FANGMAN Stocks Plunge 4.4% Today, Down $905 Billion, or 20%, since Aug. 31

It gets costly when the entire market depends on a handful of over-hyped mega-caps.

For the beginning of Thanksgiving week, it was a little messy today in the stock market, with the Nasdaq dropping 3% to 7,028. It’s down 13.6% from its peak at the end of August. But it’s still up 1.8% year-to-date, so nothing serious has happened yet, just some of the gains this year have turned out to be head-fakes.

Folks who went through the wholesale Nasdaq destruction of 2000-2002 will just smile mildly because that’s when the Nasdaq, as the dotcom bubble imploded, lost 78%. Given our Everything Bubble is even bigger and crazier, the Nasdaq’s current sell-off barely registers on my own Richter scale, so to speak.

The Dow fell 1.6%, is down just 7.2% from its peak, and for the year is clinging to a 1.2% gain.

And the S&P 500 dropped 1.7% today and is down 8.5% from the peak. It too remains, if by the thinnest margin, in the green for the year.

Nevertheless, real sums have started to evaporate. And much of it happened with the biggest stocks in so-called tech. The seven FANGMAN stocks – Facebook, Amazon, Netflix, Google’s parent Alphabet, Microsoft, Apple, and NVIDIA – got hosed today. Again.

Their combined market cap dropped 4.4% today, giving up $170 billion without breaking into a sweat. Since their combined market-cap peak of $4.63 trillion at the end of August, $905 billion have dissolved into ambient air. Down 19.6% in ca. 11 weeks.

Despite the sell-off, the FANGMAN as a whole are still green for the year, and are back where they’d first been on January 11. So, from that perspective, this $905 billion that disappeared isn’t any kind of big deal unless it’s your money that disappeared along with it:

Let’s start by blaming Apple [AAPL] due to its number 1 mega-cap status. Its shares dropped nearly 4% today and are down 20.4% from their peak at the beginning of October. Once upon a time, the company was worth $1.12 trillion. It ended the day at $882 billion. $238 billion gone in ca. eight weeks.

Not a day goes by when we don’t hear from an Apple supplier blaming an unnamed huge customer that can only be Apple for having to slash their revenue forecasts – apparently because three iPhone models are not selling very well.

Apple’s principle that it can always make up for falling sales of devices by raising prices even further on the fewer devices it sells can only succeed for so long. At some point, consumers switch to something else or just refuse to “upgrade” at an ever faster rate, as Apple has to raise prices at an ever faster rate…. You know where this is going.

Now I’m waiting for the day when Apple has to cut prices to get device sales going again. The fireworks should be pretty. The thing is Apple cannot be the only company in the universe that is able to forever increase its revenues by raising prices even as its unit sales are falling.

If Apple shares keep dropping like this, and Microsoft shares keep falling at their own pace, Apple may soon be less valuable than Microsoft. That would be too much to bear.

Microsoft [MSFT], the second most valuable company in the S&P 500, dropped 3.4% today to $104.62 and is down 10% from its peak at the beginning of October.

Facebook [FB] dropped 5.7% today, to $131.55, a new 52-week low. Shares are down 40% from their peak in July. And $249 billion in market cap have gone up in smoke.

Facebook, its CEO Mark Zuckerberg, and its COO Sheryl Sandberg had been media darlings for years, giving empowering and inspiring speeches, despite all the scandals over the way Facebook handles and monetizes the data it collects on everyone. But that goodwill has blown up, and now there’s nothing but revelations about the inner gears of its greasy machinery.  I have no idea why anyone is still on Facebook or is still using its other apps, and other people are coming to the same conclusion.

On my list of things to watch in terms of real estate: Facebook, which had no presence in San Francisco until mid-2017, signed San Francisco’s largest-ever office lease in May – 755,900 square feet in the 43-story Park Tower – about two months before its stock began to collapse. Shares are now down 40%. My gut feeling is that once shares are down 60% or so, the music will change, and instead of filling this tower with its employees, it’ll embark on a cost-cutting drive, and this office space will appear on the sublease market. This is how real estate in San Francisco falls apart when stocks fall apart.

Amazon [AMZN] dropped 5.1% today to $1,512.29 and is down 26% from the peak on September 5, when shares almost kissed for the briefest moment $1 trillion. Up by escalator, down by elevator. $254 billion have gone up in smoke. No one on Wall Street griped when market cap jumped by $254 billion in 12 months for no reason, but now the wailing and gnashing of teeth is deafening.

Alphabet [GOOG] dropped 3.9% today to $1,020.00 and is down 20% from the peak in July.

NVIDIA [NVDA] has been in the plunge business recently. This was one of the most over-hyped stocks driven even higher by the crypto-scam that is now bleeding out (it sold chips to crypto-miners). On Friday, the company reported earnings, and shares plunged another 19%. Today shares plunged another 12%. Now at $144.70, shares are down 50.5% since the beginning of October and are back where they’d been in June 2017. Dip buyers were taken out the back and shot every time.

Netflix [NFLX] dropped 5.5% today to $270.6 and has plunged 35% from its high in early July. But it is still green for the year and has a very long way to go.

In other words, it gets costly in a hurry when the entire market depends on a handful of mega-caps that have been over-hyper for years. 
 

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  131 comments for “FANGMAN Stocks Plunge 4.4% Today, Down $905 Billion, or 20%, since Aug. 31

  1. michael
    Nov 19, 2018 at 11:06 pm

    I applaud the decline of these frauds.

    • Jack
      Nov 20, 2018 at 12:14 am

      These FANGMAN stocks sound a lot like our Canadian weed stocks that are going down in smoke, too.

    • MCH
      Nov 20, 2018 at 1:33 am

      Leader Tim: “how dare you, sir. I am not a fraud, I am the champion of your privacy.”

      Rocket man Jeff: “I am as real as it gets, are you seriously saying you’ve never bought a single item from us? Ok, where do you live?”

      The Millennial: “I am all about connecting people, I am the CEO and the chairman of the board. Bitch. That’s what my card says. It doesn’t say Fraud.”

      Lar-Gey: “Don’t look at us, we haven’t been running Google for years, go talk to Sundar, if anyone is a fraud, it’s him.”

      Mr. Mustache: “I bring you endless entertainment for… psssst, what’s our monthly rate again… what? That low? We should raise it again… anyway, we bring you practically free entertainment every month for a low, low price, subsidized by our investors and other nice people. You love us, we aren’t frauds.”

      The Uber and Lyft boys: “we aren’t frauds either, in fact we aren’t even public.”

  2. Gershon
    Nov 19, 2018 at 11:17 pm

    Pop goes the Ponzi.

    The full fraud of the “wealth effect” created by ten years of Fed funny money lavished on the already super-rich is going to be on full display shortly.

  3. Bill
    Nov 19, 2018 at 11:23 pm

    Sometimes a big, profitable company has to choose between becoming a smaller profitable company or a big unprofitable company. If it weren’t for the obsession with growth driven by hype and stratospheric stock valuations the choice would be easy.

    • wapiti
      Nov 21, 2018 at 12:49 am

      Hark. Do I hear a murmur from GE?

  4. Caliban
    Nov 19, 2018 at 11:34 pm

    Great! It’s about time they got their comeuppance. Most of the FANGMAN corporations became so enamored of their efforts aiding Communist China’s totalitarian repression and suppression that they decided to employ those techniques in the United States. I’d write what I really think but Wolf wouldn’t allow that kind of commentary to appear here.

    • MCH
      Nov 20, 2018 at 1:35 am

      FNG: “we absolutely do not enable totalitarianism, no, sir. Not one bit…. they won’t let us… sniff sniff.”

    • Setarcos
      Nov 20, 2018 at 1:25 pm

      They aid AND many tech co’s also model their business practices based on totalitarian principles. The hypocricy is astounding; reading what they say and comparing to what they do is enough to bring on a bout of nausea.

