Lion of the Blogosphere

Today I sold all of my stocks

Last month I sold half (on a poorly timed day) and today I sold the rest, so I now have no money invested in stocks.

The financial markets scare me with the S&P 500 Index being close to its all-time high (which was in August) and the presidential election coming up. My conspiracy theory is that the Illuminati are holding the market together to help HRC win the election, because everyone knows a market crash hurts the party in power: McCain had no chance after bad financial stuff happened in September.

If I turn out to be wrong, well here’s a public record, so you can make fun of me later.

Written by Lion of the Blogosphere

October 28, 2016 at 12:44 pm

Posted in Investments, Politics

76 Responses

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  1. I can understand it. But I’m keeping my existing positions while maintain a huge cash position. Your decision makes sense without knowing your tax implications.

    Yakov

    October 28, 2016 at 12:59 pm

    • Do you recommend me cashing out my retirement plans? This of course would be a taxable event.

      What would retirement look like beyond 2030 in America, if I get to live that long?

      JS

      October 28, 2016 at 4:16 pm

      • If you want to switch your retirement plan to all cash, it’s not a taxable event.

        Lion of the Blogosphere

        October 28, 2016 at 5:42 pm

      • I have a Fidelity 401(k) and a Roth IRA, with a substantial amount of money in each. The Fidelity would be a taxable event if I want to empty it, because it was pre-taxed. This would be cash withdrawal, not a rollover or conversion to another retirement account. The Roth — I would only incur a taxable event on the earnings which were invested with a few mutual funds and stocks as well. The base contributions are not taxed.

        JS

        October 28, 2016 at 5:50 pm

      • JS, Can’t you just move it to a money market or a bond fund in your 401k? I move money around in my 401k without being taxed. Maybe I misunderstand what kind of account you have.

        You can move money around in a Roth as long as you keep it there as far as I know.

        Maybe I am wrong.

        ttgy

        October 28, 2016 at 6:10 pm

      • My question was not about moving money around, but withdrawing it, which becomes cash.

        JS

        October 28, 2016 at 6:48 pm

      • I see no incentive in investing with financial institutions based in the US. I need to open up a foreign bank account and then take it from there.

        I think a 401(K) converted to a money market account would be a taxable event. It becomes liquid cash.

        JS

        October 28, 2016 at 6:52 pm

      • I’m sure Fidelity has total foreign stock market and bond funds. I know Vanguard does.

        You can buy the any of the foreign stocks markets through Vanguard.

        ttgy

        October 28, 2016 at 7:43 pm

    • Check out this twitter hashtag, great stuff:

      https://twitter.com/hashtag/draftourdaughters

      Rifleman

      October 28, 2016 at 4:31 pm

  2. I don’t think it’s the Illuminati holding up the stock market. The Japanese Illuminating have horribly failed to hold up their own stock market. The market is strong because we nearly 8 years into an economic recovery. The market will crash when the next recession hits next year.

    Otis the Sweaty

    October 28, 2016 at 1:00 pm

    • “because we nearly 8 years into an economic recovery”

      What are you talking about? Have you seen the other 90% of America lately?

      Spoons

      October 28, 2016 at 3:00 pm

      • Money is only concentrated in a few cities of the Northeast and the Left Coast. The rest of America is pauper land.

        JS

        October 28, 2016 at 4:09 pm

    • The market is strong because we nearly 8 years into an economic recovery.

      There was barely a recovery.

      The world economy was kept on life support with very excessive QE only to save Obama in 2012 and Hillary in 2016.

      By 2017 they will have to unwind regardless of who wins.

      The Undiscovered Jew

      October 28, 2016 at 5:43 pm

  3. Good luck in this bold, public gamble.

    Gozo

    October 28, 2016 at 1:01 pm

  4. Want to know how bad Trump is killing it in early voting? Big swings towards Trump in the betting markets.

    Otis the Sweaty

    October 28, 2016 at 1:05 pm

    • True. I was down in the hole on Predict it, now I’m halfway out.

      Does anyone want to pontificate on Duterte Harry? Are we gonna be in a war in a year?

      gothamette

      October 28, 2016 at 2:45 pm

      • I like him. He is part of the global Alt-Right movement.

