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Why is the stock market rallying when the economy is so bad?

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Re: Why is the stock market rallying when the economy is so bad?

#501

Post by WalterBright »

nthj wrote: post #463
WalterBright wrote: post #365

Earlier quoted context omitted.

It's not about working hard, it's about working smart (i.e. choosing the right things to work on).

Also, part of working smart is owning meaningful equity in a business likely to generate meaningful returns. Startups are high risk, high reward, and if the GP doesn't care for how their luck has played out at startups, there are many other lower-risk opportunities to build equity: writing books, teaching, consulting, a bootstrapped SAAS app... and plenty more outside of the software engineering landscape.

> owning meaningful equity in a business likely to generate meaningful returns

That's exactly what the stock market provides an opportunity to do.

Re: Why is the stock market rallying when the economy is so bad?

#502

Post by mrtnmcc »

eanzenberg wrote: post #458
tinco wrote: post #443

Earlier quoted context omitted.

I think you're overestimating the value of high intelligence. I don't believe we have any accurate means of identifying potent leaders, not even a 10% slice they might belong to.

Strip the wealthy if their wealth and most will probably become wealthy again. If you don’t call it intelligence what would you call it.

Brand recognition

Re: Why is the stock market rallying when the economy is so bad?

#503

Post by jkhdigital »

eanzenberg wrote: post #455
listenallyall wrote: post #428

Earlier quoted context omitted.

>> a stock market crash would blow up a lot of retirement planning The low interest rates we've experienced over the last decade, which have only gotten lower as of late, have actually blown up retirement plans. Used to be, $500,000 saved at 8% meant you could retire off the $40k interest + social security. It also meant that growing a savings account into $500,000 was not out of reach, even on a modest income. This…

Which is a good thing to me. I’d rather people “work” to earn rather than easily collecting rent through interest. Work in quotes since applying capital in risky investments is work compared to stashing money in an interest bearing account.

I think you would benefit from a course in how capital markets work.

Re: Why is the stock market rallying when the economy is so bad?

#504

Post by harimau777 »

Consultant32452 wrote: post #379
coliveira wrote: post #370

Earlier quoted context omitted.

The issue is not that these cases exist, but that they are sold as being the standard, which they're clearly not. To became wealthy coming from a poor background requires a lot of effort, sense of opportunity, and frankly, luck. But all this is sold as something at grasp to anyone in this country, which is clearly false.

Of course luck plays a role in everything. It's merely luck that I've never been run over by a bus, or any number of other problems. But can you help me understand how a lot of effort and a sense of opportunity is not available to the common person?

The amount of opportunity available to a given person can vary greatly. For example, one person could have college paid for by parents, another could work to pay for college, and another could not have the opportunity to work to pay for college (e.g. perhaps they are taking care of younger siblings or sick family members).

Available effort could likewise vary. For example, someone with a disability might have much less effort available or their effort may be significantly less efficient. Someone who has to expend a great deal of effort on other matters (e.g. providing for basic needs, self protection, caring for others, etc.) may have less effort to expend towards things like career advancement or education.

The argument as I see it is that a person expending a roughly average amount of effort should be able to achieve a reasonable quality of life with the luck and opportunities that are available to them. (There will of course always be some variance in the effort required and the outcome received, but that's fine as long as it stays within a reasonable distance of this goal.)

The increasing anger over inequality seems to me to be because people are being asked to give above average effort (e.g. working multiple or demeaning jobs) in exchange for a low quality of life (e.g. difficulty affording healthcare, housing, retirement, raising a family, etc.).

Re: Why is the stock market rallying when the economy is so bad?

#505

Post by harimau777 »

eanzenberg wrote: post #458
tinco wrote: post #443

Earlier quoted context omitted.

I think you're overestimating the value of high intelligence. I don't believe we have any accurate means of identifying potent leaders, not even a 10% slice they might belong to.

Strip the wealthy if their wealth and most will probably become wealthy again. If you don’t call it intelligence what would you call it.

I think that's likely untrue if you include connections, training, and education in your definition of wealth.

