The stock market is off the rails

[ColdNoMore]

According to this person's opinion anyway.

If you’re an ordinary person who thinks the soaring stock market is crazy, you’re right. There’s no right or wrong value for any stock, or for the market as a whole. There’s only the value the market assigns at any point in time, based on supply, demand and other factors. But demand for stocks—investors placing buy orders—is wildly out of sync with what’s happening in the real economy, where 42 million Americans are newly unemployed and millions of businesses are reeling.

Traders are right when they say the stock market evaluates the future, not the past. Backward-looking economic data about what happened last week or last month is irrelevant to the value of stocks unless it hints at future actions, such as an unexpected change in Federal Reserve policy.

But it’s hard to imagine what future stocks are evaluating right now. 2025? 2030?

If so, that’s a time horizon so distant it’s almost meaningless.

[valuemkt]

So what's your point ??

[GoodLife]

So what's your point ??

There are some who will use anything in order to gain an advantage. Pandemics, race wars, crashing the economy, doesn't matter how many are hurt or killed.

Then there are others who panicked and sold their portfolios at a loss and are now confused by a market that keeps going back up.

[ColdNoMore]

So what's your point ??

Irrational exuberance. :ho:

[GoodLife]

Dow rallies 900 points for the first time since early April amid historic jobs surge

U.S. employers added a shocking 2.5 million jobs last month — the largest gain on record — while the unemployment rate slid to 13.3%, the Labor Department said Friday. Economists polled by Dow Jones expected a drop of more than 8 million jobs and the unemployment rate to nearly reach 20%, which would have been the highest since the 1930s.

84445

[gatorbill1]

As Yogi said - It's not over till it's over - still have a long, long way to go including a vaccine and treatment for virus that did not go away

[OrangeBlossomBaby]

Dow rallies 900 points for the first time since early April amid historic jobs surge

U.S. employers added a shocking 2.5 million jobs last month — the largest gain on record — while the unemployment rate slid to 13.3%, the Labor Department said Friday. Economists polled by Dow Jones expected a drop of more than 8 million jobs and the unemployment rate to nearly reach 20%, which would have been the highest since the 1930s.

84445

The only reason for the "historic job surge" is the "historic job plunge" last month. So basically - we're still at a significant loss.

[ColdNoMore]

The only reason for the "historic job surge" is the "historic job plunge" last month. So basically - we're still at a significant loss.

But hey, if you had 10 widgets, lost 9 of them and then get 1 back, it's a better headline saying "widgets increased by 100%"...than "widgets are up to 20% of what they were at one point." :1rotfl:

[Arctic Fox]

An assessment that any recovery in the economy will take until "2025 or 2030" seems incredibly pessimistic to me.

People sitting at home unable to work is bound to cause unemployment numbers to rise and production to fall, yet the media is announcing these things as if they were unexpected.

Once people get back to work, which most of them will have done before the end of 2020, these numbers will be back to close to pre-covid levels. Add in the pent up demand from consumers (not just products, but services, too) and the likelihood that, having been caught out by "just in time" stocking, companies will adopt "just in case" levels of stock and you have a recipe for a quick recovery in the economy.

As already pointed out, the stock market is evaluating the future not the present and, in my opinion, that future is 2021, not 2025 or 2030.

[CoachKandSportsguy]

An assessment that any recovery in the economy will take until "2025 or 2030" seems incredibly pessimistic to me. People sitting at home unable to work is bound to cause unemployment numbers to rise and production to fall, yet the media is announcing these things as if they were unexpected.

Once people get back to work, which most of them will have done before the end of 2020, these numbers will be back to close to pre-covid levels. Add in the pent up demand from consumers (not just products, but services, too) and the likelihood that, having been caught out by "just in time" stocking, companies will adopt "just in case" levels of stock and you have a recipe for a quick recovery in the economy.

As already pointed out, the stock market is evaluating the future not the present and, in my opinion, that future is 2021, not 2025 or 2030.

Although a valid opinion, the supply chains coming from around the world might have different or less solvable issues that will constrain the US re-stocking. The urban exodus with the work from home movement may require a different distribution system. Houses in suburbia are selling fast. A close friends daughter mid 20's came out of a Friday meeting where it was determined that everyone will WFH for now, maybe office visit 1-2 a quarter, and she bought a house the next Monday 3 hours from the city, prior to the house being on the market, from the builder at list price, with a one hour time limit on the offer, with a real estate agent who had an idea for that type of person's requirements.

Another example, company's discussing return to office plans are seeing huge elevator restrictions, so high rise offices will be out of favor for a while. Both mine and coachk's have these restrictions.

So retail supply and distribution systems will be changed, and that won't be without pain of deflation in real estate in some areas and abrupt inflation in another, and debt repayment issues, will hopefully be avoided.

Workforce turnover with age discrimination will be another, where older white collar workers who aren't ready or able to retire early will be forced to accept lower wages, which will cause a drag on disposable income sales, and older toy sales, ie deflation.

So, the stock market is not the economy, WFH relocation may cause more unintended consequences than are currently expected. Debt issues have been deferred, not solved, and so while the news is good, its just for today, as the future is uncertain, with some days more than others.

So glad that the TV house is fully WFH secure with high speed internet available with hard wired outlets in every room for a secure environment. Multiple monitor space available at the desks. So good we are driving down to WFH in TV for the rest of june!

[ColdNoMore]

Although a valid opinion, the supply chains coming from around the world might have different or less solvable issues that will constrain the US re-stocking. The urban exodus with the work from home movement may require a different distribution system. Houses in suburbia are selling fast. A close friends daughter mid 20's came out of a Friday meeting where it was determined that everyone will WFH for now, maybe office visit 1-2 a quarter, and she bought a house the next Monday 3 hours from the city, prior to the house being on the market, from the builder at list price, with a one hour time limit on the offer, with a real estate agent who had an idea for that type of person's requirements.

Another example, company's discussing return to office plans are seeing huge elevator restrictions, so high rise offices will be out of favor for a while. Both mine and coachk's have these restrictions.

So retail supply and distribution systems will be changed, and that won't be without pain of deflation in real estate in some areas and abrupt inflation in another, and debt repayment issues, will hopefully be avoided.

Workforce turnover with age discrimination will be another, where older white collar workers who aren't ready or able to retire early will be forced to accept lower wages, which will cause a drag on disposable income sales, and older toy sales, ie deflation.

So, the stock market is not the economy, WFH relocation may cause more unintended consequences than are currently expected. Debt issues have been deferred, not solved, and so while the news is good, its just for today, as the future is uncertain, with some days more than others.

So glad that the TV house is fully WFH secure with high speed internet available with hard wired outlets in every room for a secure environment. Multiple monitor space available at the desks. So good we are driving down to WFH in TV for the rest of june!

Good points and...have a safe trip. :thumbup:

[CoachKandSportsguy]

Employers needed the “hire back” furloughed employees, to qualify for loan forgiveness.
But they can fire them again in August, but keep the money borrowed.

So, the theory is that this money is to hold them over until an expected recovery later this summer, and that the money will be spent on prior employees.

Reality may be different, such as not spending the money and limited clawback attempts. Also, not sure if there will be any recourse for hiring different / new employees.

will be interesting

sportsguy

[biker1]

You are concerned about working from home and using Wi-Fi? That is one reason to use a VPN. Virtually all companies that allow people to work from home will require a VPN to access internal systems.



So glad that the TV house is fully WFH secure with high speed internet available with hard wired outlets in every room for a secure environment. Multiple monitor space available at the desks. So good we are driving down to WFH in TV for the rest of june!

[billethkid]

It takes a team effort to hit the bulls eye.
Those who shoots the arrows.
Those who paints a bullseye around where ever the arrows land.

The bullseye special interest group and the media report....

"SEE" the number of bulls eye hits they made.

[chet2020]

Whoops, "misclassification error," jobless numbers a "mistake" and likely three percentage points higher than the touted 13.3%.

The May jobs report had 'misclassification error' that made the unemployment rate look lower than it is. Here's what happened - StamfordAdvocate (https://www.stamfordadvocate.com/business/article/The-May-jobs-report-had-misclassification-error-15320999.php)

[ColdNoMore]

Whoops, "misclassification error," jobless numbers a "mistake" and likely three percentage points higher than the touted 13.3%.

The May jobs report had 'misclassification error' that made the unemployment rate look lower than it is. Here's what happened - StamfordAdvocate (https://www.stamfordadvocate.com/business/article/The-May-jobs-report-had-misclassification-error-15320999.php)

Mistakes happen and I'm sure, there wasn't an agenda...in making this one. ;)

[Bucco]

It takes a team effort to hit the bulls eye.
Those who shoots the arrows.
Those who paints a bullseye around where ever the arrows land.

