Summarization of current investment landscape. . .

[CoachKandSportsguy]

The case for a prolonged bear market in stocks. .
aka perma-bear porn:

1. China real estate in crisis
2. Pandemic excess savings gone
3. Lagging effects of rate hikes starting to bite credit availability - residential housing
4. Jobs creation mainly in low pay service areas
5. CRE distressed
6. New COVID variant making the rounds
7. real interest rates rising to highest in many, many years
8. Size of national debt interest payments requiring huge treasury increase in bond offerings
9. Student loan payments start up again after two+ years of suspension
10. Russian roulette by Putin with agriculture and energy and lives. .

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure

good luck!

[retiredguy123]

Regarding No. 7, being a saver, not a spender, the rise in interest rates has resulted in a huge increase in my income. My Vanguard money market fund went from earning 0.02 percent to 5.28 percent.

[JoelJohnson]

Warren Buffet once said "Never bet against the US economy". Over time the market always goes up. Remember, the rich own most of the market, they will do whatever it takes to make money over the long term.

[Stu from NYC]

Long term still have faith in US economy but better to stick with high quality equities.

[HandyGrandpap]

Great post Coach!!!

Rates will eventually come back down. Now is a great time to purchase those equities with decent yields and perhaps upside potential. Any suggestions for consideration??

I will throw in a few to start the list: 1) Utility stocks are down about 30% with very decent and safe yields. 2) If you want to take some risk look at CVS and HE as both have had recent events that resulted in pull-backs.

[manaboutown]

I hope we do not see another Black Monday (Oct. 19, 1987). A Black Swan event is possible. For now I am keeping half of my securities portfolio in six month T -Bills. 5.47% recently.

Real estate remains my largest holding, both residential and commercial. I remain comfortable with that mix.

[Two Bills]

Our remaining savings are all in cash bonds, pretty much tax free, tracking inflation or RPI.
Doing very nicely thank you very much.

[sail33or]

I used to believe there were rules to the economy. No longer. The Government has learned that they can spent infinite money, build an infinite debt and pay for everything with infinite borrowed money.

Math wise the current debt can not actually be repaid. But it can grow to any number and interest on debt paid by making that number even higher. And just add any new spending in the mix keeping Corporations profitable.

Just pretend the National Debt is $500 Trillion instead of $30 something trillion. Just borrow as many trillions as needed to pay interest on the $500 trillion adding to the existing debt of $500 trillion. Repeat every year forever.

[Caymus]

The case for a prolonged bear market in stocks. .
aka perma-bear porn:

1. China real estate in crisis
2. Pandemic excess savings gone
3. Lagging effects of rate hikes starting to bite credit availability - residential housing
4. Jobs creation mainly in low pay service areas
5. CRE distressed
6. New COVID variant making the rounds
7. real interest rates rising to highest in many, many years
8. Size of national debt interest payments requiring huge treasury increase in bond offerings
9. Student loan payments start up again after two+ years of suspension
10. Russian roulette by Putin with agriculture and energy and lives. .

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure

good luck!

Are you implying that the market "Climbs a wall of worry"?:angel:

[CoachKandSportsguy]

Great post Coach!!!

Rates will eventually come back down. Now is a great time to purchase those equities with decent yields and perhaps upside potential. Any suggestions for consideration??

I will throw in a few to start the list: 1) Utility stocks are down about 30% with very decent and safe yields. 2) If you want to take some risk look at CVS and HE as both have had recent events that resulted in pull-backs.

HE is a very high risk investment. . . most likely looking for a buyer of distressed assets.
Utility stocks as a diversified ETF makes the most sense, as any single stock has a much higher event risk . . . such as HE
CVS and many of the corporate self funded benefit plan managers are starting to get questioned about the growth in claims and total cost, as its been growing faster than inflation. The benefit managers are claiming patient privacy laws as a way to stonewall giving out information to review management effectiveness.

The SP500 has evolved into mostly near monopoly and oligopoly economic players, so the mega cap stawks of the SP500 will perform the best over time.
Avoid high debt laden corporations.


David Rosenberg @EconguyRosie typed:

Bob Farrell’s Market Rule #8:
Bear markets have three stages –
1. sharp down
2. reflexive rebound
3. a drawn-out fundamental downtrend.

We just moved into the third stage.


Personally, I am researching how to identify market rotation between ETF sectors. . I am in the middle of creating a server database with all the financials from EDGAR stocks for the past 10 years, courtesy of their quarterly extracts of filings, so that I can look at sector fundamental information as well . . .

I am threatening the TV stocks club with my presence!

[HandyGrandpap]

Coach K, you noted...Personally, I am researching how to identify market rotation between ETF sectors. . I am in the middle of creating a server database with all the financials from EDGAR stocks for the past 10 years, courtesy of their quarterly extracts of filings, so that I can look at sector fundamental information as well . . .


Very interesting, keep us posted on the summary!!

