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Old 12-28-2021, 07:45 AM   #1151
Edward64
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Join Date: Oct 2005
Nice rally yesterday and futures are solidly up this morning, thank you Tech stocks. To simplify and rebalance for next year, I exchanged some MF, ETF, stocks for S&P 500 index.

At this stage of my life, the theory is some sort of bond allocation. But I'm pretty much all in on stocks. Looking forward to a great 2022 market.
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Old 12-29-2021, 08:02 AM   #1152
Edward64
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Crazy to think S&P 500 is up 29% YTD.
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Old 12-31-2021, 07:15 AM   #1153
Edward64
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Pelosi's husband has bought a bunch of call options (must be nice to have so much disposable income to "roll the dice"). Basically, he is positive on the markets/economy.

Pelosi's husband bought Google, Disney call options that would pay off if bull market continues - MarketWatch
Quote:
Pelosi, owner and operator of a San Francisco–based real estate and venture capital investment and consulting firm, purchased between $500,000 and $1 million in call options in Alphabet stock with a strike price of $2,000 and an expiration date of Sept. 16, 2022, about 30% below the closing price of the stock on Dec. 17, 2021, the day of the transaction, according to FactSet. He bought between $250,000 and $500,000 in call options in Micron shares with a strike price of $50 and an identical expiration date, about 45% below the closing price on Dec. 21, the day of the transaction.

The speaker’s husband also bought between $600,000 and $1.25 million in call options in Salesforce with a strike price of $210 and an expiration date of Jan. 20, 2023, about 15% below the stock’s closing price of $247.21 on the day of the transaction, Dec. 20. He bought between $100,000 and $250,000 in call options in Walt Disney shares with a strike price of $130 and an expiration date of Sept. 16, 2022, roughly 13% below the stock’s closing price of $148.76 on the day of the transaction, Dec. 17.
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Old 12-31-2021, 10:27 AM   #1154
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Funny how every single new market record meant the economy was booming trump, but how many did we have this year?
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Old 01-03-2022, 07:31 PM   #1155
Edward64
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Nice start to the year.
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Old 01-03-2022, 07:33 PM   #1156
Edward64
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I hope she gets the book thrown at her.

https://www.cnn.com/2022/01/03/tech/...ict/index.html
Quote:
The jury in the criminal trial of Elizabeth Holmes, the former CEO and founder of Theranos, has reached a verdict. Holmes was found guilty on four charges — three counts of wire fraud and one count of conspiracy to commit wire fraud. The jury returned no verdict on three counts of wire fraud. She was found not guilty on three additional charges of wire fraud.

Holmes faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and each conspiracy count.
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Old 01-03-2022, 07:54 PM   #1157
GrantDawg
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Isn't it interesting she was found guilty of fraud on investors, but not the charges of fraud on the patients? It is almost as if the laws are written to protect big money and not consumers.

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Old 01-05-2022, 04:08 PM   #1158
Kodos
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Rough day for the stock markets.
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Old 01-05-2022, 04:15 PM   #1159
NobodyHere
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Originally Posted by Kodos View Post
Rough day for the stock markets.

Did something happen at 2:00pm to cause the markets to sink?
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Old 01-09-2022, 07:49 AM   #1160
Edward64
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Did something happen at 2:00pm to cause the markets to sink?

The Fed said something implying less support and possibly quicker than expected. I think 3 interest rate hikes. Growth stocks (e.g. tech) are getting hit because higher interest rates would (theoretically) mean less/slower growth than what was already priced in. Also, I think it means the Fed sees inflation as possibly a "real" problem and needs to fight it.

I'm still heavily into the big tech growth stocks/funds (go Apple!). I think they'll continue to do okay. I'm out of the more speculative ones and moved quite a bit to boring S&P Index fund in Dec.

I am somewhat overweight negative right now on the markets 1H 2022 (but definitely don't short the markets because of me!). We'll still be struggling with inflation and significant supply chain issues this year ... it comes down to are they trending better, or still stuck in a quagmire and/or still trending down.
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Old 01-10-2022, 10:34 AM   #1161
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I am not liking this year so far.
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Old 01-10-2022, 11:59 AM   #1162
Lathum
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Not a big crypto guy but the sportsbook I use pays out in bitcoin. Thinking of putting 10K into bitcoin hoping it goes back up to 60K. That would net me 5K currently.
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Old 01-10-2022, 05:36 PM   #1163
Edward64
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I am not liking this year so far.

Same.

But at least Nasdaq had a great turnaround today.
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Old 01-14-2022, 06:35 AM   #1164
Edward64
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Another ouch of a day.

I'm overweight on tech & growth funds/ETFs, and looks like Nasdaq is taking more of a hit relatively speaking so I'm wincing. The theory is higher interest rates hurt growth companies more.

I'm all for increasing rates though. As I understand it, rates need to go up so the Fed has a viable weapon to use when economy needs a boost. The rates are so low now so not as much of ammo.

There's an article that ponders on risk of stagflation - economy slows down while inflation increases. Last time that happened was in the 70's so no real experience dealing with the realities of that.

