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  1. #1
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    Default Where from here - your suggestions please

    I purchased into five main stock early this bull run as that is all the time I had to follow on the US markets. Main job self employment...

    Apple, Amazon, Facebook and Google were four of them and they have really fuelled the nine-year bull market, the second-longest behind the rally that ended in 2000. Their successes really is propelling the broader US economy, which is on track for its fastest growth rate in a decade.

    If these stocks splutter the whole US economy and market will move with them. Time to diversify or run with the corporate consolidation trend until it falters...

    what do you think and suggest.

  2. #2
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    Quote Originally Posted by Raz View Post
    I purchased into five main stock early this bull run as that is all the time I had to follow on the US markets. Main job self employment...

    Apple, Amazon, Facebook and Google were four of them and they have really fuelled the nine-year bull market, the second-longest behind the rally that ended in 2000. Their successes really is propelling the broader US economy, which is on track for its fastest growth rate in a decade.

    If these stocks splutter the whole US economy and market will move with them. Time to diversify or run with the corporate consolidation trend until it falters...

    what do you think and suggest.
    As economic cycles are normal and common knowledge leans towards not being able to pick or time the market.

    Questions to ask: Does this investment enable me to meet my personal, and financial goals in line with my time horizon and risk tolerance.

    While risks aka volatility in say the S&P500 index has increased in 2018 global forecasts are still positive with a slight slowing towards the end of 2019. You mentioned buying early in the bull run. I guess the question is do you need the money now or can you wait another 10 years if the market tanked 50%. 50% prob wouldn't be too bad either if you have been in the bull run since the start.

  3. #3
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    Thanks for your reply FIsaver...just decided to just take a measured amount off the table although for now those funds will not be returning to NZ until needed... given the current forex trend.

    I agree even a 50% hit to the current price would not be the end of the world to my personal investment although where it would leave financial market confidence is another matter :-)

  4. #4
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    Buy into a more balanced exposure such as Scottish Mortgage or Monks both by Baillie Gifford SMT.L or MNKS.L.....I think there are others with similar exposure but I like BG as a manager - note: I have mnks as smt not quite balanced enough for me.

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  6. #6
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    For once in my life I may well have sold down at the top..who would think that would ever happen!

  7. #7
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    Only just found this thread. Congrats Raz on the timing of your sale. The Fangs will remain under pressure in my opinion. Value is the new cool place to invest for 2019 and 2020 in my opinion.
    No butts, hold no mutts, (unless they're the furry variety).

  8. #8
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    Well done Raz on selling...I too sold some of my more heavily exposed holdings and am thankful for it now! I have put my “spare” cash into some value NZX listed stocks and am reserving more GBP purchases for a few more weeks (for obvious reasons!).

  9. #9
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    Weird isn't it how quickly things change ,my APX is zooming back up not far off its high ,PE 76.50 and my RMD at a new high with PE 53.56!

  10. #10
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    "index fund inflows are now distorting prices for stocks and bonds in much the same way that CDO purchases did for subprime mortgages more than a decade ago. The flows will reverse at some point, he said, and “it will be ugly” when they do."
    https://finance.yahoo.com/news/big-s...104146627.html

  11. #11
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    Quote Originally Posted by kiora View Post
    "index fund inflows are now distorting prices for stocks and bonds in much the same way that CDO purchases did for subprime mortgages more than a decade ago. The flows will reverse at some point, he said, and “it will be ugly” when they do."
    https://finance.yahoo.com/news/big-s...104146627.html
    Well Michael Burry got lucky calling the subprime crash. I recall after he went investing into water / drinking water assets ; so how did that turn out? Eitherway, it's drastically different to call ETFs or Index Funds to be comparable to complex derivatives and level of risk associated in the GFC. Furthermore, we need to question why Warren Buffet insists on just buying the index fund is the best strategy for the typical investor than to just try and time and pick stocks. For good reason because even the expert managed funds that pick individual stocks door a poor job beating the index.

  12. #12
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    Micael Burry's liquidity risk argument is a good one imo, not sure about the rest stacking up.

  13. #13
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    Quote Originally Posted by Joshuatree View Post
    Micael Burry's liquidity risk argument is a good one imo, not sure about the rest stacking up.
    I'm not seeing liquidity as a problem. Even during 2008 / 2009 did the DOW and S&P500 lose out on liquidity? Not even a hope in chance. Though I do agree liquidity is a risk in small cap stocks for the simple reason that the kind of investors that buy such sub $1/share stocks tend to be more trigger happy at exiting their positions; it's a issue of quality vs issue of liquidity. Large caps are long running companies that have tested through decades of stock market crashes, therefore the investors buying such stocks tend to hold them longer or less likely to sell off. Likewise in a recovery, they're more likely to rebound while the small caps you'll find the vast majority just disappear. In a sense, Mr Burry is ignoring the "quality" aspect of investing in stocks.

