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02-25-2020, 01:26 PM
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Join Date: Jul 2009
Location: GP AB
Posts: 16,754
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Financial Markets Meltdown
Well, it was bound to happen, the coronavirus is just a convenient trigger....looks like the Dow Jones has shed roughly 1700-1800 points since opening bell yesterday. TSX also down similar. Some folks gonna take a beating. And, as always, some folks are going to get rich. I can't help thinking how make-believe it all seems sometimes, as billions or trillions of dollars 'evaporate'...Will be interesting to see where it lands.
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'Once the monkeys learn they can vote themselves a banana, they'll never climb another tree.'. Robert Heinlein
'You can accomplish a lot more with a kind word and a gun, than with a kind word alone.' Al Capone
Last edited by Twisted Canuck; 06-22-2022 at 10:13 PM.
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02-25-2020, 01:39 PM
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Join Date: May 2007
Location: Red Deer
Posts: 1,569
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We were at all time high for quite a while.
Most people took profits.
Billions evaporate, that were not really there to begin with.
Of course it will over correct and there will be buying opportunities if you can pick the bottom.
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02-25-2020, 01:44 PM
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Join Date: Oct 2008
Location: In the shadow of the Valhalla Mountains, BC .
Posts: 9,183
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I've been waiting for something like this to happen for a long time now (market meltdown).
If this keeps up, it will soon be a Great Time to 'Buy' ❗ 
Selkirk
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02-25-2020, 01:45 PM
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Join Date: Nov 2008
Posts: 11,621
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I'm about 65% cash, now to find the bottom.
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“One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.”
Thomas Sowell
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02-25-2020, 01:46 PM
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Join Date: Oct 2016
Location: Edmonton area
Posts: 1,469
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Who told you guys to bail at 29,500? Damn glad I did
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Wherever you go, there you are
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02-25-2020, 01:49 PM
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Join Date: May 2007
Location: Calgary
Posts: 7,553
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My investments are for long term, so I'm trying not to even look at this news.
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02-25-2020, 01:53 PM
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Join Date: Oct 2008
Location: In the shadow of the Valhalla Mountains, BC .
Posts: 9,183
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Market Timing rarely works
Quote:
Originally Posted by pikergolf
I'm about 65% cash, now to find the bottom.
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By the time you "find the bottom", you'll only see it in the rearview mirror.
'Dollar Cost Averaging' is the better way to go.
Selkirk
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02-25-2020, 01:54 PM
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Moderator
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Join Date: Feb 2015
Posts: 8,099
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I've been wanting to buy Ford for quite awhile now, curious how low it will go before it bounces back.
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02-25-2020, 02:01 PM
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Join Date: Jul 2009
Location: GP AB
Posts: 16,754
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Quote:
Originally Posted by Scott N
My investments are for long term, so I'm trying not to even look at this news.
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Exactly. I'm not sweating it. My portfolio is diverse large cap blue chip dividend paying. Those companies aren't going anywhere. I could care less what the share price drops or climbs to any given day. As long as I'm not selling, I'm not losing. Just the dividend income is enough to float part of my boat in a pinch. All gets re-invested anyway.
When the markets crashed in 08 and everyone was getting killed, returns were still over 7%. Conservative, safe and boring.
__________________
'Once the monkeys learn they can vote themselves a banana, they'll never climb another tree.'. Robert Heinlein
'You can accomplish a lot more with a kind word and a gun, than with a kind word alone.' Al Capone
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02-25-2020, 02:49 PM
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Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,855
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I know Justfishin has all his stuff in tax free accounts like RRSP and TFSA so getting in and out may make sense if he can manage to get back in somewhere near the bottom. For the majority of the long term buy and hold investors the tax consequences means getting in and out doesn't work.
Let me see if numbers can make the case more simply.
