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Frequent Contributor

Tech warning signs?

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Re: Tech warning signs?

 From yogi's post: Up and Down Wall Street: 5 biggest SP500 stocks [FAAMG: FB, AMZN, AAPL, MSFT, GOOGL] cannot rise forever, and when that stops, they will take down the rest 495 stocks with them.

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Re: Tech warning signs?


@outandabout wrote:

 From yogi's post: Up and Down Wall Street: 5 biggest SP500 stocks [FAAMG: FB, AMZN, AAPL, MSFT, GOOGL] cannot rise forever, and when that stops, they will take down the rest 495 stocks with them.


So? Best time to buy the fab 5 is after a market sell off because they always rebound to higher price levels. As I recently noted, after the stock market sold off 20% in the last quarter of 2018 AAPL declined 33% from 220 to 147 in early January 2019 which was a great time to buy. AAPL closed at 371 yesterday. I dont own a SP 500 fund because there are too many losers.

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Re: Tech warning signs?


@FD1001 wrote:

video


         Maybe this is bad news for traders and good news for bottom feeders like us. 
Mostly I wait until something actually happens and see if there is an opportunity long term. I’ve been taking profits from AAPL recently as I see fund managers doing but adding to MSFT. Hopefully AMZN will be sucked into the downdraft. 

          This always reminds me that people market time based on their favorite financial gypsy (trend lines not globes) and make their prophesy come true especially if you can snare a whole group of gypsies spewing the same story. This helps to endear him or her closer to their followers and the cycle continues. I’ll just see what the smart money does with a tech “correction”.

          But where is the money going? Other sectors? Probably under current conditions back into MM funds. The trading range based on current news apparently not earnings yet may not change until after a national election and a vaccine, another 9-12 months. Tough to live on MM interest.

           *outandabout - AMZN itself has risen 600% itself since we purchased it. We’ve owned MSFT since the late 80’s, up 225 times what we bought it for. We own most of the other stocks you mentioned. My son bought FB at $17. Your correct nothing can go up forever but these types of stocks are a stairway to riches at the current time. Even mountain climbers pause along the way up to the summit.

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Re: Tech warning signs?

Makes perfect sense to me. This year has been a bit surreal and to have QQQ, for instance, recover then go to new highs after March lows. The question is what to do.


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Re: Tech warning signs?


@steelpony10 wrote:

   *outandabout - AMZN itself has risen 600% itself since we purchased it. We’ve owned MSFT since the late 80’s, up 225 times what we bought it for. We own most of the other stocks you mentioned. My son bought FB at $17. Your correct nothing can go up forever but these types of stocks are a stairway to riches at the current time. Even mountain climbers pause along the way up to the summit.

 


steel, some individual stocks can be a stairway to riches, but young investors shouldn't be relying are just a few stocks to make their riches. At the "current time" I'm very willing to sit back, rather than stepping into a stairwell. It seems you've done exceptionally well, Steel, but not all of us had the opportunity to invest enough to turn ourselves into wealthy individuals. Personally, I had family obligations that came first, but still invested what we could afford. Another M* member suggested the FAANG stocks to me as current investments if I was challenged to find opportunities outside of my current holdings, but I'm in no hurry to spend money when my current financial situation isn't in need. 

The money mkt offers little, but what you have is there tomorrow. It could be the best investment some investors will make as the current situations play out.

I have been taught by my own mistakes and they serve me well and make me more cautious and not to increase my folly.

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Re: Tech warning signs?


@Intruder wrote: I dont own a SP 500 fund because there are too many losers.


Vanguard’s S&P500 Fund VFIAX has returned, on average, 13.60% per year over the past decade ( ten years in a row ) including all their losers; that outperformed 91% of the other funds in its category. With a healthy dose of the mentioned tech stocks in the fund and the fund Warren Buffett has recommended for his heirs it seems like a decent choice for many investors.

"There seems to be some perverse human characteristic that likes to make easy things difficult.---Warren Buffett"

veni vidi vici vti
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Re: Tech warning signs?


@outandabout wrote:

@steelpony10 wrote:

   *outandabout - AMZN itself has risen 600% itself since we purchased it. We’ve owned MSFT since the late 80’s, up 225 times what we bought it for. We own most of the other stocks you mentioned. My son bought FB at $17. Your correct nothing can go up forever but these types of stocks are a stairway to riches at the current time. Even mountain climbers pause along the way up to the summit.

