Economy: Where are we now?

I was watching this video about long term and short term debt cycles (as simple as it is, I am still trying to full comprehend, lol), and I think I can definitely recognize we are in a period of social unrest, but where do we stand as far the cycles go?

https://www.youtube.com/watch?v=PHe0bXAIuk0


Also I have seen lots of commentary (elsewhere) regarding Buffet and the fact that he has not been buying stock since the crash, but rather selling. There are folks saying he must be predicting another crash. Others saying he has lost his touch. I feel like the latest upward swing we are seeing in the market is only fueled by short term optimism, and by folks not taking into account the pain we are going to see in the long haul. Am I wrong? Are we moving towards another crash?

If someone knew for sure, they'd be quite the person.

Truth is, we just have to watch for a few things:

1) covid rebound cases
2) covid rebound cases reaction, in the event they spike. Do we shutdown again?
3) covid rebound cases reaction, in the event we don't spike, do more things open?
4) OPEC

It's fragile. Signs are pointing to a market up turn. The best advice I can give you is take some cash that you could literally set on fire, and not worry about it.

Then dollar cost average some basic ETFs and stocks every week or every two weeks, or every month. See how that goes.

Anyone that can tell you things are a definite is dead wrong. My entire profession is bullish the economy, and today was my largest single day earning this year. But even I'll tell you, managing the risk of that is extremely sensitive and I will not jump on the bandwagon yet.

I got extremely lucky with some of my stuff. Nothing more than that. But the market upturn on short term optimism is more just outright optimism. Not short term. It's a curve. People having a life today is sooner than expected from covid experts, that impacts June 8 yes but also July 8 differently and down to December 8. That means Billy Bob who thought he's going back in August 1, but now June 22. Has 6 weeks of earnings more; that changes energy demand, retail demand, etc. All curve.

My personal opinion--everything is overheated. shit will scale down here soon. And mellow it. The forward optimism is too rich.

Quote:

---

Originally Posted by pumpernickel

If someone knew for sure, they'd be quite the person. I was looking at the phases in the video. I had to watch it a couple of times and I think we are in the deleveraging phase.

Truth is, we just have to watch for a few things:

1) covid rebound cases I am worried that many are acting like Covid is actually over after opening without waiting to see what the effects will be on the rise of cases.
2) covid rebound cases reaction, in the event they spike. Do we shutdown again? How bad will it be if we have to shutdown again?
3) covid rebound cases reaction, in the event we don't spike, do more things open?
4) OPEC

It's fragile. Signs are pointing to a market up turn. The best advice I can give you is take some cash that you could literally set on fire, and not worry about it.

Then dollar cost average some basic ETFs and stocks every week or every two weeks, or every month. See how that goes. I wish I had done dollar cost averaging when the market crashed in March. I decided to just play on paper, and if I had gone ahead with my stock picks I would have done well.

Anyone that can tell you things are a definite is dead wrong. My entire profession is bullish the economy, and today was my largest single day earning this year. But even I'll tell you, managing the risk of that is extremely sensitive and I will not jump on the bandwagon yet.

I got extremely lucky with some of my stuff. Nothing more than that. But the market upturn on short term optimism is more just outright optimism. Not short term. It's a curve. People having a life today is sooner than expected from covid experts, that impacts June 8 yes but also July 8 differently and down to December 8. That means Billy Bob who thought he's going back in August 1, but now June 22. Has 6 weeks of earnings more; that changes energy demand, retail demand, etc. All curve.

My personal opinion--everything is overheated. shit will scale down here soon. And mellow it. The forward optimism is too rich. I believe the optimism is way to early. What is going to happen when everyone spends all their stimulus checks? Covid has not gone away, social distancing is still in effect, business have gone bankrupt and unemployment is still at crazy levels. This can't be good for the long term.

---

I saw an article today that we actually officially hit the recession in February before Covid even hit, so if that is the case, there can't be a "V" shaped recovery if we were already headed to a recession anyway. I am wondering if that is why Buffet hasn't been buying, because he invests for the long run and this optimism is a short lived spike.

