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How can Wall Street be so healthy when Main Street isn’t?

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Re: How can Wall Street be so healthy when Main Street isn’t?

#41

Post by giantg2 »

ghaff wrote: post #19
giantg2 wrote: post #12

Earlier quoted context omitted.

Commodities could be another option. I think gold and silver aren't great choices right now, but maybe platinum is. Along this same line, real estate has real value to it.

I'd be very nervous about real estate right now. It requires a lot of speculation about long-time remote work and how cities are going to come out of this. That said, it's something I'd keep my eye on. I agree gold has had a good run up but the adviser on my managed account just sold the gold position. You can certainly have (and probably should have) some amount in bonds, etc. but the returns will indeed be pretty l…

Maybe I don't know what I'm talking about. It seems the real estate market is really hot right now in the NJ/MD/E. PA regions.

Re: How can Wall Street be so healthy when Main Street isn’t?

#42

Post by ghaff »

danesparza wrote: post #29

From the New York Times this morning, about the irrational stock market: "As irrational as it might seem, here’s the way investors rationalize the bullish stock market to themselves (we’ll only find out whether they are right or wrong in the future): 1. The stock market is forward-looking: Investors are betting on what the world and the economy look like in 12 to 18 months from now, not what they look like today, tom…

#4 seems like somewhat of an overstatement. It's true that you probably can't really keep money out of the stock market if you have appreciable money to invest. But that doesn't mean you can't reasonably hedge your bets at least somewhat. You won't get the full upside if the market continues to do well but you do have some downside protection that has at least a small return.

Re: How can Wall Street be so healthy when Main Street isn’t?

#43

Post by GhostVII »

the-dude wrote: post #36
jshaqaw wrote: post #34

The bull case is that by mid-1Q we have a vaccine and the crisis is over. Government fiscal and monetary keeps the economy on life support until that happens. If you value a business bottom up and you think 2021/2022 sort of revert back to 2019 then by now in 2020 you are basing your valuations on those numbers and decreasing the equity value where necessary for businesses that took on debt to get through 2020. The F…

AIDS never got a vaccine, SARS and MERS neither.

There are several COVID vaccines in stage 3 trials, I think it is safe to say that we will have a vaccine being rolled out by mid 2021 at the very latest.

Re: How can Wall Street be so healthy when Main Street isn’t?

#44

Post by giantg2 »

badwolf wrote: post #40
giantg2 wrote: post #12

Earlier quoted context omitted.

Commodities could be another option. I think gold and silver aren't great choices right now, but maybe platinum is. Along this same line, real estate has real value to it.

Lumber has been having quite the ride the last several weeks

Could be a good shortterm play. I'd be concerned about getting in now for a long hold. The price spikes are mostly due to covid related supply issues. Prices should normalize in the next few months (I think).

Re: How can Wall Street be so healthy when Main Street isn’t?

#45

Post by blaser-waffle »

TINA -- There Is No Alternative [to Wall Street]

Plus economies of scale on top of COVID killing mom & pop shops means that only large scale players can survive as Main Street offerings, e.g. the Starbucks on every block, or large chain eateries.

Re: How can Wall Street be so healthy when Main Street isn’t?

#46

Post by akeck »

recursivedoubts wrote: post #27

By holding interest rates so low, the Fed has created a double-bind: despite the systemic risks (which are very high) people who have investable cash have two options: the stock market or paying down debt. The stock market is being "invested" in not because it is a good investment at this point (it isn't) but because there is no where else to go. If interest rates ever revert to anything normal, it will get crushed.…

It seems like some of the COVID relief in the US provided a view into the "Modern Debt Jubilee". Apparently, many people used the infusion of cash to pay down short term debt.

Re: How can Wall Street be so healthy when Main Street isn’t?

