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@PeanutButter
- You're right, I'd like to retract that statement I made about Warren Buffett timing the market. and I agree with you that he buys at a discount/great business at a higher price (the latter is because his capital is so large, that he's restricted from buying small, better businesses).
One thing I'd like to expand and add is that when people talk about Buffett, they always cite him saying buy an index fund for example or to copy what his moves are, which are namely in large businesses.
There is hidden gems that he drops which the majority of people don't know about-- and that's buying small, unloved businesses which are priced below their value.
- Regarding bailouts on Buffett, he "bails them out" by buying preferred shares which gives a cash injection to the company. Look at Goldman and Buffett in 08. This current bank crisis isn't over in my opinion and there hasn't really been "blood on the streets yet" so I'm sure there's opportunities for him in the near future.
- I agree, I don't like TA and don't care for it. It will never be as successful as long term value investing. I understand Buffett made the bet and won. But what I'm saying as "timing the market" is different than using TA.
There is a cycle people know it as the business cycle. But it's more of a real estate cycle. Approximately every 18 years there is a recession. Barring no extraordinary situations. And it usually happens when inflation starts running rampant. The only way for inflation to be tamed is to kill demand or increase supply. More often than not demand is killed by raising interest rates which lead to economic recessions and significant drawdowns in the stock market over the subsequent years.
Look at this chart regarding inflation. Correlate the peak inflations to the S&P performance for the next few years. It often falls.
Most of the time when interest rate goes up, economic activity stalls, which results in lower profits for companies and bankruptcies (for both company and consumers). So maybe it cannot be timed the market to a T but the probabilities and indicators are telling us that it will likely happen.
- The latest regional banking crisis is a common event in systemic risk events. When interest rate rises there will be systemic event as stated above, lower consumption, lower profits, higher interest rate payments if money was borrowed, etc. Thing is, banks have been lobbying for less restrictions on themselves, see Dodd-Frank act being partially repealed. Bankers are greedy and history repeats itself, and do not think for a second banks are any less egregious than they were.
- Hard landings is my way of saying there will be a large negative economic impact on many people, businesses, and ultimately the stock market. I continue to believe there's a 30%+ drawdown (we saw it happen already and we rallied back up sure, but will likely happen again).
- I agree with you in that there is potential to miss the run up, like this last dip bought. I can humbly say I did miss it and wasn't expecting it but learned that lesson. However, I also understand that I missed it because I have my thesis and rather preserve my capital for the actual drop which has again in my opinion yet to manifest.
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