The bears den

[Mecisteus]

I was in a dilemma whether to stay in S&P500 actually. Apart from a local bank stock and reit, only a few minor positions in S&p500, the rest are in gold stocks, like 60-65% gold stocks. Mighty heavy weightage I know.

If you already have S&P, then just hold on. It doesn't make sense to add too much now.

Gold stocks are quite speculative. Basically they go up and down very fast.

Maybe what you can do is to reduce positions in gold stocks progressively as they rise. I don't think it's safe holding for long.

 

[coolhead]

If you already have S&P, then just hold on. It doesn't make sense to add too much now.

Gold stocks are quite speculative. Basically they go up and down very fast.

Maybe what you can do is to reduce positions in gold stocks progressively as they rise. I don't think it's safe holding for long.

I agree that gold is a very manipulated market hence I don't trade it. However I do hold positions in gold mining stocks which lag behind the rise in gold price. I'll think about reducing positions but that'll be quite far down the road when US has reduced interest rate to practically non existent.

Sent from HMD Global TA-1004 using GAGT

 

[Mecisteus]

I remember when revhappy created this bearish thread, someone predicted S&P500 to reach 3k first before revhappy's bearish target levels.

Maybe it was in the other US thread.

That guy is the real winner.

 

[Trader11]

Actually Powell did a great job. He raised interest rate quickly before things turn slow. Then now he has room to cut without going into negative interest rate. Smart guy. Street smart

 

[BBCWatcher]

The S&P 500 didn’t close above 3,000, although it hit 3,002.98 yesterday on an intraday basis, another all-time intraday high.

By the way, if you fear U.S. dollar inflation you shouldn’t buy gold or gold proxies. That’s the investing equivalent of buying a live horse when you want to eat a hamburger — wrong meat, too indirect, too messy. Just buy TIPS or a TIPS fund, such as ITPS or TIP5. (Note: Those particular funds are not appropriate for U.S. persons.) The U.S. Treasury has offered TIPS since 1997. (U.S. I Bonds also work very well in this particular role, but I Bonds require some U.S. financial “footprint” to buy and have low annual purchase limits.)

I’m not suggesting you should fear inflation, and perhaps you’re late if you want to do this. Also, on a medium-term and long-term basis stocks have been a terrific hedge against inflation, as it happens. Gold has not been.

 

[coolhead]

The S&P 500 didn’t close above 3,000, although it hit 3,002.98 yesterday on an intraday basis, another all-time intraday high.

By the way, if you fear U.S. dollar inflation you shouldn’t buy gold or gold proxies. That’s the investing equivalent of buying a live horse when you want to eat a hamburger — wrong meat, too indirect, too messy. Just buy TIPS or a TIPS fund, such as ITPS or TIP5. (Note: Those particular funds are not appropriate for U.S. persons.) The U.S. Treasury has offered TIPS since 1997. (U.S. I Bonds also work very well in this particular role, but I Bonds require some U.S. financial “footprint” to buy and have low annual purchase limits.)

I’m not suggesting you should fear inflation, and perhaps you’re late if you want to do this. Also, on a medium-term and long-term basis stocks have been a terrific hedge against inflation, as it happens. Gold has not been.

I don't invest in gold related because of inflation. You are right in that regard that gold is never a hedge against inflation.
That's because gold is strongly inversely correlated to real interest rate. Real interest rate = fed funds rate - inflation.
In order for gold to go up, the fed funds rate has to go down and/or inflation goes up leading to a aggregate decrease in real interest rate. This means that apart from considering inflation, one has to consider the market's perception of future fed funds rate.

Currently, inflation is trending downwards, together with market perception of dropping fed funds rate. The fed will never have considerations for gold but its actions will impact it. By comments of Bullard, he hopes to increase inflation by reducing fed funds rate which is double tailwind for gold. However by and large even with no drop in inflation, market is expecting a fed funds rate drop and consequently a lower real interest rate and hence, higher gold prices.

Sent from HMD Global TA-1004 using GAGT

 

[BBCWatcher]

Currently, inflation is trending downwards, together with market perception of dropping fed funds rate. The fed will never have considerations for gold but its actions will impact it. By comments of Bullard, he hopes to increase inflation by reducing fed funds rate which is double tailwind for gold. However by and large even with no drop in inflation, market is expecting a fed funds rate drop and consequently a lower real interest rate and hence, higher gold prices.

That’s a live horse for a hamburger, though. The analogy fits. For bets of this sort, just go get hamburgers: go long on medium-term bonds, such as 5 to 10 year Treasuries. Or TIPS if you want to place a different bet involving inflation. Or derivatives thereof, such as Treasury futures, if you want amplified betting.