[gatorbill1]

Buy Disney now

[Stu from NYC]

HE is a very high risk investment. . . most likely looking for a buyer of distressed assets.
Utility stocks as a diversified ETF makes the most sense, as any single stock has a much higher event risk . . . such as HE
CVS and many of the corporate self funded benefit plan managers are starting to get questioned about the growth in claims and total cost, as its been growing faster than inflation. The benefit managers are claiming patient privacy laws as a way to stonewall giving out information to review management effectiveness.

The SP500 has evolved into mostly near monopoly and oligopoly economic players, so the mega cap stawks of the SP500 will perform the best over time.
Avoid high debt laden corporations.


David Rosenberg @EconguyRosie typed:

Bob Farrell’s Market Rule #8:
Bear markets have three stages –
1. sharp down
2. reflexive rebound
3. a drawn-out fundamental downtrend.

We just moved into the third stage.


Personally, I am researching how to identify market rotation between ETF sectors. . I am in the middle of creating a server database with all the financials from EDGAR stocks for the past 10 years, courtesy of their quarterly extracts of filings, so that I can look at sector fundamental information as well . . .

I am threatening the TV stocks club with my presence!

Too hard to beat the market.

IMHO rather go with a basket of good no load mutual funds that have excellent track records in good and bad markets over a good number of years.

[Boomer]

Good afternoon to all you money-talkin’ guys,

Here’s my advice to you:

Keep in mind that in actuality the stock market is exactly like that crazy girlfriend you had in high school…..

Remember……

There were days when you could do no wrong.

And there were days when you could do no right.

But you could never figure out in advance if what you were doing was going to turn out to be right or wrong.

That’s it.

Boomer

PS: No! I am NOT that crazy girlfriend you had in high school. ;)

[manaboutown]

Good afternoon to all you money-talkin’ guys,

Here’s my advice to you:

Keep in mind that in actuality the stock market is exactly like that crazy girlfriend you had in high school…..

Remember……

There were days when you could do no wrong.

And there were days when you could do no right.

But you could never figure out in advance if what you were doing was going to turn out to be right or wrong.

That’s it.

Boomer

PS: No! I am NOT that crazy girlfriend you had in high school. ;)

Sounds like my ex-wife and yes I am happily divorced from her!

[spinner1001]

From ChatGPT on sportguy’s points:

Economic Uncertainty Amidst Unprecedented (https://chat.openai.com/share/764182a9-38d3-4fb6-88a2-951442025b9d)

[RickyLee]

Good afternoon to all you money-talkin’ guys,

Here’s my advice to you:

Keep in mind that in actuality the stock market is exactly like that crazy girlfriend you had in high school…..

Remember……

There were days when you could do no wrong.

And there were days when you could do no right.

But you could never figure out in advance if what you were doing was going to turn out to be right or wrong.

That’s it.

Boomer

PS: No! I am NOT that crazy girlfriend you had in high school. ;)

Personally, I always went for The crazy ones. Never a dull moment! I am all in on equities

[Andyb]

The case for a prolonged bear market in stocks. .
aka perma-bear porn:

1. China real estate in crisis
2. Pandemic excess savings gone
3. Lagging effects of rate hikes starting to bite credit availability - residential housing
4. Jobs creation mainly in low pay service areas
5. CRE distressed
6. New COVID variant making the rounds
7. real interest rates rising to highest in many, many years
8. Size of national debt interest payments requiring huge treasury increase in bond offerings
9. Student loan payments start up again after two+ years of suspension
10. Russian roulette by Putin with agriculture and energy and lives. .

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure

good luck!

I think the one thing that is keeping the market going right now is the spending of the baby boomers. The Boomers for the most part, lived during the best economic times in America and have accumulated a lot of wealth. The Boomers are in the fourth quarter of life and are not holding back in their spending in retirement. When this cycle ends, watch out. No political party is going to solve the problem, we are too far gone.

[nn0wheremann]

The case for a prolonged bear market in stocks. .
aka perma-bear porn:

1. China real estate in crisis
2. Pandemic excess savings gone
3. Lagging effects of rate hikes starting to bite credit availability - residential housing
4. Jobs creation mainly in low pay service areas
5. CRE distressed
6. New COVID variant making the rounds
7. real interest rates rising to highest in many, many years
8. Size of national debt interest payments requiring huge treasury increase in bond offerings
9. Student loan payments start up again after two+ years of suspension
10. Russian roulette by Putin with agriculture and energy and lives. .

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure

good luck!
Well, the market returns have usually beat my mattress's returns, though it seems for the last 24 months I am down 10% after expenses. Might be time to change horses.

[ithos]

We all know that another major financial dislocation is coming and most likely you will not be given a heads up by watching CNBC.

Remember Cramer?
Bear Stearns is fine. Do not take your money out. If there’s one takeaway, Bear Stearns is not in trouble. I mean, if anything, they’re more likely to be taken over. Don’t move your money from Bear. That’s just being silly. Don’t be silly.

Question is what tell-tale signs should we be looking for? Credit Card delinquencies, 401K borrowing, advance decline line? Are there analysts that have a good record on timing the market? Permabears and Permabulls are really useless.

