I just got Laid Off a hundred times

If you don't know me, I'm Osito. My company just announced they are going to Lay Off 20% of their staff. They said they will let everyone know by 3:00 pm today, so I get to sit here for 6 hours wondering if it's me (over and over again).  This is not something new to me, I was laid off in the housing market crash (Great Recession). And I was also laid off during the Dot Com recession as well.  I don't know if i'm on the block, but I have the memories to replay over and over again until I find out and the day is up.

I have worked hard my whole life and the one lesson I wish I had learned earlier is: "No matter how hard you you work, it never matters, some rich guy is going to get rid of you" 

All the 10-12 hours days in a salary position, all the weekend hours, all the eating at my desk. All of it was a waste of my life to benefit rich people.

Reduce your spending!
Payoff your debts!
Save and invest your money!

You get a bailout, and you get a bailout, and you get a bailout

I know this is hard to hear but if a company cannot survive it should fail. We are in the beginning of a new recession likely a depression.  Printing money to bail out shareholders is not a priority (I'm a shareholder, I don't deserve it) we should protect the most vulnerable members of society, this should  be our focus, instead we are trying to keep the uber rich from sliding down a tax bracket, or having to sell one of there 5 beach houses. 

Let them fail!!! Why not?

The benefits of bankruptcy.
Contracts, contract can be re-negotiated even with unions, a company will benefit from having new leverage during this time and get much better terms in new contracts because the alternative is the company will stop doing business with the other party.
Debt, payments can be temporarily suspended, giveing a company time to catch up. The majority of companies that fail will have unbelievable amounts of debt. 
Debt, can be restructured with better terms, lenders know the alternative is much worst.

Being bought.
Competitors, may choose to buy the company and fix the problems that management allowed or caused.
Investors, may chose to buy the company and fire the existing management then investors can hire industry experts that are not corrupt or incapable. 

In all cases employes that work hard might have a shot of working for an newer version of the company if aloud to fail. but this new company would have learned from its mistakes and it won't be  run by corrupt liars that line shareholders pockets (their pockets) while creating unacceptable moral hazard.

Why not Bailout?

If you bailout a company it will always plan to have that safety net, and once you bailout a company all companies will believe they are worthy of the same bailouts
Failing should hurt. If a company is bailout what lesson will it learned.
Example: The 2009 Bailouts lead to bankers getting record bonuses while people became homeless from the bankers practices, none of the bankers involved went to jail and they were all have record years again in 2019. By the way share buybacks are awesome right? What? You borrowed money to buy the shares, is that even legal? (ethical?) Hold on now you feel sick? you might be Wu-Flu? and you somehow can't afford to pay your loans? How is that possible you said your healthy? What's that you need a bailout? why because it worked before. 

Coronavirus, how should I invest

Now is a great time to start investing, stocks are down and therefore cheap. If you're thinking about investing ask yourself this: how can you lower your risk?

First invest in a emergency fund (3-6 month of expenses normally), with the current market uncertainty you should double or triple that number.

Second just time the market, only buy a stock when it is at the low, only sell when its high. Seriously it's impossible to time the market so if you have 10K to invest find an entry point and then spread you purchase out in case of further drops. (see below)

Third Pick good companies.  Only buy something you feel has a good product that you would use 5-10-20 years into the future. Don't buy some stock that went down 70% in a company you never heard of. But if you love to drink Starbucks, go look at stats read there earning reports, maybe you can start a position at a good discount.   

Fourth use the stats

Average correction stats:
The average correction lasts 4 months, recovery 4 months
The average Bear Market lasts 13.2 months, recovery 22 months

I have a buying plan that escalates as the market goes down, people don't understand how or why I can buy as the market goes down. But the key here is I don't invest more than I can afford, and I don't buy high risk equities. Example I own KO, I plan to own it for 30+ years so I can get a better yield on cost in my retirement, right now it's priced good so I buy a little every week. if the price goes down next week all things being the equal, I buy a little more. If everyone stops drinking Coke products I won't be a buyer because then I wont get that good dividend 30 years from now.  So I'm betting that KO won't break it 57 year record of raising its dividends the next 30 years bofor I need it.