Why make this much more complicated and expensive than it needs to be? Gold has all sorts of other things going on: mining discoveries, reserve sales and purchases, fluctuating industrial uses. If you have some Fed-related prediction, just go bet on that, directly.

I don’t recommend you do any of this, but if you have a forecast and want to bet on it then bet most efficiently, that’s all.

 

[Trader11]

Actually Powell did a great job. He raised interest rate quickly before things turn slow. Then now he has room to cut without going into negative interest rate. Smart guy. Street smart

Now the world is awaiting the outcome of trade deal. And if that fails, we see the birth of new bear coming to this thread.

 

[MrHighlander]

The Fed keeps bailing out and subsidizing the rich

Is there something called a permabailout?

Will it lose credibility or face capability constraints ?

 

[coolhead]

That’s a live horse for a hamburger, though. The analogy fits. For bets of this sort, just go get hamburgers: go long on medium-term bonds, such as 5 to 10 year Treasuries. Or TIPS if you want to place a different bet involving inflation. Or derivatives thereof, such as Treasury futures, if you want amplified betting.

Why make this much more complicated and expensive than it needs to be? Gold has all sorts of other things going on: mining discoveries, reserve sales and purchases, fluctuating industrial uses. If you have some Fed-related prediction, just go bet on that, directly.

I don’t recommend you do any of this, but if you have a forecast and want to bet on it then bet most efficiently, that’s all.

U do have a point about reducing dependencies by making direct bets e.g different bond tenures or treasury futures derivatives. I'm not really well versed in these areas compared to gold but I guess I'll start somewhere and build up my knowledge about these.

Sent from HMD Global TA-1004 using GAGT

 

[Dividends Warrior]

Every where central Bankers are cutting rate. Maybe equities will huat like 2010-2011 and 2013-2015 period

Huat like 2017
Low rates are here to stay. Whatever it takes.

 

[Trader11]

The Fed keeps bailing out and subsidizing the rich

Is there something called a permabailout?

Will it lose credibility or face capability constraints ?

They actually raised rates when things are doing well...... Except for Japanese

 

[[M]aiev]

I remember when revhappy created this bearish thread, someone predicted S&P500 to reach 3k first before revhappy's bearish target levels.

Maybe it was in the other US thread.

That guy is the real winner.

Actually I did call spx to hit 3k at this year.

 

[Shortthemkt]

There are still intraday opportunities to short. Watch closely on the 3007 level.

 

[Lasogette]

Huat like 2017
Low rates are here to stay. Whatever it takes.

Rinse and repeat what has worked previously.

 

[Shortthemkt]

Actually I did call spx to hit 3k at this year.

Then did u act on ur instinct?

 

[Dividends Warrior]

Rinse and repeat what has worked previously.

Yup, if it ain't broken, dun fix it.
My dividend investing strategy has worked quite decently since 2009.

 

[3dfxplayer]

The S&P 500 didn’t close above 3,000, although it hit 3,002.98 yesterday on an intraday basis, another all-time intraday high.

By the way, if you fear U.S. dollar inflation you shouldn’t buy gold or gold proxies. That’s the investing equivalent of buying a live horse when you want to eat a hamburger — wrong meat, too indirect, too messy. Just buy TIPS or a TIPS fund, such as ITPS or TIP5. (Note: Those particular funds are not appropriate for U.S. persons.) The U.S. Treasury has offered TIPS since 1997. (U.S. I Bonds also work very well in this particular role, but I Bonds require some U.S. financial “footprint” to buy and have low annual purchase limits.)

I’m not suggesting you should fear inflation, and perhaps you’re late if you want to do this. Also, on a medium-term and long-term basis stocks have been a terrific hedge against inflation, as it happens. Gold has not been.

TIPS is garbage. These things are indexed to the CPI but CPI isn't what it used to be, over the past decades the BLS has revised the methodology used to calculate CPI several times in order to understate inflation. "Hedonic quality adjustment" alone lowers the true rate of inflation by several points a year, this is how the US government gets away with paying out so little on social security. There are shadow stats out there that were derived from calculating the CPI based on old methodology (1980), the results are astounding, inflation has averaged around 10% in the last 2 decades, which was what people experienced in the 1970s.

 

[Lasogette]

Yup, if it ain't broken, dun fix it.
My dividend investing strategy has worked quite decently since 2009.

Still got what REITs and business trust can buy? The branded REITs u own all like ath.

 

[Shortthemkt]

There are still intraday opportunities to short. Watch closely on the 3007 level.

You should be a little bit in the $$ now. Any serious active intraday traders here? Make some noise.