We now have an inverted yield curve

Discussion in 'The Tiki Bar' started by El Capitan, Aug 14, 2019.

  1. Dani-Lu

    Dani-Lu Active Member SILVER Sponsor

    533
    Apr 20, 2007
    Delray Beach, Fl. / Long Island - GSB
    2001 410DA
    3126 Cats
    John,

    Please call me when you think we are near the bottom? :)

    Thanks!
     
  2. boatman37

    boatman37 Well-Known Member

    Jun 6, 2015
    pittsburgh
    2006 Crownline 250CR. 5.7 Merc BIII
    Previous: 1986 Sea Ray 250 Sundancer. 260 Merc Alpha 1 Gen 1
    5.7 Merc BIII
    I am an options trader. Rarely ever hold anything overnight except my 401k. Today I made 11% on AAPL calls and 14.5% on SPY puts. Yesterday I made 25% on NVDA calls. I bought ROKU calls yesterday (they expire this Friday) and taking a beating on them. It was a lotto trade but this is what usually happens when I hold a trade overnight. We get a pullback I'll look for buying opportunities for longer term holds.
     
    El Capitan likes this.
  3. Blueone

    Blueone Well-Known Member SILVER Sponsor

    Jan 24, 2007
    Lake Erie, Ohio
    2004 420 Sundancer
    Cummins 6CTA 450's
    I have been making heavy truck parts for 30 years. When the economy slows freight slows. Every truck manufacturer today is seeing their order backlog shrinking. This causes the factories to slow down production. So far no build rate reductions but it has to happen within 6 months. They have been going build crazy the last few years.... when the slow down happens I see this as a correction not a recession.
     
    El Capitan likes this.
  4. Golfman25

    Golfman25 Well-Known Member

    657
    Sep 12, 2009
    IL
    281
    V8
    Yep. That's what we are seeing. Going gangbusters for 2 1/2 years. Guys working 60 hours. Last few months we have slowed back to a slightly below normal level. Inventories being drawn down.
     
  5. El Capitan

    El Capitan Active Member

    439
    Jul 9, 2014
    Chicago IL./Vero Beach, Fl
    1970 SRV 180 w 2.5L Mercruiser.
    2000 Ford Expedition Eddie Bauer
    120HP Mercruiser
    Housing market is strong. Interest rates are low but housing prices are high. Bank loan committees are very strict which I agree with.

    You can wait for a correction with housing prices lower but you’ll see higher interest rates and tighter lending.

    Who the heck knows.
     
  6. boatman37

    boatman37 Well-Known Member

    Jun 6, 2015
    pittsburgh
    2006 Crownline 250CR. 5.7 Merc BIII
    Previous: 1986 Sea Ray 250 Sundancer. 260 Merc Alpha 1 Gen 1
    5.7 Merc BIII
    In a healthy market there has to be pullbacks and corrections. We have had small pullbacks recently but no real correction. The market cannot go straight up and sustain that. At some point you run out of buyers. Those holders need to take profits, which pulls markets down, then re-enter at a lower point. There are also investors sitting on their hands right now because smart money is not willing to enter at these highs. That money will be sitting idle until the risk/reward is more favorable.
     
  7. 16 Hemingway

    16 Hemingway Member

    52
    Oct 3, 2018
    2013 370 venture
    mercury verado's
    buy and hold great mega cap companies that not only pay a dividend but have a history of raising their dividend each and every year. this is a sign of positive increasing cash flow. as far as a looming recession-- average duration from the recession signal of the inverted yield curve is somewhere around 14 months. and average stock performance during that time is positive 8%. stay the course. and if you have cash--buy the dips.
     
    El Capitan likes this.
  8. 16 Hemingway

    16 Hemingway Member

    52
    Oct 3, 2018
    2013 370 venture
    mercury verado's
    and if anyone has concerns and would like to discuss further or review.... this is what I do for work. my email is mtommeraas@janney.com
     
  9. Creekwood

    Creekwood Well-Known Member GOLD Sponsor

    Apr 26, 2009
    Oakville and Georgian Bay, Ontario
    '97 330 Sundancer, Raymarine C80 suite with radar, Mercury 310 Hypalon w/8hp Yammie 2stk
    2X 454 carbs w/ vDrives
    Good insight. No panic here. Have ridden through 3 recessions in my adult life. 2 when I had investments that mattered. Stayed the course each time

    But..... what was the average market decline over the actual recession? 8% is from the signal to the start of the market drop but the drop was more than 8%. So most that rode it out were down more that they were up over the recession. And no one knows exactly when the drop will start so the 8% is only known with perfect hindsight. Not saying I am doing anything drastic. But piling new money into the market now? Not me. Not yet.
     
