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The stock market and economy have parted ways

washingtonpost.com

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Re: The stock market and economy have parted ways

#181

Post by david927 »

adaisadais wrote: post #97

I spoke to my financial advisor a month ago and he told me he was not worried of a major and sustained drop as FED and Congressional intervention had helped curtail that before it spiraled out of hand. But I cannot help but see current market prices and see current for lease and boarded up building. I wonder if he was correct. I wonder if the advice he has given me is wrong? I believe we are about 9months away from t…

I think what most people don't realize is that the pandemic is more of the pin that is popping the bubble. Remember the Fed was dropping rates all last year like a lead balloon and injecting liquidity in massive way last fall -- all before the virus.

If Covid-19 goes away overnight, I don't see the economy recovering and I think the Fed's actions have been catastrophic for the US dollar. They're literally hitching the country's solvency to the market to save it. Maybe it will work, sure, but were a bit in uncharted territory so I don't see where the confidence is coming from. And by doing this they have to be right; they're making it their hill to die on. If they're wrong, America will become a very different place.

Re: The stock market and economy have parted ways

#182

Post by mD5pPxMcS6fVWKE »

hitpointdrew wrote: post #20

> “I’m not sure what will trigger a sustained sell-off in stocks, but surging [virus] infections and another round of more business closures will be difficult for investors to ignore much longer.” An alternative place to put investments will trigger it. When your options are savings accounts paying 0.25% interest, and treasury notes paying nothing, and CD's being garbage, what are your alternatives for investing? If…

So what, out of fear to earn too little interest (0.25%), risk to lose 50% of your investment? +0.25% looks better than -50% to me. Don't see a rational logic here. Though humans have been shown to be irrational, especially in a group.

Re: The stock market and economy have parted ways

#183

Post by secondcoming »

ogre_codes wrote: post #80
whatshisface wrote: post #63

Earlier quoted context omitted.

Expecting that you'll be able to trade gold for food is assuming that the state after the collapse will fall into a very narrow band of "collapsed enough that the financial system is gone" and "not so collapsed that the food supply is gone." You might even call it... the Goldilocks zone. ;)

And for that matter, assumes you will be able to find safe places to trade gold for anything. Unless we go back to a gold-rush style economy where there are scales all over the place you can trade gold by the gram, the smallest tradeable gold will be coins which are worth $1600+ each. Try taking that to the local grocery store.

Half Sovereigns are ~$300

https://www.atsbullion.com/gold-half-sovereign-coins/

Re: The stock market and economy have parted ways

#184

Post by [deleted] »

UncleOxidant wrote: post #51
DeonPenny wrote: post #26

Theres literally no where to put you money now. The stock market would be down if you could put money in any government bonds that you thought would immediately start increasing spending or any stock or bond market that would do any better. Emerging markets are shaky with China destroying HK and corona running through cities everywhere in the world. If you could even remotely tell me a safer place to get returns then…

As was commonly heard in '08: The time has come to worry about return of investment more than return on investment.

[deleted]

Re: The stock market and economy have parted ways

#185

Post by tomp »

cephaslr wrote: post #146
baron_harkonnen wrote: post #109

Earlier quoted context omitted.

I think you are absolutely correct and the reason that the stock market is being so weird is quite simply "what else are we doing to do with that money?" The solution for individuals: cash, gold, options, etc, aren't viable solutions for institutional investors. Imagine that you're in charge of a $1 billion fund, what are you going to do? You can't put that into gold, cash or treasury notes. But all sectors are affec…

Is part of the issue that there is just too much money has been printed and hoarded and its creating some weird effects? The government has been printing money for a long time, to stimulate the economy, provide spending money, etc. Due to 80/20 rule, rich get richer effects, etc, a large portion of money the government prints ends up in the hands of a relatively small group who doesn't spend it but rather tries to in…

It's not just "rich get richer". It's also that everybody bought into the "just buy the market" idea hook line and sinker. Pension funds, individual investors, everybody.

