The Investing Year Ahead

[Yellowtail]

On 6/16/2024 at 8:20 AM, Mike Lister said:

As an afterthought to the above, I'm now carrying 10% of Money Market funds and a further 20% of bond funds, as downside protection, those are steps I never felt I needed three of five years ago. I've also reduced my mid cap holdings to 15% and small caps to 5%, a move aimed at greater certainty. And whilst the investing world seems to think that the USA is the only game in town globally, at current price levels, I refuse to go over 45% of equities invested, even if that means holding under or non performing assets. 

Why do you think that as an aggregate, small caps would be less certain than large caps? 

 

One could argue the left in the US will continue to rachet up the stifling of innovation, but unless you support that I would think small caps just as certain. 

 

 

[Mike Lister]

52 minutes ago, Yellowtail said:

Why do you think that as an aggregate, small caps would be less certain than large caps? 

 

One could argue the left in the US will continue to rachet up the stifling of innovation, but unless you support that I would think small caps just as certain. 

 

 

Small caps are renowned for volatility and markets this year have been excessively volatile. Also, small caps typically rise in advance of their larger counterparts, just before the markets rise overall. The chances of a sustained upwards increase in markets in extremely unlikely, given the US markets are already 20% over priced. Whilst the investment banks have increased the upper limit of the S&P this year to as much as 6k, their year end figures are as a low as 4,800. The question now is not whether or not markets will correct this year but whether they will crash or correct.

[Yellowtail]

45 minutes ago, Mike Lister said:

Small caps are renowned for volatility and markets this year have been excessively volatile. Also, small caps typically rise in advance of their larger counterparts, just before the markets rise overall. The chances of a sustained upwards increase in markets in extremely unlikely, given the US markets are already 20% over priced. Whilst the investment banks have increased the upper limit of the S&P this year to as much as 6k, their year end figures are as a low as 4,800. The question now is not whether or not markets will correct this year but whether they will crash or correct.

So based on past history. 

[Mike Lister]

18 minutes ago, Yellowtail said:

So based on past history. 

Plus my magical crystal ball from the planet nebula that I found on a beach at Whitby in 1964, its never been wrong.

[Yellowtail]

11 minutes ago, Mike Lister said:

Plus my magical crystal ball from the planet nebula that I found on a beach at Whitby in 1964, its never been wrong.

Wrong, it found you....

[KhunHeineken]

On 6/12/2024 at 7:06 AM, Yellowtail said:

And yes, you have invested in Thailand as well. 

Nope. 

 

I rent and pay as I go. 

 

I have nothing I can't easily walk away from and head straight to the airport, within the hour. 

 

On 6/12/2024 at 7:06 AM, Yellowtail said:

My position is that there is nothing terribly wrong with investing in Thailand.

That doesn't make it a sound investment though, does it? 

 

On 6/12/2024 at 7:06 AM, Yellowtail said:

I think manufacturing in Thailand is a generally a good investment if you know the product and market, the company we started here in 2020 i

And you said you are not invested in Thailand. 

 

On 6/12/2024 at 7:06 AM, Yellowtail said:

I have not advocated anyone buy property here, but both of the properties we have turned out okay.

In what way did they turn out "ok?" 

 

 

On 6/12/2024 at 7:06 AM, Yellowtail said:

Again, given your fear of risk, you are better off sticking to fixed accounts in your home country that have treated you so well. 

No fear of risk here.  I take somewhat of a risk in my home country, a place where I am a citizen, and I have rights.  The right to reside in the country being the main one. 

 

You could 5 Thai companies, a wife, 3 houses, 4 kids, 2 cars, 3 motorbikes, a bar, a shop, a farm, but you have no right to actually remain living in Thailand, past a visa. 

 

You only see the risk of return on investment.  I see that risk, plus a lot more. 

[KhunHeineken]

On 6/12/2024 at 2:02 PM, swissie said:

As mentioned, work permit issues arose.

Surely such a great "investment" made the paperwork associated with getting a work permit worth it. 