If I am holding 100,000 in ENB stock and my cost on that stock is 30,000 ($16.50 cost on what is now a $55 stock, that is also yielding me 19.7% dividend on my original investment, paid quarterly), I pay the government $17,500 in tax on the gain. That is a 17.5% drop in capital and I also lose the 20% dividend. Dividend income, because of it preferred tax treatment is a very effective form of earning money. A couple can basically earn $84,000 a year tax free if all their income comes from dividends. Not something you want to give up.
Even if ENB drops 20% from today's price, I will basically have broke even with having sold out and paid the tax. The problem with selling out and paying the tax is, I now only have $85,000 to buy back in with. No matter how you cut it, selling out your gains costs you a min of 25% of the gain, and that is a permanent reduction in capital. It also means that when you buy back in at $43, you will have another taxable position on that gain as the stock climbs back to $55, so the whole theory of avoiding downdrafts does not bear out unless everything you are transacting is in tax free accounts.
I do however have some cash on the side to deploy as some top quality stocks are going to be a deal as this market drop keeps up.
Last edited by Dean2; 02-25-2020 at 03:13 PM.
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02-25-2020, 02:55 PM
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Join Date: Mar 2010
Location: Vulcan County
Posts: 1,402
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Quote:
Originally Posted by Scott N
My investments are for long term, so I'm trying not to even look at this news.
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x2 but I still do anyway
Ouch! lost lots since last week & it is not hi risk stuff
Orv
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02-25-2020, 03:12 PM
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Join Date: May 2010
Location: edmonton
Posts: 3,920
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I think a lot of companys are going to send out new earning estimates cuts ... Apple. MasterCard Carnival and canadagoose are just to name a few .. as this viruses hit China that manufacture the goods and disruption to supply chain , the shut down of airlines and travel get hit again ... carnaval cruise Line is going to get hit hard. Due to the bad rep from the diamond princess, the Middle East and Europe are staying to get hit as well. And not to mention it might have already made it to the USA . Expect this to the perfect storm/ black swan . Sitting at 80% cash and 20% gold stocks
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02-25-2020, 03:14 PM
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Join Date: Dec 2013
Location: In your personal space.
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Lots of good buys out there right now. Time to burn some dry powder.
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When in doubt, use full throttle. It may not improve the situation, but it will end the suspense.
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02-25-2020, 03:15 PM
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Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,855
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Quote:
Originally Posted by Bergerboy
Lots of good buys out there right now. Time to burn some dry powder.
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I would not be in a rush unless you are putting in buy orders with limit prices 15% below current levels.
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02-25-2020, 03:18 PM
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Join Date: May 2010
Location: edmonton
Posts: 3,920
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Quote:
Originally Posted by Dean2
I would not be in a rush unless you are putting in buy orders with limit prices 15% below current levels.
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Long term investor. Don’t have to worry cause. The market tends to trend up as always . At lease get in on some dividend payments .
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02-25-2020, 03:33 PM
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Join Date: Oct 2008
Location: In the shadow of the Valhalla Mountains, BC .
Posts: 9,183
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... Wow 👀
Quote:
Originally Posted by Bergerboy
Lots of good buys out there right now. Time to burn some dry powder.
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If this meltdown continues, it could be 'Buying Time' sooner than I thought ❗
Reuters News link 👉 https://ca.reuters.com/article/busin.../idCAKBN20J2MP
Selkirk
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02-25-2020, 04:01 PM
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Join Date: May 2007
Location: South West Alberta
Posts: 859
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Picking up up a few deals now cheaper than I bought in the past. We are not at the bottom yet. Lots of cash is a good thing now.
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02-25-2020, 04:18 PM
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Join Date: Jul 2009
Location: GP AB
Posts: 16,754
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Quote:
Originally Posted by Dean2
I know Justfishin has all his stuff in tax free accounts like RRSP and TFSA so getting in and out may make sense if he can manage to get back in somewhere near the bottom. For the majority of the long term buy and hold investors the tax consequences means getting in and out doesn't work.
Let me see if numbers can make the case more simply.