In hindsight it is always obvious but is it possible to predict it beforehand in time to get out or short the market? The Fed does make it difficult since they have several ways to prop it up.

[mntlblok]

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure



Even when I've accurately assessed the big picture, "certainty" was ultimately wiped away by "timing" issues.

John Maynard Keynes – “Markets can remain irrational longer than you can remain solvent”

[dtennent]

Over the long haul, I have done very well investing in the stock market. It all depends on how soon you need the money. I will not need to increase my earnings in the next 5 years so I am willing to keep my money in equities (low cost no load mutual funds). It will be hard to predict when the rebound will come but when it comes, it is usually significant. Of course, if I die before the uptick comes, then I will have chosen poorly.

[spinner1001]

And now after a tone of cautious uncertainty, ChatGPT writes on sportsguy’s same points in the tone of Jim Cramer.

(Click link and scroll toward the bottom)

Economic Uncertainty Amidst Unprecedented (https://chat.openai.com/share/a19c2574-3679-4f59-a9df-14e9aaadedeb)

[spinner1001]

And now after a tone of cautious uncertainty, ChatGPT writes on sportsguy’s same points in the tone of Jim Cramer.

(Click link and scroll toward the bottom)

Economic Uncertainty Amidst Unprecedented (https://chat.openai.com/share/a19c2574-3679-4f59-a9df-14e9aaadedeb)

Thing is depending on one’s bias, they can spin the same economic information in opposite ways.

In my opinion, listen to what Jim Cramer says and do the opposite.

[Stu from NYC]

Of course, if I die before the uptick comes, then I will have chosen poorly.

To paraphase Allan King, if that happens your loved ones will have good reason to be unhappy.

[HandyGrandpap]

A few comments if your considering locking in returns with utilities with stock prices down due to higher rates. Thus possibility of picking up good rates and future growth when rates come back down:
Some ETF's: VPU, XLU, IDU,
Short list of stocks (but many others) ETR, AEP, DUK.
Also look at holding in VPU

[rsmurano]

The famous line 1.5 years ago: even a 12 year old could have seen this downturn coming. I sold out most everything 1/1/2022 and got back into oil fund last year for a few months, money market fund that pays over 5%, got into apple late last year and got out a couple months ago, in a tech index fund, and bought into an AI company. Most of our money is in 5.x% money market.
IMO, we are heading for a crash, just as big as 2007/2008. Consumer debt, China downturn, insolvent banks, only 7 stocks supporting the whole market, federal reserve is clueless, corrupt administration.

[Fastskiguy]

Everybody has been saying a recession is coming "soon". It's like "for sure". It's "obvious". So of course I'm looking to see some upside.

Joe

[Stu from NYC]

Everybody has been saying a recession is coming "soon". It's like "for sure". It's "obvious". So of course I'm looking to see some upside.

Joe

One of the best funds I have had for many years is Contrafund. It does the opposite of what the prevailing opinion of the market says will happen.

[Boomer]

I think the one thing that is keeping the market going right now is the spending of the baby boomers. The Boomers for the most part, lived during the best economic times in America and have accumulated a lot of wealth. The Boomers are in the fourth quarter of life and are not holding back in their spending in retirement. When this cycle ends, watch out. No political party is going to solve the problem, we are too far gone.


Fly first class or your kids will.

Boomer

[ithos]

Interesting, The FED has piled into mortgage backed securities since COVID started. About 1.4 trillion. Now they are starting to unwind.

Assets: Securities Held Outright: Mortgage-Backed Securities: Maturing in over 10 Years: Wednesday Level (MBS10Y) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/MBS10Y)

I wonder what that means for the housing market if anything. They first started purchasing during the 2008 housing crisis. Higher rates?

Why the Federal Reserve is getting rid of its mortgage-backed securities - Marketplace (https://www.marketplace.org/2022/06/02/why-the-federal-reserve-owns-mortgage-backed-securities-and-what-it-hopes-to-achieve-by-offloading-them/)

[Stu from NYC]

Interesting, The FED has piled into mortgage backed securities since COVID started. About 1.4 trillion. Now they are starting to unwind.

Assets: Securities Held Outright: Mortgage-Backed Securities: Maturing in over 10 Years: Wednesday Level (MBS10Y) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/MBS10Y)

I wonder what that means for the housing market if anything. They first started purchasing during the 2008 housing crisis. Higher rates?