EDIT: and futures this morning is looking fugly

Last edited by Edward64 : 01-14-2022 at 08:24 AM.
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Old Yesterday, 01:06 PM   #1165
fortheglory
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The truth is, you really need to be heavily invested in blue chippers as a long term investor. It's pretty much the only bonafide way to ensure you can sleep at night. lol
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Old Yesterday, 01:09 PM   #1166
fortheglory
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What the market needs is more republican representation in the federal government...as you can imagine, the uncertainty of where things are going is what creates much of the volatility. You may agree or disagree with my assessment, but just remember "perception is reality". That's just the truth of the world we live in.
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Old Yesterday, 03:28 PM   #1167
flere-imsaho
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For the sake of argument, let's consider the past 40 years, on the basis that (IMO) retail investing really took off for the first time in the 1980s and, perhaps more importantly, the last 40 years are more relevant to present day than, say, the 50 years following the Great Depression.



Source

If we look at Presidents with 8 year terms in that period, we have:

Clinton: 228.9%
Obama: 148.3%
Reagan: 147.3%
GW Bush: -26.5%

If we look at Presidents with 4 year terms and also performance of the 2 term Presidents in their first 4 years, we have:

Clinton: 105.8%
Obama: 73.2%
Trump: 50.9%
GHW Bush: 43.1%
Reagan: 35.8%
GW Bush: -3.7%


Superficially, we could probably conclude from the above data that Democratic Presidents are unambiguously good for the stock market. In reality, I think the narrative is more likely:

1. Reagan's deregulation and tax cuts led to a lot more money looking for investment, and this drove a historic rise in the stock market's value.
2. Clinton, as we know, adopted a pretty laissez-faire approach to economic issues (actually, IMO, pretty much all issues after the failures of his first year in office), so this run continued.
3. The bubble finally popped in 2001 (and recall, there were significant pullbacks before 9/11, so you can't blame 9/11 alone).
4. Bush tried to solve the above by doubling down on Reagan/GOP orthodoxy, which succeeded only in creating another bubble (housing) and a catastrophic crash in 2008.
5. Recovery began with TARP (passed mainly with Democratic votes, a majority of Republicans voted against) & ARRA (no GOP votes in the House, only 3 GOP votes in the Senate) under Obama but really gathered steam and was extended by the Fed pumping money into the economy (again, all that money needs to be invested somewhere).
6. Volatility increased under Trump, and before COVID the market rose ~40%, but with some serious pullbacks along the way and concern over, again, over-valuation (i.e. "bubble").


While I personally think Democratic economic policies are better for the economy & stock market in the long-term, especially as opposed to GOP "cut taxes and non-defense spending" orthodoxy (termed "voodoo economics" by Republican President George H.W. Bush), I think an objective conclusion on the above is that the politically schizophrenic approach to economic policy endemic to American politics creates an unavoidable boom-and-bust cycle that generally only favors the already-wealthy:

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Old Yesterday, 03:50 PM   #1168
flere-imsaho
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Quote:
Originally Posted by Edward64 View Post
I'm overweight on tech & growth funds/ETFs, and looks like Nasdaq is taking more of a hit relatively speaking so I'm wincing. The theory is higher interest rates hurt growth companies more.

The way I understand it (and the way I look at it from an investing standpoint) is that there's been a lot of money out there looking to be invested, due to things like tax cuts and the Fed pumping money into the economy. As an example, I read just the other day where Andressen Horwitz just raised $3B for new investment funds (which you know will be going into tech).

This investment money is looking for growth, which is why you see those stocks, especially, soaring (i.e. Nasdaq). You are correct that higher interest rates hurt growth companies more. The reason for this is that these growth companies will be taking advantage of low interest rates to leverage themselves and use that money for growth, be it investment, M&A, etc.... If higher interest rates are being telegraphed, then of course interest in those stocks will pull back.

I personally think this hits tech companies more because their price-to-earnings ratios tend to be pretty aggressive since investors are investing more on the basis of expected future vs. current earnings (note that the bubble run-ups are usually characterized by price-to-earnings ratios getting out of whack). And indeed tech companies' earning presentations often emphasize this concept strongly.


I'm not sure how you fix this. Venture funds seem perfectly fine to throw money at business models which do not seem at all sustainable (WeWork) or are downright fraudulent (Theranos), in part because venture funds can have 20 failures offset by one wild success. And the market follows the venture funds (at least for tech), compounding the problem.


I suppose we could require greater scrutiny around projections and restrictions around some of the more aggressive practices such as high-frequency trading and leveraged buyouts, but I'm not convinced placing more nanny controls on the market itself will pay dividends, so to speak. Plus, it's probably politically untenable.

Perhaps better to assume the wild & crazy capitalism comes with its share of fallout, and a compact between the market and the rest of society needs to be forged whereby better supports are put in place to save the common person from the fallout of spectacular failures (e.g. all the people laid off by the WeWork collapse, including the ancillary businesses supporting that model; all the people laid off when leveraged buyouts end up in bankruptcy, etc...). Put differently, if we want to preserve the ability of the 1% to take economic risks, we should require (say, through taxes & better social supports) a societal cushion for those who didn't sign up for a high-risk, high-reward economy.
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