The bullseye special interest group and the media report....

"SEE" the number of bulls eye hits they made.

Speaking of media reports...

I post this because it is the epitome of terrible taste for any news source. Extremes all over, but this is financial reporting, reporting on US economy

[Kenswing]

Speaking of media reports...

I post this because it is the epitome of terrible taste for any news source. Extremes all over, but this is financial reporting, reporting on US economy

Just like Drew Brees, they apologized. So it must be okay now..

Fox News apologizes for on-air graphic showing market reaction to violence against black men (https://finance.yahoo.com/news/fox-news-apologizes-air-graphic-195139108.html)

[Bucco]

Just like Drew Brees, they apologized. So it must be okay now..

Fox News apologizes for on-air graphic showing market reaction to violence against black men (https://finance.yahoo.com/news/fox-news-apologizes-air-graphic-195139108.html)

Yes, they did. I just came back to add that fact.

While you see some connection between a huge corporation and one pro athlete, I don't, but that's how it goes. I truely back off in even mentioning FOX, no matter how grevious the lies, but this was so terrible and insensitive and insulting.

I applaud the apology.....I totally refute your comparison.

[Kenswing]

Yes, they did. I just came back to add that fact.

While you see some connection between a huge corporation and one pro athlete, I don't, but that's how it goes. I truely back off in even mentioning FOX, no matter how grevious the lies, but this was so terrible and insensitive and insulting.

I applaud the apology.....I totally refute your comparison.
Cool.. :coolsmiley:

[Wallyworld]

There will be no vaccine!

[ColdNoMore]

Irrational exuberance. :ho:

Is today just an anomaly...or are cracks starting to show in the dam?


Only time will tell.

[rustyp]

Is today just an anomaly...or are cracks starting to show in the dam?


Only time will tell.

A major economist today sited the SP 500 is 30 x earnings similar to the tech bubble we lived through. Predicts SP 500 not only back to low but will touch 1600. Rationale was every major recession / depression had the same dead cat bounce we just experienced before the long painful recovery.

[GoodLife]

A major economist today sited the SP 500 is 30 x earnings similar to the tech bubble we lived through. Predicts SP 500 not only back to low but will touch 1600. Rationale was every major recession / depression had the same dead cat bounce we just experienced before the long painful recovery.

Tiny little guy named Krugman? The guy who told us the stock market would never recover after you know who was elected?

[Boomer]

There is an old thread deep in the archives of the investment forum here. I started it in the last part of 2018. The topic was Stock Buybacks and I asked for opinions.

At the time, I said that I thought the running bull market was an artificial high because corporations were buying back their own stock with money from their corporate tax breaks. Corporate spending on buybacks had exceeded a trillion dollars.

That old bull kept on running through 2019. But, to me, it just did not feel right.

Just think — if corporations would have put more of those tax break dollars to better use — building, employing, improving the business models, there now would be something solid to show for it. Money on paper can be fleeting. All that money spent on stock buybacks? — much of it gone now.

The 2019 market, and most of the 2018 market, were built like a house of cards, propped up by buybacks. Unrestrained greed is bad economics. I do not feel like we will see the market collapse. What I do see the market doing illustrates that old saying, “Paybacks are hell.”

Cassandra Boomer

[ColdNoMore]

There is an old thread deep in the archives of the investment forum here. I started it in the last part of 2018. The topic was Stock Buybacks and I asked for opinions.

At the time, I said that I thought the running bull market was an artificial high because corporations were buying back their own stock with money from their corporate tax breaks. Corporate spending on buybacks had exceeded a trillion dollars.

That old bull kept on running through 2019. But, to me, it just did not feel right.

Just think — if corporations would have put more of those tax break dollars to better use — building, employing, improving the business models, there now would be something solid to show for it. Money on paper can be fleeting. All that money spent on stock buybacks? — much of it gone now.

The 2019 market, and most of the 2018 market, were built like a house of cards, propped up by buybacks. Unrestrained greed is bad economics. I do not feel like we will see the market collapse. What I do see the market doing illustrates that old saying, “Paybacks are hell.”

Cassandra Boomer

A lot of prescience in that now closed thread. :thumbup:


Stock Buybacks? Opinions? (invest your time here) (https://www.talkofthevillages.com/forums/investment-talk-158/stock-buybacks-opinions-270890/index4.html)


.

[skyking]

New records for the S&P and NASDAQ. The Dow is next.

Dow Industrial
29,100.50 454.84 +1.59%
NASDAQ Composite
12,056.44 116.78 +0.98%
S&P 500
3,580.84 54.19 +1.54%

[Stu from NYC]

New records for the S&P and NASDAQ. The Dow is next.

Dow Industrial
29,100.50 454.84 +1.59%
NASDAQ Composite
12,056.44 116.78 +0.98%
S&P 500
3,580.84 54.19 +1.54%

Well hopefully we are well on the way to recovery.

[OrangeBlossomBaby]

That's great news for people who have stocks. For the majority of the country, it is just one of those "oh, isn't that nice" pieces of information. Pass the salt.

[biker1]

Actually a majority (about 55%) own stocks either directly, or via mutual funds, or via ETFs, mostly in retirement accounts.

That's great news for people who have stocks. For the majority of the country, it is just one of those "oh, isn't that nice" pieces of information. Pass the salt.

[Stu from NYC]

That's great news for people who have stocks. For the majority of the country, it is just one of those "oh, isn't that nice" pieces of information. Pass the salt.

If you include people who own mutual funds and IRA's and 401K's think that brings the percentage up quite a bit.

[tvbound]

The current stock markets have no correlation to the actual economy right now. While only a little over 1/2 of us own stocks, in any form, right now everyone is punch-drunk on greed and thinking they are smart enough that they will have a chair when reality hits and the music stops. Covid has crippled the actual economy and those who don't own stocks know it, but most of those who do own or trade stocks refuse to believe it. So many jobs have either been permanently eliminated, or it will take a long time for them to come back, that stocks make absolutely no sense right now. When the bloodbath starts - it will be really ugly.

[tvbound]

Here's one person that thinks the way I do and his personal indicator has only went up since this article last week.

Warren Buffett's favorite market indicator soars to record high, signaling stocks are overvalued and a crash may be coming | Markets Insider (https://markets.businessinsider.com/news/stocks/buffett-indicator-hits-record-high-signals-stocks-overvalued-2020-8-1029539539)

The ratio reached a historic 183% on Wednesday, reflecting the breathless stock rally in recent months and the plunge in second-quarter GDP. Buffett said it was a "strong warning signal" when the indicator peaked before the dot-com crash.

[biker1]

The stock market reflects what people think will happen in the future. It pretty much has always worked that way. Also, with interest rates at essentially zero, the Fed has made the stock market the place to go, although the broader bond market is up almost 8% YTD. I would avoid using words like "everyone", "absolutely no sense", and "most of those" since you don't know what "everyone" is thinking. So, tell us how you have shorted the market in anticipation of the big correction. Yes, there will be a correction and "everyone" knows that because the market is cyclical.


The current stock markets have no correlation to the actual economy right now. While only a little over 1/2 of us own stocks, in any form, right now everyone is punch-drunk on greed and thinking they are smart enough that they will have a chair when reality hits and the music stops. Covid has crippled the actual economy and those who don't own stocks know it, but most of those who do own or trade stocks refuse to believe it. So many jobs have either been permanently eliminated, or it will take a long time for them to come back, that stocks make absolutely no sense right now. When the bloodbath starts - it will be really ugly.

[tvbound]

I don't do "shorts," as I'm not that greedy or needy. I'm satisfied with just sitting on the sidelines for now. It's been a great run. One for the history books.

[Stu from NYC]

The stock market reflects what people think will happen in the future. It pretty much has always worked that way. Also, with interest rates at essentially zero, the Fed has made the stock market the place to go, although the broader bond market is up almost 8% YTD. I would avoid using words like "everyone", "absolutely no sense", and "most of those" since you don't know what "everyone" is thinking. So, tell us how you have shorted the market in anticipation of the big correction. Yes, there will be a correction and "everyone" knows that because the market is cyclical.

Anyone who says they can time the market is talking nonsense.

Best thing to do is dollar cost average or as close to that as you can come.

I do believe in the long term future of America and as long as you are ok riding out the bumps and bruises will do well in the long term.

[dewilson58]

That's great news for people who have stocks. For the majority of the country, it is just one of those "oh, isn't that nice" pieces of information. Pass the salt.


Salt passers are clueless.......even if the passer does not have stocks/MF's, a strong market is correlated to a strong economy which impacts jobs & wages. The passer may not need jobs & wages, but they have family &/or friends who need jobs/wages.
:ho:

[biker1]

Correct. I believe the best approach is to decide on an asset allocation strategy and stick with it. The stock market has more upturns than downturns.

