. Most companies easily beat earnings expectations. The concerns are 1) that expected gains are already anticipated in current pricing and 2) that inflation and rising interest rates will take money out of the stock market. And what will new taxes mean?qq1q

Tech stocks continue to do well though not with the gains we have come to expect. Cyclical and blue chips continue to chug along.

No need to panic. Be cool and wait for the next boom.
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No. of Recommendations: 0
Personally I'm not panicking since I don't hold those stocks. When I looked earlier today my account was at a new high (and not claiming my way is better since those stocks trounced the market last year).
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No. of Recommendations: 1
Depending on your view it is either a correction and buying opportunity or reality setting in.

My understanding is that a correction is indicated by a move to cash. If the money moves to a different part of the market that is a sector rotation. From what I have heard this is a mix, but weighted toward a rotation.
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No. of Recommendations: 9
Tech stocks continue to do well

I'm gonna have to sort of go ahead and disagree with you on that. The formerly faved SAAS stocks have been beaten back to 6 month lows. AMZN has been dead money for 7 months (after a healthy runup in Q2-3 '20). PTON down 50% in 3 months. IIVI down 35%. AAPL topped in December, down 10% since. NVDA net flat since September after a massive run in Q2 '20. NET up 50% in Q4 '20, flat/topped to down since. ZM down 50% since its top in October, although just flat since late August net. ZS down 25% since top in February although just back to early December levels. Several other stocks (MDB, etc) follow that same pattern.

FB, MSFT and GOOG have done well, almost by themselves pushing the $NDX a little higher so far this year. NFLX has just roundtripped since late November, down 25% from its gap high in Dec

Any gains are at the index level, seeming to be a thin, megacap driven run; there's been a lot of damage / retreats under the covers.
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No. of Recommendations: 3
"Might be an interesting year or two. "

************************************************

We always live in interesting times.
Retirement is much like all the other times in one's life - with the possible exception of
recognizing that time is no longer on your side.
Investment time horizons are limited and accumulation shifts into at least the possibility of
increasing withdrawals. However, we do at least recognize that even in an absolute Depression
life continues and somehow or other people come up with ways to survive.

Howie52
In other words - it could be worse.
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No. of Recommendations: 0
Last year I bought some Zoom and within a short time (month?) it doubled so I sold 50% and kept the rest. I looked today and the remaining 50% is now only up 13%. I don't plan to sell it and the whole purchase was a fairly small amount.

Around the time Apple did the 4-1 stock split (August 2020) I sold half of that as well (one of my biggest gains ever with over 600%). Since then it has trailed the market and is near the split price.

Certainly not bragging since I sure missed out on a lot of tech stock in 2020 but just as a point of reference.

I looked the other day and WCLD (kind of a cloud ETF) is off 25% of its highs.
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No. of Recommendations: 1
Certainly not bragging since I sure missed out on a lot of tech stock in 2020 but just as a point of reference.

Random walk theory applies. Current share price is a fair estimate of value given all facts known. You have no idea what will happen next. Results are random. Up, down or sideways.

We hope well managed industry leaders will continue to out perform the average stock. (But there are exceptions every day.)
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No. of Recommendations: 8
Depending on your view it is either a correction and buying opportunity or reality setting in. I tend to view it as the latter

If you go back through this board a few years, there are many posts with titles like "Is this the Peak?" and "Are we at a top?" Sometimes these are followed by nothing but the stock market growing to new highs, and sometimes there's been a three or even six month pullback followed by a big runup.

The problem with trying to time the market is that you not only have to guess the peak (to get out), but also guess the bottom (to get back in), or at least get close to those. I've read several articles, some links posted on this board, indicating that investing at each year's low is marginally better than continuously regardless of price, but it's a small difference. Investing at each year's peak is slightly worse, but the biggest killer of returns is being out of the market when the runups occur. Worst of all is staying out of the market waiting for a drawdown to get back in.

The market price (prices for the basket of all stocks) gets driven by rational reasons (interest rates, expectations of earnings, outlook for various industries) and irrational reasons (buzz, how cool something is, expectation of selling something worth little to an even greater fool who has that same expectation). It's really hard to outguess the rational reasons since most information is readily available and baked into prices. It's impossible to outguess the irrational stuff (like Dogecoin...a joke cryptocurrency that keeps making a handful of people big bucks).

What I've done:
-For money I don't need for 10 to 40 years: Be fully invested in stocks (low cost index funds mostly, a few low-ish cost active funds where they routinely beat their index like Emerging Market). I also realize that this will sometimes go down (by a lot) but that's the price to pay for being able to beat inflation long term. Note that the "price to pay" is "volatility," not "loss." if the S&P500 crashes completely, we won't be worried about our 401ks
-For money I need within a year: Cash
-For money I'll need between one year and five: Bonds plus an arbitrage fund that routinely runs at ~3% annually and rarely loses money on the year plus dividend yielding/growing stocks

The money I've made in irrationally propelled markets spends as well as money made with thoughtful analysis. The portfolio value that decreased temporarily on paper (not "lost") didn't hurt because I didn't sell low (locking in the loss) in the hopes of getting back in even lower. I know people that did and missed the eventual recovery.