  5. Mark
    Nov 19, 2018 at 11:43 pm

    “Dip buyers were taken out back and shot every time.” That is classic. : p
    I had a friend approach me about buying the dip and I advised him to watch what you ask for because you don’t know how deep the dip goes. Watching this while visiting SE Asia, I find that there appears to be a lot less western tourist here, than the same time last year. Every morning I hear the collective groans of the Brits as they look at the pound’s exchange rate. Interesting times and I suspect the fun is far from over.

    • MC01
      Nov 20, 2018 at 2:24 am

      Dip buyers have had an extraordinary long good run, especially with these megacaps. As Wolf explained in one of his audio logs there are all sorts of macro-funds out there which immediately start buying, and buying in bulk, once prices reach a certain level: that’s how the phenomenon of panic buying was born and why riding the FANGMAN was such a good trade, at least until January.

      Now those funds still have plenty of money, but not as much as a few months back as capital is getting progressively more expensive, so the fund managers need to be more careful. And the retail/small scale dip buyers who had followed in the fund managers’ footsteps are suddenly swimming naked.

      Fun is far from over? It hasn’t even started. It will be long and unlike anything we have ever seen. Let’s see those expecting a 1929 style crash will walk away disappointed just as those expecting eternal growth (without some creative accounting).

      • Rowen
        Nov 20, 2018 at 4:27 am

        We need to come up with a name for the unwinding of the asset bubble that accompanied the Baby Boomer demographic wave.

      • nick kelly
        Nov 20, 2018 at 11:48 am

        I don’t expect a 29 type crash if by that we mean 10,000 banks going under, wheat being dumped on the ground, unemployment 30 % etc, etc.

        But we have one hell of a lot of excess artificial GDP growth fueled by credit to work off.

        A simple regression to the mean will no doubt have many people crying ‘depression!’

        • Suzie Alcatrez
          Nov 20, 2018 at 11:58 am

          There’s no room to store soybeans any more.

    • Dr. Bob
      Nov 20, 2018 at 6:34 am

      My wife returned home to US yesterday after a month in Thailand visiting her family. Russia and China have made huge gains in the region while US has lost a lot of its influence. Our shameful foreign policy over many decades (going all the way back to Vietnam) has driven these countries away. I felt so ashamed to be an American during my 3 days in Cambodia in 2006. I was visiting Angkor Wat, and the tour guide pointed out damage to this World Heritage site by (illegal) US bombs.

      • nick kelly
        Nov 20, 2018 at 12:10 pm

        And then it all happened again in Iraq. There was more justification for Vietnam than Iraq. The only reason there is a prosperous South Korea today is because of that successful Asian intervention. No US led intervention in Korea would have the whole country today as a giant Jonestown.

        Vietnam was worth a try, although before US had raised its chips (sorry. men) to 500,000, maybe it should have been apparent the try wasn’t going to work

        One result of the failure in Vietnam is that Vietnam is the regional economic laggard.

        And today the big US fret is Iran. There used to be a local counterweight to Iran.

        • Dan Romig
          Nov 21, 2018 at 8:03 am

          4 August 1964.

          “Vietnam was worth a try, …”

          Nick, when the USA engages in lies to justify a war that kills hundreds of thousands of human beings, your comment is it was worth a try???

          19 August 1953, Tehran.

          “And today the big US fret is Iran.”

      • cptellis
        Nov 20, 2018 at 8:02 pm

        Really?

        The US bombed Angkor Wat?

        I doubt that it happened.

        There was damaged to the temples during the time the Vietnamese invaded Cambodia though.

        • Dave
          Nov 21, 2018 at 4:54 am

          cptellis,

          Thank you for correcting that BS lie. How many other people like Dr Bob walk away from these tours believing the bold faced lies without ever looking in to it? The invading Vietnamese also looted Angkor Wat as well. And we had the lovely nice group the Khmer Rouge running around slaughtering people too.

          The USA has made its share of mistakes, but often we are blamed for things just because it is popular to blame America….. regardless of truth.

  6. Rowen
    Nov 19, 2018 at 11:46 pm

    As much as I relish the comeuppance of these companies, I also know that billions in wealth was transferred from the 401k’s and IRA’s of everyday Joes to the the robber barons on Wall Street and Silicon Valley.

    I know so many people who will not listen to my advice to cash out their tax-advantaged retirement accounts because they’re afraid of the penalty. They’ll ride this market to maximum pain…

    • Debt Wazoo
      Nov 20, 2018 at 12:16 am

      > I know so many people who will not listen to my advice to cash out their tax-advantaged retirement accounts because they’re afraid of the penalty.

      You can hold cash in any retirement account at zero penalty.

      Or are you suggesting that the authorities will raid retirement account balances to balance the budget?

      • Nicko2
        Nov 20, 2018 at 4:32 am

        I’ve only got 20% of my 401k in stocks….netting 6-8%. Not bad really.

  7. David Horowitz
    Nov 20, 2018 at 12:31 am

    Most of these companies have close alliances with the “Deep State” intelligence apparatus and flagrantly abuse the Constitutional rights of citizens. FB may be used as a sacrificial lamb to enforce even more onerous censorship on the others. If I had to bet, FB will be the next Myspace within two years and shareholders will get hosed.

  8. Ididsa32
    Nov 20, 2018 at 12:50 am

    Now NVIDIA is the story here. This one brings back those not so fond memories of the dot com bubble burst. Boy, what a lesson I learned in my youth. I’m thankful for what I learned from it.

    NVIDIA is below 143 in after hours. To give one a sense of the extent of this particular bubble, it’s still up 100s of percent from a mere few years ago.

    The whole Trump bump seems to have been a complete and utter waste of time and resources, and true to form simply left us with this now deflating bubble and a whole bunch of extra fiscal debt and tons of volatility and panic in the market.

    The market index levels won’t even resemble any sort of statistical “normalcy” until this whole Trump bump from Nov 2016-Aug 2018 is completely shaved off the indices. All those precious resources wasted on yet another useless bubble within a bubble….

    • Rowen
      Nov 20, 2018 at 4:20 am

      The Tax Cuts were a mechanism repatriate earnings from tax havens to use to fund buybacks, which temporarily jacked up the stock price, but was merely a transfer of wealth.

    • MC01
      Nov 20, 2018 at 9:27 am

      Nvidia got a big bump by our favorite junk-rated Japanese M&A queen, Softbank, which pumped $5 billion or a similar silly sum in Nvidia.
      While I am sure the Softbank spin doctors have a very interesting justification for this enormous investment, it’s beyond doubt hope the cryptocraze would continue unabated was the main driver behind this insane business decision.
      Crypto’s are behaving a whole lot like Napoleon’s Grande Armée in Russia: after reaching the high water mark they started an orderly retreat but it has since turned into a rout, with casualties mounting by the day and the weakest tokens falling dead by the roadside.
      While Softbank can simply shrug it off (how long Gulf investors will put up with this before losing patience is another matter), Nvidia can’t. Fundamentals matter again, and if you cannot sell a lot of chipsets at a large markup to cryptomining outfits your overvauled stock will become a little less overvalued.

    • Vlad's Ghost
      Nov 20, 2018 at 12:19 pm

      NVDIA will get a reprieve with AI.

    • Ethan in NoVA
      Nov 20, 2018 at 1:12 pm

      But to be fair NVIDIA makes great graphics chipsets used by gamers. Also, their chipsets are used for scientific computing and super computer clusters. They also own companies that make high performance computing software compilers, and dabble in embedded systems (Nintendo Switch runs on an NVidia Tegra.)

      They make real products. Sure the crypto bubble wasn’t going to last forever but they are a winner in the field of the primary use of their products. A true tech company.

