Stocks Off Sharply as Market Upheaval Grows • Hacker News Board

Re: Stocks Off Sharply as Market Upheaval Grows

#381

Post by eli_gottlieb » Mon, Aug 24, 2015, 11:43 PM UTC

fweespeech wrote: post #189

dataker wrote: post #132

Earlier quoted context omitted.

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

Honestly, I don't think you have a clue what you are talking about. You aren't wrong, per-say, you just list all things that have literally 0 to do with the actual problems. Its a very common political trick for an ideologue like yourself to grab a bunch of things they think are bad and argue they are the cause of all your ills. You are approaching things from a "this is good for people, it must be good for the count…

>> A vanishing middle-class is not healthy.

>By that logic, the US economy has in the shitter since the 1980s.

Yes, and?

Re: Stocks Off Sharply as Market Upheaval Grows

#382

Post by carsongross » Mon, Aug 24, 2015, 11:48 PM UTC

MCRed wrote: post #44

kchoudhu wrote: post #37

Oh look, an opportunity to buy.

Warren Buffett says "If you're buying hamburger your whole life, do you want the price to be low or high?" For me, the situation is such a mess that I don't think we're close yet to what I would consider a buying opportunity. One saying is "buy when there's blood in the streets"... but I don't think we're there yet. Downvoted and slow banned. Why do I even contribute to this site?

I know, anything even remotely non-permabull is nuked for bad feels about The Strongest Economy In Years.

Alright, as a fellow traveller, let me help you. I'm going to make some observations and then give you my magic key to dealing with this market:

- Picking individual stocks is very difficult unless you are Buffett-tier

- The low-cost index funders have a very strong argument

- That being said, there are obvious long term momentum trends in the broad market, the efficient market guys are a joke

- Daily and even weekly movements have too much noise to be worth looking at

- Monthly is actually pretty good though

- Sitting in cash for any extended period is almost impossible for most investors and flat out impossible for funds (competitive advantage alert!)

So, putting that all together, you have the following thought:

"What if do index investing and I use momentum measurements of the broad market on a monthly basis to try to avoid the shit-show pullbacks."

I use the monthly MACD of the S&P 500, and it has worked very well: invest when MACD is positive, get more conservative as it goes to zero, start selling when it goes negative, sit in cash and wait for the faster moving average to reverse on a monthly basis.

No one believes me, and you shouldn't either. But there it is.

Re: Stocks Off Sharply as Market Upheaval Grows

#383

Post by dragonwriter » Mon, Aug 24, 2015, 11:49 PM UTC

gmarx wrote: post #153

dataker wrote: post #14

I'm assuming the Fed will not raise interest rates now.

The answer (pains me to say it) is, if anything, government spending. This was actually the answer after the financial crisis too. We have come to depend far too much on monetary stimulus relative to fiscal stimulus.

> The answer (pains me to say it) is, if anything, government spending.

That's not something the Fed can do.

That's something Congress can (in theory) do, but hasn't shown much interest in doing.

> We have come to depend far too much on monetary stimulus relative to fiscal stimulus.

I don't think anyone has a preference for monetary stimulus so much as the fact that the only place where there are sufficient people with interest in stimulus to effect anything is at the Fed, where the only lever they have is monetary stimulus.

Re: Stocks Off Sharply as Market Upheaval Grows

#384

Post by busyant » Tue, Aug 25, 2015, 12:14 AM UTC

rsmckinney wrote: post #183

acjohnson55 wrote: post #152

A whole lot of aphorisms in this commentary about falling knives and dead cats, but very little actual information. If you're trying to time the bottom you may as well take your money to the blackjack table. The quants are probably going to make a bunch of money, but if you're just a regular person, you should probably just continue making your regularly scheduled 401k contributions and diversified investments. Histo…

"Historically speaking" Historically speaking, when has the Fed kept interest rates at ZERO for 7 years? After pumping QE full throttle at $80B/mo? The economy has been in continuous "recovery" mode since '08, but not much has actually recovered. The market is going to collapse my friend because, historically speaking, we are in dark, uncharted territory and have lost our way back.

> The market is going to collapse my friend ....

Put your $ where your mouth is.

Re: Stocks Off Sharply as Market Upheaval Grows

#385

Post by ap22213 » Tue, Aug 25, 2015, 12:41 AM UTC

plg wrote: post #269

Unless you need to take your money out in the next couple of months (or unless you are facing a margin call) why not consider this as a fire sale? Your favourite stocks and mutual funds, ON SALE!

Interestingly, the people I know who have had the most success in the markets (and who have been around for a while) have told me this, each independently.

I have taken their advice and have done quite well.

Re: Stocks Off Sharply as Market Upheaval Grows

#386

Post by rsmckinney » Tue, Aug 25, 2015, 1:22 AM UTC

AnimalMuppet wrote: post #245

rsmckinney wrote: post #231

Earlier quoted context omitted.