        Putin, Duterte, Farage (soon to be replaced by Kassam), Le Pen, Abe and soon Trump.

        Otis the Sweaty

        October 28, 2016 at 3:06 pm

      • “Does anyone want to pontificate on Duterte Harry? Are we gonna be in a war in a year?”

        What a character. I think China has flipped Duterte. That’s what Duterte’s shenanigans are really about.

        While I don’t mind Duterte flipping globalists the bird, I don’t share Otis’ enthusiasm. I don’t like our allies jumping in the bed with the ChiComms. That’s bad juju.

        destructure

        October 28, 2016 at 4:10 pm

      • Totally support Duterte. I hope he kills every drug dealer in the Phillipines.

        CamelCaseRob

        October 28, 2016 at 5:28 pm

      • How can you forget Victor Orban?

        Glengarry

        October 28, 2016 at 5:46 pm

      • They aren’t “our” allies. The greatest enemy of the white man in the world is the United States. We want as weak a US as possible because without the US, the entire Globalist system comes crashing down.

        You can put Erdogan as part of the Alt Right crew as well. He has done a phenomenal job crushing modernism in Turkey.

        Otis the Sweaty

        October 28, 2016 at 5:46 pm

      • The real question with Duterte is whether he intends to kill off sex tourism. Ever since boy-girl sex died back here in the ’90s (yeah, yeah Leo D. and the occasional IB still get laid), PI’s been the only place you could put together an enthusiastic threesome. For about $80. But that’s a big source of hard currency, so maybe he’ll leave it alone.

        Burgos Bill

        October 28, 2016 at 8:01 pm

      • Camelcase — You don’t stop anything by killing supply. The way to stop something is to kill the demand.

        Regardless, it’s very dangerous to have hit squads running around whacking people in the streets. It’s only a hop, skip and a jump from whacking dealers in the street to whacking political opponents in the street. There are reports that he’s already whacked political opponents. It doesn’t take a genius to see what the little bastard is really up to.

        **
        Otis — The US isn’t the enemy. The political class running the US is the enemy. We need a coup not a weaker US. The US is the only thing keeping the monsters at bay. And the current political class is doing that even if they pose a danger in other respects. You need to think more deeply about this. Because binary thinking is just plain lazy.

        destructure

        October 29, 2016 at 6:10 pm

  5. Crooked Hillary won the Scholastic poll and she won it big. This is the first non polling evidence of a Hillary victory, all the other non polling data and analysis has pointed to Trump.

    Scholastic poll overestimated Obama by 4 points in 2008 but got his numbers exactly right in 2012, although they somewhat underestimated Romney that year.

    Otis the Sweaty

    October 28, 2016 at 1:25 pm

  6. R ballots projected to overtake D ballots in early CO voting by the end of the week.

    Otis the Sweaty

    October 28, 2016 at 1:33 pm

    • Excellent, if true. Isn’t CO a mail-in only state?

      SWPL2

      October 28, 2016 at 3:16 pm

  7. Bad move, Lion. The Fed/Goldman cabal has stocks are on a permanent rocket ship to the moon. They’re going to keep interest rates sub-2% for the next decade at least. No end to TINA in sight. However, I add the caveat that if God Emperor TRUMP pulls the upset, they will most certainly tank it.

    Two in the Bush

    October 28, 2016 at 1:46 pm

    • Upset? Trump’s cruising to a big victory.

      Andrew E.

      October 28, 2016 at 2:12 pm

    • They’re going to keep interest rates sub-2% for the next decade at least. No end to TINA in sight.

      They can’t do that except as a very temporary measure. Negative rates bring too many consequences to the banking system.

      The implosion is coming next year no matter what they do.

      The Undiscovered Jew

      October 28, 2016 at 5:47 pm

      • No, not negative. What I mean is, they are going to raise rates, but only a half a percent here, a quarter of a percent there. I don’t think you will see interest rates above 2% (which is still very low, don’t forget) for a long time. What does this mean? It means if you need to park your money somewhere there is no alternative to the stock market because you have to beat inflation.

        Two in the Bush

        October 28, 2016 at 6:39 pm

      • What I mean is, they are going to raise rates, but only a half a percent here, a quarter of a percent there. I don’t think you will see interest rates above 2% (which is still very low, don’t forget) for a long time. What does this mean?

