When stocks rebound, WHERE best to invest?

[ryanb741]

Having SMT is basically free money

This aged well BTW.....

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[mr noble]

Mate I know it is stressful but hang in. You have 15 years minimum until retirement. It'll be back up; down, up, down and up again by then. I wish I'd hung on to all the stock I liquidated last year and that has now pumped (Lloyd's, Microfocus, IAG).

I'm not hugely worried about it, like I would be if it was just one single company it was all invested in. Then things really could go wrong. But, with SMT being made up of about 65 of the biggest and best performing global companies, I know it'll come back and go well beyond 1300p. James Anderson and Tom Slater have a great track record and are sticking to their methods like they always have. The fund also uses gearing which makes the ups and downs bigger.


My real issue is with myself, firstly, being so daft as to put around 50% of my pot into a risky fund like SMT. Secondly, for not selling all or at least half of it two Friday's ago when I logged into HL to do exactly that.* And thirdly, for missing the opportunity (again) to time the market and buy back in at this lower level, which was my plan from the outset.


So the lesson has been well and truly learned, on my part, in the last 12 months........ Time in the market is most definitely a safer method than trying to time the market. Mr Montello reiterated that to me about 3 months ago. But I thought I could do better. Nope.



*I partly blame HL and the market makers for this. When I tried to sell my SMT holding, the app wouldn't allow any sells that were bigger than about £1500. I remember panicking on that day and posting about it on here. If my sell had just gone through at 8.05am that morning, I wouldn't be in this mess now.

[noTAGlove]

10 year Treasuries still on the march. Now close to where it was before the March 2020 crash.

Dollar strengthening. Gold suffering as a result.

All a recipe to reduce stock prices, especially high growth stocks. But how have the markets reacted? Of course they've gone higher.

If the 10 year treasuries carry on the way they are going, it will be like boiling a frog.

Bumping this again, for those who couldn’t see the warning signals.

My investment history is woeful. I timed the top of the gold and silver market perfectly - sadly for buying and not selling. Also put £40k into oil stocks in April 2020 - just about wiped my nose clean on those a year later, but I think I was 40% down at some points of autumn 2020 on those stocks.

Happy to say I was bang on this time. I was desperate to throw some money at tech having missed out on the 2020 boom and FOMO. I am glad I looked at the wider picture.

Three days later the tech correction started.

[noTAGlove]

As mentioned quite a few posts ago, 10 year treasuries are being auctioned this Wednesday. I think this is the macro stuff that really matters at the moment.

I knew nothing about bond yields 3 months ago, lol, but have been doing my homework (George Gammon on YouTube!) so I am not blind to all that goes on in the markets and in total reactionary mode.

This is the first auction since the 7 year note auction on Feb 25th, and if it goes as bad as that one did, yields will climb further and high debt tech will sell off again.

Mr Powell has indicated in his interview last Thursday that the Fed will not be intervening, so no yield control.

Markets don’t believe Powell that inflation is not a risk.

[Padders]

Looking at this graph with hindsight, it does seem utterly bonkers to have bought in at 1300p.

However, at the level it’s at now, it’s looking like a good time to buy in. It’s currently trading at 12% below its NAV.

Be careful with the NAV, it can be a lagging indicator so the situation may be worse than it appears and the discount not as great as it looks. I realise my post last night wasn't very sympathetic. I too have a holding, rather smaller, mine isn't quite under water yet but I do share the pain. It's never nice to see a fat gain disappear.

[mr noble]

I hear what you, Padders and NotAglove are saying. Thing is, that SMT has a history of shooting up 10% in a day as well as down, so it really is almost impossible to guess what to do at this point.

I have watched it drop day after day this last week and at the end of each day I ask myself why the hell I didn't sell it all yesterday. But the thought of cashing out and then seeing it shoot back up 10% would probably be worse than just holding. I was expecting a reversal after the Powell speech or when the next stimulus package got through the Senate......


The way I decided to play it, is that if I just ride it out, I will eventually get back into a profit (I could actually buy more at these lower levels, and think I will if its drops into the 800s) But....if I sell it now on the worry that you're hypotheses about Wednesday's treasury sale goes badly then I have crystallised the losses and am on my own trying to time a buy back point, which I'd almost certainly cock up too.



It is a bit of a big nightmare and a situation that my 22 years of safe passive investing should have had me steer well clear of. Something to tell the grand kids about.

[Montello]

So the lesson has been well and truly learned, on my part, in the last 12 months........ Time in the market is most definitely a safer method than trying to time the market. Mr Montello reiterated that to me about 3 months ago. But I thought I could do better.

I’m following my own advice and it’s a lot less exciting than your approach.