Re: Why is the stock market rallying when the economy is so bad?

#506

Post by eanzenberg »

kalleboo wrote: post #465
eanzenberg wrote: post #456

Earlier quoted context omitted.

The top 1% pay something like half our taxes. What share do you think is fairer?

It should be in proportion to how many % of the wealth they own. So more like 90%

The 1% earn 36% of the income[1] as of 2016, and pay 37% of the taxes[2]. Everyone happy now?

[1] https://www.cbpp.org/research/poverty-and-inequality/a-guide...

[2] https://taxfoundation.org/summary-latest-federal-income-tax-...

Re: Why is the stock market rallying when the economy is so bad?

#507

Post by scarface74 »

coliveira wrote: post #394
lotsofpulp wrote: post #205

Earlier quoted context omitted.

Guillotines might have worked well in the past, but with modern weapons and technology, you can use a much smaller portion of the population to suppress a much larger portion of the population. You can pay 10% of the population well enough that they support the top 0.01%, and the top 10% can pay the next 20% to 30% well enough or provide a sufficient probability to move up (or illusion) that they are incentivized to…

Missiles are similar weapons may be useful against other countries (remember Vietnam, however), but they will not stop revolts inside the country itself. What would the US government do if 80% of the city of New York decided to turn against the government? Throw an atomic bomb in the city? Their time may be running out.

It’s not like police haven’t resorted to bombing its own citizens before.

https://www.vox.com/the-highlight/2019/8/8/20747198/philadel...

The entire Civil Rights movement is littered with examples of a police state and civilian mobs shooting, lynching, using dogs, water hoses, etc against its own citizens. It doesn’t take much to rile people up against “them” and get people to look the other way or even participate.

Re: Why is the stock market rallying when the economy is so bad?

#508

Post by WalterBright »

aeturnum wrote: post #437
WalterBright wrote: post #403

Earlier quoted context omitted.

The point is they are participating in the stock market and benefiting from its gains.

I mean, if 0.1% of your savings is in the market, you're "participating" in some sense, but not with any real impact. My sense is that, for the great majority of people in the United States, the stock market's value doubling would mean little for their financial health. Having a retirement fund that goes from $10,000 to $20,000 (or even $100,000 to $200,000) has a relatively small impact on the prospect of retiring […

> if 0.1% of your savings is in the market

That means you chose not to participate in the market, not that you were prevented. In which case I can't accept grousing about not getting the gains from investing in the market.

> retirement-calculator

Use it. It'll show how much you need to invest monthly to retire a millionaire. Your money will do a lot better than double.

Re: Why is the stock market rallying when the economy is so bad?

#509

Post by icedchai »

peterangular wrote: post #477
WalterBright wrote: post #367

Earlier quoted context omitted.

> nepotism 85% of American millionaires are self-made. "The Millionaire Next Door" by Stanley

"The Millionaire Next Door" was published in 1996 when the economy was booming, the dot-com bubble had yet to burst, and the employment market meant anyone slightly skilled could get a FT+benefits career. In the 24 years since that book's publishing I absolutely argue that ladder has become more difficult to climb. But hey - what do I know? I'm just a lazy millennial who's now living through his second major recessio…

What does self made mean to you?

I read that book when I was in my early 20's. I followed all of its advice, which basically comes down to "live below your means, save, and invest." The truth is I was already following it anyway. My parents lived below their means, and my dad taught me about investing when I was a teenager.

Every generation has recessions to deal with. By the time I was in my mid 30's, I was, indeed, the millionaire next door, though just barely. This was despite the dot-com crash and the great recession...

Re: Why is the stock market rallying when the economy is so bad?

#510

Post by WalterBright »

anonytrary wrote: post #492
WalterBright wrote: post #351

Earlier quoted context omitted.

> the richest 10% of America owns 86% of its stocks I don't buy that, as a much larger percentage of stock ownership is pension plans, where ordinary people indirectly own stock.

I would bet that the majority of Americans do not even have 401k plans or pension plans, and those that do have very little money allocated in them.

> I would bet that the majority of Americans

No need to guess. Google is just a quick click away!

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