The FTSE

[MCFCinUSA]

. 60/40 is about as unsophisticated as that gets

I'll go along with this (that it's old hat and most definitely passe) but in defense of someone bandying about the traditional 60/40 - I think he was talking about stuff that retail can get its head around.

;o)

Did we once have a pint together at Fado's - or am I mixing you up with another 'Chicago Blue' on here?

I've been back in the UK for some 18 months now, and haven't touched down anywhere since.. is it correct that about 1/3 of all international routes are now off the table post pandemic - and what are your thoughts on what's ahead? Things aren't going back to how they were in a hurry - is that on the money do you think?

 

[MCFCinUSA]

@SWP's back could probably answer this better but as far as I'm aware there are 2 end games.

Either the retail/WSB crowd hold, refuse to sell, and the price goes up and up until the shorts can no longer afford the interest payments and settle their positions for a ginormous loss, after which GME drops off a cliff.

Or the Hedge funds stick it out, people on the retail/wsb start to get fidgety and sell their shares because the gains they made were decent, and the price goes down, more people panic thinking it's over and sell, the price goes down more and more, the hedge funds start closing out their positions so more people sell, the price probably goes most of the way down to where it was.

Retail were only net buyers on Monday, they went to net sellers from Tuesday onwards (source: Citadel) so there is no WSB 'hold the line' orchestrated move; which implies - as I mentioned a few pages earlier, professional day-traders, prop and high frequency firms, and most likely other hedge funds and their algos were all lumping on to things to keep prices moving up.. the original 'organisers' have now been named, and of course are all back-peddling because of the legal issues they open themselves up to in the USA..

.. I wonder if there are claims and actions arising out of all this Stateside (because I expect plenty of bag holders when all is said and done, and some folks have been a little naughty) and looking around at how many people here seem to want to get in on something that is only 'a greater fool theory' whether they'll be a nexus for UK participants to file claims?

Not that I think of the UK in the same way I consider the US - in that we're not as litigious, and neither are we such a 'Nanny-state' and as puritanically straight-jacketed (thinking of the 'average' American, which I know is a misnomer but you know what I mean) when compared to Europe.. although when it comes to owning guns and bullets America has everyone beat. You cannot fault the Americans, they're always first class, have the highest quality, the best of everything - even the violence.

 

[domalino]

(source: Citadel)

lol

 

[ChicagoBlue]

I'll go along with this (that it's old hat and most definitely passe) but in defense of someone bandying about the traditional 60/40 - I think he was talking about stuff that retail can get its head around.

;o)

Did we once have a pint together at Fado's - or am I mixing you up with another 'Chicago Blue' on here?

I've been back in the UK for some 18 months now, and haven't touched down anywhere since.. is it correct that about 1/3 of all international routes are now off the table post pandemic - and what are your thoughts on what's ahead? Things aren't going back to how they were in a hurry - is that on the money do you think?

I’m not opposed to 60/40, because the choice of how to invest ones own money is personal. I just know it’s not for me, mainly because I have other future income streams that are not market-based. It may be perfect for the person who rolls in off the street and wants an easy to understand strategy they can rebalance every few years.

There is also a Chicago Blues on here, too. However, I’ve definitely downed a few in Fado’s around the country, and can be a bit of a talker with a friendly. However, I don’t think it’s me.

I’m not sure anyone could say that 1/3 of the worlds international routes are dead post-pandemic, because nature abhors a vacuum, and if people want to go, someone will provide the service.

That said, retrenchment to strength is always the game plan during these economic shocks, so the long, thin international route build out could take considerable time.

At my airline, we went from regularly offering new growth routes to parking entire fleets of aircraft and transitioning wide body capacity to cargo almost overnight.

One group of factors that will determine speed of build back will, of course, be leisure passenger sentiment coupled with GDP, which drives business travel and airline profitability.

However, there’s also a chance that if rebuild is very quick, pricing might takeoff (pun intended!) given the large numbers of aircraft that have been retired, plus those put into long term storage that would require expensive maintenance updates before flying again.

Aviation is a supply and demand business selling a perishable product, coupled with the willingness of some airlines to price below cost to gain market share.

Currently, I’m not sure anyone is in a position to lose money for marginal share, so hopefully there will be a well organized, less cannibalistic approach, towards a reasonable build back of both capacity and profitability.

If not, there will either be blood in the water or asset sales and/or mergers in 2022!

 

[Wafty Cranker]

yeah I know about this, and also Michael Saylor's MSTR - but it doesn't change the fact that BTC has nothing behind it but people's faith.. and if that goes, you know what'll happen - there are plenty of very seasoned market professionals who don't dismiss the possibility of it going to zero (and the vast majority of managed funds cannot and will not put client money into it because the volatility is still way too high.. maybe if BTC is still around in another decade and it's vol is not so high, it could become mainstream, but it's one hell of a risky 'asset' and likely isn't going to be more than a fraction of a single percent for most managers who have the permission and constitution to trade it)

Fair enough. Can’t argue with too much in there. I think possibly I see Bitcoin as a bit more mature than you and further into that journey to becoming “mainstream”.

