The stock market

[Brock Beauchamp]

On the other hand, I'm pretty down on Tesla. I love love love their business model but I got into the company at an inflated price, one that may be too high to ever climb out of (I'm up overall but not by a lot). If I could take back one investment of the past two years, it'd be Tesla.

 

How much will you squeeze out of Tesla stock in the coming decade if their market valuation is already at something around 1/3rd the market valuation of General Motors?

 

I'm sticking with Tesla because I view them as a 20 year stock but even that may be a mistake. It's going to take years and years for them to produce enough product to be worth what they're worth today, much less what they should be worth in five years.

[Mike Sixel]

 

On the other hand, I'm pretty down on Tesla. I love love love their business model but I got into the company at an inflated price, one that may be too high to ever climb out of (I'm up overall but not by a lot). If I could take back one investment of the past two years, it'd be Tesla.

 

How much will you squeeze out of Tesla stock in the coming decade if their market valuation is already at something around 1/3rd the market valuation of General Motors?

 

I'm sticking with Tesla because I view them as a 20 year stock but even that may be a mistake. It's going to take years and years for them to produce enough product to be worth what they're worth today, much less what they should be worth in five years.

 

only if you assume they are a car company...which may or may not be true. I think I have enough money there anyway....

[Brock Beauchamp]

 

only if you assume they are a car company...which may or may not be true. I think I have enough money there anyway....

Yeah, they have growth potential outside of cars - and ultimately, I think batteries will be their bread and butter - but their valuation is still sky-high even if you include their other businesses.

 

I think Tesla will be a slow grind even as they become profitable. At some point, their product needs to balance with their valuation.

[Willihammer]

 

Literally just about everything about it

Let me re-phrase that. Why should bitcoin outperform stocks, bonds or other yielding assets?

Mike threw out a 20% number. Based on what?

[Mike Sixel]

 

Let me re-phrase that. Why should bitcoin outperform stocks, bonds or other yielding assets?

Mike threw out a 20% number. Based on what?

 

Mine is a guess....for one, I think the ETFs will be approved by the SEC. That alone could vault values by 20%. Also, I think there will be a dip in the market this year, not a collapse, but dip. I think in uncertain times, unless China somehow does kill it (they won't), bitcoin is a "safe" haven.

[DaveW]

Let me re-phrase that. Why should bitcoin outperform stocks, bonds or other yielding assets?

Mike threw out a 20% number. Based on what?

It won't forever but it has been for the last year as it's up 350%, not a bad return

 

Once the sec stuff goes through it will immediately jump to 1500+ before I think it more or less begins to "settle" around $1800-$2000

[Willihammer]

 

Mine is a guess....for one, I think the ETFs will be approved by the SEC. That alone could vault values by 20%. Also, I think there will be a dip in the market this year, not a collapse, but dip. I think in uncertain times, unless China somehow does kill it (they won't), bitcoin is a "safe" haven.

Alright, why should bitcoin outperform gold, t-bills, the USD, or other safe havens?

[Mike Sixel]

 

It won't forever but it has been for the last year as it's up 350%, not a bad return

Once the sec stuff goes through it will immediately jump to 1500+ before I think it more or less begins to "settle" around $1800-$2000

 

See, I have been doing my research.....just wish I could buy in my retirement account before the ETF is real......If not that, if I will sell some stock to buy some, as a ST gamble. Assuming tax rates drop this year, ST gambles are worth more for a few years.....

[Willihammer]

The ETF is an interesting angle. I didn't realize that was in the works. I could see a short-term bump from that.

[Mike Sixel]

 

Alright, why should bitcoin outperform gold, t-bills, the USD, or other safe havens?

 

don't know if it will. That's a fair question. Other than the ETF change, which makes them A LOT more liquid, not sure I can answer that.

[Willihammer]

Re: TSLA, I still like it. I'd buy more if I could. A lot is being made about the Goldman Sachs downgrade. I think they'll probably miss 2017 production targets but they won't lose all their pre-orders even if some folks miss out on government incentives. Barring anything unforseen the 3 will still be priced competitively. And TSLA's are a lot sexier than GM's or Nissans. The other thing to keep in mind is TSLA has the strongest position in terms of the rest of the EV ecosystem with the supercharging network, solar panels, batteries, etc. They just have to spin up some cash and then folks will be locked in. It might come a little later than expected but they'll get there eventually.