I feel pretty confident in all this thinking, with a caveat--I held on to my asset allocation through all the downs and ups we had for the last 30 years, with a consoling thought that every check was going to buy more shares at the low prices. Now that I'm living off my portfolio rather than growing it, the emotional side of my brain may still be sweating away despite the logical half repeating the three points made two paragraphs ago. But, hanging on through 2008-09 and subsequently seeing the portfolio grow like crazy the next eight out of ten years helps the logical side comfort the emotional side.
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No. of Recommendations: 1
Hi CuriousQ --

I like your attitude and perspective.

I took advantage of the rising stock market to build out my bond ladder to my full 7 year target. I don't particularly want to increase it any farther because I am banking on stocks to provide my long term inflation protection since cash and bond interest rates do not currently adequately compensate for inflation and taxes for me to consider them for that purpose. At the same time, I'm a bit nervous about current stock valuations and am finding it harder to commit new cash or cash from dividends and interest to new investments, though I do still find an occasional reasonably priced pick.

Upon thinking about how to go from here, I decided that there was one lever I was willing to adjust to try to balance the various risks. I use an assumed inflation rate in my bond ladder. Using fake numbers, assume I need $9,500 per quarter in current money. I estimate an inflation rate, such that the bond ladder would throw off $10,000 in the first quarter, and once the estimated inflation puts my cash needs above $10,000, the future rungs would be boosted to $11,000 -- and so on, so that the inflation-adjusted cash would be fairly consistent over time.

Up until this point, I have used a 3% annual inflation rate in those assumptions for my bond ladder. Based on the aggressively inflationary policies being pushed by Washington DC, I've just upped those inflation estimates to 6%. From a practical perspective, that has the effect of speeding up those ratchet points so that future rungs in the bond ladder will be that much larger. Frankly, I don't even know if that is adequate. By the BLS' own numbers, energy inflation is running around 13.2% ( https://www.bls.gov/cpi/ ). Since energy is ultimately an input cost into practically everything else, there is a risk that those surging costs will soon find their way up much of the rest of the value chain.

With that adjustment, there are currently a few time periods in my real-money bond ladder where the expected maturing bonds in my portfolio are insufficient to directly cover those anticipated costs. However, in each of those time periods, the anticipated interest payments cover the gap in anticipated maturing bonds, so I'm okay with holding the line on those time periods and not increasing those existing rungs.

Still, it's an estimate, and the reality is that the more I shift to bonds, the less I have positioned to potentially fight the real as opposed to assumed inflation that does arise. So investing remains a balancing act, and while I've adjusted the balance, I'm not radically changing the overall plan.

Regards,
-Chuck
Home Fool
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No. of Recommendations: 15
A lot of the high growth, limited/no earning stocks have gotten whalloped. Depending on your view it is either a correction and buying opportunity or reality setting in. I tend to view it as the latter based on going through this in the late 90s but I'm sure many will say "it is different this time".

Speculation vs. investing usually always leads to a wallop. The divergence between growth and value is now in the process of being corrected.

And if you got in early and made 100%+ you can afford to lose some of that profit but I had a lot of coworkers in the 90s use the drops as buying opps only to see them throw away huge profits and end up with losses.

I'm too close to retirement to gamble on those stocks and only hold token amounts.


Yes, don't gamble beyond your token amounts. There is a huge difference between holding the mega-caps such as Apple, Google, Microsoft, Facebook, Amazon compared to things that got so speculative price wise like Zoom, Peloton, Fastly, Cloudfare, CrowdStrike, Docusign, Datadog, Snowflake, DraftKings, etc... . Keeping an eye on the latter group to see what survives the current rubble will be interesting.

Investing now seems to be "find the latest craze/fad and jump on board" whether it is tech stocks, GME, NFTs, crypto currencies, baseball cards, housing, etc. Almost like surfing, if you catch the wave right you can make serious money, if not then you'll crash.

Every generation gets to go through some form of the speculative phase. Our generation got to experience the dot-com and telecomm boom & bust cycle (some loud memories still ringing in my head from all of that - and plenty of posts from me in the archives are available to view). We prefer to own it all these days (all sectors that is) and not play the rotation game, but just let the business cycle run the course it always seems to do over and over again with great companies and of course a good chunk in index funds and great individual company stocks to capture it all. No need for baseball cards, crypto currencies, NFTs, ARK funds, Reddit story stocks, etc... to reach retirement nirvana.

BB
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Every generation gets to go through some form of the speculative phase. Our generation got to experience the dot-com and telecomm boom & bust cycle (some loud memories still ringing in my head from all of that - and plenty of posts from me in the archives are available to view). We prefer to own it all these days

It sure helps if you get in early once, get phat, and then “own it all” or use other conservative strategies to keep it.

