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The stock market and economy have parted ways

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Re: The stock market and economy have parted ways

#321

Post by thephyber »

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…

> while people in tech say "I want to save the world" while thinking "I want to make a ton of money"

Citation needed. The number of people in "tech" who say that is remarkably low -- in my experience in Silicon Valley: zero.

Far more often, I hear employees who are driven by "the mission" of the company/product. I work on a newer generation cybersecurity product because the ones that exist in the space have terrible usability and probably aren't very accurate/comprehensive/ergonomic. I'm not "saving the world", but I am making marginal improvements in a high impact space.

Personally I haven't the foggiest idea of what a Hedge Fund actually is. I've seen The Big Short, Margin Call, Barbarians at the Gate and I don't find myself sympathetic with any of those characters (except the Ben Rickert[1] in The Big Short, but only because he saw how terrible the industry was and got out years before the story takes place).

[1] https://www.bustle.com/articles/128208-what-does-the-real-be...

Re: The stock market and economy have parted ways

#322

Post by everdrive »

abeppu wrote: post #291
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, ri…

Unless one spouse makes ~100k and another spouse makes very little. Then you'll get two checks.

Re: The stock market and economy have parted ways

#323

Post by blueblisters »

lumost wrote: post #259
3pt14159 wrote: post #91

Earlier quoted context omitted.

If this were true, Zimbabwe would have a lucrative stockmarket. It's not true though. A high enough inflation rate damages investor confidence and makes business operations more complex. I means constantly needing to minimize cash on hand in the local currency, or having to price contracts in inflation adjusted dollars increasing risk and mental overhead of doing business. At extremis, it means many market participan…

This is true when viewing from an external currency. If I only care about the nominal value of the S&P500 or the nominal price of oil/copper/steel/aluminum/Gold in dollars. Then the nominal price can inflate indefinitely. Historically no one has been able to inflate assets, without inflating the real economy. If the Fed's QE approach is having this effect then even as a dollar spender you would want to hold assets ab…

Contracts and price tags of things you buy are also is nominal dollars. When they change daily, it becomes extremely frustrating for consumer or producers to manage the overheads of these price swings.

Re: The stock market and economy have parted ways

#324

Post by cephaslr »

Quinner wrote: post #246
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 has not had much impact on consumer prices. But it seems very plausible that it is causing inflation of asset prices, including equities, and that that is a distortion of the market that could have negative long-run repercussions.

This seems likely to me, lots and lots of money injected and consumer prices are stable yet art, real estate in desirable urban locations, equities, and some categories of luxury goods/experiences are soaring. Am I wrong?

Re: The stock market and economy have parted ways

#325

Post by S_A_P »

_bxg1 wrote: post #298
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.

Agreed, but even though it could be elon being elon, even he thinks Tesla is trading too high.

Re: The stock market and economy have parted ways

#326

Post by svachalek »

armanboyaci wrote: post #260
bryanlarsen wrote: post #214

Earlier quoted context omitted.

If you invested into the German stock market in 1914, it would have taken over 100 years to get your money back. The America of the past 100 years has been quite exceptional. Using its history to predict the future is not a good idea, IMO.

Are you sure about the German stock market? I've googled and found this https://commons.m.wikimedia.org/wiki/File:CDAX-Kursindex.png

You've always got to consider inflation over the long term, and in this case there is a well known hyperinflation period during the Weimar days. (I don't know about the GP statistic but this graph is clearly not meaningful)

Re: The stock market and economy have parted ways

#327

Post by [deleted] »

gas9S9zw3P9c wrote: post #105
currymj wrote: post #90

Earlier quoted context omitted.

in some limited cases it seems like maybe we can be pretty confident that retail investors "caused" a price move. even if professionals magnify it, the core thing would not happen without retail investors. Like the Hertz thing, or "Long Blockchain Corp", or when people get confused over ticker symbols. but I agree it does seem sort of unanswerable in general. very odd, then, to see people making these public assertio…

> I am curious: based on your experience, do you think that, in principle, an omniscient observer of all transactions on stock exchanges and who made them could answer questions like this in many cases? If so, what concrete things would they hypothetically want to look at to figure it out? Not necessarily, because the order flow they see goes through brokers, is anonymized, and order execution is optimized algorithmi…

[deleted]

Re: The stock market and economy have parted ways

#328

Post by aaronblohowiak »

Quinner wrote: post #246
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 has not had much impact on consumer prices. But it seems very plausible that it is causing inflation of asset prices, including equities, and that that is a distortion of the market that could have negative long-run repercussions.

This is the most important and often under-looked thing in this whole thread. This will further lead to wealth gaps and difficulty for working people to "get ahead".

Re: The stock market and economy have parted ways

#330

Post by svachalek »

danhak wrote: post #77
javert wrote: post #68

Earlier quoted context omitted.

> instead of parking it safely while this global crisis plays out Because interest rates will never go back up, or if they do, they will be counterbalanced by inflation. This is the view of Ray Dalio at Bridgewater and (presumably) many other very smart people. I'm not that smart, but I agree. Thus, cash and cash obligations are no longer stores of wealth. Equities are, unfortunately. High volatility is just the pric…

Forgive me if I say this sounds awfully like the "new paradigm" / "this time it's different!" phase of a bubble.

Dalio's point is specifically "this time looks just like all the others" but unfortunately his "this time" is referring to something much bigger and scarier than yours.

https://www.linkedin.com/pulse/big-cycles-over-last-500-year...

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