        Whenever they threaten to raise rates by 0.25 points the market nose dives.

        And the stock market is hardly the only problem they will face if they raise rates. When liquidity dries up and those companies which have been borrowing at 0% interest with little to show in the way of profits encounter hikes they will halt their operations and kill economic activity.

        The Undiscovered Jew

        October 28, 2016 at 8:41 pm

  8. BOOM! The FBI is reopening it’s investigation of Hillary. Would they do that in the absence of significant info?

    SWPL2

    October 28, 2016 at 1:47 pm

    • They’ve already got significant info on Hillary. My guess is that she had something Very Dirty on Comey and the rat caved. Perhaps that’s been taken care of, or someone else has something dirtier on Comey and he will fall on his sword.

      Someone call odds on Duterte Harry – does he die in a coup this year?

      gothamette

      October 28, 2016 at 2:47 pm

      • Heh. A coup against duterte? Coup and rebellion just isn’t the Filipino way. They’re the most passive, go-along-and-get-along people I’ve encountered.

        The safest major city in Phils is Davao. Major crime is almost non-existent there. And it got that way when duterte became mayor of Davao. Anybody who wants to mess with duterte better pack a lunch; he’s absolutely brutal and utterly merciless.

        driveallnight

        October 28, 2016 at 3:15 pm

      • This is an atom bomb on Hillary’s campaign. The timing is SUPERB.

        SWPL2

        October 28, 2016 at 3:17 pm

      • @driveallnight,
        Hun, I mean a CIA backed coup. It would be stupid and incredibly obvious, but the CIA is stupid and incredibly obvious.

        @Otis –
        Is there a price on Duterte’s head now?

        gothamette

        October 28, 2016 at 4:45 pm

      • You’re ignorant, hun. The facts are that there would have to be Filipinos involved in any coup (CIA backed or not). Filipinos are (a) rigidly docile observers of authority, and (b) know that being involved in any move against duterte would result not just in their own murder, but that of everyone in their immediate family as well (and family is *everything* to Filipinos). And don’t forget we’re talking about Dirty Harry Duterte, a guy who had a barangay chief killed for laughing at him.

        The last uprising (“People Power”) in Phils was completely non-violent, against Ferdinand Marcos — and only after he openly threatened reformist Sen. Ninoy Aquino if he dared to Phils return from exile, then promptly had him shot to death on the goddamn tarmac right after his plane landed, in front of a bevy of international news media.

        Read up on the Ampatuan Massacre if you want to know how things work in Phils. There ain’t gonna be a coup. Phils isn’t like Thailand, it’s more like Cambodia or Laos.

        driveallnight

        October 28, 2016 at 9:43 pm

    • It appears to have something to do with Weiner. Too complicated for me. I need Otis to sweatsplain it to me.

      gothamette

      October 28, 2016 at 4:51 pm

      • Lion, you have GOT to do something about this new Weiner development.

        http://www.nytimes.com/2016/10/29/us/politics/fbi-hillary-clinton-email.html?_r=0

        “tens of thousands” of email on a device they shared.

        Who shares a device with their SO/husband/wife. Everyone has their own device.

        gothamette

        October 28, 2016 at 5:38 pm

      • We really don’t know right now. On NeoGaf they are saying “nothing to see here, move along…” but other information indicates that it may indeed be a big deal. Hillary’s sycophants in the media are saying it relates to 3 Weiner texts, but other sources are on the record saying it involves thousands.

        What appears to have happened is that the Russians used a femme fatale to entrap pervert Weiner and through him got access to Huma’s data and through that got access to Clinton’s server.

        Hillary and Obama have gone mute which indicates to me that something serious may be brewing.

        Otis the Sweaty

        October 28, 2016 at 5:50 pm

  9. Stocks go up, stocks go down. Nothing new to see here.

    Peter

    ironrailsironweights

    October 28, 2016 at 2:04 pm

  10. How much money did you have in the stock market, and which stocks did you sell?

    Yankee

    October 28, 2016 at 2:22 pm

    • ‘How much money did you have in the stock market’

      Mate, you are funny!