Quote:

---

Originally Posted by chloevankatie

I saw an article today that we actually officially hit the recession in February before Covid even hit, so if that is the case, there can't be a "V" shaped recovery if we were already headed to a recession anyway. I am wondering if that is why Buffet hasn't been buying, because he invests for the long run and this optimism is a short lived spike.

---

First, Warren isn't some God. I've worked under him, for a little over two years. I wouldn't believe everything he says or does. He's a very practical investor, but that's it. The Intelligent Investor is more or less his style.

In regards to your red stuff:
1) kick out the phases. You can't label periods like that, you're making things follow an order..that's a technical trading style. No mo of that.
2) I agree, I think people are acting like it's over but it's definitely not. I just don't think the second shutdown will be of any material. Businesses will fight it tooth and nail. The real risk is something growing from Covid, as in Covid is the derivative, and it manifests into something we have no control of. That may be surreal but that's the risk of covid. I don't think the second shutdown will be anything like the 1st.
3) start now then.dca should be everyone's forte. Ok, $100 a month. Find a fractional share site, go in 50-60% SP, 10-20% dividend, 10-20% bond, up to 10% in micro doses of some very large cap stocks. Set it and forget it. Money you invest is money you can light on fire, and not worry about. At least 1 yr, you don't look at it besides depositing, investing and logging out.
4) Im of the thinking everyone's spent their stimulus check, and done so in an inappropriate fashion. That catches up within 6 months, and how income equality widens. The rich will scoop up the shit the poor spent wrong on. Those bodies will be buried q4 2020-q2 2021. For sure, you'll see the real impact later.

Quote:

---

Originally Posted by pumpernickel

First, Warren isn't some God. I've worked under him, for a little over two years. I wouldn't believe everything he says or does. He's a very practical investor, but that's it. The Intelligent Investor is more or less his style. I found a video where he discussed why he decided to sell, so I guess that mystery is solved. It wasn't a great reason, but still an explanation.

In regards to your red stuff:
1) kick out the phases. You can't label periods like that, you're making things follow an order..that's a technical trading style. No mo of that. I was simply trying to get help understanding the long term and short term debt cycles that Dalio discussed in the video. I was hoping someone could help me understand it more. There was no trading or investing discussed in the video. I am assuming all of this money being handed out is eventually coming back to us in the form of taxes.
2) I agree, I think people are acting like it's over but it's definitely not. I just don't think the second shutdown will be of any material. Businesses will fight it tooth and nail. The real risk is something growing from Covid, as in Covid is the derivative, and it manifests into something we have no control of. That may be surreal but that's the risk of covid. I don't think the second shutdown will be anything like the 1st. So you don't think a second shutdown would have the same impact as the first?
3) start now then.dca should be everyone's forte. Ok, $100 a month. Find a fractional share site, go in 50-60% SP, 10-20% dividend, 10-20% bond, up to 10% in micro doses of some very large cap stocks. Set it and forget it. Money you invest is money you can light on fire, and not worry about. At least 1 yr, you don't look at it besides depositing, investing and logging out.
4) Im of the thinking everyone's spent their stimulus check, and done so in an inappropriate fashion. That catches up within 6 months, and how income equality widens. The rich will scoop up the shit the poor spent wrong on. Those bodies will be buried q4 2020-q2 2021. For sure, you'll see the real impact later. I guess I am one of the few that still has mine, lol.

---

...........

Quote:

---

Originally Posted by chloevankatie

...........

---

Warren did what any risk manager would do--sell, to avoid too much of a loss. Difference between him and Ackman, is Ackman sold to get short and buyback in. Warren sold to prevent more losses, but took the realized mtm hit. Nothing's realized until you hit sell or buy, nothing. Everything else is just paper and fluff limits. Unfortunately companies enforce that so traders obey.

These st & lt debt cycles are just things they come up with to rationalize their investment behavior. They categorize it after a strategy to give it significance. The truth is debt cycles will more or less adjusted to current interest rates, the tenure, and geopolitical risks. This cycle bullshit is like me coming up with a theory on why I spend for sex. Truth is I have more free time(can't predict when), horny, and disposable income. Can't figure out exactly when all three happen at once but there some math and logic to it. Call it a buffet and fasting cycle for me.

