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Open Thread: If the Market Drops, What are You Buying/Selling?
Extended Duration treasuries will probably benefit short term. I'm thinking Gold and even Gold Miners might see some upside. European Equities that have a global footprint might be another option.
I am hesitant to dive into the correction with aggressive buys without having a better sense of whether this is a garden variety correction or a sign of worse. When/if I do, I will look at VIG, GIM, KMR, OAK, STWD/SBY and some holding companies/conglomerates.
I'll be watching mainly for opp'ties to bulk up on EMs, both bonds & stocks, via Matthews, Seafarer, & maybe TGEIX & even PCY if/when it bottoms out. That'd be partly a continuation/possible ramping up of a longer-term plan to build a much heftier stake in Asia.
I'll probably sell the last remaining smidgen of an EAFE index in an index-only 401k. I'd been moving the $ a chunk at a time to an Asia-Pacific index fund; I'll probably stick with that approach.
If this begins to look like a correction that might go on for a while, I'd add to PIGIX as a ~ safe haven.
My money will go to aggressive funds (EM, Growth, etc.), if there is a significant correction, and it would go to my steady eddie funds, if there is a small correction.
Reply to @Investor: This 5 star fund has been on fire...even giving MSCFX a run for its money with better Sharpe and comparable if not better downside volatility...watch out Max! But trust you will be ready to jump if heads south...it's never been around during dark times, like RYSEX or LLSCX, the latter drew down nearly 60% in 2009.
Reply to @Charles: +1 on the BAC as I too added to my BAC. And after the market closed none other than Meredith Whitney said look for 15 in the short term and the 20s in the next year and a half. BAC is up after hours on her comments. Of course she is the same lady that predicted the demise of the muni market a few years ago and lost much of the credibility she had gained from predicting the 2007/08 banking crisis.
Reply to @Hiyield007: The financial that I continue to look at is Fiserv (FISV). Not a "value", but a financial services co that held up reasonably well in 2008. "Fiserv is a leading global provider of financial services technology serving approximately 16,000 clients worldwide. The company provides account processing systems, electronic payments processing products services, internet and mobile banking systems, and related services. Fiserv handles more than $1 trillion in payments and manages more than 20 billion digital transactions annually."
A bet on services all banks need, as well as evolving tech (mobile banking, etc.) If only it paid a dividend...
Just my 2 cents. Betting on specific banks may pay off more if things continue, but I suppose the idea of betting on services all banks require may be a tad less volatile over time.
Additionally, Whitney apparently also likes Discover (DFS)
Reply to @Charles: Got Cortina idea from one of your charts in an earlier post.THBVX was in the latest category kings in WSJ.Both available in Fidelity Retirement Accts with very low minimums.Started a position in Cortina and looking at Thompson on weakness.Both very small asset bases.Nimble? CRSVX THBVX
Doesn't look now like Cyprus is going to move the U.S. market... But if the market does finally correct, first thing I'm going to buy is a 6pack of Samuel Adams beer. Then I'll sit back and get ready to put some money back into the market. I'm less than 40% equity right now. I'd like to get back up to ~55-60% equities - probably a bigger stake in EM's and PRHSX or PRGTX. It's always clearer after a good beer.
Reply to @Art: I gave JAOSX some time thinking that it could turn things around. Oh well. I do think that I'll start to add to EM (DEM, perhaps?) into the declines.
"DeMark Sees Shanghai Index Resuming Jump: China Overnight"
Sold my position in Family Dollar, it hit my stop. Adding to my exisiting funds as market drops a bit more , especially PKW (a stock buyback ETF), FBTIX, PHSZX, WAGTX, SMGIX
Moved a little more cash into Schwab brokerage account today.
Bought:
More BAC @ 12.669 COP @ 59.139 CLF @ 20.258 (Don't laugh...just felt this miner has been hammered and is ripe for take-over...could not resist today's additional 7% drop...now at 52 week low.)
