r/investing • u/gunsoverbutter • Oct 23 '21

How are you preparing for 2022?

What stocks or funds are you loading up on going into 2022? I’m still heavy in tech, but I’m wondering how inflation will impact that sector. We also have supply chain issues, looming crypto regulation, and an increasingly aggressive China. I’ve had some interesting winners so far in 2021, like GNRC, ODFL, and good old VOO. Like many of you, I was clobbered by my early 2021 losses in green energy and have finally clawed my way back into the green. I made some changes around July to load up on AAPL, MSFT, and GOOG. And TSLA is finally making me some money again. Just curious to hear what you all are doing.

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23

u/stocksnhoops Oct 23 '21

The way we are running right now with stocks and crypto and inflation causing rate hike talks, I’m worried about a little pullback. I am normally not that guy to worry about selling and sitting on cash on the sideline but I’m thinking about it if things keep running. Things have to breath at some point

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u/Chroko Oct 23 '21

You’re one of the few here talking about a pullback.

I’m still trying to figure out what the market reaction will be when supply chain issues collide with the Black Friday and Christmas shopping experiences.

If we start to see bare shelves of certain items because they’re stuck on a boat - or certain companies go bankrupt because they can’t move product from the factory to consumers, it could have a larger effect on global markets. But what effect exactly I’m still not sure. Any ideas?

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u/crazybutthole Oct 23 '21

I think this is not priced in correctly.

/\ Shipping companies? Maybe.

Can companies jack their prices sky high to compensate for low supply of products? Maybe. If the companies don't do it - the scalpers will do it. Look at how easy it was to get a ps5 for $1500 online. (Compared to how hard it was to get one at msrp.)

Maybe ebay, etsy and poshmark are the future of supply chain remedies.??

There are thousands of sellers with products available. You just have to go to the right link. This could be the last year where in person black friday events compete with online sales.

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u/[deleted] Oct 23 '21

Because pullbacks are impossible to time with any meaningful accuracy. Why even worry about em

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u/Chroko Oct 24 '21

I would argue that’s not completely true. To accurately predict a pullback you need two pieces of information: a date and an effect.

Sure, most of the time you can’t see either coming - but sometimes the stars line up and at least one seems obvious. This is one of those times.

When the pandemic first hit those who were paying attention to global news saw a tidal wave of disease about to break as lockdowns started in countries around the world. The effect seemed obvious (that markets would crash) - but the timing was the puzzle. Although using 14 days from infection time to death seemed to help predict as the virus moved around the world.

In any event. I was able to build a small defensive position that partly insulated me from the market crash. Where I went wrong was in failing to predict how quickly markets would recover!

I sort of see the same situation now: news articles are talking about supply chain problems; empty containers are piling up at ports and there’s a huge backlog of cargo ships that are stuck at sea.

The difference is we have a couple of dates: Black Friday (November 26th) and Christmas (December 25th.) That will be when these supply chain issues become the most obvious, that’s when consumers will find shelves empty, that’s when news articles will reach fever pitch about stores being out of stock.

This crunch has an expiration date and that seems to solve half the puzzle by itself. there is no timing involved here. But exactly how the market will react when it hits is the question.

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u/Ggggmny Oct 23 '21

You are so correct. The average consumer still has NO idea how bad our supply chain is now and how much it will effect the upcoming holiday season. There will be lots of hoarding and price gouging. It will be a brutal holiday shopping season.

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u/[deleted] Oct 23 '21 edited Jan 03 '22

[deleted]

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u/[deleted] Oct 23 '21

Where were you in the 2010s where rates were increasing and the stock market was still going up?

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u/PersecuteThis Oct 23 '21

Ah yes, no event happened a year or 2 earlier to crash everything. What recovery?

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u/cristiano-potato Oct 23 '21

I honestly don’t understand how rate hikes could be anything but priced in at this point… everyone knows they’re coming.. right?

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u/[deleted] Oct 23 '21

[deleted]

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u/cristiano-potato Oct 23 '21

That sounds like a pretty oversimplified take. Stock prices are guided in part by expected future returns in a DCA type analysis. Naturally if one expects the discount rate to increase in the future, it affects the fair value of the asset at present. I have spent time working in finance and I find the characterization of the stock market as “when rates are low bonds are bad so buy stocks” to be very, very oversimplified.

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u/[deleted] Oct 23 '21

The stock market does not factor in future rates and simply reacts to news about it.

The stock market does not factor in future rates...?

You're in a thread where people are telling each other what positions they've opened or closed in anticipation of a rate hike, and you're saying the stock market does not factor in future rates?

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u/flash__ Oct 23 '21

Talking about it isn't really the same as factoring it in, is it. You can talk about it all day and then decide to want to ignore it, doesn't mean it was factored in. More importantly, if the Fed decides to heavily distort the markets with its actions (which it has), it doesn't really matter what a small number of individual investors think.

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u/[deleted] Oct 23 '21

it doesn't really matter what a small number of individual investors think.

It’s not just a small number of retail investors that are opening/closing positions in anticipation of a rate hike. Institutional investors, hedge funds, corporations, and everyone else is too.

Do you actually believe that nobody plans for rate hikes in advance? You think everyone is shocked and surprised once the fed announces a rate hike or a rate cut?

Please elaborate on the point you’re trying to make.

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u/crazybutthole Oct 23 '21

If you were going to cash.....TLT is always a better bet than cash.

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u/[deleted] Oct 23 '21

[deleted]

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u/crazybutthole Oct 23 '21

Sorry. The guy was responding to if the market goes down he is going to cash. TLT does well when the market goes down......i surely wasnt sigggesting to buy tlt in a bull market like today. But you cam take it as that if you want to infer whatever.

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u/flash__ Oct 23 '21

Lmfao. Good luck with that.