No, I don't think the second one does. It'd be too grave for the economic health and mental health of society. Way too much opposition. It'd have to take something extrinsic to covids symptoms for it to turn heads THEN pause the world. The travel and tourism economy is temporarily fucked.

Well good and bad. Save appropriately and spend appropriately, its what makes the world go round. I'm still bearish the economy, but mildly bullish travel. I'll get long airlines, hotels, some energy stocks and short the happy go Lucky's for the meantime. Always slightly padding fat to the core stack I run.

Quote:

---

Originally Posted by pumpernickel

These st & lt debt cycles are just things they come up with to rationalize their investment behavior. They categorize it after a strategy to give it significance. The truth is debt cycles will more or less adjusted to current interest rates, the tenure, and geopolitical risks. This cycle bullshit is like me coming up with a theory on why I spend for sex. Truth is I have more free time(can't predict when), horny, and disposable income. Can't figure out exactly when all three happen at once but there some math and logic to it. Call it a buffet and fasting cycle for me.

---

This is probably true. When doing research, I come across lots of old articles and videos that predict one thing or another, and of course, years later, those predictions did not happen. Dalio himself says he lost everything in the 80s when he made a huge prediction about the economy that did not come true. Hopefully he learned from that, as he is doing much better now. It won't stop me from trying to keep reading though, I like to learn as much as I can and see where folks have gone wrong as well as where folks have been right. History is fascinating and I have been reading about the changes that have affected the economy over time.

^^ Yep, both comments immediately above are dead on regarding economic predictions given by industry experts. IMO. :thumb:

It's exactly like I said back at the beginning of the SARS-COV-2 & COVID-19 spectacle. And look what happened. Heh... smh. :rolleyes: A bunch of nonsense predictions based on flimsy to horrible to 'absolutely zero' data.

In that regard it was worse b/c at least finance experts try to use solid and valid data as best they can. Still, it will never work for predicting certain economic conditions or outcomes. Statistical & historical eco analysis are helpful but you can't control the massive global "societal herd" mentality which affect market conditions simply on speculation. As a result you can't apply necessary future data and outcomes (or they could easily change) which end up being the result of those speculative behaviors, itself driven by numerous social media or market phenoms (case in point? COVID-19).

And here we go

https://www.buzzfeednews.com/article...on-coronavirus

^ Yup Chloe and what's horrible about that unemployment rate is it didn't have to happen. Sigh.

I'm not certain (personally) yet about the ultimate economic impacts or if they are going to be that dire, but, yes, I agree the unemployment and immediate effects in the last few months have been horrible. My biggest issue is that it shouldn't have happened. :/

Quote:

---

Originally Posted by pumpernickel

And here we go

---

PN was that a dig, or did you mean it like, "yea and this too", or maybe, "ok, here we go off to the races with some continued debating...". Not sure what you meant.

It's a grim report. I don't know if it will be that dire either. He is stating some pretty sad facts though.

Quote:

---

Originally Posted by mathguy

^ Yup Chloe and what's horrible about that unemployment rate is it didn't have to happen. Sigh.

I'm not certain (personally) yet about the ultimate economic impacts or if they are going to be that dire, but, yes, I agree the unemployment and immediate effects in the last few months have been horrible. My biggest issue is that it shouldn't have happened. :/

---

Quote:

---

Originally Posted by mathguy

PN was that a dig, or did you mean it like, "yea and this too", or maybe, "ok, here we go off to the races with some continued debating...". Not sure what you meant.

---

Nothing of that sort. I said here we go as in...here we go down stock market wise.

Eh August really isn't my worry Chloe. It's election time, jes Christmas. Q4-Q1 bodies will be buried. And before someone says 6 months only, no it's a ripple. Divorce rates, unplanned pregnancies, domestic abuse get higher, mental health gets worse. It's not pretty. The real impact on the economy isn't there yet.

