481–490 of 542 posts
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…
I think the current TSLA situation is simply about betting on the future. The stock price of a company not only represents what it's doing right now (sales, profits, whatever) but also a prediction of what it might do into the future. Tesla are doing OK now, (kind of) breaking even, and making a decent number of cars. I think most would agree they're more solid now than ever before, and it seems like they're probably…
Or what just park 20% of your portfolio in airlines and wait. Telsa is up 200% for no reason at all since crash. AAPL is up 27% YTD, because shutting down most of the planet somehow led to 27% growth.
Or we can look at it another way, since US printed ~25% of annual GDP in 'free money' and USD remains the primary method of exchange, we are all trading in dollars that are worth 25% less, so nothing has changed but a buffer to pad numbers on balance sheets until the wheels start turning. Something that was done too late in 2008.
And to disillusion people, its not that hard to pick stocks, and no the people at funds dont tend to be any better than you at their jobs. The industry is ran on finding and exploiting market inefficiencies, insider information, and hype. Watch MSNBC for a day and start guessing the days when DJI dips based on Covid coverage the day before.
Conspiracy theory time! I don't really believe either of these with any non-trivial degree of probability, but I figure at worst I'd get downvoted, and maybe I'd get some insightful takes. There was an opinion expressed after '08 that the crisis was used by "elites" to conveniently get rid of (as in fire, mostly) a bunch of people that were, to them, superfluous. Like, that was long overdue and there was a good excus…
Individual businesses are full of inefficiencies that are easy to tolerate when times are good. In many cases, it's often a net waste of time to plug most of them, you usually have higher ROI activities to attend to.
But when a crisis hits and the economy slows down, the equation has changed, many higher ROI activities (eg. marketing or sales activities) are no longer higher ROI, and plugging your many inefficiencies remains one of the few lucrative activities you can choose from. So the organization focuses inwards and starts looking for cost inefficiencies.
Put another way, you wouldn't tell someone who just lost their job that they're just using their loss of income as a convenient excuse to cancel their Hulu subscription that they rarely use.
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If people have nothing for collateral, they're most likely in poverty and should be receivers of charity or other government assistance programs.
So no student loans? Most 19 year olds have no collateral.
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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".
So when I open a savings account, I'm immorally and parasitically feeding off the poor, needy bank?
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Because the borrower is out of options, and will have to resort to engaging in an interest based transaction, whereby he is exploited by the lender. It's not really voluntary at that point. Do you think anyone in their right mind wants to be on the paying side of an interest based loan?
I mean we're not just talking about sketchy payday lenders here, right? You're also saying that Fortune 500 companies that issue bonds are being forced into doing so by whoever's buying those bonds. That's crazy though. There are plenty of reasons that a company might prefer to issue debt instead of selling more equity.
By issuing debt, especially when not in dire need, the borrower is enabling others to engage in said parasitic practices.
> “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.
If you are right and that’s what Wall Streets is looking up to, they are in for the big surprise in the next two weeks.
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This is the most sane thing anyone can say. At some point there is going to be a critical mass of people not paying their mortgage, not paying rent, not paying loans, not paying credit cards...and simply no money and unemployment. I think this week we will begin to see some acknowledgement of the realities because July 15 is the new tax return date, and I think there will be millions and millions of American's who ju…
$600 federal unemployment top up ends July 31st. PPP and other paycheck guarantee program layoff moratoriums end at the end of September. I expect carnage in October. United Airlines has already stated they are targeting ~36k job cuts in October when they're permitted to [1] [2], I presume other airlines and businesses will follow. [1] https://www.usatoday.com/story/travel/airline-news/2020/07/0... [2] https://www.fl…
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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.
The Fed is playing off the same dynamics as fractional reserve banking. This has been the standard form of banking for ~2-3k years, and allows a bank operating in its own currency (Bank Notes) to create arbitrary amounts of money. This is the same process by which loans are generated. https://en.wikipedia.org/wiki/Fractional-reserve_banking
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Is part of the issue that there is just too much money has been printed and hoarded and its creating some weird effects? The government has been printing money for a long time, to stimulate the economy, provide spending money, etc. Due to 80/20 rule, rich get richer effects, etc, a large portion of money the government prints ends up in the hands of a relatively small group who doesn't spend it but rather tries to in…
It's not just "rich get richer". It's also that everybody bought into the "just buy the market" idea hook line and sinker. Pension funds, individual investors, everybody. How retirement works on paper: you save the money by buying the market and get 20% more when you retire in 40 years. How retirement works in reality: younger people work to supply the old with food and medical care. The real transfer is happening no…
This came at high costs: once a large enough part of the population buys houses at inflated prices with the expectation of their price further increasing, the government needs to protect them from housing crashes and depreciation to inflate the bubble further and further.
Now that pretty much everyone has their money invested in the stock market, I see the same thing happening in the US. The Fed needs to keep the interest rate artificially low and guarantee policies to keep the stock market up so that people don't lose money, but also making sociery overall worse.