
Ask HN: How should I invest $200K in this market? - buy-the-dip
Investment horizon: long term to forever<p>Risk appetite: If I lost this money, my lifestyle would only slightly be impacted.
======
WheelsAtLarge
The market will rebound and a few years from now we will be wishing we had
invested. We will see stocks that doubled or tripled. The big problem is that
there's really no way to know now what those winners will be.

The best advice is to pick a broad index, S&P 500, and invest the money over a
period of time, maybe 6 months. You won't hit a homerun but you'll do better
than most.

~~~
basch
There are considerably safer bets than S&P500, with similar returns, including
a classic 60/40.

[https://portfoliocharts.com/portfolio/portfolio-
matrix/](https://portfoliocharts.com/portfolio/portfolio-matrix/)

[https://portfoliocharts.com/portfolio/risk-and-
return/](https://portfoliocharts.com/portfolio/risk-and-return/)

~~~
6gvONxR4sf7o
The risk is less important when OP says

> Investment horizon: long term to forever

Total market ranks 1 on average return, which arguably matters most assuming
OP is gonna wait 30-40 years before using this money.

------
cbanek
This is just my feeling from watching the markets for a while, is not
financial advice, isn't necessarily the best, etc., etc.. I still think we
have further to fall, but when we do, I'm looking to put money to work. It's
hard to time a bottom, so maybe buy in a few lots over a while as each drop
happens.

Of course you should probably buy at least some index fund at some point. I
also think the tech chip stocks are being pounded: Intel is in the DJIA, and
has been brought down a lot I think rather unfairly because of the index.
Taiwan Semiconductor is top of class and TSMC has also been pretty pounded.
Texas Instruments, Qualcomm, Western Digital. All down, and all have really
pretty reasonable dividends. Their moat is the IP as well as the manufacturing
facilities. Tech isn't going to just stop, if anything it will end up in
everything even more than now.

Be careful on the airlines. They'll get a bailout almost certainly, and maybe
will merge down. Warren Buffet, who recently bought a lot of airlines was
known for saying:

"Now if I get the urge to invest in airlines, I call an 800 number, and I say:
'Hello, my name is Warren, and I'm an air-o-holic,'" he has said in the past.

He got burned in US Air in 1989. He relapsed in 2016.

~~~
alecco
If you are so confident with how the market will move you should put your
money where your mouth is and trade options accordingly. Hint: you shouldn't
be so confident.

------
auslegung
I like generalpass's answer, "Not based on information obtained here." And yet
I'm going to give a genuine answer.

I'd use [dollar cost
averaging]([https://en.wikipedia.org/wiki/Dollar_cost_averaging](https://en.wikipedia.org/wiki/Dollar_cost_averaging))
and invest in a index funds. I would personally try to wait out the freefall
so you can start investing closer to the bottom, but you will never know when
the bottom is, only when the bottom was, so I wouldn't get too fancy with
waiting.

------
f-maga
Hedge your bet.

Buy stocks in Facebook, Microsoft, Amazon, Google and Apple. (F-MAGA).

If they go up, you make a lot of money.

If they go down, the world has become a better place.

------
runawaybottle
It might be prudent to ask more simpler questions, such as: will humans ever
take a cruise again? Will they ever take planes again? Will they ever go back
to restaurants?

There, now go invest.

------
streetcat1
First of all, ignore the news. Most news is there to sell ads, clicks, etc.
Nobody really knows what the market will do in the next minute/hour/day.
Nobody.

Also, price is always leading the news, not the other way around.

And, a lot of fund managers (who already entered the long positions) will go
on TV and start suggesting their own version on how to handle the crisis and
why this is an opportunity of a lifetime. Assume that everyone is talking the
book.

So a bear market is lower lows/lower highs. The SP is still in this bear
market. As long as this bear trend continues, do not enter.

However, there will be one day in the future when the market will reach
capitulation. The news will be so bad and panic so high, that the market will
fall hard, but then you would see very high volume of buyer, and the market
would end positively for the day.

At that day you can start to gradually enter.

------
jpn
Berkshire (BRK-B)

[https://finance.yahoo.com/quote/brk-b/](https://finance.yahoo.com/quote/brk-b/)

\- Buy it now.

\- Check in on it every quarter.

\- You might lose money in the short term.

\- But not participating in the eventual rebound would be a huge missed
opportunity.