We need people to go from being able to get by, to literally no liquidity. That'll shape up in some form of the curve by end of q3, as we get closer.

Quote:

---

Originally Posted by mathguy

PN was that a dig, or did you mean it like, "yea and this too", or maybe, "ok, here we go off to the races with some continued debating...". Not sure what you meant.

---

I thought he was merely unable to contain his joy when you joined thread.

Lol j/k :)

It seems the sudden optimism in the markets have died. Reality is setting in.

Quote:

---

Originally Posted by chloevankatie

I thought he was merely unable to contain his joy when you joined thread.

Lol j/k :)

---

No no you don't have to be j/k Chloe ;)
One can always hope lol. In my mind that's what I was going with anyway :tongue: :pound:

Quote:

---

Originally Posted by chloevankatie

I thought he was merely unable to contain his joy when you joined thread.

Lol j/k :)

It seems the sudden optimism in the markets have died. Reality is setting in.

---

Ha. Good to have others chime in.

We'll see where we strike 2nd week ish of July, midish July. Texas is level 2, and 2nd phase of re opening on Monday. I'm curious.

And this constant bullish rallies are such easy sells. I really think people who have never invested in the stock market, came out of the wood works. The daily flip margins are huge, its a bipolar game.

I still stick to my angles though, very confident in it. Worst YTD I've had in my career, I think I'll end up positive though. I'm making baby margins messing the dailies on the rookies. That's giving me leverage to keep the var maxed to the gills.

I was still long term long airlines, sold out some of my AA cause of the stupidity in the rally. And shorted Tesla again. That stock you can literally trade short term and make significant money. Put more into the core, and kept some FCF against my shit p&l.

Quote:

---

Originally Posted by pumpernickel

We'll see where we strike 2nd week ish of July, midish July. Texas is level 2, and 2nd phase of re opening on Monday. I'm curious.

And this constant bullish rallies are such easy sells. I really think people who have never invested in the stock market, came out of the wood works. The daily flip margins are huge, its a bipolar game.

I still stick to my angles though, very confident in it. Worst YTD I've had in my career, I think I'll end up positive though. I'm making baby margins messing the dailies on the rookies. That's giving me leverage to keep the var maxed to the gills.

---

I think we will see a very regional profile to recovery. Texas new cases way up, but with more tests and about 2 weeks into re-opening that shouldn't be a surprise. Europe starting to re-open in earnest, but now China scrambling because of a few dozen new cases after almost 7 weeks without.

I don't think we will see a full shutdown even if things get really bad again...the economic hit just isn't palatable and elections right around the corner.

Interesting you are willing to keep your VAR high, that is a bit contraindicated when volatilty is so high. It IS about FCF now and probably into Q1...those with strong liquidity will do well, and those without will struggle or be forced to file.

Quote:

---

Originally Posted by Ben Rhimene

I think we will see a very regional profile to recovery. Texas new cases way up, but with more tests and about 2 weeks into re-opening that shouldn't be a surprise. Europe starting to re-open in earnest, but now China scrambling because of a few dozen new cases after almost 7 weeks without.

I don't think we will see a full shutdown even if things get really bad again...the economic hit just isn't palatable and elections right around the corner.

Interesting you are willing to keep your VAR high, that is a bit contraindicated when volatilty is so high. It IS about FCF now and probably into Q1...those with strong liquidity will do well, and those without will struggle or be forced to file.

---

I always keep my var maxed. Scared money don't make money.
I say FCF but more so in hype stocks I sell or short to get liquidity. I have a bunch of reciporacting positions.

And agreed on second "shutdown" strength, or lack thereof. It's not really that, that keeps me a net bear. It's duration. People knew opening would cause a spike, etc. That's natural.

I don't think the economy still grasps 2021 is still heavily impacted, too. A lot of the US set to travel in a Oct & Nov 2020 globally. I'm betting that doesn't happen. I'm betting it's not even possible till q3ish 2021. People won't be able to attend live sports for a year +, not just these next 3 months. It's q4-q1 that'll hit people hard and understanding the magnitude. That shit life may not be entirely normal for more than a year. That changes the scope of things. From real estate, travel, entertainment, etc. That's a new beginning.