Anyone who says they can time the market is talking nonsense.

Best thing to do is dollar cost average or as close to that as you can come.

I do believe in the long term future of America and as long as you are ok riding out the bumps and bruises will do well in the long term.

[davem4616]

We watched comedian Rita Rudner on Amazon Prime last night...she talked a little about meeting with her new Financial Advisor....

Best line was "My Financial Advisor asked me what my risk tolerance was and wanted to know how much money I was willing to lose...(she paused)...why none of it I said" the crowd roared, as did we.

A previous doctor that I had before moving to TV and I had a discussion about the stock market...I recall him saying "I woke up in a total sweat the other night realizing that having all my retirement money in the stock market was the same as taking it to Vegas!"

There's and old saying....Bulls and Bears make money....pigs lose.

[OrangeBlossomBaby]

Salt passers are clueless.......even if the passer does not have stocks/MF's, a strong market is correlated to a strong economy which impacts jobs & wages. The passer may not need jobs & wages, but they have family &/or friends who need jobs/wages.
:ho:

As long as states are allowed to mandate a $7.25/hour minimum wage, the economy will be horrible.

Not everyone is destined to earn a 6-figure salary. SOMEONE has to bag your groceries. SOMEONE has to give you forms to fill out at the doctor's office. SOMEONE has to dry-clean your suit. SOMEONE has to groom your cat. SOMEONE has to polish your nails. SOMEONE has to pick the tomatoes off the vine, and SOMEONE has to stock them in the bins at the supermarket.

Those are all minimum wage jobs. Jobs that are necessary for "those with means" to be able to enjoy the life to which they have become accustomed.

When those employees are earning less than $200 per week and have to rely on themselves and spouse who also earns less than $200 per week for all living expenses, including day-care for the kids, clothing, food, gas, rent (because who's going to give someone who only earns $200/week a mortgage to buy a home?)...

for those people the economy is not good. It's not even mediocre. There are millions of people across the country who are living below the poverty level, most of whom would love to be lawyers and doctors and famous hollywood actors and TV producers and therapists and engineers and architects.

But they can't afford school. They can't afford to take time off from work to attend classes, AND take time away from their kids to dedicate hours in class instruction - even if it's online.

You keep these people poor because you need them to be poor. And then you tell everyone how awesome the economy is.

The economy is not good. It's lousy. STOCKS are good. But stocks /= economy.

[Topspinmo]

According to this person's opinion anyway.

Stock market is Ponzi scheme and set up for insider’s the rest of us are just pawns they milk.

[Boomer]

As long as states are allowed to mandate a $7.25/hour minimum wage, the economy will be horrible.

Not everyone is destined to earn a 6-figure salary. SOMEONE has to bag your groceries. SOMEONE has to give you forms to fill out at the doctor's office. SOMEONE has to dry-clean your suit. SOMEONE has to groom your cat. SOMEONE has to polish your nails. SOMEONE has to pick the tomatoes off the vine, and SOMEONE has to stock them in the bins at the supermarket.

Those are all minimum wage jobs. Jobs that are necessary for "those with means" to be able to enjoy the life to which they have become accustomed.

When those employees are earning less than $200 per week and have to rely on themselves and spouse who also earns less than $200 per week for all living expenses, including day-care for the kids, clothing, food, gas, rent (because who's going to give someone who only earns $200/week a mortgage to buy a home?)...

for those people the economy is not good. It's not even mediocre. There are millions of people across the country who are living below the poverty level, most of whom would love to be lawyers and doctors and famous hollywood actors and TV producers and therapists and engineers and architects.

But they can't afford school. They can't afford to take time off from work to attend classes, AND take time away from their kids to dedicate hours in class instruction - even if it's online.

You keep these people poor because you need them to be poor. And then you tell everyone how awesome the economy is.

The economy is not good. It's lousy. STOCKS are good. But stocks /= economy.



And therein you have the big elephant in the room that so many refuse to see — The Working Poor.

[sail33or]

The GOLDEN RULE: Those that have the GOLD make the rules.

I learned long ago that the only ones that actually know what is going on are the very wealthy. (And I do not mean those with a few million.) I mean CEO's that earn $25 million a year and get stock options worth $100 million. Those guys.

They are in a special club and not likely to screw up by telling the rest of us anything. However I know a retired CEO that said, after many glasses of wine that the reason the stock market is back at Record highs despite Covid, no travel and millions of small business owners gone is:

1. Major Corporations can borrow money at ZERO interest rates. This is free money because they set up repayment far into the future while paying executives huge bonuses NOW.
2. Small businesses are crushed and their market share will eventually go to Major Corporations.
3. Safe retirement investments like CD's pay almost nothing tempting people to invest in the Stock Market with some of their savings.
4. The Dow has dropped OIL/Energy from their calculations. Oil/Energy is the TRUE MEASURE of everything as everything runs on OIL (No matter what you might want to believe) Oil/Energy stocks are down 50%. Exactly where we truly are.
5. Big Corporations will benefit no matter the election results. (I can't say why as that would trigger the forum sensors.)

[justjim]

The current stock markets have no correlation to the actual economy right now. While only a little over 1/2 of us own stocks, in any form, right now everyone is punch-drunk on greed and thinking they are smart enough that they will have a chair when reality hits and the music stops. Covid has crippled the actual economy and those who don't own stocks know it, but most of those who do own or trade stocks refuse to believe it. So many jobs have either been permanently eliminated, or it will take a long time for them to come back, that stocks make absolutely no sense right now. When the bloodbath starts - it will be really ugly.

I think your spot on with your prediction. Time will tell.

[biker1]

Don't claim that "You keep these people poor ... ". I am not keeping anyone poor. You, of course, fail to point out that 2% make minimum wage and that people move up and down in economic classes throught their life. I started out pretty much destitute when I was young but I didn't stay there for long. Many, not all, who are stuck in the lowest economic classes are there because of bad decisions they made. Do you want to avoid being poor? Finish high school, get a job, and don't have children before you are married. Marriage does wonders for your financial prospects.

As long as states are allowed to mandate a $7.25/hour minimum wage, the economy will be horrible.

Not everyone is destined to earn a 6-figure salary. SOMEONE has to bag your groceries. SOMEONE has to give you forms to fill out at the doctor's office. SOMEONE has to dry-clean your suit. SOMEONE has to groom your cat. SOMEONE has to polish your nails. SOMEONE has to pick the tomatoes off the vine, and SOMEONE has to stock them in the bins at the supermarket.

Those are all minimum wage jobs. Jobs that are necessary for "those with means" to be able to enjoy the life to which they have become accustomed.

When those employees are earning less than $200 per week and have to rely on themselves and spouse who also earns less than $200 per week for all living expenses, including day-care for the kids, clothing, food, gas, rent (because who's going to give someone who only earns $200/week a mortgage to buy a home?)...

for those people the economy is not good. It's not even mediocre. There are millions of people across the country who are living below the poverty level, most of whom would love to be lawyers and doctors and famous hollywood actors and TV producers and therapists and engineers and architects.

But they can't afford school. They can't afford to take time off from work to attend classes, AND take time away from their kids to dedicate hours in class instruction - even if it's online.

You keep these people poor because you need them to be poor. And then you tell everyone how awesome the economy is.

The economy is not good. It's lousy. STOCKS are good. But stocks /= economy.

[Stu from NYC]

Don't claim that "You keep these people poor ... ". I am not keeping anyone poor. You, of course, fail to point out that 2% make minimum wage and that people move up and down in economic classes thought their life. I started out pretty much destitute when I was young but I didn't stay there for long. Many, not all, who are stuck in the lowest economic classes are there because of bad decisions they made. Do you want to avoid being poor? Finish high school, get a job, and don't have children before you are married. Marriage does wonders for your financial prospects.

Very true. Most of the successful people in our country did not start off that way. They went to school graduated made good financial decisions and worked hard.

Expect to have a minimum wage job all your life and you are well along the way to meet your expectations

[SacDQ]

We’re witnessing a Paradigm shift in our life’s and a new normal will emerge at the end. If a corporation can cut its footprint by having its employees work from home and increase profits. Other than Defense manufacturing and final assembly of autos what do we still make in the USA?
The talking heads in Washington state the pandemic require that we bring back all medical manufacturers RIGHT like that’s going to happen. The big pharmaceutical combined have been screwing us for years manufacturing drugs every where but in the USA yet charging us enormous prices.
Very interesting times ahead.

[oldtimes]

Very true. Most of the successful people in our country did not start off that way. They went to school graduated made good financial decisions and worked hard.

