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Selling or buying the dip ?!

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  • edited September 27
    Who here would not bet half the house --- assuming economic and business variables stay largely the same and the current guy stays in office --- after a -20% decline? The combo of boomer and millennial greed is a Force.


    How can we ever get to a -20% decline if everybody is trained to buy any dips (or diplets)?
  • edited September 28
    BaluBalu said:

    Very good discussion in this thread.

    Over time, I have read about a lot of buying strategies. E.g., DCA, BTD, etc. But I have never read an exit strategy. I think this is a secret sauce people do not share. I hope folks in this forum share their exit strategies.

    Investors sometimes sell their best-performing stocks too soon and keep their poor-performing stocks too long.
    I mostly invest in mutual funds and would consider selling a fund for the following reasons:

    1) Underperforms category for more than two consecutive years.
    Some funds generate "lumpy" returns which is factored into the decision.
    2) Unwelcome fund company or fund manager/management team changes.
    3) Significant investment strategy modifications.
    4) Meaningful fee increases.

    This is more art than science for me.


    Selling your winners and holding your losers is like cutting the flowers and watering the weeds.
    -Peter Lynch

  • Thanks, Observant1. Those would be my reasons as well, except 4.

    Most of the Buy strategies I read about have an element of Price or are Price based. I would like to hear about Sell strategies that are Price based too. For example, no more than 5% loss, sell 25% of holding for each 20% gain in a year, etc.
  • Whatever happened to dead cat bounces?
  • And the ride continues ! More diplets today, or so it appears at this time. Will the DOW hit 34K or 35K at the next stop ?
    @Mark : I believe animal rights activists had that removed ?
    Still holding, Derf
  • edited September 29
    The market closed lower into the Close which is about 5% lower from peak for the SPY. I guess DBs (Diplet buyers) may have decided to hand off the buying responsibility to the Dippers (BTD buyers).

    Joking aside, is it possible the relentless DBing or Dipping could be related to the high job openings, high unemployment (and the low gap between those two), and too many < 60 yr olds (at least temporarily) leaving the work force? Is it possible too many people think playing the stock / option market could be a career for everybody? I do not know if these, if true, are long term trends / somehow linked to the pandemic.

    Higher interest rates and / or higher inflation may change those dynamics.
  • Dips are tougher when bonds don't hold up well. Then its a double-dipper experience.

    Had some funds with no price change today, but could not locate any green on the screen. Gosh, you couldn't even hide out in stalwarts like GME or AMC today.
  • edited September 28
    Green today:

    XOM +1.05%
    CVX +0.38%
    XLE +0.34%
    IOFIX +0.17%
    TOTL +0.04%
    FLOT +0.04%

    Freed up some cash today via sales of bond OEFs.

    ADDing to some US & Foreign stock/allocation funds tomorrow & Thursday.
    Disclaimer: Not sure if I'll be a Dipper or Diplet, or both.
  • The three major US equity indices futures are up right now - up about 0.60%. These indices also closed higher today in the aftermarket session, though not as much reflected in the futures. May be the diplet buyers and dippers have decided not to let the music stop.
  • edited October 1
    The diplet has run its course, and we get the obligatory bounce today as we buy these dips. It was just starting to get interesting this morning. Started buying SPY.

    Does it even feel possible that we get a legit correction? Still waiting.
  • edited October 1
    Did most of my Dip/Diplet buying Wed and Thu as noted in my prior post here.

    Also added to ITOT this AM when it was fractionally DOWN.

    What happened? Take your pick...

    Powell''s comments
    BIG Merck news
    Re-rotation to Value
    Start of the market's annual UP period cycle
    Bond yield slowing/effect getting consumed by market participants
    $16 Trillion on the sidelines (Read it again s-l-o-w-l-y and try to understand it.)
    Or just the ol' tried and true axiom, "Enuff Dip/Diplet is enuff!"