Looking at this graph with hindsight, it does seem utterly bonkers to have bought in at 1300p.

However, at the level it’s at now, it’s looking like a good time to buy in. It’s currently trading at 12% below its NAV.

What site/tool is giving you that graph?

[noTAGlove]

I hear what you, Padders and NotAglove are saying. Thing is, that SMT has a history of shooting up 10% in a day as well as down, so it really is almost impossible to guess what to do at this point.

Given it is a cold cloudy relative boring lockdown afternoon, I decided to test the SMT and Treasury yield relationship this with some data. I don't have any access to financial tools, so just stuck the data in Excel.



Since treasury yields started to flash amber, you can see that there is a very good inverse correlation between the SMT share price and 10 Year Treasury yields.

The 5% bounce in SMT's share price in late February correlated with the treasury yields falling from 1.55% to 1.42%.

Will it continue to correlate? Who knows. But if it does, then I would say that your bet is that yields will be contained going forward. Which is fair enough if that is the case.

You can look back at the same correction in early 2019 when yields picked up and the broad stock market including the FTSE dropped 20%, before reversing their losses in 2019 when the yields dropped again.

I guess your views on inflation have to come into your decision. The markets are sending signals that they don't believe the Fed on this matter, but who knows whether that will continue.

Good luck whatever route you choose.

Edit : I would also add that although SMT is priced in GBP, I assume a lot of the stocks it invests in is denominated in USD.

That’s a major currency risk, and I presume you are betting the USD will remain strong against the GBP going forward.

Certainly SMT made out like gang busters when the dollar strengthened and tech stocks rose.

It appears SMT will do well if inflation is benign and the dollar continues to be strong. On the flip side high inflation and a weak dollar appear to have major downsides to the SMT price.

But, I am just an engineer who has taken an interest in these things relatively recently after trying to understand why I lost money on a gold ETF (precisely because Treasury yields have risen), and make myself more knowledgeable for future investments.

So, please be careful with anything of mine you read!

BTW, FWIW (not a lot!) it is no-TAG-love as noT-A-Glove would be a bit strange.

[mr noble]

BTW, FWIW (not a lot!) it is no-TAG-love as noT-A-Glove would be a bit strange.

Amazing. I've spent ten years wondering why you have no glove.

[mr noble]

Did a great post

You've got me more worried now.


I looked up the 10 year chart and zoomed out to 5 years, and realise that the yield is currently low and does look very likely to rise much more.

https://uk.investing.com/rates-bonds...ear-bond-yield


Oh crap.

[mr noble]

I’m following my own advice and it’s a lot less exciting than your approach.



What site/tool is giving you that graph?

I paid for the ad free access* to Investing.com the desktop and app versions are both good, especially if you spend time sorting your portfolio on their site.

That shot is a screen grab from the app on my phone (in dark mode)



* The website is almost unusable with all the adverts flassing and popping up. I think it's £15 for two years.

[noTAGlove]

I looked up the 10 year chart and zoomed out to 5 years, and realise that the yield is currently low and does look very likely to rise much more.

The Fed meet every 2 months and the next meeting is March 16-17, a week after the latest debt auction. So, if it all goes t1ts up next week at the debt auction, things should turn interesting at the Fed meeting.

The last thing the Fed needs is increased yields as it directly impact the long term borrowing cost of businesses damaged by COVID. And it makes mortgages more expensive. Plus, they want to give the markets notice well ahead of time, rather than the markets forcing their hand.

It will be interesting to see if they allude to yield control, which will reduce longer term borrowing rates and tech will rally, but has the potential to turn short turn borrowing yields negative, forcing them to raise interest rates to counteract significant outflows of cash, which in turn increases borrowing rates. A bit of a death cycle. The Fed does appear to be caught between a rock and a hard place.

Meanwhile, even still with a relatively strong dollar, crude oil is a few cents off $70 and the world has not even opened up yet. The Saudis will stick two fingers up to Biden’s foreign policy by hitting him were it hurts, in the pockets of the electorate at the gas station. Given the US total reliance on road shipment of goods, this should put some pressure on inflation.

I am finding this stuff absolutely fascinating at the moment, and easy to understand even for a financial dumbo like me. It is not rocket science. I look forward to the weekly analysis from my favourite YouTube economists. Not the shock-jocks who just pump everything that is going.

If nothing else I presume SMT should bounce a bit on a Monday given the NASDAQ closed 5% higher after London closed on Friday. That may take the pressure of a bit.

Once again, good luck.

[ryanb741]

What about sticking the whole thing into Dogecoin?

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[tommyzzj]

What about sticking the whole thing into Dogecoin?

