Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The stock market and economy have parted ways

washingtonpost.com

Post reply on HN
Print view View original

411–420 of 542 posts

Re: The stock market and economy have parted ways

#411

Post by mixmastamyk »

cure wrote: post #346
Quinner wrote: post #246

Earlier quoted context omitted.

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. For years now everyone has been saying "where is the (consumer price) inflation"? Meanwhile real estate prices are rising fast (in desirable parts of the country) and the stock market has been on an epic bull run. It's obvious that the inflation is in the asset prices. This is a dangerous trend. The rich (who tend to own those assets) get richer and and the poor (who rent/live paycheck to paycheck) get more and…

> inflation is in the asset prices. The rich… get richer

Numbers rising don’t equal values rising, the definition of inflation. It benefits borrowers as well.

Re: The stock market and economy have parted ways

#412

Post by devalgo »

NotSammyHagar wrote: post #360
devalgo wrote: post #238

Earlier quoted context omitted.

>Hmm, I'm almost convincing myself that even us $ could eventually not last. So, I'll just take one of those job offers on hacker news that says we'll get you a visa to come to Amsterdam? You realize that the world economy is inexorably linked to the US right? If there was such a devastating crash what makes you think the Eurozone would be stable? The UK left the EU and France nearly did, a massive wave of unrest cou…

The thing europe has is that covid-19 is under far more control. I don't see the us getting over our idiocy against masks and basic health care choices for a year, we'll need a lot more deaths to convince people. and some people will never get over it. A vaccine isn't coming that quickly either.

Agreed but that's also reason for the EU to continue blocking entry to Americans so that doesn't seem likely to change.

Re: The stock market and economy have parted ways

#413

Post by thephyber »

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.

Death counts are important, but only part of the story.

Hospitalizations are still extremely problematic because there is permanent health harm. There is also a massive cost to being in the hospital for an American. COVID hospitalizations seem to take between 1-3+ weeks, which costs more than the net worth of the average American.

Also, the economic impact is severe and has yet to fully show itself. Lots of employees are still "employed" but indefinitely furloughed. They will show up as unemployed when their company finally falls into bankruptcy or takes decisive headcount steps. In September, the PPP strings for employment expire and there will be an employment rate cliff unless Congress acts. 20% of Americans are behind on their rent/mortgage and are worried about an eviction/foreclosure in the next 6 months. This is both bad for the obvious reason and because a consumer-driven economy shrinks quickly when consumers are more judicious about spending.

We still don't understand why deaths per case are dropping yet. Until we know the variables (perhaps the weakest already died off, perhaps the colder weather amplified the worst symptoms, etc) I don't think it's safe to assume the death rate will be monotonically decreasing.

Re: The stock market and economy have parted ways

#414

Post by ajzinsbwbs »

mhuffman wrote: post #375
Spivak wrote: post #368

Earlier quoted context omitted.

Question from someone who has no dog in this fight. If your model is right would it be in you best interest to short their stock or do you believe that the market can "remain irrational" forever?

Yes it would, but I am very, very nervous that the actions of the government and the capricious actions of retail investors would go against me, so I have no stomach to do it. As an example, image that you shorted bitcoin half-way up its rise ... you would be broke! Possibly less than broke! On the other hand, you would have eventually been right, just the timing on a bubble stock (or possible meme stock, in this cas…

If you shorted BTC halfway to its peak, and managed not to get closed out, you’d be breaking even right now.

Re: The stock market and economy have parted ways

#415

Post by WrtCdEvrydy »

pc86 wrote: post #249
WrtCdEvrydy wrote: post #202

Earlier quoted context omitted.

Fed will continue printing until Boomers die off... there is a lot of wealth locked up in 401k that needs to be disbursed. This block votes and they vote often and if their little pennies are threatened, they will vote people out. Edit: If you think these market rises are anything other than a way for the rich to rinse their money before the market bombs, I have a bridge to sell you, it's very pretty.

Imagine referring to an entire generations' life savings as "their little pennies."

When the 1% own the majority of the market and use it to control the other 99% into making them richer, what would you call that?

Re: The stock market and economy have parted ways

#416

Post by mixmastamyk »

blaser-waffle wrote: post #384
WalterBright wrote: post #377

Earlier quoted context omitted.

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.

Expensive apts are still filling in our expensive neighborhood in LA. From $2500-4000 a month.

Re: The stock market and economy have parted ways

#417

Post by secabeen »

marvin wrote: post #403
mhuffman wrote: post #375

Earlier quoted context omitted.

Yes it would, but I am very, very nervous that the actions of the government and the capricious actions of retail investors would go against me, so I have no stomach to do it. As an example, image that you shorted bitcoin half-way up its rise ... you would be broke! Possibly less than broke! On the other hand, you would have eventually been right, just the timing on a bubble stock (or possible meme stock, in this cas…

There is also the significant risk that you are wrong. I haven't seen this mentioned; maybe it's obvious and you've considered that aspect too. A short bet means unlimited downside, and if you arrive at 1/5 of the current market cap, there seems like a significant risk the market has seen something you haven't. Tesla was at $200 one year ago. Guaranteed to be an irrational bubble?

You can bet against TSLA with put options, but given its volatility, they are very expensive.

Re: The stock market and economy have parted ways

#418

Post by rrrrrrrrrrrryan »

rtuulik wrote: post #398
runT1ME wrote: post #369

Earlier quoted context omitted.

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…

What head start in driverless tech? Right now, Tesla isn't even among top companies developing self-driving car technology. Also, it's would pretty naive to think that governments would allow a single company to have such sort of monopoly like you describe.

The headstart is all the data they've collected by having actual cars, on actual roads, driven by actual humans.

The idea is that gathering this data may be a prerequisite to resolving the bajillions fringe-cases that are currently in the way of level 4 autonomy.

Re: The stock market and economy have parted ways

#419

Post by importantbrian »

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…

I'm not sure it's the case that Tesla has a massive monopoly on driver data, and even if it does it won't for long. Toyota for example has their TSS system which collects a ton of driver data. Tesla has produced around ~1 million vehicles in its lifetime. Toyota produced 10x that last year alone. If more data is the key to unlocking level 5 then Toyota or one of the other big players will get there long before Tesla does.

Re: The stock market and economy have parted ways

#420

Post by imtringued »

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…

Most people don't own any stock at all so it is not very surprising.
Post reply on HN