The Stock Market

A large part of the enthusiasm atm is based on the newly passed tax bill. The anticipation is that the profits currently parked by big multi-national corporations in their foreign subsidiaries will quickly be repatriated to the USA at the much lower tax rates, which could be rolled back if the democrats take Congress and the White House. The thinking is that the vast majority of that money will be used for stock buy-backs or for mergers and acquisitions, since there's little appetite for investing it in new equipment, new factories, or (exploding laughter) higher wages.

Market was growing before the tax bill. Not saying it makes no impact (I don't have the analysis skills to make that determination) but it seems like there are other factors.

Market was growing before the tax bill.

Markets are all about pricing the future. But, yes, the tax bill isn't the only factor in play. It's just a very big factor. If the market started to believe the Fed was going to boost interest rates at an accelerated pace, that could slow it down a fair bit. Right now, exuberance is the order of the day. Even having an unstable semi-literate running the executive won't change that calculation... for now. Expectations about the future are inherently unstable.

It's been growing at an insane rate since trump was elected, but maybe it's all on the assumption of tax breaks and business giveaways

A big infrastructure bill loaded with lots of goodies would just whet their greed even further. That's another business giveaway the market is hoping will land in their lap. In fact, overheating the economy seems to be the Republicans' main strategy for avoiding big losses next November.

http://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years

^^ worth a peek for context

mid 2015-2016 on that graph is basically ¯\_(ツ)_/¯

haha i was thinking wonder woman / weezer / wwf wrestling

Watch the bond market (which dwarfs equities). July 2016 was the "top" (lowest yield). There's an important test of the "lows" (high yields) of December 2016 and March 2017 in the next couple weeks.

Also, the yield curve is growing ever flatter: expectations for slowing growth.

Reuters: Chinese agency Dagong cuts U.S. sovereign ratings to BBB+ from A-

The growing reliance on the debt-driven mode of economic development will continue to erode the solvency of the U.S. federal government, the Beijing-based ratings agency said.

“Deficiencies in the current U.S. political ecology make it difficult for the efficient administration of the federal government, so the national economic development derails from the right track,” Dagong said.

“Massive tax cuts directly reduce the federal government’s sources of debt repayment, therefore further weakens the base of government’s debt repayment.”

Levis IPO -- trading at $22.50 per share with 0.75 earnings per share. That's 30x earnings. Earnings growth is completely flat for the last three years. Valuation makes no sense. Tell me why I'm wrong.

The p/e is 30? That’s not unusual

It seems unusual for zero growth. A&F is 23x earnings, Gap is 10x earnings, American Eagle is 13x earnings. Maybe you could say the Levi's brand is stronger.

IPO starved hype

I think that growth is the idea, though. The growth plan is apparently to sell more stuff online instead of at kohl's, convince women to wear jeans instead of yoga pants, sell more shirts somehow, and sell more outside of the US. Buying the naming rights to the 49ers stadium is supposed to help somehow.

My plan is to look at this every morning
https://www.macrotrends.net/2488/sp500-10-year-daily-chart

For morning kicks?

to remind yourself we might be partying like it's 1999?

1999 would have been such a horrible year to put all of your chips in. 15 years to see a return.

Jay-Z weed SPAC y/n

i know this was a year ago but

1999 would have been such a horrible year to put all of your chips in. 15 years to see a return.

― say it with sausages (Sufjan Grafton), Thursday, March 21, 2019 6:20 PM (one year ago) bookmarkflaglink

it was pretty bad! one year in 20 is this bad https://github.com/zonination/investing

The only answer to that is you have to put your chips in gradually over time I guess.

No you just wait until the stock market is at it’s lowest point and about to go up. It’s easy.

Time to mortgage house, cars, even family members and put it all in AAPL. P/E ratio is 12.23 for the world's most successful company!

― Mr. Snrub, Sunday, August 23, 2015 11:48 AM (five years ago) bookmarkflaglink

Up 411% since this post, nbd.

couldn't have predicted in 2015 that apple was going to be successful

whaddya got now snrub?

