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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

#461

Post by hitpointdrew »

thephyber wrote: post #388
hitpointdrew wrote: post #226

Earlier quoted context omitted.

> 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.

Good luck to you... I have always heeded the advice of just holding through any downturns, so far that advice has served me well.

Re: The stock market and economy have parted ways

#462

Post by bpt3 »

subsubzero wrote: post #373
bpt3 wrote: post #331

Earlier quoted context omitted.

The boomers you know (white collar professionals in the Bay Area apparently) are not a representative sample of the entire population. The group you mentioned has done well in every generation in modern times.

Some are, some are not. They are all friends parents and some family, a few others are blue collar business owners or workers. One striking example is a friend who's Dad(in the construction business) owns multiple properties and his son(late 30's) rents. They are doing the exact same job and it shows how skewed things are based on 30-40 years ago(his Dad owned a house at his age).

A "blue collar" business owner with multiple properties isn't really a great example either. I'm not arguing against your thesis that the boomer generation overall basically extracted resources from future generations (and their parents who lived through the depression and at least 1 world war), I'm just saying that there are lots of individual boomers who didn't have lucrative careers or happen to own property in the right places, and you don't seem to know any of those people (which is fine of course).

Re: The stock market and economy have parted ways

#463

Post by bpt3 »

cool_dude85 wrote: post #404
bpt3 wrote: post #352

Earlier quoted context omitted.

> Defined benefit pensions existed for quite a while before "fully funded" pension funds, using a pay-as-you-go system, and could probably survive indefinitely that way if designed right. The PBGC was created because this isn't the case. The issues with Social Security are another example of how pay as you go isn't completely sustainable.

The PBGC is an insurance system. Of course, pension plans haven't always been able to pay out, but the fact that an insurance system exists for them doesn't make them any more of a failure than a savings account backed by FDIC. And what issues with social security do you mean? The program has taken in more than it's paid out since '83.

Yes, and the PBGC exists because so many of the pay as you go pensions went under.

Also, social security has required many changes that decrease benefits over the years to remain solvent, such as increasing the expected retirement age.

Re: The stock market and economy have parted ways

#464

Post by mrep »

thorwasdfasdf wrote: post #451
msteffen wrote: post #435

Earlier quoted context omitted.

Yes--see https://www.investopedia.com/ask/answers/082515/who-decides-... under "How the Fed Creates Money With QE": "The Fed can indeed create money "out of thin air." To be more precise, it does so with keystrokes on a computer. This was illustrated with its QE program, also known as open market operations. That's when the Fed buys an asset from a financial institution and pays for it with money it simply creates."

and i know this is technically fully legal. but conceptually, it seems like fraud. I mean, they're just creating money at will and buying up assets. if anyone else did that, they'd be in jail.

Most of those assets they are buying are just our own government's debt and the profits they make from it (100 billion dollars in 2015 for example) go right back to our government reducing our budget deficit. I don't understand why people get so upset about this especially considering basically every country is doing this.

Re: The stock market and economy have parted ways

#465

Post by stubish »

importantbrian wrote: post #419
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…

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…

Also, in which regions? Other manufacturers could collect data globally, whereas Teslas seem rare outside of the US.

Re: The stock market and economy have parted ways

#466

Post by nitrogen »

apta wrote: post #434
danans wrote: post #224

Earlier quoted context omitted.

> You can expect returns, but not fix them ahead of time Fixing them ahead of time is an attempt to quantify risk. It doesn't eliminate risk - loan defaults happen. The riskier a loan, the higher the interest rate. As long as the lendee has the option of refinancing with another institution (i.e. there is a competitive market for loans), usury shouldn't be an issue. Usury is an issue when the lendee has no other reso…

You can try to rationalize it in any way you want, however, that does not change the fact that engaging in an interest bearing transaction is parasitic and immoral. > What other mechanism do you suggest for those? Pay in installments with 0% interest, for a reasonable period of time, not like we see today that even for auto loans they're giving them out to people who can't afford them over insane periods of time. Thi…

engaging in an interest bearing transaction is parasitic and immoral.

You keep stating this, but you have not proven it.

Re: The stock market and economy have parted ways

#467

Post by apta »

nitrogen wrote: post #466
apta wrote: post #434

Earlier quoted context omitted.

You can try to rationalize it in any way you want, however, that does not change the fact that engaging in an interest bearing transaction is parasitic and immoral. > What other mechanism do you suggest for those? Pay in installments with 0% interest, for a reasonable period of time, not like we see today that even for auto loans they're giving them out to people who can't afford them over insane periods of time. Thi…

engaging in an interest bearing transaction is parasitic and immoral. You keep stating this, but you have not proven it.

Is it not parasitic practice to feed off the needy? When a small player does it, they're called "loan sharks", when bank or the Fed does it, it's "finance".

Re: The stock market and economy have parted ways

#468

Post by webninja »

Infinitesimus wrote: post #456
importantbrian wrote: post #421

Earlier quoted context omitted.

This assumes that the other manufacturers don't also gather data from actual cars, on actual roads, driven by actual humans. Which is not the case. Toyota for example has it's TSS system. Toyota also makes around 10 million cars a year. Tesla makes around 370k. Even if they had a head start it's not going to take long for them to get lapped.

I haven't explored Toyota's offering but Tesla's OTA updated will always give them an edge. With all Toyota's data, you will have to buy a brand new car to get whatever improvements your data contributed to the system. With Tesla, you get those improvements while you're asleep and maybe your car drives a bit better. For a tech-centric space where people are used to software improving overtime, Tesla will have an edge…

Toyota Motors North America (TMNA) doesn’t even use drivers data when making design decisions in their dashboard electronics so don’t worry about them. What use is all of this data if the important decision makers don’t have access to it? Contractors design most of their components but Toyota doesn’t/won’t provide their contractors (95%+ foreigners working locally on visas) with data to make decisions with or training to learn from past lessons. This leaves their contractors to just wing it for them and hopefully make the crucial decisions correctly. Many of TMNA’s insights come from frequent tear downs of competitor vehicles including the latest Model 3s.

Re: The stock market and economy have parted ways

#469

Post by xur17 »

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…

> stocks normally join in the 500s - 300s or so, and grow from there.

Does 500 - 300 represent the share price? If so, do most companies issue a similar number of shares before getting included in the S&P?

Re: The stock market and economy have parted ways

#470

Post by WalterBright »

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.

You might look back on this 5 years from now as the ideal time to buy real estate.
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