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:

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

No, I am reminded more of a crazy College girl friend.

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.

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.

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.

Or mattresses.

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.

the proper term is to ski

"spending kids' inheritance"

:spoken:

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

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

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

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.

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

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.

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. .

A Blast from the Past
 

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

Road repair and road construction.

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

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...644421?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.

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.

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

sector rotation
 

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

Smart monkeys with a good aim?

Thought the monkeys cheated.

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

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.

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

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.

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.

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

Mega-Cap Stocks Continue To Dominate. But Why? - RIA

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!

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.