    Now for a brief moment, let's look at the NZ stock market. Is there an explanation why liquidity has been drying up in the NZX? The large hedge funds looking to buy NZ stocks are well aware of the major liquidity risk involved. As all brokers i've spoken to in NZ, if a person had $1M invested in any NZX share, how quick could the investor buy or sell that single NZ listed company without going unnoticed when the share price spikes or drops so quickly? Just look at the commission scheme NZ brokers work on - large positions are costly to buy and sell and must be done over a spread, many days or weeks resulting more commissions for the brokers. My belief why the NZX is drying up is more to do with gov't regulations (ie the FMA) and many brokers in the US for eg. have simply exited the NZ share market and thus, for their clients operating hedge funds.

    I did enjoy the movie The Big Short. But the reality is there's countless of guys like Mr Burry that simply got lucky. Even Buffet himself said he was lucky on his performance record. You have guys like Robert Kyosaki (Rich dad....poor dad) calling each year that the stock market will crash, sooner or later he will guess it right. But no one knows with certainty year after year where the markets will go.

    I strongly advise investors (especially new into this game) to at least spend the full 12 minutes watching Buffet do a spew against hedge funds (ie. managed funds, Kiwi Saver funds, any portfolio where they try to beat the index by trying pick winners).

    https://www.youtube.com/watch?v=xp9KUCel778

  14. #14
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    Quote Originally Posted by SBQ View Post
    Well Michael Burry got lucky calling the subprime crash. I recall after he went investing into water / drinking water assets ; so how did that turn out? Eitherway, it's drastically different to call ETFs or Index Funds to be comparable to complex derivatives and level of risk associated in the GFC. Furthermore, we need to question why Warren Buffet insists on just buying the index fund is the best strategy for the typical investor than to just try and time and pick stocks. For good reason because even the expert managed funds that pick individual stocks door a poor job beating the index.
    He also went long Gamestop, so far not looking like a good bet. https://markets.businessinsider.com/...9-9-1028516635

  15. #15
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    Quote Originally Posted by kiora View Post
    "index fund inflows are now distorting prices for stocks and bonds in much the same way that CDO purchases did for subprime mortgages more than a decade ago. The flows will reverse at some point, he said, and “it will be ugly” when they do."
    https://finance.yahoo.com/news/big-s...104146627.html
    Yep as ugly as it can get?
    https://www.marketwatch.com/story/wh...eo_top_stories

  16. #16
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    Yep
    Couldn't get much uglier when investors looking for liquidity
    “It was a flight to cash,” says Kenneth Nutall, a financial planner at BlackDiamond Wealth in Wilmington, Del. “People were selling whatever they could sell and were selling whatever was liquid.”
    https://www.marketwatch.com/story/mo...of2&yptr=yahoo

  17. #17
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    Quote Originally Posted by kiora View Post
    Yep
    Couldn't get much uglier when investors looking for liquidity
    “It was a flight to cash,” says Kenneth Nutall, a financial planner at BlackDiamond Wealth in Wilmington, Del. “People were selling whatever they could sell and were selling whatever was liquid.”
    https://www.marketwatch.com/story/mo...of2&yptr=yahoo
    "In a regular correction or bear market, retail investors typically cash in stocks but hold close to their bonds, which are seen as a safe haven and usually go up in value."

    Thanks to gov't bail outs and a fully comprehensive funding plan by all gov'ts around the world and by the World Bank and IMF, we're not seeing much of a crash like before. So far the recovery has been strong and confidence is back. The underlying message in that article is, people are so sick of low % returns from the bond market that they're better off moving it to equities. We're talking even wealthy seniors that traditionally should hold their assets in fixed term deposits that are flee out of bonds because... 1 or 2% a year just doesn't cut it anymore.

    Never let the opportunities of a crisis go unused!!! I do feel the worse is past regardless of the bad news coming out.

  18. #18
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    The shareholding notices seem to indicate its the insto's buying

  19. #19
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    Could be interesting.8 am Sunday,this morning
    "Yahoo Finance is the exclusive online host of the 2020 Berkshire Hathaway Annual Shareholders Meeting which takes place on Saturday, May 2nd. Live coverage begins here at 4:00pmET. Investors and non-investors alike can witness history, live, as Berkshire Hathaway Chairman and CEO Warren Buffett shares his unscripted views on the company, the markets, the economy, corporate governance, and a lot more. Please join us here for this unique event on Saturday May 2nd at 4:00pmET."
    https://finance.yahoo.com/brklivestream/

  20. #20
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    Quote Originally Posted by kiora View Post
    Could be interesting.8 am Sunday,this morning
    "Yahoo Finance is the exclusive online host of the 2020 Berkshire Hathaway Annual Shareholders Meeting which takes place on Saturday, May 2nd. Live coverage begins here at 4:00pmET. Investors and non-investors alike can witness history, live, as Berkshire Hathaway Chairman and CEO Warren Buffett shares his unscripted views on the company, the markets, the economy, corporate governance, and a lot more. Please join us here for this unique event on Saturday May 2nd at 4:00pmET."
    https://finance.yahoo.com/brklivestream/
    Warren's message, don't bet against America. Do you agree ?

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