Lion of the Blogosphere

Stock market advice

I just bought some SPY (a large ETF that tracks the S&P 500).

Based on the proverb to “buy the rumor, sell the news,” this is a good time to sell, with the news being the Republican tax bill.

But I think that post-tax-bill animal spirits plus the January Effect will keep stocks buoyant through at least February.

However, I don’t feel strongly enough about this to go 100% in. And there’s the usual warning that my timing advice is more often wrong than right.

Written by Lion of the Blogosphere

December 20, 2017 at EST am

58 Responses

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  1. Lion, my man, what’s your investment horizon for that purchase? Short term? You are an ass. Long term? You’ve finally made the right investment decision.

    Looks like you are having a busy day at work. How is the coffee?

    Yakov

    December 20, 2017 at EST am

    • The coffee is great, they have these Keurig machines that freshly grind Starbucks coffee beans for each individual cup.

      Lion of the Blogosphere

      December 20, 2017 at EST am

      • I don’t like those machines, they don’t brew it right. People make better coffee than machines. They just do. Try Madras coffee, if you haven’t already. That’s something to write home about.

        Yakov

        December 20, 2017 at EST pm

      • They had those Keurig devices at an office I used to work at.

        The machine itself was fine but the coffee’s taste was mediocre to poor.

        The Undiscovered Jew

        December 20, 2017 at EST pm

      • They had those Keurig devices at an office I used to work at.

        The machine itself was fine but the coffee’s taste was mediocre to poor.

        The machine is as good as what you put in it. A lot of offices use cheap pods. We have Keurig machine at home and use good stuff, like San Francisco Bay French Roast. Also helps to run it without a pod before you make your coffee: flushes out residue of last brew and heats up your cup.

        David Pinsen

        December 20, 2017 at EST pm

      • A lot of offices use cheap pods.

        My former office used the cheap brand coffees.

        The Undiscovered Jew

        December 20, 2017 at EST pm

    • Looks like you are having a busy day at work. How is the coffee?

      I don’t drink coffee, but I’m enjoying my lunch break and a grill cheese sandwich, lying on my couch in my underwear, with the windows open and 80 degree weather outside. Back to work in a couple of hours. Then twelve days off!

      E. Rekshun

      December 20, 2017 at EST am

      • ‘lying on my couch in my underwear’.

        This is prole. You don’t lye in underwear on a couch where your guests are invited to sit. You are a brute! Right, JS?

        Yakov

        December 20, 2017 at EST pm

      • I have two couches. One for me and one for guests.

        E. Rekshun

        December 20, 2017 at EST pm

      • Regardless, a gentleman doesn’t loaf around in his underwear with windows open like he is some kind of fish in an aquarium. JS kept quiet, which tells me that he is a latent brutish prole himself. I think we just outed him!

        Yakov

        December 21, 2017 at EST am

  2. SPY has gone up 22.7% in the last year, so you may have missed the boat.

    As an aside, the revamped Google Finance is terrible. It was always worse than Yahoo Finance but now it isn’t even close.

    Also, I didn’t realize that Yahoo is now owned by Verizon, as is AOL.

    ScarletNumber

    December 20, 2017 at EST am

    • It went up 30% in 1995, and again in 1996, 1997, 98, 99, finally falling in 2000-2002 . Google & yahoo finance have always been terrible. You get what you pay for, which is nothing.

      grey enlightenment

      December 20, 2017 at EST pm

      • Morningstar is good and reasonably priced.

        Daniel

        December 21, 2017 at EST am

    • Yahoo Finance was a go-to until it was revamped last year. Now it’s unusable.

      David Pinsen

      December 21, 2017 at EST am

  3. ‘However, I don’t feel strongly enough about this to go 100% in.’

    What’s this supposed to mean? 100% into what? SPY?

    You can buy XES for a quick 5%. Get it at 15.5/15.75 and sell it at 16.25/16.5.

    Yakov

    December 20, 2017 at EST am

    • Wickert’s verse-translation of Tasso’s The Liberation of Jerusalem is very entertaining. Finished Canto One last night.

      Garr

      December 20, 2017 at EST pm

  4. Do you not invest in equities usually? I think index fund investing is the standard consumer financial advice.

    R P

    December 20, 2017 at EST am

  5. my timing advice is more often wrong than right.

