[2020] A little stock market sense

[RENTER]

I also learned that a company can simply take away their employees' pensions. That was the one that really lit a fire under my [posterior].

The government will step in with a pension protection thru the PBGC program. It protects private pensions. Does not protect government workers, 401k's and IRA's. But there is a limit on what it protects. So if someone is receiving a generous pension, they will be capped.

In 2023, the cap for those in single employer plans over 65 was $81,000 a year. Under 65 it is a little bit more complicated to figure out but should be around $36,000 a year. For multi-employer plans again complicated to fiqure out but around $12,870 for those who worked 30 years.

Sadly again people do not get it until it is to late. Same thing with social security. For years they ignored my warnings that they would not be able to survive on social security if one passes away. That they had to save more and cut their spending.

They are so brainwashed about receiving free money, they would shrug it off and say IT WILL BE NO PROBLEM, THEY WILL BE GETTING THE LARGER OF THE TWO CHECKS.

Sure enough, 3 months after one passed away, it was sob, sob, sob. They could not survive on social security.

I just shake my head how clueless people are in today's internet age. These are things I learned as a teenager before the internet. I learned from watching what was happening to the greatest generation.

I am considering a party pooper. One you do not invite to social events because I am too serious. My wife defends me by telling them i did not have a normal childhood because I hung out with the greatest generation and not kids my age who were doing drugs and drinking.

Then she tells them thank God he did because I have kept her out of doing so many stupid things others were doing because they never learned and were wiped out.

 

[rapmarks]

You probably won't believe this, but I know people who pulled money out of their retirement accounts for Taylor Swift tickets.

Lot of stupid people around.
I have a friend whose husband needed care. She was shocked to find out that she couldn’t put him on Medicaid and keep tboth their pensions and social security for herself. She even hired a lawyer who had to explain it to her.

 

[VacationForever]

Then you do not live in my world. It must be nice to live in such a world. Because people in my world do it to get Medicaid and nursing home care. They can only own $2000. There are exceptions if a child lives with you.

Just got off the phone with someone in tears. She has to put her mom in hospice, and it costs $500 a day. That is why they move the house out of their parents name to their children's name. Not just the house but all assets. Or they put it in a trust.

Again it must be nice to live in the world some of you do. One mentioned how great his 401K plan was and he could select anything. To bad others do not have that benefit.

Before you ask why doesn't she bring her home, she has to work and cannot find adequate help with the long term care policy they have. A problem many people in my world have.

Fortunately, I do not live in your world, but I understand what you are saying. There are too many wealthy people living around me, including one 80 year old guy who built a large extension on his property to house 24x7 caregivers when/if he needs it one day. His will says that if his young (I don't know number what) wife puts him in a nursing home, she will be disinherited. I don't live in his world either.

 

[DrQ]

Former CNBC analyst-turned-fugitive arrested by FBI after nearly 3 years on the run​

Former CNBC analyst-turned-fugitive arrested by FBI after nearly 3 years on the run

James Arthur McDonald Jr. told one person he planned to "vanish" before going on the run in 2021.

www.cbsnews.com

 

[RENTER]

Many will shake their heads hearing this story. Another example of someone stop using their brains thinking they are getting something for free. Will shake your head even more when i tell you she was a well-paid corporate worker in the finance department.

She had no tax liability each year. So she did not have to file a tax return. But she paid to have one done any way. WHY? Because when she took her RMD at the end of the year, she insisted on having taxes withheld when she did not have to.

She told me, she wanted to feel good about the government giving her money. So she filed a tax refund to get the money she had withheld during the last week of December.

Now you may ask me why, a well-paid corporate worker had no tax liability. Because she had no pension. She took it and then spent it. All she had was her social security and the $98,000 left in the IRA.

There was a husband's pension. But he took the higher amount so when he died she received nothing. This was before they changed the rules to protect spouses. He was a well-paid city department head.

People think I rent for the money. No, it is for fun. Dealing with people and their money is total frustration. If people will not save and make good financial decisions, then I will rent to them and help them save money and have fun at the same time.

