Dow Hits 20000 for First Time • Hacker News Board

Re: Dow Hits 20000 for First Time

#141

Post by forgetsusername » Wed, Jan 25, 2017, 6:28 PM UTC

mooreds wrote: post #44

pilom wrote: post #2

So what? The Dow is a terrible indicator of even how well the stock market or the economy as a whole is doing. It is price weighted instead of market cap weighted so smaller companies that released fewer shares at a higher price have more impact on the Dow than larger companies. http://www.npr.org/sections/money/2017/01/04/508261371/episo...

This! So this! I wish that we could just drop the Dow entirely and focus on the more modern indices like the S&P. I understand it has historic significance, but let the DOW lie.

>I wish that we could just drop the Dow entirely and focus on the more modern indices like the S&P.

I don't get it. Is someone forcing "us" to use the DOW in some manner? It is what it is, use the information how you choose.

This reminds me of people who complain about how the BLS calculates specific measures of inflation or unemployment. They list their methodology. Either you find the information important and useful, or you can choose to ignore it. We don't have to "drop" anything.

Re: Dow Hits 20000 for First Time

#142

Post by forgetsusername » Wed, Jan 25, 2017, 6:33 PM UTC

xigency wrote: post #71

I understand that people believe Trump is good for business. And I also understand that people believe Trump is good for the rich. And I also understand that people believe Trump is good for the blue-collar worker. But I don't understand how Trump could be a good influence, in the long term, on business and the stock market, when looking at his positions and policy changes. Why Trump isn't good for poor working class…

>All in all, I'd like to hear what others think

I think that "command and control" and "free market" economies are the extremes of the spectrum, neither optimal, with lots of room in between.

Trump has talked a lot, but we don't know where he will actually fall, policy-wise. It's not out of the question he implements economically beneficial policies. We should judge what he does, not what he says.

Re: Dow Hits 20000 for First Time

#143

Post by [deleted] » Wed, Jan 25, 2017, 6:36 PM UTC

jjawssd wrote: post #132

harryjo wrote: post #64

Earlier quoted context omitted.

Let's see which regulations get cut first. So far, it's not the government contracting regulations. Bonus: when Trump "freezes the size of Federal employment" do you think that will be match by a freeze in contracting, or a boost in crony contracts?

What I learned reading The Art of The Deal is his MO: Trump: "I have a problem (e.g. Wollman Ice Rink) but know nothing about this topic. Who is the best company that makes ice rinks?" Makes a few calls to hockey teams to find this information. Learns the name of the company. Calls CEO of the ice rink company. After 15 mins of conversation, learns that freon-based ice rinks suck the monkey and that brine-based ones l…

[deleted]

Re: Dow Hits 20000 for First Time

#144

Post by celticninja » Wed, Jan 25, 2017, 6:38 PM UTC

jjawssd wrote: post #136

celticninja wrote: post #93

Earlier quoted context omitted.

Stuff still needs to get done, so a hiring freeze means needing a workaround, they will find money for contractors because it is seen as a limited time expense, even though it is probably 3x or 4x more expensive over the long term. When they tell you they cut the size of government they won't tell you that government costs went up, or they will tell you government payroll is down and contractors get costed as somethi…

"3x or 4x more expensive over the long term" And that's where you're wrong. If done right, 3x to 4x more expensive up front and less TCO in the long run.

In software it never works like that. Costs more to build it with contractors and then because you get rid of the contractors support is done by people unfamiliar with the code so support costs more, upgrades cost more because new contractors need time to learn the codebase or the old contractors charge more because they know the codebase.

Re: Dow Hits 20000 for First Time

#145

Post by coldtea » Wed, Jan 25, 2017, 6:40 PM UTC

benjanik wrote: post #52

coldtea wrote: post #24

Earlier quoted context omitted.

> But 20k dow says nothing more about the state of the economy than the 19.9 dow did a few days ago. It's not the 20k vs 19.9 it's a) the record high, b) the upward trend.

But we won't be celebrating 20.1k in the same way.

Which makes sense, because even if a value is continuous and its rise monotonic, you obviously can't celebrate all the time.

Having some milestones to pause and ponder along the way makes sense.

Re: Dow Hits 20000 for First Time

#146

Post by [deleted] » Wed, Jan 25, 2017, 6:40 PM UTC

wtvanhest wrote: post #121

bamdadd wrote: post #58

Listen to this episode of Planet money in 2013: Despite all the celebration, the Dow Jones industrial average has not hit record highs recently. If you adjust for inflation, the highs just aren't as high as they seem. And even if it does hit a real, inflation-adjusted high in the next few weeks, it won't mean much. The Dow is a seriously flawed stock index, and it's certainly not a good way to measure what's going on…

Yes, the dow is a flawed index. That said, the S&P 500 & Russell 1000 are also at all time highs. https://www.google.com/finance?q=INDEXSP%3A.INX&ei=6-KIWNi7K... https://www.google.com/finance?q=INDEXRUSSELL%3ARUI&ei=8eKIW... None of these data points mean anything on their own. People that look at a chart a conclude anything at all are not doing enough analysis.