    Mine too. I completely cashed out of stock mutual funds at the absolute bottom in March 2009. I did, however, subsequently make four serendipitous real estate purchases that greatly boosted my net worth over the 7 figure mark.

    E. Rekshun

    December 20, 2017 at EST am

    • The irony of the standard advice to “buy low, sell high” is that most people do the opposite.

      ScarletNumber

      December 20, 2017 at EST pm

      • Sell your losers and let your winners run.

        Yakov

        December 20, 2017 at EST pm

      • the reverse of yakov’s advice is called “rebalancing”.

        john jacob jinglehemier schmidt

        December 20, 2017 at EST pm

      • Thus isn’t really mine, it’s my father in laws. The man had his own brokerage firm and six seats on the exchange. Retired by 54. Can’t say he didn’t know what he was doing. I’m a feather weight.

        Yakov

        December 20, 2017 at EST pm

    • Lion’s advice is to buy high and sell higher. It’s prole to buy low and sell high in a Trump economy.

      cesqy

      December 20, 2017 at EST pm

      • Lion hasn’t offered any investment strategy for our benefit. He is either being a dog in the manger or an ass.

        Yakov

        December 20, 2017 at EST pm

  6. I have been long tech stocks for years. same for Bitcoin. buy & hold has been a winning strategy

    grey enlightenment

    December 20, 2017 at EST pm

  7. Just finished end of the year selling to offset my capital gains. Owe no capital gains taxes, either long or short. I’m relaxed now.

    So Lion, if you are getting back into investment advising, you had better tell us about your strategy, because unless you have one, and it doesn’t have to be perfect just sensible, you are a total ass.

    I have a buy out for 50 shares of SPY at $260 for my granddaughter. The time horizon is 5 years. If it goes south, I keep it for the younger granddaughter, and give the older the equivalent plus a 10% a year appreciation from other sources. Once the trade executes, I’m gonna lose the password to that account. Obviously $13,000 investment is nothing for a kid today, but it’s not the only one that she has and I’m not alone saving for her. This is parenting, this is investing, this is future time orientation, this is Darwin.

    Yakov

    December 20, 2017 at EST pm

  8. Lion, kinda late , huh? But I think the market will go a lot higher, so better to buy now than never. Interest rates low, GDP growth steady, profits & earnings double -digit growth. Been long tech stocks such has Google, Facebook, Amazon, but also Bitcoin, for years.

    grey enlightenment

    December 20, 2017 at EST pm

    • Bitcoin is pure Ponzi. There is literally nothing of value in owning a Bitcoin. If you have had a good run on Bitcoin, sell now. When Bitcoin crashes, it will be so precipitous that you will have no time to react.

      Millionaire, Billionaire drug dealers don’t use Bitcoin. They want the efforts of their hard, dangerous work in cold, hard cash. The only drug dealers using Bitcoin are small time sellers of LSD, mushrooms and ecstasy. Hardly enough assets moving through their accounts to justify the ridiculous price. The only value I can see in Bitcoin is to bribe a politician. Setup a Bitcoin account and have him cash it out in a numbered Swiss bank account. Otherwise it is a con.

      Daniel

      December 21, 2017 at EST am

    • The market will probably go a lot higher but it has absolutely nothing to do with business fundamentals or the economy, or Trump really. People are starting to freak out about various sovereign and municipal bonds. Most governments are broke and headed for trouble. Money that would have gone into bonds is going to pump up the blue chip stocks.

      bobbybobbob

      December 21, 2017 at EST pm

  9. So, it is time to sell everything when lion goes back to markets. 🙂

    Seriously, I have been thinking about going back to oil and I have added some positions of PXJ and RSX already. Of course there’s risk that the whole market will collapse next year, but I believe oil will rebound next year. Also RSX is one of the cheapest markets in the world, it will benefit a lot when oil will rebound. There’s also lot of false FUD about the country which makes it interesting investment oportunity for contrarian like me.

    There’s some reasons for the oil price rise next year: https://drive.google.com/file/d/0B9wSgViWVAfzUEgzMlBfR3UxNDg/view

    tmmm

    December 20, 2017 at EST pm

    • I believe in oil for the long run, but I also know that oil has a high beta, and if the market goes down, oil will go down even more than the market.

