S&P 500 at largest deviation w/ stocks in it since 1999

godawgst

Why the S and P is up 65% from the low, and almost 10% for the year, the average stock in it is not up nearly as much.

Another example how the Faang stocks plus microsoft and salesforce are just dragging the rest along for the ride.

Last time there was this much difference was 1999 and that was the beginning of the tech bubble bursting that took the Nasdaq down from 9k to a low iirc of around 1200.

Build up cash boys, this is bubbleicious.

godawgst

Just to add on, b4 today the S and P was hitting all time highs the past 2 weeks yet only 13% of the stocks in the 500 were sitting at all time highs. Average stock in the S&P is down 25% from it's all time highs and half the stocks in the 500 have no gains in the last two years.

They don't ring bells at the top or bottom, but when Apple, Amazon, are doubling in 6 months, Microsoft going up 30 b/c of tiktok, Zoom and Salesforce going up 40% in a day, tesla up 100% since they announce a split that sound you should be hearing is chimes banging as loud as possible.

FireCohen

Dude relax and drinking the cool aid like the rest of us.

creepycoug

godawgst said:

Why the S and P is up 65% from the low, and almost 10% for the year, the average stock in it is not up nearly as much.

Another example how the Faang stocks plus microsoft and salesforce are just dragging the rest along for the ride.

Last time there was this much difference was 1999 and that was the beginning of the tech bubble bursting that took the Nasdaq down from 9k to a low iirc of around 1200.

Build up cash boys, this is bubbleicious.

Still up year-to-date. What is propping it up? Civil unrest, COVID and jobless reports don't dent it. You may be right.

Tequilla

Two schools of thought:

1) Bulls out there seeing that consolidation of power influence within large companies that specifically are well positioned for the next wave of business (notably the power of 5G and some of the learnings coming from COVID) is only going to strengthen ... these companies either take over the void of SMBs and/or provide the infrastructure to SMBs going forward (in the case of an Amazon)

2) There will be an inevitable bubble burst as the Dems go too hard too fast on policies that while they may be good in some respects has some value destructive elements in the short term (higher taxes, greater regulations, etc) and there will be some reckoning in that leading into 2022 mid-term elections

My view at this point is to continue to be smart about jumping into your 401K and getting some protections there for these companies being explosive because long term these are good plays ... but in the short term the bubble is going to burst at least a bit and it’s better to protect the cash waiting for that down turn

creepycoug

Tequilla said:

Two schools of thought:

1) Bulls out there seeing that consolidation of power influence within large companies that specifically are well positioned for the next wave of business (notably the power of 5G and some of the learnings coming from COVID) is only going to strengthen ... these companies either take over the void of SMBs and/or provide the infrastructure to SMBs going forward (in the case of an Amazon)

2) There will be an inevitable bubble burst as the Dems go too hard too fast on policies that while they may be good in some respects has some value destructive elements in the short term (higher taxes, greater regulations, etc) and there will be some reckoning in that leading into 2022 mid-term elections

My view at this point is to continue to be smart about jumping into your 401K and getting some protections there for these companies being explosive because long term these are good plays ... but in the short term the bubble is going to burst at least a bit and it’s better to protect the cash waiting for that down turn

Those both make a lot of sense to me. I lean on bubble too and think it has to happen. Do I just liquidate the 401-k to cash now and wait? Or do you still market upside? I know, I know, timing the market is a fool's errand.

Your big company influence point is an interesting one. I recommend not posting it in the Tug or the place might actually, physically, explode.

Tequilla

creepycoug said:

Tequilla said:

Two schools of thought:

1) Bulls out there seeing that consolidation of power influence within large companies that specifically are well positioned for the next wave of business (notably the power of 5G and some of the learnings coming from COVID) is only going to strengthen ... these companies either take over the void of SMBs and/or provide the infrastructure to SMBs going forward (in the case of an Amazon)

2) There will be an inevitable bubble burst as the Dems go too hard too fast on policies that while they may be good in some respects has some value destructive elements in the short term (higher taxes, greater regulations, etc) and there will be some reckoning in that leading into 2022 mid-term elections

My view at this point is to continue to be smart about jumping into your 401K and getting some protections there for these companies being explosive because long term these are good plays ... but in the short term the bubble is going to burst at least a bit and it’s better to protect the cash waiting for that down turn

Those both make a lot of sense to me. I lean on bubble too and think it has to happen. Do I just liquidate the 401-k to cash now and wait? Or do you still market upside? I know, I know, timing the market is a fool's errand.

Your big company influence point is an interesting one. I recommend not posting it in the Tug or the place might actually, physically, explode.

Given the penalties for liquidating the 401K I just personally don’t think it’s something worth touching for a number of reasons ... one of the biggest being that the fund managers are reading the tea leaves and allocating the holdings accordingly

Market upside is always a unique thought ... I always lean towards companies that are tied to strong industries for the future and leaders within those industries. I will always lean towards companies that are growing and/or looking for ways to continue to leverage their positions for the next thing. Once companies get on the train of trying to keep what they have is the day that I’m willing to take my bets elsewhere.

There will be a day when companies get too big with too much influence that they will at minimum ceremonially be broken up. I can completely see Amazon getting broken up particularly when it comes to something like AWS that doesn’t seem to really fit the consumer centric world they are in for the masses. In the end I suspect these break ups will still have some kind of working relationships and the short term push back will result in growing value as each company separately will turn into growth engines

HFNY

Do not liquidate your 401(k). Do you have an IRA or Roth IRA?

creepycoug

Sorry. Liquidiate 401-K was confusing. I meant, liquidiate my equity positions in the 401-k. I have, for example, a large balance in the S&P just because I like a portfolio to include "just the market" returns. Should I liquidate to money market and wait for the burst? Are we? that confident a bubble pop is on the way?