[KhunHeineken]

On 6/12/2024 at 2:07 PM, swissie said:

Has said condo in Pattaya been sold?  There are thousands of properties for sale in Pattaya.  There's an oversupply of property. Answer: Now the Chinese provide a "price floor".

What about all the bar closures, before and since covid?  If bars are so profitable, why so many closures? Answer: I said "in Pattayas heydays". Long gone.

Are you suggesting buying a condo in Pattaya is a good investment? Answer: I said "those that bought 20 years ago".

Are you suggesting buying a bar in Pattaya is a good investment? Answer: See comment above.

We are not discussing 20 year afgo, are we? 

 

Would buying a condo no be a good investmnet?  Yes, or no?  Simple question. 

[Mike Lister]

19 hours ago, Yellowtail said:

So based on past history. 

Everything that happens today has happened in the past, so using the old, based on history line, doesn;'t really wash. The realities are that the markets function is specific ways. Spending by the population is first noticed in small companies, because they are smaller the spending shows up more quickly. Ditto when the population ceases to spend, the small caps are the ones who feel it first and where it shows up soonest. Large caps and giants need momentum and greater levels of spending that come with sustained economic improvements, that why small caps are so volatile.

 

The same is true of index rises and falls. Of course there is a historic pattern , there's a historic pattern to everything. But pattern in itself is not the cause of any future prediction, the predictions for the future is generated by understanding what causes the pattern in the first place!

[Yellowtail]

1 hour ago, Mike Lister said:

Everything that happens today has happened in the past, so using the old, based on history line, doesn;'t really wash. The realities are that the markets function is specific ways. Spending by the population is first noticed in small companies, because they are smaller the spending shows up more quickly. Ditto when the population ceases to spend, the small caps are the ones who feel it first and where it shows up soonest. Large caps and giants need momentum and greater levels of spending that come with sustained economic improvements, that why small caps are so volatile.

 

The same is true of index rises and falls. Of course there is a historic pattern , there's a historic pattern to everything. But pattern in itself is not the cause of any future prediction, the predictions for the future is generated by understanding what causes the pattern in the first place!

I was kidding. I think you took me to task earlier in the thread when I commented on my use of "past history", but I could be wrong, first time for everything...

 

 

 

 

[Mike Lister]

Just now, Yellowtail said:

I was kidding. I think you took me to task earlier in the thread when I commented on my use of "past history", but I could be wrong, first time for everything...

 

 

 

 

So was I ....:)))

[Mike Lister]

3 hours ago, Yellowtail said:

I was kidding. I think you took me to task earlier in the thread when I commented on my use of "past history", but I could be wrong, first time for everything...

 

 

 

 

A decent read:

 

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/myo-chart-images-2024/2024 Mid-Year Investment Outlook.pdf

[Yellowtail]

14 hours ago, KhunHeineken said:

Nope. 

 

I rent and pay as I go. 

 

I have nothing I can't easily walk away from and head straight to the airport, within the hour. 

Previously you said you invested very little in Thailand, now you are claiming you have nothing invested in Thailand. Were you telling the truth then, or now? 

14 hours ago, KhunHeineken said:

That doesn't make it a sound investment though, does it? 

It doesn't make what a sound investment? There are good and bad investments everywhere, including Thailand. 

14 hours ago, KhunHeineken said:

And you said you are not invested in Thailand. 

I never said I was not invested in Thailand. You are either confused, or being intentionally untruthful, which is it? 

 

14 hours ago, KhunHeineken said:

In what way did they turn out "ok?" 

In that they ended up being profitable. One very much so. 

14 hours ago, KhunHeineken said:

No fear of risk here.  I take somewhat of a risk in my home country, a place where I am a citizen, and I have rights.  The right to reside in the country being the main one. 

You claim you have no fear of risk, but you seem terrified of the risk of Thailand kicking you out at any moment. 

14 hours ago, KhunHeineken said:

You could 5 Thai companies, a wife, 3 houses, 4 kids, 2 cars, 3 motorbikes, a bar, a shop, a farm, but you have no right to actually remain living in Thailand, past a visa. 