  10. Dani-Lu

    Dani-Lu Active Member SILVER Sponsor

    533
    Apr 20, 2007
    Delray Beach, Fl. / Long Island - GSB
    2001 410DA
    3126 Cats
    I hear you, but I am buying cash and trying to conserve as much money as possible, since my income will be directly tied to my investments.
     
  11. Dani-Lu

    Dani-Lu Active Member SILVER Sponsor

    533
    Apr 20, 2007
    Delray Beach, Fl. / Long Island - GSB
    2001 410DA
    3126 Cats
    Citi sent me a graph depicting 8% to 32% growth in S&P 500 in the last 4 Inversions. From the Inversion date to the beginning of recession date lasted 8 to 16 months.

    So the million dollar questions are, will history repeat itself, how many months and how do you know when to get out? Obviously making an 8% plus profit and leaving money on the table getting out early would/should be an acceptable strategy, unless you are a pig or hog (I can never remember which is worse).

    I guess betting the farm on this strategy would be too risky, but putting some expendable cash in wouldn’t be crazy.
     
  12. 16 Hemingway

    16 Hemingway Member

    52
    Oct 3, 2018
    2013 370 venture
    mercury verado's
    to Dani-Lu's point-- putting money to work but particularly in to companies which people view as a "flight to safety" is even a better plan.
     
  13. Dani-Lu

    Dani-Lu Active Member SILVER Sponsor

    533
    Apr 20, 2007
    Delray Beach, Fl. / Long Island - GSB
    2001 410DA
    3126 Cats
    One last thought from an investor that thinks way too much. In golf, you think you stink. I guess this carries over to investing for me :(

    We have a pro-stock market president. I think he will do whatever he can to stop a recession, until post 2020 elections. Delaying some tariffs on China until December is one example.

    So for you smart investors, some choppy days ahead, with good opps to buy and sell. For me, I will just hold the dice and keep thinking. But the one thing I won’t do is panic - I hope! :)
     
    El Capitan likes this.
  14. daddyox

    daddyox Member

    209
    Apr 1, 2007
    Connecticut River
    Sundancer 320 2004
    260 5.0 B III's
    Reading this entire thread I’ve come to a conclusion. Why not just invest in a new to me boat with known depreciation? At least I’ll be able to use it.
     
  15. Blueone

    Blueone Well-Known Member SILVER Sponsor

    Jan 24, 2007
    Lake Erie, Ohio
    2004 420 Sundancer
    Cummins 6CTA 450's
    The fed dropped the rate a 1/4% .... that was a mistake... Trump agreed.
    I agree trump is pro growth but I think we will go thru some pain before we take back manufacturing and trade... I think China has their own problems with Hong Kong and the Koreas... pressure from us only helps take them off their game.... will be interesting to see what happens
     
    Woody likes this.
  16. El Capitan

    El Capitan Active Member

    439
    Jul 9, 2014
    Chicago IL./Vero Beach, Fl
    1970 SRV 180 w 2.5L Mercruiser.
    2000 Ford Expedition Eddie Bauer
    120HP Mercruiser
    I betcha the Fed drops rates again if the consumer industry slows ie retail, real estate, auto etc.

    I believe Trump knows what he’s doing.
     
    Blueone likes this.
  17. Golfman25

    Golfman25 Well-Known Member

    657
    Sep 12, 2009
    IL
    281
    V8
    Sorry to all the "pundits" but a recession 8 to 16 months later doesn't make it a very good predictor. 8-16 months these days is a lifetime.
     
  18. Dani-Lu

    Dani-Lu Active Member SILVER Sponsor

    533
    Apr 20, 2007
    Delray Beach, Fl. / Long Island - GSB
    2001 410DA
    3126 Cats
    One correction - The underlined is wrong!! From the Inversion date to the beginning of recession date lasted 8 to 16 months.

    It should read: From the Inversion date to the Peak. Similar, but not the same..

    For the record, none of my comments are meant to be used for investing advice. These are just my hypothetical, logical to me, but future results may differ completely. In fact, the fact I am stating it, go the other way. :).

    And I agree with the recent comment about buying another boat - This you can take to the bank - The enjoyment you receive, will far outweigh the poor financial returns!!!!!!!
     
  19. Blueone

    Blueone Well-Known Member SILVER Sponsor

    Jan 24, 2007
    Lake Erie, Ohio
    2004 420 Sundancer
    Cummins 6CTA 450's
    Damn.... I hate disclaimers :)
     
    Dani-Lu likes this.
  20. sbw1

    sbw1 Well-Known Member

    Oct 10, 2006
    West Michigan
    This is listed in my signature
    This is listed in my signature
    IMG_4230.JPG Time in the market is what counts, not timing the market. All of the current noise is a reaction to short term events. Longer term, the market will sort this out. Relax folks.
     

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