 

[RENTER]

Fortunately, I do not live in your world, but I understand what you are saying. There are too many wealthy people living around me, including one 80 year old guy who built a large extension on his property to house 24x7 caregivers when/if he needs it one day. His will says that if his young (I don't know number what) wife puts him in a nursing home, she will be disinherited. I don't live in his world either.

I hope this does not turn into another squatter story where caregivers refuse to leave after the person passed away.

 

[ScoopKona]

I just shake my head how clueless people are in today's internet age.

I've found it's better to profit by this ignorance.

 

[Ralph Sir Edward]

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Those who did not today are complaining about the RMD's and the taxes they have to pay. So when considering if the match is worth it, you have to consider the taxes you pay in the end. If you had limited choices and high fees, was the match worth it vs having a Roth or a non-retirement account were you can harvest tax losses to control your taxes.

Harvesting tax losses means selling something for a loss and using it to offset your gains. Then buying it back. But because of wash sale rules, you cannot buy it back for 31 days. However I play the system to get around the wash sale rules and it is perfectly legit because i am not buying the identical thing.

I play the sectors. I have a bull and bear fund for different sectors. One of those funds are going to be down. Each month I look at what fund is down the most. Then I sell it to create the loss. But I cannot buy that sector again for 31 days. But what I do is buy the top stock in that sector so I still have exposure to that sector. Then 31 days later I sell that stock and buy back the whole sector. Then I look for which fund is down the most and play the game again.

As far as what to put it, I do not deal with wealthy people. I deal with people whose salaries range from $30,000 to $60,000. So they do not have much to invest. If they just do the $7,000 in the Roth and KEEP THEIR HANDS OFF IT, they will have $473,000 in 25 years. Way more then the average $112,000 today.

-

Could you expand on the highlighted? Example - the bull and bear fund for different sectors. Are they 2 different fund or only one fund? How many sectors you you use? How do you determine the upside cap? Things like that.

 

[RENTER]

Could you expand on the highlighted? Example - the bull and bear fund for different sectors. Are they 2 different fund or only one fund? How many sectors you you use? How do you determine the upside cap? Things like that.

 

[Brett]

I also learned that a company can simply take away their employees' pensions. That was the one that really lit a fire under my [posterior].

I don't think it's easy for a company to take away a pension but "multi-employer union" pension plans were drastically reduced until the government bailed them out
https://www.nytimes.com/2021/03/07/business/dealbook/bailout-pensions-stimulus.html

 

[RENTER]

I have 23 investments i use that has both a bull and bear ETF or mutual fund. So a total of 46. Not all are sectors. 3 are bonds such as high yield, immediate and long term treasuries. 1 is bitcoin and 6 of the magnificent 7.

Then I add 45 more sectors. There is no bear to hedge them against. But I hedge them against each other. Semi-conductors vs Reits, Pipelines vs transportation, staples vs discretionary.

Then I hedge all 45 against floating rate treasuries and treasury bills ranging from 1 month to 10 years.

I keep an equal amount in each except for the floating rate which is my safety net. I set up my screen to show me market value from highest to lowest. If any at the top of profits over 10%, I take the profit and buy what is down at the bottom of the list.

When I want to harvest tax losses, I do not put those profits at the bottom of the list, i sell the loser rather then put more money into it. I will wait the 31 days. In the meantime I will park those profits into the floating rate or buy something similar to the loser I sold.

People will complain that if you put equal amounts into a bull and bear you break even. Yeah for the first minute. Eventually they pull away from each other.

Then people will say it is to much work. Took me 6 hours to buy everything. 5 minutes a day to rebalance.

Those brave during bull rallies will say that it grows to slow. You know the crybabie during bear markets. They are correct but it still grows in bear markets and I rub it in their faces showing pictures of that.

In the end, it will match the index. But there is no roller coaster and I can cherry pick the winners while building up dividends.

 

[ScoopKona]

I don't think it's easy for a company to take away a pension but "multi-employer union" pension plans were drastically reduced until the government bailed them out
https://www.nytimes.com/2021/03/07/business/dealbook/bailout-pensions-stimulus.html

It's simple! Sell the company to a multinational. Let the new foreign owners simply take the pension away. And then watch as the US government does nothing.