You keep saying that, but exactly what difference does it make? I was somewhere else before I got here, and somewhere else before that. I bet I could be to the airport faster than you could if I had to go. 

14 hours ago, KhunHeineken said:

You only see the risk of return on investment.  I see that risk, plus a lot more. 

You're the one moaning about risk, not me. The most valuable thing I have to invest is my time, and I care about how I get to spend that than I do bit of money here and there. 

 

 

[Yellowtail]

14 hours ago, KhunHeineken said:

We are not discussing 20 year afgo, are we? 

 

Would buying a condo no be a good investmnet?  Yes, or no?  Simple question. 

It's not a simple question, it's a silly question. Asking if buying a condo is a good investment, is like asking if renting is a good investment.

 

To be clear, renting is an investment. 

 

And a lot depends on how you define "a good investment", and what your situation is. There are condos today that will turn out to be great investments, condos that will turn out to be good investments, and condos that turn out to be bad investments.

 

 

 

 

[Sir Dude]

I haven't read the entire thread, just some of it, but having a good view of what's going on in the world and understand supply and demand is obviously crucial. I suppose the clear message at the moment is that the world is becoming more dangerous and chaotic all the time currently, so if you are not an "ethical investor" and want to go for stocks/shares, then the defense sector looks like a good bet (the likes of Lockheed Martin/Raytheon/Northrop Grumman etc.)... although it could be argued that this boat has already sailed, I don't see a new era of enjoying the peace dividend will happen anytime soon like after the Cold War and fall of the USSR.

[swissie]

On 6/21/2024 at 6:21 PM, KhunHeineken said:

Surely such a great "investment" made the paperwork associated with getting a work permit worth it. 

It was a small investement, keeping me busy and yielding 35% annually for almost 5 years. Believe it or not. I am not going to elaborate any further, concerning "Thai Work permits". If you are on the "radar" of the local officialdom, you are on the radar, rectifiable only by exchanging brown enveloppes. I refused to be pert of this game.

[swissie]

On 6/21/2024 at 6:23 PM, KhunHeineken said:

We are not discussing 20 year afgo, are we? 

 

Would buying a condo no be a good investmnet?  Yes, or no?  Simple question. 

I never said that buying a condo or a bar today is a good investment. Unless the Thai Government realises that an increasing number of wealthy Chinese Nationals are in desperate need to "shelter their money". Adjusting legislation accordingly, opening certain "floodgates". In such a case there might evolve a drastic undersupply of condos in Pattaya.

[swissie]

Just received an alarming phone call from my clairvoyant Romanian gypsie lady this morning: "Institutonal Investors are only sitting on 4% of cash". They are fully invested, where does the fuel come from to support the party"?

Got me thingking, as all industrial commodities have failed to rally after a significant decline before. The worst "bull trap" in years. Those commodities hovering slightly above major support lines, if broken on the downside, stock markets will not remain "unaffected".

[KhunHeineken]

On 6/23/2024 at 5:03 PM, swissie said:

Just received an alarming phone call from my clairvoyant Romanian gypsie lady this morning: "Institutonal Investors are only sitting on 4% of cash". They are fully invested, where does the fuel come from to support the party"?

Got me thingking, as all industrial commodities have failed to rally after a significant decline before. The worst "bull trap" in years. Those commodities hovering slightly above major support lines, if broken on the downside, stock markets will not remain "unaffected".

Pig farms in Thailand are a safe haven during these times of instability, if you can get a work permit. 

[KhunHeineken]

On 6/23/2024 at 4:20 PM, swissie said:

I never said that buying a condo or a bar today is a good investment.

But pig farms are. 

[KhunHeineken]

On 6/23/2024 at 4:00 PM, swissie said:

keeping me busy and yielding 35% annually

35% of not much is, well, not much.  I suppose if it pays for a box of Leo a week then that can be considered profit. 

[Mike Lister]

It's time for me to dial back on US equities, valuations don't support the current levels so I've offloaded any above average momentum funds and halved my global tracker. The chorus from the strategists at the major investment banks is getting louder, utilities, health care and telecoms it is.