  9. Realist
    Nov 20, 2018 at 12:58 am

    Apple has a very apple specific problem. Their image as overpriced so called premium they can not introduce a cheaper product line because no one wants to be a labeled poor by using such a device.

    • Nov 20, 2018 at 1:41 am

      True, but… If Apple cuts prices in half, it still wouldn’t be “cheap.” It would just be less outrageously expensive. Snob appeal is great. But smartphones is a saturated no-growth market. The market-share battle is a zero sum game. Apple is losing market share. So how can it halt that loss of market share? Raising prices isn’t going to help.

      • Michele
        Nov 20, 2018 at 7:26 am

        Apple is in a trough. 5G is being piloted in a few cities but it won’t scale for another year to 18 months. But after the mass roll out starts cell phone sales, and certainly APPL, will soar.

        • raxadian
          Nov 20, 2018 at 1:52 pm

          I still use my G3 phone. So dream on, people won’t switch to G5 right away. They already got burned when they bought G3 Cellphones that were totally supposed to be compatible with G4 when it came out in a year or so. Only for G4 to be so darn fragmented the only way it was work on their year old phone was by moving to another country that has the G4 protocol it was compatible with.

        • Bet
          Nov 20, 2018 at 2:40 pm

          AAPL trades like a commodity stock. Relentless on the way
          up and on the way down. AAPL looks to trend back to its long term UPtrendline at about 130 to135. The Fruit has a wee bit
          of worm rot going on.

      • MASTER OF UNIVERSE
        Nov 20, 2018 at 9:40 am

        Christmas is just around the corner and Thanksgiving is here this week. If Apple Inc. was smart they would have included a Frozen Turkey with every new Apple iPhone and their sales would have maintained the stratospheric irrational exuberance that put them where they are today.

        iPhone value added Frozen Turkeys would give them a market edge to compete.

        A turkey in every pot used to be good politics in America!

        MOU

        • lenert
          Nov 20, 2018 at 11:32 am

          Always been partial to canned ham.

      • Pavel
        Nov 20, 2018 at 10:01 am

        Macrumors just has a post saying that Apple is hosting a “four-day Black Friday” event this year. Doesn’t sound like a company that has no problems selling things!

        I had an iPhone 5s with a dead battery I hadn’t used in 3 years — I just put in a new battery for $30 and it works fine, and IMHO it was the best designed iPhone ever. And when I got it years ago it was about $600 IIRC — and that was “top of the line”. And now Apple expects people to pay $1000+ in a market saturated with phones?

        Glad to see the stock prices fall. It’s been one big grift and ponzi for too long, and Tim Cook has demonstrated the epitome of greed.

        • Erle
          Nov 22, 2018 at 6:36 am

          Oh, crud. I bought a Blackberry Edge2 because of the reputed inscrutability of the thang.
          If BBRY is good enough for Hillary’s State Department,. it is good enough for me.

      • MCH
        Nov 20, 2018 at 4:37 pm

        Waiting for the Million Dollar iPhone here. I’m sure that’ll catch the attention of the market. May be it’ll shoot lasers too. heh heh.

        Seriously though, I think Apple has very well internalized the lesson of the early 90s. They are trying (not succeeding yet) desperately to find the next hit product while milking the cash cow of the iPhone for all it’s worth. If anything, leader Tim is a very sophisticated operations guy, he is focusing on making sure Apple has a great balance sheet to fund whatever the next big thing is. The issue is that they don’t have a Steve Jobs running the innovation show. Jony Ives for all of his fame is an iteration guy, not an ideas man like Jobs was. Both Jony and Leader Tim are like that, they will polish the apple until it is shinier than the sun, but they cannot come up with the next hit product. They just aren’t the visionary like Jobs.

        My guess is that somewhere in Apple, there is already that visionary, probably several of them has gone into and out of that company since Cook took over, but the corporate bureaucracy that was built up by Cook probably killed whatever idea there was before management was even aware of it. All this stuff about self-driving cars wasn’t original, just a copy of what Waymo and others were focused on.

        They need someone like a Jobs, but that’ll never happen until Cook steps aside, and good luck getting the Apple board to find that next Jobs, they are essentially the biggest bunch of do-nothings around.

        • RagnarD
          Nov 21, 2018 at 12:29 am

          Saying a company needs to find the next Steve Jobs is like telling The Bulls / Edmonton they need to finD the next Jordan/ Gretzky.

          Doesn’t everyone?!

          While we’re creating the wish list, how bout adding on an alchemist recipe for turning rocks into gold?

        • MCH
          Nov 21, 2018 at 9:28 pm

          @RagnarD

          You’re right about the fact that every company could use a Jobs. The difference is that Apple probably has a few of those that has either passed through since the real Jobs kicked the bucket, or is still in the company. But they probably have been grounded down by the bureaucracy of the current management. I think Jobs tried to instill a sense of innovation with Apple, but ultimately, this is not the type of thing that you can set up as a part of a formula.

    • Varughese
      Nov 20, 2018 at 2:03 am

      If that’s a problem, then apple should follow the auto guys. Create a sub-brand for cheaper products.

    • earl d
      Nov 20, 2018 at 3:54 am

      Pepsi and Coke are essentially citric acid, sugar and carbonation. Everything else is ‘image’. The great irony of Jobs wooing Sculley (then a Pepsi executive) over to Apple with the question of whether he wanted to sell sugar-water the rest of his life, is that that’s exactly what Jobs hired him to do, and a decade and a half later, Jobs returned to Apple to became the undisputed king of selling the electronic equivalent of sugar water. Not only is selling based on image a viable long-term business model, to-date it is the *only* viable long-term business model.

      With respect to iphone market share, approximately 60% of Apple revenues come from iphone sales. But 12% of Apple’s sales come from non-platform services, and those sale have higher margins and are growing rapidly.

      Apple could be a perfectly successful company simply by advancing iphones as a loss leader and continuing to grow digital services. Instead they’ve managed to carve out an extraordinary position of commanding a very high premium for their hardware and then turn around and charge a doubly high premium for the non-hardware features the platform gives you access to. It’s mass consumerism executed with an extraordinarily deft touch. Griping about its lack of value misses the point entirely. And thinking that US consumers will suddenly wake up, repudiate their shallow obsession with brand and ditch iPhones for Androids strikes me as a bit far fetched.

      • Nicko2
        Nov 20, 2018 at 4:35 am

        And what has Apple been releasing this past year?….a whole range of lower cost (less feature rich) models of mobiles/tablets/notebooks. It’s working.

      • California Bob
        Nov 20, 2018 at 7:51 pm

        re: “Pepsi and Coke are essentially citric acid, sugar and carbonation.”

        Only in Mexico. Us gringos get high fructose corn syrup swill.

        • Erle
          Nov 22, 2018 at 6:43 am

          At least if you drink beer all day you will not get the problems from HFCS.

    • RangerOne
      Nov 20, 2018 at 10:24 am

      The other part of their problem is Apple has always had a cheap model. That is simply buying the 2 year old model when the new one comes out. Most people with iPhones these days are loyal to the OS, but are carrying a range of 6s, 7s and 8s.

      The new features in their X and whatever their new phones are simply not compelling enough upgrades.

      They should have been planning for the day when upgrade demand started to level off. PCs and tablets have already experienced this. Phones will likely always do some amount better because they get used more heavily and break or get lost.

      There will likely be another wave of mobile tech innovation with either foldable devices or AR enhanced devices. I am leaning towards AR being viable before anyone finds a good foldable device… until then phones have gotten pretty dull and almost any recent device works for most people.

  10. kevin
    Nov 20, 2018 at 4:59 am

    What a bunch of wussies here… so many talking about comeuppance.

