Here come the bailouts

[DarterBlue]

It is very sad, really, but this is what we are to be periodically reduced to ... unless, of course, we just say no!

https://www.cnbc.com/2020/03/16/us-airlines-seek-more-than-50-billion-in-aid-as-coronavirus-roils-business.html

[DBP66]

corporate socialism anyone??….but just make sure we reduce the number of lazy bums on food stamps!!...

[Horsefly]

1 hour ago, DarterBlue said:

It is very sad, really, but this is what we are to be periodically reduced to ... unless, of course, we just say no!

https://www.cnbc.com/2020/03/16/us-airlines-seek-more-than-50-billion-in-aid-as-coronavirus-roils-business.html

Glad you’re back.  Would love to hear you start a thread on what you’re doing investment wise.  I enjoyed your stick pick discussions.  

For me I’m sitting on the sidelines with cash waiting for things to bottom out.  Generally looking at airline, energy and financial sectors.

what was are you focusing in on as potential buys?  

[DarterBlue]

1 hour ago, Horsefly said:

Glad you’re back.  Would love to hear you start a thread on what you’re doing investment wise.  I enjoyed your stick pick discussions.  

For me I’m sitting on the sidelines with cash waiting for things to bottom out.  Generally looking at airline, energy and financial sectors.

what was are you focusing in on as potential buys?  

It is too early to focus on buys unless you have a horizon greater than 10 years. I have never seen  a collapse this bad in thirty one years of trading and investing. And in that time I have seen many kinds of markets both good (mostly so) and bad. Aside from what happened in 1929, I don't think this has happened in the entire history of the United States. While the immediate cause is Covid-19 (a Corona virus), I think it has a lot to do with serious structural problems in the USA. 

First, is the fact that our health care system is probably ill equipped to deal with an epidemic. Too many uninsured; too many just in time policies in place; too much of our critical health care infrastructure is imported; a population that is largely blissfully unaware of the potential consequences ... I could go on. 

Second, is the economic circumstances of the majority of working Americans. A very large percentage of American workers cannot afford to miss a paycheck. So, the tendency will be to go to work even if they are sick and suspect you have the virus. This will only increase its spread.

Third is the fact that the government, mired in debt, is ill prepared to deal with this issue fiscally. At some stage the rich in this country figured out it was better to lend to the government, even at very low to zero interest rates than to pay taxes. But this has a fundamental effect on the government's ability to address this kind of crisis. 

All is not lost. For while this virus is very communicable, it is not the Plague, or Ebola, or Typhoid or Yellow Fever. The death rate, depending on how it is handled and on demographics seems to be between .5% and 5%. Bad, but it won't wipe us out. What it will do is cause a severe contraction in economic activity leading likely to a recession. Now if companies were not loaded up with debt (compliments of lax interest rate policy promulgated by both Republican and Democratic administrations), we would get through this like we do in normal recessions. However, many corporations will not be able to service the debt with a rapid decrease in economic activity. This will lead to bankruptcy; hence, the need for bailouts. 

Since mid-October, when the market broke out to new highs I have been on the sidelines. As you know, I had been short, but covered the positions (taking a loss) when the averages broke out to the upside. While I would like to say that I have profited from this collapse, I cannot, as I have remained on the sidelines. At this stage, I don't think being either short or long is the correct play for most people. While this volatility is the God send of skilled day traders, the average person would mis-trade it. I took on a gig from mid-January through mid-April. If I had not taken it, I would try to exploit the volatility very selectively. But to be fair to my employer, I could not do this effectively while working as I would have to be focused solely on the market. It thinks remain in this mode, I will post my thoughts mid to late April. 

 

[15yds4gibberish]

36 minutes ago, DarterBlue said:

It is too early to focus on buys unless you have a horizon greater than 10 years. I have never seen  a collapse this bad in thirty one years of trading and investing. And in that time I have seen many kinds of markets both good (mostly so) and bad. Aside from what happened in 1929, I don't think this has happened in the entire history of the United States. While the immediate cause is Covid-19 (a Corona virus), I think it has a lot to do with serious structural problems in the USA. 

First, is the fact that our health care system is probably ill equipped to deal with an epidemic. Too many uninsured; too many just in time policies in place; too much of our critical health care infrastructure is imported; a population that is largely blissfully unaware of the potential consequences ... I could go on. 

Second, is the economic circumstances of the majority of working Americans. A very large percentage of American workers cannot afford to miss a paycheck. So, the tendency will be to go to work even if they are sick and suspect you have the virus. This will only increase its spread.

Third is the fact that the government, mired in debt, is ill prepared to deal with this issue fiscally. At some stage the rich in this country figured out it was better to lend to the government, even at very low to zero interest rates than to pay taxes. But this has a fundamental effect on the government's ability to address this kind of crisis. 