Expect to have a minimum wage job all your life and you are well along the way to meet your expectations

The problem is never that simple. There are many college grads who are making minimum wage right now. Due to the pandemic there are also far more people with no income at all right now through no fault of their own. However, raising the minimum wage is also going to raise prices and eliminate jobs and cause more businesses to fail. It is a very complex problem. Also paying someone 15.00 an hour in NYC is a lot different than paying someone 15.00 an hour in Mississippi. I am not in favor of one size fits all solutions.

[Stu from NYC]

The problem is never that simple. There are many college grads who are making minimum wage right now. Due to the pandemic there are also far more people with no income at all right now through no fault of their own. However, raising the minimum wage is also going to raise prices and eliminate jobs and cause more businesses to fail. It is a very complex problem. Also paying someone 15.00 an hour in NYC is a lot different than paying someone 15.00 an hour in Mississippi. I am not in favor of one size fits all solutions.

Very little in life is simple.

Why get a degree in something (and amass a huge debt) if it will be difficult to find a job paying a good salary?

Raising the minimum wage sounds nice but go into a grocery lately? Look at all the automated cashier stations. Raise the minimum wage and less cashiers.

Trick is to find something that will be in demand and stay in demand which typically will pay a better salary.

[Dahabs]

Although a valid opinion, the supply chains coming from around the world might have different or less solvable issues that will constrain the US re-stocking. The urban exodus with the work from home movement may require a different distribution system. Houses in suburbia are selling fast. A close friends daughter mid 20's came out of a Friday meeting where it was determined that everyone will WFH for now, maybe office visit 1-2 a quarter, and she bought a house the next Monday 3 hours from the city, prior to the house being on the market, from the builder at list price, with a one hour time limit on the offer, with a real estate agent who had an idea for that type of person's requirements.

Another example, company's discussing return to office plans are seeing huge elevator restrictions, so high rise offices will be out of favor for a while. Both mine and coachk's have these restrictions.

So retail supply and distribution systems will be changed, and that won't be without pain of deflation in real estate in some areas and abrupt inflation in another, and debt repayment issues, will hopefully be avoided.

Workforce turnover with age discrimination will be another, where older white collar workers who aren't ready or able to retire early will be forced to accept lower wages, which will cause a drag on disposable income sales, and older toy sales, ie deflation.

So, the stock market is not the economy, WFH relocation may cause more unintended consequences than are currently expected. Debt issues have been deferred, not solved, and so while the news is good, its just for today, as the future is uncertain, with some days more than others.

So glad that the TV house is fully WFH secure with high speed internet available with hard wired outlets in every room for a secure environment. Multiple monitor space available at the desks. So good we are driving down to WFH in TV for the rest of june!

Very well said. Been thinking along similar lines. Did not understand the rationale (or believe it) with the stock market's rapid rise. I believe we are a long way from normal.

[CoachKandSportsguy]

maybe yes, maybe no, but the market is a function of global liquidity and corporate expectations. Liquidity, or money in the system has exploded recently. So if the excess liquidity goes into the high quality stocks, in general, that means that the active money goes into the higher weighted components of the SP500. Remember, passive or index funds, in which many have their retirement accounts invested, are price insensitive buyers. Active management are price sensitive buyers and sellers and determine the price of individual equities. So how is an active manager to beat the index, if that is his benchmark? by buying 80% index fund, and the last 20% his favorites to beat the return and the large cap weighted stawks. This is called closet indexing or a tilted portfolio to beat an index return.

So with most of the money going into the indexes and large cap weighted stocks as the strongest to survive the economic recession, the indexes appear to be "going crazy" Today is a correction but also the election is coming up and there looms a constitutional crises of a legal happy president trying to cause chaos to nullify the election. (my prediction of the future, and the future hasn't finished being written on this election, so save your typing if you are going to tell me i am wrong.) which may increase volatility and selling due to the uncertainty as the election nears. in bull times, buy the rumor and sell the news. IN bear market times, sell the rumor and by the outcome.

However, the work from home will be temporary in mass, so lets not extract long term outcomes from a short term influence. all pandemics have an end, and this one will as well. The issue is always how fast and at what damage. the worst is past for the virus, but there never has been herd immunity for a corona virus, nor a reliable vaccine, so expect the return to the office to be slow over time with some set backs of course. Also from being in corporate discussions about back to work, people adapt, and are creative so expect new solutions which one hasn't thought of before to surface to add to productivity.

And as always the future is uncertain, sometime more uncertain than at other times.

sportsguy

[Stu from NYC]

maybe yes, maybe no, but the market is a function of global liquidity and corporate expectations. Liquidity, or money in the system has exploded recently. So if the excess liquidity goes into the high quality stocks, in general, that means that the active money goes into the higher weighted components of the SP500. Remember, passive or index funds, in which many have their retirement accounts invested, are price insensitive buyers. Active management are price sensitive buyers and sellers and determine the price of individual equities. So how is an active manager to beat the index, if that is his benchmark? by buying 80% index fund, and the last 20% his favorites to beat the return and the large cap weighted stawks. This is called closet indexing or a tilted portfolio to beat an index return.

So with most of the money going into the indexes and large cap weighted stocks as the strongest to survive the economic recession, the indexes appear to be "going crazy" Today is a correction but also the election is coming up and there looms a constitutional crises of a legal happy president trying to cause chaos to nullify the election. (my prediction of the future, and the future hasn't finished being written on this election, so save your typing if you are going to tell me i am wrong.) which may increase volatility and selling due to the uncertainty as the election nears. in bull times, buy the rumor and sell the news. IN bear market times, sell the rumor and by the outcome.

However, the work from home will be temporary in mass, so lets not extract long term outcomes from a short term influence. all pandemics have an end, and this one will as well. The issue is always how fast and at what damage. the worst is past for the virus, but there never has been herd immunity for a corona virus, nor a reliable vaccine, so expect the return to the office to be slow over time with some set backs of course. Also from being in corporate discussions about back to work, people adapt, and are creative so expect new solutions which one hasn't thought of before to surface to add to productivity.

And as always the future is uncertain, sometime more uncertain than at other times.

sportsguy

Interesting analysis, who knows what the changes due to the virus will ultimately bring but think work from home will be around for quite awhile bringing some interesting changes to the economy and our lives.

[Chi-Town]

With the downturn today there is talk of a Minsky moment. That would not be good.

[Boomer]

With the downturn today there is talk of a Minsky moment. That would not be good.

Chi, you made me look that up. :) I just read a rather lengthy article about it. Such is my exciting 2020 life — in my house — reading Investopedia articles.

The old bull has been running way too long. Besides, this feels like a frenzy. Unsustainable.

It’s been a house of cards for a couple of years, propped up by trillions of dollars generated by those corporate tax cuts being used by companies to buy back their own stock.

There is a quote that I use sometimes. (I probably have already used it in this thread. I know have used it in other threads. But it bears repeating.) “Unrestrained greed is not only bad morals, it’s bad economics.”

Cassandra Boomer

[OrangeBlossomBaby]

The problem is never that simple. There are many college grads who are making minimum wage right now. Due to the pandemic there are also far more people with no income at all right now through no fault of their own. However, raising the minimum wage is also going to raise prices and eliminate jobs and cause more businesses to fail. It is a very complex problem. Also paying someone 15.00 an hour in NYC is a lot different than paying someone 15.00 an hour in Mississippi. I am not in favor of one size fits all solutions.

I agree to some extent. However, raising minimum wage has not increased prices in states that have already done so. So you can just check that off your list of potential problems.

However, I agree that paying someone $15 in NYC is different than the same in Mississippi. I feel FEDERAL minimum wage needs to be increased - $7.25 isn't a reasonable minimum wage in any state or municipality in the country. Notice I'm not even saying liveable - I'm saying reasonable.

I feel that $10 minimum wage nationwide is reasonable - and states would be free as they already are, to make it higher if they wish. Minimum wage was created to provide a LIVEABLE wage for women and young workers, who - up until that point, were working in sweatshops and unable to pay the minimum bills (rent, food, clothing, heat and water). There was no federally established minimum wage until the 1930's, when Roosevelt implemented the New Deal.

Minimum wage was $3.80 in 1990, 30 years ago. Minimum wage was set to $7.25 in 2009 - 11 years ago. And there are a lot of exceptions to that minimum, including agriculture workers, workers who have "special needs" (the mentally disabled) and people who work for tips. If you're under 20 years old, federal law says you only have to be paid $4.25/hour for the first 3 months of employment. After that they have to pay you at least $7.25/hour.

It's time for Minimum Wage to start catching up with the cost of living in the USA. It should catch up to the -lowest- cost of living. In other words - find out where it's cheapest to live. And raise the Federal minimum wage to accommodate that. Then let the states deal with their own minimums above that amount.

