US stock market valuations

[wasCB14]

190% total market gap to GDP!

Are others pretty heavily invested? Accumulating cash? What do you like?

I did some recent sales, but I feel like my best ideas now are to just sit on the cash or accumulate more Berkshire Hathaway (and write covered calls on some of it for a little income). Everything else looks dead, dying, or healthy but doomed to eventually crash to a saner valuation.

It seems everyone loves big tech...but it could be due for some major antitrust or other regulation.

[Citylights18]

For all the contrarian opinions about the market and worries about sky high valuation I say "show me" when it comes to the next correction hitting. The market seems immune to bad news, only dropping 1.5% in a day and then recovering.

That said all bets are off as to where the broader market is headed. With stimulus money the dow could 36,000 by September. Could also see a bear rotation back down to 26,000 for a while. I'd rather not try to bet against the broader market unless a real correction hits.

I found some Blockchain ETFs which I think are pretty good. The entire crypto space has room to run. You have to anticipate pull backs and take profits from positions. Everytime a stock moves up 20% I'm taking 10% profits. I'm only buying back in once a stock returns to support range in price. This way you don't over pay for stocks and have some cash sitting on the sideline to buy the dip.

In my more restricted employer 401k I was in bonds to begin the year which helped me. Then I flipped back over into growth with the rebound and the fact the bond market is about at its ceiling for funds. If the broader market dips I have to stick with growth over bonds since I can't make money on the bond fund with little downside potential in treasuries.

[IntegerIntrovert]

I'm sidelined right now also in all cash.  I'm going to wait till after the inaugration.  The markets don't like drama.

[CBartowski]

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@Citylights18 wrote:

For all the contrarian opinions about the market and worries about sky high valuation I say "show me" when it comes to the next correction hitting. The market seems immune to bad news, only dropping 1.5% in a day and then recovering.

That said all bets are off as to where the broader market is headed. With stimulus money the dow could 36,000 by September. Could also see a bear rotation back down to 26,000 for a while. I'd rather not try to bet against the broader market unless a real correction hits.

I found some Blockchain ETFs which I think are pretty good. The entire crypto space has room to run. You have to anticipate pull backs and take profits from positions. Everytime a stock moves up 20% I'm taking 10% profits. I'm only buying back in once a stock returns to support range in price. This way you don't over pay for stocks and have some cash sitting on the sideline to buy the dip.

In my more restricted employer 401k I was in bonds to begin the year which helped me. Then I flipped back over into growth with the rebound and the fact the bond market is about at its ceiling for funds. If the broader market dips I have to stick with growth over bonds since I can't make money on the bond fund with little downside potential in treasuries.

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I like it. Similar here.

Curious, which blockchain ETFs?

[wasCB14]

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@IntegerIntrovert wrote:

I'm sidelined right now also in all cash.  I'm going to wait till after the inaugration.  The markets don't like drama.

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My brokerage accounts are about 35% cash, but that falls to closer to 10% when I factor in rental properties. I couldn't exactly turn on a dime if I wanted to.

We've had a lot of drama so far and stock prices have been quite resilient.

[wasCB14]

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@Citylights18 wrote:

For all the contrarian opinions about the market and worries about sky high valuation I say "show me" when it comes to the next correction hitting. The market seems immune to bad news, only dropping 1.5% in a day and then recovering.

That said all bets are off as to where the broader market is headed. With stimulus money the dow could 36,000 by September. Could also see a bear rotation back down to 26,000 for a while. I'd rather not try to bet against the broader market unless a real correction hits.

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And that immunity makes me a bit uncomfortable. Bad news...whether relating to the virus, consumer health, political chaos, or corporate earnings...doesn't seem to hurt a lot of stock prices.

I'm not betting against the market directly...I don't have enough confidence (or at least confidence in market timing) to short a lot of companies or buy put options.

I'm just sort of...opting out...of the broader maket for a bit. I'm sticking with things that make sense to me and avoiding those that don't.

Like Snap Chat (ad saturation means I've rarely used it, and many users lack disposable income) getting a value nearly half that of Costco (loyal customers with high spend).