The stock market is easy. Just buy reasonably successful companies and never ever ever ever ever sell until your son goes to college.

AAPL has been the worst since it split.

Learning the wrong lesson here. Bought stock last week for the first time in my life (outside of a 401k from a past job) and am up 5%+ one week later (did Sonos, Shopify, and Redfin).

Wait, what is the wrong lesson?

xxp what if you're ready to retire? the stock market feels like a giant bubble right now

Oh, if it’s always been instilled in me that the stock market is gambling, it’s like having a good first hour in the casino and feeling guilty about it. But if I just hang onto those three for a long while...

"Casino" was always a flawed metaphor for the stock market. Casinos are rigged so that you virtually always lose money if you play long enough. The stock market isn't necessarily like that -- historically if you ride the market long enough and are broadly invested enough (e.g. in an index fund or a broad basket of stocks) you make money. But if you think of the market as a baseline, trying to pick individual stocks tends to be a losing proposition in *relative* terms, because you will virtually always underperform the market in the long run, especially when factoring in transaction costs (although IDK how no-fee trading is going to impact that in the long run if it survives). So basically you "lose" in the sense that by actively trading you are actually doing worse than if you just passively invested.

And that's also part of why active trading is both addictive and deceptive -- my dad used to say "When the market is going up, everyone is a genius." You pick stocks, they go up, wow, you were right! You know what you're doing! But most likely you got lucky, and that luck was probably magnified by the overall direction of the market at that moment.

Stuff like Gamestop is a lot closer to reckless gambling because it's not really based on anything except hope.

When people do anything that they just decide to jump into emotionally, it usually ends badly.

Haircuts!

look out below

-0.7% hardly worth a revive lads

horse track betting is not a perfect analogy but much closer to the stock market than casino gambling, in that there is a knowledge base and experience that can help you be more successful than the people who come out once a year to the track

Bought stock last week for the first time in my life (outside of a 401k from a past job)

Were you actively managing the 401k holdings ... or was it just one of those things where the company just did it for you? Granted there are certain things you can do in a regular brokerage account that you can't do in a retirement account but ... it's pretty much the same.

i love having a perishingly small value of stocks and looking at the app and seeing "today's return $0.50"

the second best thing i did all year, after Gamestop, was shorting the shit out of TSLA last Friday.

Were you actively managing the 401k holdings ... or was it just one of those things where the company just did it for you?

I set up the allocations while I was still at the job and have pretty much left it alone. I also used to copy-edit both equity research and bond-ratings research but never invested outside of setting up that allocation (Gen X artist values, lol).

Meanwhile, with those stocks above I’ve gained 10% so far, thanks mostly to Sonos being 30% of my portfolio), even with today’s correction. Two of the four report tomorrow (TJX and Redfin).

I generally stay away from retail companies -- "consumer discretionary" -- e.g. TJX -- because of how the economy and capitalism has "evolved" over the past 30+ years, but maybe it's undervalued? idk ... I'm sitting on some commercial real estate companies that at the time I thought were a solid investment, but that was pre-covid.

TJX was based on going into HomeGoods for the first time last year, and literally anytime I’m in there — no matter the hour or day — at least 10 people are in line for the registers. And Marshall’s as well: never seen one without a line. Which makes me think there might be something about the thrift-store-like scavenging that is an in-person experience that isn’t the same online. (None of this has to do with its current value, and I did read some research, but that was the instinct behind it.)

xp to self: but for now, I'm going to hold onto them with the rationale that rich property speculators and the people that make money off of them (e.g. mortgage holding companies) are going to get rewarded by the US Government because our country sucks like that.

Commercial real estate seems like such an unknown now, as far as how office life is going to change, but assuming the rewards are coming either way makes sense.

i love having a perishingly small value of stocks and looking at the app and seeing "today's return $0.50"

― himpathy with the devil (jim in vancouver), Tuesday, February 23, 2021 9:44 AM (five hours ago) bookmarkflaglink

up another $2 since this.

https://i2-prod.dailyrecord.co.uk/incoming/article10126257.ece/ALTERNATES/s810/MDthen-2.jpg

being flat is better than being down.