#47

Post by svachalek »

thieving_magpie wrote: post #37
throwaway_USD wrote: post #3

Easy Congress put on bandannas and robbed the tax payers of about $18,000 each. Congress then turned around and gave taxpayers $1,200 each, of their own money, that total amount can be doubled that to account for the temporary unemployment benefits increase. The rest of the taxpayer money went to the FED so they will guarantee the prices of shit stock...the market can't lower because as many rich CEOs and investors c…

I'd really like to read more about how tax payers are paying $18,000 each but all I can find as a source is some twitter comment and a reddit thread where the claim is disputed. Do you have something more substantial I could read? At first glance it seems extremely exaggerated so I'd like to get my head around it.

I think this is simply dividing the cost of relief packages by the number of taxpayers. It’s oversimplification of government budgeting to the point that it doesn’t mean much of anything other than to give a sense of scale.

Re: How can Wall Street be so healthy when Main Street isn’t?

#48

Post by zacherates »

1. Stock markets are forward looking. Prices reflect expectations about the company going far into the future, not just right now. So yeah, this year and next year are going to be bad, but we expect that five years from now things will be back to normal or better and prices reflect that.

2. Companies in the S&P 500 (which is what people often mean when they talk about Wall Street/the market/etc) are by definition are big and have easy access to the capital markets. Consequently, they are the best positioned to whether the storm and seize the opportunities as they come. When things start recovering companies with money/easy access to the bond market are going to be the ones who can open new locations and capitalize on pent up demand.

3. There are a bunch of big companies that have actually done well for the last six months. The obvious ones are companies like Amazon, Netflix and Zoom, but for instance Target and Walmart have benefited from being allowed to stay open because they sell essentials while also selling everything else so they were often the only option other than Amazon.

4. When people talk about the S&P 500 recovering unbelievably fast, they often mean vs. the lows in March. Those lows were not reflective of the reality of what was happening (definitionally: nobody knew the reality of what was happening, lack of testing, etc.), but there was some concern that the actual apocalypse might have occurred... and everyday as merely bad news poured in that actually restored confidence because the news was not apocalyptic. So, the prices rose.

5. There really are a bunch of bored people buying stocks on their phone because they can't bet on sports anymore [1]. It's not clear how big an effect this is, but there really does seem to be extra retail demand for stocks.

[1] https://www.bloomberg.com/news/audio/2020-07-09/inside-the-m...

Re: How can Wall Street be so healthy when Main Street isn’t?

#49

Post by mantap »

giantg2 wrote: post #12
CalRobert wrote: post #5

Where else are you gonna put your money? Stable governments are paying ~0 or negative interest. I'm actually asking, right now I'm just paying off debt but would be curious what people think. If I didn't have the debt I'd probably buy equities (index fund, etc.) like everoyne else.

Commodities could be another option. I think gold and silver aren't great choices right now, but maybe platinum is. Along this same line, real estate has real value to it.

Real estate has intrinsic value but does it have returns? Residential real estate is fundamentally limited by wages but we are seeing huge unemployment.

And demand for commercial real estate is low due to the whole pandemic situation. If you want to invest in commercial real estate then you are betting that these tendencies towards doing things online are a temporary blip. That could well be false, people are developing new purchasing and working patterns, it's entirely possible that this pandemic will lead to permanent changes in real estate demand.

Re: How can Wall Street be so healthy when Main Street isn’t?

#50

Post by BoiledCabbage »

thieving_magpie wrote: post #37
throwaway_USD wrote: post #3

Easy Congress put on bandannas and robbed the tax payers of about $18,000 each. Congress then turned around and gave taxpayers $1,200 each, of their own money, that total amount can be doubled that to account for the temporary unemployment benefits increase. The rest of the taxpayer money went to the FED so they will guarantee the prices of shit stock...the market can't lower because as many rich CEOs and investors c…

I'd really like to read more about how tax payers are paying $18,000 each but all I can find as a source is some twitter comment and a reddit thread where the claim is disputed. Do you have something more substantial I could read? At first glance it seems extremely exaggerated so I'd like to get my head around it.

Presumably the 6 Trillion collectively authorized, divided by the population of the US.

Or we could've all just worn masks and saved most of that but ya know...

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