Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Will probably see a lot of these warnings as the Cassandras come out in force after this week's carnage. Sure would have liked to have seen more fear here this week instead of buying the dips and averaging down on losers as the market kept cascading downward.
I'm buying, but I don't think I'm buying in the traditional "buy the dip" mentality. I'm buying because I think something is a tremendous value (BPY, which I'll just keep continuing to buy - it's an MLP w/K-1 and not something I'm recommending because it's not conservative, but I think it's absurdly cheap), I'm buying because I really like a company a great deal and think of it as a decades-long holding and don't want to time it (Ecolab, Canadian National Railway, V/MA, others.) I'm buying because I think the market was already mis-understanding the fundamentals and is now indiscriminately selling the sector/panicking on top of it (Gilead). I'm buying because there's an element of me that's concerned that talk of rate rises turns to talk of "next-level" monetary policy easing when things turn South.
Am I buying because I think things are going to be a-okay? No. If anything, I'm certain that this period in the markets ends badly - it's not a question of if, it's a question of when and how - it's particularly the how that interests me as I think things may look very different than past crises and I'm not sure that owning cash and bonds will be the way to go again.
I would think the one thing that could cause the greatest decline in the market is not China but more pain in the energy markets. More pain would be greater than expected bankruptcies and then a rout in the junk market. As much as we have heard about falling junk bond prices recently, they are still outperforming stocks YTD. Of course, energy is also what could lead the market back to new highs- namely an unexpected rebound. Then again, maybe there is something lurking out there we don't yet see that could lead to a further 15% to 20% or more market decline.
Comments
I'm buying, but I don't think I'm buying in the traditional "buy the dip" mentality. I'm buying because I think something is a tremendous value (BPY, which I'll just keep continuing to buy - it's an MLP w/K-1 and not something I'm recommending because it's not conservative, but I think it's absurdly cheap), I'm buying because I really like a company a great deal and think of it as a decades-long holding and don't want to time it (Ecolab, Canadian National Railway, V/MA, others.) I'm buying because I think the market was already mis-understanding the fundamentals and is now indiscriminately selling the sector/panicking on top of it (Gilead). I'm buying because there's an element of me that's concerned that talk of rate rises turns to talk of "next-level" monetary policy easing when things turn South.
Am I buying because I think things are going to be a-okay? No. If anything, I'm certain that this period in the markets ends badly - it's not a question of if, it's a question of when and how - it's particularly the how that interests me as I think things may look very different than past crises and I'm not sure that owning cash and bonds will be the way to go again.
Uh, no. Not even close. Brett Arends needs to take a cold shower to clear his head.
That would be utter chaos.