      Yakov

      October 28, 2016 at 4:36 pm

  11. The markets will have another few rounds of Brexit turmoil as well after the election is safely in hand.

    Fiddlesticks

    October 28, 2016 at 2:22 pm

  12. First you convince me to spend a bundle on iRobot stock and now this… you’re killing me !!

    Camlost

    October 28, 2016 at 2:24 pm

  13. Libertarians invest 1/4th each in stocks, bonds, cash, gold, plus if you like some in real estate and sleep at night. Re-adjust portfolio back to the 1/4th rule every year or so.

    But going all-cash to re-assess after a run-up is never a dumb move.

    Robert

    October 28, 2016 at 2:30 pm

    • Do you have a gold fund or just actually buy the gold?

      I remember in 2005 sitting in the waiting room reading an article that said buy gold. It took off. I wish I had bought some.

      Real Estate index funds skyrocketed too but crashed terribly.

      ttgy

      October 28, 2016 at 4:22 pm

    • There is no run up, market did nothing for a long while.

      Yakov

      October 28, 2016 at 4:38 pm

      • The S&P 500 hit an all-time high in August. True, it was not that much higher than where the index was in 2015. But there was a big six-year bull run from 2009 to 2015.

        Lion of the Blogosphere

        October 28, 2016 at 5:45 pm

  14. I agree with your reasoning. And I cant see how anyone can “make fun of you” for consolidating gains.

    Even people who are long term bulls have to admit we are overdue for a retrenchment. I am still long EUO because it is so enjoyable to be but other than that my exposure is limited.

    Lion o' the Turambar

    October 28, 2016 at 2:47 pm

  15. How are you smarter than the market? You aren’t.🙂

    Shawn

    October 28, 2016 at 2:49 pm

  16. I’m tell you you Lion, if Trump wins, it will be a ‘uge risk that the Fed tries to sabotage him with monetary tightening. Nominal spending growth is already trending lower, and the monetary base is actually shrinking. There’s lots of pressure on the Fed to raise the short term interest rate, because people don’t understand what monetary policy is really about. So even though inflation is super low and has been for years, the Fed will have cover to cause a modest recession if they want. I think getting out of stocks was smart. The market will probably go up a bit more if Crooked Hillary wins, but the ratio of the S&P 500 to nominal GDP (basically a record of how the two have grown, relative to one another) is fairly high, historically, there’s probably not much scope for further gains in the next year or so. Better not to risk losing money, especially because Trump will win.

    Economic Sophisms

    October 28, 2016 at 2:53 pm

  17. I thought you were invested mainly in oil. It cannot go much lower than this.

    tmmm

    October 28, 2016 at 2:55 pm

    • Oh yes it can! Oil has a high “beta” so if the market tanks, so will oil.

      Lion of the Blogosphere

      October 28, 2016 at 3:27 pm

    • oil has been significantly lower than this and was so only about 4 months ago.

      james n.s.w

      October 28, 2016 at 4:22 pm

    • Oil is trading sideways around 50 a barrel, if the OPEC meeting in Nov goes nowhere (which is looking more likely)-it’ll go back closer to where it was in Feb.

      morningnewstelegraph.com

      October 29, 2016 at 6:56 am

  18. FBI back on the game …

    Bruno from Paris

    October 28, 2016 at 3:05 pm

  19. You can’t “time” the market. It reflects nearly all public info super fast…..the market is mostly efficient…..but it doesn’t sound like you believe this?

    Shawn

    October 28, 2016 at 3:33 pm

  20. USA Today, 10/27/16 – The Dow’s 2-year trip to nowhere

    http://www.usatoday.com/story/money/markets/2016/10/27/dows-2-year-trip-nowhere/92790516/

    The Dow has taken investors on a wild ride to nowhere in the past two years. On Wednesday, the Dow Jones industrial average, the iconic U.S. stock index represented by 30 of the USA’s best-known companies, closed up 30 points at 18,199.13. And while that gain pushed the Dow’s gain for the year up to 4.4%, it is a stark reminder that the stock market has barely budged in almost two years.

    The last time the Dow passed a milestone, it was Dow 18,000. And that happened way back on Dec. 23, 2014 — nearly two years ago… the Dow, based on Wednesday’s close is just 175.16 points higher than it was 22 months ago. Not to depress long-term investors, but that equates to a price gain of just 0.97% — which means investors have seen the Dow grow at an annual pace of 0.5% the past two years.

