The General Employment Strike of 2020-2022 Howdy folks,
It's going on as we watch. How can we play it?
All around us, not only in the US, but overseas as well, we're witnessing (and participating in) a General Strike by workers everywhere. 'Take this job and shove it. I ain't working here no more'.
Workers have more power than they've had in decades and they're using it. Deere and Kellogg are out and on the west coast, the TV and Movie peeps narrowly avoided a strike because management caved in on every issue. At Deere, they were offered 5-6% and the workers are saying, Stuff It. I seriously believe the west coast hospital workers will walk and think of their leverage. And folks, this is only the beginning. Pilots can't strike, but they sure can get sick. Oh, and think how easy it is right now to supplement your strike pay. McDonald's is hiring at $21 per hour. This seems to me that the workers are going to win. Tough to bet against them.
The pandemic has created a perfect storm for workers and employment in general.
1. Not safe to go to work because of the virus.
2. Kids at home.
3. Tired of receiving shit wages for shit work.
4. Additional unemployment benefits [although the bs the republicans spread about exacerbating the problem has proven to be just that - BS. Indeed, the states that cut benefits early not only didn't see any reduction in help wanted signs, but it actually hurt their overall economies more than the states that maintained them due to a reduced aggregate demand.]
5. Lack of some spending - travel, dining out, concerts, movies, etc. - has allowed many households to become cash flush.
6. Perfect opportunity to change careers.
7. Virtual options for financial gain - Ebay, Market Place, OnlyFans, etc. My barber has a friend, who is buying Amazon 2nds for peanuts and reselling them.
Sokay, how to play?
Watch for the companies that figure it out and take the 'high road' vs. the ones that don't. A very easy tell, is whether there are Help Wanted signs or not. The businesses with pervasive help wanted signs are having a very tough time even staying open. How many restaurants do you know with reduced hours and menus? Which are simply raising wages and benefits and not bitching.
New industries that get it (e.g. pot. I was talking with a budista and he said, they were receiving great pay and benefits and it was the best job he'd had in years).
Short? Anyone that relies on truck drivers. Again, POT. To drive a semi, you have to have a CDL. With a CDL, you are subject to random drug testing and pot has a half life of 30 days. Hell, they're pushing to allow teenagers to drive. Feh, in my state, you've got to be 21 to buy pot.
Just a start of a discussion.
and so it goes,
peace and wear the damn mask,
rono
Let the SS COLA Projections for 2022 Begin It was a nice clean calculation (+1).
One needs to read the source cited for the estimated 2022 premium to discover the ultimate source. That's the 2021 annual report of the Medicare trustees.
https://www.cms.gov/files/document/2021-medicare-trustees-report.pdfA few items in that report worth mentioning:
1. The premium is computed based on expected 2022 costs for Medicare (pdf p.26, second paragraph). That's no different from what virtually every other insurer does when setting premiums. This calculation is de novo; it does not look at what the premium was last year.
2. The $158.50 estimate does not (yet?) include the
impact of covering Aduhelm (pdf p94, bottom paragraph). So that might affect the final numbers.
3. There's a $3 claw back for some premium reductions (
hold harmless reductions and the
2021 cap on the premium increase). Pdf p. 89. This is projected to be added onto premiums through 2025 (pdf. p 90, 2nd full paragraph).
In a desperate attempt to relate this to mutual funds, I'll point out that this claw back is very similar to the claw back that mutual funds employ with temporary fee waivers. See, e.g. TRBUX (gross ER 0.29%, but net ER of 0.31% including a 0.02% claw back).
A Flexible Fund Adept at Finding Income - FMSDX / by Lewis Braham in Barron’s Interesting looking income focused fund. It has done especially well since the
2020 downturn. Here are it's recent stock %'s per M*.
Selling or buying the dip ?! - “Assuming your question is in good faith and not a rabbit hole invitation...”
- “Other posters have presented studies to show it does NOT work. I've argued that such studies produce statistics that support the Three Kinds of Lies.”
Arguments others may have made to the contrary need not be characterized as lies. It is possible for good and rational people to view the same evidence and arrive at different conclusions.
Yeah, you kind of short-handed what I've posted here. I did NOT state any specific poster lied.
Here ya go (again)...
Studies produce statistics. A very old saying about statistics (maybe only amongst people who professionally crunched data for a living for three+ decades?) goes like this....
There are three kinds of lies.
1. Lies
2. Damned lies.
3. Statistics.
Meaning, in this specific discussion...
Any study that produced/produces a statistic to show that BTD does NOT work is effectively a lie in relation to the ACTUAL results of of my BTD trades since March
2020.
And there are/will be thousands of other examples of BTD success stories and IMO they can't simply be dismissed/treated as outliers.
Adios on this thread.
