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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

#261

Post by soared »

tossAfterUsing wrote: post #253
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…

my first (only) financial advisor was a manager at RadioShack for 10 years before he got the advisor job. relatedly, i once applied as a network admin at Ed Jones. They didn't have their shit together when i showed up for the interview, and gave me the questions for the financial advisor interview instead. it was an automatic process, about 100 questions that were some variant of "how good or bad do you feel about as…

Financial advisors study for months and are legally required to pass tests before giving financial advice. It’s not like one day you’re at radio shack and the next you’re a cfa/cfp.

Series 7, series 63, cfp, cfa, etc. when you get a job at fidelity you literally just go to class and study 8 hours a day for a few months.

Also you were asked sales rep questions, not actual advisor questions.

Re: The stock market and economy have parted ways

#262

Post by tossAfterUsing »

earthtolazlo wrote: post #156
thisisnico wrote: post #74

Earlier quoted context omitted.

Market cap of Bitcoin is: 117.81 billion U.S. Market cap of Tether USDT: $9.16 billion Tether would account for 7.8% of all Bitcoin. Not sure if that would count as being propped up. It's significant but not entirely propped up, there is a ton of real money in there too.

Market cap != market liquidity If I create 100 billion FakeCoins and sell one to my grandmother for $10, suddenly FakeCoin has a 1 trillion dollar market cap. It doesn’t mean there’s anywhere near that much money actually in the market to support that valuation.

this is precisely right and why nobody should ever buy a bitcoin under any circumstance.

Re: The stock market and economy have parted ways

#263

Post by tossAfterUsing »

noxer wrote: post #203
thisisnico wrote: post #74

Earlier quoted context omitted.

Market cap of Bitcoin is: 117.81 billion U.S. Market cap of Tether USDT: $9.16 billion Tether would account for 7.8% of all Bitcoin. Not sure if that would count as being propped up. It's significant but not entirely propped up, there is a ton of real money in there too.

>...there is a ton of real money in there too. There is zero money "in there" market cap for a non-backed currency is meaningless value. No amount of bitcoin buying will ever put money "into" anything. The money goes to whoever sells its just a trade.

nobody should ever buy a bitcoin under any circumstance for exactly this reason

Re: The stock market and economy have parted ways

#264

Post by refurb »

FlyMoreRockets wrote: post #145
yonaguska wrote: post #100

Earlier quoted context omitted.

Let me know when you figure out a better way to put a price on the risk of loaning money. As evil as you may think interest rates are- without a price on the risk of loaning money- access to loans dry up and only the already wealthy will have access to capital.

> Let me know when you figure out a better way to put a price on the risk of loaning money. Collateral.

So people with no collateral are SOL?

Re: The stock market and economy have parted ways

#265

Post by tossAfterUsing »

mattmanser wrote: post #96
thisisnico wrote: post #74

Earlier quoted context omitted.

Market cap of Bitcoin is: 117.81 billion U.S. Market cap of Tether USDT: $9.16 billion Tether would account for 7.8% of all Bitcoin. Not sure if that would count as being propped up. It's significant but not entirely propped up, there is a ton of real money in there too.

Doesn't that make it much worse? Only a certain amount of the tether is real, making it a tiny chunk, that's propping up a small chunk, that's propping up the large chunk. If the tiny chunk goes, it all goes tumbling down?

exactly.

stay far away from bitcoin.

Re: The stock market and economy have parted ways

#266

Post by jb775 »

I think the simple explanation here is money parked in millennial 401k accounts. If a millennial gets laid off, they collect unemployment.....none I know would dare mess with their 401k.

Kind of crazy it's socially acceptable for the finance world to slice & dice & profit off the life savings of an entire generation while transferring any risk taken back to taxpayers.

Re: The stock market and economy have parted ways

#267

Post by wesleyy »

talkingtab wrote: post #209

Original thinking and therefore probably wrong, but perhaps interesting: A more precise explanation than FOMO is that the stock market is simply a form of poker. In poker, the cards themselves have zero value, they are simply a tool used to determine a winner. While stocks may have some intrinsic value, it is commonly acknowledged that their value as assets is substantially lower than their stock market price. Moreov…

> While stocks may have some intrinsic value, it is commonly acknowledged that their value as assets is substantially lower than their stock market price. Moreover companies continue to buy their own stocks further reducing the value of stocks as assets.

This is not really relevant. Companies have larger market caps than their intrinsic assets because people trade on discounted cash flow.

> Any small players (yes that means you and me) can easily lose their shirt in a down turn as we do not have reserve assets or other means (hedge funds) and are not able to participate in the next hand.

1. There's no mechanism that forces you to "call" a bet in investing. It's not winner takes all. 2. Why can't you allocate your bond/equity split such that you do have reserve assets?

Re: The stock market and economy have parted ways

#268

Post by tossAfterUsing »

empath75 wrote: post #35
ideals wrote: post #6

The amount of friends I have that are out of work and posting screenshots of robinhood on ig and snap right now is wild. This feels like crypto 2017 all over again. I suppose the difference is there is a real market under it all and retail traders aren't entirely driving this, but they're the ones left holding the bag when the curtain drops.

One of my unemployed friends just told me he's putting everything into bitcoin.

good for him. hope he can hold out for a couple years...

Re: The stock market and economy have parted ways

#269

Post by beervirus »

apta wrote: post #208
namdnay wrote: post #161

Earlier quoted context omitted.

But here we’re talking about equity (stocks), not bonds (loans). So the interest isn’t coming from loaning, it’s coming from investing.

When I say interest I mean money for money transactions, like savings accounts in banks or bonds where the return is set ahead of time and is practically guaranteed (i.e. usury). Investing is fine since it can incur a gain or loss.

Why does that make investing fine?

Re: The stock market and economy have parted ways

#270

Post by johnnylambada »

JKCalhoun wrote: post #188
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…

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

Care to define TINA?
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