Something to think about before you invest:
Can you last 13.2 months?  what if you lose a job?
Is this a correction or a recession?
Will Bonds go down?
Will real estate go down?
Is corporate Debt a bubble?
Will we have inflation or deflation?
Will your pension implode?
When will consumers start buying goods again?
Does Gold/Silver/etc hedge against everything?

So if you're ready to drop lets say $50,000 in the market here's how to do it without great risk. Don't put it in a high yield saving account instead. Then Open a M1 Finance account and Start investing in some Dividend stocks with $100, then once we start to recover (in about 13.2 months) start buying 400 per week. 
Click here to get a $10 bonus when you sign up for M1 Finance

Or if you need return but don't like the equities markets try P2P Lending. Click to sign up for Groundfloor and get your $10 bonus

I predicted the Corona Virus stock market sell off

I saw this coming from over a year ago, I predicted that at some time in the future we would have a rational or irrational stock sell off. I have bought into this crash almost every day (and I'm happy with every single purchase) HOW IS ALL THIS POSSIBLE?

Actions I have taken before this crash (currently at the time of writing this -12.7% from highs, could be more tomorrow)

• 12 months before crash, decreased allocation of higher risk P2P loans
• 8 months before crash, add a new income stream
• 8 months before crash, decreased unsecured P2P loans
• 8 months before crash, increased short term (30 day) P2P loans  (for better access to cash)
• 8 months before crash, increased Bonds from 5% to 10% (of paper assets)
• 8 months before crash, increased Gold 1% to 5% (of paper assets)
• 5 months before crash, sold out of oil stocks
• 4 months before crash, add a new income stream
• 2 months before crash, increased Bonds from 10% to 16% (of paper assets)
• 2 months before crash, increased Gold 5% to 7% (of paper assets)
• 2 months before crash, sold week positions for a gain (stocks I didn't think would do well in a recession, but I may rebuy at a lower cost)
• 2 weeks before crash, predicted it
• 1 week before crash paid off high interest car loan 54 months early
• day of crash, bought more paper assets
• 1 day after crash, bought more paper assets
• 3 day after crash, bought more paper assets
• 4 day after crash, bought more paper assets
• 1 week after crash, bought more paper assets
• going forward I will continue to buy good assets at discount prices every day

So ya I guess I was prepared and motivated but I did miss some goals I had.

• I wanted to get to 20% Bonds but in the end only got to 16%. 
• I wanted get 30% of my P2P loans in short term notes (90 and 30 day) but only got to 20%. 
• I wanted to sell  4-5 rentals that need of a lot of work (while prices are high) and only sold 2. 

so I guess my predictions or rather my actions were a little off, I probably lacked a little confidence.

My whole investment thesis for equities is to invest in companies with dividend growth, I don't time the market I invest every Monday morning regardless of the indicators. If the market goes down I invest more (I call it Carpet bombing) Right now I'm getting ready for a Recession, and when it occurs I will start my rotation from P2P loans into my Equities (I talk about it here "Investing, How to get started...")

How did I predict the crash, there was no one thing that caused me to do this, I take in a massive amount of new and media and it seemed very obvious. For example a couple weeks before the first case was in the US, I said I bet we'll see prices on masks and had sanitizers got up 2x, 5x, 10x, etc as there sold out of retailers and now (30+ days later) that is the reality.

The last recession I would go to work and try to talk to people about how the housing market was a giant bubble about to pop, and how the adjustable debt was a huge issue if that happened. No One wanted to talk about it aside from a few special people. This time I was talking about our over dependence on China and its slowing economy and Chinese banking and global debt issues, then I heard that china was arresting doctors for warning the public. Again people didn't seem to care, say things like only 100 people are dead, the flu kills more. 

I think looking back we will say COVID-19 wasn't that bad, but I also think a lot of people will have lost real money and have to delay there retirements, lose there houses, default on loans, etc.  So what will be the reason for these losses: COVID-19 Panic? shelter in place? lack of preparation? break down in supply lines? Chinese Banks/Lending? Global Debt? Everything?