[DaveW]

Bitcoin set to hit $1300 shortly

[Mike Sixel]

 

Bitcoin set to hit $1300 shortly

 

I hate you. That is all.

[Willihammer]

Seems to be a fair number of analysts saying the SEC will shoot down the ETF.

[glunn]

I am worried about the following:

 

1. Trump doing something stupid that crashes the stock market.

 

2.  A prolonged war over the replacement of the Affordable Care Act that stalls tax cuts.

 

3. A breakup of the Eurozone.

 

4. A major terror attack that triggers widespread panic, like 9/11 or something worse.

 

5. A major injury from Buxton crashing into an outfield wall.

 

Four of these five things could crash many of our portfolios. Be fearful when others are not.

 

I am not getting out of the stock market, but am looking at every position asking myself what could go wrong, and I am re-balancing to get greater diversification. I am also glad that I did not invest in this: http://www.citypages.com/news/how-you-can-buy-shares-in-tyler-duffeys-future-8239471

[gunnarthor]

 

I am worried about the following:

 

1. Trump doing something stupid that crashes the stock market.

 

2.  A prolonged war over the replacement of the Affordable Care Act that stalls tax cuts.

 

3. A breakup of the Eurozone.

 

4. A major terror attack that triggers widespread panic, like 9/11 or something worse.

 

5. A major injury from Buxton crashing into an outfield wall.

 

Four of these five things could crash many of our portfolios. Be fearful when others are not.

 

I am not getting out of the stock market, but am looking at every position asking myself what could go wrong, and I am re-balancing to get greater diversification. I am also glad that I did not invest in this: http://www.citypages.com/news/how-you-can-buy-shares-in-tyler-duffeys-future-8239471

Well, yeah. Depends on how old you are. I'm in my early 40s so the short term ebb and flow of the market isn't too scary for me - but I also said that in 08 when we held a lot of Wachovia stock (remember them?) and citibank. Uff-da.  So we're watching a bit more closely this time but generally I don't worry about timing the market so much as having a smart(ish) portfolio, meaning buying boring index funds when appropriate.

 

[Mike Sixel]

I'm almost 53, so I'm a bit more worried about the next correction than some of you should be.

 

At 7%, it takes 8 years to break even from a 40% fall in prices. I'd be 61 then.....I'd kind of like to only lose 20% in the next correction somehow. So, I am looking at things, and thinking about putting in automatic sales.

 

OTOH, I thought the market would drop in the weeks following the election, then bounce up, then come down sometime this year. So, wtf do I know?

[glunn]

I am older than both of you, but wish that I had been more diversified in 2008 when I was close to Mike's age.

 

I am also seeing lots of scenarios where there could be a drop of 40% or more within the next year or two.

[diehardtwinsfan]

 

I am worried about the following:

 

1. Trump doing something stupid that crashes the stock market.

 

2.  A prolonged war over the replacement of the Affordable Care Act that stalls tax cuts.

 

3. A breakup of the Eurozone.

 

4. A major terror attack that triggers widespread panic, like 9/11 or something worse.

 

5. A major injury from Buxton crashing into an outfield wall.

 

Four of these five things could crash many of our portfolios. Be fearful when others are not.

 

I am not getting out of the stock market, but am looking at every position asking myself what could go wrong, and I am re-balancing to get greater diversification. I am also glad that I did not invest in this: http://www.citypages.com/news/how-you-can-buy-shares-in-tyler-duffeys-future-8239471

 

The market is unwinding a lot of the Trump trades right now and testing it's bull market trend line. I maintained before that I think we're due for a correction, and I still think that (though it's taking its time).  As for your points.

 

1.  Trump will do plenty stupid.  he's already done plenty stupid. The bulls though are irrational and I don't think Trump's stupidity will be the reason for a correction.

2.  This will probably happen.

3.  This will almost definitely happen in some way. I think the EU is going to look drastically different in a couple years.