So equities, long BAC, GE, BRK.B, COP. All with intent to B&H. And CLF speculative. My other speculative attempts recently (RSH, P, and short SPLS) came up zilch, as usual...but I trust I am learning.
Pretty tight stop limits on all since my experience trading stocks makes me better appreciate my fund managers.
Reply to @Charles: Also picked up COP, as well, and very pleased with the announcement after the close last night (find co-owner Anadarko up 3.2% pre-market). Also like the 4.5% yield and dividend focus going forward. I also thought about buying a bit of Shell, but I didn't want any more Euro exposure (Shell A shares) or British Pound Exposure (Shell B shares.)
Some discussion from GE this morning that they may spin-off GE Capital down the road.
CLF is not a bad idea, especially at these levels. It may take a while, but you're about at 2008 prices. A lot of the iron ore/mining plays have been creamed (VALE is another) and many mining CEOs have recently departed.
Still on the shopping list - HTA and O (or ARCP instead of O) Maybe INF. There's definitely a few other maybes, as well.
"but I trust I am learning."
I've definitely had my share of stuff that didn't work out - I think trying and learning is awesome and important. Investing is one thing where I think you'll never know everything - there's always something to learn/experiences to learn from.
Reply to @TSP_Transfer: Both doing just fine this year, despite fears that small caps are over valued. Cortina Funds seems somewhat cookie-cutter, but I appreciate them keeping expenses down given the small AUM. I like the frankness of Alexander Yaggy in the CRSVX annual reports...he's done quite well so far. As for THBVX...talk about tiny, can you really start a mutual fund with just $300K? Looks like the firm believes there is an edge in micro caps, since they are generally under evaluated and may offer value opportunities. So far so good.
Increase AQR Risk Parity, I, AQRIX Pimco Dividend and Income Builder, I, PQIIX Wasatch EM Small Cap, WAEMX TCW Emerging Markets Local Currency Income, I, TGWIX
Reply to @hank: Gold correlation to the markets has been off/on throughout the last few years - there have been a number of examples where gold has been risk-on when the markets were risk off (I believe during much of Greece, for example.) There's been times when all assets are risk on. The dollar lately has been a bit of a headwind as other currencies (Yen, Euro, GBP haven't done well, and the Brazilian Real is another currency that hasn't done that well in the last couple of years - http://finance.yahoo.com/echarts?s=BRLUSD=X+Interactive#symbol=;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined )have problems at the moment. Of course, you could try being like Dennis Gartman and be "long gold in EUR or long gold in JPY" based upon which way the wind is currently blowing. You can see how well Gartman's ETF is doing.
Reply to @hank: Thanks for your comments and I agree with what you said and it may continue, especially with USD$ moving higher again against the Euro today. I suppose my only curiosity is how long that is allowed to happen. No one wants a stronger currency in this day and age, including this country. If the amount of turmoil in the currency markets increase, there's going to - I think - be people who start looking at various commodities instead, even the "evil" oil speculators might return. I give all the credit in the world to people who can trade currencies - the rate of success is limited and I think it continues to seem like a futile game of musical chairs as one has to figure out which is the "least worst" currency this week.
I remain positive on metals unless I see considerable changes in what I believe to be the fundamental case. That said, and this is a big thing for me: precious metals are something I'm positive on, but I think there's just so many plays with a *similar mentality* that people can do that I think people shouldn't limit themselves (not saying that you are, certainly, just saying in general.)
If someone likes gold and silver, they - I think, by association - like real assets. Have some metals, but if someone likes real assets, buy PAGG or MOO. Buy INF and get real assets and a 6.5% yield. I like the pipeline companies because, like rail companies, it's very difficult for someone to come along and replicate. I like the Canadian apartment REITs, because in an overvalued market, I just see there continuing to be demand for the foreseeable future. On and on, you get the idea - precious metals are fine and they are not always correlated to the market, which I think in some ways is a plus, but I just think there's a ton of things that are hard assets that you can also get a yield on in the meantime.