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haha great idea - that paired with a time machine, would make some serious money :)

[Kingstepper]

Or maybe invest in tweets?

https://www.bbc.co.uk/news/world-us-canada-56307153

[mr noble]

There’s also the effects of the $1.9tn stimulus package to add into the mix.

This 3rd one has just gained Senate approval so looks like the $1400 cheques will be posted out late next week.

Many of those cheques will be used to buy stocks and Bitcoin.

It certainly is a fascinating thing to study. Even more so when the effects are having a dramatic effect on your potential retirement age.

Do you have a link to the YouTuber you’ve mentioned, please?

[noTAGlove]

Do you have a link to the YouTuber you’ve mentioned, please?

I watch Ramin over at PensionCraft e.g.

https://youtu.be/JlyUUC5vLAY

And I at watch Value Investing With Sven Carlin e.g.

https://youtu.be/Mgn5Mi3cIZ0

Both of the above I find very good and neutral.

I really like George Gammon and his whiteboard analysis. He takes a complex relevant economic topic and breaks it down into something I can understand. In the usual American way the context can be dramatic, but he does leave the watcher to make a decision for his/her self.

I recommend watching these in order

https://youtu.be/XAAdwhxzhE8

https://youtu.be/vKa99-RE0ew

The latter video gets into yield control about half way through.

For precious metals I like maneco64 e.g.

https://youtu.be/uZ5ucXPvA-U

He was a bond and derivatives trader in the City for 20+ years and hates the bullion banks with a passion.

It beats crap like Meet Kevin, who has 10 times more following but ramps stocks continually without any analysis.

[ernestrome]

Be careful with interpreting the NAV of a fund.

[Raffe]

As I see it, we may be in for a bounce on Monday/Tuesday. That's why I wanted to close some of my short Tesla. But I remain sceptic/careful for the medium term, once the economy reopens, the attention of many new traders will be away from the stock market and people will start spending again, maybe triggering the need to take some money away from the market. If that happens already now or if the stimmy effect comes first, I don't know.

In my book it makes sense to position for a period of high volatility and potential large swings. If that begins with the first move up or down, I don't know. Given my priority of managing risk, I have positioned defensive. I may lose a bit of the recovery potential if it bounces (even though I hope the SPACs will join the bounce), but see myself protected if it sells off further.

We shall see.

[mr noble]

I recommend watching these in order

https://youtu.be/XAAdwhxzhE8

https://youtu.be/vKa99-RE0ew

Both very good videos. And well worth the time taken to watch them.

It does leave some worrying thoughts about the future and which way everything will go. In fact, he does not suggest any single area of the market (including property) that might be "safe".

I am a little confused as to why gold/silver have been falling too, as usually they go the opposite way to stocks.

Maybe that's covered in the last video you linked to? I'll watch it later.

[mangoosian]

Both very good videos. And well worth the time taken to watch them.

It does leave some worrying thoughts about the future and which way everything will go. In fact, he does not suggest any single area of the market (including property) that might be "safe".

I am a little confused as to why gold/silver have been falling too, as usually they go the opposite way to stocks.

Maybe that's covered in the last video you linked to? I'll watch it later.

DXY has bounced up so that can be enough to be negative for gold and silver.

https://uk.tradingview.com/symbols/TVC-DXY/

[Raffe]

Helen knows.

https://twitter.com/HelenTrailer/sta...54998968631301

[petethegeek]

https://twitter.com/HelenTrailer/sta...54998968631301

Ain't she just somthin' else?

[mr noble]

Let's see if this horror show is set to carry on then.....

[Raffe]

Let's see if this horror show is set to carry on then.....

Nasdaq futures getting clobbered....

If we don't find buyers soon it may become a difficult week.

[Raffe]

What happens if any of that money needs to come out of the market again?

[noTAGlove]

Putting day trading aside for a moment, the next 2 weeks are probably the most important in the market since last March given the rising Treasury rates, potentially very unsettling debt auctions and Fed meeting.

Three possible outcomes;

1) The Treasury yield stabilise which calms the markets - seems unlikely given $1.9T stimulus and inflation expectations at all time high.

2) Wednesday's debt auction goes badly and Treasuries rise further - seems more likely. Stocks will correct further. Precious metals will fall.

3) Point 2 above but the Fed allude to Treasury yield control - dollar collapses, inflation will rise and precious metals go through the roof. Risk of starting a 'crack-up boom'

Personally, having completed a lot of reading over the weekend, I think point 2 will happen. Jay Powell said on Thursday that point 3 (or some other action plan) will only happen if there is a disorderly impact on the markets.

Hold onto the handrail.

