Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member Latest Breaking News Editorials & Other Articles General Discussion The DU Lounge All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

Bernardo de La Paz

Bernardo de La Paz's Journal
Bernardo de La Paz's Journal
February 6, 2025

False dichotomy. That is a binary approach; very limited compared to a nuanced approach


Your post implies that an investor thinks a market is either a buy or sell and they should go all the way one way or another.

A multi-valued approach includes the possibility of holding cash or other instruments like bonds while being out of stocks, neither long nor short.

I simply think the market is too risky right now. I'm neither long nor short. I do think it is topping, but I could be wrong. I think the risk of a bear market outweighs the risk of missing some small gains from the tail end of a two year bull market during a time of orange chaos.

Your post further has another fallacy: that the main prediction is "soon plummet". In actuality, a person might think that a market will soon plummet or plummet before long or plummet after an extending topping period or plummet in any of those three ranges hence an unknown future point that could be sooner or later.

A third fallacy implicit in your post is the idea of being all long or all short (short the market). One can be all long, partly long, mixed long and short, out, partly short or all short.

People investing in mutual funds or ETFs can be in funds or in cash to varying degrees.

People who invest in individual stocks can let the stocks reveal their patterns individually. If they use trailing stops (either long or short) they will find that as markets top out and begin to roll over, they get stopped out of more and more stocks. Similarly if they have short positions in stocks as a bear market bottoms out.
February 6, 2025

I got in August 1 and got out Jan 9 and went to 85% bonds, 15% money


I haven't been invested for decades but was able to get back in in 2024 into a stock fund. Thus far I have not yet been able to follow enough stocks or get set up for a disciplined approach to investing in individual stocks like I want to and did decades ago. Then I had stops on stocks and was mostly out by the crash of 1987 (Black Monday).

I got out in January and into a bond fund. My reasoning is that the bull market is old, and that the orange chaos agent was making things too risky by January. I expect the market to go up and make some new records but not by much. I expect I am out before the peak, but I am peaceful and am out before a potential quick big drop.

There is irrational exuberance among conservative investors about the prospects of a tRump bull market (continuation of Biden bull market) and expected interest rate cuts. Such widespread sentiment ("I'm fully invested and going to stick with it" ) is common at bull market tops.

The problem is that conservative investors and advisors -- conservative in that they use simple strategies like buy-and-hold and dollar cost averaging (the best simple strategy when combined with portfolio rebalancing) -- the problem is that they expect things to more or less continue as before with only a few ripples and generally "steady as she goes" with all the usual indicators and aphorisms applying. They have not yet fully realized how chaotic things are getting rapidly. Tariffs (inflationary initially, depressive longer term) and labor force disruptions (massive govt layoffs and immigrant roundups) lead to job loss, contraction in consumer spending (60% of economy) and recession or worse. Drastically reduced government spending is depressive. Massive tax cuts for the rich do not stimulate the economy much, because the rich already have a lot of cash and have a lot of stuff parked in illiquid assets like real estate and artwork.

The average duration of the 11 recessions between 1945 and 2001 is 10 months, compared to 18 months for recessions between 1919 and 1945, and 22 months for recessions from 1854 to 1919.


So I expect a brief inflationary bump, and then interest rate cuts that don't stimulate the economy or the markets as much as expected because of the other severely contractionary forces. Then I expect an extended recession, probably longer than average, probably more like two years, until the effect of the 2026 Congressional elections (blue wave) start to put things back together again, and I hope a blue wave in 2028 for the Presidency.

I am foggy about bonds, but my thinking is that as interest rates decline, even if the economy declines, then the bonds that the fund already owns become more valuable.

My goal is to dabble a bit in puts and conservative option strategies on the downside, and then start picking up stocks carefully and slowly when I judge the stock market may be coming out of a bottom, in 2026, 2027, or later. I don't know when, but the market will tell me.
February 6, 2025

"last crash"? Are you referring to the crash in 1999, 2008, 2021 or the more recent piddly 2% day crashes?