    When you’re talking about comeuppance, it figures that you had completely missed the ride up over the last decade, and hence can only make your ego feel better with “I told you so…. finally (after 10 years)”.
    But all your friends made a huge bundle even if they get out now, while you got nothing to show for it except a sense of schadenfreude. lol.

    Ok, let’s say we agree that FANGMAN is fundamentally all hot air and they are supposedly deflating now.
    Since you wussies are so damn sure now, this MUST be the greatest BIG SHORT opportunity of your lifetime staring back at you.
    No brainer, right?

    So, instead of merely talking about it here on WS, why don’t you go SHORT now and make some real money?

    If your believe your own bulls**t, then it is still not too late for you to place SHORTS on the FANGMAN and ride it all the way down, right?
    Heellllloooo?… anyone?

    Of course, you can continue to be wussies just talking about all the ups and downs, and reminiscing about all the could’ve / would’ve / should’ve that happens in your life.

    GO SHORT them now! Then come back here to gloat how much you have made IF you are successful.

    • fajensen
      Nov 20, 2018 at 6:28 am

      F.W.I.W: I fairly recently acquired a BEAR x3 synthetic PUT option on OMX 30 Nordic. :p.

      Mostly because of the Brexit debacle. I knew they would screw it up. Next, it’s a steep drop in the pound and FTSE, then they sign the deal and there is a rally. December, I’d guess.

      – But also because someone called Oscar Properties are being sued by clients over delays and selling 2’nd and 3’rd tranches of luxury flats at ever lower prices. Property is a leading indicator.

      – When the property bubble in Sweden really blows; it will be biblical.

      • Erle
        Nov 22, 2018 at 6:46 am

        Will it then be less expensive for the Swedes to fund your pals in Malmo?

        • fajensen
          Nov 23, 2018 at 12:58 pm

          Which “pals”? I know only one person who lives in Malmö.

      • fajensen
        Nov 23, 2018 at 1:03 pm

        Closed it. Made about 10%.

        Didn’t like the smell of the OMX just sitting there the whole week and even moving up slightly right before the weekend.

        Will repeat the bet on the next rally but before the 19’th where the brexit vote is going down.

    • Lance Manly
      Nov 20, 2018 at 7:09 am

      The long ride up was driven by ZIRP and QE. Don’t believe me, they said it themselves. I believed them and rode it up.

      http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html
      “This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”

      Those policies are being reversed. It was time to dismount. The only thing holding things together is the huge pile of debt that the late cycle stimulus added this year. And that sugar high is bound to lead to a downer.

      • Dale
        Nov 20, 2018 at 11:04 pm

        Well said. Until late 2017, global QE and ZIRP/NIRP were pushing asset prices higher. There has been a relatively slight lull in the past several months – only the Fed has really changed direction and it was only 20% of the problem – which is impacting global markets.

        At some point, hopefully later rather than sooner, the easing will recommence, and probably more vigorously than ever. There is no alternative that is feasible both politically and fiscally. So rather than complaining about QE or not QE, people should be devising strategies to profit or at least survive the inevitable.

        Incidentally, there doesn’t seem to be a cleaner dirty shirt than the US, all things considered and at this time. Which is not to say the US is immune but rather that the consequences are truly global.

      • Erle
        Nov 22, 2018 at 6:48 am

        It used to be abbreviated to “BTFD”.

    • Wendy
      Nov 20, 2018 at 8:13 am

      Amen, Brother. My Netflix is now down so much that I have been reduced to a mere 15 bagger, compared to my 20 bagger status only weeks ago. I’m sure you can feel my pain.

      • Tinky
        Nov 20, 2018 at 12:15 pm

        be sure to let us know when you actually sell your shares. Then, and only then, might you be in a position to gloat. The operative word being “might”.

        • Wendy
          Nov 21, 2018 at 7:27 am

          I will be selling in 2030.

          I wasn’t gloating, I was trying to show that you are better off playing the stock market game with some play money in disruptive companies, than sitting on the sidelines with cash for 10 years. Not being a wussie as they say.

          The problem is that if you follow logic, and wait for a disruptive company to make a profit, you miss out on all the gains.

          With Netflix, I sold enough to recoup my initial bet at the six bagger point years ago, so I am now playing with the house money.

          I am still technically a wussie, since if I had more balz when I first invested 6 years ago, I would be flying in a private jet. Sometimes I like to think of what could have been, at times when I am not crying.

      • Escierto
        Nov 20, 2018 at 4:24 pm

        Next week you will be bragging that it’s still a 10 bagger.

    • Petunia
      Nov 20, 2018 at 8:56 am

      Aside from the fact that I don’t have the cash to short the market, you are the one missing the bigger picture. We are at the end of the fictionalization of everything model. What makes you think that when the market takes a trillion dollar hit, as it surely may, you will be able to get out.

      • Petunia
        Nov 20, 2018 at 8:58 am

        Autocorrect changed financialization to fictionalization, but I think it works better anyway.

        • Nov 20, 2018 at 9:40 am

          Hilarious. Made my day.

        • MF
          Nov 20, 2018 at 9:58 am

          Yup. I like fictionalization way better. It’s direct and true.

          Ignore the snotty showboaters. You’ll never get through to people who measure their value with bank statements and other irrelevant tchotchke.

          Money is a utility. But crappy humans love to hoard it, pet it, and stroke their egos with it. Just like technology, it becomes the end instead of the means.

        • robt
          Nov 20, 2018 at 10:48 am

          Our daughter has a disclaimer tagline on her iPhone:
          If any spelling mistakes blame Siri.
          I don’t use a smartphone, but apparently sometimes you’re not even allowed to correct the ‘correction’.

    • Nov 20, 2018 at 9:04 am

      Kevin,

      People who were prudent and conservative investors, such as retirees who put their money in Treasury securities and CDs, got totally crushed for a decade, doing the prudent thing. And while they were getting crushed by ZIRP and QE, they were also getting ridiculed for being morons that stupidly missed the biggest Fed-engineered bull market ever.

      They’ve been through hell. Now it’s their turn to feel good. Don’t call them “a bunch of wussies” for not shorting the crazy FANGMAN stocks. Shorting is done by speculators. These folks who were governed by prudence and got crushed by ZIRP and QE are by definition not speculators.

      • Paulo
        Nov 20, 2018 at 10:53 am

        Just to add to what Wolf said, cash folks (like me) don’t readily gamble with their hard earned money. While my Dad actually supported himself with poker winnings for a few years in the military so he could send his pay home to support his mom and siblings, I have never gambled and don’t plan to. However, I sure do sleep well at night and have enjoyed retirement. (Still have my cash, too). We are planning to dip into the principal when some specific properties in our neighbourhood come up for sale, but as they will be cash purchases and income producing vehicles, it’s still a wash. No…you can have your stock gamble and keep it. As Buffett said, “If you look around and don’t know who the mark is, it’s you”.

        Besides, when Tech implodes there will be lots of available jobs raking leaves in the forest according to…… No worries.

        • RD Blakeslee
          Nov 20, 2018 at 2:12 pm

          Very few of us on a website like Wolf’s think in terms of living on rural real estate not “managed” by anybody else, right, Paulo?

      • Nov 20, 2018 at 12:37 pm

        Shorting is not the exclusive venue of speculators, funds use options to hedge, and option sellers (institutions) add shorts to cover their positions. The majority of short interest in the Fangs is probably being done to lock in profits.

      • kevin
        Nov 20, 2018 at 1:49 pm

        Wolf, I know your readership is important so you have to be polite to everyone. I thank you for that.

        Yes, wussies maybe a tad strong, although I had already replaced the p to accord some decency without losing the required impact. :-)
        I might sound rude, but to those who can understand my message, they will know I’m actually HELPING them, if they get the message.
        Sometimes, you need to slap people hard to wake them up, but I can understand most will not appreciate the tight slap.

