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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?

#521

Post by lumost »

tinco wrote: post #457
jjoonathan wrote: post #117

Earlier quoted context omitted.

Yes. I'm sure plenty of Theranos / WeWork style opportunities will emerge to pick up the slack. It's a fundamental problem of capitalism: the market's notion of "value" is weighted by wealth, without growth to stir things up wealth concentrates, and those looking to create value are increasingly forced to search for marginal "rich people problems" rather than tackle obvious "poor people problems." You wind up in a pa…

Neither Theranos nor WeWork were trying to solve rich people problems.

arguably, they solved a problem of where to stick money to try and get a greater than x% return. To do so both companies took on insane levels of risk by trying to solve impossible business/science problems on the basis that they could maybe just spend enough money and fake it till they made it. In WeWork's case some rational investors may have thought that they'd end up with a monopoly on B-tier office space as a failure mode.

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

#522

Post by bagacrap »

mancerayder wrote: post #240
d_burfoot wrote: post #178

I work at a big tech company. One of the big realizations we've made is that WFH is not killing our productivity - it may actually be increasing it. If that is widely true, it has huge implications, and points towards an enormous amount of value that can be unlocked, by allowing professionals to work wherever they want (presumably in lower CoL locales). This article indicates that the housing crisis costs the US econ…

I don't know. I work in tech and almost everyone I know is finding themselves less productive and can't wait to get back to the office. Maybe because most of us live in an apartments and not magestic houses with woods or lakes behind them, and the feeling of being trapped indoors is neither healthy nor pushes one to work more effectively. My PC is in my living room and I'm on it, in the same seat, at the same desk, u…

Indeed, the home office space is important If you had a permanent work from home option, you might rent an apartment with some office space, and renting a 2 bedroom somewhere that is not SF is probably still cheaper than a studio in the city.

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

#523

Post by [deleted] »

tinco wrote: post #457
jjoonathan wrote: post #117

Earlier quoted context omitted.

Yes. I'm sure plenty of Theranos / WeWork style opportunities will emerge to pick up the slack. It's a fundamental problem of capitalism: the market's notion of "value" is weighted by wealth, without growth to stir things up wealth concentrates, and those looking to create value are increasingly forced to search for marginal "rich people problems" rather than tackle obvious "poor people problems." You wind up in a pa…

Neither Theranos nor WeWork were trying to solve rich people problems.

[deleted]

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

#524

Post by icedchai »

kelnos wrote: post #251
magicsmoke wrote: post #9

> And as has often been the case in recent years, investors find themselves faced with few attractive alternatives if they opt out of betting on stocks. The problem is so familiar it has its own acronym: TINA, or There Is No Alternative to stocks. Cash: Gets eaten away by inflation. Although the CPI doesn't indicate high inflation it only measures consumer goods. Inflation is there in the price of investments. If you…

Corporate bonds are... interesting... now. I've been looking at airline bonds that mature in the next 6 to 18 months. Quite a few of them have yields-to-maturity north of 7%. I figure airline bonds aren't super risky (at least for the majors in the US), since the US gov't will prop them up until the end of time. Some of these aren't rated investment-grade anymore, but I don't particularly trust the ratings to be all…

I suspect many airlines will go bust before this is done. Not all of them. A few are going to come back strong. You could diversify, buy JETS (airline ETF.)

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

#525

Post by smegma2 »

zapita wrote: post #358
peterangular wrote: post #238

Earlier quoted context omitted.

> or envision themselves as (somehow!) becoming part of the top 10% I don't disagree with you but want to add some insight to this... My entire life I've been told the lie that if I "just work harder" I can be rich etc. Most of America thinks about themselves in this same way, and it's taken me years of traditional employment + risky startup opportunities to realize that no, success is not guaranteed if you "just wor…

I think you defined perfectly the defining problem of this generation in the US: nepotism. It is the root cause of so many structural problems that we see as unrelated. In particular the failure of the press to do their job and hold the powerful accountable. Not so easy when you went to the same school as them; got an internship thanks to them; were at a NYC roof party with them last week. Positions once available to…

Of all things, nepotism seems like an odd thing to single out. Do you have any numbers for this claim? It would be useful to hear e.g. what percentage of people secure positions through referrals/family members.

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

#526

Post by mirimir »

> Gains in U.S. stocks accelerated Friday after April’s nonfarm payrolls report showed unemployment rose to 14.7%, the highest level on record.

Aren't stock prices generally proportional to unemployment level? Maybe because low unemployment pushes wages up?

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

#527

Post by Consultant32452 »

peterangular wrote: post #513
Consultant32452 wrote: post #491

Earlier quoted context omitted.

I expect about 0% of people to go from the bottom level position at Taco Bell directly to owning one. But I'm sure you're smart enough to have known that. So why did you feel it would be useful to frame the scenario in such a disingenuous way?

I am 100% dialing it back in good-faith to explain why I just framed it as you put it. 1. I read tinco's comment to state (paraphrasing): "it is difficult to start a business, and for the common person it is a game of chance." Which, I absolutely agree with when I measure it against my life experiences/knowledge. 2. You replied with two questions, also paraphrasing: "It's a lottery to work at Taco Bell?", and, "And a…

I told the story of one person I knew who started working at Taco Bell in high school and then worked his way up to eventually owning a few of them.

The response to that was, "Well, just a lottery winner" with no argument whatsoever. How can you have taken that seriously?

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

#528

Post by icedchai »

refurb wrote: post #381
mobilefriendly wrote: post #91

Earlier quoted context omitted.

There's a gap between those folks, though, and the median household which earns $63,000 a year but has almost no savings or stock holdings. The median household wealth is $100,000 and that's almost all housing.

I know plenty of middle class people who stay away from stocks - they don't understand them and view them as very risky investments. They stick with bonds and such.

The sad truth is many folks are afraid of investing. Much of the financial services industry is built off this. How many financial advisor offices do you see around? Instead of educating themselves, they'd rather pay a "professional" who often does no better than they'd do themselves if they just stuck to simple index funds.

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

#529

Post by NotSammyHagar »

zelias wrote: post #498
CamperBob2 wrote: post #482

Earlier quoted context omitted.

How is that any different from the proposition offered by your local Mafia muscle?

All governments are Mafias to some extent. That's what it means to have police. The difference is that we expect the government to leverage its Mafia-like power in a manner that best suits its citizens.

That seems like an unfair comparison. The govt has courts that can overturn it. Before trump we didn't have the whim on the executive.

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

#530

Post by peterangular »

icedchai wrote: post #509
peterangular wrote: post #477

Earlier quoted context omitted.

"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,…

"Self made" is an over-simplification of a complicated process... one which you impressively admit you've achieved. Which, 100% - that is amazing, and you should be proud of your accomplishments.

My definition of "self made" is not important, my point is that everyone's definition is going to be different.

Here's the thing - I have no idea who you are, what your history is, and I can't make a single comment on the validity of how you got from point A to point B... that is outside of the above compliment really.

What I will tell you is that my anecdotal experience is that no one is out there admitting, "OH YEAH, my parents totally dropped $120k on my education, bought all of my cars, paid my rent, and gave me a free-reign credit card into my 30's." and ironically... I've ran into a TON of those people who self-identify as "self made" which is why I don't take the term seriously and see it as 100% subjective.

TLDR: "self made" is subjective as all heck. I can't comment on your life man - I have no idea who you are. I stand by my original comment that things are getting more difficult in regards to building wealth from nothing. I got snarky against a comment that seemed to just posit a book from the 90's as the entire content of a reply as if that's valid to any conversation.

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