~~~
raincom
In a way, BRK-B is an index on it's own.

------
gigatexal
My strat is this: (not baked on historical testing so take a free strat for
what it is, free) I am buying stocks again hat are at half or less of their 52
week highs and only large cap companies. I’m in Boeing now and United Airlines
and Ally bank to name a few. The thesis is: this will pass and large core
companies that make up a big portion of the economy will come back and will
either be acquired or buy up smaller players (remember these larger companies
with large bank reserves...).

My time horizon is the same as yours.

------
coderintherye
I won't tell you how to invest, as who knows, other than that if Buffet buys
then that is probably a good time to buy.

I will ponder a question though, will the flight from markets drive more money
into other assets asides cash?

For instance, we are selling a farm property right now (in a small city, not a
hot market) and don't yet know if it will be impacted by the overall economic
climate. Part of me thinks more people might move their assets into
farm/raw/rural land as another "hard" asset during these times. But there's no
way to really know without observing.

------
User23
This is not advice and I am not a financial advisor.

That said, I noticed that put options for Delta airlines with a strike price
of 18 were trading at $4.10 which is $410 per contract, so I wrote (sold) 10
of them. That means that either I’m going to get to keep $4100 in a month or
I’m going to get 1000 shares at an effective price of $13.90 per share. If
that happens I’ll sell for a profit if I can or otherwise hold for a couple
years and hope to profit off the bailout. Worst case is a net loss of $13900,
which I can absorb if need be.

~~~
MR4D
I must be missing something - that looks like a horribly asymmetric payoff.
Why would you ever do that?

~~~
ivalm
Some people make concave bets in high vol markets, most of such people are
suckers.

~~~
User23
There is absolutely nothing wrong with making bets where the payoff is smaller
than the money risked, so long as the bet has positive expected value and the
bettor's risk management is sound. It's the idiots who lever up too high or
otherwise disregard bankroll management who get ruined when a "sure thing"
doesn't go their way.

------
thedudeabides5
Don't take investment advice from overconfident folks on HN.

Try www.reddit.com/r/wallstreetbets if you really need it

~~~
throwGuardian
Because overconfident Reddittors >> HNers

~~~
doingmyting
I think you missed the sarcasm

------
johnchristopher
So, you have 200K you can lose without being impacted and you decide to take
advice from an Internet forum instead of a financial advisor ?

Can't you lobby for a better world or something instead ?

~~~
sys_64738
Is a Financial Advisor really better than random opinions from here?

~~~
johnchristopher
He has knees that break so I'd say yes.

(/s, don't do that)

------
lancewiggs
Yes - if you want to speculate. Buy puts or calls. No - if you want to invest.
This is not a rational market.

I still see a long way to fall. Wait months until the market is dead before
buying.

------
SenHeng
VGT, because you’re on HN. I would just put it all in now and not look at it
for a few months.

Long term, it probably doesn’t matter if you buy it $200 or $150.

Do not forget to reinvest the dividends.

~~~
sytelus
VGT is still far from "good" price. My yard stick is crash of Dec 2018 which
is not too far in past. If price hasn't fallen below that then the stock is
holding up still well. Also, instead of VGT, why not QQQ? I like to go for
ETFs that have the biggest assets because they track prices well and are "too
big to fail".

------
congulio
One-sixth per month in VTWAX, for the next six months.

