>who is buying these stocks? It’s not individuals. It’s not even pension funds. It’s not the private sector. Almost all the stock purchases are being bought back by corporations in share buyback programs. In other words, companies are buying their own stocks in order to push up the price stocks keep going up while only a minority benefits and not much is returned into actual growth http://michael-hudson.com/2017/08/s…
Do buybacks actually increase stock price? If a company buys back $1M in stock, that means it has $1M less in its bank account (meaning the company is now worth $1M less), but also $1M less stock is in circulation. Mathematically I would expect the price to stay the same.
Stocks Up $1T Since October
41–50 of 121 posts
Re: Stocks Up $1T Since October
#42Earlier quoted context omitted.
You'd still be doing well even if you invested only at the high points. I'm quite good at buying right at the tippy-top just before it dives.
My point is that people have not been thinking “this is the top” for 40 years straight, not that people wouldn’t make money if they bought and hold through recessions.
> My point is that people have not been thinking “this is the top” for 40 years straight
My point is the people who don't invest do think that way, and so don't invest. Most investors also think that way, which is why they sell their winners, and hence have below-market returns.
Me, I never sell my winners. This seems to be a highly unusual strategy. I'm still holding stock I bought 40 years ago.
Re: Stocks Up $1T Since October
#43Earlier quoted context omitted.
You'd still be doing well even if you invested only at the high points. I'm quite good at buying right at the tippy-top just before it dives.
My point is that people have not been thinking “this is the top” for 40 years straight, not that people wouldn’t make money if they bought and hold through recessions.
Those same people have trouble recognizing the bottom as well, and generally always have a reason to not invest.
For them, I recommend investing after 3 years of a sustained market direction from an inflection point.
Re: Stocks Up $1T Since October
#44Earlier quoted context omitted.
If I only have $2, why would I put $1 in stocks when I could put all $2 in food?
You can always find an excuse to not invest.
I'm saying that when you are on the edge of being able to feed yourself, investing in anything other than being able to eat is the wrong call. I have actually been in that position.
It also seems kind of silly to play with $1 in the stock market; I'm going to make like 8 cents in a year on average with a high variance, while if I bought food I would be able to work using those calories and maybe earn $8 in the time it took to burn those calories.
Re: Stocks Up $1T Since October
#45Earlier quoted context omitted.
My point is that people have not been thinking “this is the top” for 40 years straight, not that people wouldn’t make money if they bought and hold through recessions.
Those same people have trouble recognizing the bottom as well, and generally always have a reason to not invest. For them, I recommend investing after 3 years of a sustained market direction from an inflection point.
> I recommend investing after 3 years of a sustained market direction from an inflection point
Defining an inflection point is subjective, particularly a few years after it. Late 2008 was a crash; 2011 featured lots of hand-wringing around QE, "green shoots" and the like.
Re: Stocks Up $1T Since October
#46Earlier quoted context omitted.
You can always find an excuse to not invest.
I'm saying that when you are on the edge of being able to feed yourself, investing in anything other than being able to eat is the wrong call. I have actually been in that position. It also seems kind of silly to play with $1 in the stock market; I'm going to make like 8 cents in a year on average with a high variance, while if I bought food I would be able to work using those calories and maybe earn $8 in the time i…
Ah, the bottom 90% of Americans, ever on the edge of being able to feed themselves.
Re: Stocks Up $1T Since October
#47Earlier quoted context omitted.
People making $180k a year lack funds to buy stocks? Yeah, that’s a no from me.
>> I'm thinking the bottom 90% doesn't own much stock due to lack of funds. Not because they don't know how or because transaction fees are too high. > People making $180k a year lack funds to buy stocks? Yeah, that’s a no from me. An individual person making $180K a year is in the 92nd percentile. Parent is talking about the other roughly 300 million people.
GP is talking about the 90th percentile. If you want to quibble about exactly where that line is, whatever, but it's not the point. It's very clear that the percentage of people who can afford to invest is broader than the top decile.
Re: Stocks Up $1T Since October
#48Earlier quoted context omitted.
" The poorest third of households buy half of all lotto tickets, according to a Duke University study in the 1980s, in part because lotteries are advertised most aggressively in poorer neighborhoods. " https://www.theatlantic.com/business/archive/2015/05/lotteri... [EDIT] It's not an insignificant amount either: half of $70 billion. From the same article: " According to the North American Association of State and Pro…
I bet they have televisions too, the sheer audacity
What? The point is that lack of funds for investing is clearly not the problem if they're buying so many lotto tickets.
Re: Stocks Up $1T Since October
#49Never talk about stocks on HN. You will be downvoted by people who missed out on the 10 year bull market and desperately trying to justify their mistake by saying its a rigged scam that is akin to playing roulette at a casino.
Or maybe you're being downvoted because "I did great and you're dumb lolol" is never a good look, or a useful helpful contribution? (or because you're whining about downvotes and attacking the downvoters based on imaginary reasons, which is against the site guidelines).
Re: Stocks Up $1T Since October
#50Earlier quoted context omitted.
You can always find an excuse to not invest.
I'm saying that when you are on the edge of being able to feed yourself, investing in anything other than being able to eat is the wrong call. I have actually been in that position. It also seems kind of silly to play with $1 in the stock market; I'm going to make like 8 cents in a year on average with a high variance, while if I bought food I would be able to work using those calories and maybe earn $8 in the time i…
It's pretty clear that we're discussing the far greater majority that actually can feed themselves and have money left over to invest.
Also people go through different stages in life, as you claimed in your comment. You might have been too poor before but I assume you can invest now right?