So The Stock Market Is A Touch Frothy These Days
 

Is anyone bailing ?

As of today's close, I'm 90% cash - 10% risky funds in my 401k, which is up 25% ytd, as of this morning.
I suspect it'll be up ~26% at tonight's settlement.
I'll take it !
I sold all of my stocks except for JFrog, which I will sell on Monday for $72.00 hopefully.
Then I'll wait for a little correction.
The Fed and monetary policy is allowing for stretched valuations, ergo records for the S&P and NASDAQ today.
How long can it last ?
The brokerages have to book their profits for the year soon, the unemployment numbers are going up again, and that nuke scientist was whacked in Iran today, so I'm packing it in for a bit.
What are you thinking kids ?:waiting:

https://www.yahoo.com/finance/video/...154200122.html

Laugh all you want about the news source, but Muhammed El-Erain is one smart cookie.

I've gone the opposite way. I started buying long treasuries and gold in fall 2018 after the cycle peaked.

Sold last of long treasuries a couple of months back, sold remaning gold last week.

Portfolio is more bullish than it's been since early 2018. 25% of overall portfolio still in int. term bonds in 403(b). Rest equities (& 1% bitcoin).

+35% since Feb. 19th prior peak, QQQ is +25%. I've had a good year by virtue of being prepared for the crash. Still made mistakes though, and waited way too long to start buying. I only spent about about 20% of our cash/gold/treausry reserves buying stocks the week of the lows in March. Lesson I'm taking - when you get your price, buy. I was greedy and expecting more pain/tears/selling.

Joe Biden is getting the Bill Clinton treatment - handed success on a silver platter. Economy will rip in 2021. Trump getting screwed. 0% chance the media will credit him with what he has set us up for coming out of this lockdown crap.

Biden will **** the blue collar working class with amnesty and offshoring, but that won't hurt stocks. "Wealth gap" is going to start ripping again IMO.

.02

Nice run for Bitcoin! I was in way back at $9800 but bailed before it tanked.
Luckily, my money was used wisely in the interim.

bulls make money

bears make money

pigs get slaughtered

as normal, fully invested for the long term, cash in hand for next year's spending.

if i can average 6% each year, i'm good. since we spend about 3.5% each year.

:DAB:

I guess that I should figure out what % that I spend per year.
You and I are the same age, so that would probably be a crucial number to know.:lol:

long ago, a pretty smart guy (not me) did a study of history, and found that if you limit your withdrawals to 4% or less, you wouldn't run out of money in a 30 year retirement.

my experience has confirmed that over the last 12 years.

I did not know that. :cert:

Not bailing out.... <Shrug>........not using what I've saved/invested.
Property management company takes care of our rentals.
Still trying to figure out what to do with money I don't spend every month. Around 2k.
Suggestions?

I pay people to make those decisions. :leaving:

:hurray:

oooh, ooooh, ooooh....

pick me....pick me!!!!!

only a few things to do with money: spend it, save it, give it away.

at present prices, that's about 2 cases of ammo a month. :faint: used to be about 9 :slap:

a recent uptick allowed us to sell a winner and we'll now pay off the home loan we took out to help pay for the shop. :DAB:

Lol.....I'll continue to save.....my bid for a APV was denied by SWMBO. :funniest:

If you withdrew 4% per annum, the principal would last 26 years, not 30 years.
Are you assuming a 3% return, per annum, on the remaining principal?
That would seem to get you to 30 years.

the study done long ago used historical data, ups and downs, covering 30 year time periods from 1929 (i think) to the 90s or so. even with down cycles, the ups made up for the downs on average.

so, yeah, we all want 10-12% per year (that's what Dave Ramsey assumes :slap: ), but i'm ok with reducing risk and being happy with 6%.

if you do it right, you get to a certain point where you can stop taking so many risks. risks have ups, and large downs too.

i think i figured some time ago that if we averaged 6% long term, we'd end up with more than we started with and live nicely too.

I have absolutely no idea what I’m doing financially.

But I do get brokerage statements every month that I never open, so I got that going for me.

You're ahead of the curve. :thumbs::thumbs:

:cheers:

:rofl::rofl:

I've reached my risk tolerance for the time being, so I cashed out for now.
For the past 5 years, I have averaged 12.5%. This year... 26%, so that'll bring the average up. I've had a couple years like this in the past, and a couple less than 5%. I just don't feel alive unless I have skin in the game.:D

if we are both 57ish, then we are both expecting SS to start paying us in a few years, and in 2 years we can start taking money from retirement accounts without penalty.

i need to run some numbers and see if it's wise to take money from my IRA, pay minimal taxes, and stash it elsewhere (taxable account), but if i'm clever, after that, any capital gains will be taxes at zero.

According to leftist Biden picks only evil rich have retirement accounts.
Wait for it all to be confiscated in the name of equality.