[ghost-cell]

Still learning. I started getting interested in investing when I got interested in credit, maybe in Aug 2019

[Citylights18]

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@wasCB14 wrote:

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@Citylights18 wrote:

For all the contrarian opinions about the market and worries about sky high valuation I say "show me" when it comes to the next correction hitting. The market seems immune to bad news, only dropping 1.5% in a day and then recovering.

That said all bets are off as to where the broader market is headed. With stimulus money the dow could 36,000 by September. Could also see a bear rotation back down to 26,000 for a while. I'd rather not try to bet against the broader market unless a real correction hits.

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And that immunity makes me a bit uncomfortable. Bad news...whether relating to the virus, consumer health, political chaos, or corporate earnings...doesn't seem to hurt a lot of stock prices.

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I agree its bizarre the market is this resillient. Go back to 2016 and there was huge selloffs on Brexit now its a nothingburger.

My guess is will see a selloff post earnings season, Dow retest 27,000. But it could still be 35,000 by September anyways.

[Citylights18]

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@CBartowski wrote:

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@Citylights18 wrote:

For all the contrarian opinions about the market and worries about sky high valuation I say "show me" when it comes to the next correction hitting. The market seems immune to bad news, only dropping 1.5% in a day and then recovering.

That said all bets are off as to where the broader market is headed. With stimulus money the dow could 36,000 by September. Could also see a bear rotation back down to 26,000 for a while. I'd rather not try to bet against the broader market unless a real correction hits.

I found some Blockchain ETFs which I think are pretty good. The entire crypto space has room to run. You have to anticipate pull backs and take profits from positions. Everytime a stock moves up 20% I'm taking 10% profits. I'm only buying back in once a stock returns to support range in price. This way you don't over pay for stocks and have some cash sitting on the sideline to buy the dip.

In my more restricted employer 401k I was in bonds to begin the year which helped me. Then I flipped back over into growth with the rebound and the fact the bond market is about at its ceiling for funds. If the broader market dips I have to stick with growth over bonds since I can't make money on the bond fund with little downside potential in treasuries.

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I like it. Similar here.

Curious, which blockchain ETFs?

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A couple that I've been trading.

BCLN- Nex Gen Nasdaq Fund

KOIN- Shares NextGen Protocol ETF

BLOK- Amplify Transformational Data Sharing ETF

LEGR- First Trust Indxx Innovative ETF

They kind of track pretty close to the market but they are more conservative than Grayscale ETFs (GBTC, ETHE, LTCN ect) which trade at high premiums to the value of the underlying asset.

[iced]

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@wasCB14 wrote:

190% total market gap to GDP!

Are others pretty heavily invested? Accumulating cash? What do you like?

I did some recent sales, but I feel like my best ideas now are to just sit on the cash or accumulate more Berkshire Hathaway (and write covered calls on some of it for a little income). Everything else looks dead, dying, or healthy but doomed to eventually crash to a saner valuation.

It seems everyone loves big tech...but it could be due for some major antitrust or other regulation.

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In terms of cash, I'm only sitting on maybe $70k between emergency savings and reserves I keep in case the next big dip comes along. Otherwise I'm still full steam ahead on dollar cost averaging into stocks, and have bought around $10k worth so far this year. The way I see it, that's plenty of cash (on top of income) to get me through any short-term cash needs, and there's nothing with low volatility and returns above inflation to park more money in, so I'll stay all-in on stocks for the time being. I'm also generating 5 figures a year in dividends, so even if there's a correction I'm not pressured to sell for cash.

They can trust bust the mega-tech all they want, but it won't really change things all that much. Tech is the future, and I'd say we're just as due for a reconciliation on sectors as we are for another correction. Tech has already started taking over energy, health care, retail, and other sectors.

I'm still sitting out crypto due to its volatility. I'm 100% a long-position buy and hold type investor, I don't do margin trading, and I don't ever sell something in under a year (all my investment income is either long-term cap gains or dividends). With that context, I still see the volatility in crypto as unteneble for my portfolio as it almost requires quick action and a 5-10 year position on a single crypto is a risk not worth taking for me.