    To call the market a go-nowhere market, or a sideways-moving market or a dud market, would all be accurate. The bull, of course, is now seven years, seven months old. And like an aging athlete, this bull doesn’t have the money-making moves it had in its prime. Whether the bull has one more big run in it or is on the verge of retirement remains to be seen.

    E. Rekshun

    October 28, 2016 at 3:40 pm

  21. “If I turn out to be wrong, well here’s a public record, so you can make fun of me later.”

    Don’t be silly. We’re going to make fun of you regardless. :P”

    But, seriously, I’ve been thinking about selling as well. Though I usually wait for a sell signal. I figure there’s more to lose by getting out too early than by waiting for the sell signal.

    destructure

    October 28, 2016 at 3:45 pm

  22. “If I turn out to be wrong, well here’s a public record, so you can make fun of me later.”

    Awww, can’t we just make fun of you NOW?

    Heh. I keed, I keed.

    maj

    October 28, 2016 at 3:55 pm

  23. I remember reading an article in August 2008 that said get out of the market now. There will be a crash. I can’t remember who wrote it. I wish I had listened. I held on ,but eventually sold some to cut my losses.

    We already had a correction in the summer of 2015, but I think it could go down 20% or more.

    How can this be a bull market when it hasn’t done much in a couple of years?

    I have 50% in stocks now. I might move some more of my 401k into bonds.

    Some companies are now recommending to buy some foreign index funds because those markets have been under-performing so should go up.

    ttgy

    October 28, 2016 at 4:18 pm

  24. On the one hand as Shawn points out: mostly efficient market, can’t time it, etc. On the other hand everyone agrees we’re due for a correction. I’m tempted to pull out back to cash but I can’t shake that Jack Bogle conservative voice telling me to stay invested.

    RP

    October 28, 2016 at 5:01 pm

    • I’ve been following Bogel’s advice.

      Here’s a good video:

      Shawn

      October 28, 2016 at 11:19 pm

    • If the markets are efficient (they are not), you cannot loose by buying or selling anything in your 401k (no transaction cost).

      My Two Cents

      October 30, 2016 at 12:28 am

  25. Good for Lion.

    I have been out of the market since late 2014 when the euro crisis began brewing after Greece elected what was then an anti-euro leftist party.

    The disintegration of Europe’s monetary union is approaching; its arrival has been delayed only to help Hillary, who may lose anyway. Regardless of who wins the crash will happen in 2017.

    https://pragmaticallydistributed.wordpress.com/2016/10/02/too-failed-to-save-deutsche-bank-heralds-a-global-crash/

    The Undiscovered Jew

    October 28, 2016 at 5:39 pm

  26. I was 60/40 stock/bond forever until I panicked and sold off a large chunk at the absolute bottom during mid-March 2009, and realized a $100K loss. I’ve been 20/80 stock/bond-CDs since and largely missed out on most all of the gains of the multi-year bull market. Sucks for me. I did make four serendipitous, lucrative real estate purchases since that time though.

    E. Rekshun

    October 28, 2016 at 6:51 pm

    • I put 95% of my money in stocks in March-April 2009 and was able to get some good returns.

      ttgy

      October 28, 2016 at 10:19 pm

  27. I am sitting on cash in banks and 401K’s for quite a few months now. Did the same move in April 2008. It was fun to talk about it with friends and coworkers in late 2008 and early 2009 as their nest eggs were shrinking.

    My Two Cents

    October 29, 2016 at 1:06 am

    • How did you know when to get back into the market?

      JoeKnow

      October 29, 2016 at 1:43 pm

      • I did not know, so I slowly rotated back to stocks once it was obvious that the worst was over.

