The Stock Market thread

[Vegas Vic]

The stock market is this close to setting another record -- the shortest bear market in history

[sterlingice]

I just don't get this in the least. Well, I guess I do if I just go "the stock market is not the economy"

SI

[RainMaker]

Originally Posted by sterlingice

I just don't get this in the least. Well, I guess I do if I just go "the stock market is not the economy"

SI

Give companies trillions of dollars and their stock will do well. Money printer has been on full blast for awhile now.

[sterlingice]

I know, I know - it's the corporate debt buyback and bailouts for companies, especially large ones, while the smaller ones get roasted.

It just seems odd as we have long equated the stock market with the economy - like batting average in baseball - not a perfect predictor and there are better stats - but there's some positive constellation.

SI

[Edward64]

Originally Posted by Gary Gorski

Splitting the stock makes it easier for small investors to buy in and then hopefully continue to push the price higher. It's much easier financially and mentally for an average person to buy a share at $100 than $400. I mean what regular person could afford a share in Berkshire Hathaway at $290k but if they had split the stock over and over again throughout time lots of us would buy in at $100 a share.

Nevermind, I saw Apple popped like 10% a couple Fri ago and still going strong now. I like this psychological (and artificial) uplift.

I said in another post, it took forever for Apple to be at 1T and now after 2-3 years they are within spitting distance of 2T. They look unstoppable right now. I think I have more than I should with Apple but I'll keep on rolling with them because I think the iPhone 12 and 5G will be a hit, especially since they will have lower cost models.

With that said, I am leaning towards Android this cycle. The Pixel 4a is probably all I need but Pixel 5 with (supposed) larger screen would be better.

[Edward64]

Originally Posted by sterlingice

I know, I know - it's the corporate debt buyback and bailouts for companies, especially large ones, while the smaller ones get roasted.

It just seems odd as we have long equated the stock market with the economy - like batting average in baseball - not a perfect predictor and there are better stats - but there's some positive constellation.

SI

I think the consensus is the stock market is "a leading indicator" of the economy.

I am worried there is some "irrational exuberance" going on because although I do see economy picking up and unemployment going down from the March-April shock, surely there is no reason to believe we should be at the near-high again.

[Edward64]

Was out for a couple weeks. Did my monthly investment xls and we are up 12% total so far. We continued 401k contributions all year and didn't sell any big positions (other than a smaller chunk in anticipation of college fees).

No surprise in retrospect, the thing I've noticed is my tech stocks (Apple, Amazon and lesser degree Google) have exceeded the market. My mutual funds/ETF that have more tech stocks have also exceeded the market. My other mutual funds/ETF (primarily dividend growth players) that are based off S&P and broader market are, of course, close to market returns.

Lessons learn this year is don't try to time the market, continue contributions, and get lucky with industry (tech).

[Arles]

I think there will be a bit of a reckoning in late Sept/early Oct. Octobers before the presidential election rarely do well in the market (market hates uncertainty). And if there's no upcoming vaccine, Biden wins or we have another relapse into more Covid cases - the market could pull back a bunch in November/December.

My plan is to get out of my shorter term call options by mid sept (maybe do some puts) and only be in long term stocks I like or 2021 options at that point (maybe for things like oil since the price is so cheap). But, I will try to make as much as I can through August.

[Edward64]

The case made is to not vote for a clean-sweep. Better to mix it up some as a check.

I'm thinking let's do a clean sweep for at least the initial 2 years to give Biden an opportunity to clean up & restore stuff.

https://www.marketwatch.com/story/he...?mod=home-page

So what’s a liberal to do?

“My strong suggestion is that if you vote Democrat for the Executive Branch (and you like your net worth), either don’t vote for the Senate and House, or vote the other party as a check on power,” Hayes said. “IF the tax policy changes as proposed, so will everyone’s retirement account value.”

