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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

#291

Post by abeppu »

subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

> #4 People are using their stimulus checks extra unemployment money to invest in stocks

Really? I'd normally guess that people with high incomes are most likely to invest, and to qualify for a stimulus check you couldn't have a really high income, right? And if you're receiving unemployment, people at the higher end of the income range will be receiving less because of benefit caps and won't have "excess" income, right?

I've heard claims in the past that a large share of stock is held by the wealthiest minority (like the top 10% owning > 80% of stock or something, the top 1% owning ~50% etc). Can the people investing their stimulus or unemployment benefits really change prices that much?

Re: The stock market and economy have parted ways

#292

Post by 0x8BADF00D »

malandrew wrote: post #287
subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

> especially Tesla with no clear reason why It's called a short squeeze.

VIX needs to hit 40+ before that happens.

Re: The stock market and economy have parted ways

#293

Post by blueblisters »

gas9S9zw3P9c wrote: post #189
NotSammyHagar wrote: post #169

Earlier quoted context omitted.

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 impo…

> I hear this quite often but where does it come from?

A part of it might be stereotypes and depictions in pop-culture. The drama Billions shows hedge funds getting their consistent edge from insider info. Not sure how true that is but for people outside the industry that doesn't come off as a good look.

Re: The stock market and economy have parted ways

#294

Post by dkarl »

subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

Anecdotal from conversations with my friends:

1. People are worried about their stock investments losing value due to the Covid economy.

2. Some people can't imagine putting their money in anything but stocks.

3. Ergo, there's a lot of demand for stocks that are familiar to casual investors and feel relatively safer from the effects of Covid.

Re: The stock market and economy have parted ways

#295

Post by WalterBright »

subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

It could be a reflection of all the money that's been printed.

Re: The stock market and economy have parted ways

#296

Post by api »

objektif wrote: post #279
pjc50 wrote: post #141

Earlier quoted context omitted.

Once you allow for the fall in interest rates over the past decades, the house price rise looks less surprising. However, there's a weird corollary: what happens when rates go negative?

US will not allow interest rates to go negative.

Will we have a choice? The Fed has tremendous influence over the economy in the short-medium term, but over long time horizons they are actually at the mercy of it.

Re: The stock market and economy have parted ways

#297

Post by mlthoughts2018 »

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…

I think you are massively incorrect. Equities right now are at a pretty massive discount to future value. If anything I think the coronavirus effect on the economy has just demonstrated that economic growth is fundamentally not impacted much by around 1/3 of all jobs. The labor product and consumption activity of that 33.3% just doesn’t matter.

The implications of this seem mostly sociological to me. Is that a good state of affairs for the world? Could we use those people more productively?

The implications are not about the current stock market.

Amazon and Microsoft are pretty damn likely to keep growing in value for 10+ more years regardless of any coronavirus situation. That’s an amazing / dumbfounding situation. But it still would imply a rational longterm investors sees those stocks as being attractively priced right now.

Re: The stock market and economy have parted ways

#298

Post by _bxg1 »

subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

Something I don't see a lot of people talking about with Tesla is that over the last couple years, the writing has appeared on the wall about internal-combustion. Most developed nations have set a hard end-date for it at this point. That makes an electric car company a really appealing long-term investment.

Re: The stock market and economy have parted ways

#299

Post by missedthecue »

malandrew wrote: post #287
subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

> especially Tesla with no clear reason why It's called a short squeeze.

Squeezes last 1 maybe 2 days. Not 4 months

Re: The stock market and economy have parted ways

#300

Post by qqqwerty »

mrfredward wrote: post #256
charwalker wrote: post #205

Earlier quoted context omitted.

Printing money has recently shown to have little impact on inflation. This is likely due in part to lack of consumer spending (can't inflate prices if nobody is buying it anyway) as well as spreading the USD across billions of people in dozens of interconnected economies that base off the dollar. The recent $5 trillion injection from the Fed (buying bad debt/assets) and Treasury (stimulus/PPP) may simply show that we…

Printing money to get through a recession vs printing money as the primary way of funding government programs are wildly different things. The mere suggestion that U.S. officials were serious about running a deficit of a large percentage of GDP could send people fleeing U.S. dollar denominated assets, and thanks to the exchange rate effects cause a spike in inflation before the programs even started. The thing that m…

We haven't even rolled back the quantitive easing from the last recession. These financial rescues are now becoming permanent fixtures on our balance sheets. At least with health care, we would have something to show for these massive injections of money. Instead we just get inflated asset prices and growing wealth inequality.
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