I know it happened at least once in the 1990s. As a result, I did my own retirement planning and diversified to the point where the actions of one company can't really affect me.

 

[Ralph Sir Edward]

Definitely not my style. I like to buy value and hold.

 

[rapmarks]

I agree, I guess the test is how much more he has made that if he had bought and hold.

 

[RENTER]

I agree, I guess the test is how much more he has made that if he had bought and hold.

you miss the point why I do it this way to eliminate the roller coaster and match the market with less risk. To survive crashes. Ask those how they did when the market crashed on their buy and hold in 2008 and they lost their jobs.

 

[Ralph Sir Edward]

I agree, I guess the test is how much more he has made that if he had bought and hold.

Buying value required two abilities. Being able to discern value, and willingness to be able to wait to buy cheap. The latter is what is called "market timing". buy when stock are on sale, and save money up after to buy when the go on sale again; which they will do eventually. Stocks are always on sale in recessions, sometimes at other times, like the crash of 1987, that's when to invest in stocks.

It was good enough for J. P. Morgan Sr., it's good enough for me. (I'm still holding the Altria, I bought in 2020; and I bought some more a few months ago when it got back down to 10% dividend yield.

 

[Ralph Sir Edward]

you miss the point why I do it this way to eliminate the roller coaster and match the market with less risk. To survive crashes. Ask those how they did when the market crashed on their buy and hold in 2008 and they lost their jobs.

I don't miss it, I just don't follow your investing style. Let me give you an example. I bought Altria (the old Philip Morris - yes - the cigarette stock) in 2020 when it was yielding a 10% dividend. the dividend has gone up modestly each year since then. (All inside of a Roth IRA.) I ignore the price fluctuations, and occasionally buy more when the dividend yield reaches 10% again. Tobacco stocks are the most despised stocks in the world, but they don't depend on a depleting asset (like oil), they have a gross profit margin of over over 50%, and 75% (or more) of the price of cigarettes are taxes, which would leave big holes in government budgets if tobacco was banned. (If you notice, there is no "hue and cry" about banning tobacco any more.) Despite anti tobacco advertising, the smoking rate has been staying relatively constant over the last 5 years, among <all> age groups. I'm patiently waiting for the next recession. Maybe I'll be able to buy Nvidia for 2 cents on the current dollar, like you could Amazon or Cisco Systems in 2002. . .

 

[#1 Cowboys Fan]

I don't miss it, I just don't follow your investing style. Let me give you an example. I bought Altria (the old Philip Morris - yes - the cigarette stock) in 2020 when it was yielding a 10% dividend. the dividend has gone up modestly each year since then. (All inside of a Roth IRA.) I ignore the price fluctuations, and occasionally buy more when the dividend yield reaches 10% again. Tobacco stocks are the most despised stocks in the world, but they don't depend on a depleting asset (like oil), they have a gross profit margin of over over 50%, and 75% (or more) of the price of cigarettes are taxes, which would leave big holes in government budgets if tobacco was banned. (If you notice, there is no "hue and cry" about banning tobacco any more.) Despite anti tobacco advertising, the smoking rate has been staying relatively constant over the last 5 years, among <all> age groups. I'm patiently waiting for the next recession. Maybe I'll be able to buy Nvidia for 2 cents on the current dollar, like you could Amazon or Cisco Systems in 2002. . .

I disagree about the smoking rate...it continues to dwindle....

 

[Ralph Sir Edward]

I disagree about the smoking rate...it continues to dwindle....