[Dana1963]

Jobs were not added or increased employees previously let go were recalled. Still approximately 25 million yet to be recalled

[oldtimes]

I agree to some extent. However, raising minimum wage has not increased prices in states that have already done so. So you can just check that off your list of potential problems.

However, I agree that paying someone $15 in NYC is different than the same in Mississippi. I feel FEDERAL minimum wage needs to be increased - $7.25 isn't a reasonable minimum wage in any state or municipality in the country. Notice I'm not even saying liveable - I'm saying reasonable.

I feel that $10 minimum wage nationwide is reasonable - and states would be free as they already are, to make it higher if they wish. Minimum wage was created to provide a LIVEABLE wage for women and young workers, who - up until that point, were working in sweatshops and unable to pay the minimum bills (rent, food, clothing, heat and water). There was no federally established minimum wage until the 1930's, when Roosevelt implemented the New Deal.

Minimum wage was $3.80 in 1990, 30 years ago. Minimum wage was set to $7.25 in 2009 - 11 years ago. And there are a lot of exceptions to that minimum, including agriculture workers, workers who have "special needs" (the mentally disabled) and people who work for tips. If you're under 20 years old, federal law says you only have to be paid $4.25/hour for the first 3 months of employment. After that they have to pay you at least $7.25/hour.

It's time for Minimum Wage to start catching up with the cost of living in the USA. It should catch up to the -lowest- cost of living. In other words - find out where it's cheapest to live. And raise the Federal minimum wage to accommodate that. Then let the states deal with their own minimums above that amount.

I agree that 10.00 an hour would be reasonable and probably not have major negative repercussions. Then states that have higher cost of living could adjust. If only government could pass a helpful bill without expensive and needless pork attached we might get somewhere.

[Stu from NYC]

I agree that 10.00 an hour would be reasonable and probably not have major negative repercussions. Then states that have higher cost of living could adjust. If only government could pass a helpful bill without expensive and needless pork attached we might get somewhere.

The problem with such a large increase is companies will decide jobs not worth that much and will find ways to eliminate them.

Once upon a time people got paid to pump your gas. Now more and more cashiers in fast food restaurants are going away being replaced by computer terminals.

[thesquare]

WE use IP Vanish works well and not expensive..

[Dana1963]

We were fortunate to sell at the high earlier this year reinvested and bought the lows just got out of the market again yesterday. With stock buybacks Fed buying junk paper and this past month the US had the biggest monthly trade deficit ever. We’ve agreed to sit out the market for a while, made mor than we expected this year.

[Kenswing]

We were fortunate to sell at the high earlier this year reinvested and bought the lows just got out of the market again yesterday. With stock buybacks Fed buying junk paper and this past month the US had the biggest monthly trade deficit ever. We’ve agreed to sit out the market for a while, made mor than we expected this year.
It's amazing how many people report how they perfectly timed the market after the fact.. :1rotfl:

[davem4616]

The stock market is the stock market...it goes up and it goes down. If you can time it...you were just lucky once or twice

IMHO if you are still depending upon the stock market at this point in your life to get by...just maybe you didn't make all the right financial moves or plan all that well

if that is the case, I hope that you make it though whatever is going to happen okay...I wish no one unhappiness or financial struggles

I'm thinking that they teach investing for your retirement in high school as a required course...or at least the power of money and time

[Stu from NYC]

The stock market is the stock market...it goes up and it goes down. If you can time it...you were just lucky once or twice

IMHO if you are still depending upon the stock market at this point in your life to get by...just maybe you didn't make all the right financial moves or plan all that well

if that is the case, I hope that you make it though whatever is going to happen okay...I wish no one unhappiness or financial struggles

I'm thinking that they teach investing for your retirement in high school as a required course...or at least the power of money and time

Wonder how many people here know what the rule of 72 is?

[Stu from NYC]

It's amazing how many people report how they perfectly timed the market after the fact.. :1rotfl:

I like when so called investment advisers invite people for a free dinner and show them how they call all of the downturns with their super duper computer program.

Than they show you a chart of how the market does not do as well as it really does over time so you are better off with an annuity paying a guaranteed 3-4%. Of course the commission allows them to live rather nicely.

[Topspinmo]

It's amazing how many people report how they perfectly timed the market after the fact.. :1rotfl:

Yep, probably the same ones that go to Vegas and say the broke even:coolsmiley:

[Stu from NYC]

Yep, probably the same ones that go to Vegas and say the broke even:coolsmiley:

My brother in law used to tell us what a great gambler he was. Always telling us he won a few thousand dollars but funny thing never did say when he lost.

[davem4616]

My brother in law used to tell us what a great gambler he was. Always telling us he won a few thousand dollars but funny thing never did say when he lost.


funny how they never do talk about the losses...until they lose their home

[tvbound]

New records for the S&P and NASDAQ. The Dow is next.

Dow Industrial
29,100.50 454.84 +1.59%
NASDAQ Composite
12,056.44 116.78 +0.98%
S&P 500
3,580.84 54.19 +1.54%

Oops. Is resurrecting this thread the day before the markets are having a serious correction similar to the golf announcer's curse, or does it show that this site actually has an impact on the stock markets? The Street and investment professionals want to know. lol

[Stu from NYC]

funny how they never do talk about the losses...until they lose their home

Yup. Such a sad story.

[dewilson58]

Wonder how many people here know what the rule of 72 is?


That was the average life expectancy in 1974.

[Stu from NYC]

That was the average life expectancy in 1974.

nope not even close, will give a hint and it is related to investments.

[tvbound]

nope not even close, will give a hint and it is related to investments.

The "Rule of 72" doesn't really have anything to do with this thread subject, given that it is just a simple way to determine how long an investment will take to double, given an "estimated" fixed annual rate of interest. The key being that it relies on a variable, the expected ROR, to derive the number of years for that doubling and as can be seen by the gyrations of all of the markets recently - no one really knows what that variable will actually be.

[dewilson58]

nope not even close, will give a hint and it is related to investments.


That was sarcasm Sheldon, sarcasm. :ohdear:

[Stu from NYC]

The "Rule of 72" doesn't really have anything to do with this thread subject, given that it is just a simple way to determine how long an investment will take to double, given an "estimated" fixed annual rate of interest. The key being that it relies on a variable, the expected ROR, to derive the number of years for that doubling and as can be seen by the gyrations of all of the markets recently - no one really knows what that variable will actually be.

Not just interest is taken into account.

If the stock market on average goes up say 8% a year for the past 50 years and lets say you want to have a million dollars in investments by the time you retire in 30 years it gives you an idea of how much you need to put into investments each year.

Of course in the short run the results will vary greatly.

It is a very handy tool.

[Kenswing]

Wonder how many people here know what the rule of 72 is?

The number of posts you strive to make in a day? :1rotfl:

[Stu from NYC]

The number of posts you strive to make in a day? :1rotfl:

Nah not even close. Some day when everything we would like to do opens up again my post count will drop off substantially.

[Paper1]

Not just interest is taken into account.

If the stock market on average goes up say 8% a year for the past 50 years and lets say you want to have a million dollars in investments by the time you retire in 30 years it gives you an idea of how much you need to put into investments each year.

Of course in the short run the results will vary greatly.

It is a very handy tool.

Does the word “Ponzi” ring a bell?

[Stu from NYC]

Does the word “Ponzi” ring a bell?

You would call the stock market a ponzi scheme? Sorry no way.

Now if you wanted to call the beginning of social security a ponzi scheme would not argue with you.

[Paper1]

You would call the stock market a ponzi scheme? Sorry no way.

Now if you wanted to call the beginning of social security a ponzi scheme would not argue with you.

Yes I do believe today’s stock market is a “ legal” Ponzi scheme but we share the same opinion of SS. The winners in today’s market are being funded by tomorrow’s losers or future investors if you prefer. That said for the sake of my grandchildren I hope I’m wrong.

[tvbound]

Stocks aren't anything like a Ponzi scheme.

Stocks Aren’t a Ponzi Scheme — Oblivious Investor (https://obliviousinvestor.com/stocks-arent-a-ponzi-scheme/)

"In the last two years, one assertion I’ve heard over and over is that the stock market a giant Ponzi scheme — it only works if everybody continues to feed it money, and it collapses when people take their money out. A similar assertion is that the stock market is just a “greater fool game,” in which stocks’ only value lies in the hope that you can sell them at a higher price to a greater fool at some point in the future.

Both claims are nonsense.


Stocks Have Inherent Value

If the public at large decided that they wanted nothing to do with stocks, and they all pulled out (and this is, to a lesser extent, what goes on in severe bear markets), stocks wouldn’t become worthless. Yes, they’d be "worth less," but not "worthless."

[skyking]

Does the word “Ponzi” ring a bell?

Yes! Stock markets have only been around since the 1600s but soon someone will discover it's a ponzi scheme. Our poor grandchildren.