All is not lost. For while this virus is very communicable, it is not the Plague, or Ebola, or Typhoid or Yellow Fever. The death rate, depending on how it is handled and on demographics seems to be between .5% and 5%. Bad, but it won't wipe us out. What it will do is cause a severe contraction in economic activity leading likely to a recession. Now if companies were not loaded up with debt (compliments of lax interest rate policy promulgated by both Republican and Democratic administrations), we would get through this like we do in normal recessions. However, many corporations will not be able to service the debt with a rapid decrease in economic activity. This will lead to bankruptcy; hence, the need for bailouts. 

Since mid-October, when the market broke out to new highs I have been on the sidelines. As you know, I had been short, but covered the positions (taking a loss) when the averages broke out to the upside. While I would like to say that I have profited from this collapse, I cannot, as I have remained on the sidelines. At this stage, I don't think being either short or long is the correct play for most people. While this volatility is the God send of skilled day traders, the average person would mis-trade it. I took on a gig from mid-January through mid-April. If I had not taken it, I would try to exploit the volatility very selectively. But to be fair to my employer, I could not do this effectively while working as I would have to be focused solely on the market. It thinks remain in this mode, I will post my thoughts mid to late April. 

 

Really glad you are back posting on this @DarterBlue...Bewildering series of events, but that market short in mid-Feb is starting to look pretty good 😉

[Horsefly]

54 minutes ago, DarterBlue said:

It is too early to focus on buys unless you have a horizon greater than 10 years. I have never seen  a collapse this bad in thirty one years of trading and investing. And in that time I have seen many kinds of markets both good (mostly so) and bad. Aside from what happened in 1929, I don't think this has happened in the entire history of the United States. While the immediate cause is Covid-19 (a Corona virus), I think it has a lot to do with serious structural problems in the USA. 

First, is the fact that our health care system is probably ill equipped to deal with an epidemic. Too many uninsured; too many just in time policies in place; too much of our critical health care infrastructure is imported; a population that is largely blissfully unaware of the potential consequences ... I could go on. 

Second, is the economic circumstances of the majority of working Americans. A very large percentage of American workers cannot afford to miss a paycheck. So, the tendency will be to go to work even if they are sick and suspect you have the virus. This will only increase its spread.

Third is the fact that the government, mired in debt, is ill prepared to deal with this issue fiscally. At some stage the rich in this country figured out it was better to lend to the government, even at very low to zero interest rates than to pay taxes. But this has a fundamental effect on the government's ability to address this kind of crisis. 

All is not lost. For while this virus is very communicable, it is not the Plague, or Ebola, or Typhoid or Yellow Fever. The death rate, depending on how it is handled and on demographics seems to be between .5% and 5%. Bad, but it won't wipe us out. What it will do is cause a severe contraction in economic activity leading likely to a recession. Now if companies were not loaded up with debt (compliments of lax interest rate policy promulgated by both Republican and Democratic administrations), we would get through this like we do in normal recessions. However, many corporations will not be able to service the debt with a rapid decrease in economic activity. This will lead to bankruptcy; hence, the need for bailouts. 

Since mid-October, when the market broke out to new highs I have been on the sidelines. As you know, I had been short, but covered the positions (taking a loss) when the averages broke out to the upside. While I would like to say that I have profited from this collapse, I cannot, as I have remained on the sidelines. At this stage, I don't think being either short or long is the correct play for most people. While this volatility is the God send of skilled day traders, the average person would mis-trade it. I took on a gig from mid-January through mid-April. If I had not taken it, I would try to exploit the volatility very selectively. But to be fair to my employer, I could not do this effectively while working as I would have to be focused solely on the market. It thinks remain in this mode, I will post my thoughts mid to late April. 

 

Thanks Darter for the insight, appreciate it.  But my focus was on fairly short term, quick profits focusing on corp. with limited debt, there are a few I’m tracking.  

 

[DarterBlue]

1 hour ago, Horsefly said:

Thanks Darter for the insight, appreciate it.  But my focus was on fairly short term, quick profits focusing on corp. with limited debt, there are a few I’m tracking.  

 

Then the one piece of advice I would give you is: Keep the bets small and if you must participate on the long side, buy extreme weakness. Buying the close today might be an example of that. The thing is, though, you have to be willing to book your profits. I fear that we will see lower prices before we hit bottom.

[Horsefly]

5 minutes ago, DarterBlue said:

Then the one piece of advice I would give you is: Keep the bets small and if you must participate on the long side, buy extreme weakness. Buying the close today might be an example of that. The thing is, though, you have to be willing to book your profits. I fear that we will see lower prices before we hit bottom.

Thanks for the tip 

[DarterBlue]

2 hours ago, 15yds4gibberish said:

Really glad you are back posting on this @DarterBlue...Bewildering series of events, but that market short in mid-Feb is starting to look pretty good 😉

If you are short, then you are looking very good right now. I think we have further to go to the downside. However, if you shorted at or near the top, it may be prudent to take 50% of the position off the board. One thing about shorting one cannot ignore is that the authorities will do everything possible to halt the meltdown. At some stage, probably not yet, they will come up with the means to halt the bloodletting at least for a few months.

Rallies off bottoms tend to be very, very strong, so unless you are willing to tolerate a lot of volatility and have a lot of confidence in your position you can easily get shaken out.