        I’d still like to say it the way it is. Prudent and conservative investors are the ones getting creamed. They will ALWAYS be creamed, throughout financial history, precisely because they are prudent and conservative.

        How do I know? My parents were “prudent and conservative” and they got financially creamed by all the corporate shenanigans, theft of retirement accounts that are in many cases sanctioned by government officials, corrupt or otherwise.

        I too used to be a “prudent and conservative investor”, and I LOST money every time I become a prudent and conservative investor playing by the rules. lol.

        Wolf, you of all people, with all your in-depth knowledge and findings and experience in financial matters over the decades, should know full well that Mom & Pop investors playing it safe and following the rules so-to-speak, will get creamed no matter what they do, and thats an understatement.

        You can’t win this game playing by “prudence and conservatism”. Whether you talking about bonds, real-estate or equities or derivatives makes no difference because its a global system now.

        If you play as a chicken, you will eventually get eaten by the wolf (I mean the real wolf “wolf”, not you wolf ;)

        I’m just saying if you want to continue playing this financial game, either by force of habit or by force of your social circumstances, then play it smarter. If you don’t have the heart to play as a Wolf, then you got 2 choices left:

        – You can (and should) leave this “Financialized game (or “Fictionalized” according to some accounts) altogether. Then, why waste time reading financial blogs or educating yourself if you’re not here to learn how to avoid getting financially predated upon?

        Or

        – You can become a Sheep Dog. Actually, I think WolfStreet site should be called SheepDog.com, because you are a sheep dog in practice. Sheep Dogs are the ones who prevent wolves from eating the chickens or the sheep, to put it nicely.

        I presume Wolf is really here to educate and prevent real Wolves out there from hurting the chickens he is educating? Well, I hope that’s part of your mission Wolf.

        Now, to someone else (such as MF) who comes here to preach morals about not “measuring your value with bank statements or other irrelevant whatever”, then may I ask why are you even here MF?

        I’m not saying you are wrong to state that money is a utility. Of course, I realize that and I do not love money either. However, I respect money and what it can do for me and my family. I make lots of it first, so that I got the freedom and the time to do other things more worthwhile. That’s the way the current world order is setup, unfortunately.

        MF, if you think money is not important, then go do something else or go to some other website, (and why the heck do you call yourself MF?) The problem with most people is they really WANT money, but they are half-hearted about it. They struggle internally with their biblical morals about “the poor inheriting the kingdom of God” etc. or something to that effect, so they flip-flop about through life not achieving much money. Just as many TALK about the ups and downs of the property / stock / bond markets but they never for once learn how to ride the markets up AND down.

        MF, I applaud your moralistic overture, so you should really go do something more RELEVANT like go to some mountain retreat to find out the meaning of life, or go to Zimbabwe to help feed the poor, care for sick or maybe you can even go study about UFOs to reverse-engineer their technology for the good of humanity.

        Who knows, you might even break into the secrets of UFO ZPE (zero point energy) and overturn the entire financialized (or in your mind “fictionalized” global economy in one deft stroke and FREE humankind from the yoke of capitalist labor forever, yeah? ;-)

        • RD Blakeslee
          Nov 20, 2018 at 2:16 pm

          “Prudent and conservative investors are the ones getting creamed. They will ALWAYS be creamed, throughout financial history, precisely because they are prudent and conservative.”

          Dead wrong! One isn’t “getting creamed” by eschewing greed and living well on deliberately modest finances.

        • Bobber
          Nov 20, 2018 at 2:26 pm

          So, being conservative at the end of a multi-decade speculative asset bubble is a bad thing in your mind?

          You are only partially correct. There is a time to be speculative, and there is a time to be conservative. Your timing here is off. Now is no time to switch from conservative to speculative.

          Interestingly, those who are speculative all the time often wind up in the poor house. Those who are conservative all the time never wind up in the poor house.

          If you don’t understand that….

        • Nicko2
          Nov 20, 2018 at 2:29 pm

          Let me guess, you’re a follower of Objectivism?

        • Petunia
          Nov 20, 2018 at 2:43 pm

          Kevin,

          Since you have balls of steel, why not 10X synthetic puts. Those fakers in Silicon Valley are sure to make you rich.

        • IdahoPotato
          Nov 20, 2018 at 3:38 pm

          @Petunia

          Option trading hedge fund guy just went on Youtube to tell his 290 high net worth clients they had lost a boatload of money.

          https://www.youtube.com/watch?v=VNYNMM0hXXY

        • MCH
          Nov 20, 2018 at 4:48 pm

          @Idaho.

          Fortunately, it wasn’t the hedge fund guy’s money, only his client’s money. The good thing is the hedge fund guy can always get new clients.

          Just promise them a bunch of unrealistic stuff.

          @Kevin,

          This is all about psychology, specifically about fear, any rational mind will realize that shorting has the potential of unlimited losses. How many people have lost their shirts shorting Tesla. Looking at its price today, it was not worse off than (not significantly) when Musk tweeted “Funding secured.” This is not to say that Musk isn’t using borrowed money to fund his EV experiment. But good luck getting the timing right.

          Think back to 2008, there were probably people who saw the CDOs and CDSs for what they were, but didn’t have the financial wherewithal to see their bet through or was caught on the wrong side of the short timing wise. For each one of those that made a killing, I wonder how many there were that failed. You don’t hear about those at all, because Hollywood can’t make a movie about failure to succeed.

        • JZ
          Nov 21, 2018 at 2:58 am

          There were time when people can honestly creating wealth and EARN W2 and be okay to raise children and retire. Kevin is right that nowadays, you will NOT be okay to HONESTLY Earn your way out of this. You are FORCED to play the wealth transfer game OR you will be CREAMED/SUCKED UP dry and be tossed away. So you either get wealth transferred to death or you are forced to play a game you do NOT understand and be transferred any way. Here is the thing, the wealth transfer game is 95% of the wealth get transferred to the 5%, like all kinds of gambling wealth transfer games. The question you ask is “are you the 5%”. And you have to honestly answer that question.
          So, you die if you don’t play like Kevin said. And 95% chance you will die if you play. Hmmmmm,
          no wonder DJT is the president now. Soon, when the 95% truly figures this game out, they will NOT play in the market to transfer wealth. They will pull out guns to transfer your wealth. By the way, Kevin you sound like one of the 5%, but are you? This cycle has NOT completed yet. I heard there is one guy who thought he is the 5% shorting natural gas and hot wiped out last week.

        • fajensen
          Nov 23, 2018 at 1:14 pm

          Thanks!

          A funny risk with options trading in Stockholm is that if they are in the money, they automatically are assigned.

          Just imagine getting the phone call: “Good morning Sir. You are now the owner of 75000 shares of Eriksson B bought on margin. Perhaps Sir has a credit card or some other means of payment?”

      • fajensen
        Nov 20, 2018 at 3:04 pm

        I don’t like the risk/reward profile of shorting. IMO options are better, but, also significantly more complicated to trade. For some things like indexes the block size is 350 on OMX-30, meaning that to short OMX via options, one would need to buy about 230000 EUR’s worth which is probably a bit rich for most folks.

        Nowadays, there are ETF’s that work like synthetic PUT or CALLS with leverage. They are generally called BEAR / BULL xN (where N is the leverage).

        Using those devices, one can be short / long almost anything, risking only the capital invested.

        The caveat is that due to the fee structure and the way that the “delta” is calculated internally, these instruments only really “work” for larger moves over some time. Between 2 – 6 weeks holding time is probably optimal. Also, on a very large daily move, like we actually see more and more, there is a stop-loss clause usually kicks in at 30% so one will not get rewarded for the whole move, like with shorts and options.

        Anyways, It’s a possibility. If one feels certain enough to be gambling a bit.