[swissie]

2 hours ago, Mike Lister said:

It's time for me to dial back on US equities, valuations don't support the current levels so I've offloaded any above average momentum funds and halved my global tracker. The chorus from the strategists at the major investment banks is getting louder, utilities, health care and telecoms it is.

"The Bull is well supported by earnings" I hear. Major players are down to 4% cash. Where does the "fuel" come from to keep the party going?
Mostly overlooked: The Chinese "Locomotive" is having serious problems, with global ramifications

[Mike Lister]

8 hours ago, swissie said:

"The Bull is well supported by earnings" I hear. Major players are down to 4% cash. Where does the "fuel" come from to keep the party going?
Mostly overlooked: The Chinese "Locomotive" is having serious problems, with global ramifications

I read it is well supported also, at present levels, but the potential to increase them in a down trend economy is next to zero. IF there's a perfect goldilocks landing of the economy, from hereon out, great, but when in your life have you ever known future economics to be perfect and would you bet on the future ever being so! I would not.

 

True that a political upset in the US could change things; true that what happens in China could change things also; but there are too many large scale variables at present and most are all US centric or related, the US being the only market that is firing on all cylinders. Having all your eggs in one basket, that has a broken handle, is not a reasonable risk.

 

Most global trackers are market capital weighted, in a market where the ten largest stocks represent 30% of the index weight. That's not an index or market tracker, that's a fulcrum! So it is with many funds where market momentum distorts fund performance. Holding global trackers (or high momentum funds) might be reasonable in an up or early bull market but not today.

 

 

 

 

[jas007]

The S&P?  
 

I used to trade in and out of stocks, and still do, on occasion, when I’m bored, but I’ve never fooled around with the S&P, either as a trading vehicle or as a long term holding.  But if I had to guess, I can list a few pros and cons.

 

Pros:

 

Despite all the naysayers and despite all the gloom and doom people, the overall direction for the market will be higher. Money will continue to flow into stocks and out of bonds as central banks continue to inflate the currencies.  They don’t have much choice.

 

Fear of missing out.  Fund managers don’t like to look stupid, and many of them are beginning to look pretty stupid right now.  The expected crash never materialized, and as they watched from the sidelines, many stocks kept rising. Those people will reenter the market soon enough. 
 

The geopolitical situation is unstable right now.  If the conflicts around the world escalate, so does the possibility of a major war. That would stoke the economy, for sure. Increased defense spending.

 

The AI revolution will be world changing.  Increasing productivity while at the same time acting as a deflationary force.  Big business will profit. Workers will suffer. The fallout from that? More of what we’ve seen since the introduction of the computer, but at a faster pace.  Society will be slow to adapt, over the near term. 
 

Con’s:

 

A few big cap stocks figure heavily in the S&P.  A mass rotation out of those socks would mean trouble. Trouble for the big banks, for pension funds, and for the broader market.
 

Some see the long term economic outlook as one of deflation. Too much capacity.  
 

Regardless of the outcome of the U.S. election, people will overreact. Remember when Brexit finally passed?  The markets went crazy for a day or two. The same will happen after the US election.  That could spark a larger panic.  
 

The possibility of WW III.  Bad for the market, for sure. Actually, bad for the human race.  If there was ever a full scale nuclear exchange, you can forget about stock markets.  The grid will be down. Billions of people will be dead. Anyway, it’s nothing to worry about.  If it happens and if you survive, you won’t need the S&P.  You’ll probably be looking for scraps of food and clean water. 

[Mike Lister]

3 minutes ago, jas007 said:

The S&P?  
 

I used to trade in and out of stocks, and still do, on occasion, when I’m bored, but I’ve never fooled around with the S&P, either as a trading vehicle or as a long term holding.  But if I had to guess, I can list a few pros and cons.

 

Pros:

 

Despite all the naysayers and despite all the gloom and doom people, the overall direction for the market will be higher. Money will continue to flow into stocks and out of bonds as central banks continue to inflate the currencies.  They don’t have much choice.