Why the Federal Reserve is getting rid of its mortgage-backed securities - Marketplace (https://www.marketplace.org/2022/06/02/why-the-federal-reserve-owns-mortgage-backed-securities-and-what-it-hopes-to-achieve-by-offloading-them/)

Cannot read article but they will lose a lot of money selling these securities

[ithos]

Fixed-rate mortgages are tied to the 10-year Treasury yield. When that goes up or down, fixed-rate mortgages follow suit.
How The Fed's Rate Decisions Move Mortgage Rates | Bankrate (https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-rates/)

10-year Treasury yield hits highest level since 2007
Access Denied (https://www.cnbc.com/2023/08/21/us-treasurys-investors-await-fed-speaker-comments-economic-data.html)

[Caymus]

Fixed-rate mortgages are tied to the 10-year Treasury yield. When that goes up or down, fixed-rate mortgages follow suit.
How The Fed's Rate Decisions Move Mortgage Rates | Bankrate (https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-rates/)

10-year Treasury yield hits highest level since 2007
Access Denied (https://www.cnbc.com/2023/08/21/us-treasurys-investors-await-fed-speaker-comments-economic-data.html)

Let me know one week before the 10 year peaks. ;);)

[Boomer]

T v. MO? Interesting video from fool.com a couple of days ago……

Not much growth expected from either. Other factors come into play, too. And one, of course, is a sin stock — however that makes you feel.

(Believe you me, this is not a recommendation. I don’t do that — ever. The size of those dividends right now just happened to catch my attention.)

“Never forget that yield is not all there is to dividend investing,” said Boomer, stating the obvious.

Boomer

[Robbb]

HE is a very high risk investment. . . most likely looking for a buyer of distressed assets.
Utility stocks as a diversified ETF makes the most sense, as any single stock has a much higher event risk . . . such as HE
CVS and many of the corporate self funded benefit plan managers are starting to get questioned about the growth in claims and total cost, as its been growing faster than inflation. The benefit managers are claiming patient privacy laws as a way to stonewall giving out information to review management effectiveness.

The SP500 has evolved into mostly near monopoly and oligopoly economic players, so the mega cap stawks of the SP500 will perform the best over time.
Avoid high debt laden corporations.


David Rosenberg @EconguyRosie typed:

Bob Farrell’s Market Rule #8:
Bear markets have three stages –
1. sharp down
2. reflexive rebound
3. a drawn-out fundamental downtrend.

We just moved into the third stage.


Personally, I am researching how to identify market rotation between ETF sectors. . I am in the middle of creating a server database with all the financials from EDGAR stocks for the past 10 years, courtesy of their quarterly extracts of filings, so that I can look at sector fundamental information as well . . .

I am threatening the TV stocks club with my presence!

Yes but the age old question that has never been answered for the long run...how do you know when a specific stock or even segment will make a move? Without insider information you are only guessing. Regardless how accurate your rear view mirror is, it is still a rear view which has no bearing on the future. If all the super computers on the planet cannot predict where the market will be tomorrow, how can we?

[CoachKandSportsguy]

Interesting, The FED has piled into mortgage backed
I wonder what that means for the housing market if anything. They first started purchasing during the 2008 housing crisis. Higher rates?



Not sure, but I played golf with a local mortgage broker on Saturday, and in the very old, highly developed suburbs of New England, housing inventory is so low due to 3% refinancing and working from home, that prices are still increasing, even at these rates. .

However, this is not the entire market nor the entire country, just largely east coastal and old, well developed sections. .

higher rates will come from the treasury re-funding of an additional $1T for trillion of treasury bills and notes sales over the next three months or so. . this is already planned and announced, as well as china selling some holdings in order to prop up their currency in the FX market, which is waste of money.

maoist communism and consumer / free markets can't coexist together in harmony because of the basic inherent conflicts between the two philosophies. . .

good luck. .

[CoachKandSportsguy]

From ChatGPT on sportguy’s points:

Economic Uncertainty Amidst Unprecedented (https://chat.openai.com/share/764182a9-38d3-4fb6-88a2-951442025b9d)

LOL! i have tried to get some programming logic out of it, and it took several attempts. . and some of the answers are flat out wrong, but some will find it helpful as they better learn prompt design to get the best answer out of it. .

The ChatGPT financial portfolio is NOT doing well, last i read and looked. . so again, its very early stages, but also a very dangerous piece of software. It will enable people who want to perform evil to do so more easily, as well as give Dunning Kruger types information which they won't know how to use properly. .

[ithos]

Not sure, but I played golf with a local mortgage broker on Saturday, and in the very old, highly developed suburbs of New England, housing inventory is so low due to 3% refinancing and working from home, that prices are still increasing, even at these rates. .

However, this is not the entire market nor the entire country, just largely east coastal and old, well developed sections. .

higher rates will come from the treasury re-funding of an additional $1T for trillion of treasury bills and notes sales over the next three months or so. . this is already planned and announced, as well as china selling some holdings in order to prop up their currency in the FX market, which is waste of money.

maoist communism and consumer / free markets can't coexist together in harmony because of the basic inherent conflicts between the two philosophies. . .

good luck. .

Well, it seems best to do it in a strong housing market.

And you can thank General George Marshall for single handedly ensuring that Mao Zedong would defeat the Nationalists and rule China until he died. All because he hated Chiang Kai-shek.

[melpetezrinski]

Yes but the age old question that has never been answered for the long run...how do you know when a specific stock or even segment will make a move? Without insider information you are only guessing. Regardless how accurate your rear view mirror is, it is still a rear view which has no bearing on the future. If all the super computers on the planet cannot predict where the market will be tomorrow, how can we?