"Over"... i see no fat lady on stage

You see the Fed no longer pumping QE at $80B/month.

For now... QE 4 is coming, there is no doubt. It's the only tool in the chest. This time around though it won't be parked directly in the banks, but more likely it will be helicoptered directly to consumers, probably in the form of tax breaks, directly or indirectly. QE 4 will happen, but it still won't work of course because the economy sucks and people won't spend it, it will find its way back into the banks after all.

Re: Stocks Off Sharply as Market Upheaval Grows

#387

Post by rancur » Tue, Aug 25, 2015, 2:09 AM UTC

redwood wrote: post #340

rancur wrote: post #318

Earlier quoted context omitted.

> most people really shouldn't be paying attention eh, IDK about that. I was cooping at a company that bottomed to $2.50 ~February 2008. I had been reading everything I could get my hands on regarding the Fed, their history, and general fiscal policy. I had about $7k in cash I was planning to dump into the company's ticker. But in February, when it was $2.50, I wasn't quite confident of my analysis. In May or so I ha…

this is dangerous stuff because you're implying that a few success stories or missed opportunities are representative of what folks can expect

no...each should be very careful...in my case, I was dead right twice. The third was a wash, and is why I don't bother unless I'm 100% certain (which I wasn't, the third time)

Re: Stocks Off Sharply as Market Upheaval Grows

#388

Post by msandford » Tue, Aug 25, 2015, 2:10 AM UTC

lmm wrote: post #333

jbooth wrote: post #270

Earlier quoted context omitted.

People ARE buying federal bonds at that rate, right? You can find a figure for the sales, look at the yield curve, and quantify exactly how many people are acting that way with their own money (or how much money, at least). Looking at http://www.treasury.gov/resource-center/data-chart-center/in... , the yield for 10 years is actually more like 2%. Less than a year is very close to 0, so there are apparently a ton of…

There are a ton of people out there who will lend the fed money at that rate. But the fed is in a rather special position.

They're not loaning it to the Fed, they're borrowing it from the Fed and loaning it to the Treasury. By doing it this way everyone gets to pretend that the Fed isn't the entity buying government debt, and so it's not "monetizing the debt" and therefore -- somehow miraculously -- it isn't outright theft.

Ultimately though it's not as though banks are making the decision to loan to the Treasury at very low rates all by themselves. It was coordinated how the money flows would happen and it would do two things: allow the banks to repair their balance sheets through "free money" loans and also help the government out of a bind where there was nobody to buy their debt that they desperately needed in order to fund expansions of social services during the downturn.

Personally I think that it's pretty immoral to steal from savers to bail out borrowers, but that's because I'm a saver who's been locked out of the housing market by not having gotten in prior to prices going 2x, 3x, 5x or whatever. Ultimately I think the whole thing is going to end very badly, but of course I have no idea how long it'll take. It might take another 2-3 years, it might take another 20-30. No way to know how long the speculative mania will last.

Re: Stocks Off Sharply as Market Upheaval Grows

#389

Post by sokoloff » Tue, Aug 25, 2015, 2:14 AM UTC

IceColdCoder wrote: post #349

theseatoms wrote: post #330

Earlier quoted context omitted.

Weighted by what?

I was thinking of clustering. If you have a large group of people in a general income sub-group then it would weigh more than fewer people in another income subgroup. The point of weighing is that margin-based models depend heavily upon a large consumer base and only certain consumer bases are of any significant size.

So, in other words, just the average across the population?

Re: Stocks Off Sharply as Market Upheaval Grows

#390

Post by kragen » Tue, Aug 25, 2015, 2:16 AM UTC

ChuckMcM wrote: post #185

I find it fascinating how this discussion goes, Do we differentiate between "healthy" and "strong" ? The US economy is, as far as I can tell, tethered in a macroeconomic sense, to the bill of the very expensive land wars it recently fought. The cost to the economy both in terms of government spending and workforce depletion as national guard troops were mobilized for duty in Iraq and Afghanistan. American worker prod…

So let's follow up on the conclusion, now that you've gotten unreversed. Apple pays less for the phones and becomes more profitable. Foxconn or whoever sees a rise in demand due to their effectively-lower prices and has to raise the prices for the next contracts they sign with Apple and whoever else, but not enough to completely compensate for the lower RMB price, so Apple still wins. Foxconn wins too, since their volume and profit margin is higher than before. Who loses?

Well, Chinese consumers lose, because the phones Foxconn is assembling now cost more renminbi. Samsung (in Korea), TSMC (in Taiwan), and Intel (in the US and Israel) lose, because their competition in Mainland China was just able to lower their prices. In the long run, possibly Apple loses because Foxconn is in a better position to stop being a mere OEM and start competing with Apple directly, just as Microsoft did in the 1980s.

And that's why people have been worried about the RMB devaluation sparking a wave of currency devaluations as governments and central banks attempt to stay competitive with China by applying whatever leverage they have.