If I am holding 100,000 in ENB stock and my cost on that stock is 30,000 ($16.50 cost on what is now a $55 stock, that is also yielding me 19.7% dividend on my original investment, paid quarterly), I pay the government $17,500 in tax on the gain. That is a 17.5% drop in capital and I also lose the 20% dividend. Dividend income, because of it preferred tax treatment is a very effective form of earning money. A couple can basically earn $84,000 a year tax free if all their income comes from dividends. Not something you want to give up.
Even if ENB drops 20% from today's price, I will basically have broke even with having sold out and paid the tax. The problem with selling out and paying the tax is, I now only have $85,000 to buy back in with. No matter how you cut it, selling out your gains costs you a min of 25% of the gain, and that is a permanent reduction in capital. It also means that when you buy back in at $43, you will have another taxable position on that gain as the stock climbs back to $55, so the whole theory of avoiding downdrafts does not bear out unless everything you are transacting is in tax free accounts.
I do however have some cash on the side to deploy as some top quality stocks are going to be a deal as this market drop keeps up.
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Excellent analysis. I had somebody explaining to me how stupid I was to hold, and not panic sell. Of course the person who was telling me I was stupid has a net worth of a 2001 dodge ram with 200,000 km on it, and a tool pouch on the passenger seat....
Anyway. Ride it out, take the dividends, max out the TFSA, and wait for the smoke to clear. That's my personal position.
__________________
'Once the monkeys learn they can vote themselves a banana, they'll never climb another tree.'. Robert Heinlein
'You can accomplish a lot more with a kind word and a gun, than with a kind word alone.' Al Capone
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02-25-2020, 04:19 PM
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Join Date: Oct 2010
Location: central Alberta
Posts: 12,630
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Just reading this thread... an observation... no point, just and observation.
On any given day one person is selling their stocks and another person is buying their stocks. The odd thing is that both people think they are savvy and intuitive investors.
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This country was started by voyagers whose young lives were swept away by the currents of the rivers for ten cents a day... just for the vanity of the European's beaver hats. ~ Red Bullets
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It is when you walk alone in nature that you discover your strengths and weaknesses. ~ Red Bullets
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02-25-2020, 04:19 PM
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Join Date: Oct 2016
Location: Edmonton area
Posts: 1,469
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This aint over yet
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Wherever you go, there you are
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02-25-2020, 04:22 PM
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Join Date: Oct 2007
Posts: 2,361
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I think most here are grossly underestimating the impact of this virus event. Good luck to those who stayed in.
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02-25-2020, 04:46 PM
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Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,855
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Quote:
Originally Posted by The Elkster
I think most here are grossly underestimating the impact of this virus event. Good luck to those who stayed in.
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So to be clear. For most longterm buy and hold investors, the market has to come off 20 percent and in many cases up to 50 percent, as in drop to half where it is now, before it would make sense to sell, pay the tax and sit on the sidelines till you are sure the market has bottomed. The larger your accumulated gains the more the market needs to drop before you break even, let alone end up ahead by selling out. Each person needs to do a detailed analysis, specific to their individual situation. You need to know exactly how far your individual stocks will have to drop for it to make sense to sell. Even of the market comes off 40% it doesn't mean the stocks u are holding will do that bad or they could do far worse.
To just advise to sell out because things are gong to be bad is just way too simplistic and if you investment advisor is giving u that kind of advice then you need to fire him.
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02-25-2020, 04:47 PM
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Join Date: Jul 2009
Location: GP AB
Posts: 16,754
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Quote:
Originally Posted by Red Bullets
Just reading this thread... an observation... no point, just and observation.
On any given day one person is selling their stocks and another person is buying their stocks. The odd thing is that both people think they are savvy and intuitive investors.
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Absolutely true. Well, sort of. I don't think I'm that savvy. But I think the people who manage my portfolio are very savvy.
Quote:
Originally Posted by The Elkster
I think most here are grossly underestimating the impact of this virus event. Good luck to those who stayed in.