Selling or buying the dip ?! "much of my gains would evaporate (at least temporarily) in a SEVERE market crash."
What a surprise! Who would have guessed?
If you're poking fun at me, not sure why. I posted that because some posters here seem to have needed that stated clearly.
Selling or buying the dip ?! Buying dips is easy. Catching a falling knife is difficult. Selling just before a dip is damn impossible . Hence why most studies show buy and hold works for most people.
I kind of think when people here say they bought the dip they are talking about a fraction of their portfolio. Again the benefit is not very significant versus risk compared to buy and hold. Could be wrong but I doubt it.
Agreed on everything except your reference to "a fraction of their portfolio." That does not describe my particular case.
I'm a LT, B&H, TR investor who
significantly increased my stock exposure by about 50% through BTD since the March
2020 crash.
Funds for ALL BTDs was from cash, CD proceeds and bond OEF sales. Most funds came from CD ladder rungs that fell off during that period and I chose to not replace and instead BTD.
It has worked tremendously well for me since March
2020.
Really tired of
trying to explain that and going to move on from this thread after two more replies.
Selling or buying the dip ?! "much of my gains would evaporate (at least temporarily) in a SEVERE market crash."
What a surprise! Who would have guessed?
Selling or buying the dip ?! -
“Assuming your question is in good faith and not a rabbit hole invitation...”Why would I waste my time misleading people? My question was intended for
MFO board members in total who share an immense amount of combined investment wisdom and experience.
-
“Other posters have presented studies to show it does NOT work. I've argued that such studies produce statistics that support the Three Kinds of Lies.”Arguments others may have made to the contrary need not be characterized as
lies. It is possible for good and rational people to view the same evidence and arrive at different conclusions.
-
“What categories of stocks were bought?” It’s a fair point - but somewhere outside the focus of
@Derf’s question which I took to be related more to the broad-based U.S. equity indexes. There are always pockets of value in any market. A separate thread on that question might generate much interest.
- “
What about taxes on the sale of assets used to BTD? Were Dip BUYs ultimately SOLD and gains realized?”
Again - we’re stretching the intent of Derf’s original question. Many here invest in tax-sheltered accounts like 401-Ks and some others, including self, hold substantial amounts in Roth’s which are tax exempt. I’d expect Derf’s question and responses to it to be relevant to those investors as well.
- “
Every Dip I bought (at or near the low point of each Dip”
Therein lies the crux of the issue. What verifiable formula, measurement, or other objective criteria exists to inform an investor when it’s appropriate to buy a dip and when it wouldn’t be?
- “
BTD in bonds for me right now is akin to playing a not-so-friendly game Russian roulette.”
Fair enough. I like the analogy. But the same might be said of buying the S&P or other broad-basket of equities at elevated prices.
- “
ALL BUYs remain invested in broad basket US stocks.”
This would seem to contradict point
#3.
- “
BUT much of my gains would evaporate (at least temporarily) in a SEVERE market crash.”
I think that’s what most who have responded to the question are concerned about.
Selling or buying the dip ?! “If you SOLD the most recent Dip/Diplet, I kindly suggest you address the question, "What do I do now that the market has just about fully recovered?"
...To the larger issue, if buying the dip works with stocks all the time, than it should work with other assets. Right?
Anyone here buying the dip in bonds? How about gold and silver- which have been more depressed than equities this year? The Aussie (Australian Dollar) is reported to be down big time. Anyone buying that dip?
If dipping just works with a single asset, I’d surely like to learn why that is the case.
To the larger issue, if buying the dip works with stocks all the time, than it should work with other assets. Right?
Assuming your question is in good faith and not a rabbit hole invitation...
Um, no on both counts.
BTD does NOT work all the time with stocks.Other posters have presented studies to show it does NOT work. I've argued that such studies produce statistics that support the Three Kinds of Lies.
There are significant variables to the equation that will generate vastly different results: What monies were used to BTD? At what point of the Dip did the investor BUY? What categories of stocks were bought? Are the BUYs still fully invested? What about taxes on the sale of assets used to BTD? Were Dip BUYs ultimately SOLD and
gains realized? On and on and...
That said, it's worked SO FAR for me EVERY time I bought a Dip/Diplet since the
2020 crash. Every Dip I bought (at or near the low point of each Dip - yeah, that matters) with cash, CD proceeds and/or bond OEF sales proceeds. I used money from asset classes that were making nothing-to-virtually nothing. Since then they've ALL increased in value significantly (except the current one which is only UP a few %) over what their value would have been had they been left where they were. ALL BUYs remain invested in broad basket US stocks.
It's all worked swimmingly BUT much of my
gains would evaporate (at least temporarily) in a SEVERE market crash.