[tcxr750]

I retired in 1999. The fantasy on the job was take your lump sum retirement package and you’ll make more money in retirement than working. I did that and than along came...tech bubble. rising interest rates...falling interest rates..Great Recession...Pandemic. Usually if I made no withdrawals and waited a few years the IRA value was restored. Same with the Pandemic losses. If you live long enough your IRA value will be restored in time for your heirs to enjoy the money.
What I’ve learned after four Advisors. Some honest, some not. Some on Barrons top 100. On market downturns they will do nothing. “Stay fully invested”. IMO. Roth vs conventional IRA. No mandatory withdrawals after age 701/2 on Roth. Back in 1999 I got free financial advice from a local “expert” in the city newspaper. Asking would 6% bonds be a good investment? He said no. 6% bonds would have given me more than enough cash flow with money aside to invest in equities. Ah, the good old days.

[tcxr750]

RYes! Stock markets have only been around since the 1600s but soon someone will discover it's a ponzi scheme. Our poor grandchildren.

If you are old enough you may remember that the only person who had “investments” was your old uncle Ed who had shares in Northern Pacific and AT&T and used that for the dividends. A real investor was Mr.Davis down the street who owned a “double” rental property.
The feeding frenzy started in about the late 90s when major companies by regulation (I think) could give you your pension money in a lump sum.
This resulted in an invitation to you and your wife for free dinner and seminar at an upscale steakhouse. At the seminar they showed how they would take your $100,000 pension lump and in ten years grow that to $1,000,000.
Results did not exceed expectations.

[DeanFL]

.
.
I always kept quite a bit of cash (by my standards anyway) in Synchrony, an online bank. For ease of movement if needed - to keep very liquid. It was paying 2% a year ago, then 1% mid year, now .75%.

So about 4 months ago I decided to take a few Grand out and invest in the Market thru eTrade. Decided that auto stocks would be a good bet, esp since many are investing in elec/batt vehicles. And auto sales should take off once the COVID slows. So that investment was wise +++. Then researched some sole-elec vehicle stocks (not Tesla) - bought 3, and BAM! One is up 150% the others 50% (should have invested more, you know...).

Then a month ago bought 2 EFTs - one for Infrustructure stocks, other for elec vehicle mfrs. And they are slow growers for now - but should be a great long-term investment. So my play-money - rather than a measly .75% is now at 20%+, and should continue to grow nicely - no matter the politics.
.
.

[Becca9800]

The only reason for the "historic job surge" is the "historic job plunge" last month. So basically - we're still at a significant loss.

Source of your misinformation, please?
https://www.cnbc.miscom/2020/10/02/jobs-report-september-2020.html
Jobs report October 2020: Unemployment rate slides, growth stronger than expected (https://www.cnbc.com/2020/11/06/jobs-report-october-2020.html)

[Stu from NYC]

R

If you are old enough you may remember that the only person who had “investments” was your old uncle Ed who had shares in Northern Pacific and AT&T and used that for the dividends. A real investor was Mr.Davis down the street who owned a “double” rental property.
The feeding frenzy started in about the late 90s when major companies by regulation (I think) could give you your pension money in a lump sum.
This resulted in an invitation to you and your wife for free dinner and seminar at an upscale steakhouse. At the seminar they showed how they would take your $100,000 pension lump and in ten years grow that to $1,000,000.
Results did not exceed expectations.

If these guys are such genius's they would be retired on a tropical island,' We have gone to several of these dinner when at good restaurants and on occasion do get some good info which is used for my own investments.

Much better to develop a balanced portfolio of well run mutual funds with a good track record

[valuemkt]

I asked the original poster back in june what was his / her point about their declarative statement of the stock market being off the rails. The S+P 500 closed at 3230.78 on 12/31/2019. The month of March brought in the COVID panic, and on March 23, the S+P closed at 2237.40. On 6/5/2020, the day of the original post, the S+P 500 closed at 3193.93, retracing most, but not all of its "COVID" losses. The original post mentioned nothing of the nearly 50% decline. So did that qualify as the market being off the rails ? Yesterday, the market closed at 3585.15, making a YTD gain of nearly 11%. Very good, but off the rails ? More to the point.. did you keep with your investment strategy through the year, or buy high and panic sell low ? Did you buy the dip ? If you thought the market was off the rails on 6/5, then you must think it is bat $H*t crazy today. So then why not sell into the rally, and build yourself another year of retirement cash ? That will protect you from the next major dip. Last point, please do not canonize Alan Greenspan, who is best known for his irrational exuberance comment. A closer look to his tenure will lead you to the conclusion that his ignorance as Fed chairman was one of the major causes of the Financial / mortgage crises of the early 2000's. In today's terms, he would be duly categorized as a RINO, or worse.. a topic beyond this post's scope

[Decadeofdave]

The house next to our friends in Duval has 3 young women from NYC
that came here to WFH.

[Tom M]

Why are markets so high today? Yes, as previously mentioned, it's in part due to the very low cost of borrowing (and buying back stocks), that small business failing means big business profits.

But, the markets were high before COVID. I think it's largely because there's no where else to go. With bond rates very low (and a risk if interest rates rise of losing money on bond holdings), and with fixed interest rates so low (that you're actually losing money after inflation and taxes) -- where else do you go? Gold, property, art? Those are tangible assets that can do well to offset inflation but not vehicles for the masses to save for retirement. So everyone goes for stocks and mutual funds. That drives up the price and the market and P/E ratios keep going up due to optimism that it's never going to end and perception that there's nowhere else to go.

What's wrong with that? What happens when interest rates rise? Yes, the government wants to keep rates low to fund the debt, but at some point the theory of unlimited demand for treasury bonds will be tested and rates may rise anyway. Then things will get very interesting. Bond returns will start rising and fixed rates as well. As people gradually start to move away from stocks to bonds/fixed returns the market may start falling. And it may fall (or remain flat) for a LONG time - perhaps the amount of time we saw the rise - decades.

But nobody knows when. I know many who got out of the market 3 years ago to miss out on great returns since. Trying to time the market is a scary thing. Divesting of asset types is likely a good idea. There are more strategies than just stocks/bonds/fixed.

[Stu from NYC]

the house next to our friends in duval has 3 young women from nyc
that came here to wfh.

wfh?

[biker1]

work from home

wfh?

[Chi-Town]

I asked the original poster back in june what was his / her point about their declarative statement of the stock market being off the rails. The S+P 500 closed at 3230.78 on 12/31/2019. The month of March brought in the COVID panic, and on March 23, the S+P closed at 2237.40. On 6/5/2020, the day of the original post, the S+P 500 closed at 3193.93, retracing most, but not all of its "COVID" losses. The original post mentioned nothing of the nearly 50% decline. So did that qualify as the market being off the rails ? Yesterday, the market closed at 3585.15, making a YTD gain of nearly 11%. Very good, but off the rails ? More to the point.. did you keep with your investment strategy through the year, or buy high and panic sell low ? Did you buy the dip ? If you thought the market was off the rails on 6/5, then you must think it is bat $H*t crazy today. So then why not sell into the rally, and build yourself another year of retirement cash ? That will protect you from the next major dip. Last point, please do not canonize Alan Greenspan, who is best known for his irrational exuberance comment. A closer look to his tenure will lead you to the conclusion that his ignorance as Fed chairman was one of the major causes of the Financial / mortgage crises of the early 2000's. In today's terms, he would be duly categorized as a RINO, or worse.. a topic beyond this post's scope

Where is the original poster? He can provide an update to his current thoughts.

[Topspinmo]

So what's your point ??


The point? It’s Ponzi scheme where only insiders make ANd control the paper money. Where 27 trillion plus on debt and going higher. It’s all paper money on monopoly scheme.

[valuemkt]

wfh?

wfh = work from home

[Stu from NYC]

The point? It’s Ponzi scheme where only insiders make ANd control the paper money. Where 27 trillion plus on debt and going higher. It’s all paper money on monopoly scheme.

You really believe your first sentence>??

[JimJohnson]

It is obvious that the election brought great confidence back to the country.

[biker1]

No. What has brought great confidence back to the country was a news story you might have missed. Pfizer/BioNTech reported very good results from the Phase 3 trial of their coronavirus vaccine.

It is obvious that the election brought great confidence back to the country.

[Dr Winston O Boogie jr]

Dow rallies 900 points for the first time since early April amid historic jobs surge

U.S. employers added a shocking 2.5 million jobs last month — the largest gain on record — while the unemployment rate slid to 13.3%, the Labor Department said Friday. Economists polled by Dow Jones expected a drop of more than 8 million jobs and the unemployment rate to nearly reach 20%, which would have been the highest since the 1930s.