    Final hour could be telling. But either way, it was just a matter of time before it ran/runs its course.

    It's a fun game this Dip/Diplet BUYing thing.

    If you haven't before, try playing along next time.
  • I’ll bet you a nickel the Dow closes below 34,000 again at some future point this year.
  • hank said:

    I’ll bet you a nickel the Dow closes below 34,000 again at some future point this year.

    I'm looking for Dow closer to 30,000. But I might be looking for a while.

  • hank said:

    I’ll bet you a nickel the Dow closes below 34,000 again at some future point this year.

    Wow, that's really bold. Betting that the DOW will drop 0.95% below today's close sometime within the next three months.

    So I guess you would probably also bet straight up that BUF will beat HOU this weekend?

  • edited October 1
    So I guess you would probably also bet straight up that BUF will beat HOU this weekend?
    We Bills fans are always at the edge of our seats waiting for the next shoe to drop @stillers:) , but I'll take the straight up bet vs Houston and in a few weeks I'll take it against KC. Then a couple weeks later against Brady. Ahhh, feels like I'm back in he '90s.

    Does this constitute trash talk:) Go Jim Kelly... oh, I mean Josh Allen!!!
  • MikeM said:

    So I guess you would probably also bet straight up that BUF will beat HOU this weekend?
    We Bills fans are always at the edge of our seats waiting for the next shoe to drop @stillers:) , but I'll take the straight up bet vs Houston and in a few weeks I'll take it against KC. Then a couple weeks later against Brady. Ahhh, feels like I'm back in he '90s.

    Does this constitute trash talk:) Go Jim Kelly... oh, I mean Josh Allen!!!
    Always have had a soft spot for the Bills, all the way back to the AFL and Kemp. Then of course once you got the 'burgh's/East Brady's Jimbo in the fold, well, 'nuff said.

    Very familiar with the plight of Bills fans. We watch it play out pretty much every week and season. That said, this, or a year coming very soon, should be your year...

    But...

    Seems that other shoe dropped pretty hard on you guys in Wk 1 when you lost to the B&G, who then went onto show their likely real 2021 selves vs the Raiders and Bungles. That AFC loss may come back to haunt you guys when the dust settles at the end of the RS. Hope not though.
  • edited October 1
    stillers said:

    Wow, that's really bold. Betting that the DOW will drop 0.95% below today's close sometime within the next three months.So I guess you would probably also bet straight up that BUF will beat HOU this weekend?

    Than I guess I don’t understand the celebratory note evident in your post. Markets go up. Markets go down. Since we’ve pivoted somehow to football - When their prima donna clowns spike the ball and dance in the end zone following a score, coaches sometimes admonish: “Act like you’ve been there before.”

    Bet on football? Not interested. And a tough game to wager on. Basketball? Yes. I can usually make a dime gaming the changing point spreads - if betting site is so enabled. Bet on the stock market? Yes. Best of all. I can usually make a buck.
  • edited October 2
    Hmmm...No reasonably intelligent investor thinks the market now has no chance of losing a point over the next three months.

    That said, Friday was a pretty important day in which the Dip/Diplet appears (to me and the people I read/follow) to have abated. At least for the time being that is, and stopping a potential gusher after you've rolled the dice a bit is always an upbeat time for me.

    As I've posted previously, I've been BTD pretty successfully throughout 2020-21 with few exceptions when they opportunities arose. My experience over that period of time suggests to me I may have played this one right again.

    Either way, UP or DOWN from here, yeah, I'm pretty happy I exchanged a bond OEF holding for more stocks when they were in total DOWN ~5% from their highs, and on indv stocks, DOWN >10% from their high.

    NOTE: At least one recent study showed that investors are more than 2x more upset when they lose money in the market than they are happy when they make money. Since reading that study, I take every opportunity I can to BE HAPPY when I make worthy trades/make money.

