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Market timing step 2: going back in

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  • Mar 23rd, 2022 1:09 am
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yvrbanker wrote: What should happen to convince you to enter that order? If the market goes under yesterday's lows, surely VTI won't stop declining at 110.
So it went down to $109.49 yesterday (Mar 23rd) - trying not to regret not upping the VTI limit to $110 (kept my -40% off ATH orders intact - for now.. although $103.54 doesn’t seem realistic, but “we shall see” :))
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So like the bank robber said, "Nobody moves - nobody gets hurt".

I'm trying not to move (be patient) until I see earnings come out.
Usually management is all about being positive and upbeat, but when they write stuff like BCE did on Friday, it's time to "freeze".
Due to the speed with which the situation is developing and the uncertainty of its magnitude, outcome and duration, we are not able at this time to estimate the impact of the COVID-19 situation on our operations or financial results; however, the impact could be material.
From here - emphasis mine.

Next earnings dates of some securities I own or am watching (√ = confirmed date).

next earnings.png

Source: Koyfin.com
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freilona wrote: Thank you so very much, @MrMom! =) Avocado toast and diamonds make this high quality content housewife and millennials friendly! Face With Tears Of Joy I think it deserves its own thread (as I’m sure many would love to learn now), but I’ll be happy to be able to find it in this one =)
Agree 100%.
As someone with limited knowledge of bonds, I have learned a lot from @MrMom's posts.
It would be great to have all the anecdotes in one place.
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MrMom wrote: Every pundit, including this BBG writer, who writes on this topic must never have marked a credit book during a crisis. People should not assume the NAV accurately reflects the underlying prices of the assets. Seems like hardly anyone understands that price discovery ≠ NAV ≠ ETF price. Attempt to arb at your own risk. He is correct though, a good wake up call.

Bond ETFs Will Never Be the Same After Coronavirus
March 23, 2020, 6:00 AM EDT

https://www.bloomberg.com/opinion/artic ... his-crisis
Good read, and liquidity is half of the problem. The other half is described here :

Why Your Supposedly-Stable Fixed-Income ETF Fell Off A Cliff


Rod
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freilona wrote: So it went down to $109.49 yesterday (Mar 23rd) - trying not to regret not upping the VTI limit to $110 (kept my -40% off ATH orders intact - for now.. although $103.54 doesn’t seem realistic, but “we shall see” :))
I noticed it indeed stopped there, after trillions of dollars in stimulus which wasn't realistically expected either. Well, what's the worst that can happen after not buying? The economy magically recovers and stocks go to new ATH? Not an outcome that should bring any regrets. Realistically, there will be lots of bad news coming, starting from unemployment reports and then corporate earnings reports for the next few quarters. It will take quite a while for the market to evaluate the new reality.
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yvrbanker wrote: It will take quite a while for the market to evaluate the new reality.
Yep, I used to always rush in, so using this opportunity to practise patience Grinning Face With Smiling Eyes
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I looked over the Nike quarter, they posted very strong growth in Asia, however sales in China were down 5%.

They still managed 5% year over year revenue growth system wide even with the shutdown of their stores. Overall it was pretty reasonable considering the global health crisis going on. If any company was to be in the "center of the storm" I'd assume it would be Nike and Apple.
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Gungnir wrote: I looked over the Nike quarter, they posted very strong growth in Asia, however sales in China were down 5%.

They still managed 5% year over year revenue growth system wide even with the shutdown of their stores. Overall it was pretty reasonable considering the global health crisis going on. If any company was to be in the "center of the storm" I'd assume it would be Nike and Apple.
Its only results till the end of Feb. The virus impact will barely show in these results.
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zobi123 wrote: Its only results till the end of Feb. The virus impact will barely show in these results.
Good point.

China was in pandemic mode during Feb so they said they learned from that and would apply to rest of world. Plus most stores in China now open and said growth coming.

That said visibility and results for rest of world that was more impacted after quarter [March onwards] going to be tough. Not going to sell as optimistic in their mgmt.
2022/3: BOC raised 10 times and MCAP raised its prime next day.
2017,2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
2020: BOC dropped rates 3 times and MCAP waited to drop its prime to include all 3 drops.
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IrwinW wrote: So like the bank robber said, "Nobody moves - nobody gets hurt".

I'm trying not to move (be patient) until I see earnings come out.
Usually management is all about being positive and upbeat, but when they write stuff like BCE did on Friday, it's time to "freeze".


From here - emphasis mine.

Next earnings dates of some securities I own or am watching (√ = confirmed date).


next earnings.png


Source: Koyfin.com
I bought a bunch of BCE the other day because in all honesty I can't figure out how this situation is going to affect BCE revenue much and I think it is an amazing value right now.

- Yes, they just took some charges for allowing data overages etc. This is not a huge deal however.
- Most of their revenue is not driven from retail transactions
- Most BCE employees can work remote. Yes this includes call centre employees. So it's not like they are paying people to not work as many companies are
- They're probably raking up a lot of new CRAVE subscribers

Cell phones, internet, these are non-optional expenses for most people... people will buy cheaper groceries before they will cancel their cell phone.
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zobi123 wrote: Its only results till the end of Feb. The virus impact will barely show in these results.
Their stores are already reopened in China and South Korea...
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Gungnir wrote: Their stores are already reopened in China and South Korea...
did we isolate, quarantine, and test like they did?
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rodbarc wrote: Good read, and liquidity is half of the problem. The other half is described here :

Why Your Supposedly-Stable Fixed-Income ETF Fell Off A Cliff


Rod
Re: SA article the market, buy side requests and order flow changed about 5 years ago.