I need the market to realize Christmas is painful. That's my bet. And if I'm wrong, then that means energy,oil, retail is up. And I got a position there.

Quote:

---

Originally Posted by pumpernickel

A lot of the US set to travel in a Oct & Nov 2020 globally. I'm betting that doesn't happen. I'm betting it's not even possible till q3ish 2021. People won't be able to attend live sports for a year +, not just these next 3 months. It's q4-q1 that'll hit people hard and understanding the magnitude. That shit life may not be entirely normal for more than a year. That changes the scope of things. From real estate, travel, entertainment, etc.

---

The Disney experience for NBA and MLS will provide a lot about the trajectory for sports, and I agree concerts will follow. I wonder about real estate, as most of the job loss has been retail, etc and that tends to be rental base. Landlords will be hurting cuz of supply/demand imbalance but equity/housing is a longer outlook.

I kinda get you on the scared money point, but you can split the difference and buy the debt, which is yielding nicely now depending on sector. And you've got a stronger position if it goes into bankruptcy...

Quote:

---

Originally Posted by Ben Rhimene

The Disney experience for NBA and MLS will provide a lot about the trajectory for sports, and I agree concerts will follow. I wonder about real estate, as most of the job loss has been retail, etc and that tends to be rental base. Landlords will be hurting cuz of supply/demand imbalance but equity/housing is a longer outlook.

I kinda get you on the scared money point, but you can split the difference and buy the debt, which is yielding nicely now depending on sector. And you've got a stronger position if it goes into bankruptcy...

---

NBA apparently is already have some internal issues. We'll see. I think the world had to hit fast forward on a lot of things I I thought would happen in the near future.

1) A majority, and viable Work from Home designation.
2) Virtual Reality Entertainment (sports, concerts,etc). Where you pay for the POV on your headset at home. And stadium owners can really charge whatever. It's virtual seats, can have 100k at a game not just 20k for the NBA.
3) Virtual job reach--i don't need to hire a local lawyer or doctor, I can virtually hire one now. As good, in regards to representation...the virtual aspect will come.
4) Drones. Waiting for full on drone delivery, no humans. Can't pass sickness around with drones doing the work. Itd require FFA and USPS war

All this stuff leads to folks looking at suburb living, don't need to live near work now, possibly virtual education, etc.

Quote:

---

Originally Posted by pumpernickel

NBA apparently is already have some internal issues. We'll see. I think the world had to hit fast forward on a lot of things I I thought would happen in the near future.

1) A majority, and viable Work from Home designation.
2) Virtual Reality Entertainment (sports, concerts,etc). Where you pay for the POV on your headset at home. And stadium owners can really charge whatever. It's virtual seats, can have 100k at a game not just 20k for the NBA. pricing is the issue here but agree with concept
3) Virtual job reach--i don't need to hire a local lawyer or doctor, I can virtually hire one now. As good, in regards to representation...the virtual aspect will come.telemed is a thing, but it only works for minor stuff.... you will still want full-blown experience for cancer, etc.
4) Drones. Waiting for full on drone delivery, no humans. Can't pass sickness around with drones doing the work. Itd require FFA and USPS war. its the touching part....drones do NOT eliminate that -they only remove a human to human exchange...any virus can remain.

All this stuff leads to folks looking at suburb living, don't need to live near work now, possibly virtual education, etc.

---

Companies can save thousands on rent each month if they let WFH continue. But will they give up the control over having everyone on-site every day?

Drones will limit the amount of human spent time. That'll only help the case.

Cancer, yes. Pregnancy, yea. But the normal routine visits? Thing of the past. Telemed existed but was never insured.

VR wise, pricing will market itself in. It'll never be too stupid, cause market will always tailor itself.

As for companies giving up control, that shall be seen. I think the ones that do it reluctantly, don't do it American based. They say F it, we'll do all remote but from India or the Philippines.

Time to strategically start loading in.

