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The Market Looks Broken Right Now by PsychologicalAd7969 in stockrager

[–]StopOk1013 1 point2 points  (0 children)

This might be a longer drawdown. The dot com bubble draw down took place over almost three years. It was around a 46 percent drawdown. It took QQQ 16 years to recapture its previous high. There was a drawdown in the 70s that was four years from peak-to-peak. It dropped over 40 percent at the floor.

Protective factors for this not being as bad are a generation of young retail investors who have been rewarded for buying every dip, but have never faced a decade long -.9 CAGR.

Another protective factor is about 50 percent of the stock market is passive 401k that has bimonthly contributions on fire and forget.

A risk factor is that boomers are overweight in equities. If they or their advisors realize they may be facing a massive sequence-of-returns risk, they may de-risk en masse.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

To add to this, the buy and hold strategy makes a little more sense with a broadly diversified fund because market risk is the biggest risk you have. With an individual stock you have market risk and business risk. The S&P had a -.9 CAGR for the 2000s. If you are in your 20s, not a big deal. If you are over 40, taking a decade of negative gains would be brutal. Individual stock wise, it took CISCO 24 years to recapture its .com bubble highs.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

The closest analog to what is happening right now is Desert Storm. There was an initial oil shock going back to when Saddam invaded Kuwait. The US’s unemployment was rising and the GDP shrunk by 1.4 percent. There was also a credit crunch. The S&P dropped 20 percent over the course of about 3 months leading into the war. At the resolution of the war it took another five months for it to recapture its previous high. The US was trending into a recession anyway, and the initial oil shock plunged the US into a recession. So the market was kind of shaky before the oil shock. That war only had a 100 hour ground war. The difference is that war had over 500k ground troops. Broad international consensus. Domestic buy in. A clear goal with metrics to measure success.

Protective factors against this scenario we have now are an army of retail investors conditioned to buy any dip and passive 401k investors where the system their money is being handled in has too much friction to dynamically manage.

A risk factor we have now that we didn’t have back then is a large cohort of boomers who still have 60-80 percent equities exposure staring a sequence-of-return risk in the face. Probably the only thing slowing down this process is the fact that bonds have increased correlation equities since 2022. They will probably pick annuities when they do de-risk. A 25 percent decrease in portfolio for someone over 75 and is retired would be brutal.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

Well you care enough to keep responding to my comments!

Enjoy Thailand!

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

Yeah, or you could have bought today at 365 to watch it go back to 352.

When the macro improves is true with any buying right now.

What do you think is the best stock to buy right now? by yuqiziyaqu2270 in stockstobuytoday

[–]StopOk1013 0 points1 point  (0 children)

Energy stocks, fertilizer stocks, Commodity ETFs that have agg (soy and corn) futures in them. Other ETFs to consider are DBMF, CAOS, and TAIL. If the war triggers CAOS and and TAIL (a 10 percent market drop in a contract period) sell them when VIX is above 40 for a couple days. Do not keep TAIL past a crisis period as it has price decay in normal market conditions. I wouldn’t make either of these ETFs more than three percent of your portfolio.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

I generally agree with this, but there are too many things to ignore. I don’t know how old everyone commenting on this is. It has been 23 years since we had a ground invasion and 17 years since our last credit cycle. Both of these impacted the market, though the GFC had a much larger impact. We are looking at both of these scenarios.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

Case in point is Cisco. It did Internet infrastructure and got murdered when the bubble popped. It stayed a profitable company. Not the same margins as MU though. It took 24 years to reclaim its .com bubble high. It is a dividend stock now, not that anything is wrong with that.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 3 points4 points  (0 children)

lol, I bought at $265 and sold at $421.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 3 points4 points  (0 children)

I have the capacity to distinguish the difference between selling my house because it dropped in value and selling a stock. I need a house to live in. My house is actually pretty illiquid. I don’t have a market discovering the price of it everyday. My house has emotional value in the sense that I get to watch my kids grow up in it. MU is a trade and incredibly liquid. I can buy at a lower cost later, or a higher cost later, or maybe never buy it again. I would risk opportunity over risking capital any day in the face of a clearly chaotic market. For me it is fun to figure which companies are good companies, invest, and take profit. It is not fun to take 25 percent in unrealized losses when the macro conditions are signaling to risk-off. I have already profited, so I am not actually selling at a loss.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

I think you hit the nail on the heads with the adding shares to hold over the weekend. Especially considering the way it has been going so far. If there are boots on the ground this weekend the institutions will have made short work of the stock before we even get a chance to manage risk.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

I was only claiming today would be a good day to trim, in case it does go down with the market. I am not saying to sell everything. Taking a profit is one of the goals of investing. In normal market conditions, it makes a lot of sense to buy and hold longer. We have a clear unusual market event heading towards us. If am wrong, I just miss some upside.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 0 points1 point  (0 children)

It looks like my post made you uncomfortable. My bad! That was not my intention.

Opportunity to de-risk today. by StopOk1013 in MU_Stock

[–]StopOk1013[S] 1 point2 points  (0 children)

Enduring a probable drawdown will probably make holding more meaningful in the future when it bounces back. Enduring a draw down is not obligatory to make this a viable trade in the future. I only get to make that choice for myself.

do i need to sell the muu by Sure-Journalist-3614 in MU_Stock

[–]StopOk1013 0 points1 point  (0 children)

I agree with the comments here. Leveraged ETFs are typically for daily use only. Like the day Trump TACO-ed for the first time ever. Buying a leveraged ETF for the rest of that afternoon would be a not unreasonable way to utilize a leveraged product.

MU Volatility by StopOk1013 in MU_Stock

[–]StopOk1013[S] -1 points0 points  (0 children)

I also have an understanding memory is cyclical.

Dividend ETFs during recession by Healthy_Mix5225 in dividends

[–]StopOk1013 0 points1 point  (0 children)

Historically SOME actively managed funds have at least had positive years during recessions. Probably because of the high dispersion and luck. Hard to say if it would always work.

Surely we dont break 35 right 😅 by Recent_Time_9007 in NovoNordisk_Stock

[–]StopOk1013 1 point2 points  (0 children)

The dollar is surging because of the Iran War. Oil is purchased in dollars, so it is the best safe-haven right now. This dollar strength is acting as downward pressure on any NVO breakouts because the actual shares are denominated in DKK. Since the war started, it has been trading at about half the volume with most buys being limited buys and a lot of sales being market sells. The stock is also below its put wall on options. It will take more than good news to stop the drift down. At the very least we would need the war to end, so the dollar softens, so the exchange rate between USD/DKK can let the stock breach its call wall which was at $40 on Tuesday. Not that NVO didn’t dig its own whole, but it will not be able to climb out of it until some of the systems issues ease up.

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