[Raffe]

Well, the late selloff never happened. I am somewhat miffed that IBKR went down five minutes before the close, was actually going to sell some more puts at the close. Hmmm.

Maybe it's good for something, now I remain very short Tezzla over the weekend. We shall see what Monday brings.

I have sold all of my remaining momentum stocks during the recovery rally this evening. no more ACTG, BBIO, APPH (already sold the rest earlier).

Now I only have a load of $10 SPACs and a handful of long-term holdings (have even reduced position size with those) and lots of cash.

Ready to look at new opportunities next week.

Thank you IBKR. TSLA opening down 5% at $570.

Payday.

[mr noble]

Right - that's me bailed. After an awful 2 weeks and daily misery watching the price of SMT go down and down, I decided that I would sleep better if I sold it.

I also spent a lot of time over the weekend reading and watching economic articles and videos. It's mind bending stuff, but I tended to agree with NoTAGlove's points above. Number 2 is likely to be the outcome we get, but all 3 outcomes could still spell further losses for the tech bubble. I concluded that it was safer to cut my losses and put the money into pleces that can make a safer return and recovery, than to risk further losses.

SMT had a nice 3% up tick at open, great, but yet again Hargreaves Lansdown was limiting sells to about £3000.

By the time I'd got through on the phone, gone through security and waited on hold far an eternity to get a price from the market, SMT had dipped about 4.5% back down again. Unreal.

So here's an example of crap investing - bought at 1350p and sold at 999p. Ouch.




Strangely, despite losing more than I earn in a year over the last two weeks, I feel relief at no longer having to watch the price dropping daily.



Of course, we will now get a huge up tick and it'll be back to 1250p by Friday. Probably.

[Raffe]

Bought a chunk of TSLA shares, locking in some of the early weakness. Not turning my view on them, I still think we will go a LOT lower but as I cannot get access to my option positions for another few hours just buying a little in case we see a relief rally.

As I wrote yesterday, I see a lot of volatility over the next weeks with plenty of opportunities to make or lose money. Be careful, the rules of the game have changed and it won't be as easy as during the last 12 months.

[Pete D]

Right - that's me bailed. After an awful 2 weeks and daily misery watching the price of SMT go down and down, I decided that I would sleep better if I sold it.

I also spent a lot of time over the weekend reading and watching economic articles and videos. It's mind bending stuff, but I tended to agree with NoTAGlove's points above. Number 2 is likely to be the outcome we get, but all 3 outcomes could still spell further losses for the tech bubble. I concluded that it was safer to cut my losses and put the money into pleces that can make a safer return and recovery, than to risk further losses.

SMT had a nice 3% up tick at open, great, but yet again Hargreaves Lansdown was limiting sells to about £3000.

By the time I'd got through on the phone, gone through security and waited on hold far an eternity to get a price from the market, SMT had dipped about 4.5% back down again. Unreal.

So here's an example of crap investing - bought at 1350p and sold at 999p. Ouch.




Strangely, despite losing more than I earn in a year over the last two weeks, I feel relief at no longer having to watch the price dropping daily.



Of course, we will now get a huge up tick and it'll be back to 1250p by Friday. Probably.

Never nice to take losses, and I admire your frankness in terms of approach/results. I am adopting the grit teeth and hold technique for both SMT and JCGI; the fund managers have a good track record - they 'should' be adjusting their portfolios to make the most of current circumstances (in any case better than I would do...again, I hope). My investments are aimed at 5 year returns, so I have not entered the buying and selling frenzy....I have neither the inclination nor the expertise to do so.

All the best.

[Raffe]

Drink!

[mr noble]

Yup - so when SMT hits 800, I'll buy it all back again. To the moooon!!

[Raffe]

Bought a chunk of TSLA shares, locking in some of the early weakness. Not turning my view on them, I still think we will go a LOT lower but as I cannot get access to my option positions for another few hours just buying a little in case we see a relief rally.

As I wrote yesterday, I see a lot of volatility over the next weeks with plenty of opportunities to make or lose money. Be careful, the rules of the game have changed and it won't be as easy as during the last 12 months.

Sold Tesla again at $582, not bad $17.50 in less than an hour.

Now for today's TSLA pump, Elon must be getting really desperate:

[Raffe]

Bought a chunk of TSLA shares, locking in some of the early weakness. Not turning my view on them, I still think we will go a LOT lower but as I cannot get access to my option positions for another few hours just buying a little in case we see a relief rally.

As I wrote yesterday, I see a lot of volatility over the next weeks with plenty of opportunities to make or lose money. Be careful, the rules of the game have changed and it won't be as easy as during the last 12 months.

