The Market 2022-2023-2024

[Finito]

man, I cant get back in until march or april after I sell my home but there is some of the best dip ever being put together right now. Starting to look like that feb/march 2020 dipping sauce.

nom nom nom

 

[Folster]

Crazy market rally today. Can't believe the NASDAQ finished up .63%. The rest of this week will be interesting.

 

[Russ Smith]

Just like I predicted markets come flying up close in the green.

OK I didn't predict that but I wished it!

 

[Russ Smith]

Crazy market rally today. Can't believe the NASDAQ finished up .63%. The rest of this week will be interesting.

I was walking and talking to my friend who was lamenting her 401K and getting ready to deposit a rollover. I said the good news is you will be going in at a dip so that works. While we were talking my phone messaged me that the DOW was recovering but I just ignored it, was still down like 600 but half off the low. Unreal close like KC and Buffalo!

 

[dscher]

Crazy market rally today. Can't believe the NASDAQ finished up .63%. The rest of this week will be interesting.

Looks like the tech/growth is possibly rotating with the values on a day like today. Dow was outperforming relatively to the nasdaq early. Then finished underperforming.

 

[elindholm]

Just like I predicted markets come flying up close in the green.

Well, as some on this board take great pains to explain to us, there is always a possibility that anything could happen.

 

[Devilmaycare]

Crazy market rally today. Can't believe the NASDAQ finished up .63%. The rest of this week will be interesting.

I just got home from a lunch date and can't believe the turnaround around. I left the house depressed with the DOW down over 900 to come home and find it in the green and all of my big holdings doing ok. This market is crazy.

 

[dscher]

Well, as some on this board take great pains to explain to us, there is always a possibility that anything could happen.

Great investing philosophy!

 

[Folster]

Do you guys think we'll see the market rally back today?

I opened a position in TROW today after fixing my model. I made a big analysis post that I had to delete because the site I was using, Market Watch was pulling bunk cash flow data for some reason. It wasn't the only site. I had to actually go to their annual report to check the numbers.

I opened the position with 5 shares at $155. I calculated fair value for an investor requiring a 10% annual return at $169.

I'd like to build the position up to about $3500 over the next few weeks/months.

 

[dscher]

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[elindholm]

I opened the position with 5 shares at $155. I calculated fair value for an investor requiring a 10% annual return at $169.

Good luck! I tend to be nervous about buying in incrementally, because I don't want the stock to go up until I'm all in. So if I had a long-term plan to invest $3500 in the stock, I'd look for a good price point and do it all at once. (And if the $3500 isn't available, well then I might have to let the opportunity pass.) I know that dollar-cost averaging is fashionable for mutual funds as a variance-reduction strategy, but the difference there is that you don't have as much control over your price point.

If TROW jumps to 165 immediately after your first purchase, what do you do? Stick with the plan of investing more?

I'm no Amazon/Bezos fan, but AMZN sure is moving into tempting territory.

 

[Folster]

Good luck! I tend to be nervous about buying in incrementally, because I don't want the stock to go up until I'm all in. So if I had a long-term plan to invest $3500 in the stock, I'd look for a good price point and do it all at once. (And if the $3500 isn't available, well then I might have to let the opportunity pass.) I know that dollar-cost averaging is fashionable for mutual funds as a variance-reduction strategy, but the difference there is that you don't have as much control over your price point.

If TROW jumps to 165 immediately after your first purchase, what do you do? Stick with the plan of investing more?

I'm no Amazon/Bezos fan, but AMZN sure is moving into tempting territory.

It's tough. I've learned that my timing is bad enough on a falling stock that I usually get an opportunity to buy at a lower price. But it's a crapshoot. We'll see.

 

[elindholm]

It's tough. I've learned that my timing is bad enough on a falling stock that I usually get an opportunity to buy at a lower price.

I sure hear that. But I try to remind myself that almost no one is lucky enough to sell at the absolute peak or buy at the absolute trough. Since I tend to buy on downswings, I assume that I'll be kicking myself for the first few weeks as it continues its trajectory. But obviously one never knows where the bottom is until it's already passed.

 

[Folster]

I sure hear that. But I try to remind myself that almost no one is lucky enough to sell at the absolute peak or buy at the absolute trough. Since I tend to buy on downswings, I assume that I'll be kicking myself for the first few weeks as it continues its trajectory. But obviously one never knows where the bottom is until it's already passed.

I usually go in with half, but the exceptional volatility has be a bit more cautious.

 

[dscher]

With the way relative strength is behaving lately...looks like we could get a tech miss on earnings starting tomorrow. Just a relative strength outlook compared to the broader market.

 

[Folster]

I'm spread a lot thinner than that, and I'm surprised that we don't have more overlaps -- Alphabet and Intel are our only matches (except I hold GOOGL, not GOOG). I got impatient with T and swapped it out for VZ, but maybe I should have hung in there. I don't own sin stocks directly, so MO and XOM are off the table for me, but I understand their appeal. We have some strategic matches, for example I hold MSFT instead of AAPL, and MMM instead of HON. But I cover mid- and small-cap as well. Obviously that just means smaller positions everywhere, but I don't like the idea of a big percentage being tied up in the fortunes of any given stock.

