Anybody buying on this downturn?

[disneysteve]

Etsy and Fiverr are totally different types of resources. Both have a purpose but Fiverr is certainly more business oriented.

[LivingAlmostLarge]

downturn? What downturn? The market is terrifying me. I don't get it at all. How we are "shut down" and have economic pain and companies are pulling guidance and unemployement is going higher and yet we are almost back to our 2020 peak.

[disneysteve]

downturn? What downturn? The market is terrifying me. I don't get it at all. How we are "shut down" and have economic pain and companies are pulling guidance and unemployement is going higher and yet we are almost back to our 2020 peak.

The market hates uncertainty.

When the COVID stuff was ramping up and things were shutting down and nobody knew what would happen or how long it would last, the market tanked.

Now, things are starting to reopen. There are some promising trials going on. Cases have started declining in many places. Social distancing worked and prevented tens of thousands of deaths. The medical system wasn't overwhelmed in most places. The government injected some significant stimulus into the economy. Employers are beginning to rehire those who were laid off (my daughter was rehired on Monday). These are all positives in the eyes of investors and the market is responding accordingly.

Unlike 2008, this was not fundamentally a financial crisis. It was a medical crisis that spilled over into the financial markets. Once the medical stuff improved, which it seems to have, the financial world could start getting back on its feet.

One big concern, of course, is what the 2nd wave looks like when that hits. Also, it's too soon to know if the reopening efforts will cause a spike in cases and deaths as some predict. I don't think the volatility is over yet.

[kork13]

With the moderate market recovery (TBD if it lasts, I guess...I don't think I trust it yet), I've significantly slowed down my weekly ETF purchases. I've added ~$25k (taxable) into the market since I started doing those buys in early March, and it is up ~$1k in all. I've also decided to slow down our Roth IRA contributions to slightly slow down how fast we max them out. We've been doing $300/wk each for DW & I (maxing out by mid June), but I'm pulling it back to $200/wk (maxing in mid-July instead). We've each got $3900 contributed for 2020 so far.

I haven't stopped buying completely though... I'm still doing my normal twice-monthly buys into my taxable brokerage ($1k/mo), and I also haven't changed my normal purchases into my TSP (~$1k/mo), since that's a pain to make changes to (requires 1+ month lead time).

[LivingAlmostLarge]

My husband when I commented the economy appears to be fine last night said. What? Economy no. Stock market yes. He said it's a complete disconnect he doesn't understand at all either. I am not sure I agree that we aren't in a financial crisis steve. I mean fundamentals were a long bull market and very high in feb 2020 before the covid 19. Where is there pullback from there?

[disneysteve]

My husband when I commented the economy appears to be fine last night said. What? Economy no. Stock market yes. He said it's a complete disconnect he doesn't understand at all either. I am not sure I agree that we aren't in a financial crisis steve. I mean fundamentals were a long bull market and very high in feb 2020 before the covid 19. Where is there pullback from there?

I didn't say there isn't a financial crisis. There is, for sure. I said it wasn't fundamentally a financial crisis. I think there's a difference. 2008 was fundamentally a financial crisis. It originated in the financial system. This crisis originated from the virus pandemic, which then affected the financial system secondarily. Had COVID never happened, chances are the market and the economy would have continued cruising along just fine.

I'd also point out again that the economy is not the stock market and vice versa. As TexasHusker often said, sometimes the market is down during a recession and sometimes the market is up during a recession. There is not a direct correlation between the two. This could turn out to be one of those times when the market does okay during a recession. Time will tell.

[Jluke]

My very first auto purchase of Wellington will go through today. A whopping $150 invested and price is about $40/share or so.

I had an extra $150 at Vanguard and thought about buying one share of VTI but didn’t bother.

[james.hendrickson]

So, there is starting to be some decent research out there about what types of companies had their stock prices hold up in the Covid-19 pandemic.

Here a pretty solid NBERs paper I found this morning.

Here is the abstract: Corporate Immunity to the COVID-19 Pandemic

Wenzhi Ding, Ross Levine, Chen Lin, Wensi Xie

NBER Working Paper No. 27055
Issued in April 2020
NBER Program(s):Corporate Finance

Using data on over 6,000 firms across 56 economies during the first quarter of 2020, we evaluate the connection between corporate characteristics and stock price reactions to COVID-19 cases. We find that the pandemic-induced drop in stock prices was milder among firms with (a) stronger pre-2020 finances (more cash, less debt, and larger profits), (b) less exposure to COVID-19 through global supply chains and customer locations, (c) more CSR activities, and (d) less entrenched executives. Furthermore, the stock prices of firms with greater hedge fund ownership performed worse, and those of firms with larger non-financial corporate ownership performed better. We believe ours is the first paper to assess international, cross-firm stock price reactions to COVID-19 as functions of these pre-shock corporate characteristics.

----------------------------------------

No real surprises here, but its nice to see the world still works in predictable ways. Firms whose stock prices did better in the COVID-19 shock have the following characteristics:

1. Have flexible management that's not beholden to hedge funds.
2. Have stronger balance sheets
3. Are location independent and not subject to supply chain constraints
4. Are good corporate citizens & have high community trust

Source: NBER.

[rennigade]

Welp, its in. Warren Buffett says to sell airlines stocks. It seems no one is going to fly commercial ever again. We should all start flying private. AAL down almost $1 pre market. I may pick up a few more shares today.

[Like2Plan]

Welp, its in. Warren Buffett says to sell airlines stocks. It seems no one is going to fly commercial ever again. We should all start flying private. AAL down almost $1 pre market. I may pick up a few more shares today.

I saw that this morning. He even dumped Southwest which of all the airlines it seems like they had the best position. It makes me tremendously sad. I think what Warren is saying is it might be a while before we can get back to our usual pattern of travel.

[disneysteve]

Welp, its in. Warren Buffett says to sell airlines stocks. It seems no one is going to fly commercial ever again. We should all start flying private. AAL down almost $1 pre market. I may pick up a few more shares today.

Yeah, I saw that. I don't know. I think air travel will be impacted for quite some time but it will come back. I can certainly understand Buffet getting out. He owned a large stake and he has shareholders to answer to. I wouldn't be surprised, though, to see him get back in at some point.

Prior to him doing this, I was actually thinking about picking up more JETS if the price dipped again. This might be my chance.

[rennigade]

Yeah, I saw that. I don't know. I think air travel will be impacted for quite some time but it will come back. I can certainly understand Buffet getting out. He owned a large stake and he has shareholders to answer to. I wouldn't be surprised, though, to see him get back in at some point.

Prior to him doing this, I was actually thinking about picking up more JETS if the price dipped again. This might be my chance.

I picked up some more AAL at $9.19 this morning. Not a lot but a little here and there. Its fun having skin in the game. Its the only individual stock I own.

[disneysteve]

I picked up some more AAL at $9.19 this morning. Not a lot but a little here and there. Its fun having skin in the game. Its the only individual stock I own.

I bought some AAL when this mess all started but then moved on to JETS to diversify across the industry better. It dropped at the opening today but has recovered some. If it gets down into the 12s or less again, I'll probably pick some up. I should put in a limit order.

[LivingAlmostLarge]

I'm debating buying more JETS. How much JETS do you have DS?

[disneysteve]

I'm debating buying more JETS. How much JETS do you have DS?

I have 600 shares. I put in an order to get 100 more at $12.50. It doesn't look like it will get there, or at least not today, but I'll leave the order open. I'm okay either way.