BTD may or may NOT work with other assets.And IMO, it likely won't for many other asset classes. To wit, bonds are driven by significantly different market forces and are in a different stage of their market cycle. BTD in bonds for me right now is akin to playing a not-so-friendly game Russian roulette.
Conversely, BTDs of the S&P since March
2020 crash has worked largely due to the depth of the crash and the Fed actions (to be mild) that have supported its recovery and higher prices.
And...if history rhymes, some of the future US market Dips/Diplets will transcend into full blown corrections or bear markets. We are getting closer to the next of both with each passing trading day. BTD results when the Dip becomes a C or BM (so to speak) may cause some investors to rush off to the toilets.
SS increase: what to do "In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase."
That is correct, but remember that the 2021 was supposed to be four times this amount or $15.60 ($3.90 x 4). It was limited to 25% by the law that was passed to help with Covid (can't remember the law's official name).
----------------------
stillers: As my wife likes to say, "Good remembering!" Here's an article about that from 09/21/20:
https://www.cnbc.com/2020/09/29/congress-may-limit-medicare-part-b-premium-increase-for-2021-.html------------------------
It is my understanding that this will be deducted this year in addition to the new calculated amount for 2022, so whatever this year's amount calculates out to, this $11.70 ($3.90 x 3) will be added as well. Of course, this assumes that your particular SS benefit increase exceeds this Medicare increase, otherwise you are held harmless.
----------------------------
stillers: Not sure how that's your "understanding " of that. I've never seen that written but I could have missed it. Do you have a reference/link? Having worked in other areas of the Program for a coupla decades, it would knock me off my chair to learn that was correct, or even contemplated as something that could pass, or pass-through, as it were. But I digress.
All that aside, and cutting to the chase, here's medicareresources.org's take on it as of 10/05/21:
https://www.medicareresources.org/faqs/how-much-does-medicare-part-b-cost/Excerpts:Medicare Part B costs: key takeaways
Standard Part B premiums are $148.50/month in 2021; projected to be $158.50/month in 2022...
...As described below, the Social Security cost-of-living adjustment can sometimes limit the increase in Part B premiums, but that’s not expected to be the case for 2022, as the COLA is expected to be historically large.
The Part B premium increase from 2020 to 2021 was smaller than initially projected, thanks to a short-term government spending bill that was enacted in the fall of 2020, and that included a provision to cap the increase in the Part B premium for 2021.That ($158.50-148.50 or) $10 increase is in line with some other estimates I've seen and does not quite compute with what you posted.
And in relation to the subject of my post, a response to another poster's comment, "Medicare will eat it anyhow," even if correct, the absolute Medicare Pt B increase in 2022 will be small relative to the SS COLA increase for the vast majority of recipients.
-----------------------------
Just my two cents worth
-------------------
stillers: As we used to say in the bizness, "Noted."
-------------------
Growth Bubble: Making Money on Companies That Make No Money Interesting article
@LewisBraham.
Hmm. Does this take into account companies are less
capital intensive than they were 20-30 years ago? Many growth companies are in the tech segment...building out their eco system and capturing customers ala Apple back in the day. Who cares if the customer is profitable now, they will be way profitable over the next five years. Many companies are bought for their technology before they become profitable...MuleSoft, by Salesforce, CRM. Look at Avalara, not profitable I believe but growing revenues, taking market share.
Last I checked non profitable companies don't really pay much tax either...think Bezos and AMZN...churned thru money, not profitable, huge free cash flow to invest back in the business, took market share, scaled business, didn't pay much in taxes...anytime they want they can flip the switch and scale profits
I'm on the fence on this one, respect the wisdom of GMO etc, but wonder if this thought process requires adjustment to today's world?
Best,
Baseball Fan
Selling or buying the dip ?! Ugh! Nobody's dancing here over our recent Dip/Diplet BUYs as the
gains are still negligible and the ST verdict ain't in yet. That said, we have partied pretty hard over the six prior BTDs we've participated in since March
2020, all of which are UP 10%-60%.
But that's NOT the point.
The point is ALL investors have a choice with Dips/Diplets, as we have EVERY day of the year with/without them: BUY, SELL or HOLD.
If you bought this last Dip/Diplet, things are looking good. Stories of the the demise of the BTD strategy seem to have (once again) been greatly exaggerated.
We'll cross over the 50dma today and sights will be set on the most recent S&P high of 4536, 2.2% higher than THU's close.
If you SOLD the most recent Dip/Diplet, I kindly suggest you address the question, "What do I do now that the market has just about fully recovered?"
BTW, that answer should have already been in your investment strategy with specifics on the execution of your strategy at a pre-described time/level. If it wasn't, kindly suggest you put it in there now.
Not the best, but it's FREE:
https://www.yahoo.com/finance/news/p-500-price-forecast-p-163010316.html
TSHIX There are never any early redemption fees on Fidelity funds.