He used this chart to show how, historically, a Democrat in the White House with a split Congress has delivered the best returns. A Republican sweep has been by far the worse scenario, though, as Hayes highlighted, that has a lot to do with the Great Depression:

[Arles]

Yeah, I think the sweet spot for the market is a somewhat moderate democrat president with a republican congress.

[Edward64]

Congrats Apple for being a $2T company.

Well deserved in IMO for changing the world with the new paradigm of smart phones, tablets (and lesser extent thin-and-light laptops) etc. and being the innovator for the past 13+ years that others follow.

Now please doing something with new tech on progressive glasses!

Keep up the upward trajectory.


And oh, welcome back bull market.

[NobodyHere]

I want to put more money into my index-based mutual fund, but I'm wary of buying stuff when it's at record highs.

[Edward64]

Originally Posted by NobodyHere

I want to put more money into my index-based mutual fund, but I'm wary of buying stuff when it's at record highs.

Assuming this is for the long term, lets say 5+ years. Few can time the market well and (none probably) can do it consistently. You may be concerned that the market drops after you buy or it could continue increasing. You may miss out on any gains.

So the idea is not to time the market and just invest your money into a diversified/index fund.

So do dollar cost averaging which is essentially buy over a period of months. As an example, if you have $6K, then buy $500 or $1,000 per month for the next 12 or 6 months. Most brokerage firms now don't charge for buying.

[Edward64]

Okay, I really want Amazon to declare a 4-for-1 split in September, then Google a 2-for-1 split in October, Microsoft in Nov and by then Tesla or Apple will be ready for another split in Dec.

Let's keep this Tech rally going.

[Edward64]

Somewhat troubling (but not unexpected) signs recently on layoffs.

• Coca-Cola -- 4,000 (but at least they are buyouts)
• MGM -- 18,000
• AA -- 19,000 furloughs/layoffs
• Salesforce - 1,000 to 2,000

It's just weird how resilient the stock market is. But Tech is leading the gains and that makes some sense.

[Hammer]

Got a pretty heavy holding in a U.S. Index Fund, heavily weighted with tech funds. Struggling to hold my nerve and not cut and run at this point after some great gains. But ultimately I probably will stay in. Trouble is you never know when to buy back in and can end up missing the boat.

[Galaril]

Originally Posted by Edward64

Okay, I really want Amazon to declare a 4-for-1 split in September, then Google a 2-for-1 split in October, Microsoft in Nov and by then Tesla or Apple will be ready for another split in Dec.

Let's keep this Tech rally going.

This entire market right now over the last two and half months is a mirage and we are going to see a plummet once the government can’t keep it propped up with large Corp debt buy back keeping it up.

[PilotMan]

Originally Posted by Galaril

This entire market right now over the last two and half months is a mirage and we are going to see a plummet once the government can’t keep it propped up with large Corp debt buy back keeping it up.

Which is why you're not seeing politicians do much right now. Both sides are waiting for the other to blink. I'd have to think that r's have more to lose at the moment because of the election. Time will tell, but about a month from now, when debates start, and there's 5 weeks until the election, we're either going to have a big stimulus brought to you by trump himself (of course) that will save the economy and possibly the world; or we're going to have nothing and it'll be starting to feel pretty damn sporty around here and fear will be setting in, people will start having that darting look in their eyes and lines will start to break.

[JPhillips]

Without another injection of cash from the federal government, there are going to be a lot more layoffs announced between now and the election.

[Vegas Vic]

I don't see how this is possible.

Aren't we in "the greatest recession since the Great Depression", or is that cliche the new replacement for "this is the most important election of our lifetime."?

[HerRealName]

Originally Posted by Vegas Vic

I don't see how this is possible.

Aren't we in "the greatest recession since the Great Depression", or is that cliche the new replacement for "this is the most important election of our lifetime."?

How can it be "the greatest recession since the Great Depression" when Trump "created the greatest economy in the world" and we will be "quickly returning to full employment"?

[albionmoonlight]

Originally Posted by HerRealName

How can it be "the greatest recession since the Great Depression" when Trump "created the greatest economy in the world" and we will be "quickly returning to full employment"?