From the 2008/9 playbook. When you can't get risk off, you sell anything you can and that means the most liquid assets, bank "deposit notes." Too bad everyone has seen that playbook. Except for the recently promoted traders since then who are eager to write "volume." School of hard knocks for them.

In normal times, the buy side became so big, they offered to provide liquidity because there wasn't enough supply to go around. Well, where are they now?

In normal times, some institutional investors might sell some bonds to pay for the new issue. Lead dealers in the syndicate might bid alone or share the risk of the "out trades" so they can place the new debt.

Back to a previous post, the bonds being sold might be the less then pristine apples. Aka off the runs and less desirable. In normal times, some of that risk might be recycled to other investors.

These are not normal times. Who wants to add risk in this environment? Lastly, thanks to regulatory changes since 08/09, dealers acting as principal has greatly diminished.

Canadian corporate bonds battered amid market carnage
March 24 at 6:35 PM ET

"With many investors liquidating all they can, there are few buyers for even the safest Canadian corporate debt, while the market is virtually inaccessible to new issuers. A CIBC report estimated Canadian bond market liquidity at just 10 per cent of its normal levels."

https://www.theglobeandmail.com/investi ... t-carnage/

The NY Fed actions seems to have succeeded. In the Fed we trust.





What's my point? No trades equals no price discovery. No price discovery means it's very hard to judge what the "right" price to mark a bond. There will be a wide range of marks. I can't go through all the stuff I've seen. How do you know what is "right?" These are not Level 3 assets and can't be held at cost. Well if no one knows, what does that mean for ETF NAV's? Michael Burry 2-0.

Update #1
IMO, although I know I am not alone in thinking this, the market has changed over time in a way that some desired and pushed for. That's coming back to haunt them now. Yes, that's as much transparency as I can share on public forum.

Update Mar 27

How the Fed helped bond ETFs meet their biggest challenge


Update Mar 28

The biggest lesson investors can learn from exchange-traded note liquidations

https://www.cnbc.com/2020/03/27/exchang ... stors.html

In the end, there’s one important takeaway for investors from this phenomenon, Nadig said: “know what you own and know why you own it. You’ve got to understand what’s under the hood.”
Last edited by MrMom on Mar 28th, 2020 10:29 pm, edited 2 times in total.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
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brunes wrote: I bought a bunch of BCE the other day because in all honesty I can't figure out how this situation is going to affect BCE revenue much and I think it is an amazing value right now.

- Yes, they just took some charges for allowing data overages etc. This is not a huge deal however.
- Most of their revenue is not driven from retail transactions
- Most BCE employees can work remote. Yes this includes call centre employees. So it's not like they are paying people to not work as many companies are
- They're probably raking up a lot of new CRAVE subscribers

Cell phones, internet, these are non-optional expenses for most people... people will buy cheaper groceries before they will cancel their cell phone.
I'd also rather own telco equity than bank equity right now. Gather your inner Peter Lynch and do the assessment of the individual companies and the sectors.

BTW, when you can place debt in this Cdn market, you are doing something right.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
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The headline is misleading. You'll have to read to see.
Everyone aspires to be JPM.



One big US bank said it was regularly putting through twice its usual daily volumes in its cash equity trading division.

“Equity volumes have been ‘off the charts’ and the trading firms’ equity trading revenues will reflect the strength,” said Gerard Cassidy, analyst at RBC, who recently increased his first-quarter trading revenue forecasts for Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley.

Within equities, cash trading, particularly over electronic platforms, was the strongest, bankers said, while equity derivatives was the weakest, hinting at potential issues for the French banks who dominate that space.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
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Jan 18, 2016
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Gotta admit, I'm really surprised that virtually no one on this forum is talking gold. If you're a gold bug,and have held on, you are perfectly positioned right now. If you're not, the liquidity dump that hit everything may be your last chance to get in at these prices. Seriously, other than miners, who is going to report positive earnings in Q1? is there still that much hate for the yellow metal?
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Patiently waiting right now, and regretting not jumping into some of my stocks I was watching to ride the 10-15% wave.
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twowood wrote: Gotta admit, I'm really surprised that virtually no one on this forum is talking gold. If you're a gold bug,and have held on, you are perfectly positioned right now. If you're not, the liquidity dump that hit everything may be your last chance to get in at these prices. Seriously, other than miners, who is going to report positive earnings in Q1? is there still that much hate for the yellow metal?
Oh there’s a few but the issue with gold is that you likely had to been holding it before this. Many on here do argue for it to be a part of the portfolio. And it clearly does work as a diversification tool. The question is what happens to gold on the other side of this? The playbook that’s most recent is the post credit crisis gold meltdown. A 35% drop in the commodity and the stocks got annihilated.

There’s also an abundance of other liquid products to play the fear trade....long VIX ETFs, long bear ETFs. So there competition on that side of the spectrum. Then you also have the bitcoin side of things that’s almost what has been pushed as the virtual form of the gold trade.

So while not against it as part of the portfolio...even then it may be a source of funds if you want to go bargain shopping at some point.
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Out of curiosity, what brokers are you guys using to place buy orders?

Currently using TD Trading Service.
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Bleachway wrote: Out of curiosity, what brokers are you guys using to place buy orders?

Currently using TD Trading Service.
TD DI here as well.

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