How retirement works on paper: you save the money by buying the market and get 20% more when you retire in 40 years. How retirement works in reality: younger people work to supply the old with food and medical care. The real transfer is happening now, while the financial transfer is happening over decades. I don't think this creates a healthy, sustainable dynamic.

Re: The stock market and economy have parted ways

#186

Post by JKCalhoun »

hitpointdrew wrote: post #20

> “I’m not sure what will trigger a sustained sell-off in stocks, but surging [virus] infections and another round of more business closures will be difficult for investors to ignore much longer.” An alternative place to put investments will trigger it. When your options are savings accounts paying 0.25% interest, and treasury notes paying nothing, and CD's being garbage, what are your alternatives for investing? If…

> But the safety/stability doesn't mean shit if the return is near 0.

Hmmm.... One of the things you mentioned though could drop in an instant.

A return of negative is worse than 0.

I suspect many are sitting on cash, waiting for the other shoe to drop (or, you know, the market).

Re: The stock market and economy have parted ways

#187

Post by Loughla »

cliffy wrote: post #92
Loughla wrote: post #9

Earlier quoted context omitted.

That's where the FOMO comes in. I, and many, many of my friends, missed out on Bitcoin in college. Many of my friends are posting the same things you state on their social media, and are making it clear they won't be left behind this time. Not sure what all that means, but it's fascinating.

Saying you missed out on Bitcoin is like saying you missed out on a giant ponzi scheme.

Yes, but at the top of the pyramid, in my case. . . The part where the money is.

Re: The stock market and economy have parted ways

#188

Post by JKCalhoun »

baron_harkonnen wrote: post #109
hitpointdrew wrote: post #20

> “I’m not sure what will trigger a sustained sell-off in stocks, but surging [virus] infections and another round of more business closures will be difficult for investors to ignore much longer.” An alternative place to put investments will trigger it. When your options are savings accounts paying 0.25% interest, and treasury notes paying nothing, and CD's being garbage, what are your alternatives for investing? If…

I think you are absolutely correct and the reason that the stock market is being so weird is quite simply "what else are we doing to do with that money?" The solution for individuals: cash, gold, options, etc, aren't viable solutions for institutional investors. Imagine that you're in charge of a $1 billion fund, what are you going to do? You can't put that into gold, cash or treasury notes. But all sectors are affec…

> "what else are we doing to do with that money?"

TINA

Re: The stock market and economy have parted ways

#189

Post by gas9S9zw3P9c »

NotSammyHagar wrote: post #169
claudeganon wrote: post #143

Earlier quoted context omitted.

Isn't some form of this what the Taleb-advised Universa fund is doing? https://www.bloomberg.com/news/articles/2020-04-08/taleb-adv...

Holy shit. 41x! I'm in the wrong world. Even though I'm in the overpaid-programmer-industrial-complex, in an expensive west coast town with an expensive million dollar house and expensive taxes, I can't imagine what it would take to get into evil and profitable investment vehicles like these hedge funds. I just have no exposure to that world.

I'm curious - why do you call the hedge fund world evil? I hear this quite often but where does it come from?

I've worked in both a hedge fund and in tech, and I found the former to be less evil and pretentious. People in finance think and say "I want to make a ton of money" while people in tech say "I want to save the world" while thinking "I want to make a ton of money" - resulting in misaligned incentives and imposter syndrome everywhere.

Re: The stock market and economy have parted ways

#190

Post by rwmj »

beagle3 wrote: post #98
secondcoming wrote: post #25

Earlier quoted context omitted.

I'm no gold bug, but turn some of your cash into gold.

It is actually very hard to get real gold (especially in a form that you can convert back to cash in the future). Just try to get delivery of a gold bullion. And if you succeed, try selling it into the system again, without losing 30%. Paper gold is a bet no different than a stock; it is a bet that the system and your counterparty will both be solvent when you need them.

Not that I'm advising anyone to get them, but what would be the counterparty risk with gold ETFs? You don't believe their guarantees that they are backed up with actual gold? eg: https://etf.invesco.com/gb/private/en/product/invesco-physic...
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