The ones I have no sympathy for are those who are gambling with money they have to make more money they don’t need, and then wind up with no money at all.
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No. of Recommendations: 1
I'm gonna have to sort of go ahead and disagree with you on that. -FlyingCircus

There it is. Maybe the market hasn't been challenged enough to get really motivated, possibly due to distraction by TPS reports?
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No. of Recommendations: 3
I think it was the early 20th century Wall Street financier Bernard Baruch who said something like "when you get stock tips from your shoe-shine boy, its time to sell"

For about the last several months, many of the investment discussion forums I've visited have been dominated by shoe-shine boys. I see very little in the form of fundamentals and earnings potential in the discussions.

We have sold all of our tech and am working selling small caps. We're about 50% cash right now. Yes, this is exposed to inflation, but I'll take that in exchange for not feeling the pain of a significant correction I sense is headed our way.

BruceM
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No. of Recommendations: 1
...said something like "when you get stock tips from your shoe-shine boy, its time to sell"

Very close to a direct quote:

"You know it's time to sell when shoeshine boys give you stock tips. This bull market is over."

Joseph Kennedy (JFK's pappy for you youngins out there), winter 1928

https://www.4investors.eu/post/the-shoeshine-boy-indicator

Pete
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No. of Recommendations: 0
For about the last several months, many of the investment discussion forums I've visited have been dominated by shoe-shine boys. I see very little in the form of fundamentals and earnings potential in the discussions.

Saul's board doesn't tolerate shoe-shine, it shuts that down right quick. Plenty about fundamentals, especially about growth. Growth of the business, or nothing. Lots of tech there, though.

https://boards.fool.com/sauls-investing-discussions-120980.a...
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No. of Recommendations: 2
Saul's board doesn't tolerate shoe-shine, it shuts that down right quick. Plenty about fundamentals, especially about growth. Growth of the business, or nothing. Lots of tech there, though.

You don't find that many of the stocks discussed on that board are of the shoe shine variety?
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No. of Recommendations: 8
The question isn’t whether they are stocks a shoe shine boy would talk about. It is whether the discussion of the companies on Saul’s board is deep, substantive and substantial. In that regard the board is top notch.
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No. of Recommendations: 2
The question isn’t whether they are stocks a shoe shine boy would talk about. It is whether the discussion of the companies on Saul’s board is deep, substantive and substantial. In that regard the board is top notch.

Yessir!

And there is also a good argument that these are not 'shoe-shiners' at all, or at least of the variety we normally think about as shoe-shine companies. These companies are not like the mortgage and insurance companies making bad subprime loans and bundling them all together into CDAs that were almost worthless, bringing the market to a standstill. Even more, these companies are unlike the dot-coms that had no there there, no earnings, just a wing and a prayer and a catchy name.

While you **can** argue that they are overvalued (something that we will see born out one way or another relatively soon), virtually all of them have good earnings that are increasing quarter over quarter.

That is the definition of a company that I want to at least look at for potential purchase and Saul's Board provides multiple in-depth looks at each of the companies it posts on.

Pete
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No. of Recommendations: 2
The question isn’t whether they are stocks a shoe shine boy would talk about. It is whether the discussion of the companies on Saul’s board is deep, substantive and substantial. In that regard the board is top notch.

I liken the "Saul Stocks" to the 1990's tech boom stocks. Learned, deep dives into the minute nuances of every report or statement from the favorite stocks of the moment.

Oh, I own a handful of those stocks, but I keep a finger at the ready near the trigger in case something goes sour.

CNC
... The NoCount fortune is 90% in mutual funds.
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No. of Recommendations: 23
The question isn’t whether they are stocks a shoe shine boy would talk about. It is whether the discussion of the companies on Saul’s board is deep, substantive and substantial. In that regard the board is top notch.

There was plenty of deep, substantive and substantial talk about Lucent back in the 90’s. Also WorldCom, Napster, Juniper and especially AOL (CompuServe, MSN, etc.) I was party to a lot of it and made a bunch. I lost some on Lucent and @Home, among others.

Those were stocks that were “discussed”, mostly because “fundamentals” didn’t really exist, so we talked about growth rates, and customer capture, and Gorilla characteristics and a bunch of other stuff, some of which turned out to be transitory. But then there were also the Amazons and Apples and Starbucks and others.

I note that Pets.com was a flopapalooza, but Chewy seems to be doing OK, so it’s not as though the *concept* was bad, just the execution. Or timing. Or management. Or product selection. Or marketing. And that’s kind of the point: all of the “good concept” in the world doesn’t mean Home Run.

Many of the stocks discussed on Saul’s board are concept stocks and will go on to greatness, and (I suspect) many won’t. The discussions there do remind me of the 90’s, and we’ll know in another decade or three who was right and who wasn’t. I’m not in that game anymore, I’m in wealth “preservation” not “accumulation” mode.

I will say that Saul’s board is well focused, if a bit authoritarian for my taste, and it’s a good addition to the Fool. It will also have its turn in the barrel; the idea of “sector rotation” seems to be a surprise to many there - but if the market does one thing it’s educate.

No, the party’s not completely over. But the next time the Fed has a real inflation sniffle (and it *is* coming) I expect a lot of people to catch colds, and we’ve all seen what happens then.

Good stocks with good fundamentals and moats and earnings will be OK. Some concept stocks will keep on chugging. Some will drown. It’s the oldest story in the world.
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