Youth and Tobacco Use

See how smoking and smokeless tobacco use are almost always initiated and established during adolescence.

www.cdc.gov

 

[RENTER]

I don't miss it, I just don't follow your investing style. Let me give you an example. I bought Altria (the old Philip Morris - yes - the cigarette stock) in 2020 when it was yielding a 10% dividend. the dividend has gone up modestly each year since then. (All inside of a Roth IRA.) I ignore the price fluctuations, and occasionally buy more when the dividend yield reaches 10% again. Tobacco stocks are the most despised stocks in the world, but they don't depend on a depleting asset (like oil), they have a gross profit margin of over over 50%, and 75% (or more) of the price of cigarettes are taxes, which would leave big holes in government budgets if tobacco was banned. (If you notice, there is no "hue and cry" about banning tobacco any more.) Despite anti tobacco advertising, the smoking rate has been staying relatively constant over the last 5 years, among <all> age groups. I'm patiently waiting for the next recession. Maybe I'll be able to buy Nvidia for 2 cents on the current dollar, like you could Amazon or Cisco Systems in 2002. . .

I don't miss it, I just don't follow your investing style. Let me give you an example. I bought Altria (the old Philip Morris - yes - the cigarette stock) in 2020 when it was yielding a 10% dividend. the dividend has gone up modestly each year since then. (All inside of a Roth IRA.) I ignore the price fluctuations, and occasionally buy more when the dividend yield reaches 10% again. Tobacco stocks are the most despised stocks in the world, but they don't depend on a depleting asset (like oil), they have a gross profit margin of over over 50%, and 75% (or more) of the price of cigarettes are taxes, which would leave big holes in government budgets if tobacco was banned. (If you notice, there is no "hue and cry" about banning tobacco any more.) Despite anti tobacco advertising, the smoking rate has been staying relatively constant over the last 5 years, among <all> age groups. I'm patiently waiting for the next recession. Maybe I'll be able to buy Nvidia for 2 cents on the current dollar, like you could Amazon or Cisco Systems in 2002. . .

Yeah you did miss it and I am so sorry you do not understand my investing style. All I did was take the stock market pie and divided it into slices that get hot and cold at different times. Which is why I match the market with a lot less risk and roller coaster rides.

But I am glad for you that you are in such good financial shape that you can ride out the downturns this stock took in 1999, 2009 and 2018. Many people can't which is why my style works for them. Approx half the account will be up during a downturn so if they get in financial trouble, they do not have to take a 30% to 50% drop like this stock did during those times.

Yes you get a good dividend, but it still does not beat the 500 index over the long term. But I also get good dividends from all the investments I have especially the REITS. I also have this stock in several ETF's so I am getting those dividends also.

So I hope your financial success continues and you do not have to sell during a crash.

 

[Ralph Sir Edward]

Yeah you did miss it and I am so sorry you do not understand my investing style. All I did was take the stock market pie and divided it into slices that get hot and cold at different times. Which is why I match the market with a lot less risk and roller coaster rides.

But I am glad for you that you are in such good financial shape that you can ride out the downturns this stock took in 1999, 2009 and 2018. Many people can't which is why my style works for them. Approx half the account will be up during a downturn so if they get in financial trouble, they do not have to take a 30% to 50% drop like this stock did during those times.

Yes you get a good dividend, but it still does not beat the 500 index over the long term. But I also get good dividends from all the investments I have especially the REITS. I also have this stock in several ETF's so I am getting those dividends also.

So I hope your financial success continues and you do not have to sell during a crash.

Renter, I starting studying the markets in December 1974, at the ripe old age of 17. I've seen the bear market of 1974, 1980, 1982, 1987 (a crash), 1990, 2000-2002, 2008-2009, and 2020 (I don't consider 2018 a bear market, per se.) Every one was a great time to buy , as Warren Buffet said, "a great company at a good price", or even "a good company at a great price". When you do that, over time, you really don't care about having to sell in a crash. Even if you do, you will find that those older investments are worth plenty even at a much lower price. I've always lived below my means and invested the difference. The trick is to figure out what the great companies are. They change over time. Let me give you an example. Amazon. A terrible investment in Jan 2000, a great investment in Nov 2002 when it was down 98%. It gone up roughly 10,000% since then. If it crashed down to 5% of the current price, it would still be up 500% from the Nov 2002 price.

I don't worry about what I'm worth. Live modestly (and below your means), avoid debt as much as you can (and pay it off as soon as you can), and acquire diversified assets over time. I pay no attention to "the Jones" or "Mrs Grundy". The roses on my desk smell wonderful, cut from my own back yard. . .