      Lion of the Blogosphere

      December 20, 2017 at EST pm

      • Might be, but if the markets don’t crash next year and oil goes up, there’s plenty of potential in oil.

        In the end the stock market bull market it pretty easy to understand. QE and low interest rates are pumping money to the markets. Also the high PEs are not that high if you compare them with the bond yields. This might continue for a while after the QE stops. The things I cannot however totally understand is why the inflation is so low. It seems all the money is going to stock markets and to some extent also to real estate (at least here in Europe). Not to the consumer prices. The only reason I can come up with is that without QE there would be deflation and QE has just prevented the deflation and not yet caused any inflation.

        tmmm

        December 20, 2017 at EST pm

      • I have a huge oil position.

        Yakov

        December 20, 2017 at EST pm

      • oil is going to $0.

        john jacob jinglehemier schmidt

        December 20, 2017 at EST pm

      • Oil is not going to zero.

        Lion of the Blogosphere

        December 20, 2017 at EST pm

      • don’t be a schnook. one of these days oil is gonna get whacked. it’d already be at about $10 if it weren’t for the OPEC racket. everyone is consuming less oil except the chinese and indians. at the same time the supply is increasing.

        the whole developed world is going down the route of japan. the fed will never reduce its balance sheet significantly. the numbers today are just a dead cat bounce.

        sell CL. buy ZB.

        john jacob jingleheimer schmidt

        December 20, 2017 at EST pm

    • I feel the the Russian market is dangerous now and am mulling reducing my positions to 10% and possibly getting out. It looks to me that Trump intends to crush the Russian oil and gas industry to benefit American corporations. Russia is in dire economic and political straights at the moment. There us a risk of collapse. RSX at 20 gets an avoid rating from me.

      Yakov

      December 20, 2017 at EST pm

      • It is hard for me to see how they could crush the gas industry. Most of the gas goes to the Europe and new pipelines that don’t go trough Ukraine are going to be build. I guess this is the real reason for the military situation getting more difficult in the baltic sea right now. There are plans to build new underwater pipeline from Vyborg to Germany.

        But as I said, there’s lot of FUD which is already in the prices. This makes it even more interesting investment opportunity.

        And when I have recently visited Russia, I have generally got a feeling that things are much better there than what western media is trying to tell us.

        tmmm

        December 20, 2017 at EST pm

      • ‘And when I have recently visited Russia, I have generally got a feeling that things are much better there than what western media is trying to tell us.’

        Only in a few major cities. The situation is dire everywhere else. Don’t forget that the wealth is being siphoned abroad, not reinvested in Russia. It’s a very risky situation. I’m long Gazprom and have liquidated Sberbank.

        Yakov

        December 20, 2017 at EST pm

  10. You’re better off buying VWO or EEM, IMHO. Emerging markets are still priced cheaper relative to US equities.

    Read Jeremy Grantham’s comments in the 2017Q3 GMO quarterly newsletter. He notes that he’s put 50+% into Emerging markets in the pension funds he manages for his sister and his children (page 16):

    https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf?sfvrsn=50

    Read this November 2017 article from Research Affiliates. Note the portfolio allocation, they have 0% allocated to U.S. equities. 18.6% to emerging markets, and 9.0% to EAFE:

    https://www.researchaffiliates.com/en_us/publications/articles/643-building-portfolios-diversification-without-the-heartburn.html

    Bloomberg on Where to Invest $10,000 (October 2017), Barry Ritholtz recommends emerging markets as a decade-long trade:

    https://www.bloomberg.com/features/2016-how-to-invest-10k/

    Read Meb Faber’s Twitter feed and website, he’s also big on cheap foreign/emerging markets stocks.
    That’s my investment advice for today. You are welcome.

    HuffPost Reading Diversity Loving SJW

    December 20, 2017 at EST pm

  11. A way you can get competitive returns while taking on less risk than SPY:

    David Pinsen

    December 20, 2017 at EST pm

    • Is your portfolio armour product easy to use/understand?

      Daniel

      December 21, 2017 at EST am

      • I think so. You just have to enter the dollar amount you’re looking to invest, and the largest decline you’re willing to risk over the next 6 months.

        David Pinsen

        December 21, 2017 at EST pm

      • This is interesting, gonna try to check it out. Thanks, man.

