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If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

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Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#21

Post by taeric »

anthonyskipper wrote: post #10
epolanski wrote: post #4

Earlier quoted context omitted.

Fun fact, dividend adjusted, over the last 5 years only Google has outperformed something like say, McDonald's.

Something about that doesn't seem right. What about Apple or literally any of the other mega corps that have passed or closed to approach the 1T market cap?

I take the factoid as not about the companies doing better, it was about investments in the companies. It has become incredibly common for stocks to not pay dividends nowadays, so that the only way you make money from investing in them is by exiting that investment. (Well, if you are ultra rich, you could leverage it.)

Edit: This also means that much of the money you would make from owning something like McDonald's can't be seen by just charting the growth in stock price. You have to also look at the money you could make by taking the dividends and putting that somewhere.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#22

Post by [deleted] »

pauldenton wrote: post #17
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

https://ourworldindata.org/grapher/population The massive growth of the global population is hard for people to grasp, but is a big part of the cost of housing. Even if we've built billions of new homes in the last century that isn't enough to compensate the bigger still population increase.

[deleted]

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#24

Post by onlyrealcuzzo »

EstesPark wrote: post #18
dragontamer wrote: post #13

Because a large number of 401k plans are drawing upon stocks so that retired folk can live out their retirement. The boomers are retiring, and they're the first major group to retire under 401(k) program. They will be selling stocks and bonds (and whatever else they've invested into) and are no longer buying stocks with their end-of-career top-level paychecks.

Does anyone have an actual breakdown of how much the younger generations are placing away in a 401k - if that's even possible?

401ks are like ~10% of the stock market: https://theirrelevantinvestor.com/2020/10/25/who-owns-the-st...

Boomer 401ks are probably The idea that boomer 401k withdrawals is going to crash the stock market or tamp out future growth is pretty strange.

Defined benefit & defined contribution pension plans are both larger chunks of the stock market than 401ks.

And all of those together are a smaller chunk than foreigner holdings.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#25

Post by hammock »

mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

>Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing

If there is a housing shortage then the unaffordability is reflective of proper valuation.

If people need more housing than they are getting, a free market would indicate valuations to go higher. I would suspect that you’d like to see housing revalued lower, though

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#26

Post by verdverm »

cma wrote: post #19
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

>with less built than is necessary for multiple decades of time. I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.

Absolute footage is the wrong metric of the average per household is also larger. You want to look at the number of units. One thing that can happen is a single family home split into multiple units

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#27

Post by ramraj07 »

mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

I came to the same conclusion from another place: the nth time seeing news about some block finding it cheaper to live in a cruise ship than in a retirement home anywhere in the US. This is only possible if all land value is inherently overinflated beyond measure that a floating coal burning ship all expenses paid is cheaper than a retirement home that should have 5x less overhead.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#28

Post by cheriot »

pauldenton wrote: post #17
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

https://ourworldindata.org/grapher/population The massive growth of the global population is hard for people to grasp, but is a big part of the cost of housing. Even if we've built billions of new homes in the last century that isn't enough to compensate the bigger still population increase.

The limiting factor in population is the ability to construct housing?

Growth in the developed countries with housing shortages keeps getting revised down.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#29

Post by KittenInABox »

cma wrote: post #19
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

>with less built than is necessary for multiple decades of time. I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.

The US contains also huge mcmansion-style houses that are actually only classified to hold a single family. I think if you speculated more for the average person, housing is less and less available to them all the time... Although the above poster attributes it to a lack of housing, the actual cause of housing shortage is likely far more complicated. The crash in real estate in 2008 froze construction for over a decade arguably, and also, real estate is considered a commodity/investment as opposed to something like a car. So people plan their financial futures assuming their assets will go up in value, ignoring that this means their assets will by necessity price out their own economic band.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#30

Post by Scarblac »

cma wrote: post #19
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

>with less built than is necessary for multiple decades of time. I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.

US houses are very large.

I don't think it's realistic to expect that multiple families will start living in houses intended for one, so the amount of sqft doesn't help as much.

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