 

[Brett]

Yeah you did miss it and I am so sorry you do not understand my investing style. All I did was take the stock market pie and divided it into slices that get hot and cold at different times. Which is why I match the market with a lot less risk and roller coaster rides.

But I am glad for you that you are in such good financial shape that you can ride out the downturns this stock took in 1999, 2009 and 2018. Many people can't which is why my style works for them. Approx half the account will be up during a downturn so if they get in financial trouble, they do not have to take a 30% to 50% drop like this stock did during those times.

Yes you get a good dividend, but it still does not beat the 500 index over the long term. But I also get good dividends from all the investments I have especially the REITS. I also have this stock in several ETF's so I am getting those dividends also.

So I hope your financial success continues and you do not have to sell during a crash.

I'm also one that doesn't understand your "investing style".
If you're not getting higher returns than the S&P 500 then why all the 'harvesting' and trading and "playing" among different sectors?
-- seems to be counter productive (other than charging "clients" a fee for all that activity)





But Nvidia keeps going


Nvidia Becomes Biggest Company In World Market

 

[RENTER]

Renter, I starting studying the markets in December 1974, at the ripe old age of 17. I've seen the bear market of 1974, 1980, 1982, 1987 (a crash), 1990, 2000-2002, 2008-2009, and 2020 (I don't consider 2018 a bear market, per se.) Every one was a great time to buy , as Warren Buffet said, "a great company at a good price", or even "a good company at a great price". When you do that, over time, you really don't care about having to sell in a crash. Even if you do, you will find that those older investments are worth plenty even at a much lower price. I've always lived below my means and invested the difference. The trick is to figure out what the great companies are. They change over time. Let me give you an example. Amazon. A terrible investment in Jan 2000, a great investment in Nov 2002 when it was down 98%. It gone up roughly 10,000% since then. If it crashed down to 5% of the current price, it would still be up 500% from the Nov 2002 price.

I don't worry about what I'm worth. Live modestly (and below your means), avoid debt as much as you can (and pay it off as soon as you can), and acquire diversified assets over time. I pay no attention to "the Jones" or "Mrs Grundy". The roses on my desk smell wonderful, cut from my own back yard. . .

Good for you. But I do not want to figure out what the great companies are because they can go bad at anytime. I do not want to guess and I do not need to beat the market. Just match and be ahead because of the taxes I saved with tax harvesting.

You also missed the point that when Nivida does drop to the 2 cents like you said., I had taken out all the profits everytime they hit 10%. At the same time my Nivida bear will be soaring and I will be taking profits from there.

Right now I am taking those Nivida profits and parking in the floating rate fund that is paying over 5%.

So during those periods your stocks have a 30% to 50% drop , I will be posting pictures showing me doing just fine.

Oh and by the way, my returns have been beating Warren Buffet and the market over a bull and bear cycle.

 

[RENTER]

I'm also one that doesn't understand your "investing style".
If you're not getting higher returns than the S&P 500 then why all the 'harvesting' and trading and "playing" among different sectors?
-- seems to be counter productive (other than charging "clients" a fee for all that activity)





But Nvidia keeps going


Nvidia Becomes Biggest Company In World Market

View attachment 94925

If you match the market and created tax losses at the same time, you beat the market.

When others drop 30% to 50%, and I am up 10%, I beat the market.

I never have to sell anything that is down 30% to 50% unless I want to create a tax loss

I beat the market over one bull and bear cycle.

All for spending 5 minutes a day

By the way, the trades are free

Will never understand why people cannot understand simple concepts

Will never understand why people learn from the mistakes of others such as those who believed in buy and hold and were crushed in 2008 and had to sell because they lost their jobs and were losing their homes. Like I posted, I saved that widow by taking her out of a growth and income fund that dropped 50% and broke it up just like I am doing now.

Will never understand why people do not understand diversification just like those who told me in 1999, they were diversified. Then cried like a baby when they were wiped out. Yeah, they were diversified, they had all the Baby Bells.

 

[rapmarks]

You don’t help yourself by claiming you post pictures of your holdings and gloat.