Fidelity has two different sets of policies. One on non-Fidelity mutual fund transactions and one on Fidelity fund transactions.
- Make too many (two) short term (within
30 days) round trip (buy, then sell) transactions on a single
Fidelity fund in a single account within a
90 day span, and you
may begin triggering restrictions on trading Fidelity funds.
http://personal.fidelity.com/products/trading/Trading_Platforms_Tools/excessive_trading_policies.shtmlThis is Fidelity's excessive trading policy.
There are so many exceptions that if this is something you really want to do, it shouldn't be a problem. It doesn't apply to MMFs or reinvested divs. It doesn't apply to trades
totaling less than $10K per day, as noted above. (The limit had been $1K, but was
raised to $10K a year ago.)
Or you can use the same automatic investment mechanism that people use to buy TF funds for a $5 fee. If you use this to buy a Fidelity fund, then regardless of the amount, the transaction doesn't count as part of a round trip.
- Sell shares of a
non-Fidelity NTF fund within
60 days of purchase and you will incur a short term trading (not early redemption) fee imposed by the brokerage. (The funds themselves may impose an additional early redemption fee; Fidelity funds do not.)
https://www.fidelity.com/mutual-funds/all-mutual-funds/feesUnlike the excessive trading policy, which applies to Fidelity funds and is focused on the number of trades in a fund and not the shares, short term trading fees are focused on which shares you sell quickly.
Shares are treated FIFO, so this is also a relatively easy fee to avoid. If you purchase 100 shares in May, another 100 in July, and sell 100 in August, you will be fine. Even if you specifically identify the July shares as the ones you're selling.
Let the SS COLA Projections for 2022 Begin By law, "[t]he standard Part B premiums are set to cover 25% of projected average per capita Part B program costs for the aged, with federal general revenues accounting for the remaining amount."
https://sgp.fas.org/crs/misc/R40082.pdfHowever, for 2021 the law was changed so that the federal government absorbed most of the premium increase.
To ... avoid a large premium increase, Congress in the new budget law added enough money to Medicare so, according to a spokesman for House Speaker Nancy Pelosi, the Part B premium will increase only by an estimated $4 a month.
https://www.aarp.org/politics-society/advocacy/info-2020/congress-medicare-part-b.htmlSo part of the increase for 2022 would seem to be catching up to what 2021 should have been. Thus only the remainder of the 2022 increase would be due to the projected rise in medical costs between 2021 and 2022.
That may not make you feel any better, but it does help to harmonize the 2022 premium increase (whatever that turns out to be) with the small increase in medical costs over the past year.
While CMS announces original Medicare premiums in November, it has already released average increases for private Medicare insurance:
The average premium for Medicare Advantage plans will be lower in 2022 at $19 per month, compared to $21.22 in 2021, while projected enrollment continues to increase. As previously announced, the average 2022 premium for Part D coverage will be $33 per month, compared to $31.47 in 2021.
https://www.cms.gov/newsroom/press-releases/cms-releases-2022-premiums-and-cost-sharing-information-medicare-advantage-and-prescription-drug
Selling or buying the dip ?! No telling where this all ends up by YE, but for now...
...with earnings rolling in, futures are UP nicely this AM, and S&P will likely have its 50dma of 4,364 in its crosshairs today/tomorrow (maybe even at today's OPEN).
If it overtakes it, its previous high of 4,537 will come into focus and be the next target on the UP side.
Having done this successfully several times since the 2020 crash, I again BOT this Dip/Diplet. At this stage of the process I wonder if I didn't BUY enough.
Just curious...If you SOLD the Dip/Diplet, what'd'ya do now?
FWIW, I've been there a few times years ago using my old strategy that was driven by capital preservation/loss avoidance, and EACH TIME failed to respond quickly enough. And it cost me.
SS increase: what to do ...Medicare will eat it anyhow.
There's a lot of that notion going around. Let's walk through that.
I did this relatively quickly - please check my math. Also see Disclaimer below.
Looking ahead...If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
No definitive word yet on the Medicare Part B increase for 2022.
Looking back...In
2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
So...IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.
Let the SS COLA Projections for 2022 Begin ...And yet, I just read that Medicare will eat the increase. Should have remembered.
There's a lot of that notion going around. Let's walk through that.
I did this relatively quickly - please check my math. Also see Disclaimer below.
Looking ahead...If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
No definitive word yet on the Medicare Part B increase for 2022.
Looking back...In
2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
So...IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.
TSHIX Lost 18.14% in 1Q 2020, vs 10.94% for FMSDX .
WBALX lost only -8% in 1Q
2020.
But....FMSDX has a 3 year annual return of close to +17%, versus TSHIX at 12.5% and WBALX at 10.6%.