 


steel, some individual stocks can be a stairway to riches, but young investors shouldn't be relying are just a few stocks to make their riches. At the "current time" I'm very willing to sit back, rather than stepping into a stairwell. It seems you've done exceptionally well, Steel, but not all of us had the opportunity to invest enough to turn ourselves into wealthy individuals. Personally, I had family obligations that came first, but still invested what we could afford. Another M* member suggested the FAANG stocks to me as current investments if I was challenged to find opportunities outside of my current holdings, but I'm in no hurry to spend money when my current financial situation isn't in need. 

The money mkt offers little, but what you have is there tomorrow. It could be the best investment some investors will make as the current situations play out.

I have been taught by my own mistakes and they serve me well and make me more cautious and not to increase my folly.


 

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Re: Tech warning signs?


@outandabout wrote:

@steelpony10 wrote:

   *outandabout - AMZN itself has risen 600% itself since we purchased it. We’ve owned MSFT since the late 80’s, up 225 times what we bought it for. We own most of the other stocks you mentioned. My son bought FB at $17. Your correct nothing can go up forever but these types of stocks are a stairway to riches at the current time. Even mountain climbers pause along the way up to the summit.

 


steel, some individual stocks can be a stairway to riches, but young investors shouldn't be relying are just a few stocks to make their riches. At the "current time" I'm very willing to sit back, rather than stepping into a stairwell. It seems you've done exceptionally well, Steel, but not all of us had the opportunity to invest enough to turn ourselves into wealthy individuals. Personally, I had family obligations that came first, but still invested what we could afford. Another M* member suggested the FAANG stocks to me as current investments if I was challenged to find opportunities outside of my current holdings, but I'm in no hurry to spend money when my current financial situation isn't in need. 

The money mkt offers little, but what you have is there tomorrow. It could be the best investment some investors will make as the current situations play out.

I have been taught by my own mistakes and they serve me well and make me more cautious and not to increase my folly.


          Well I can invest like this because WINTEL and AAPL, overvalued high PE leaders of their time, gave me enough gains to invest in CEF’s 20-30 years later to live on their 8 -10% yearly payouts. This is basically LTC money if ever needed.

           I understand your starting position, we were all there. My first 2k went to a state muni fund, JNJ and KO. My one son’s went to FAANG’s. Same starting point, late 20’s. Sure it will all come to an end some day like MSFT, INTC and AAPL’s hay day did but I still think this is where the young should be at least in part currently.

             You’re as familiar as me then with “Don’t invest in the market unless you can afford to lose money”. So you and maybe most take a more cautious path. I just have the attitude if I have a chance to lose I’ll patiently follow the market leaders long term which the smart money does to hopefully improve my odds which it has for 40+ years.

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Re: Tech warning signs?

It all depends on your style and goals. If you buy and hold for years this thread isn't for you.  If you buy bottoms this thread isn't for you.

But, if you added 10-20+% to equities when prices were much lower and were looking to get back, that maybe a good time. If you invested a much higher % in tech and wanted to change that maybe it's a good time. That can lead to several options such as 1) lower % in stocks   2) lower your tech exposure from QQQ to SPY  3) More value stocks and maybe GLD  4) change from a typical index such as SPY to Invesco S&P 500 Equal Weight ETF (RSP). 

In my case, I don't buy bottoms or sell tops, I wait for a rebound and join the uptrend just to make several % and I sold weeks ago, after all, my goals are to make a certain % with the lowest volatility ;-)

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@Intruder wrote:

@outandabout wrote:

 From yogi's post: Up and Down Wall Street: 5 biggest SP500 stocks [FAAMG: FB, AMZN, AAPL, MSFT, GOOGL] cannot rise forever, and when that stops, they will take down the rest 495 stocks with them.


So? Best time to buy the fab 5 is after a market sell off because they always rebound to higher price levels.


And what will determine your entry point, Intruder? Surely not Monday!? There are a couple of those mentioned that I would buy eventually, and it sounds as you can wait until....................

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Re: Tech warning signs?


@FD1001 wrote:

It all depends on your style and goals. If you buy and hold for years this thread isn't for you.  If you buy bottoms this thread isn't for you.

 

In my case, I don't buy bottoms or sell tops, I wait for a rebound and join the uptrend just to make several % and I sold weeks ago, after all, my goals are to make a certain % with the lowest volatility ;-)


Sounds about right. I don't expect to be the first in or the last out with any of my individual stocks. LOL, that has been the case, but I done alright for one who isn't greedy or one who remains fully invested.

