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Dow Hits 20000 for First Time

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191–200 of 214 posts

Re: Dow Hits 20000 for First Time

#191

Earlier quoted context omitted.

It is so so so much more nuanced than that. In one way, the more people that bought put protection on their stock portfolio created the bullish pressure that took weeks to unwind. (When you buy puts, the market maker is going long the stock as their own hedge. most akin to a bookie)

If you buy puts, MM sold puts and will sell shares against since he is holding a deltaLong position from selling his puts (he makes money if the underlying goes up and lose money if the underlying goes down (which is why you bought the put). To hedge that risk he would sell shares against the sold put so that the risk of the underlying move would be covered.

you're right, but yes the concept I'm referring to was staying delta neutral. When people close their put options before expiration, the MM's create buying pressure.

Re: Dow Hits 20000 for First Time

#192

Earlier quoted context omitted.

Businesses would like to make their goods as cheap as possible (by using cheap labor outside the US). What he has proposed (tariffs) forces them to build here, hence the jobs are here.

Business would like to make their goods as profitable as possible, they have never shown any willingness to pass on savings to customers.

That's the point, they are supposed to make as much money as possible. That's why you need competition. If corp A's competitor is selling the same product at a lower price, then corp A loses out on the profit. It's a nice feedback loop.

Re: Dow Hits 20000 for First Time

#193
post #38

Trump for all his craziness is vehemently pro business. I know the whole tech crowd wants him to crash and burn but the stock market rising is no surprise to me. Whether it's worth the damage done to the poor and the environment is yet to be seen.

"the whole tech crowd wants him to crash" - is this an alternative fact? lol. Get downvotes for pointing out the "alternative fact".

Please don't complain about downvotes, the guidelines ask us not to: https://news.ycombinator.com/newsguidelines.html. Additionally, this account has been posting mostly political or ideological comments. That's not what this site is for, and eventually we ban accounts that abuse it in this way.

Re: Dow Hits 20000 for First Time

#194
post #173

Earlier quoted context omitted.

Also, the stock market isn't the economy.

THANK YOU for pointing this out. The stock market is not the economy. Stocks going up is not objectively good, and stocks going down is not objectively bad. Same for housing prices and cost of living. When the pie grows, often the result is I have a shrinking portion of it.

Yes, true, but unfortunately for all of us who don't have our billions yet, many of those making policy decisions have a thumb or three in that pie and much of their wealth tied to it. What I've learned is that you can either be part of the "tide which lifts all ships" or be drowned by it. TL;DR get some index funds :)

Re: Dow Hits 20000 for First Time

#195

Earlier quoted context omitted.

THANK YOU for pointing this out. The stock market is not the economy. Stocks going up is not objectively good, and stocks going down is not objectively bad. Same for housing prices and cost of living. When the pie grows, often the result is I have a shrinking portion of it.

Yes, true, but unfortunately for all of us who don't have our billions yet, many of those making policy decisions have a thumb or three in that pie and much of their wealth tied to it. What I've learned is that you can either be part of the "tide which lifts all ships" or be drowned by it. TL;DR get some index funds :)

Don't forget too that 401(k)s force your hand to care about the stock market to get any sort of retirement in the modern era.

Re: Dow Hits 20000 for First Time

#196
post #4
post #2

So what? The Dow is a terrible indicator of even how well the stock market or the economy as a whole is doing. It is price weighted instead of market cap weighted so smaller companies that released fewer shares at a higher price have more impact on the Dow than larger companies. http://www.npr.org/sections/money/2017/01/04/508261371/episo...

It's a mildly interesting psychological milestone.

It's also a good technical one. We hovered very close for over a month. Good earnings and we popped over.

Re: Dow Hits 20000 for First Time

#197
post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

And here we are, invested in index funds, outperforming the hedge funds again...

I wonder about an index fund bubble. I am mainly using them too but if everyone is and continues to you wonder if it gets too crowded?

Re: Dow Hits 20000 for First Time

#198
post #134
post #71

I understand that people believe Trump is good for business. And I also understand that people believe Trump is good for the rich. And I also understand that people believe Trump is good for the blue-collar worker. But I don't understand how Trump could be a good influence, in the long term, on business and the stock market, when looking at his positions and policy changes. Why Trump isn't good for poor working class…

I'm sorry that I don't have the time to respond to all of your assertions, but I have done a reasonable amount of research on one of the points and figured I'd add my $0.02. > Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The United States is a net exporter of agricultural goods[1], where…

Just two minor points - be careful not to treat "agricultural goods" and "food" as the same. As one example, the US is a major (THE major) producer and exporter of corn...but a dizzying amount of that corn is NOT for direct human consumption. It's largely animal feed, and a few industrial uses.

This also serves as a reminder that there are relative advantages. The US is great (climate-wise) for producing corn, soybean, etc, but there are some OTHER foods that we are less good at producing than other countries, be it climate or infrastructure. Basic trade principles show that it's better all around if everyone focuses on their specialties and trades rather than each trying to be fully self-sufficient.

So it's a bit simplistic to say our grocery prices will rise only to the point where it makes sense to switch to domestic production...that switch implies a lot of inefficiencies, which means that there is an upper cap on how much prices can rise, but not that we want to get to that point.

Re: Dow Hits 20000 for First Time

#199
post #131

The Dow is a bad index, but if it's the warmest year ever, we shouldn't focus on all that's wrong with the Fahrenheit scale.

The Dow is more similar to using a barometer and proclaiming it the warmest year ever. However, in this case, the thermometer just happens to agree.

Re: Dow Hits 20000 for First Time

#200
post #134

Earlier quoted context omitted.

I'm sorry that I don't have the time to respond to all of your assertions, but I have done a reasonable amount of research on one of the points and figured I'd add my $0.02. > Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The United States is a net exporter of agricultural goods[1], where…

Just two minor points - be careful not to treat "agricultural goods" and "food" as the same. As one example, the US is a major (THE major) producer and exporter of corn...but a dizzying amount of that corn is NOT for direct human consumption. It's largely animal feed, and a few industrial uses. This also serves as a reminder that there are relative advantages. The US is great (climate-wise) for producing corn, soybea…

> Just two minor points - be careful not to treat "agricultural goods" and "food" as the same. As one example, the US is a major (THE major) producer and exporter of corn...but a dizzying amount of that corn is NOT for direct human consumption. It's largely animal feed, and a few industrial uses.

Oh, totally. Corn, specifically, has a really interesting history in grading, purpose, and politics in America. A lot of corn growing is meant to keep supply of other good down, that is, if the farm is not just paid to _not grow_ at all.

> The US is great (climate-wise) for producing corn, soybean, etc, but there are some OTHER foods that we are less good at producing than other countries, be it climate or infrastructure.

That's somewhat true, but becomes more true in time with repeat yield of nitrogen-fed corn production. That's mostly infrastructure though (with some time to rotate and repair soil).

> Basic trade principles show that it's better all around if everyone focuses on their specialties and trades rather than each trying to be fully self-sufficient.

Better "all around" for market efficiency in international-driven trade. The market in New York State could be optimized for specialized production that would well-exceed its own demand (with a couple areas of Long Island converting from specialty/rare goods to more general production).

> So it's a bit simplistic to say our grocery prices will rise only to the point where it makes sense to switch to domestic production...that switch implies a lot of inefficiencies, which means that there is an upper cap on how much prices can rise, but not that we want to get to that point.

You said it -- there is a huge amount of waste and risk in going international with product, so producers will go domestic at the earliest point possible. Foodtech (why I've done research into this topic) is really fascinating because of the complexity and fuzzy political costs.

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