 

Fear of missing out.  Fund managers don’t like to look stupid, and many of them are beginning to look pretty stupid right now.  The expected crash never materialized, and as they watched from the sidelines, many stocks kept rising. Those people will reenter the market soon enough. 
 

The geopolitical situation is unstable right now.  If the conflicts around the world escalate, so does the possibility of a major war. That would stoke the economy, for sure. Increased defense spending.

 

The AI revolution will be world changing.  Increasing productivity while at the same time acting as a deflationary force.  Big business will profit. Workers will suffer. The fallout from that? More of what we’ve seen since the introduction of the computer, but at a faster pace.  Society will be slow to adapt, over the near term. 
 

Con’s:

 

A few big cap stocks figure heavily in the S&P.  A mass rotation out of those socks would mean trouble. Trouble for the big banks, for pension funds, and for the broader market.
 

Some see the long term economic outlook as one of deflation. Too much capacity.  
 

Regardless of the outcome of the U.S. election, people will overreact. Remember when Brexit finally passed?  The markets went crazy for a day or two. The same will happen after the US election.  That could spark a larger panic.  
 

The possibility of WW III.  Bad for the market, for sure. Actually, bad for the human race.  If there was ever a full scale nuclear exchange, you can forget about stock markets.  The grid will be down. Billions of people will be dead. Anyway, it’s nothing to worry about.  If it happens and if you survive, you won’t need the S&P.  You’ll probably be looking for scraps of food and clean water. 

Thanks, you cheered me right up.

[jas007]

On 6/29/2024 at 5:46 PM, Mike Lister said:

It's time for me to dial back on US equities, valuations don't support the current levels so I've offloaded any above average momentum funds and halved my global tracker. The chorus from the strategists at the major investment banks is getting louder, utilities, health care and telecoms it is.

Utilities and telecoms I can sort of see as defensive dividend plays. Some health care stocks may be a little overvalued, though.  LLY, for example.  A few years back I bought 1000 shares of it one day and was just going to let it ride.  I think I paid around $120 a share. Something like that.  Anyway it started becoming way too volatile for me, so I sold it.  Of course not too long after it started its climb to its current level. What is it now, around $900? That seems nuts to me. Other drug companies haven’t fared too well and have already dropped considerably.  Maybe some of the big hospital corporations?  Or just find a basket of health care stocks.

[Mike Lister]

2 minutes ago, jas007 said:

Utilities and telecoms I can sort of see as defensive dividend plays. Some health care stocks may be a little overvalued, though.  LLY, for example.  A few years back I bought 1000 shares of it one day and was just going to let it ride.  I think I paid around $120 a share. Something like that.  Anyway it started becoming way too volatile for me, so I sold it.  Of course not too long after it started its climb to its current level. What is it now, around $900? That seems nuts to me. Other drug companies haven’t fared too well and have already dropped considerably.  Maybe some of the big hospital corporations?  Or just find a basket of health care stocks.

I'm most likely just to ratchet down my risk inm stages over the next few weeks, I've already dialed back some higher momentum funds that have done extremely well but that party is now over. US markets are currently 39% of my total equities but only 24% of my total portfolio.

[khlongtoey]

what does this even mean "The risk of a credit bubble weighs heavily, Blackrock exited US markets completely as a result"

 

what is going to happen, no one knows

what factors will influence what happens? is pretty pointless questions , see above

 

how to invest my money?  your money?  -- then you would need to sketch out your situation and plans ; but then you didn't ask that.

 

I'm waiting for the crypto offer to pop up...

[Mike Lister]

3 minutes ago, khlongtoey said:

what does this even mean "The risk of a credit bubble weighs heavily, Blackrock exited US markets completely as a result"

 

what is going to happen, no one knows

what factors will influence what happens? is pretty pointless questions , see above

 

how to invest my money?  your money?  -- then you would need to sketch out your situation and plans ; but then you didn't ask that.

 

I'm waiting for the crypto offer to pop up...

This may help explain:

 

https://www.asianinvestor.net/article/market-views-is-a-bubble-brewing-in-private-credit/496887