I also continue to like things higher up the needs ladder as longer-term holds - what do people need at the end of the day? All of that stuff continues to either get smaller in terms of amount or higher in price or both. If things are great, staples won't do much, but I think over time, they've been pretty consistent in good times and bad and everyone needs TP (Kimberly Clark or PG) and other such supplies.
"Tide is one of the most recognized laundry detergents with its bright-orange container. With a retail price from $10 to $20, Tide has become liquid gold on the streets. It can sell on the black market for half the price and it’s impossible to track.
“Tide is highly recognizable, it’s very difficult to trace and it’s easily resold,” said Brad Garrett, ABC News consultant and former FBI special agent.
In March, cameras caught a man stealing more than $6,000 worth of the product during the course of 15 months near Minneapolis.
“Tide is a staple item,” Lt. Brad Pyle of Prince George’s County, Md., police told ABC News in March. “Everybody uses it day in, day out. And it’s the most popular brand, so they can move it and get a lot of money for it.”
------
As for the bond unraveling, I don't know how that will play out in detail (of course), but I tend to think that there's no way that something that sizable will go smoothly. I just tend to believe that it's human nature - this idea that people are going to calmly shift from bonds to equities in a virtual single file line.... I think that's optimistic. There's so many variables, including demographics - whether or not a generation of retired people want to play ball again in the markets. Many probably don't - as I noted earlier today, households put significantly more in treasuries last year than the year before.
Even I've shifted a bit, and I've emphasized yield (with stocks, not with fixed income) as part of an increasingly longer-term view. Just reinvesting dividends and becoming increasingly less micromanage-y about it.
Today I doubled the amount I had been dcaing into SMGIX, since I was still rather heavy in cash from the sale of a couple of stocks ( of course they had dramatic rises right after I sold, that ALWAYS seems to happen, one was NIKE, the other FDO) and added the ETFs XLP and RHS. Also added to WAGTX.
Comments
EDV
CEF
GLD
GLDX
VGK
BWG
I was going to do this anyway so it is not particularly related to market action.
More BAC.
If AQRIX and ARLSX hold-up well in correction, I will look to add more to both, likely pulling from ARIVX.
If DODGX moves under 10 mo SMA (gasp), will shift 75% to DODIX.
I'll probably sell the last remaining smidgen of an EAFE index in an index-only 401k. I'd been moving the $ a chunk at a time to an Asia-Pacific index fund; I'll probably stick with that approach.
If this begins to look like a correction that might go on for a while, I'd add to PIGIX as a ~ safe haven.
Also, same idea as Charles on ARLSX ....
A bet on services all banks need, as well as evolving tech (mobile banking, etc.) If only it paid a dividend...
Just my 2 cents. Betting on specific banks may pay off more if things continue, but I suppose the idea of betting on services all banks require may be a tad less volatile over time.
Additionally, Whitney apparently also likes Discover (DFS)
CRSVX
THBVX
Art
Janus Overseas(JAOSX) (-3.4) for 1 week
Oppenheimer Dev. Market (-3.37) for 1 week
"DeMark Sees Shanghai Index Resuming Jump: China Overnight"
http://www.bloomberg.com/news/2013-03-19/phone-stocks-fall-as-suntech-tops-slump-china-overnight.html
Demark does have a reasonably decent record as those like him go.
Kevin
Bought:
More BAC @ 12.669
COP @ 59.139
CLF @ 20.258 (Don't laugh...just felt this miner has been hammered and is ripe for take-over...could not resist today's additional 7% drop...now at 52 week low.)
So equities, long BAC, GE, BRK.B, COP. All with intent to B&H. And CLF speculative. My other speculative attempts recently (RSH, P, and short SPLS) came up zilch, as usual...but I trust I am learning.
Pretty tight stop limits on all since my experience trading stocks makes me better appreciate my fund managers.
Thinking about BA, but don't like the P/B.
Some discussion from GE this morning that they may spin-off GE Capital down the road.