Your mistake is in trying to connect words to reality.

Words mean what the GOP tells us they mean.

They need not mean what the GOP told us they meant yesterday.

They need not mean what the the GOP will say they mean tomorrow.

And they sure as hell don't need to have any connection to reality.

[sterlingice]

Originally Posted by Vegas Vic

I don't see how this is possible.

Aren't we in "the greatest recession since the Great Depression", or is that cliche the new replacement for "this is the most important election of our lifetime."?

How is what possible? High stock market while jobs are falling apart?

SI

[Edward64]

Originally Posted by Vegas Vic

I don't see how this is possible.

Aren't we in "the greatest recession since the Great Depression", or is that cliche the new replacement for "this is the most important election of our lifetime."?

Did Trump actually say greatest recession since the Great Depression or was it Dems?

Definitely in terms of 2Q unemployment but good chance it won't be as severe over a duration.

[Edward64]

Originally Posted by Galaril

This entire market right now over the last two and half months is a mirage and we are going to see a plummet once the government can’t keep it propped up with large Corp debt buy back keeping it up.

The saying is "never bet against the Fed".

Beats me what's going to happen next in the market, I certainly don't like the uncertainty of the 2nd stimulus but am somewhat optimistic as we'll hopefully have a boring moderate in office, vaccine/therapeutics are full-steam ahead and its only a matter of time. And tech seems immune to this uncertainty or its the default safe-harbor (vs bonds) nowadays.

But honestly, I can see how companies are going to take this opportunity to reduce and streamline workforce. So my guess is continued layoffs (not just furloughs) in the white collar ranks.

[Hammer]

Change my mind. I am pulling out today. Have to believe a 10% loss is more likely than a 10% gain at this point. 25% up in 3 months, don't want to let the greed eat my gains.

Going to keep a few funds here and there, but bailing on the U.S. for now. The gains have been too good.

[molson]

We've never relied on technology more, is it really that suspicious that those companies are killing it?

[Radii]

Originally Posted by Edward64

Did Trump actually say greatest recession since the Great Depression or was it Dems?

The IMF said it. https://blogs.imf.org/2020/04/14/the...at-depression/

No idea if that's the original source or if it's commenting on it, but yeah.

[Edward64]

I like the idea. I know its self-serving for Ackerman and $1M in 65 years won't be $1M today (if I did the calculation correctly, assuming 3% the NPV is $146,400).

https://www.marketwatch.com/story/bi...?mod=home-page

Bill Ackman has an idea for saving the system that made him a billionaire.

The Pershing Square Capital Management chairman told investors in a recent note that, in order to preserve capitalism, steps need to be taken to close the increasing inequality gap.

One possible measure: investment accounts for every child.

Under Ackman’s plan, each child born in the U.S. would receive $6,750 in a government-funded basket of index funds that could only be tapped at retirement. Assuming 8% returns over 65 years from birth to retirement, that total would ultimately exceed $1 million, and it would cost the government about $26 billion a year, if the birthrate holds.

If it actually does encourage more financial literacy, it's worth it. Not sure where the annual $26B will come from but I vote the increasing some tax on the financial industry because they will benefit the most.

He added that a government-led push for equities-investing accounts could “encourage greater financial literacy” and spread the stock-market’s gains across a wider swath of the U.S. population.

“Americans that have no ownership in the success of capitalism, and who are suffering economically, are more motivated to turn toward socialism or other alternatives,” he said in the note.

[Ksyrup]

Originally Posted by Galaril

This entire market right now over the last two and half months is a mirage and we are going to see a plummet once the government can’t keep it propped up with large Corp debt buy back keeping it up.

[bhlloy]

Originally Posted by molson

We've never relied on technology more, is it really that suspicious that those companies are killing it?

Truth. I still think there’s a bubble that is likely to burst that even the big tech companies won’t be able to survive without taking a massive hit. But if you look at what is doing well and why they are doing so well, I don’t think it’s a huge surprise. Look at Amazon and AWS for example.

