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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

#381

Post by subsubzero »

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…

I put this at the bottom as it seems the least likely in my opinion and makes the least sense. I've heard this with robinhood traders on many financial sites as explanations for stocks jumping as people are spending their stimulus checks day trading.

source - https://www.cnbc.com/2020/05/21/many-americans-used-part-of-...

Re: The stock market and economy have parted ways

#382

Post by dllthomas »

willcipriano wrote: post #313
dllthomas wrote: post #252

Earlier quoted context omitted.

Even if they have the actual gold, they have the actual gold. If they decide not to give it to you, there needs to be enough of a functioning court system to remedy that; and even then it may take time - just because you have a legitimate claim to that gold doesn't mean a court can easily decide that you're the only one with a legitimate claim to that gold.

Even with a functional court system you can lose it with the stroke of a pen[0]. Physical gold however would require more effort to take from you. [0] https://en.wikipedia.org/wiki/Executive_Order_6102

That's true, and it's a risk. I am unclear on whether it should be technically considered "counterparty risk", although it plays out similarly.

Re: The stock market and economy have parted ways

#383

Post by rileymat2 »

runT1ME wrote: post #369
mhuffman wrote: post #357

Earlier quoted context omitted.

I built a valuation model of TSLA and came up with a fair intrinsic price of less than $200. Of course it is hard to value anything right now because coming up with a discount rate is fraught and you have government manipulation of the asset market as well. I don't know if there are waaaay smarter and informed people than me that know something about TSLA's long-term growth prospects or it is just bing meme-ed into o…

Here's one way to look at TSLA. I see zero chance of Toyota, BMW, Mercedes, Volkswagon, or GM making all of their direct competitors obsolete. With Tesla's massive monopoly on driver data (likely a prerequisite for level 5 automation) and head start in driverless tech overal there is absolutely a chance that TSLA puts all the aforementioned companies out of business. I don't know how likely that is, but it's a hell o…

It is hardly a lottery ticket, the TSLA market cap is already larger than Toyota, GM and Ford combined. It is unclear to me how much room for growth there is.

Found this: https://docs.google.com/spreadsheets/u/1/d/1HflVng6sYIb6Gs4p...

Not sure how accurate it is, but the rest of the industry is only worth 773 billion combined. Which means if you invest now at a market cap of 277b, you can only 3x your money on that lottery ticket.

Re: The stock market and economy have parted ways

#384

Post by blaser-waffle »

WalterBright wrote: post #377
csixty4 wrote: post #277

Earlier quoted context omitted.

There Is No Alternative

Real Estate

Not a great choice in the era of COVID -- no one is renting or getting AirBnBs.

And who knows what will happen to that market once stimulus checks run out and lots of jobless people start getting evicted.

And then you need to worry about taxes, maintenance, and, if you want to be a landlord, all of those rule & regs.

Or you just drop it in QQQ and try not to think about it too much.

Re: The stock market and economy have parted ways

#385

Post by brahweh »

m0zg wrote: post #273
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…

Wall Street is looking where everyone should - at the deaths. And deaths have been going down since mid-April. It's just that recently (about a month ago) we've massively ramped up testing throughput. We're on track to become the most tested large country in the world in a few weeks. And the "lagging deaths" have so far failed to materialize.

Interesting - in the barrage of recent pessimism about the US's covid response, I was unaware of its high testing numbers. Nice to have a little good news.

https://coronavirus.jhu.edu/testing/international-comparison

Re: The stock market and economy have parted ways

#386

Post by thrownaway996 »

woeirua wrote: post #371
thrownaway996 wrote: post #312

Earlier quoted context omitted.

Why? Eviction processes in most cities take months, and if the 2008 crisis is any indication, even _then_ they'll be slow to leave. Just logistically, how do you physically evict tens of thousands of people in every major metro area in that short a period of time? I'm not downplaying the seriousness of what's happening, as the economic impact will be catastrophic. But physically evicting large percentages of a popula…

Lawful evictions take time, yes, but as the system becomes overwhelmed desperate landlords are going to take matters into their own hands. Cops, strained by lots of other problems just wont have the time or resources to respond to all the calls of people who had the locks changed on them illegally.

Sure, but who is renting the property after that? In your scenario, the answer is, noone, which significantly incentivizes at least _some_ of the landlords to negotiate with tenants, instead of mass eviction. Some income is better in the short-run than no-income, particularly for small property owners.

Re: The stock market and economy have parted ways

#387

Post by subsubzero »

Lavery wrote: post #378
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…

One other note on Tesla in particular, that I think the other comments here have largely missed: Tesla is--and has been for a while now--the largest market cap company that is not included in the S&P 500. To be considered for inclusion in the S&P, companies must show at least 4 consecutive quarters of profitability. Tesla's next earnings release (which is in roughly two weeks) has the possibility of being that fourth…

Thanks, this is an excellent observation. One of the other stocks I watch is docusign and it has also gone parabolic for quite the same reasons(getting included in nasdaq 100) although not as much as tesla. I feel like this is a way to game the system, grow somewhat big and you can then be included in a premier index where you then have multiple funds forced to buy your stock, your market cap increases, get added to more indexes etc.

Re: The stock market and economy have parted ways

#388

Post by thephyber »

hitpointdrew wrote: post #226
JKCalhoun wrote: post #186

Earlier quoted context omitted.

> 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).

> I suspect many are sitting on cash, waiting for the other shoe to drop (or, you know, the market). Well, MOST people can't afford an unexpected $500 bill, so most people aren't sitting on cash. Nevertheless, I don't agree that most of the people who can afford an unexpected $500 bill are sitting on large cash sum either either. Personally I have 2/3 in the market, and 1/3 cash (for liquid assets, I also have equity…

I'm out of the stock market waiting for the other shoe to drop. I've been all-cash since early Feb just watching this FOMO rally from the sidelines.

I'm not average for an American (consumer or investor), but people like me exist.

Re: The stock market and economy have parted ways

#389

Post by marvin »

bennyg wrote: post #334
marvin wrote: post #154

Earlier quoted context omitted.

Where are you getting out to? A 40% inflated money supply of US dollars?

Property

Property also seems pretty inflated from where I sit. Direct return on investment a paltry half percentage point or so above the interest rate.

Maybe if you want to bet on the interest getting negative and staying there forever, but then you're back at the same assumptions as if you invest in the stock market.

Re: The stock market and economy have parted ways

#390

Post by MichaelDickens »

Lavery wrote: post #378
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…

One other note on Tesla in particular, that I think the other comments here have largely missed: Tesla is--and has been for a while now--the largest market cap company that is not included in the S&P 500. To be considered for inclusion in the S&P, companies must show at least 4 consecutive quarters of profitability. Tesla's next earnings release (which is in roughly two weeks) has the possibility of being that fourth…

I would expect some activity like this, but it seems implausible that it could drive up the price >2x. Surely lots of these would-be arbitrageurs will end up losing a lot of money?
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