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Stocks Up $1T Since October

bloomberg.com

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Re: Stocks Up $1T Since October

#71

Post by [deleted] »

dwohnitmok wrote: post #59
Thorrez wrote: post #33

Earlier quoted context omitted.

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.

The price of a stock has only an indirect relationship to the abstract value of a company. The current price of a stock is simply the highest buy order that is not yet fulfilled by a sell order. So if a company just keeps offering to buy stock at a high enough price to match existing sell orders it'll push the price of a stock up. Whether that's sustainable in the long run is a different story, but there's no ironcla…

[deleted]

Re: Stocks Up $1T Since October

#72

Post by manigandham »

pacyu wrote: post #12

>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…

That's from the summer of 2017 and misses the entirety of what happened over the last 2 years. Millions of people are very happy and benefiting greatly from their new wealth and large retirement accounts.

If you can't benefit from the S&P going up 30% in a year, I'm not sure what anyone can do for you.

Re: Stocks Up $1T Since October

#73

Post by WalterBright »

nitrogen wrote: post #44
WalterBright wrote: post #26

Earlier 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…

The freeways around here are gridlocked every day with people driving nice cars to work. Nicer cars than is really necessary. They could buy a cheaper can and invest a lot more than a dollar.

My daily driver is 30+ years old. It's probably worth about $500. Repairs, taxes, and insurance on it is cheap, too. For one thing, since the car is pretty much worthless, there's no point in spending money on comprehensive insurance.

But I turn the key and it goes. Except for today, when the battery cable corroded to the point of not passing enough current. I ordered a new cable from Amazon for $10, and will install it tomorrow. It'll probably take about 10 minutes. Did I say it was cheap to repair?

Re: Stocks Up $1T Since October

#74

Post by WalterBright »

manigandham wrote: post #50
nitrogen wrote: post #44

Earlier quoted context omitted.

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?

My iphone is 4 years old now. I've saved a ton of money not buying the latest every year, money I invest.

Re: Stocks Up $1T Since October

#76

Post by manigandham »

coliveira wrote: post #57
WalterBright wrote: post #11

Earlier quoted context omitted.

Much of the wealthy got that way by investing in stocks to begin with. If you don't invest in stocks, you won't benefit from a rising market. Why not do the obvious, and start investing yourself? Don't invest in lottery tickets, which are mathematically a losing game.

Nonsense, the stock market can (sometimes) help on retirement, but apart from professional traders, I haven't seen anyone who got rich simply by investing in stocks, and I know a lot of people who make good money. This is a myth propagated by the Wall Street.

When people talk about getting rich, beware that they're mostly talking about getting rich quickly in a matter of months or years. That won't happen, but you can definitely retire as a millionaire from modest means.

It's simple math that investing even minor amounts over your life can compound greatly.

Re: Stocks Up $1T Since October

#78

Post by WalterBright »

loeg wrote: post #55
treelovinhippie wrote: post #2

[flagged]

Here's the more sciency source for that claim (several links later): https://www.nber.org/papers/w24085 Here's an excerpt: > The sharp fall in median net worth and the rise in overall wealth inequality over these years are largely traceable to the high leverage of middle class families and the high share of homes in their portfolio. I.e., the middle portion (affluent or frugal enough to save, but not so extremely wea…

I can confirm my father's experience that real estate stinks as an investment:

1. maintenance costs

2. insurance costs

3. heavy and ever-increasing property taxes

4. 6% real estate commissions when you sell (contrast that with stock broker commissions on a trade)

5. you never have a clear idea what it is worth

6. it can take months to sell, meaning your money is not available to invest elsewhere

The only good thing about it is it's usually the cheapest way to borrow money.

Re: Stocks Up $1T Since October

#79

Post by lliamander »

WalterBright wrote: post #30
lliamander wrote: post #27

Earlier quoted context omitted.

Surely a recession would be a good time.

Only in hindsight. It takes extra large intestinal fortitude to invest in a recession. I've generally lacked such guts.

Why so? I admit to being a novice in that area, but unless you are worried things are going to get drastically worse (civil war, etc) won't most stocks get better as the economy leaves the recession?

Re: Stocks Up $1T Since October

#80

Post by JumpCrisscross »

manigandham wrote: post #69
JumpCrisscross wrote: post #56

Earlier quoted context omitted.

> It's pretty clear 2008 was the inflection point It's clear now. But (a) there are lots of starts that stall and (b) it's impossible to differentiate them 3 years afterwards. At the end of the day, timing the market is incredibly difficult. When one decomposes returns of the world's top investors, timing is pretty much random.

Time in the market beats timing the market. You're describing all the rationalizations people use to stay out. 2008 was the bottom and it went up for 3 years. You would see that by 2012 so buy in. That's it. That's the entire rule/suggestion. There's no "timing the market" needed.

> That's the entire rule/suggestion. There's no "timing the market" needed.

“Invest 3 years after an inflection point” is an attempt at timing the market.

For every 2008, there are ‘54 and ‘57; ‘70 and ‘73; ‘80 and ‘81; et cetera.

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