[Ben E Lou]

It seems that some companies are doing well *because* they let people go, cut costs, and are therefore still turning a profit. Clearly that cycle can’t continue forever because eventually we reach a point where there aren’t enough consumers consuming, but evidently we’re not there yet.

[NobodyHere]

If you value your sanity do NOT look at the S&P today.

[Edward64]

Originally Posted by NobodyHere

If you value your sanity do NOT look at the S&P today.

Too late. Oh well, easy come easy go.

It'll go back up eventually.

[Edward64]

Originally Posted by Edward64

Somewhat troubling (but not unexpected) signs recently on layoffs.

• Coca-Cola -- 4,000 (but at least they are buyouts)
• MGM -- 18,000
• AA -- 19,000 furloughs/layoffs
• Salesforce - 1,000 to 2,000

It's just weird how resilient the stock market is. But Tech is leading the gains and that makes some sense.

Add

United -- 16,000 furloughs
Schlumberger - 21,000 layoffs (announced in July)

[Kodos]

I think this is healthy. There has been such a disconnect between the market and what's happening with employment / foreclosures / evictions / etc. I won't be surprised if we're at the start of another big drop.

[albionmoonlight]

I would feel more comfortable with a decline over the next few months. I'd like to see the air slowly come out of the balloon instead of a bubble bursting.

[Vegas Vic]

Down 3.5% today. Up 20% since September 3, 2019.

[Edward64]

Tech stocks got hammered !! Futures right now are showing about a -1.2% for Nasdaq and <.4% for Dow and S&P.

It would really suck to go into the holiday weekend with another major drop on Fri. Septembers are supposed to be a bad month for the market.

I'm "hodling" on.

[Julio Riddols]

Glad I swapped most of my holdings to UVXY yesterday morning. Might just leave it there because I think we're in for the wildest part of Mr. Toad's ride over the next 3 months +.

[Edward64]

Originally Posted by NobodyHere

If you value your sanity do NOT look at the S&P today.

Another fugly day especially for the Nasdaq (and Apple).

[Ben E Lou]

Originally Posted by Ben E Lou

It seems that some companies are doing well *because* they let people go, cut costs, and are therefore still turning a profit. Clearly that cycle can’t continue forever because eventually we reach a point where there aren’t enough consumers consuming, but evidently we’re not there yet.

This dummy needs to keep his thoughts to himself.

[Edward64]

Originally Posted by Edward64

Another fugly day especially for the Nasdaq (and Apple).

Only a 1.27% loss on the Nasdaq. Whew.

Apple and Tesla were both in the red in the morning when I checked but, surprise, they were in the black at the end of the day. Who knows what that all means but I'm glad Apple didn't take another shellacking 2 days in a row. Still above $2T market cap.

[Edward64]

Has not been a good 2 weeks.

Don't know about you guys but I ain't looking. I am sure my portfolio has been hammered.

Hopefully when the game of stimulus chicken ends and there is some relief, it'll get better.

[Edward64]

Easy come, easy go. Apple is no longer a $2T company. It's lost about $400B in under 3 weeks, down to about $1.8T right now. That's a Johnson & Johnson or Walmart or Proctor & Gamble gone in 3 weeks.

[sterlingice]

Almost as if this is all artificially propped up

SI

[albionmoonlight]

A slow steady decline of the market over the next 6-12 months, matched by a slow steady improvement of the actual economy over the next 6-12 months seems like the best way for them to come back into alignment. The alternative might be a 15% crash at some point that will be a lot worse for everyone.

[Edward64]

Ouch, ouch.

All I got to say is hurry up to the capitulation stage and let's go back up!

[Kodos]

I suspect we have more room to go down. Possibly a lot more.

[Arles]

A couple weeks ago I moved to almost entirely covered calls in my account. Great strategy for this chop fest. Whether your stocks go up or down - doesn't really matter if you don't sell them. Just keep selling out of the money premiums and let time decay and a choppy market work in your favor.