Because you generally don't "invest" in the markets to catch a short term "move". You invest for the long term and that "age old question" has been answered time and time again, in that, the markets will be higher in the future.

[CoachKandSportsguy]

Yes but the age old question that has never been answered for the long run...how do you know when a specific stock or even segment will make a move? Without insider information you are only guessing. Regardless how accurate your rear view mirror is, it is still a rear view which has no bearing on the future. If all the super computers on the planet cannot predict where the market will be tomorrow, how can we?

If a super computer could predict the moves, do you really think that you or I would know about it? Do you really think Rennaisance Capital gave away their technological advantage as soon as it was proven? Perspective, there are people and systems, now called robots, which make decisions which humans can't because the robots can manage much more information that the human mind can absorb and then use to decide. . DBD

Ah, the number 1 determinate of equity pricing is revenue growth. . that's your first clue.
Second clue is industry and products. .
Industrial, manufacturing, commercia, retail, consumer: new products, new services, one time
purchase product or repeat buyers over what time span, and how often, and product life
cycle.
Third clue is near monopoly, oligopoly or very regional marketplaces and diverse competition.
Shows up in margin sensitivity, supply chain effectiveness and purchase price sensitivity,
and revenue growth. . .
Fourth clue is interest rate / inflation / fx rates sensitivity,
Fifth clue is debt to equity and Return on Assets ratios. .
Sixth is event risk: how sensitive is the company to customer events, employee events, new product events, political events, geopolitical events, etc. . which is inversely proportional to size

That's a good start to the analysis, and its not easy, but if you get it right, you can make quite nice returns. . DBD

finance guy

[ithos]

If a super computer could predict the moves, do you really think that you or I would know about it? Do you really think Rennaisance Capital gave away their technological advantage as soon as it was proven? Perspective, there are people and systems, now called robots, which make decisions which humans can't because the robots can manage much more information that the human mind can absorb and then use to decide. . DBD

Ah, the number 1 determinate of equity pricing is revenue growth. . that's your first clue.
Second clue is industry and products. .
Industrial, manufacturing, commercia, retail, consumer: new products, new services, one time
purchase product or repeat buyers over what time span, and how often, and product life
cycle.
Third clue is near monopoly, oligopoly or very regional marketplaces and diverse competition.
Shows up in margin sensitivity, supply chain effectiveness and purchase price sensitivity,
and revenue growth. . .
Fourth clue is interest rate / inflation / fx rates sensitivity,
Fifth clue is debt to equity and Return on Assets ratios. .
Sixth is event risk: how sensitive is the company to customer events, employee events, new product events, political events, geopolitical events, etc. . which is inversely proportional to size

That's a good start to the analysis, and its not easy, but if you get it right, you can make quite nice returns. . DBD

finance guy

Or you could just watch Jim Cramer every afternoon. :icon_wink:

[ithos]

Actually I think that Josh Brown is the best analyst on CNBC. He is quick witted and funny. too.

[jimjamuser]

Good afternoon to all you money-talkin’ guys,

Here’s my advice to you:

Keep in mind that in actuality the stock market is exactly like that crazy girlfriend you had in high school…..

Remember……

There were days when you could do no wrong.

And there were days when you could do no right.

But you could never figure out in advance if what you were doing was going to turn out to be right or wrong.

That’s it.

Boomer

PS: No! I am NOT that crazy girlfriend you had in high school. ;)
No, I am reminded more of a crazy College girl friend.

[DAVES]

Warren Buffet once said "Never bet against the US economy". Over time the market always goes up. Remember, the rich own most of the market, they will do whatever it takes to make money over the long term.

My thoughts. I am proudly contrarian. We hear terms such as Buffet Like. Reality we do not trade in the same market as Buffet does. We can trade exactly as Buffet does by buying shares in Berkshire Hathaway. Rich? For perhaps too many their definition of rich is anyone who has more than they do. I compare my results to the S&P. I rarely beat the S&P. Buffet credited with being the greatest stock picker has suggested we simply buy an S&P index.

That option is available to everyone. Do whatever it takes to make money? Not sure what that means. I was an overnight success. It only took me 49 years of hard work and investing.

Buffet spoke about the magic of compounding. Average stock market return is quoted as 7-8%. Actually over the past 15 years it has been almost twice that. At 8% money doubles every 9 years over 49 years that is 5.4 times 10,000=20000 (1)20,000=40,000 (2) 40000=80,000 (3) 80,000=160,000 (4) 160000=360,000 (5) the half=540,000. Fuzzy math perhaps but how it works for all.

[jimjamuser]

I think the one thing that is keeping the market going right now is the spending of the baby boomers. The Boomers for the most part, lived during the best economic times in America and have accumulated a lot of wealth. The Boomers are in the fourth quarter of life and are not holding back in their spending in retirement. When this cycle ends, watch out. No political party is going to solve the problem, we are too far gone.
The way I read about it, US people over 65 represent ONLY about 6% of the population. I thought that companies marketed to the under-30 crowd because they are a large % and they need more toys so they spend more.