4.  Let's hope not

5.  Let's hope not.

 

In my opinion, the Fed raising rates in a couple weeks will be a wake up call, and not in a good way. The market is pricing 2 rate increases in, and if they go up in March, the thought is that we get 3 or 4 this year.   Might not be a bad time to buy some out of the money put options. I'm considering it.

[diehardtwinsfan]

 

I'm almost 53, so I'm a bit more worried about the next correction than some of you should be.

 

At 7%, it takes 8 years to break even from a 40% fall in prices. I'd be 61 then.....I'd kind of like to only lose 20% in the next correction somehow. So, I am looking at things, and thinking about putting in automatic sales.

 

OTOH, I thought the market would drop in the weeks following the election, then bounce up, then come down sometime this year. So, wtf do I know?

 

A correction is one thing.  That's a 10-20% drop, which will recover in a reasonable amount of time.  For example. we had a correction in Jan of 2016. The market recovered over the rest of the year. 

 

A crash is what you are very vulnerable to right now.  That will take a year to unwind, and the time back can be long. 

[Mike Sixel]

 

A correction is one thing.  That's a 10-20% drop, which will recover in a reasonable amount of time.  For example. we had a correction in Jan of 2016. The market recovered over the rest of the year. 

 

A crash is what you are very vulnerable to right now.  That will take a year to unwind, and the time back can be long. 

 

Fair. 

[diehardtwinsfan]

I'd add that the economy is not near good enough to raise rates.  They have to raise them b/c they know inflation is getting bad.  They never fixed 2008.  They just punted on the problems.

[glunn]

 

I'd add that the economy is not near good enough to raise rates.  They have to raise them b/c they know inflation is getting bad.  They never fixed 2008.  They just punted on the problems.

Agreed. And with reduced regulation of the big banks, we might see another too big to fail crisis.

 

Too bad the Republicans were unwilling to work with Obama on infrastructure. In the long run, better infrastructure seems like a worthwhile investment.

[diehardtwinsfan]

I'm still holding out hope that Glass-Steagle gets re-enacted... probably asking too much though that the politicians actually do what is in the best interest of the constituents.

[gunnarthor]

 

I'm still holding out hope that Glass-Steagle gets re-enacted... probably asking too much though that the politicians actually do what is in the best interest of the constituents.

Oh, wow, man.  I mean, that was a tough chance with Dems in the White House.  No chance at all now.  We'd need another 2008 for that to happen.

[DaveW]

Bitcoin hit an all time high, followed by a $180 drop minutes later.

 

Stupid SEC!

[diehardtwinsfan]

 

Oh, wow, man.  I mean, that was a tough chance with Dems in the White House.  No chance at all now.  We'd need another 2008 for that to happen.

Another 2008 wouldn't be the worst thing (for me at least).  I'm positioned a lot better this time around if that happened. I wouldn't mind picking up a few more rental properties for 10k a piece... 

 

The problem is the damage it would do to everyone else. I got burned in 2008, but we came out OK.  So many didn't and the economy as a whole has still not recovered.  I seem to remember Trump (or maybe it was someone else) dangling Glass-Steagle during his campaign.  Unfortunately, with a former Goldman higher up on his cabinet, I don't see it happening.  It needs to though.

[Mike Sixel]

Golly I hope you people bought Shopify last year.....

 

I'm close to betting on bitcoin right now, every time it takes a drop, it recovers. But, I am short cash.....

[Willihammer]

Timing is a fool's game I know but it really seems like this latest run-up was built on political hopes and dreams that seem unlikely to materialize. I'm saving as much cash as I can afford to.

[diehardtwinsfan]

 

Golly I hope you people bought Shopify last year.....

 

I'm close to betting on bitcoin right now, every time it takes a drop, it recovers. But, I am short cash.....

 

I don't know what to think about them. I've been watching it for a while now.  Very volatile.  I'm guessing ultimately it becomes another inflation hedge, like Gold or Silver, but one that cannot be as easily manipulated. 

 

That said, the dollar is trending down again. In the short term, inflation protection portfolios make sense.

 

As for the market, I'm wondering if it would be wise to buy some out of money puts.  I think that correction is coming very soon.