I think what I would say the best idea I’ve read is Jim’s QQQE, so I may give that a shot.
GOOG is attractive, I already own probably too much though and I’m not entirely sure the fallout from APPL privacy moves that hit Facebook is understood.
APPL seems like something I could look at. MSFT too, I own a small amount.
BRK seems to have held up better than most, so I don’t think adding here is a great move, I’d still probably prefer cash (that means I sold).
SaaS I think is a NO, UPST earnings today, if they are good and market doesn’t react positively, then you can check back next earnings, actually same advice in any scenario there.
I’m still positive on Real Estate, but have enough (for now), but you can still get a 30 year for about 5% and a cash flow positive rental property for essentially 50k - 100k down in large portions of the southeast. Main issue is the legwork to get established if you don’t live there.
Activision arbitrage is looking better every day as well.
I like to follow some medical device, Dexcom, Abbott, Insulet, looking okay, essentially they’ve erased 5 years of stock price growth, I think I still like cash this week though.
My snooze-inducing General Mills (GIS) and Masco (MAS) are among the very few green shoots I see on the screen today.
Beautiful day outside. Will be heading out as soon as the guys in the basement finish replacing the water heater. (Maybe I should buy some AOS then? It’s up today, too!)
Just for fun (not to be taken as a recommendation) I’ve recently bought the following…
A large position in Facebook
A large position in Google
A small position in PayPal, which I might add to
A small position in Alibaba, which I probably won’t add to in any meaningful amount given the possibility of a large loss
I recently sold entire, large positions in Walmart and Coke. Both looked to be unreasonably high valuations, in an environment where I think the odds are that there will be much better opportunities elsewhere either now or in the near future.
Amongst others, I’m looking carefully at potentially creating new positions in Salesforce and Amazon, if the price is right. Before anyone asks, I haven’t yet figured out what I think that price would be for either of those two.
My other meaningfully-sized long term positions (including Berkshire) are unchanged.
What’s your take on the odds on a recession coming next year?
Stocks like Coke and Walmart are recession plays. Coke is a low cost luxury. Easy to treat you and yours when other luxuries are out of reach. Ditto Walmart anticipates people cutting back due to inflation or recession.
Not growth stocks but likely to be ok.
Hershey, Proctor & Gamble, Kellog, General Mills, beer, cigarettes, also mentioned. Dollar General.
I hesitatingly admit to just having bought Sep’22 Calls DDOG+CRWD+ZS+S. I agree with everybody (Warren, Charlie etc.) claiming this market is a Casino. I am living proof. Please do not excommunicate me.
I’m buying what Warren and the two T’s are buying. My largest holding by far is BRK : )
Second largest holding is cash…to buy more BRK, when people stop asking “Is this the Bottom?”
I bought some goog, intel, qqqe. I bought a very little bit of DOUG simply because that is my name and I’ve done well doing day trades for entertainment. I recently sold off the last of the XOM I bought in the $30’s. I don’t know the ins and outs of oil company cash flow but I spent 40 years finding and producing oil and there are huge volumes available at this price.
What’s your take on the odds on a recession coming next year?
Stocks like Coke and Walmart are recession plays. Coke is a low cost luxury. Easy to treat you and yours when other luxuries are out of reach. Ditto Walmart anticipates people cutting back due to inflation or recession.
Not growth stocks but likely to be ok.
Recession - I don’t like to make macro forecasts. But it seems fairly possible that there might be a recession of some size. What does it mean for the direction of the market if there is a recession? I don’t know. Down would be perhaps more likely than up, but not a certainty.
Coke and Walmart - just as I don’t like to make macro forecasts, I don’t like to make macro plays; not one, but two dimensions of predictions both have to be correct for things to work out and I have no special predictive powers with either one. With that said, I don’t see why under any macro circumstances, stocks that I think are meaningfully overvalued at their current prices should be relied upon to go higher into even more overvalued territory over a short time horizon to make an investment idea work out.
If I thought they were substantially undervalued and there were no better opportunities out there, then sure, I might be buying them. It all comes down to my own assessment of what they’re worth. Your assessment might be different. You might be right and I might be wholly wrong.
Though I’m not currently a holder or a buyer, I note that Brookfield Asset Management (BAM) at $46.31 is 26% off its 52 week high.
And below where I might estimate the price “should” be these days.
The reason I mention it:
Many people tend to underappreciate that inflation is quite good for their business.
They get to the point of appreciating that they have a lot of debt and that interest rates are rising.
But don’t get to the next steps of noticing that their current debt load is essentially all fixed rate, so inflation erodes the burden of the debt principal.
And that inflation has risen more than interest rates have, so real interest rates have been falling–their real interest burden is falling, not rising.
One might expect a lot of rate bumps in their lease and operating agreement contract renewals.
No doubt they have some offices that are emptier than one would like, but that will pass.
And some dud malls, but not enough to make a material dent to the parent firm.
They knew they were duds when they bought them, so at least some of that dudness was in the price.
Though I’m not currently a holder or a buyer, I note that Brookfield Asset Management (BAM) at $46.31 is 26% off its 52 week high.
And they have a distant cousin in UK: Legal & General
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia. With almost £1.3 trillion in total assets under management, we are the UK’s largest investment manager for corporate pension schemes and a UK market leader in pension risk transfer, life insurance, workplace pensions and retirement income.
And like BAM the management likes to compare itself with leading US asset managers like BAM, BLK and makes a case for being valued on par with them.
Dividend yield now over 8% for those who care about that sort of stuff.
Actually asset managers like BLK and TROW are worthy of consideration too. Valuation has been crushed, TROW at forward PE of 11 and BLK 15. Steady growers with the market, and even in the worst markets like 2009 make profits. As long as equity markets grow in 7 out of 10 years, they should do well. Even when they don’t they will make money, though less, on other assets, like bonds.
I have dipped my toes and bought LGGNY, and added to TROW and BLK.
Heck, we’re not even in bear market territory yet, as least for the S&P. (The Nas is off 25%, so, yeah.)
There’s a way whole lot of excess to be wrung out, the silliness of NFTs and crypto demonstrates that almost as much as the goofy people running around saying “values don’t matter” and legions of small timers ganging up on already dead stocks to rescue them from … what? How much excess? I don’t know, but people are paying hundreds of millions for a painting (it’s not even a painting! It’s a print!) and housing is starting to cool, but “starting” isn’t “cooled.”
Not that any of that frothy nonsense will go away completely, but the market regularly corrects irregularly, and this is it. If you don’t want to pay attention to macro, well OK, that’s on you, but with occasional exceptions playing marbles during an earthquake probably isn’t the best use of your skill.
Nobody says a bear stops at 20%. Could be more. Sometimes it’s a lot more.