[spinner1001]

LOL! i have tried to get some programming logic out of it, and it took several attempts. . and some of the answers are flat out wrong, but some will find it helpful as they better learn prompt design to get the best answer out of it. .

The ChatGPT financial portfolio is NOT doing well, last i read and looked. . so again, its very early stages, but also a very dangerous piece of software. It will enable people who want to perform evil to do so more easily, as well as give Dunning Kruger types information which they won't know how to use properly. .

Are you using ChatGPT 3.5 or 4? ChatGPT 3.5 is the free version. The pay version is ChatGPT 4. I recall that 4 costs $20 per month. I have not subscribed. I hear that 4 is noticeably better than 3.5.

[jimjamuser]

Well, the market returns have usually beat my mattress's returns, though it seems for the last 24 months I am down 10% after expenses. Might be time to change horses.
Or mattresses.

[jimjamuser]

The famous line 1.5 years ago: even a 12 year old could have seen this downturn coming. I sold out most everything 1/1/2022 and got back into oil fund last year for a few months, money market fund that pays over 5%, got into apple late last year and got out a couple months ago, in a tech index fund, and bought into an AI company. Most of our money is in 5.x% money market.
IMO, we are heading for a crash, just as big as 2007/2008. Consumer debt, China downturn, insolvent banks, only 7 stocks supporting the whole market, federal reserve is clueless, corrupt administration.
I would have to disagree. The Fed Reserve is NOT clueless. The current administration is doing well on the economy and trying to provide jobs to the vanishing middle class where jobs are most needed.

[CoachKandSportsguy]

Fly first class or your kids will.

Boomer

the proper term is to ski

"spending kids' inheritance"

:spoken:

[CoachKandSportsguy]

Are you using ChatGPT 3.5 or 4? ChatGPT 3.5 is the free version. The pay version is ChatGPT 4. I recall that 4 costs $20 per month. I have not subscribed. I hear that 4 is noticeably better than 3.5.

3.5, as I don't have a huge need to pay for this service. .

[CoachKandSportsguy]

btw, for anyone reading the individual posts,

The trading robot developer I follow, who basically mints money with about a 20% return per year, and his robots have been trained on data starting in the 1980s,

gave CRASH warning with a 70% down probability / 30% up probability for tomorrow, Tuesday, Aug 21st. .
a crash is more than 1% move i believe. . . currently, the robots have a full hedge on his portfolio. .
the hedge started at 4390 last week. . crash not confirmed by second robot. .

for those who don't always believe that the market is impossible to forecast, we will see. .
I am positioned $SPY for the 30% up for other reasons, with a full hedge on with NOV SPY puts, using a friend's 39 day market trading cycle expecting a blast up as also confirmed with some options cyclical patterns i found looking for 1% days to trade. .

might work, might not work. . and if nothing happens. . . all good as well. .

[HandyGrandpap]

btw, for anyone reading the individual posts,

The trading robot developer I follow, who basically mints money with about a 20% return per year, and his robots have been trained on data starting in the 1980s,

gave CRASH warning with a 70% down probability / 30% up probability for tomorrow, Tuesday, Aug 21st. .
a crash is more than 1% move i believe. . . currently, the robots have a full hedge on his portfolio. .
the hedge started at 4390 last week. . crash not confirmed by second robot. .

for those who don't always believe that the market is impossible to forecast, we will see. .
I am positioned $SPY for the 30% up for other reasons, with a full hedge on with NOV SPY puts, using a friend's 39 day market trading cycle expecting a blast up as also confirmed with some options cyclical patterns i found looking for 1% days to trade. .

might work, might not work. . and if nothing happens. . . all good as well. .

Hey OP, you need to reprogram you AI robot as tomorrow is the 22nd! opps, (a bit of levity) thanks

[CoachKandSportsguy]

Hey OP, you need to reprogram you AI robot as tomorrow is the 22nd! opps, (a bit of levity) thanks

i'm retired, i actually just go by the day of the week,
the numbers are so many i can't keep up with them each month. .

seriously

[Mrfriendly]

I would have to disagree. The Fed Reserve is NOT clueless. The current administration is doing well on the economy and trying to provide jobs to the vanishing middle class where jobs are most needed.

Curious, what type of jobs is the government trying to provide to the vanishing middle class?
All I see is the tremendous amount of spending with no end in sight and it follows that with a positive spin rhetoric I don’t believe.

[Caymus]

Does the robot consider increases in theft? I notice that Dick's is down over 20% this morning based on theft concerns.

[Stu from NYC]

I would have to disagree. The Fed Reserve is NOT clueless. The current administration is doing well on the economy and trying to provide jobs to the vanishing middle class where jobs are most needed.

Fed could do a much better job, way to late trying to curb inflation. These higher interest rates will cause structural problems in ways nobody is even talking about.

[CoachKandSportsguy]

Does the robot consider increases in theft? I notice that Dick's is down over 20% this morning based on theft concerns.

doubtful, but so far what ever the robots saw, hasn't materialized yet, and I closed out my longs this morning. .

