Buffet on the impending market crash

[afm199]

I've been light on equities for the last 12 months, not because I'm trying to time the market. Simply because I don't believe the market is properly pricing risk across the board at this point and I'm concerned that the returns that will be available over the next 5-10 years aren't worth the risk. Now, if we hit a true correction, which in my mind is more than a 20 percent drop, I'll rethink that. But I'm also at a stage in my life where capital preservation is more important that outright return. If I were younger I might have held on a little longer, but there is no way I would have been heavy equities a week ago at these valuations. They're just fucking nuts.

Yeah, I hear that. My total equity position is quite low.

 

[cheez]

If you " got out " in time, when will you know that you should "get in at the right moment?"

When the equities I'm certain have solid valuation stop shedding ticker value.

The business world hasn't changed significantly, COVID-19 or otherwise, Trump or otherwise, Bernie or whoever or otherwise. AAPL, AMZN, GOOG, TSLA, MSFT- they all have solid business right now, even if there are economic doldrums. When they trend level for a while, buy back in. Don't be afraid of missing the top of the peak or the bottom of the trough- just getting in the relative ballpark is enough to be massively profitable.

I've been light on equities for the last 12 months, not because I'm trying to time the market. Simply because I don't believe the market is properly pricing risk across the board at this point and I'm concerned that the returns that will be available over the next 5-10 years aren't worth the risk. Now, if we hit a true correction, which in my mind is more than a 20 percent drop, I'll rethink that. But I'm also at a stage in my life where capital preservation is more important that outright return. If I were younger I might have held on a little longer, but there is no way I would have been heavy equities a week ago at these valuations. They're just fucking nuts.

This mirrors my thinking. The prices we've seen are unsustainable- growth can't continue at this rate, there's no tax cuts left to throw at it- so we'll see a correction down. 20% sounds about right, maybe closer to 25% at the bottom I expect. I'm down to 7% of my total holdings in equities, from 78%.

 

[cheez]

C'mon old man, don't you know these young guns have got the market nailed?!

I love hearing the investment philosophies of people whose entire adult life has been a bull market. :laughing

My strategy is borne of having taken 78% losses in 2001 and 32% in 2008. I was on track to retire at 40, I've had to reset for 51 as a result of 2008 losses. I won't "ride it out with a long view" ever again. That's the rube's game- the real game is buy low, sell high.

 

[afm199]

My strategy is borne of having taken 78% losses in 2001 and 32% in 2008. I was on track to retire at 40, I've had to reset for 51 as a result of 2008 losses. I won't "ride it out with a long view" ever again. That's the rube's game- the real game is buy low, sell high.

The problem with market timing is just that.

This market has done a 10% correction almost overnight. Today it showed that it can go both ways quickly. I wish you the best finding a point to jump in that meets your goals.

 

[cheez]

The problem with market timing is just that.

This market has done a 10% correction almost overnight. Today it showed that it can go both ways quickly. I wish you the best finding a point to jump in that meets your goals.

Thanks!

 

[bpw]

My strategy is borne of having taken 78% losses in 2001 and 32% in 2008. I was on track to retire at 40, I've had to reset for 51 as a result of 2008 losses. I won't "ride it out with a long view" ever again. That's the rube's game- the real game is buy low, sell high.

There aren't any actual losses unless you sell, sitting long term since the mid 90's would have you doing pretty well right now, even after the last few days drop.

I still have yet to see any research showing individuals are able to beat the market any more often than blind luck would suggest.

 

[DesiDucati]

As long as an extra $Trillion keeps getting dumped into the economy, it will limp along.

So are you sure there’s going to be more QE?

 

[DesiDucati]

I'll dollar cost average back into the market when I feel comfortable. It's not about catching the spike for me.

That means waiting on a couple months of data about the global economy and the U.S. economy


You'd be surprised I owned Amazon for 22 days :wow

Isn’t it called catching the falling knife?

 

[Cycle61]

If you " got out " in time, when will you know that you should "get in at the right moment?"

When Horse says so.

 

[littlebeast]

this subject has my babe and i at the most odds we’ve been over anything in years - to the point where i have forbidden him to discuss it. he asked if he could still ‘think it’. to which i responded ‘knock yourself out’ (thinking to myself - you do it or i’ll do it).

he can’t handle financial pressure. my attitude is that it’s sort of a can’t stand the heat - then get out of the kitchen situation. that’s my domain. :laughing

 

[Removed 3]

Isn’t it called catching the falling knife?

Was responding to afm199's comment, you have to take risks. I understand where he's coming from. My revelation was that I did.

I profited from buying and selling Amazon but the volatility is not for me. I've done much experimentation with what my personal preferences in investing is. The style is conservative. It's not about trying to predict when the best time it is to buy low but when to be out and when I can grow my balance incrementally in equities.

 

[JesasaurusRex]

When Horse says so.

:laughing

 

[SM610]

So are you sure there’s going to be more QE?

Have a look at the repo market and see if whats happening there looks like QE. Does to me...

https://www.forbes.com/sites/johnmauldin/2020/01/02/the-fed-has-quietly-started-qe4/

 

[UDRider]

When Horse says so.

:rofl

 

[Climber]

this subject has my babe and i at the most odds we’ve been over anything in years - to the point where i have forbidden him to discuss it. he asked if he could still ‘think it’. to which i responded ‘knock yourself out’ (thinking to myself - you do it or i’ll do it).

he can’t handle financial pressure. my attitude is that it’s sort of a can’t stand the heat - then get out of the kitchen situation. that’s my domain. :laughing

Fire and ice, you've hinted at that before, you truly have a volatile but sustainable relationship. :thumbup :laughing

 

[cheez]

There aren't any actual losses unless you sell, sitting long term since the mid 90's would have you doing pretty well right now, even after the last few days drop.

I still have yet to see any research showing individuals are able to beat the market any more often than blind luck would suggest.

Actually if you were still holding the mix of equities I was holding in 2001 when the market did drop, your portfolio valuation would be closer to $0 than "doing pretty well right now." One has to sell a stock to realize the value gain, but a worthless asset is a worthless asset. You're not still holding on to real estate in Flint, Michigan hoping it'll start appreciating again, are you? ...and THAT has the benefit of being tangible, unlike ownership in a corporation. I'm not taking nearly that long of a view.

Nobody beats the house, as a rule, yet specific individuals are unwelcome from playing games at certain house tables, right? I'm not saying I'm going to time the market and get rich- I'm saying I'm going to avoid significant losses.

Edit: Down 13% this week despite QE...

 

[Blankpage]

Good time to buy GoPro?

 

[cheez]

Good time to buy GoPro?

Personally I don't think so, because I think the action cam market is kind of saturated with knockoffs and they aren't really leading the market any longer. They're also at the same valuation they were Monday thanks to an earnings report that looked good.

 

[JesasaurusRex]

Personally I don't think so, because I think the action cam market is kind of saturated with knockoffs and they aren't really leading the market any longer. They're also at the same valuation they were Monday thanks to an earnings report that looked good.

 

[Mike95060]

LOL perfect man.