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Re: Tech warning signs?


@outandabout wrote:

@Intruder wrote:

@outandabout wrote:

 From yogi's post: Up and Down Wall Street: 5 biggest SP500 stocks [FAAMG: FB, AMZN, AAPL, MSFT, GOOGL] cannot rise forever, and when that stops, they will take down the rest 495 stocks with them.


So? Best time to buy the fab 5 is after a market sell off because they always rebound to higher price levels.


And what will determine your entry point, Intruder? Surely not Monday!? There are a couple of those mentioned that I would buy eventually, and it sounds as you can wait until....................


When AAPL is cheap or on the rebound. I bought at 282 on 4/28 on the premise that AAPL would increase as the economy improved. I had no time frame for the stock to appreciate. AAPL closed at 371 on Friday up 32%.

 

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Re: Tech warning signs?


@FD1001 wrote:

It all depends on your style and goals. If you buy and hold for years this thread isn't for you.  If you buy bottoms this thread isn't for you.

But,...


Good heads-up.

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Re: Tech warning signs?

Screenshot_2020-07-25 VFIAX,VTI,QQQ - SharpCharts com Performance Workbench.png

Here is the comparison chart of VFIAX with VTI,QQQ, and VGT using VFIAX as the reference. Do not mistake me. I have been investing in VTI and the corresponding mutual fund as my core for more than 25 years and recently a lot of cash in VTI when I moved all my TIAA assets to Vanguard. I still use it as a core. At the same time, compare the performance of QQQ and VGT. So, growth category has outperformed by 340% and 280%, and it is not a chump change.

The recent small drop should not worry about because it is only temporary, may be time to buy more using this drop. Why would I say that? I used to think that VTI was expensive when it at $56/share and VIG was expensive when it was $43/share. I still have some of those shares with a huge CG. So, if you think long term, growth has cenrtainly outperformed even though I had not been investing in QQQ or VGT until last week. I still use VTI as my core except that I have cut it from 60% to 40%.

 

 

 

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Re: Tech warning signs?


@Bentley wrote:

@Intruder wrote: I dont own a SP 500 fund because there are too many losers.


Vanguard’s S&P500 Fund VFIAX has returned, on average, 13.60% per year over the past decade ( ten years in a row ) including all their losers; that outperformed 91% of the other funds in its category. With a healthy dose of the mentioned tech stocks in the fund and the fund Warren Buffett has recommended for his heirs it seems like a decent choice for many investors.


10 yr total return for QQQ averages 19.92% per year.

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Re: Tech warning signs?

https://www.foxbusiness.com/markets/investor-anxiety-greed-market-melt-up

Excerpts from article:

Now, some analysts see recent signs of a “melt-up” in which investors are buying things simply because they are rising, with little regard for economic fundamentals or the mixed signals sent by assets including stocks and bonds rising together. Traders are riding the momentum in everything from large technology stocks like Apple Inc. to the precious metal silver.

Such powerful rises are a concern for analysts who worry that the investments will suddenly fall in tandem if trading patterns shift or the pandemic worsens, driving a broad market retreat. Memories remain fresh of a bruising March selloff during which investors sold stocks and dumped assets normally deemed havens as governments halted business and travel.

People are hopping on the train, and they’re also looking to get anything else in their portfolio for when the day of reckoning comes,” said Christopher Stanton, chief investment officer of Sunrise Capital Partners. Mr. Stanton is betting against the dollar, expecting Federal Reserve stimulus programs to continue weakening the currency, boosting investments from stocks to commodities that are priced in dollars.

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Mr. Stanton is betting against the dollar, expecting Federal Reserve stimulus programs to continue weakening the currency, boosting investments from stocks to commodities that are priced in dollars.”

Interesting observation—hopefully true, since all my stock buys lately (and in the foreseeable future, as long as US cities are in flames and armed rioters are looting and pillaging) are in foreign stock, where I see ample opportunities to find growth and value.

Makes me wonder about foreign bonds, which I’ve never owned, purely as a currency play—which I’ve never done.

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Re: Tech warning signs?

While usd might weaken but if other currencies weaken more usd will get stronger. Something like this happened last time.

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Re: Tech warning signs?


@waffle wrote:

While usd might weaken but if other currencies weaken more usd will get stronger. Something like this happened last time.


That's what I see because everyone wants to weaken their currency. I am in gold for the first time.

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