I'm 57.
I get my pension at 62.
I can start withdrawing from my 401k at 59 1/2
We get SS at 67?

Full SS at 67, you can draw a smaller check starting at 62.

The pictures you post prove you're FOS. ;)

I read this kind of shit constantly, and can't help asking myself: "What the **** are these morons invested in, and who the **** told them to invest this way?"

As of the close today, my 401K is up 35.5% this year, and I have literally not made a single trade in it ALL YEAR. I read all the time about folks saying "COVID killed my 401K" and shit like that, and I can't fathom WTF these folks are doing with their retirement savings! Your 401K is supposed to be your "nest egg", that will prevent you from needing to eat cat food when you stop working. Why the **** would you invest it in "risky funds"?

For the record: the above are basically rhetorical questions.

I have been retired over 2 years and have yet to get into my retirement fund. The stock market goes up and down. so just see what happens.:cert:

I’m taking my SS at 62. My break even age is about 81. For all three options.

I’ll take uncle sams money and leave my money alone.

I just call the option that I chose in my 401k, "risky". It is not necessarily risky per se'. I don't actually think that there is a truly risky option in a Principle 401k suite, just poor choices.
Mick, a while back, you mentioned in another thread something about your investing prowess. I'd be very interested to hear what it is that you are into to earn 35% ytd.
For the record, I would have been up 51% ytd in the Vanguard fund that I'm in, if I would have left the money alone and was not spooked out.
Timing the market lost me 25% , but at my age, I figure that I'm better safe than sorry.

Price - YTD - Last Complete Mo. - Last 3 mo. -1yr. - 3yr. - 5yr. - 10yr. - Since inception
Attachment 49548

me too:seasix:

My main "prowess" is buying sensible shit, and leaving it the hell alone. Especially in my tax deferred accounts. My main tax deferred account was in a 401K but got transferred to an IRA when I lost my job. It is currently invested in SPY and AAPL. I have not done a trade in the account in literally years.

I have a small chunk of money in my taxable account, and my wife and I do our options trading in that account to generate cash. I have done write-ups of the two main strategies we use, namely selling covered calls and selling cash-covered puts. If people are interested, I can post them again.

I’d be interested to see it. I’m sure as Hell not taking any investment advice from Jeff. :rofl:

Please don't! If you listened to his wisdom 9 years ago you'd be ****ed.

Best to not take advice regarding your money from people on an intrawebz forum. Talk to a "guy". :rofl:

1.5 billion Earthlings will enter the middle class over the next 10 years spending money they should save and that will drive the Global Economy upward.

Regardless, nobody is dumb enough to have everything in public equities and those dividends sure are nice so just leave it unless you're needing that money in 5 years :yesnod:

I missed your write up but would like to see it.
I have tried to understand options but it appears that I'm not wired for it, so if you could post the dummy version, that'd be great. :cert:

My folks are 80 and they just took a bunch out and put it in their safe bucket. At that age, it's an excellent idea.

Everyone's situation is different depending on so many factors it's really stupid for people to discuss it online as nobody is talking Apples to Apples.

Totally not true. You just would have made less than you would have that year.
Just because I was cautious and like to sleep at night, not making the 6% that I would have otherwise made, was ok in my world. Well not really, it sucked, but I digress.:D
I have called bottoms and tops many times and was really close, so it works in my world. I've made 30% in years and 5% in years. My 5 year average as of today is 13%. Works for me.
Timing the market is not easy. Like I said, I would have been up 51% instead of 26% if I would have just let it alone this year, so far.. I'm not perfect, as no one is.
I don't give investment advice to anyone, so take what I say with a grain of salt if you want. No skin off my teeth.
Like DAB said...
Bulls Make money
Bears Make Money
Pigs get slaughtered.

Truer words have never been spoken. I like to sleep at night.
I do better than any investment advisor would with my money.

Everyones situation is different. Yes, That is huge.
As I said earlier, I'm 57 , retired from a job with a full pension and do not want to work anymore.
Kinda like DAB.
I'm sure that we all understand that nothing is apples to apples, so why is is stupid to discuss?
Maybe we can learn something.
If I wasn't so pig headed, I would have learned a long tome ago to set it, and forget it. But noooo... I like to think that I'm better than that. Well sometimes I am, and sometimes I'm not. No biggie. I enjoy it. Enjoyment sometimes costs money and If I can profit from enjoyment, all the better.

https://i.imgflip.com/4o5zwa.jpg
.

* win

true to a certain extent.

but what i do know is that it is very hard to spend money you don't have.

if you want to work until you drop dead, go for it. if you want to have options down the road, there are ways to give yourself some flexibility later on.

:DAB:

The economy is not the stock market.