84445

The economy disintegrated because of Covid-19. It is much easier to make huge gains when we're at the bottom of a recession. The better the economy gets, the more difficult it is to improve.

if you play golf, it's pretty easy to take some lesson and learn to break 100. It's a bit more difficult to learn to break ninety and it becomes even more difficult to shoot in 70s. Being able to shoot under par is almost impossible for most people that don't have a lot of natural talent and are not willing or able to spend hours and hours practicing the right way.

The stock market, the job market, the overall economy and the gross domestic product are the same. The better they get the more difficult it is to improve. We can expect the most growth when we are recovering from a bad patch. Unemployment hitting a new low of 13.3% would have been laughable a year ago when it was 3.5%.

[Mikef99]

With the jobless rates recalculated using different criteria I do not think it has meaning anymore. The news needs to report more for people to fear.
The markets seem to be up and some false rises partly due to the elections is not uncommon, also the low interest rates (some at least governmental policy). If you can not go to interest rates for a return some are in for the market for the returns.

[manaboutown]

It is obvious that the election brought great confidence back to the country.

It is the vaccine driving the markets as the apparent election results are obviously an economic drag.

Asian markets are also going up due to vaccine developments. Vaccine focus drives Asian stocks to record highs | Fox Business (https://www.foxbusiness.com/economy/vaccine-focus-drives-asian-stocks-to-record-highs?fbclid=IwAR1Cvsj4SjzWjHdm3ZLIYo6_iwIyvfwOW3T Sy1X83BDtDLbJS3Iz_wkb-fo)

[chet2020]

It is the vaccine driving the markets as the apparent election results are obviously an economic drag.

Asian markets are also going up due to vaccine developments. Vaccine focus drives Asian stocks to record highs | Fox Business (https://www.foxbusiness.com/economy/vaccine-focus-drives-asian-stocks-to-record-highs?fbclid=IwAR1Cvsj4SjzWjHdm3ZLIYo6_iwIyvfwOW3T Sy1X83BDtDLbJS3Iz_wkb-fo)

We were told during the October 22 presidential debate that the current "apparent" election results would result in a stock market crash. I'm surprised there wasn't a big sell-off. It's almost as if nobody believed him.

Fact check: Will the stock market '''crash''' if Biden wins? (https://www.nbcnews.com/politics/2020-election/live-blog/2020-10-22-trump-biden-election-n1244210/ncrd1244450#blogHeader)

[Aces4]

You really believe your first sentence>??

I think anyone with financial acumen knows he was speaking the truth. People must realize that the stock market numbers are where they are due to maneuvering of savings rates to push investments into the way overvalued stock market. This country’s debt is massive.

Sadly, I suspect the chickens will come home to roost shortly.:pray:

[tvbound]

The current stock markets have no correlation to the actual economy right now. While only a little over 1/2 of us own stocks, in any form, right now everyone is punch-drunk on greed and thinking they are smart enough that they will have a chair when reality hits and the music stops. Covid has crippled the actual economy and those who don't own stocks know it, but most of those who do own or trade stocks refuse to believe it. So many jobs have either been permanently eliminated, or it will take a long time for them to come back, that stocks make absolutely no sense right now. When the bloodbath starts - it will be really ugly.

Here's one person that thinks the way I do and his personal indicator has only went up since this article last week.

Warren Buffett's favorite market indicator soars to record high, signaling stocks are overvalued and a crash may be coming | Markets Insider (https://markets.businessinsider.com/news/stocks/buffett-indicator-hits-record-high-signals-stocks-overvalued-2020-8-1029539539)

The ratio reached a historic 183% on Wednesday, reflecting the breathless stock rally in recent months and the plunge in second-quarter GDP. Buffett said it was a "strong warning signal" when the indicator peaked before the dot-com crash.

I'm going to stay with my opinions from about 2-1/2 months ago, as I think they are even more germane now. I have seen nothing, not even the great news of potentially two vaccines, that makes me change my mind on the underlying fundamentals of stocks, which I believe were significantly overheated even before the pandemic. Given that about 70% of our "economy" (not a stock price) is dependent on consumer spending, I find it hard to believe that we've even come close to finding out what the last horrible 6 months has done to the average American family's finances - re: ability to purchase future goods and services.

[AJ32162]

...

[stanley]

Where is the original poster? He can provide an update to his current thoughts.

He was banned I think

[dewilson58]

30,000 Dow
3,600 S&P
12,000 Nas


Thank God it fell of it's rails.


Now we need to make these numbers into floors, not ceilings.


:coolsmiley:

[rustyp]

30,000 Dow
3,600 S&P
12,000 Nas


Thank God it fell of it's rails.


Now we need to make these numbers into floors, not ceilings.


:coolsmiley:

Wonderful. Lots to be thankful for like not having to sit in 5 hour plus lines for food pantry handouts so we can celebrate on Thursday our record breaking economy.

[Chi-Town]

Kinda puts the fear to rest for now about a new administration. Janet Yellen as the new Treasury Secretary is a plus factor for the market.

[graciegirl]

Kinda puts the fear to rest for now about a new administration. Janet Yellen as the new Treasury Secretary is a plus factor for the market.

I was thinking that the news of the first Covid-19 vaccinations arriving as early as December influenced the stock market.

I never once thought it was anything else.

[Topspinmo]

sell now before the insider traders sell off causing drop as it been done 100s of times.

[Chi-Town]

I was thinking that the news of the first Covid-19 vaccinations arriving as early as December influenced the stock market.

I never once thought it was anything else.

The vaccine is a big boost but not the only one.

Stocks soar as Biden zeros in on Yellen as Treasury secretary | Fox Business (https://www.foxbusiness.com/markets/us-stocks-nov-23-2020)

[Stu from NYC]

One would hope that once the virus is under control and the economy back to normal the govt will stop running huge deficits by getting the budget under control and while they are at it bring social security back to a firm footing.

Of course I also believe in the tooth fairy and Santa.

[DAVES]

One would hope that once the virus is under control and the economy back to normal the govt will stop running huge deficits by getting the budget under control and while they are at it bring social security back to a firm footing.

Of course I also believe in the tooth fairy and Santa.

My view. The virus-we all tend to focus on one issue. If, the virus is brought under control by sold as miracles with no side effects vaccines, we will find other issues, see other issues.
Back to normal? That is a language a communication problem. Things never go back to normal. Normal itself, what is normal? We will, we always do create a new normal.
Deficits? Deficits have become the new normal. Our economy, interest rates are controlled by our government. It was not that long ago that a ten year treasury would pay 2% above the rate of inflation oh and not important in Florida, it was it is free of state and local taxes. Interesting and amusing to me the Fed which issues the bonds still take their full bite out of returns. I read a while ago that social security holds 40% of the national debt. As far as the rate of inflation the CPI consumer price index recently was calculated at 3.7%.
What to do? As I am not a professional or an advisor, I can state the truth-beats me.

[Bucco]

My view. The virus-we all tend to focus on one issue. If, the virus is brought under control by sold as miracles with no side effects vaccines, we will find other issues, see other issues.
Back to normal? That is a language a communication problem. Things never go back to normal. Normal itself, what is normal? We will, we always do create a new normal.
Deficits? Deficits have become the new normal. Our economy, interest rates are controlled by our government. It was not that long ago that a ten year treasury would pay 2% above the rate of inflation oh and not important in Florida, it was it is free of state and local taxes. Interesting and amusing to me the Fed which issues the bonds still take their full bite out of returns. I read a while ago that social security holds 40% of the national debt. As far as the rate of inflation the CPI consumer price index recently was calculated at 3.7%.
What to do? As I am not a professional or an advisor, I can state the truth-beats me.

Thanks for mentioning the deficits, which have simply skyrocketed.

I have beat that drum for a few years now, and it has gotten me lots of rude comments.

It will be with a few generations, and we can say we witnessed the explosion and never even cared

[PugMom]

Just like Drew Brees, they apologized. So it must be okay now..

Fox News apologizes for on-air graphic showing market reaction to violence against black men (https://finance.yahoo.com/news/fox-news-apologizes-air-graphic-195139108.html)

it's not the same network anymore. they've done their best & are now included in the msm

[PugMom]

The problem is never that simple. There are many college grads who are making minimum wage right now. Due to the pandemic there are also far more people with no income at all right now through no fault of their own. However, raising the minimum wage is also going to raise prices and eliminate jobs and cause more businesses to fail. It is a very complex problem. Also paying someone 15.00 an hour in NYC is a lot different than paying someone 15.00 an hour in Mississippi. I am not in favor of one size fits all solutions.

agreed. this was tried in Ct., & all it did was kill jobs & severely restrict whichever ones were left. it SOUNDS good, but doesn't work

[Bay Kid]

Thanks for mentioning the deficits, which have simply skyrocketed.