        My Two Cents

        October 30, 2016 at 12:17 am

  28. Rifleman–that ‘draft our daughters’ hashtag is genius. Every one said so much more than one would have thought possible with just a few words and a picture. Chateau Heartiste was saying recently that the alt-right is winning the war of social media with their memes and humour. Considering the vast array of money and supposed talent on offer for the mainstream media it is something of a guerilla counter-insurgency, and it’s encouraging to see after such a long period in which the right was seen as staid and the left creative and fresh.

    prolier than thou

    October 29, 2016 at 12:28 pm

  29. I just went on Healthcare.gov to see how much a health insurance plan would cost at different ages between 50 – 57 and at various AGI from between $20K – $50K. The subsidy disappears at about $50K, and it’s about $250/mo at $40K. The subsidy is $500/mo at $20K. The basic bronze-level plan, about a $6000 deductible and 50% co-pay (w/ annual max out of pocket at something like $7200) is about $500/mo. So, not unaffordable if one can keep their AGI down below, say, $40K. Though, it’s kind of costly to use it. But maybe I’m spoiled – for the past ten years, my employer has offered an excellent $0 deductible HMO plan, with premiums fully paid by the employer.

    And NY State has a plan that is within the marketplace called “essential.” In a single person can keep their AGI under $23,540, they can get a decent $0 deductible plan for $20/mo.

    http://info.nystateofhealth.ny.gov/sites/default/files/Essential%20Plan%20Fact%20Sheet.pdf

    LotB, is this the plan you’re on? If so, good move.

    E. Rekshun

    October 29, 2016 at 4:53 pm

  30. My primary bear market strategy is gold, consumer staples, some bought long-dated puts, and cash. Be very careful with applying the efficient market theory to your investing. Whatever rhetoric about market responses to new information is irrelevant to how people actually invest: They put money into index funds using a buy-and-hold strategy with dollar-cost averaging. Thus, the majority of investors are always long, weighting their investments inside the biggest firms, and investing without any consideration for the underlying business. This is pushing the P/E ratios of firms to some of their highest in a decade. The EMH was basically designed to make money for Wall Street by convincing the public to just hand over their money.

    There are serious problems with earnings and cash flow. If cash flow dries up, then that will affect share buy-backs, dividends and bond payments. In fact, we are probably heading into a severe credit default cycle, where a lot of firms will go bankrupt because they can’t roll over their debts.

    What we are going to experience is a lot of whipsawing. Everyone is chasing yield, which means more money going into riskier investments. When those investments hit turbulence because they miss earnings and revenue targets, you will see a flight out of them to something relatively safe.

    These are traders conditions, not investing conditions.

    map

    October 29, 2016 at 5:42 pm

  31. I am aggressively short stocks, long volatilty and holding large cap oil. Also long gold.

    I’ve been expecting a horrific decline for a while and I’ve written so in your comments. I continue to expect it. Most likely, we will see an incident that incites a financial crash, and this incident will probably occur before the election.

    I mean, I cannot see the future but the pieces fit together much more elegantly if the “event” happens before the election. So I expect the first domino to occur n explosive fashion like was seen on 9/11/2001 and, again, we will see this before the election on 8 november.

    There are a number of reasons that I expect this crash, including technical analysis and fundamental analysis and also more spiritually-centered analysis involving market cycles and God’s plan for mankind.

    When I last commented on your blog about crash recommendatoins I also said the crash is likely to force a mandatory bank holiday to preserve the banking industry (against bank runs) and that, after this, we will see food riots as debit, credit and EBT transactions go offline for a period of time (maybe weeks but I can’t guess how long)…

    This is also my current expectation. I am recommending that everyone buy a couple of weeks (or more if possible) of canned meat (chicken, sardines, tuna etc) and canned veggies. This is the advice for you too, Lion and your readers.

    In short I am expecting pandemonium and insane amounts of stress, especially in the more riot-prone big cities. Imagine the most extreme economic devastation possible and this is what I am planning for to unfold sometime soon.

    Oh and also, I don’t plan to hold value in $USD because a severe market crash is likely to trigger inflationary policy like QE and “helicopter money” and there is a good chance insane central bank response to the market crash will ruin many currencies (maybe including the USD and most definitely the euro) like the Weimar-era mark and force creation of “new” monies.

    If this occurs and my shorts finish in the money then I will roll the profits into physical precious metals, select stocks (oil, defense, mining, resilient staples, etc) and try to time it so that I am out of cash when/if my accounts are frozen.

    Karl

    October 29, 2016 at 10:08 pm

    • Now that you made this public, we can make fun of you if you turn out to be wrong.

      not too late

      October 30, 2016 at 8:04 pm


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