Sold Tesla again at $582, not bad $17.50 in less than an hour.

Great idea, bloody poor execution: Tesla trading at $603 now, meaning my huge profit on the puts has crumbled. Bit archaic that one cannot trade options outside of the regular trading session.

[Daveya.]

Yazz ooooooo

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[Pete D]

More chance of ‘Those Magnificent Men’......


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[~dadam02~]

Argo share placement: https://www.londonstockexchange.com/...llion/14892047

[ryanb741]

Argo share placement: https://www.londonstockexchange.com/...llion/14892047

I have a ton of these shares but am too thick to know if this is good or bad news?

Edited to add they are offering them at 200p. How can they do that when current stock price is 250p?!!? Surely that's shafting current stock holders. So I assume I've misread

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[Bondurant]

It's more shares on the market which is a dilution, so theoretically slightly negative I suppose (I haven't looked how much difference it would make to the total shares available). If they do something worthwhile with the funds they raise then that could be good news for the share price longer term.

[petethegeek]

They're off to Texas to join the gold bitcoin rush - https://www.forbes.com/sites/ninabam...h=28c12b2b379f

[mr noble]

If they’re including the private shareholders in the open offer, then you will benefit from being able to buy some too, Ryan.

If you hold, say 10,000 shares, you may be offered 1-100, so you’d be able you buy an additional 100 shares at 200p. Which goes some way to relieve if the pain of the dilution. (If they’re trading higher at the time)

It’s a standard way for listed companies to raise new capital.


I’m guessing the funds are to pay for the land in Texas that they’ve just bought. And to buy the directors a Lambo each.

[ryanb741]

If they’re including the private shareholders in the open offer, then you will benefit from being able to buy some too, Ryan.

If you hold, say 10,000 shares, you may be offered 1-100, so you’d be able you buy an additional 100 shares at 200p. Which goes some way to relieve if the pain of the dilution. (If they’re trading higher at the time)

It’s a standard way for listed companies to raise new capital.


I’m guessing the funds are to pay for the land in Texas that they’ve just bought. And to buy the directors a Lambo each.

Ok.

I have 44k shares. I was worried other people would be able to buy at 200p meaning why would they buy mine which are currently valued at 250p.

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[Raffe]

I have a ton of these shares but am too thick to know if this is good or bad news?

Edited to add they are offering them at 200p. How can they do that when current stock price is 250p?!!? Surely that's shafting current stock holders. So I assume I've misread

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What a shitco, after all directors have sold tons of stock last week they are offering new shares at 200p, not a rights issue so you only get diluted and have no rights.

That's what happens when you invest in shitcos.

[murkeywaters]

That was close I nearly bought a few ARGO, I have gone through rights issues with both Rolls Royce and TUI and currently doing well on both of those.

So is ARGO a rights dilution or just a dilution?

[Raffe]

That was close I nearly bought a few ARGO, I have gone through rights issues with both Rolls Royce and TUI and currently doing well on both of those.

So is ARGO a rights dilution or just a dilution?

Anyone can participate and file via www.PrimaryBid.com (user ID required) to buy shares at 200p.

[Justin Case]

Right - that's me bailed. After an awful 2 weeks and daily misery watching the price of SMT go down and down, I decided that I would sleep better if I sold it.

I also spent a lot of time over the weekend reading and watching economic articles and videos. It's mind bending stuff, but I tended to agree with NoTAGlove's points above. Number 2 is likely to be the outcome we get, but all 3 outcomes could still spell further losses for the tech bubble. I concluded that it was safer to cut my losses and put the money into pleces that can make a safer return and recovery, than to risk further losses.

SMT had a nice 3% up tick at open, great, but yet again Hargreaves Lansdown was limiting sells to about £3000.

By the time I'd got through on the phone, gone through security and waited on hold far an eternity to get a price from the market, SMT had dipped about 4.5% back down again. Unreal.

So here's an example of crap investing - bought at 1350p and sold at 999p. Ouch.




Strangely, despite losing more than I earn in a year over the last two weeks, I feel relief at no longer having to watch the price dropping daily.



Of course, we will now get a huge up tick and it'll be back to 1250p by Friday. Probably.

https://www.londonstockexchange.com/...hares/14892052

[Raffe]

Bought SP500 futures 3,835


...and collecting some rewards on Tezzla puts.

[mr noble]

US markets (Nasdaq and Futures) in free fall again.

Been looking at buying CLA which just lost 12% in an hour. Good time to buy!?


What’s happened?

[wileeeeeey]

I'm getting pig in a bag fears re SPACs and THCA. Think I might bail. I keep reading there are more SPACs than companies who want to go public and it makes me paranoid.