Getting out at the top of 1999 or 2008 would have been smart. 2021 was harsh, but clearly the full amount recovered pretty quickly (a year or two) and in larger view looks more like a blip. That would have been a good one to stay in for, in hindsight, if that is what you are talking about.

Timing the market is very difficult, but can be arranged in stages and with gradualism if one does not expect 100% accuracy. If an investor can gain even only 60 % of a bull and avoid 60% of a bear, they are doing well and will do much better than buy-and-hold or even dollar cost averaging. One can end up in the 60% by getting out early, before the final top or after a top, and buying back in too early or too late.

One way of gradualism, especially for chart readers, is if you have a discipline with trailing stops and also with pullback stops set after new buys. If you have a set of stocks and they are rising and you keep raising trailing stops, then as the market tops and turns over, one by one your stocks will get stopped out and you will have timed the market. Similarly, if you are tracking interesting stocks and they are forming bases after a bear, you can see a breakout here or there and start nibbling in. Some buys will get stopped out because it was too early. As you find more and more breakouts, you find yourself more and more invested as a bull market gets underway.

S&P 500. Notice the log price scales on the lefts. Very important must-have feature when using charts.




February 6, 2025

Stock market cycles natural bc investors are emotional. Market too big for manipulation; individual stocks another story


I think there is legal manipulation of individual stocks.

When I was watching DJT {un}Truth Social stock for interest, not invested long or short, I noticed that there would be an hour or so of a thousand shares a minute roughly and not much price action. Then all of a sudden there would be 300,000 shares traded in two minutes. The price would shoot up about 20 to 50 cents. Then over another hour or so it would deflate back down.

I think what happens is that a big investor, a tRump sycophant, buys a bunch and sells it back out slowly. They may net a bit of money, but if not, they have propped up their dear leader's shares at not much cost.

Say it was at 25 bucks. Boom, an investor puts in orders and manages to buy say 200k shares, at say an average price of 25.20 as it ends up at 25.50. Other investors like day traders notice the action and put in orders to buy, say another 100k and it goes up to 25.50. Then the first investor starts dribbling shares for sale. But they are starting that when the price is higher than their last purchase. Over an hour, they dribble out and get out before it goes below 25.20. They make a profit. Day traders and maga suckers end up holding shares bought at 25.40 average, say, when the price has gone back below 25.20.

If the big investor's average buy-in on 200k shares was 25.30, and average buy-back was at 25.20, that's a loss of 10 cents per share or $20,000. Seems like a lot, but the investor purchase cost $5,060,000. In other words, they are pushing the market for that stock around at little relative cost.

In the meantime, the stock has gotten a boost and looks active and interesting even if the boost was only temporary. I've seen it used to halt a slow decline, where it was going down as the whole market went down a bit and then it diverged and didn't go down as much as the rest of the market.

I don't have any evidence, so this is pure supposition on my part thinking through how such action might work and why.
February 5, 2025

American friends, please vacation in Canada: Cdn dollar cheap, country is vibrant & beautiful


Canadians love American people, but tRump is almost as universally loathed as he is in the Democratic Party. Well, there are about 15% supporters here, just like everywhere every issue has 15% crackpots.

We love Americans (and we love your money too, to be frank!). But best be discreet (not silent, not invisible) about your American-ness. US flag tshirts would be helped and served, but cooly and professionally. Flag pins might start warm conversations about experiences on both sides of the border.

Be American, be proud of your country, and share our innate friendship that will ultimately outlast the maga infestation south of our border.
February 3, 2025

Yeah, I know. It's a sensitive time, so hear me out, please.


It's a joke that I have flipped in the past or posted the Canadian version of it: United Provinces of Canada and the Jesusland Confederacy. But it became hollow when tRump began talking about the 51st state. Even then initially I took a joking approach, much as you have, pointing out the EC votes, the extra blue Senators, etc.

