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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?

#71

Post by taeric »

lotsofpulp wrote: post #64
taeric wrote: post #21

Earlier quoted context omitted.

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 c…

>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. What about the money you could lose by taking the dividends and putting that somewhere?

That is a bit of a diversion, as you could have picked a tech stock that went to zero, as well.

That said, sibling post disputes if the factoid is even true. So, not clear what the full point is. I am personally sympathetic to the idea that dividends used to be one of the defining differences between profit and non-profits. You have to get into buybacks to fully see the differences today, I think. And that does feel like a very different thing. The argument doesn't get any favors from false factoids, though. :(

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

#72

Post by verdverm »

cma wrote: post #38
verdverm wrote: post #26

Earlier quoted context omitted.

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

I believe the US is near the top in second homes per capita as well, and near at the top in owning additional homes on wheels (RVs).

I'd believe that, there's also a trend towards Airbnb over long-term rentals adding to the problems

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

#73

Post by cable2600 »

lame-robot-hoax wrote: post #9
cable2600 wrote: post #2

Inflation and cost of living index. The economy is in a recession.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

COVID-19 killed a lot of careers and businesses. The rise in gas and diesel increases the costs of shipping which is passed on to the customers.

Going green will destroy our economy because there is no infrastructure to replace fossil fuels yet.

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

#74

Post by [deleted] »

cs702 wrote: post #56

Here's an interesting, and I think relevant, comparison: From 1964 to 1981 (17 years), the US stock market went nowhere. From 1981 to 1998 (the next 17 years), it went up ~10x: Date DJIA 12/31/1964 874 12/31/1981 875 12/31/1998 9,181 During the first 17 years, US GDP went up almost 5x. During the second 17 years, GDP went up less than 3x. Source: https://finance.yahoo.com/news/mr-buffett-stock-market-fortu...

[deleted]

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

#75

Post by [deleted] »

lotsofpulp wrote: post #62
anthonyskipper wrote: post #10

Earlier quoted context omitted.

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?

The claim is nowhere near true. https://dqydj.com/stock-return-calculator/ MCD is 11.29% per year for the last 5 years. AAPL is 28.2%, MSFT is 26.49%, GOOG is 20.91%. Even a riskless SP500 investment earned 11.139% https://dqydj.com/sp-500-return-calculator/

[deleted]

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

#76

Post by sroussey »

cma wrote: post #34
Scarblac wrote: post #30

Earlier quoted context omitted.

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.

> I don't think it's realistic to expect that multiple families will start living in houses intended for one That is common in other countries, though it is usually a single extended family.

It’s more common in the US than many think, at least in some communities.

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

#77

Post by cs702 »

frumper wrote: post #66
cs702 wrote: post #56

Here's an interesting, and I think relevant, comparison: From 1964 to 1981 (17 years), the US stock market went nowhere. From 1981 to 1998 (the next 17 years), it went up ~10x: Date DJIA 12/31/1964 874 12/31/1981 875 12/31/1998 9,181 During the first 17 years, US GDP went up almost 5x. During the second 17 years, GDP went up less than 3x. Source: https://finance.yahoo.com/news/mr-buffett-stock-market-fortu...

1962 652.10 1985 1,546.67 2008 8,776.39 What years you pick changes impressions. The 70s were an economic mess though.

Agree! My point was, and is, that the stock market can decline or go nowhere as the economy grows, sometimes for a long time!

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

#78

Post by Izkata »

lame-robot-hoax wrote: post #9
cable2600 wrote: post #2

Inflation and cost of living index. The economy is in a recession.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

We're only officially in a recession when NBER declares it. And they only do so by looking backwards, months after the fact at least.

The "two quarters of negative growth" was only ever a rule of thumb that mostly fit, never the official definition.

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

#79

Post by flandish »

Because “the economy” is defined by the author at any given time.

For the poor and working class: the economy may be terrible.

For the rich and owners of capital: it may be fantastic, if they want to impress, or terrible if they want to layoff and hedge.

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

#80

Post by Supermancho »

zeroCalories wrote: post #68
zelon88 wrote: post #58

Earlier quoted context omitted.

I would argue we need to put limitations on what entities can purchase residential property. There is no reason a corp needs to own a 2 bedroom house. It is manipulating a critical market and destabilizing everything. Push them out of the market. They should have have no skin in this game. You want to increase the supply. I want to tank the demand. Your method won't work because if regular people could afford to comp…

Rentals make up a small percentage of single family homes. Around 5% depending on where you are. Not letting black rock buy a home won't save you from the overpaid tech worker or nurse-account power couple from dropping 1.5x the listing price in cash. We know flooding supply works because we've seen it play out. Tokyo is the biggest metro area in the world, with a growing population, and reasonable rents because the…

> Not letting black rock buy a home won't save you from the overpaid tech worker or nurse-account power couple from dropping 1.5x the listing price in cash.

What data do you have to support this?

> As of 2022, investment companies own about one-fourth of all single-family homes in the US, accounting for 22% of American homes sold, down from 80% in 2020-2021

Naturally, the homes bought are all in the most densely populated areas with a relatively new construction (gentrified neighborhoods). I think it's gonna be a couple years before prices drop.

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