Interestingly, the robots are programmed to buy stocks at extremely undervalued prices, which can be more reasonably programmed versus an over valued overhyped stock where the fundamentals don't matter. . bargains can be programmed as a value play, bubbles cannot be. .

CA theft is ridiculous, and all the stores should leave CA and see how the government and their constituents like the results of their decisions.

The other point to remember is that Passive ETFS buy and hold and are price INSENSITIVE. . . so who then causes price movement? active fund managers. .

as passive is about 50% of the stock ownership, active owns the rest, and active as a percentage of tradeable float, which is total float minus passive holdings, creates increased volatility, due to 50% of the float being tradeable. .

So where as Dick's might have been a 10% correction today, it turned into a 20% correction due to about 50% of the shares being held in passive accounts. . who don't care what the price is. .

This is where an individual stock has a much higher event risk stock movement, as seen today with Dicks, which is why the diversified ETF by industry is always the better purchase. .

[Boomer]

The most recent episode of PBS WealthTrack was an interview with Burton Malkiel who wrote the classic A Random Walk Down Wall Street, 50 years ago. (I think this episode first aired a little over a year ago, but I cannot imagine this guy has changed his mind.)

Sounds like he and Bogle were buddies. It is interesting to hear what happened when Bogle first introduced the index fund.

Malkiel’s book has had several updates, but his basic strategy still holds true — in spite of robots and formulas and ESG investing and all that other stuff that’s out there to talk about now.

I am throwing this info in here because I think some of you might want to see this interview, especially those who really like their index funds.

If you are interested in old-school, simple investing advice, you might want to Google wealthtrack.com and Burton Malkiel and you will find the episode. Besides, an old man with real knowledge and experience is a lot more fun to listen to than a robot.

Boomer

[jimjamuser]

Curious, what type of jobs is the government trying to provide to the vanishing middle class?
All I see is the tremendous amount of spending with no end in sight and it follows that with a positive spin rhetoric I don’t believe.
Road repair and road construction.

[Robbb]

If a super computer could predict the moves, do you really think that you or I would know about it? Do you really think Rennaisance Capital gave away their technological advantage as soon as it was proven? Perspective, there are people and systems, now called robots, which make decisions which humans can't because the robots can manage much more information that the human mind can absorb and then use to decide. . DBD

Ah, the number 1 determinate of equity pricing is revenue growth. . that's your first clue.
Second clue is industry and products. .
Industrial, manufacturing, commercia, retail, consumer: new products, new services, one time
purchase product or repeat buyers over what time span, and how often, and product life
cycle.
Third clue is near monopoly, oligopoly or very regional marketplaces and diverse competition.
Shows up in margin sensitivity, supply chain effectiveness and purchase price sensitivity,
and revenue growth. . .
Fourth clue is interest rate / inflation / fx rates sensitivity,
Fifth clue is debt to equity and Return on Assets ratios. .
Sixth is event risk: how sensitive is the company to customer events, employee events, new product events, political events, geopolitical events, etc. . which is inversely proportional to size

That's a good start to the analysis, and its not easy, but if you get it right, you can make quite nice returns. . DBD

finance guy

So why do monkeys throwing darts against a board beat active money manger's'' over 80% of the time.

[ithos]

Jim Cramer strikes again.

@jimcramer
UBS says sell Footlocker, if you do this please remember to invite me to your funeral
7:21 AM · Mar 29, 2023·
https://twitter.com/jimcramer/status/1641037770771644421?lang=en

It was at 40 then now it is at 16.

[Caymus]

Jim Cramer strikes again.

@jimcramer
UBS says sell Footlocker, if you do this please remember to invite me to your funeral
7:21 AM · Mar 29, 2023·
https://twitter.com/jimcramer/status/1641037770771644421?lang=en

It was at 40 then now it is at 16.

Cramer is amusing when he has one of his meltdowns. We will see if he has one today.

[Caymus]

The most recent episode of PBS WealthTrack was an interview with Burton Malkiel who wrote the classic A Random Walk Down Wall Street, 50 years ago. (I think this episode first aired a little over a year ago, but I cannot imagine this guy has changed his mind.)

Sounds like he and Bogle were buddies. It is interesting to hear what happened when Bogle first introduced the index fund.

Malkiel’s book has had several updates, but his basic strategy still holds true — in spite of robots and formulas and ESG investing and all that other stuff that’s out there to talk about now.

I am throwing this info in here because I think some of you might want to see this interview, especially those who really like their index funds.

If you are interested in old-school, simple investing advice, you might want to Google wealthtrack.com and Burton Malkiel and you will find the episode. Besides, an old man with real knowledge and experience is a lot more fun to listen to than a robot.

Boomer

Her's is one of the podcasts I subscribe to. The interviewwas on her podcast a few months ago. I downloaded the updated book from my library but found much of it was a repeat of the book I read decades ago.

[CoachKandSportsguy]

Malkiel’s book has had several updates, but his basic strategy still holds true — in spite of robots and formulas and ESG investing and all that other stuff that’s out there to talk about now.