    The football reference was simply an analogy. No intention to actually make that bet OR turn this thread into a football discussion.
  • @stillers : :Hmmm...No reasonably intelligent investor thinks the market now has no chance of losing a point over the next three months. "

    Did this tidbit of info come from your eight or crystal ball ?
    Good investing to all, Derf
  • One reason to question whether the mini-selloff in equity has run its course: the S&P 500 hasn't recovered to its 50 day moving average yet.
  • edited October 2
    @Stillers: "Friday was a pretty important day in which the Dip/Diplet appears (to me and the people I read/follow) to have abated. At least for the time being that is, and stopping a potential gusher after you've rolled the dice a bit is always an upbeat time for me."

    Do you mind sharing with us where you read / follow those people, assuming those are public and free sites? Did these folks also mention why the market went down? It will be good for me to also read other forums.

    P.S. to everybody: I happen to buy on Thursday Close and again on Friday - not a high conviction that we have seen the seasonal bottom but I am not good at picking the bottom. As an aside, I could not stop smiling when I read the outrage about Clarida buying multimillion $$ in equity index funds on February 27, 2020 while on February 28, 2020 Powell mentioned the Fed is watching the markets. Clarida lost 25%+ of the investment in less than a month to the March 23, 2020 bottom. If he waited for the required two day cooling period and bought at the open on March 26, he would have avoided 17% of that paper loss or would have bought 27%+ below the February 19, 2020 market top. Poor guy, he must have received an earful from his spouse for his trade! May be the dip/diplet buyers do not have any scar tissue from buying too soon and watching the market keep going down in Feb-March 2020, granted we do not currently have a similar massive unknown (but now we know from the pandemic how vulnerable we are - i.e., there is nobody at the steering wheel). I still do not understand why the market went down in September.

  • @MikeM: try being a Giants fan. We never sit on the edge of our seats because there’s no drama. Does BUF have a cure for the “wide right” curse?
    .
  • edited October 3
    Derf said:

    @stillers : :Hmmm...No reasonably intelligent investor thinks the market now has no chance of losing a point over the next three months. "

    Did this tidbit of info come from your eight or crystal ball ?
    Good investing to all, Derf

    Um no. It's a widely held cornerstone of investment philosophy/strategy for anyone not living under a rock.
  • edited October 3
    BaluBalu said:

    @Stillers: "Friday was a pretty important day in which the Dip/Diplet appears (to me and the people I read/follow) to have abated. At least for the time being that is, and stopping a potential gusher after you've rolled the dice a bit is always an upbeat time for me."

    Do you mind sharing with us where you read / follow those people, assuming those are public and free sites? Did these folks also mention why the market went down? It will be good for me to also read other forums.

    ...

    Do you mind sharing with us where you read / follow those people,
    No, I would rather NOT share their names/company's names. I'm getting bashed here a bit and the last thing I want to do is post names of my fave T/A's, market analysts, PMs, etal that I subscribe to/follow, and then have to fend off the additional bashing about them. Not worth my time.

    assuming those are public and free sites?
    No, they are not all (free) public sites. I pay for a coupla investment service newsletters.

    Did these folks also mention why the market went down?
    Hmmm...first, a LOT of investors/media get bent out of shape over DOWN moves of 5% in the overall market. That's still in the normal market breathing range for me. Yes, they all state their thoughts on the specific reasons for this LITTLE move DOWN we've had recently. They of course vary. That said, IF there's a consensus among them, it's that the recent action was highly predictable/widely expected and normal market breathing.