      • Tom Jones
        Nov 20, 2018 at 5:45 pm

        And I am on of them….too old to gamble, but with a fat wad of cash doing nothing for a decade…just now getting 2 to 2 1/2% interest with some cash in reserve. With a mere 5% return, my income would now be greater than during my working years. So If the planet doesn’t come unhinged because of an economic collapse, I’m loving rising interest rates.

      • vinyl1
        Nov 20, 2018 at 9:45 pm

        You still could have bought utilities, tobacco, and oils, and gotten 4-5% on your money with good capital gains.

        These types of stocks have not gone down much yet, and utilities were actually up today.

        • Nov 21, 2018 at 12:50 am

          Yes, for example PG&E [PCG], a huge utility. Check out the stock, dividend cancelled, shares crushed, down 67% in 13 months. Utilities are save like Treasuries :-]

    • Tom
      Nov 20, 2018 at 10:48 am

      Great advice:Ten years of patience produce huge profits in just days. And we thank you!!

      • TrojanMan
        Nov 20, 2018 at 2:38 pm

        Kevin, you sound like a … [xyz]. Some of us started our careers during the last ten years and paid off an ass ton of debt. Now that we have some money to invest, everything is in the stratosphere. Only a fool would be investing at these prices and you know shorts are a more dangerous game with limited upside compared to going long.

        It’s a b!tch move to call a bunch of strangers wussies on an anonymous message board. It’s also a b!tch move to egg people on to make risky investments so you can stroke your ego and brag about your gains. If you did well, good for you but why hate on others? What are you 12 yo? This board is usually void of people with your attitude and it’s pretty awesome. I really hope … [xyz].

        • Nov 20, 2018 at 5:19 pm

          About TrojanMan’s comment: …[xyz] indicates that I deleted some text that I deemed to be a direct personal attack on another commenter (kevin). Such attacks are against the guidelines.

        • TrojanMan
          Nov 20, 2018 at 5:32 pm

          Sorry Wolf…

        • JZ
          Nov 21, 2018 at 3:12 am

          There is certain truth to what Kevin said, and he is in deed trying to help.
          I allocated 5% of my investable shorting S&P since 2016, covered put. Took a beating, but hey, that’s only loss on 5%. Now the position is 10% now. There is 50% chance I will short it all the way down like 2000 or 1929, and there is 50% chance I will get squeezed by another 30% and then short it all the way down like 2000 or 1929. I will transfer all of Kevin’s gain into my account since he can NOT tell who is the boss. I think Kevin thinks FANG is the boss but I think FED is the boss. When FEF tells me long, I will long, when FED tells me short, I will short. When FED is no longer the boss, I have 20% GLD. If nothing works, I will have my W2. my W2 is my ONLY and true edge against the pros. I do NOT HAVE to play if the cards are bad. I think the cards are good now.

        • JZ
          Nov 21, 2018 at 3:16 am

          And if there is a vote to shut down the FED and throw a
          bunch of bankers in jail, I will be the first to vote, so that we can all go get out of this wealth transfer game and a W2 earner can have a place to live, raise children and restire without having to be forced into gambling position.

        • kevin
          Nov 21, 2018 at 3:29 am

          To fajensen, yours is probably one of the saner schemes, I don’t know all your details on managing it but as long as you ensure that you are covered from the outset. I have dealt with various spreads, synthetics, diagonals and combinations thereof of futures, options and the underlying, which works well provided the person knows what he/she is dealing with, and have predetermined loss limits built into the trade.

          Even then, there are no guarantees, just probabilities. I had encountered messy situations where one leg gets called or assigned or the brokerage platform goes down when their servers can’t handle the volume on a bad day. I’m sure if & when, the next Black Monday comes, it will happen again when you can’t even access your brokerage accounts, and you will get the shock of your lives when the market opens the next day and everything has already gapped enormously.

          Thus, stop loss settings are useless in severe market reactions and only well-placed derivatives can protect you with predetermined max loss allowable. Ironical that something deemed so “risky” as derivatives actually serves as better protection. Having said that, if sufficiently large numbers of people delve into put options for insurance and bid up their prices, then I will be doing some other thing to exploit that. The mindset has to be always on a moving target, fluid and ever-changing and is the way I know to handle this beast. Anytime, you think you’ve got the best strategy or the best way to manage the risk, the Beast will find a way to humble you (as it has done once again in the youtube shared by Lion above. Sad but great lesson nevertheless…I hope he will be ok mentally)

          ALWAYS ensure you are fully covered, which is why (for those who accuse me of promoting naked shorts here)…I do not do any naked shorts nor even ratioed schemes.

          I have occasionally done simple long puts, and would add that the current market behavior have been good for such simple setups. If it works, it works. If it doesn’t I just lose a fixed x amount even if the whole market literally shuts down. Managing options with many moving parts in a hurry is not a good experience for me at least. In any case, I keep it simple and the bulk of my assets are elsewhere not dependent on electronic networks.

          Be aware that even the apparently “safe” ETFs may face bottlenecks if the markets fall sufficiently hard and/or liquidity dries up so much the APs cannot easily redeem them as their constituent units.

          Which comes to my next point…that there is really no surefire “prudent & conservative” investments available at all….if it is not already cross-collateralized, indexed or sold off as some form of instrument to someone else. When the markets drop, very little will be spared since everyone is joined at the hips.

          To RD Blakeslee especially, who I think, missed my point again.
          I’m saying you won’t even be able to invest successfully in the markets, if you are truly and honestly dedicated to being “Prudent and Conservative”.
          There is no such thing as a “Prudent & Conservative INVESTOR”, with the global markets we have now.

          In the first place, if you genuinely want to be “prudent and conservative”, then stop being an “investor” in anything. Actually, in the extreme, you’d have to withdraw all your 401ks, sell all your shares, convert all your cash into gold and hole up in a mountain cabin to live off the grid :-)
          If you want to continue to use and earn this thing called money, (despite being reviled by the financial system?) then you jolly well learn about all the risks that you are not yet aware about or assume that such-and-such is a “prudent or conservative” approach… until it is not.

          The reality today, is that there is NOWHERE to hide from the tentacles of the globalist financiers and bank Tzars., because even having all your assets in cash with your local bank is NOT a “conservative” nor “prudent” approach either. Just look at banks in Greece (or was it Cyprus?) that basically sequestered customer accounts, during the depts. of the last financial crisis. Lol
          If America were to be facing another Hail Mary moment, do you seriously think Trump will not sign an executive order to immediately do “whatever it takes” with your private bank account monies? So, pray tell me where or what is truly a “prudent and conservative” approach now?
          That’s why I say “prudent and conservative” folks will ALWAYS get creamed. They are prudent and conservative, and they mass together thinking of “safety in numbers” but that is what makes them predictable as a big fat juicy target and available to be easily exploited by the Financial Elites and Wolves who can move very fast and be very vicious.
          That’s all I have to say, you can call me a s**thead and I don’t care ‘cos I’ve looked at the Wolf in the eye and know its nature. Hear me out if you want or spit on it too for all I care. I’ve said my piece and I’ll move on.

  11. Max Power
    Nov 20, 2018 at 5:21 am

    It looks like a head and shoulders pattern might be building up in the stock market. If we get a year-end rally it will be confirmed. A true bear market afterwards would be just about guaranteed.

    • wendy
      Nov 20, 2018 at 8:05 am

      Yes, the old head and shoulders…
      This is why the chartists have always been able to beat value investors. Warren Buffett could learn a thing or two, and improve his results.

      • Petunia
        Nov 20, 2018 at 9:10 am

        The only technical analysis that really matters is the trend, up or down.

        • Rowen
          Nov 20, 2018 at 4:26 pm

          Or as i explained to my friend during the crypto boom, there’s really no intrinsic price in most assets, prices go up when there’s more buyers than sellers at a price point; prices go down when there’s more sellers than buyers.