[deleted]

Re: Dow Hits 20000 for First Time

#147

Post by i_cant_speel » Wed, Jan 25, 2017, 6:42 PM UTC

bamdadd wrote: post #58

Listen to this episode of Planet money in 2013: Despite all the celebration, the Dow Jones industrial average has not hit record highs recently. If you adjust for inflation, the highs just aren't as high as they seem. And even if it does hit a real, inflation-adjusted high in the next few weeks, it won't mean much. The Dow is a seriously flawed stock index, and it's certainly not a good way to measure what's going on…

I listened to that podcast when it got rebroadcasted. Even the people who are in charge of the Dow admit it's not a great tool for measuring the economy. They don't change it because the only thing it has going for it is the fact that the algorithm has been around for over a century. If they changed it, they wouldn't gain much and they would lose the only thing it has going for it, which is its standing as the oldest economic measurement used today.

Re: Dow Hits 20000 for First Time

#148

Post by [deleted] » Wed, Jan 25, 2017, 6:42 PM UTC

wtvanhest wrote: post #121

bamdadd wrote: post #58

Listen to this episode of Planet money in 2013: Despite all the celebration, the Dow Jones industrial average has not hit record highs recently. If you adjust for inflation, the highs just aren't as high as they seem. And even if it does hit a real, inflation-adjusted high in the next few weeks, it won't mean much. The Dow is a seriously flawed stock index, and it's certainly not a good way to measure what's going on…

Yes, the dow is a flawed index. That said, the S&P 500 & Russell 1000 are also at all time highs. https://www.google.com/finance?q=INDEXSP%3A.INX&ei=6-KIWNi7K... https://www.google.com/finance?q=INDEXRUSSELL%3ARUI&ei=8eKIW... None of these data points mean anything on their own. People that look at a chart a conclude anything at all are not doing enough analysis.

[deleted]

Re: Dow Hits 20000 for First Time

#149

Post by crusso » Wed, Jan 25, 2017, 6:43 PM UTC

crisnoble wrote: post #122

crusso wrote: post #107

Earlier quoted context omitted.

The pipeline will create jobs and decrease fuel costs (pro business and worker). Freezing federal hiring will decrease the tax and regulatory load shouldered by everyone (pro business and worker). The ACA was shown to have been sold to the workers based upon lies regarding costs and access to their doctors. It's imploding under its own weight. Further, if the ACA benefits anyone, it benefits people who don't work but…

Freezing federal hiring literally will cost jobs, so is in no way pro worker. Employees of the government are workers too. The ACA benefits my wife who was able to quit her job to start a business without worrying about being denied healthcare for her pre-existing condition. The ACA benefits all workers in businesses who now are required to offer healthcare plans which meet a minimum standard. Workers will not benefi…

Government jobs are paid for through taxation. Taxation is a form of theft and at best should be considered a necessary evil for running the government that everyone agreed to - as outlined in the Constitution. The Constitution never allowed for the massive Federal work force we have. It's a bit of a leviathan that needs to be reduced.

Sure, the ACA has some short-term, especially anecdotal benefits. I'm glad your wife was able to use it productively while it was available to her... but the ACA is loaded up with give-aways paid for with other people's money - so it's unsurprising that there are some who think it's a good deal for them.

If I give you my neighbor's big-screen TV, I'm sure you'd have a great story about getting a big-screen TV. But you aren't the only party in that transaction.

Long term, the system set up by the ACA is collapsing. Insurers are fleeing from the markets because they don't make economic sense without ever increasing government subsidies to the industry.

Worse, the big promise of the ACA was that it would lower costs for everyone without changing their doctor-patient relationships. Those were lies. Not just mistakes, but pre-meditated and documented lies.

Re: Dow Hits 20000 for First Time

#150

Post by tinytim69 » Wed, Jan 25, 2017, 6:46 PM UTC

elastic_church wrote: post #56

tgb wrote: post #22

Earlier quoted context omitted.

I'm just a little confused about this though. If everyone thinks the market will decline due to Trump, then doesn't the market actually decline? What I'm saying is that apparently there were even more people making the opposite guess.

It is so so so much more nuanced than that. In one way, the more people that bought put protection on their stock portfolio created the bullish pressure that took weeks to unwind. (When you buy puts, the market maker is going long the stock as their own hedge. most akin to a bookie)

If you buy puts, MM sold puts and will sell shares against since he is holding a deltaLong position from selling his puts (he makes money if the underlying goes up and lose money if the underlying goes down (which is why you bought the put). To hedge that risk he would sell shares against the sold put so that the risk of the underlying move would be covered.