[tophcfa]

Originally Posted by CoachKandSportsguy

Well, FYI for dividend stocks, dividends paid out of increased debt versus cash from operations is not a sustainable mgmt decision. ie, see GE, General Electric which did just that. Only invest in companies with dividends from cash flow from operations, that's not the earnings per share, the answer is on the cash flow statement.

Market timing does work, but its not for everyone because you have to reprogram your lizard brain, the linear extrapolation part which humans have built into their survival reactions. . . Trust me, I had to go through that the hard way, which most traders and market timers do. Cost me personally 1/2 Million . . Market timing long term trends, ie multi year trends, is the way to go. This January was very profitable for me on the short side, day trading, as there are short term signals embedded in options stats, option greeks and other market data points which can signal certain movements. . . its not easy, its very hard to do consistently, but keep the trade sizes below the risk of ruin, and practice the skill and one can learn it. There is no educational course to qualify anyone, as trading is all a learned skill because you have to retain your brain's normal survival skills that fear is good and greed is bad. FYI, SP500 fair market value, is about 3000 to 3500, depending upon earnings with normal non pandemic expenses ratios, which i will then put my 401K from all cash bonds back into stocks, which i pulled out of last August.

Inflation is an imbalance of supply and demand, like a unicycle, the seat moves and the wheel moves. Only when they are in perfect balance does inflation not move. . . demand is the seat, supply is the wheel. . the problem with most TV aged inhabitants is that they associate inflation with the 1970's inflation spiral. increasing inflation from 2% to 5% is not an inflation spiral, due to fed actions and temporary supply chain disruptions. Both can be reversed

However, the inflation engine right now which will be with us for awhile is labor inflation. two long term effects: shrinking human population, even here in the US, and the job/education imbalance between blue collar and office jobs. Technology is displacing human jobs, I have done it personally with programming, taking a 4-6 hour manual job and replacing it with 15 minute programming and key strokes, to overnight automation coding. The lack of specialized manual labor and a shrinking labor supply will persist, and keep an inflation floor. . . the hidden effect is that fewer middle class white collar consumers will mean that maintaining current corporate growth rates will require hire retail prices. . . so something has to give in awhile. .

Three thoughts on the above. First, it’s nice to see someone still doing detailed fundamental analysis (tearing apart a companies income statement, balance sheet, and sources and uses of funds) to identify exactly what sources of funds are being used to pay dividends. Second, your inflation argument is mostly correct, but is missing one key component. When looking at supply and demand, one must consider money supply into the demand equation for goods and services. The irresponsible actions of the Federal reserve, since the recovery of the housing market bubble burst in 2007/2008, of non stop pumping trillions of new dollars into the money supply (termed quantitative easing) has dramatically increased the money supply to unprecedented and dangerous levels. Those actions created so much more money supply, all chasing the same goods and services, that hyper inflation was eventually inevitable regardless of shortages in supply chains or labor. Think of your unicycle example, the circumference of the wheel of the cycle (money supply) has been increased dramatically, so every pedal covers much more ground (translated into everything costs more). Third, you remind me of me when I was still working. By that, I mean work has you trapped not being able to schedule your free time to be outdoors getting exercise all day. Your channeling all the time work has you trapped by a computer into analysis and trading. I get it, been there and done that, and extremely glad those days are over. Now that my schedule is mine, and not dictated by an employer, I put our savings in index funds and forget about them. Now I can use the time to figure out how to squeeze in exercising the dog, working on the yard, swimming laps, golfing, a bike ride, and doing some weight training every day. Dude, you need to retire, it’s sooooooooo liberating : )