Trading the stockmarket (NO Referrals)

Skeptic · 18 Mar 2020 at 16:49

A global all-share index is a bet on continued productivity and growth for the world. Is this current crisis enough to bet against that? If yes, then what's the alternative? Guns and ammo??!

For the more speculative among us, I've increased my holdings in AAZ (no-debt, cash generative, gold-miner) and CAML (minimal debt, resources miner - copper, zinc and lead - can you imagine the bounce back here!?).

The above is not advice, but let's have some perspective here. If this is an existential threat to humanity, do you think things like 'ethics' and 'process' will be maintained? E.g. those who say a vaccine is 18 months away...really?! Come on now.

Ahleckz · 18 Mar 2020 at 16:53

Skeptic said:
A global all-share index is a bet on continued productivity and growth for the world. Is this current crisis enough to bet against that? If yes, then what's the alternative? Guns and ammo??!

For the more speculative among us, I've increased my holdings in AAZ (no-debt, cash generative, gold-miner) and CAML (minimal debt, resources miner - copper, zinc and lead - can you imagine the bounce back here!?).

The above is not advice, but let's have some perspective here. If this is an existential threat to humanity, do you think things like 'ethics' and 'process' will be maintained? E.g. those who say a vaccine is 18 months away...really?! Come on now.

I think it's fair to say there's going to be a big slow down and I suspect recession on the back of this affecting the major economies of the world. So yes, the current crisis is enough to bet against that. My view is that of course it'll go back up, but the bottom isn't here yet. It won't be here until the UK and US go into similar lockdowns seen elsewhere. So for me it makes sense to sell now, hold cash, and buy back in when the price is even lower than today. I can't say what the best time is, but I believe that the falls will keep coming so it makes sense to sell and buy back in at a later, lower, point, to maximise returns.

Skeptic · 18 Mar 2020 at 17:02

That is absurd, to my mind. All evidence, ever, points to what you are doing as a bad idea. Selling ‘low’ with an expectation that you can buy in lower, is fundamentally misaligned with your goals.

What you have done is locked in a loss, in the hope that you can time the rise. You might get lucky, but you weren’t lucky enough to sell out before the drop, how will you be lucky next time?

I get it, honestly I do. I’m not making judgments about your decision - seeing your portfolio dip is not fun. However this is the nature of the beast of equity. What if old Bojo, or any other nation in the world, announces tomorrow that there is a working vaccine? Market rallies 20% or 30% and you miss it? Big numbers, yes, but we have grown accustomed to 5-10% drops, why not a 30%+ rise?

I’m just suggesting that your logic is faulty, not that your decision is bad.

Minusorange · 18 Mar 2020 at 17:09

Breakers hit again

Rexxar · 18 Mar 2020 at 17:51

Similar to my other post, a lot of colleagues saying now is a great time to buy stocks as the only way can be up... not so sure myself, what are people's thoughts?

dbilsborough · 18 Mar 2020 at 17:58

Rexxar said:
Similar to my other post, a lot of colleagues saying now is a great time to buy stocks as the only way can be up... not so sure myself, what are people's thoughts?

If you have money to burn, invest. Lots of companies could go bust worldwide, and one going down can domino others. The best advice to investing is to always do what you would normally do. In other words, don't put more in when the market goes down, don't sell low with the hope it goes lower. Investing in a fund can be a better idea as it spreads your risk over a number of stocks and shares. Over the long term, stocks overall tend to go up, but in most cases, people don't make a fast buck, but lose a lot of bucks pretty quickly!

Skeptic · 18 Mar 2020 at 18:00

No, they’re going straight down. Or up. Definitely down. DOW at 1000, or maybe a billion.

There is a humility in this game. Of course the ‘only’ way can’t be up. Has the nature of the world fundamentally changed these last few weeks? If you believe the answer to that question is ‘no’, then it’s a great time to buy. You’re getting the same thing, but with a discount.

Apple is still apple; Amazon is still amazon. But if you are asking random strangers on the internet, I wonder whether you are going about this the right way.

mid_gen · 18 Mar 2020 at 18:04

Rexxar said:
Similar to my other post, a lot of colleagues saying now is a great time to buy stocks as the only way can be up... not so sure myself, what are people's thoughts?

Were these the same people advising to buy stocks last year as markets just keep going up?

Fusion · 18 Mar 2020 at 18:04

Rexxar said:
not so sure myself

Steer clear, unless you can put yourself in a position where you're more sure, or have a better understanding and tolerance for the risk. It's not a game to be playing if you don't know what you're letting yourself in for, especially at a time like this.

Skeptic · 18 Mar 2020 at 18:08

Folks, we need to have a bit of a PSA here. A 10 year bull run has infected yo’ minds.

Neither you, nor I, can predict the stock market falls or rises. When we do so, we do so with a tongue in cheek, acknowledging that we really don’t know - or accept that it is gambling. You might get it right, but you might get it wrong.

Investing in the market is different to buying shares. The idea is that you invest in a broad index, which, over a period of time increases in value as the world moves to increasing efficiency, productivity etc. It may not, but it always has done in the past. That’s the best that we have.

If you can’t cope with 50% falls, you should consider whether the stock market is for you. You accept, however, the returns you will get in a high-interest savings account. That is fine. You should not invest money that you need in the short or medium term.

The value of your investment account matters on two dates; the day you buy, and the day you sell. The stuff in between is completely unknown, and unknowable, so it’s just noise.

Azza · 18 Mar 2020 at 18:15

Shut up and stop talking any sort of common sense @Skeptic and sell all your holdings right now!!!

Jono8 · 18 Mar 2020 at 18:29

Dow below 19k now!

R.P.L · 18 Mar 2020 at 19:13

My personal opinion (and it is only that) is that assuming you're investing, wait until the market has stabilised and hasn't dropped significantly for a couple of weeks. You might miss the absolute bottom but that's much better than kicking off a position with a ~30% loss.

Skeptic · 18 Mar 2020 at 19:15

Without meaning to be difficult, and to stimulate debate. When will you know that the market has stabilised?

Skeptic · 18 Mar 2020 at 19:15

Or perhaps 'how will you know?' is better phrasing.

mid_gen · 18 Mar 2020 at 19:29

It would be helpful if people on this thread recognise the difference between investing and trading. Although the thread is titled trading it seems that many posters seem to be under the impression everybody should be saving for their pension and thus being condescending to anyone that's interested in shorter term trading.

Market movements like this don't come around often, some of us want to discuss taking advantage of it.

Caveat - if your mates/colleagues are giving you stock advice....don't. Unless you really, really can lose your money and deal with the mental side of it on top of the virus situation, now is not the time to get involved.

Skeptic · 18 Mar 2020 at 19:31

In that spirit: dominoes pizza and/or just eat. Go on lads.

Azza · 18 Mar 2020 at 19:40

Buy order in for Just Eat, off out tomorrow to buy a yacht.

Randomface74 · 18 Mar 2020 at 19:43

I had chinese, it was pretty late.

BennyC · 18 Mar 2020 at 19:48

Having topped up my S&S ISA for the year a few weeks ago I still have a little held as cash and also have a pension transfer in progress to my SIPP ongoing.

I've a not-an-insignificant amount of capital earmarked for my SIPP too (utilising previous years unused allowances but of course not exceeding earnings.)

Contemplating allocating some of this to specific companies which have suffered recently but that should recover well to take some modest gains before investing with a longer term view.

For now like most I am waiting on the sidelines and will start dripping in over the next few weeks and months.