    It will be good for me to also read other forums.
    You can read "forums" until you're blue in the face. LOTS of threads out here frequented by LOTS of posters with varying levels of investment experience and expertise (yeah, they're different). There were a couple posters who have made me "real" money over the past 10 years, namely the old M* CEF Forum crew who daily, for years, provided a pretty much paint-by-numbers plan to profit from FI CEFs, and the poster who got me to fully understand and apply his main investment axiom, "Volatility is the price you pay for growth." They are more the exception than the rule of forums. Kindly suggest finding some worthy professionals to regularly read. I will throw out two names. Start with Katie Stockton (for T/A) and Jurrien Timmer (for market perspective). See if you like them and if not, find someone that you do. Also, disregard the widespread bashing of CNBC. They have regulars and guests on there who provide priceless, free, current analysis on the market. Three notable PMs who are regulars on there are amongst my faves for market analysis and portfolio construction.
  • edited October 3
    AndyJ said:

    One reason to question whether the mini-selloff in equity has run its course: the S&P 500 hasn't recovered to its 50 day moving average yet.

    https://www.fidelity.com/learning-center/trading-investing/autumn-stock-market-correction

    Excerpt:

    That seasonal window is now upon us, and like clockwork the market has been testing its 50-day moving average (MA). Given how many times the S&P 500 has successfully tested this support level over the past year, it wouldn't surprise me if it eventually fails to hold. Perhaps we will see a test of the 200-day moving average in the coming weeks, which would amount to a proper 10% mid-cycle correction.

    Nor would it surprise me, and yes, I will BUY more stocks if it does.

    Note (if you haven't already) that (beyond the headline news) a significant % of US stocks have already lost 10+%. Some think that as long as the big techs DON'T fully roll over, we're headed towards 4500-4700 by YE.
  • edited October 3
    BenWP said:

    @MikeM: try being a Giants fan. We never sit on the edge of our seats because there’s no drama. Does BUF have a cure for the “wide right” curse?
    .

    As a fan of another team...that last comment is just plain sad.

    But I guess with your team

    only winning 18 games over the past 4+ seasons,
    having only one playoff appearance, a WC loss, in the past 9 seasons,
    no W's yet this year and none in the foreseeable future,
    a potentially epic bust of a (Duke? WTF?) QB whom your team inexplicably reached for with the 6th overall pick in an NFL Draft,

    you're pretty much down to that old "wide right" thingie when you converse with BUF fans, eh?

    BTW, refresh my memory about that ONE game that you were maybe gonna win this year against the WFT. Didn't your DL jump offsides before their K missed it (OMG!) WIDE RIGHT, allowing them to re-kick and beat your guys on the last play of the game?

    So what'd'ya mean "no drama" with your team? That was pretty compelling drama to me at least.

    Aside: I'm taking BUF this week in our suicide pool. My wife weekly takes whoever the NYG play. Just sayin'.

    Remember: YOU started this.
  • edited October 3
    I bought during the recent stock market dip on 9/17, S&P500 @4433 and then again on 9/21, S&P500 @4354 with these buy steps opening my fall investment spiff position which I generally hold through the winter months and then average out of during spring months moving into summer. Generally, I make six to eight percent on my fall spiffs, sometimes more, thus making me a happy camper.
  • Thanks @stillers for the memories. Because I moved to MI in 1970 I don’t get to see the NYG games on tv unless they are getting national coverage. As a reward I get the Lions, who managed to add yet another chapter to a long-running serial devoted to inventing a new way to lose games. A 66-yard field goal after giving up a first down on a 4th and 19?
  • @Stillers, Thanks. Sorry you feel you are getting bashed at MFO - I did not notice but I do not have the history. Just as an FYI - If I ask you a question, it is seeking info but not to bash or challenge. Nobody is obligated to answer.

    It is news to me that CNBC is widely bashed. I listen to / read anybody that is thorough and rational and continue to follow those that have proven to be more correct than wrong - I tend to avoid those that just provide / produce one liners - sound bites (too much work to figure out their thinking for the potential benefit their sound bites might have). Just as PMs, my experience has been that most market commentators come into and go out of form. Only a few PMs perform / outperform consistently and one hopes one finds them and follows them, even if they charge more than the average market price. I will pay in money for opinions if they are more correct than wrong - I do not expect anything for free. I do listen to Jurrien Timmer.
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