          The macro trend is the exiting of the Boomers from tax-advantaged retirement funds.

    • Nov 21, 2018 at 11:05 am

      There is an inverse H&S although it might be stretched a bit, there are positive divergences, the EM is out of the news, the bear will begin when global liquidity dries up. The CBs can continue to provide liquidity even with higher interest rates. (thus heading off a liquidity event) The global monetary base has expanded greatly the last several years and there is no really no mechanism to deleverage (see Doug Noland on this). Put the pieces together, you have a global recession, with a mix of consumer inflation and asset deflation. When things “normalize” the Fed will drop rates, add QE at the onset of a recession. Oil has already priced in the move. When the USG floats a new stimulus package at reasonable rates, the Fed will take a victory lap.

  12. LouisDeLaSmart
    Nov 20, 2018 at 7:27 am

    \\\
    UBS just dumped stocks from one of it’s largest funds from 50% (neutral) to 20% a few days ago. In my humble opinion, the only reason the stocks are not plummeting into the abyss, is the large players need time to unload their junk to unsuspecting buyers.
    \\\

    • Wendy
      Nov 20, 2018 at 8:27 am

      It’s just a matter of time before Berkshire dumps it’s Apple stock at the bottom.

      Or, you will see that they quietly bought more at a lower price, leaving us expeets to contemplate why we didn’t do this when looking back ten years from now….

      Now, let’s see which is the more likely scenario.

      If you believe the first, go ahead and short.

      If you believe the latter, wait for a trough and accumulate.

      But don’t just say, “I told you so”, and do nothing, since that is not a strategy.

      • LouisDeLaSmart
        Nov 20, 2018 at 11:25 am

        \\\
        Simply put in respect to the stock market:

        “I no buy, I no sell, I no play game!” (Reggae music in background)

        The solution is not to be part of the problem. Don’t play, don’t own stocks. I mean literally anything else but stocks.
        \\\

        • RD Blakeslee
          Nov 20, 2018 at 2:19 pm

          Agree, except for “literally anything else”. It’s quite possible to make dumb buys that are not stocks.

  13. Bobby
    Nov 20, 2018 at 8:15 am

    When earnings for fang stocks where typically released, the headline and media would hype one aspect of the growth metric and bury the half glass empty details. I have always been confused how Netflix could report profit (miniscule in comparison to the price of the share) and yet have a negative free cash flow. Similarly if I was in the cupcake business spending heavily on icing, that I don’t factor into the cost of making the cupcakes, and I claim a profit.

  14. Gershon
    Nov 20, 2018 at 9:06 am

    Looks like the Wall Street-Federal Reserve Looting Syndicate has officially commenced the Great Muppet Reaping of 2018, as the Fed’s Ponzi markets and asset bubbles are imploding under the weight of their own fraud and fictitious valuations. After being bilked out of their wealth and assets for the third time since the 1990s by yet another Wall Street-Federal Reserve Pump & Dump scam, you’d think the muppets would finally wise up and demand an end to the Fed. We will not have honest markets or sound money until these counterfeiters and racketeers are audited, then shut down, and their Wall Street grifter accomplices jailed along with the captured regulators, enforcers, and politicians who turned a blind eye to their swindles against retail investors and the population at large.

  15. timbers
    Nov 20, 2018 at 9:36 am

    In addition to my full time good job, I have a part time job bartending just for fun at Boston Symphony.

    Many of my co-workers there own stocks (“Someone has to plan for my retirement”) and Apple is the stock I’ve heard mentioned among them. They work in the multiple catering, bartending, waiting, and service gigs (that sounds so “sharing economy”).

    So yah, working folks w/o 40/hr/wk work benefits will be also get hit by a deflation of the Everything Bubble.

    On a side note, I decided to buy a new “Smart” phone because my iPhone 4 is on it’s last legs. iPhone wasn’t even on my list this time because IMO it’s nuts to spend so much on a phone.

    Ended up getting a Moto E4 Plus for $130, last years model. The Moto E5 Plus had better camera and more whatevers, but it it has only a 4,000 batter vs the E4 Plus 5,000 battery which suits my needs better as I have a young Labrador Retriever I enjoy taking on long hikes thru State Parks.

  16. MF
    Nov 20, 2018 at 10:27 am

    It’s fascinating to see the number of folks who think the Fed can fix a tech correction.

    OK, maybe it’ll reverse its reverse QE in a panic if FANGMAN grinds down to far. But what will gambling addicts do with the new money? Chase the hoary tech hooker pleading for just one more hit of heroin?

    No.

    They’ll cast FANGMAN aside like a used needle on skid row and hop the next train in search of the next Big Thing in a new Big City with Bright Lights.

    • fajensen
      Nov 20, 2018 at 3:15 pm

      An index is just like a brand-name washing powder. Sometimes the manufacturer change the ingredients to meet its internal objectives or for health-, safety-, environment-. or legislation reasons. The box and the brand name usually stays the same. The manufacturer is in the business of selling whatever is in the box.

      With a stock index, they usually prune the losers which gives indices a bullish bias. I believe this is intended. FANGMAN could be discarded as a brand when it does not move enough product.

  17. Gorbachev
    Nov 20, 2018 at 10:33 am

    The question for me is -who will survive.

    Nvda is most at risk.The rest have so much cash or brand

    leadership that they will out run this pullback.

  18. Nov 20, 2018 at 11:06 am

    NVDA makes GPU which is the component of AI, so that one bears watching. All the others are really Media companies, which means they should be under the FCC, and the FCC should actually do something. If your primary revenue is advertising you are a media company. (Hence the prospects of new regulation overrides the benefit the deregulatory wave) I recall the B2B hype and the Nasdaq bubble, but B2B did not go away. The difference in the stock bubble then and now, is different. The hype then was palpable, this stock bubble is liquidity driven, where money goes to work in an orderly fashion. The D&Gers like to see it both ways, remember that when you are watching the evening news on Facebook.

    • Bet
      Nov 20, 2018 at 2:50 pm

      NVDA is what we call a story stock. Wallstreet wants a pony to ride
      especially one with a smaller floats under 500 million like NVDA its
      much easier to goose it up. NVDA blast off from 25 dollars to almost
      300= crazy town. Its not sustainable. They do not bounce well. In all likelyhood long term NVDA heads back to 50 to 60. Others ? MCD (hamburgers lead the market..not) COST,NFLX,AAPL, UNH, HD ,BA and more . These were all in the straight up blast off to da moon from 2016. Well what goes up hard and fast comes down harder and faster. Yes like 2000
      I figure in a few months the markets head back to 2016 levels
      This is now the Toonces market

  19. Maximus Minimus
    Nov 20, 2018 at 11:47 am

    “I have no idea why anyone is still on Facebook or is still using its other apps, and other people are coming to the same conclusion.”

    I had no idea either, until I was returning my VW due to dieselgate, and the only owners’ discussion was on FBook. Also, every politician of any stripe has a FBook page, which is ironic given the discussions there are more essential than some secret amorous liaisons. Momentum rules, for now.

  20. Shawn
    Nov 20, 2018 at 11:50 am

    Regarding Facebook, loved this line, “I have no idea why anyone is still on Facebook or is still using its other apps”

    Priceless.

  21. IdahoPotato
    Nov 20, 2018 at 11:50 am

    There is a huge contingent of young folks who have never invested through a complete market cycle who sing the praises of broad market index funds.

    Index funds can get abjectly skewed by a few stocks and this is a perfect example. About 65% of the stocks in the U.S. are in a bear market already. Many have been for several months. It’s the FANGMAN stocks that were holding up this tottering edifice.

    Let’s see how many have the stomach to keep holding these funds.