What was your rationale for MMM? I see it's back near it's 52 Week low. I looked at it briefly last Feb when it was $196 and thought it was overpriced. The current price of $173 is slightly below what I calculated back then. I'll have to take another peak under the hood. My kids love their tape. LOL!

 

[elindholm]

What was your rationale for MMM? I see it's back near it's 52 Week low. I looked at it briefly last Feb when it was $196 and thought it was overpriced. The current price of $173 is slightly below what I calculated back then. I'll have to take another peak under the hood. My kids love their tape. LOL!

Well, almost everything is near a 52-week low right now, but...

Good question. As my father-in-law was nearing the end of his life, we thought it best if I had access to his accounts, not to make any decisions, but just to make sure that he wasn't accidentally sabotaging himself. He had been managing his own portfolio for a long time, and had done well, so I studied how he had put it together. He had a few old-school Dow 30 stocks, including MMM. As we've been building our portfolio, I liked the idea of some low-risk dividend producers that would function similarly to bonds, and MMM was on my mind as an option. We were able to get it at 167.50, so it's doing pretty much what it's supposed to, which is feed us a few dollars in dividend and maybe also appreciate a bit.

Of course, that was all before 7% inflation made a 3.5% dividend rather less attractive.

 

[Folster]

Well, almost everything is near a 52-week low right now, but...

Good question. As my father-in-law was nearing the end of his life, we thought it best if I had access to his accounts, not to make any decisions, but just to make sure that he wasn't accidentally sabotaging himself. He had been managing his own portfolio for a long time, and had done well, so I studied how he had put it together. He had a few old-school Dow 30 stocks, including MMM. As we've been building our portfolio, I liked the idea of some low-risk dividend producers that would function similarly to bonds, and MMM was on my mind as an option. We were able to get it at 167.50, so it's doing pretty much what it's supposed to, which is feed us a few dollars in dividend and maybe also appreciate a bit.

Of course, that was all before 7% inflation made a 3.5% dividend rather less attractive.

That was similar to my rationale with my picks of MO and T, along with the perceived upside that MO has with marijuana and T with its streaming. It's really important not to overpay for these dividend payers. It sounds like you got in at a good price. Not surprisingly, I've found my DCF model works best for these types of mature and stable companies.

 

[elindholm]

That was similar to my rationale with my picks of MO and T, along with the perceived upside that MO has with marijuana and T with its streaming. It's really important not to overpay for these dividend payers. It sounds like you got in at a good price. Not surprisingly, I've found my DCF model works best for these types of mature and stable companies.

It's a good time to be holding T, probably. Unfortunately I bought it at 29 and got tired of waiting for it recover. I swapped it over to VOD, which is up since I got it -- although by less than T has rebounded over the same period, so I lost a little by switching out. But sooner or later I get fed up looking at a big red number in the same spreadsheet cell every day, so there is some psychological value in moving on.

 

[dscher]

During this downturn this could serve some looking for extreme sentiment in either direction. I use it frequently during times like these. One of the rare things CNN got right. IMO. .

Fear & Greed Index - Investor Sentiment - CNNMoney

Fear & Greed is CNNMoney's investor sentiment tool that comprises of 7 markets indicators.

money.cnn.com

I'm looking for a number below 10 or so for a true bottom on this current pullback. We got below that number in March of 2020.

 

[dscher]

Another good one. I don't want to see it above or near the zero line. It will keep you out of recessions/crashes based on it's track record alone.

St. Louis Fed Financial Stress Index (DISCONTINUED)

Graph and download economic data for St. Louis Fed Financial Stress Index (DISCONTINUED) (STLFSI3) from 1993-12-31 to 2022-10-28 about FSI, financial, indexes, and USA.

fred.stlouisfed.org

 

[elindholm]

I swapped it over to VOD, which is up since I got it -- although by less than T has rebounded over the same period, so I lost a little by switching out.

Well never mind, T has fallen back down and now my switch to VOD was correct.

 

[Folster]

Well never mind, T has fallen back down and now my switch to VOD was correct.

I looked at MMM and was surprised to see analyst consensus of revenue growth at 10-12% over the next 5 years considering revenue has been fairly flat over the past 5 years.

For my required rate of return of 10%, I calculated a purchase price of $147-$164 depending on how you feel about debt, but for a long-term stabilizing force to balance more aggressive holdings in a portfolio, it's pretty attractive at it's current price. An investor may get lucky and pick it up for $150ish, but it's pretty solid where it's at now. I'll keep it on my watchlist and looks at it again if it falls back down to the 150's

 

[Folster]

There seems to be no deviation from the course that the Fed has already outlined.

 

[dscher]

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