------
jdkee
Cash until 2021.

~~~
bbimbop
This is the worst suggestion. Cash will be eroded by inflation faster than you
think,

------
adventured
A lot of people won't give you actual suggestions. I will. I'll offer my
opinion. All of these are meant to be held for years, not played short-term.

Square (SQ) as close to $30 or under as you can get. I was buying today below
$35. I'll keep buying if it wants to keep going down. At a $14-$15 billion
market cap, it was a comical steal to hold long-term. It's a future $100b
market cap company.

Pinterest (PINS) here (below ~$12), to be held for a minimum of five years.

Grab some financials, the stronger companies. These are not going to collapse,
short of the US collapsing. They're classic too big to let fail. They survived
the great recession, the Fed will inject whatever it has to in order to prop
them up. I'd suggest a basket of JPM, WFC, BAC, GS, MS.

IBM (IBM). Below $100 ideally. Their future will be brighter with the new
management and they're trading for 9-10 times earnings with a good dividend.
It was cheap before the crash, it's very cheap now.

Micron (MU), particularly if you can grab it below $30.

Beyond Meat (BYND). I like their valuation at this point, it has been crushed.
They've demonstrated strong operational controls on costs and they have plenty
of cash. I think they'll be fine coming through this.

I'd like to suggest Cloudflare (NET), I don't love their valuation here
though, it hasn't gotten beaten down enough. It was briefly down a few days
ago, but it's back up again. If you can get it below ~$15-$16, I like it there
for a long-term hold.

Buy some silver (small position), however you prefer to go about that. The
recent shock plunge is an opportunity to be taken advantage of. The same is
true about a few other commodities. People are in panic mode, dumping most
everything.

Luckin Coffee (LK). Big coin flip on the situation in China and the physical
space in general with the virus. However, if they survive (presently burning
plenty of red ink) they have a decent shot at being the Starbucks of China.
They raised some capital in January, they'll certainly need it. It had held up
well, but cracked today and dropped 13%, rolling back to November's prices.
Stalk it for the low $20s or below.

Medifast (MED). To be held for several years minimum.

In the energy industry, Schlumberger (SLB) maybe. Their valuation has gotten
very tempting here. $36 to $12 in a month. I don't like most of the energy
industry, including XOM, CVX, much less OXY or APA or CLR. It's an amazing
double smashing, from Covid and the oil war.

John Deere (DE) is getting close to interesting. I'd like it below $100. $180
to $106 in the past month, it's getting there. I like them a lot more than
companies such as Caterpillar (CAT) or 3M (MMM).

iRobot (IRBT) has my attention here. They got hammered first from the China
trade war concerns previously, then later from Covid as China went down. Their
most recent quarter had popped the stock, until they got smacked again by
Covid. I might like it below $30 at this point, we'll see if it gets there in
the coming days or weeks. Plenty of competitive risks with the company,
however the value proposition is very interesting now (below one times 2019
sales, 11x operating income).

Companies to avoid: retailers (too much risk, not enough upside); airlines
(who knows what's about to happen to them); the classic FAANGS etc (AAPL,
NFLX, GOOGL, MSFT, AMZN, FB - they haven't gotten cheap enough yet to warrant
buying); avoid Tesla, GM, Ford; I don't like UBER or LYFT here; I don't like
PayPal, Visa or Mastercard, they were all stupidly overvalued before and still
are; I dislike Shopify, they're worth $60-$80 / share, trading for $336. At
current valuations, I'd avoid Intel, AMD, Cisco, Oracle, nVidia and numerous
other larger tech companies (not beaten down enough). I don't like most of the
classic bluechips at all here, including KO, JNJ, PG, XOM, MCD, CVX, PFE, PEP,
MMM, and so on, they're just not cheap enough. Give me MCD at a ~9 PE ratio
and I'll consider it. I'd avoid the telecoms, including T-Mobile, AT&T,
Verizon, Comcast, not cheap enough vs growth (plus I just plain dislike them
as investments, unless they're being given away), they haven't been pounded in
this. I don't like a lot of the more recent class of tech stocks, the Workday
generation, their valuations aren't crushed enough (stocks like Twilio,
ServiceNow, Splunk, Atlassian, etc) and most are either bleeding red ink or
barely making money along with having extreme valuations (most still have the
bulk of their epic gains from years of running).

Delta (DAL) and Southwest (LUV) would both be interesting to track on an
intricate basis (you have to stay on top of every little detail about what's
happening to them and the industry here). DAL is trading for three times 2019
earnings now, LUV is at eight times. If they're going to remain independent,
survive and get back to normal (whether it takes two years or five etc), this
is a steal, and their stock prices will plausibly go lower yet. I'd stalk them
for a cheaper entry yet if I were going to bother.

And if I had Berkshire's $130 billion in cash, I'd eat Kraft Heinz, refurbish
Kraft, keep Heinz for myself, and then spin Kraft off or sell it in a few
years to a peer in the segment. Most companies in that segment aren't worth
touching here though (that includes KHC), not unless they get a lot cheaper
yet.