More room to fall, eyeing small buy ins at FB, tech, s&p, dividend etfs. Gonna dip more but the layering process starts now.

Very confident in a year will be double digits % gains.

Quote:

---

Originally Posted by pumpernickel

As for companies giving up control, that shall be seen. I think the ones that do it reluctantly, don't do it American based. They say F it, we'll do all remote but from India or the Philippines.

---

Shell already does that. Problem is, the folks in London don't realize all the adjustments made in Manila, so they don't have the control they think they have. It was funny to watch that play out, because your SMEs actually need to ge experts, don't they, or it falls apart...

Quote:

---

Originally Posted by Ben Rhimene

Shell already does that. Problem is, the folks in London don't realize all the adjustments made in Manila, so they don't have the control they think they have. It was funny to watch that play out, because your SMEs actually need to ge experts, don't they, or it falls apart...

---

Lol. Too close to home.

I was kind of echoing Shell, but didn't say that specifically. The fact you did the math on that, bourbon on me my friend.

And boom, Warren buys out doninion
Wonder if this is in some fashion to integrate.

That's a big investment in fossil fuel backing unless he's looking to convert.

Old thread, but relative. I fear we are going to see some reaction from the politicians by inauguration time. The economy is going to have to be majority halted again.

You hold your savings cash, set aside. Get ready to buy back in equities, stay out of real estate until that forbearance lifts + a few months.

Always relevant pumper.

I try to avoid broad catergories like equity or debt. The successful equity players will be those that can pivot and deliver service amid lockdowns. Amazon, UPS, DHL, Doordash, etc. On the debt side deleveraging is crucial in the near term to survive. Capital expansion plans are/have been slashed to get through this. It may not be enough for some. Locally, the smaller O&G players have a tough row to hoe (no pun intended)...OPEC+ is driving this and as long as Aramco's cost to produce is <$10 everyone has to follow their lead...

:santahat:

Quote:

---

Originally Posted by Ben Rhimene

Always relevant pumper.

I try to avoid broad catergories like equity or debt. The successful equity players will be those that can pivot and deliver service amid lockdowns. Amazon, UPS, DHL, Doordash, etc. On the debt side deleveraging is crucial in the near term to survive. Capital expansion plans are/have been slashed to get through this. It may not be enough for some. Locally, the smaller O&G players have a tough row to hoe (no pun intended)...OPEC+ is driving this and as long as Aramco's cost to produce is <$10 everyone has to follow their lead...

:santahat:

---

I buy almost anything that bleeds heavy. I like it, like I like my steak. When these cases grow heading into the inauguration, I'm expecting a definitive drop. At least I've sized for it.

Quote:

---

Originally Posted by pumpernickel

I buy almost anything that bleeds heavy.

---

Sounds like a fetish...no judgement here...

This was my first time ever to play with stocks. I made a few bets like Under Armour, Carnival Cruise, delta & tesla and almost all of them worked for me. During lock down all I did was read up the history and necessity of stocks and picked those.

Quote:

---

Originally Posted by Aaron02h

This was my first time ever to play with stocks. I made a few bets like Under Armour, Carnival Cruise, delta & tesla and almost all of them worked for me. During lock down all I did was read up the history and necessity of stocks and picked those.

---

The tell tale is when the dip comes, if you're set up to buy more. Not necessarily hit the bid and bail, out of fear.

I mean this momentum is nuts. We're near pre covid levels, we are printing money, you have society living free right now. I think they'll extend those benefits to mid 2021. But there's going to be a time, when it stops and it'll rip.

I have tenants on rent relief. If they don't extend, they owe me my rent lump sum Jan 1. They can't afford that. If I don't get paid, that costs me where else I would spend cause I need to cover that bill.

We're hoping central banks continue to mask the damage, and the vaccine resolves the society issue. At minimum, I think that happens till June 2021 for the central bank, but vaccine wise we need a healthy % of the population fully vaccinated. That means both shots. If it comes out in April, that'll take till winter before we get decent numbers. Bankruptcies are one thing that have zero cares for that. Going broke is the one thing that'll still lose. If you go broke, you're screwed.