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Luck? Meh.....it the virus comes to kill us all, what difference does it make? If it doesn't...what difference does it make? Markets are gonna market. If it takes 2 or 3 or 5 years to make a "comeback" ....I will have time, or I won't. The only certainty in life is death, and taxes, as has been stated ad nuaseum.....
__________________
'Once the monkeys learn they can vote themselves a banana, they'll never climb another tree.'. Robert Heinlein
'You can accomplish a lot more with a kind word and a gun, than with a kind word alone.' Al Capone
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02-25-2020, 04:47 PM
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Join Date: Sep 2007
Location: Strathcona County
Posts: 1,917
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Yawn. What Meltdown. Wake me up when the markets are all down 25%. Maybe then I can get excited.
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02-25-2020, 05:00 PM
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Join Date: Dec 2011
Posts: 3,047
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Quote:
Originally Posted by Twisted Canuck
Absolutely true. Well, sort of. I don't think I'm that savvy. But I think the people who manage my portfolio are very savvy.
Luck? Meh.....it the virus comes to kill us all, what difference does it make? If it doesn't...what difference does it make? Markets are gonna market. If it takes 2 or 3 or 5 years to make a "comeback" ....I will have time, or I won't. The only certainty in life is death, and taxes, as has been stated ad nuaseum.....
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x2 Very well put.
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02-25-2020, 05:01 PM
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Join Date: Oct 2007
Posts: 2,361
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Quote:
Originally Posted by Dean2
So to be clear. For most longterm buy and hold investors, the market has to come off 20 percent and in many cases up to 50 percent, as in drop to half where it is now, before it would make sense to sell, pay the tax and sit on the sidelines till you are sure the market has bottomed. The larger your accumulated gains the more the market needs to drop before you break even, let alone end up ahead by selling out. Each person needs to do a detailed analysis, specific to their individual situation. You need to know exactly how far your individual stocks will have to drop for it to make sense to sell. Even of the market comes off 40% it doesn't mean the stocks u are holding will do that bad or they could do far worse.
To just advise to sell out because things are gong to be bad is just way too simplistic and if you investment advisor is giving u that kind of advice then you need to fire him.
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Every case is different and I don't advise anyone to do anything without carefully considering their own situation. I'm just warning that this is not likely to be a normal correction. I'd be leery about buying the dip. Preserving cash is not a bad thing right now. Penny saved is a penny earned.
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02-25-2020, 05:07 PM
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Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,855
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Quote:
Originally Posted by The Elkster
Every case is different and I don't advise anyone to do anything without carefully considering their own situation. I'm just warning that this is not likely to be a normal correction. I'd be leery about buying the dip. Preserving cash is not a bad thing right now. Penny saved is a penny earned.
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Very prudent and fair comment. If it gets really bad, some cash in the mattress might be quite handy too.
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02-25-2020, 05:25 PM
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Join Date: Jul 2009
Location: GP AB
Posts: 16,754
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Quote:
Originally Posted by Dean2
Very prudent and fair comment. If it gets really bad, some cash in the mattress might be quite handy too.
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If it gets as bad as all that, I'm gonna say tinned goods, toilet paper, lots of ammo, and some gold and silver is where it is at. And some good wine and whisky of course.
I am covered on all counts.... 
__________________
'Once the monkeys learn they can vote themselves a banana, they'll never climb another tree.'. Robert Heinlein
'You can accomplish a lot more with a kind word and a gun, than with a kind word alone.' Al Capone
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02-25-2020, 05:55 PM
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Join Date: Jan 2014
Location: Edmonton
Posts: 6,179
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You know one of the major rules for the market? DO NOT TRY TO TIME THE MARKET, it is simply impossible. You may be correct on one end but you will miss on another. If your timing is 2-10 years- just sit tight.
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02-25-2020, 06:03 PM
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Join Date: Jun 2014
Location: Canmore
Posts: 2,150
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Quote:
Originally Posted by Justfishin73
This aint over yet
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A very big storm($$) is looming and it will be a long hard ride.
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Woke up with a pulse, best day ever
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