    • vinyl1
      Nov 20, 2018 at 9:48 pm

      If you want to know where the horn is that they blow when the market reaches the bottom, it’s when all the ‘long-term’ retail investors give up and sell the S&P 500 fund in their 401K.

  22. Shawn
    Nov 20, 2018 at 11:54 am

    And if you want anymore proof of what a Ponzi scheme Nvidia is, please look at this graph and filter, ‘All’.

    https://www.marketwatch.com/investing/stock/nvda

    • OutLookingIn
      Nov 20, 2018 at 1:09 pm

      Agreed Shawn. NVDA

      An average stock price of Nvidia Corp. from Jan. 2002 until Jan. 2016 (a fourteen year span) is approx $14.30
      Now, from January 2016 until August 2018 the price went from $28.18 to $272.52 a span of about 19 months.
      From a 14 year average of $14.30 to a high of $272.52 occurring just in the past year and a half? A 20 times valuation? This is a BUBBLE.

  23. OutLookingIn
    Nov 20, 2018 at 12:00 pm

    Ladies & Gentlemen –

    Hang on to your hats! Here we go.
    If you have been paying attention to the fundamentals, both micro and macro, they ALL now portend an imminent market melt down.
    I know some will say; “Even a broken clock is right twice a day”.
    These so-called “sooth sayers” have their heads firmly embedded in the sand. For those in the “know” plainly see the writing on the wall.

  24. KPL
    Nov 20, 2018 at 12:32 pm

    Given that 52 Week High was 2941 and we are at 2691-as I write (250 points down) on the S&P, we are just 8% down from the ATH. So in reality nothing has happened yet, not even correction territory yet. Not to mention given the 300% run up since 2009 a 8% drop is not even worth talking about. In fact that the Fed has not come cooing all over the market is in all probability because of this.

    Let us see what happens at the Fed should the market get into a bear market which is still some way down. Clarida and Evans were making cooing noises a week ago. This cooing will get louder if the correction really gets going.

    While I very much wish the stock market investors get a thorough whack, it is very likely the Fed’s favorite whipping boys-savers, retirees, prudent and conservative people are the ones who are going to get knocked on the head once again. But then that is likely to be the lot for this group when scoundrels have the key to the house.

  25. Mark
    Nov 20, 2018 at 12:57 pm

    I still have a hard time seeing what fundamentally changed in September that led to this correction. The yield curve hasn’t inverted, let alone go flat, and credit spreads are still tight.

    If we had gotten some bad GDP growth numbers or unemployment numbers I could buy that as the spark that started this correction, but this seemed to have no trigger other than some general ennui about peak profits and trade protectionism that may or may not end up harming the US economy. The correction in late 2015 and early 2016 was more convincing of real economic problems than this drop, though this one has everyone convinced the end is near…

    I still think stocks will have one final run higher this cycle for the above reasons. I’m not bailing out of stocks until the curve inverts and credit spreads start to move.

    • Petunia
      Nov 20, 2018 at 1:52 pm

      It was the election and the expectations leading up to it. Look at who’s on the financial committees in congress. Be afraid, be liquid.

      • GSH
        Nov 20, 2018 at 3:03 pm

        Agree. But now we have certainty. Gridlock for at least 2 years. There will be lots of noise but no traction. Generally, this has been good for the markets.

        • RD Blakeslee
          Nov 21, 2018 at 8:57 am

          … and for me, who is not in the markets, because the pols will be too busy fighting to look for solutions to “problems” in my bailiwick ..

      • nick kelly
        Nov 20, 2018 at 11:45 pm

        The big fear is the trade war. All done thru executive action (tariffs are supposed to be up to Congress) on grounds it was a national security issue, including the steel and aluminum tariffs on major security threat: Canada.

        At some point you are going to have to deal with the fact that Potus is semi- literate, completely ignorant of basic economics and most other topics. He just confused Balkans with Baltics, and advised the small Baltic countries, threatened by Russia, to be more friendly to Russia.
        Maybe Ukraine should be too.

        When discussing the budget with economic adviser Cohen who resigned the day after the tariffs were announced, Trump wondered what was the budget problem: ‘just print the money”

        • fajensen
          Nov 21, 2018 at 2:57 am

          Beginning Dementia would be my take. Geriatrics should maybe not be presidents?

  26. marie
    Nov 20, 2018 at 2:43 pm

    What I got from the article is : why would anybody still be on Facebook.
    I ask myself the same question everyday.
    Why would they?
    A similar one would be: why would anybody need the latest iphone?
    Beats me.

    • Mark
      Nov 21, 2018 at 5:11 am

      As I am currently in SE Asia, I find that a large segment of the population in Thailand, Vietnam, and the Philippines love FB and use it everyday. But, so does my Mother in Omaha, Nebraska and her demographic cohort. I deleted my dormant account years ago. Some segments of the world who mostly only use smartphones, love FB. Might be enough to keep it a float, yet having been around awhile, it may face a MySpace future as some has suggested.

      • marie
        Nov 22, 2018 at 5:06 pm

        The rich purchasing power markets indeed.
        They also love KFC so, who knows?
        It just feels so working class and last decade.
        Big tech censorship of freedom is a repulsive no no to me.

  27. SuzeB
    Nov 20, 2018 at 3:22 pm

    For us average folks who (try to) manage our own IRA portfolio, it is tough to know what to do when the market starts to tank. In 2008 I did nothing, lost 50% and it came back but now I’m ten years older and about 8 years away from retirement age. Just read a post from an already retired friend who says he put everything in cash a week ago.

    Thankfully I have the bulk of my non-retirement savings in cash.

  28. Laughing Eagle
    Nov 20, 2018 at 4:04 pm

    Those in the stock market better look back to 2008. They suck you in with dreams of retirement but its all an illusion. QE pushed all the inflation to the canyons of Wall Street and thats why they are crying now, deflation in the market.
    If you think Wall Street is a retirement haven read “Broken Markets by Sal Arnuk and Joseph Saluzzi.
    Second I have had an Apple mini ipad since 2012 and I will always be an Apple guy. Anytime you have a problem there is an 800 number to call. Best is you get to speak to an American.

  29. Art
    Nov 20, 2018 at 5:23 pm

    Schadenfreude buffet.

  30. bigblew
    Nov 20, 2018 at 9:05 pm

    All the fangman company execs have to be looking at IBM and thinking if they can get away with being a fraudulent shell of a company for years and years, maybe so can we!

  31. vinyl1
    Nov 20, 2018 at 9:51 pm

    Cramer suggested tonight that there are a lot of margin calls at hedge funds that lost big on oil bets, and he could be right. These traders may well have to sell their good stocks to raise cash. Such forced selling will make everyone else nervous, and they’ll start dumping stocks too.

    • cd
      Nov 20, 2018 at 10:59 pm

      Kashoggi death started crude sell off, small caps started selling off, than healthcare, heck bio tech is 25% down..now adjustments and tax loss selling along with macro news is testing new investors with 10% correction.

      it was needed…PE ratios are not in bubble, earnings season was excellent…
      some cutback on expectations but the economy is doing fine. Welcome to the jungle, Bitcoin folks are learning it even harder…

  32. andy
    Nov 21, 2018 at 2:23 am

    Apple only has 15% of the global mobile market.
    With an eco- system guaranteed to send it the the way of RIM/Blackberry
    80 million units to zero in 5 years.
    They better lower prices and add a USB port if the want to stay in business.

  33. Mark
    Nov 21, 2018 at 5:30 am

    As I am currently in SE Asia, I find that a large segment of the population in Thailand, Vietnam, and the Philippines love FB and use it everyday. But, so does my Mother in Omaha, Nebraska and her demographic cohort. I deleted my dormant account years ago. Some segments of the world who mostly only use smartphones, love FB. Might be enough to keep it a float, yet having been around awhile, it may face a MySpace future as some has suggested.

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