There are two camps of investing,

passive and active

Passive is a theory of investing which is minimal cost and management. The theory has scale limitations, which some people don't understand, and has some nuanced weaknesses, such as price insensitivity, and scale issues.

Active is the traditional method of expertise. . . and has its advantages, has similar scale limitations, and is primarily responsible for price discovery. As the competition for active management is very intense, the cost of active has been coming down, and they look for advantages of technology to create more alpha.

Active has several versions, and there is a small population of quantitative hedge funds and traders who do generate a stable and high rate of return over long time periods, well over the return of the indexed funds. . however, their IP, intellectual property, is not shared, and not well known as they are not publicly sold nor advertised.

However, the biggest achilles heel for all investments is scale, as investing has very specific scale limitations, which is completely different than the physical production world. .

YMMV

[Tab51]

I.B.D. had a publication that measured relative strength in 196 industrial groups.

There was another charting service that had maybe 70 groups that would chart the top 25
stocks by relative strength in each sector.

If I remember...you could see some groups making all the same type of bottom patterns.
The same would be apparent with certain sectors showing topping patterns.

Good tools to find opportunities

[retiredguy123]

So why do monkeys throwing darts against a board beat active money manger's'' over 80% of the time.
Smart monkeys with a good aim?

[Stu from NYC]

Smart monkeys with a good aim?

Thought the monkeys cheated.

[kkingston57]

The case for a prolonged bear market in stocks. .
aka perma-bear porn:

1. China real estate in crisis
2. Pandemic excess savings gone
3. Lagging effects of rate hikes starting to bite credit availability - residential housing
4. Jobs creation mainly in low pay service areas
5. CRE distressed
6. New COVID variant making the rounds
7. real interest rates rising to highest in many, many years
8. Size of national debt interest payments requiring huge treasury increase in bond offerings
9. Student loan payments start up again after two+ years of suspension
10. Russian roulette by Putin with agriculture and energy and lives. .

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure

good luck!

Great time for the non risk takers. 5% guaranteed, even at the banks.

[kkingston57]

The famous line 1.5 years ago: even a 12 year old could have seen this downturn coming. I sold out most everything 1/1/2022 and got back into oil fund last year for a few months, money market fund that pays over 5%, got into apple late last year and got out a couple months ago, in a tech index fund, and bought into an AI company. Most of our money is in 5.x% money market.
IMO, we are heading for a crash, just as big as 2007/2008. Consumer debt, China downturn, insolvent banks, only 7 stocks supporting the whole market, federal reserve is clueless, corrupt administration.

Got out of Apple too early +/- $190 now. 2007/2008 was an anomaly due to the crazy bank financing. Not optimist about the situation but it will not be like Covid onset. Corrupt administration and fed reserve is clueless? Recall someone with the initials ending with a T chose him. On bright side a lot of seniors can not complain about low returns from banks. They were the most vocal about low bank interest rates.

[kkingston57]

One of the best funds I have had for many years is Contrafund. It does the opposite of what the prevailing opinion of the market says will happen.

Have it also and has clearly overperformed my Vanguard retirement plans.

[kkingston57]

Road repair and road construction.

Agree drove through 14 states this summer and in all states, a lot of road construction and based upon their conditions the work was long overdue.

[CoachKandSportsguy]

So why do monkeys throwing darts against a board beat active money manger's'' over 80% of the time.

LOL! how much alpha did they generate? how well did they manage the inflows and withdrawals? Were they tax efficient or just plain investors. .

its an amusing comment, but not factual

[Stu from NYC]

LOL! how much alpha did they generate? how well did they manage the inflows and withdrawals? Were they tax efficient or just plain investors. .

its an amusing comment, but not factual

But I bet my monkey is better than your monkey.

[CoachKandSportsguy]

So here is one of the risks of the passive indexing that Mr Bogle espoused:

Mega-Cap Stocks Continue To Dominate. But Why? - RIA (https://realinvestmentadvice.com/mega-cap-stocks-continue-to-dominate-but-why/)

Therefore, as investors buy shares of a passive ETF, the shares of all the underlying companies must be purchased. Given the massive inflows into ETFs over the last year and subsequent inflows into the top-10 stocks, the mirage of market stability is not surprising.

Individual mega caps will have a declining growth rate, then the price becomes expensive, so the sellers (apple is down) take the money and buy other lower valued mega caps, just rotating money within the index which gives the illusion of strength, against a weakening economy. .

The long term index buyer is betting on survivorship bias where the index continues the behavior of expelling declining stawks and including up and coming large growth stawks. The other is the safety /liquidity of the mega caps, which is creates a "pyramiding bias" of everyone flocking to the same 5-10-20 stocks to guarantee / hedge against poor stock picking to keeping their jobs. . However, the better returns are made with stawk picking, not amongst the mega caps, but there are liquidity and ownership constraints.

pick your poison!

[MrChip72]

I work at a large international bank. From what I know, the currently high interest rates will spike profits for at least the next little while as it creates an excellent spread for the banks, even with the drop in new mortgages being put out. I'm shifting more of my stuff into financials for the near term.