~~~
spectramax
Just curious about your statements regarding SQ. Their entire model is that
they're a bank (I think they got approved a day or two ago) based on credit-
card transaction volumes in retail business. Retail businesses are the shadow
of SEARS and it is likely to be the slowest segment to recover after this
pandemic. So, I am not so sure about SQ - their credit-card gateway isn't as
successful as Stripe & Braintree. Personally, I would stay away from any
business that depends on retail foot traffic.

Also, I would add:

EA/ATVI/TTWO: They're outperforming relative to the SPY

Innovo/Moderna/etc. : Any of the Cov vaccine companies, a pot pourry of them

OLED/LG: LCD/OLED semiconductors

And, I would disagree:

AMD/INTC/AMAT/KLAC/NVDA/MU: Semiconductors are a _solid_ investment, not
beaten down enough because the demand of semiconductors will soar in the
future.

~~~
adventured
SQ will grow much faster than physical retail will decline. Overall physical
retail isn't going to vanish. Some parts of it will disappear; some physical
retailers will do much worse than others.

Their growth over the past three years disputes the concerns on their growth
re physical retail. They're not mirroring damage in physical retail: sales,
$1.7b -> $2.2b -> $3.3b -> $4.7b. Their operating profit has gone from -$170m
-> -$54m -> -$36m -> +$153m. They have a clean path from here to over
$10b-$12b in sales (Covid will roll them backwards and or slow their growth
dramatically for a while, which of course is why the stock is being priced as
it is).

NVDA with an optimistic 30 to 40 PE is far beyond a reasonable valuation in
this climate. Half that range would be reasonable given their growth potential
for the next few years and the market conditions now. So far NVDA is only back
to Dec & Nov prices.

I love what AMD is doing on the product front and obviously investors are
optimistic. Buying them at ~100 times earnings - with modest growth against
that valuation - I consider a bad value in this market after the upside run
they've had (since ~mar 2018). They still haven't been adjusted with much of a
discount (and of course I have no idea if they will be or not at some point),
they've merely been priced back to December. A normalization of AMD's
valuation to the semi industry requires they earn ~$2 billion in net income at
some point to justify their present valuation. They've pulled a lot of future
gains forward here.

------
ryansmccoy
IMO, the biggest unknown right know is that we don't know how long this
pandemic is going to last or when the new case curve will start to flatten.
This creates uncertainty and markets HATE uncertainty. I think once we get a
sense of this, the market will be able to price in the overall impact and thus
bottom out. Other things that would accelerate this understanding of the
timeline would be things like a vaccine, cure, etc. Obviously, a big risk is
that we continue to see infection rates rise.

Some interesting statistics I found regarding US Economy, According to the
BEA, Housing and Heath account for more than 50% of services spending in the
United States. Transportation, restaurants and recreation account for a bit
more than 20%.

The other issue the market is trying to digest is the Oil shock brought on by
Saudi/Russia price war. I almost want to say that I'd wait for some sort of
agreement on this as well before I even attempt to invest in the sector.

In terms of what I'm investing in, I don't currently try to pick individual
stocks, something I did for nearly a decade for Institutional Investment
funds, instead I prefer to diversify across market cap, so a large cap
(Russell 1000, IWB), mid cap (Russell Mid Cap, IWR), and small cap (russell
2000, IWM) index to diversify.

------
7402
If you haven't already done so, you could invest some of that in your local
food bank.

