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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?

#91

Post by CapstanRoller »

zelon88 wrote: post #60
zeroCalories wrote: post #53

Earlier quoted context omitted.

This fundamentally misses the problem. Investors are only able to speculate because there is a shortage of housing. They are betting that in the future even more people will want that housing, and they are probably right. The only real solution is to crash the housing market by building more houses in places that people want them. Banning speculation won't solve the problem, and it might actually make the problem wor…

If we do that you'll have two social classes. You'll have the price fixed low income housing that looks like it belongs in a Command & Conquer game and you'll have the corporate owned HOAs that are just out of control expensive. Oh, and plenty of tent cities.

I'll take C&C barracks (a basic Quonset Hut) at this point, as long as I can own it and it's legally habitable. I don't care about aesthetics. In fact, something like that would be ideal as I could customize it completely.

Unfortunately those sorts of structures are banned by most municipalities.

https://en.m.wikipedia.org/wiki/Quonset_hut

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

#92

Post by HDThoreaun »

DrReachAround wrote: post #88
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…

This is absolutely false. Since 1968, 77 million housing units have been been built in the US. Assuming 2.5 people per household, today's average, that's enough for 190 million people. US population has increase 133 million since 1968. We have plenty of housing. It may just not be where you want to live and the type of housing want at the price you want. But no one is guaranteed any of those and shouldn't be. https:/…

New builds never recovered from 08.

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

#93

Post by HDThoreaun »

mindvirus wrote: post #43

The article doesn't mention it, but part of the answer is equity risk premium: https://corporatefinanceinstitute.com/resources/valuation/eq... If I can get ~5% risk free return from treasuries, I need to believe I can get MORE than 5% return on equity to pay for the risk. So prices have to fall. I'm surprised prices haven't fallen more given we've gone from 0% risk free return in a short period.

This is mentioned right at the beginning.

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

#94

Post by HDThoreaun »

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.

This explanation misses the point of the article which is that consumer stocks are broadly doing worse than the market.

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

#95

Post by HDThoreaun »

Izkata wrote: post #85
friend_and_foe wrote: post #83

Earlier quoted context omitted.

Appeal to authority is a weak argument. We are trying to use reason to figure out what's going on, not close the discussion by saying that we are not the entity that gets to decide such things.

They asked for the definition. That is the definition in the US. Everything else is speculation.

No they asked for a definition that would say the US is in a recession.

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

#96

Post by epolanski »

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/

Previous poster mentioned Amazon though.

McDonald's did outperform both SP500, Amazon and Facebook.

My point was that this kind of comparisons are true when you speak about sectors (growth vs dividend growth the first is gonna outperform in the long run, it's designed to...) but if you compare on a stock basis you find plenty of tech mega caps outperformed by old boring business if dividends are included, McDonald's was just a random example.

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

#97

Post by lotsofpulp »

epolanski wrote: post #96
lotsofpulp wrote: post #62

Earlier quoted context omitted.

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/

Previous poster mentioned Amazon though. McDonald's did outperform both SP500, Amazon and Facebook. My point was that this kind of comparisons are true when you speak about sectors (growth vs dividend growth the first is gonna outperform in the long run, it's designed to...) but if you compare on a stock basis you find plenty of tech mega caps outperformed by old boring business if dividends are included, McDonald's…

> McDonald's did outperform both SP500, Amazon and Facebook.

MCD outperformed AMZN.

META (14%+) outperformed MCD.

SP500 was equal to MCD.

> if you compare on a stock basis you find plenty of tech mega caps outperformed by old boring business if dividends are included, McDonald's was just a random example.

What is a stock basis? If your unit of accounting is money, and your goal is money, then the total return calculator, which includes dividends, linked above is going to give you the only answer.

I cannot conclude there are not plenty of businesses out there outperforming the tech megacaps. Amazon might be lagging in the 5 year period, but you have to look on a timeline of decades. There is a reason these companies are at the top of the market cap rankings. There are entire sectors of other old businesses have not increased in decades by what just AAPL or MSFT alone have grown.

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

#98

Post by toomuchtodo »

zelon88 wrote: post #60
zeroCalories wrote: post #53

Earlier quoted context omitted.

This fundamentally misses the problem. Investors are only able to speculate because there is a shortage of housing. They are betting that in the future even more people will want that housing, and they are probably right. The only real solution is to crash the housing market by building more houses in places that people want them. Banning speculation won't solve the problem, and it might actually make the problem wor…

If we do that you'll have two social classes. You'll have the price fixed low income housing that looks like it belongs in a Command & Conquer game and you'll have the corporate owned HOAs that are just out of control expensive. Oh, and plenty of tent cities.

> If we do that you'll have two social classes. You'll have the price fixed low income housing that looks like it belongs in a Command & Conquer game

It does not have to be this way.

https://www.youtube.com/watch?v=sKudSeqHSJk

https://www.youtube.com/watch?v=d6DBKoWbtjE

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

#99

Post by javagram »

DrReachAround wrote: post #89
zeroCalories wrote: post #68

Earlier quoted context omitted.

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…

The average home size in Tokyo is 60 square meters, that's 645 square feet. That's called a one room studio apartment in the US. I don't personally know anyone that wants to live in a box like that, except maybe single people just out of college with little income.

There are plenty of people in the USA who live in apartments today. Building more apartments is outlawed in many areas due to land use rules. If people truly won’t live in the apartments, land use rules can be abolished and developers and builders won’t build those homes because they’ll find them unsaleable in the marketplace.

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

#100

Post by kbelder »

DrReachAround wrote: post #89
zeroCalories wrote: post #68

Earlier quoted context omitted.

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…

The average home size in Tokyo is 60 square meters, that's 645 square feet. That's called a one room studio apartment in the US. I don't personally know anyone that wants to live in a box like that, except maybe single people just out of college with little income.

There's lots of people with little income. Many would find a tiny apartment preferable to not having a place to live.
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