But it soon become a sour joke when it became clear tRump is serious so I stopped a couple of months ago.

Right now, tRump has started a war against Canada, a trade-tariff war. Right now, we feel under attack from a country that embraced us until tRump knifed us in the back.

The embrace has always been a mix of a hale-fellow-well-met friendship and a crushing bear hug of US cultural and investment imperialism. Canada has had to work hard and expensively for my whole life to maintain a distinct culture and avoid being swamped and drowned by US culture.

So, I may have over-reacted a bit, but not by much. The "joke" feels like it is part of the attack these days, especially when it seemed to be so cavalierly delivered, as if it were only natural that tRump's claim was right, that everybody in the whole world wants to be American. Perhaps I was overly sensitive, but I do think it would be best if DU Americans had a bit more sensitivity during these times. Ask yourself how you'd react in 2042 if a dominant China was "joking" about making Hawaii, Alaska, and the West Coast provinces of Greater China while the airwaves were filled with C-pop, and executives and school children were all scrambling to take immersion Chinese lessons.
February 3, 2025

Turn it around. US join Canada, then you'll see why your suggestion is so repulsive.


Would you dissolve the US and have it join Mexico? Indonesia?

Don't you realize that Canadians love their country?

All this flippant discussion about joining the US, as if only stupid countries would not, is really arrogant American exceptionalism.

Do you not love your country? If you don't, then leave and renounce your citizenship. If you do love the US, then please stop with the background shitty assumption that other countries' peoples don't love their own countries because the US is obviously so much better.

Joining the US is a non-starter, so please just drop it. You (the USA) are causing enough deep problems for the good people of Canada who did not ask for any of this. Do not add the arrogance of casually discussing 51st or whatever state to our troubles.
February 2, 2025

Indeed. Pride goeth before a fall. It's a sin against themselves


maga pride is different from Pride ("out and proud" ) and different from pride in work (which is actually satisfaction at a job well done after analysis and assessment of the result).

Pride blinds people to reason, makes responses automatic, and encourages racism and sexism. Those are all things that lead to mistakes and ultimately they harm themselves as they harm others.
January 24, 2025

Wrong. Some billionaires are bad. I think you meant to say "Not all billionaires are bad" or "Some aren't bad"

This is a common error of sentence construction that seems rampant today. By clarifying perhaps I can help people think and express themselves more clearly.

The clearest expression is to say "Not" and then the phrase you are negating. To move the "not" inside the phrase disrupts and muddies the phrase. Alternatively, replace the "All" with "Some".

"All billionaires are rich."
"All billionaires" establishes the set under analysis.
"are rich" is the condition that is applied to them. (True they are all rich)

"All billionaires aren't bad."
"All billionaires" establishes the set under analysis.
"aren't bad" is the condition applied. (False: some billionaires are bad)

"Not all billionaires are bad."
"Not" means that whatever follows is going to be negated in its entirety.
Clearly means "It is not true that all billionaires are bad because it is a fact that some billionaires are not bad.
Alternatively, we can take the "Not all", which means "some", i.e. some billionaires are bad and thus by logic, the rest are good or neutral.
The "Not all" is often employed when the majority of a set are one way and we want to emphasize that some are not that way, which is your drift, your intention.

It has to do with the "all" quantifier contrasted with "some", because we can certainly clearly express ourselves when when we write "Some billionaires aren't bad and some billionaires are bad." In that sentence, the "not" is not muddying things by its position.

Profile Information

Gender: Do not display
Member since: Fri Jul 16, 2004, 10:36 PM
Number of posts: 52,326

About Bernardo de La Paz

Canadian who lived for many years in Northern California and left a bit of my heart there. (note to self: https: //images.dailykos.com/images/1043361/original/2016.09.19_sunflowers_header.jpg . https://i.imgur.com/1VKgdmc.jpeg)
Latest Discussions»Bernardo de La Paz's Journal