CLF is not a bad idea, especially at these levels. It may take a while, but you're about at 2008 prices. A lot of the iron ore/mining plays have been creamed (VALE is another) and many mining CEOs have recently departed.
Still on the shopping list - HTA and O (or ARCP instead of O) Maybe INF. There's definitely a few other maybes, as well.
"but I trust I am learning."
I've definitely had my share of stuff that didn't work out - I think trying and learning is awesome and important. Investing is one thing where I think you'll never know everything - there's always something to learn/experiences to learn from.
Here's M* look back at past year growth:
online.barrons.com/article/SB50001424052748704836204578354410146165172.html#articleTabs_article%3D0
AQR Risk Parity, I, AQRIX
Pimco Dividend and Income Builder, I, PQIIX
Wasatch EM Small Cap, WAEMX
TCW Emerging Markets Local Currency Income, I, TGWIX
FWIW
http://finance.yahoo.com/echarts?s=HAG.TO+Interactive#symbol=HAG.TO;range=5y
Added a bit to PQIDX and added OAK (wheee, another K-1) last week.
http://blogs.barrons.com/focusonfunds/2013/03/20/oaktree-yield-to-approach-9-this-year-10-by-2015-predicts-morgan-stanley/?mod=yahoobarrons
Not much at all on shopping list (HTA, maybe O or ARCP and maybe FISV.)
I remain positive on metals unless I see considerable changes in what I believe to be the fundamental case. That said, and this is a big thing for me: precious metals are something I'm positive on, but I think there's just so many plays with a *similar mentality* that people can do that I think people shouldn't limit themselves (not saying that you are, certainly, just saying in general.)
If someone likes gold and silver, they - I think, by association - like real assets. Have some metals, but if someone likes real assets, buy PAGG or MOO. Buy INF and get real assets and a 6.5% yield. I like the pipeline companies because, like rail companies, it's very difficult for someone to come along and replicate. I like the Canadian apartment REITs, because in an overvalued market, I just see there continuing to be demand for the foreseeable future. On and on, you get the idea - precious metals are fine and they are not always correlated to the market, which I think in some ways is a plus, but I just think there's a ton of things that are hard assets that you can also get a yield on in the meantime.
I also continue to like things higher up the needs ladder as longer-term holds - what do people need at the end of the day? All of that stuff continues to either get smaller in terms of amount or higher in price or both. If things are great, staples won't do much, but I think over time, they've been pretty consistent in good times and bad and everyone needs TP (Kimberly Clark or PG) and other such supplies.
Heck, there's already a black market in Tide detergent: http://abcnews.go.com/blogs/headlines/2013/01/rising-tide-thefts-leave-colo-retailers-airing-dirty-laundry/
"Tide is one of the most recognized laundry detergents with its bright-orange container. With a retail price from $10 to $20, Tide has become liquid gold on the streets. It can sell on the black market for half the price and it’s impossible to track.
“Tide is highly recognizable, it’s very difficult to trace and it’s easily resold,” said Brad Garrett, ABC News consultant and former FBI special agent.
In March, cameras caught a man stealing more than $6,000 worth of the product during the course of 15 months near Minneapolis.
“Tide is a staple item,” Lt. Brad Pyle of Prince George’s County, Md., police told ABC News in March. “Everybody uses it day in, day out. And it’s the most popular brand, so they can move it and get a lot of money for it.”
------
As for the bond unraveling, I don't know how that will play out in detail (of course), but I tend to think that there's no way that something that sizable will go smoothly. I just tend to believe that it's human nature - this idea that people are going to calmly shift from bonds to equities in a virtual single file line.... I think that's optimistic. There's so many variables, including demographics - whether or not a generation of retired people want to play ball again in the markets. Many probably don't - as I noted earlier today, households put significantly more in treasuries last year than the year before.
Even I've shifted a bit, and I've emphasized yield (with stocks, not with fixed income) as part of an increasingly longer-term view. Just reinvesting dividends and becoming increasingly less micromanage-y about it.