I have beat that drum for a few years now, and it has gotten me lots of rude comments.

It will be with a few generations, and we can say we witnessed the explosion and never even cared

Just look at all the money we are giving to foreign countries in the relief bill. This is all money that we are borrowing. It is like someone wants to destroy our economy.

[PugMom]

very good thread. so many opinions & ideas, lots of good info. :icon_wink:

[Bucco]

Just look at all the money we are giving to foreign countries in the relief bill. This is all money that we are borrowing. It is like someone wants to destroy our economy.


Not nessarily the problem. Do not listen to the loudest voices. This is not the problem. ONE PERCENT !

"Foreign aid is money, technical assistance, and commodities that the United States provides to other countries in support of a common interest of the U.S. and that country. Opinion polls consistently report that Americans believe foreign aid is about 25% of the federal budget, when it is actually less than 1%. As the world’s wealthiest nation, the U.S. provides more assistance than any other country, but a smaller proportion of its gross national product (GNP) than other wealthy nations. Historically, support for foreign aid has been bipartisan."

What every American should know about US foreign aid (https://www.brookings.edu/policy2020/votervital/what-every-american-should-know-about-us-foreign-aid/)

[biker1]

Not really. The SS trust fund is about $2.9B (funds collected in excess of benefits paid plus earnings) and the national debt is about $23B. That is about 12%.

I read a while ago that social security holds 40% of the national debt.

[dewilson58]

Not really. The SS trust fund is about $2.9B (funds collected in excess of benefits paid plus earnings) and the national debt is about $23B. That is about 12%.
might want to use a T, rather than a B

[biker1]

Hey, I was only off by 3 orders of magnitude ;-) Good catch. I will restate: $2.9x10^12 and $23x10^12.

might want to use a T, rather than a B

[tvbound]

Not really. The SS trust fund is about $2.9B (funds collected in excess of benefits paid plus earnings) and the national debt is about $23B. That is about 12%.

"the national debt is about $23B."

Ignoring the mistake of using billion instead of trillion, you may want to do a little research on the actual amount. Just in the last 4 years, it went from about $19.9 TRILLION to almost $27 TRILLION. I won't touch on the obvious, but it didn't happen accidentally or in a vacuum.

The National Debt Is Now More than $27 Trillion. What Does That Mean? (https://www.pgpf.org/infographic/the-national-debt-is-now-more-than-27-trillion-what-does-that-mean)

[biker1]

Actually you might want to do a little research yourself because you have it wrong also (and, yes, I did type a B instead of a T, I will use scientific notation from now on). It is $27.5x10^12. I was using an old number from memory, the B instead of T notwithstanding. Regardless, I was responding to the post that suggested SS was 40% of the national debt. It is actually closer to 11% than the 12% I originally posted (assuming $23x10^12 national debt). Are you trying to make some sort of political statement?

"the national debt is about $23B."

Ignoring the mistake of using billion instead of trillion, you may want to do a little research on the actual amount. Just in the last 4 years, it went from about $19.9 TRILLION to almost $27 TRILLION. I won't touch on the obvious, but it didn't happen accidentally or in a vacuum.

The National Debt Is Now More than $27 Trillion. What Does That Mean? (https://www.pgpf.org/infographic/the-national-debt-is-now-more-than-27-trillion-what-does-that-mean)

[valuemkt]

So this thread was started in early June with the claim by the original poster of Greenspan's famous irrational exuberance.. It has now devolved into a deficit discussion.. If you've hidden your money under your mattress for the past six plus months, you;ve missed a very handsome move.. Irrational or not, it very easily could have generated another year or so of cash that you can take off the table.. As someone else has said, it;s not market timing, it's time in the market. Take some money off the table and put some hedges on your portfolio.. Lumpy mattresses aren't very comfortable either

[Paper1]

Hey, I was only off by 3 orders of magnitude ;-) Good catch. I will restate: $2.9x10^12 and $23x10^12.

Social Security Trust Fund is a cruel hoax. It's funding is the same as the stimulus checks being mail out this week, mostly to people who did not loss employment I might add. My vote would be to eliminate all income taxes and speed up money printing press. Win Win, Watch the stock market roar!

[Bay Kid]

Soon it will all be funny money.

[Chi-Town]

Morgan Stanley Global Economists maintain their view that the V-shaped recovery will continue into 2021, and they forecast global growth of 6.4%, 100bps above the consensus.

[tvbound]

If there was ever the perfect example of how Wall Street does not reflect Main Street and the economy overall, we are living it. For those 52% of us that own stocks and can work, or don't need to work, things are pretty great right this minute. For the other 48% of Americans, many of whom are unemployed and in food lines for hours just to feed their families - not so much.

[Paper1]

Morgan Stanley Global Economists maintain their view that the V-shaped recovery will continue into 2021, and they forecast global growth of 6.4%, 100bps above the consensus.
Morgan Stanley has no choice but to predict a V shaped recovery.

[dewilson58]

Can't believe I'm saying this, but nice 2020 from a market return. :super:

[Stu from NYC]

Can't believe I'm saying this, but nice 2020 from a market return. :super:

Very true nobody can time the market on a continuous basis.

[Dr Winston O Boogie jr]

There are some who will use anything in order to gain an advantage. Pandemics, race wars, crashing the economy, doesn't matter how many are hurt or killed.

Then there are others who panicked and sold their portfolios at a loss and are now confused by a market that keeps going back up.

If a pandemic or race war or the economy crashing is going to happen anyway, why shouldn't people do what they think is best for them? Why shouldn't an investor take advantage of whatever situation is occurring? It's not as thought they are creating the situation.

[Bucco]

If a pandemic or race war or the economy crashing is going to happen anyway, why shouldn't people do what they think is best for them? Why shouldn't an investor take advantage of whatever situation is occurring? It's not as thought they are creating the situation.

I suppose, given your stated considerations, that it is a matter of your personal priorities.

[CoachKandSportsguy]

So, the potential impact for all the stimulus, which is not really stimulus, but more backstopping the pandemic economic damage preventing a systemic real estate banking crises, is to cause the dollar to fall, and interest rates to rise. As alot of older aged / retirement portfolios have bond funds, so there is a risk to bond fund asset price reductions.

So what is the best way to protect your bond fund asset decline?

1 is to take an outright hedge by shorting bond instruments yourself, short TLT, put options on TLT etc.
2 is to purchase some gold
3 is to look at WisdomTree Interest Rate, Hedged U.S. Aggregate Bond Fund, or other hedged bond funds
4 diversify into a some real estate investment trusts where rents will return and underlying assets will increase over time.
5 sell a portion of the bond funds and by back later when interests are higher.


What the equity market prices are predicting is that with the vaccine available and in distribution, that there will be a pandemic tipping point where all of a sudden, the infection rate will drop like a rock, and the world will begin to return to normal. looking 6-9 months ahead, the end of the summer is the latest market prediction, and the pros who are looking 1-2 years into the future are betting on that.

However, as in 1918, the economic structure of the workforce dislocation will change human behaviors for a long time, and owners of houses in the villages are in a good place to take advantage of the us residential tax migration which is currently underway. . . but there are always tipping points, being congestion and service demands which can't be maintained. . .

good luck, but that's the way i see the investment landscape for 2021. . .

sportsguy

currently long VXX equity volatility (small)
short TLT (medium) as a hedge
short (NKLA, and a few other low revenue high valuation stocks)
80% bond funds, 20% equity overall, waiting on a reasonable valuation to increase equity to 50% or more.

:blahblahblah::blahblahblah::blahblahblah::ho:

[DAVES]

I find it amusing that people will argue about anything. We toss about the national debt. I think the number is 28 Trillion. Goering said we say something over and over again and we think it makes sense. Besides me how many realize that few of us can comprehend 1 Trillion let alone 28 of them.
I try to put things together and expect, demand, them to make sense.
The fed claims the rate of inflation is below their 2% target. The CPI (consumer price index) is up 3.7% and this year the dollar has lost 7% of it's value.
Covid financial relief. They are sending checks to people who are retired. Lost income? Huh?
)

[DAVES]

If a pandemic or race war or the economy crashing is going to happen anyway, why shouldn't people do what they think is best for them? Why shouldn't an investor take advantage of whatever situation is occurring? It's not as thought they are creating the situation.

An interesting thought. Reality is people will always do what they think is best for themselves.
Our subprime mortgage fiasco. I did not do it. However, people who bought more house than they could afford. These same people had it worked out would have posted how smart they are, how much money they made that stupid people did not. I for one, though had no choice in the matter. I had to pay for their mistakes.
The stock market. Many of us, including me, have far more exposure than we should.
Why? It is the only option.
I dare to ask. Are we investing or is it a ponzi scheme?