"with the senate" I don't get it :shrug:

NOX & Anjdog mentioned in another thread that the cost of my house in Buffalo was a down payment on a house in California. The same is true in Long Island where my BIL lives. Yep, that is true.
What is also true is the salaries in Buffalo are less as well.
That being said, the stock market is a vehicle to help get me to that level.
ICNL in California or LI because, quite frankly, I can't afford to. I'd love to live in Monterey or Laguna but that is not an option.
I'm ok with Delaware and winters in Florida.
Yep, people's situations are bigly different.
So what... You play with the cards that you are dealt.
By the way.... I have visited California a few times and ICNLT, or LI for that matter. Nice to visit, no doubt, but ya, no want.
I'd live in Arizona but Liz wants to stay on the east coast.:sadangel:

generally speaking, home prices reflect local incomes.

people can afford more, sellers/developers price their homes accordingly.

when we considered where to move to from MD's DC suburbs, we drew up a list of nice to have, and can do without.

didn't need a place on the water. didn't need a place near golfing. did want some acreage (was shooting for 5 or more), not too big a city, but big enough you didn't have to drive an hour to a bigger city to get the basics of life. we considered NM, WY, but CO was out.

and you have to adjust your wish list to your pocketbook. $10M place in the Florida Keys? sounds great, but i'm about 9.5M short. :slap:

next idea....

Ahhhhhhhhh SHIT !!

Supposed to say "win". Dammit.

https://i.imgflip.com/4o6axj.jpg

:Jeff '79: I hear that !!

Here is the first "Lesson" I wrote for interested folks. I probably wrote it almost a decade ago, but I gave it a quick read, and it looks just as applicable today:

Trading Options Lesson #1: Selling a Covered Call

First, this will be long so here are your Cliff’s: Don’t read this if you are not interested.

It came up in another thread that some folks on here are relatively inexperienced investors, and are interested in options. I put this together to try to explain a basic option transaction, hopefully without any jargon, and in 1200 words or less. Because the topic of “selling covered calls” came up, and happens to be an excellent place for a beginner to start, I have addressed this transaction below. The following is my view, and my opinion, developed from 20 years of experience trading options. It is not intended to be investment advice. What is written is intended to be solely about options on commonly traded equities.

I’ve written it in five sections as follows:

1. What is a call option?

2. What does buying and selling a call mean?

3. What is a covered call?

4. The story of my first covered call.

5. The pros and cons of selling a covered call.

1. What is a call option?

A call option provides the buyer of the option the right, but not the obligation, to buy 100 shares of a pre-specified stock (the “underlying equity” or often just “the underlying”), at a pre-specified price (the “strike price”), on or before a pre-specified date (the “expiration date”).

2. What does buying and selling a call mean?
When someone “buys” the call, they buy the right, but not the obligation, to buy the underlying stock as specified above, at the strike price on or before the expiration date. As with most things in the economy, for every buyer, there is a seller. The person who sells the call, is selling the buyer the right to buy the underlying stock from the seller of the call, at the strike price on or before the expiration date. When the transaction is made, the buyer pays the seller an agreed upon price (called the “premium”) to get that option from the seller. For clarity: once the buyer buys the option, the seller of the option is obligated to sell his stock to the buyer of the option at the strike price if said buyer chooses to exercise his option. Another term for selling an option is “writing” an option, so “selling a call” and “writing a call” mean the same thing.

3. What is a Covered Call?

If the seller of the call already holds the 100 shares of the underlying equity in their account, the call is said to be “covered” by those shares. Meaning, if the buyer of the call wants to exercise his call the next day, the shares are already in the sellers account so that he can just buy them directly. If the seller does not hold the shares, the call is said to be “uncovered” or “naked”. Selling naked calls is much more risky than selling covered calls, so I will not address that here.

4. The story of my first covered call:

For well over a decade, I had been buying options but had never sold one. Probably for the same reason as lots of folks, I wasn’t sure I really knew what I was doing, so I was a little afraid of getting in over my head. About 5 years ago, I bought 100 shares of Apple (AAPL) for $180 per share. I loved the stock, but it was very volatile. I noticed that because of the high volatility, the option prices were sky high, so I was talking to one of my advisors about the possibility of writing a call on my new purchase. We looked at it a bunch of different ways, but the one we thought had some real validity was this:

Since I just bought the stock, if the price ran up really fast, would there be a point where I figured I had made my money, and sell to take the profit? Of course, the answer was yes. I was sure that if the stock ran up $20 in the next month or so, I would sell and take the profit. Based on that, and the fact that I am a reasonably disciplined investor, the question changed from “Why sell the call?” to “Why not sell the call?” 200 strike options a month and a half or so out were trading at $8 per share, so I could get $800 minus a commission for the call, so I sold it.