        Yakov

        December 21, 2017 at EST pm

  12. When my father passed away 5 years ago, I transfered all his CD IRA accounts into brokerage, sold all his 401-K mutual funds and consolidated everything in one brokerage IRA account. Everything in that account I invested in SPY. My mother was 87 at that time and SPY would not have been my investment vehicle of choice had the account not been significantly under performing its potential for two decades. I felt that I had no choice but go with the market. I personally guaranteed a 10% return on that investment no matter what and that enabled me to sleep at night while the market was gyrating. The original investment would be accruing a minimum of 10% regardless of market conditions. I had the financial ability to do so. So the investment actually had all the attributes of being long term. If you look at the chart of SPY for the last 5 years, the index has almost doubled. I follow the same strategy with my older grandkids: invest in the broad index and guarantee the minimum annual return of 10%. This is my strategy for the people whose financial welfare I have to take off at this point. If I had more wearwithal, my investments would have been more defensive in nature and in the current market environment might have not done as well, but I would have been OK with that.

    Yakov

    December 20, 2017 at EST pm

  13. Lion you are smart enough to invest in crypto, where the real money is being made. If you are willing to take some risks, the gains are waiting.

    Cool Nerdy Guy

    December 21, 2017 at EST am

  14. I don’t believe we have seen the top of the cryptos yet. Currently you have to be pretty tech savy to invest in them and big masses are not yet investing in them. When we will see crypto-etfs and funds it is time to sell. Not yet.

    tmmm

    December 21, 2017 at EST am

    • Crypto futures just came out. So maybe now IS the time to sell?

      Lion of the Blogosphere

      December 21, 2017 at EST am

      • No yet. It is not easy for normal people to trade in futures markets. When we will se ETF investing in crypto futures in NYSE it is time to sell.

        tmmm

        December 21, 2017 at EST am

      • Yes, I agree that only very sophisticated speculators know how to trade futures. While you can buy an ETF with any brokerage account.

        Lion of the Blogosphere

        December 21, 2017 at EST am

      • Well, a smart Greek guy and friend of mine went completely broke trading futures for his own account. He was a professional commodities trader. Another smart German guy and also a friend of mine didn’t do any better. Both never saw an early retirement. He was a Wall Street analyst. A stupid Jewish guy went completely broke speculating in the stock market. That stupid Jewish guy was me. I say be careful mates, because here you have it: three guys with the best HBD potential all stumbled badly. Had they put ALL of that money into SPY, they would be tanning their hides on a Caribbean cruse right now and enjoying Fuji spring water, without any concern for the cost.

        Yakov

        December 21, 2017 at EST am

      • If you guys are in it for the long haul, why buy ETFs instead of regular mutual funds?

        Hermes

        December 21, 2017 at EST pm

      • EFTs are easier to buy if you have a brokerage account. There’s never any load and the management fees tend to be very small and are clearly documented online. I only buy ETFs for that reason.

        Lion of the Blogosphere

        December 21, 2017 at EST pm

      • If we are talking about a long term investment in an SP500 index, a mutual fund is preferable to an ETF. You can dollar cost average on a monthly basis without incurring transaction costs, your dividends are automatically reinvested without incurring transaction costs, you are insuring yourself against being swept by market panic, capitulation or hype because it takes more of an effort to liquidate a mutual fund and do something stupid. When my first great-grand-kid is born in 3-4 years, he is gonna have an index mutual fund opened to his name with automatic monthly contributions and I’m gonna lose the password to it. I have better things to do in my retirement than lose my future generations’ money in the stock market. Gonna run marathons and play basketball and chill.

        Yakov

        December 21, 2017 at EST pm

      • I guess all of those points are valid.

        But I feel like I have more control with an ETF.

        Lion of the Blogosphere

        December 21, 2017 at EST pm

      • You’ve nailed it, my man! But with passive investments LESS control = MORE money. You are your own worst enemy. STUPID = MORE money, SMART = LESS money.

        Yakov

        December 21, 2017 at EST pm

  15. If you want to play it is better to play poker than stock markets. It might be also more fun and social also.

    tmmm

    December 21, 2017 at EST pm

    • Poker is fun when you win and not so much fun when you lose. I have not been successful in winning money playing in-person poker.

      Lion of the Blogosphere

      December 21, 2017 at EST pm


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