I’m happier with Bitcoin in the portfolio than I would be with GameStop!

A nice rally after Michael Saylor’s seminar with corporate execs at Binance Blockchain week this week would be nice.

 

[MCFCinUSA]

lol

they account for over half of all retail trading in the US; it is Citadel who Robinhood et al route their business to, and it's because of this concentration that lends fragility to this aspect of US markets and one of the reasons certain observers were concerned about increasing systemic risk (which is still there, regardless of when GME blows over.. currently 1x1 186/187 quoting out of hours as I type this with 36.9 million traded today, which is hardly surprising)

here are the retail numbers I was quoting from last week from Citadel (laugh all you like, but they're almost the only game in town, which is hardly amusing compared to when you had multitudes of market makers and greater order book depth and a far more robust 'exchange'):

• Retail Buys Retail Sells Net Market Volume Market Share
• Monday 26,558,557 24,489,122 2,069,435 177,874,000 28.7%
• Tuesday 24,888,375 26,794,942 (1,906,567) 178,587,974 28.9%
• Wednesday 12,966,267 13,743,184 (776,917) 93,396,666 28.6%
• Thursday 9,972,227 10,078,110 (105,883) 58,816,595 34.1%
• - TOTALS: 74,385,426 75,105,358 (719,932) 508,675,235 29.4%

(sorry I'm a noob at making tables in this, so for any supernerds I've attached a screen shot of how it looked at my end before I hit send if you want to see the numbers properly displayed)

 

[MCFCinUSA]

Fair enough. Can’t argue with too much in there. I think possibly I see Bitcoin as a bit more mature than you and further into that journey to becoming “mainstream”.

I’m happier with Bitcoin in the portfolio than I would be with GameStop!

A nice rally after Michael Saylor’s seminar with corporate execs at Binance Blockchain week this week would be nice.

nope - I'm quite a lot older than Bitcoin, although I wouldn't mind rolling the clock back... sounds like you're long the stuff.. I hope this thread ages well for you buddy.

* and I trust you've done your due diligence on Saylor, he has form.

 

[MCFCinUSA]

I’m not opposed to 60/40, because the choice of how to invest ones own money is personal. I just know it’s not for me, mainly because I have other future income streams that are not market-based. It may be perfect for the person who rolls in off the street and wants an easy to understand strategy they can rebalance every few years.

There is also a Chicago Blues on here, too. However, I’ve definitely downed a few in Fado’s around the country, and can be a bit of a talker with a friendly. However, I don’t think it’s me.

I’m not sure anyone could say that 1/3 of the worlds international routes are dead post-pandemic, because nature abhors a vacuum, and if people want to go, someone will provide the service.

That said, retrenchment to strength is always the game plan during these economic shocks, so the long, thin international route build out could take considerable time.

At my airline, we went from regularly offering new growth routes to parking entire fleets of aircraft and transitioning wide body capacity to cargo almost overnight.

One group of factors that will determine speed of build back will, of course, be leisure passenger sentiment coupled with GDP, which drives business travel and airline profitability.

However, there’s also a chance that if rebuild is very quick, pricing might takeoff (pun intended!) given the large numbers of aircraft that have been retired, plus those put into long term storage that would require expensive maintenance updates before flying again.

Aviation is a supply and demand business selling a perishable product, coupled with the willingness of some airlines to price below cost to gain market share.

Currently, I’m not sure anyone is in a position to lose money for marginal share, so hopefully there will be a well organized, less cannibalistic approach, towards a reasonable build back of both capacity and profitability.

If not, there will either be blood in the water or asset sales and/or mergers in 2022!

much appreciated for your thoughts and taking the time to share.. not sure where I read the international routes stats - the Guardian and Telegraph are my usual casual news sources but in an 80/20 Pareto ratio - ;o) - but they got hit hard, whereas domestic travel not so much; I think the journalist/analyst wasn't relaying too optimistic an outlook, and also for the airport operators (they're in a pretty deep hole too)

 

[SWP's back]

I guess you are a bit touchy about people having opinions. Textbooks, you say? Well, what could I possibly say to that?!

If you told me ANYTHING about aviation and I thought you were right, I’d agree. If I thought you were wrong, I’d disagree and tell you why I had my opinion.

Before I went onto to get a BS & MS in Aeronautical Science, I got a BS in Finance, and worked as a Financial Analyst for a Fortune 500 company.

When I became a major airline pilot, my first Union position was as the Retirement & Insurance Representative. I still do work with them occasionally as my best friend took over that position when I moved up to Chairman.

That said, I’ve seen the Schwab analysis of investment portfolios of the 12,000 high income professionals I currently help represent, and I’ve heard more sob stories regarding their lack of sophistication than I can, or would, share. Many are 7 figure portfolios and people with advanced degrees!

As an industry professional yourself, you are seeing your own data, and good for you. Your clientele have self-selected themselves as SOPHISTICATED, because they’ve sought professional help to protect and grow their assets. That self-selection, in and of itself, says something. And, fwiw, over my 25yrs doing this, I’m probably at seeing about 30,000 pilots, so take that for what it’s worth, which appears to be nothing!