Said another way, have any of you guys ever been so confident that the market is overheated that you pulled out of equities entirely in your retirement accounts and sat around waiting for the market to drop?

Pitchfork51

creepycoug said:

To be clear guys, I mean liquidate my equity positions in the 401-k. I have, for example, a large balance in the S&P just because I like a portfolio to include "just the market" returns. Should I liquidate to money market and wait for the burst? Are we? that confident a bubble pop is on the way?

Said another way, have any of you guys ever been so confident that the market is overheated that you pulled out of equities entirely in your retirement accounts and sat around waiting for the market to drop?

You should get rid of it all. When the left comes into power they will view anyone with a 401k as the evil rich and destroy them. Cook it

Tequilla

I’m a big proponent that if you’re riding long term you take the ups and downs knowing in the long run that you’re a winner

YellowSnow

Tequilla said:

I’m a big proponent that if you’re riding long term you take the ups and downs knowing in the long run that you’re a winner

I just don’t stress about the 401k in the short term. I don’t need the money for 25 years.

creepycoug

YellowSnow said:

Tequilla said:

I’m a big proponent that if you’re riding long term you take the ups and downs knowing in the long run that you’re a winner

I just don’t stress about the 401k in the short term. I don’t need the money for 25 years.

Agreed. But my tim horizon is a little shorter - a lot shorter - and, not so much stress, but opportunity. I was just wondering if anybody had ever put their money where their mouth is, litterally, and go all-in on cash and other liquid short-terms while waiting for the big purge. I've always been too chicken shit to pull the trigger because of FOMO. So I've riden every waive since 1996 when I started working.

godawgst

creepycoug said:

Sorry. Liquidiate 401-K was confusing. I meant, liquidiate my equity positions in the 401-k. I have, for example, a large balance in the S&P just because I like a portfolio to include "just the market" returns. Should I liquidate to money market and wait for the burst? Are we? that confident a bubble pop is on the way?

Said another way, have any of you guys ever been so confident that the market is overheated that you pulled out of equities entirely in your retirement accounts and sat around waiting for the market to drop?

Every year I look at my portfolio and 19 years ago I put a small position of money into the S & P 500 (SPY) Via vanguard and reinvested the dividends. In that time frame thru 9/11. 2008/09 financial crisis, 2020 free fall in Feb-March, etc it has returned 420% and I did nothing with it.

95% + off all managed funds can't even being to sniff that return.

Yet I have other stocks that have double or tripled that, and if you bought Amazon, MSFT, Apple, FB, Tesla, etc those returns have produced generational wealth if you put enough in and just left it alone.

Guess this goes back to being a passive versus active investor. If I could give someone today just starting out what to do, it would be plow 90% of your retirement/401 plan money into that index fund (and please please please reinvest the dividends), 10% into whatever else you want to do, and in 40 years you will be a happy camper.

creepycoug

godawgst said:

creepycoug said:

Sorry. Liquidiate 401-K was confusing. I meant, liquidiate my equity positions in the 401-k. I have, for example, a large balance in the S&P just because I like a portfolio to include "just the market" returns. Should I liquidate to money market and wait for the burst? Are we? that confident a bubble pop is on the way?

Said another way, have any of you guys ever been so confident that the market is overheated that you pulled out of equities entirely in your retirement accounts and sat around waiting for the market to drop?

Every year I look at my portfolio and 19 years ago I put a small position of money into the S & P 500 (SPY) Via vanguard and reinvested the dividends. In that time frame thru 9/11. 2008/09 financial crisis, 2020 free fall in Feb-March, etc it has returned 420% and I did nothing with it.

95% + off all managed funds can't even being to sniff that return.

Yet I have other stocks that have double or tripled that, and if you bought Amazon, MSFT, Apple, FB, Tesla, etc those returns have produced generational wealth if you put enough in and just left it alone.

Guess this goes back to being a passive versus active investor. If I could give someone today just starting out what to do, it would be plow 90% of your retirement/401 plan money into that index fund (and please please please reinvest the dividends), 10% into whatever else you want to do, and in 40 years you will be a happy camper.

I like that. Sage advice. So much of this is psychology, and psychologically, I could never be the guy trying to pick 'em all day with the whole portfolio. Too much on the line and too much pressure, even if I were good at it; and I'm not. Literally the only individual stocks I ever fucked with were tech stocks after the bubble popped in March 2000. I didn't have a lot of cash, but I was buying Cisco at 12, 14, 18, shit like that. That's done well and I've held it just so I can say I have some stocks. I have a TON of company stock that is a good yield play and thereby have been breaking all the rules about diversification. But, I know the company and the business, so there's that.

The time has come to break up that party - stock is really up - and my plan with the proceeds is to spread out into other dividend payers. There's a good video of Kevin - Mr. Wonderful - on youtube about dividend stocks. That kind of play is more attuned to my personality. My bargain with the universe was, I don't need to get there tomorrow and am willing to wait. But in exchange for the Tony Gwyn slap swings, I have to have assurance that I'll get there.

HFNY

Don't fight the Fed, it's so sad but so true. The USA really needs to run an account surplus again though no one has will.

International Value isn't sexy right now but it's a pretty good way to put cash to work.

creepycoug

HFNY said:

Don't fight the Fed, it's so sad but so true. The USA really needs to run an account surplus again though no one has will.

International Value isn't sexy right now but it's a pretty good way to put cash to work.

I've got some exposure to International in my 401-k, though I don't know if it's all value. I believe there is some growth and thus a diversified fund.