To all ye prognosticatoes....

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bloobs
Posts: 1083
Joined: Tue May 21, 2019 8:00 pm

To all ye prognosticatoes....

Post by bloobs »

Open questions:

(1) What do you think is the next Black Swan* event to occur, and
(2) How will that affect the total economy and market?
(3) Most importantly, how will you accordingly respond (or have already prepared for it)?


* A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.

Scarfinger
Posts: 626
Joined: Mon Jan 30, 2012 12:00 am

Re: To all ye prognosticatoes....

Post by Scarfinger »

bloobs wrote: Fri Jun 04, 2021 10:00 am Open questions:

(1) What do you think is the next Black Swan* event to occur, and
(2) How will that affect the total economy and market?
(3) Most importantly, how will you accordingly respond (or have already prepared for it)?


* A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.
1) unknown what or when it will happen. 100% chance it will happen in the future.

2) market crash? Fast or slow, to be determined. Followed by a recovery. 1, 5, 10, or 15 year recovery… to be determined. With the Fed supporting the economy, hopefully no longer than a 5 year recovery.

3) Be diversified for your time frame. If I get caught in the downturn, do nothing and dollar cost average on the way down. If I am lucky enough to be out of the market, get back in at a discount and stay in until the recovery is realized.

(Lesson learned after getting in at the bottom of COVID-19, then jumping out and missing gains. I should of excepted the discount and road out the bumps on the way back up)
I am just an average Joe. I have no clue to what the market will do.
TimboSlice wrote: "People really need to stop overthinking this."
5/3/21: Buy and Hold 30% C, 70% S if I can stay disciplined.

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Aitrus
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Re: To all ye prognosticatoes....

Post by Aitrus »

bloobs wrote: Fri Jun 04, 2021 10:00 am Open questions:

(1) What do you think is the next Black Swan* event to occur, and
(2) How will that affect the total economy and market?
(3) Most importantly, how will you accordingly respond (or have already prepared for it)?


* A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.
1) The world is going through a process of de-globilization. I think the Black Swan will be a formal political and trade breakdown internationally, most significantly between the US and China. Biden is more nationalist than Trump was in terms of trade policies. All of the trade policies between the US and Mexico, Canada, Japan, South Korea, and the UK set up during Trump administration have not only been upheld by Biden, they've been enhanced. Every sanction and tariff Trump put on China has been reinforced under Biden. Finally, Biden's choice for US Trade Representative is Katherine Tai, a Tawainese immigrant who specializes in international trade law who has made a career out of suing China for trade violations. I would guess that it will come to a head sometime before the end of 2022.

2022 is also when the vast majority of the Baby Boomers go into retirement and all the capital they've been putting into the markets in terms of investing for retirement will come to a screeching halt, and the cost of capital will go up significantly. That will put a cramp on businesses that rely on new capital in order to expand, but if our returning manufacturing can keep up as well as millennial consumption keeps rolling along, we'll be able to weather the storm.

Peter Zeihan is a fantastic explainer of why all this is coming to pass - his presentations and lectures are well worth the time watching on YouTube.

2) I think that we'll drop into another recession, but it won't be as bad as what's coming to the rest of the world's economies.

3) I'll be staying the course. I have enough time left to recover any losses, and my portfolio can't afford to miss out on any upswing the market will experience.
Seasonal Musings 2021: viewtopic.php?f=14&t=18757
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
"It's not what happens to you, but how you react to it that matters" Epictetus

Bubba
Posts: 172
Joined: Thu Mar 05, 2020 3:40 am

Re: To all ye prognosticatoes....

Post by Bubba »

I'm sure many unexpected events will happen. My suggestion is to read every word Jay wrote here http://jayonthemarkets.com/ and read this page https://jayonthemarkets.com/2019/10/24/ ... re-part-i/ and this one http://jayonthemarkets.com/2020/01/27/p ... cade-lull/. If you don't read the last page, then you will be surprised what is headed our way.

One last note. This is general investing and not TSP investing. TSPCalc is still the best for that.

Best

Bubba

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bloobs
Posts: 1083
Joined: Tue May 21, 2019 8:00 pm

Re: To all ye prognosticatoes....

Post by bloobs »

Bubba, I think this article is compelling and actionable. Thanks

Best takeaway: 'The relevant question is “how will you mitigate this risk”? The time to start contemplating and planning is now.'

I am now headed to Tspcalc to look for strats that meet the performance criteria I gleaned from this article. Maybe the strat I am on right now already meets it.

Bubba
Posts: 172
Joined: Thu Mar 05, 2020 3:40 am

Re: To all ye prognosticatoes....

Post by Bubba »

bloobs wrote: Sat Jun 05, 2021 9:29 am Bubba, I think this article is compelling and actionable. Thanks

Best takeaway: 'The relevant question is “how will you mitigate this risk”? The time to start contemplating and planning is now.'

I am now headed to Tspcalc to look for strats that meet the performance criteria I gleaned from this article. Maybe the strat I am on right now already meets it.
Bloobs,


Make sure you read that last article. I think it will be a thing within the next 6 to 12 months. Having said that, check this https://www.merrilledge.com/publish/con ... ECqhESGLYx. I think the 40s, 50s and 60s mirror better what is going on more than the 70s. In any case, that should give you an idea where to go. Feel free to PM me, Bloobs for what I'm doing.

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FundPriceDayYTD
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S $82.88 -1.28% 11.70%
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