~~~
malux85
Is that an investment? I.e. is there a monitory return?

What you’re saying is charity right? (Which I’m not against, it’s just I
didn’t think you _could_ invest in food banks)

~~~
7402
There is a payoff, but it's in the satisfaction of helping, rather than in
money.

------
tannerbrockwell
Investing is a very personal matter. A financial advisor is the best person to
discuss this with. If I were pursuing this for myself I would build a
Permanent Portfolio [1]. If I was looking for a financial advisor I would talk
to Andrew Horowitz [2]. I would also recommend you look a small allocation in
something such as Bitcoin, Zcash or Ethereum as they have a lot of upside
potential still.

Permanent Portfolio Allocation: 25% Cash 25% Long Term Bonds 25% Stocks 25%
Gold

[1]: [https://assetbuilder.com/knowledge-center/articles/the-
world...](https://assetbuilder.com/knowledge-center/articles/the-worlds-best-
investment-strategy-that-nobody-seems-to-like) [2]:
[http://thedisciplinedinvestor.com/blog/dhunplugged/](http://thedisciplinedinvestor.com/blog/dhunplugged/)

------
RantyDave
Right now, stuffing it under your mattress is probably at least reasonable.

------
bbimbop
Head on over to
[https://www.reddit.com/r/wallstreetbets/](https://www.reddit.com/r/wallstreetbets/)

------
cjbenedikt
My tuppence: by some long-term LEAP calls and perhaps write some OTM puts on
SPY. Due to current volatility premiums are insane.

------
cakeofzerg
TeamViewer and other companies positioned to make zillions off the work from
home movement.

White collar employees won't want to go back to work.

~~~
alecco
You don't know if that's already priced in. The key to investment is timing
(alpha). If others figured it out before you it's priced in.

That's why insider information is highly regulated.

------
NicoJuicy
There are to many variables to consider.

It's too early

------
generalpass
Not based on information obtained here.

------
sytelus
General philosophy: Buy ETF that is (1) below at least 52-week lows _and_
below Dec 2018 price point (2) too big to fail (i.e. large market caps),
preferably with investments from big wall street+political influencers (3)
diversified, and (4) you have reasonable assurance of rebound in 1 year time
frame.

With this, I think good buys are XLE, SPY, VFH, VNQ.

~~~
skookum
Many people would argue that your fourth criterion rules out all options.
We're in historically unprecedented territory - there is no reasonable
assurance of anything. The broad market is 30% off recently-set all-time
highs. Whether it will go down a lot more or not is unknown. If the damage to
the economy is sufficient it could take years to recoup a broad market
investment made even at today's 30% off ATH level.

------
fierarul
BRK-B

~~~
sytelus
Not too sure how they would do. Their major assets are getting crushed right
now. I also worry about Buffet retiring and see as single point of failure for
long term term investing.

~~~
bbimbop
Ye of no faith. Buffet has planned succession for practically his whole life.
He has many capable managers. One recently bought a position in Kroger (KR).
Go take a look at it.

------
KhoomeiK
Buy call options on volatility ETFs like UVXY or VXX.

------
listenallyall
duh, BTC. John McAfee told me so.

------
throwGuardian
1\. Invest 50% in an index fund

2\. For the short term gains, Gilead sciences, and other antiviral makers,
even generic chloroquine & friends, are likely to gain FDA approval for CV.

3\. Ventilator makers and even CPAP manufacturers are likely to see a massive
spike in demand

Donate your gains from #2, #3 to needy CV patients/health Care centres

------
alecco
I have _no idea_. But I can tell none of the commenters here have any clue.
Source: I worked in finance for years and like to keep informed.

The level of Dunning-Kruger in this thread is appalling.

------
cjcenizal
TSLA

------
uyuioi
Yeah sure. Cause HN is full of people that can read the future.

------
kevincrane
Donate it to local charities or order a lot of takeout food and tip
extraordinarily well.

------
ellis0n
Help fund iPad Pro tool for remote workers
[https://animationcpu.herokuapp.com/](https://animationcpu.herokuapp.com/) :)