5. The Pros and Cons of Selling a Covered Call:

Let’s start with the cons, because the pros are easy and people seem to see a lot of cons. The first thing people often say is: “you will lose money if the stock runs up past the strike price”. Well, I would say I won’t “lose” money, because it was money I never had in the first place. I would also say that if I am a disciplined investor, and really did sell when the price hit $200, I wouldn’t “lose” any upside, since I would be out of the stock with or without the sale of the call.

The next thing they say is “your brokerage firm won’t let you sell the shares when you have them covered, so if the shares start dropping, you won’t be able to get out and will therefore lose more money than you would without the call.” This starts out right, brokerage houses will only let the most experienced options traders have naked call positions, so the regular Joe can’t sell the shares with the call out on them. However, when the stock drops, so does the option price. So if I want to take my lumps in the underlying, all I have to do is buy back my call and I can go ahead and sell my shares. It is likely (though not guaranteed), that I will net a small gain on my call, which will offset some of my loss on the underlying. I would not have had access to this small gain had I not sold the call in the first place.

Now, to the pros: There is really only one, but it is a nice one, the premium. Once I took that $800 premium, it’s mine. No matter what happens, I don’t have to give it back. I may choose to give some of it back if I want to get out of a falling stock, but I don’t have to. In the investing world, cash I can stick in my pocket with no obligation attached is a sweet thing. Oh, and I might have to give up my shares, but I’ll get paid a nice profit on those too. I love it when my stocks get called away, because that means I made money on the stock, AND have a premium in my pocket.

options skeer me. :willy:

me too

I sold jFrog this morning for $72 and am 90% in cash right now.
Correction time????
:ball:

I apologize for all past bitcoin insults.

Our Vanguard accounts are in the green right now because of GBTC and MSTR (1% position in each). Everything else getting ass-blasted but GBTC and MSTR up by over 20% each.

:dance:

:Jeff '79:

LONG LIVE BITCOIN I'VE BEEN A BELIEVER FROM THE BEGINNING IGNORE FAKE NEWS

GBTC & MSTR ↑↑↑↑↑

What the hell is "everything else"? My IRA is currently up 45% for the year, and it is fairly conservatively invested. How the hell can you be "getting blasted" in this market?

Party is about to end though.

Translation: He's invested in the wrong shit. :yesnod:

same thing I saw when I ran my three options. Get it while ya can:seasix:

Definitely!

My options trading habit occasionally generates what I call "problem children". Stocks that got put to me, and dropped so low I can't sell a call at my cost basis, so I have to realize a loss, or be stuck with them. This year, I sold EVERY ONE of my problem children in order to offset the capital gains I have, and still had to pay the vig to the gumment on the difference. In my taxable accounts, I LITERALLY don't have ANY stocks that show an unrealized loss.

If your portfolio is getting "ass-blasted" this year, you are clearly doing it wrong. :yesnod:

Edited to add: FWIW, the S&P 500 set another all time high today.

I got a hot tip on how to turn 1K into 50K in just 10 days from another forum.

if you own individual stocks, you only owe cap gain taxes when you sell and realize a gain. and if you are in the lower tax brackets, your capital gain and qualified dividend tax rate is 0%. :dance:

I saw that, and chose to not point out how "maffs be powerful hard boss". If he really invested what he said he did, and the underlying really moved as much as it said, he would have had a gain of $5.7 million. :yesnod:

I ain't buying it.

Uh, the day of that post. Not for the year. I don't do YTD because I'm not a fund manager who gets paid on YTD, but I do know exactly where we were on Feb. 19th, the prior peak before the crash. We're up 37.4% from Feb. 19th while QQQ is up 31.2%, and we're not now and have never been 100% long large cap U.S. equities i.e. our risk adjusted return is even better.

I will continue to actively manage our portfolio until the market outperforms me, at which point I'll go full Boglehead.

Maybe back half of 2021. We'll see.

Q1 and Q2 2021? I expect buy-the-dip in stonks to work.

Back half of 2018 was the time to worry and start buying gold and treasuries. Overweight them outperfomed through 2019, and of course saved your bacon once the covid crash of 2020 commenced.

Now they're out of my portfolio. I'd be shocked if I bought them back in the 1st half of 2021, but I'm always ready to change on a dime if the facts on the ground change. For now, it looks like growth and inflation accelerating into the 1st part of 2021 in rate of change terms.

:waiting:

I will say that just after the election, my ExxonMobil stock soared. It sucked ass while fracking increased oil production. I’m really looking forward to the increased gas prices.

Looking forward to?
It's already happening.

:leaving:

2020 has been good :yesnod:

:leaving:

So, it looks like you are buying in the money calls? I've heard Lenny Dykstra was pushing that strategy.

I mostly only sell options. When I like a stock, I don't buy it, I sell a put. When I am ready to get out, I don't sell it, I sell a call.