Yes, most UNSOPHISTICATED investors will plunk down their money in a Retirement Target Date group of investments, such that their risk trajectory decreases over time. 60/40 is about as unsophisticated as that gets (100- your age is a great cookie cutter approach if nothing else), but whatever helps someone sleep at night is the best investment mix for most. Most of the people with whom I interact usually have at least 3 other retirement income sources, so their stock portfolio can often be considerably less risk averse than most retail
Investors.

My buddy swears by the Permanent Portfolio, because he is pretty set with his $$$ and prefers steady, relatively stable growth in the 6% range. It’s not Treasuries, but it’s not Tesla, either. I think the trajectory of bonds, especially Treasuries are at the end of a long bull market, so the returns on the PP may not be repeatable over the next X number of years due to Fed actions, but that’s my opinion that I shared with him. Believe or not, he already knows how to land planes (he flies the 787), and didn’t take offence. BTW, he does taxes as a side gig, so I tend to listen to him and his ideas, for which he normally provides references.

I’m hope you enjoyed swinging your dick in my general direction, and that it helped you feel good about yourself. Is it cold where you are?

You should always feel free to share any and all opinions with me regarding aviation, but I’ll make sure not to talk money with you, as it appears to be a bit of a touchy subject if one has opinions.

Have a profitable day! I know I am...and I haven’t even had lunch yet!

View attachment 9418

See, you’re not the only one with dick moves....and before you ask, “freezing with 16 inches on the ground!”

Snow that is!

You’re still not getting it although I absolutely loved your post, I love it when you wave your willy at me.

As I explained more fully a few pages back, most normal, run of the mill laypeople do not have the capacity and appetite to hold only ETF Equity portfolios. You and I both know that if you stick your life savings in an S&P500 tracker and then didn’t check your value again for 20 years then you’re on to winner and you’d have no complaints about the growth - and if you back test it, it doesn’t matter which 20 year period you choose.

But in the real world people do check their value and when your 2001/2’s and 2008/09’s happen, people panic and pull their funds out when they see losses of 30-40%. This is obviously the worst possible thing that an investor can do as they crystallise what is only a paper loss (it’s also the opposite of what people do when there’s a housing slump - no one ever sees their house has lost £100k in value and immediately call the estate agent and put their house on the market). As such, and by having conversations with investors about what they would do should they see a negative 40% growth, we are able to slowly ascertain their capacity and appetite for risk (along with a risk profile questionnaire and spending 40 minutes discussing their needs and wants and what else they have available should they need to liquidate x amount of cash). So I repeat, returns are not the be all and end all for retail investors. It’s all about the maximum return for the amount of downside risk and volatility ‘x’ portfolio may produce.

Well done on studying finance, that will allow you to stomach market fluctuations as you understand the mechanics of whatever takes place in the market. But that’s not remotely the same as studying to give advice. I don’t know what it’s like in the States but the new ambulance chaser thing we see on adverts now is “have you been missold and lost money in an investment? Call this number and we can get your money back in 6 weeks...” Well despite these cunts and despite doing the job for the best part of 20 years, I’ve not had a single complaint (upheld or otherwise) and that’s because I ensure that clients I have understand how their investments work and what they can expect to see in any given period and I can count on the fingers of one hand the amount of clients I’ve had they are able to place 100% of their funds into equities and it be best advice.

If people want to self invest and go for the best returns and are aware of the volatility they’re buying into then great and I wish them well. My original reply to you was stating simply that Equity ETF funds will not give the diversification of a balanced multi-asset portfolio. Take last year, FTSE100 was down 22% at one point, none of my “balanced” clients saw drops of over 6% because their funds included commodities, alternatives, gilts, bonds and other non-equity correlating assets. Of course the vast majority of managed portfolios won’t beat ETF’s over the long term. That’s because ETF’s have greater risk and because 7-8 years in 10 see positive growth. Good managed portfolios offer greater stability and lower downside risk in volatile markets though.

The only investors I have that are 100% deep in equities ARE the very sophisticated investors (usually former bankers or traders themselves).

So going back to my original point, most people aren’t looking for the best returns above all else, most people are looking for the best returns that allow them to sleep at night, whatever the market conditions.

 

[SWP's back]

I’m not opposed to 60/40, because the choice of how to invest ones own money is personal. I just know it’s not for me, mainly because I have other future income streams that are not market-based.

Well would you look at that, your capacity for risk is far greater than 90% of people because you’re not relying on those funds to get you through retirement, there is virtually no scenario where you are forced to crystallise a loss to meet an income need. You have non-correlating assets that will provide you with an income. Same for me, which is why I only hold ETF’s and single shares but we are the exception rather than the rule.

This thread is read by a lot of people, far more than post in it and I always end up with a few pm’s from people reading it. So I make no apologies about reminding people about downside risk, I don’t think either of us would want someone to lump £20k into an ETF based on what they’ve read and pull those funds out for £12k eight months later because the market’s on its arse.