Stock Market

[mathguy]

Wow I like totally missed this thread or wasn't paying attention. Very funny Chloe.... cute. You little joker

Compulsive?? Me?? Nooooo. No way. Uh uh. Never. Hahaha.

Anywho, all joking aside, now that I've read this thread I'd say I'm very much in agreement with James and Ben and the points they made (for what it's worth anyway - not a stock broker here, nope, but I'm a smart mothafucka hehe). It's good sound logic and reasoning that James and Ben discussed throughout. Timing markets is super difficult, basically a huge gamble. Best you can do is wait for it to crash like it has, buy low, stay in it for the long position, reap the rewards in time.

It could go lower though. It may and it may not. No telling really. The market is essentially a huge speculation engine. Say some seriously bad news comes out of a major scientific study on SARS-COV-2 which gets lots of media coverage then that could spell doom for the market. It won't be due "necessarily" to a critical underlying economic mechanic but more likely due to mass panic & speculation which will drive the sell off of large stock positions. That is more or less what drives the market down. Speculation that the companies will not do well (or can't do well - which makes sense if things continue in this current manner). In this case it's due to an outside force and not some critical underlying economic factor so the bounce back could be utterly profound and swift. However, the longer we go like this the more chance we have of creating underlying economic mechanics and factors that *will* cause a serious depression. That's why I've said so many times that this can't continue. Not like this. :/

The one thing that is for damn certain though is that it IS going back to 30K+ (and well beyond). The only question is where is the speculative bottoming out and how quick/profound OR slow (though I think it will be quick if we can get our shit together soon) will that journey to north of 30K end up being?

[hawhawhaw76]

You would do well to just go with an index fund as has been suggested earlier. I would go with S&P 500 or NASDAQ 100. You can google "which companies are in S&P 500/NASDAQ 100" to see what you're getting.

I love that you're reading about Buffett. When I was starting out I read everything I could on WB.

Good Luck

[Ben Rhimene]

It could go lower though. It may and it may not. No telling really. The market is essentially a huge speculation engine.

The players will all tell you it is superior analytics...

In truth, it is a bit of both. In this day and age we all have access to the same news, so it is almost impossible to get a jump on the market. It is how we view that same news and whether or not we choose to act on it that makes the difference between winners and losers.

As hawhawhaw said you can always buy an index. The merit in that is the Alpha that active investors seek is relatively small compared to the overall market, because over time their successful "guesses" or good timing is offset by their unsuccessful "guesses" or bad timing. Playing the overall market protects you from that, but not from macroeconomic, geopolitical shitstorms like we currently face.


I should also be more clear when I discuss paper losses. They aren't paper losses to everyone. Somebody decided it was time to sell at a given price (or was a short and forced to sell but that's a bit too heady for Sunday morning), and when somebody bought it that created the new "mark" for that particular investment. Every time somebody tries to buy on the cheap and finds a seller who thinks it is time to get out it moves a bit lower. The seller may have lost money, or maybe made money because he/she bought it low and held it a long time but now it peaked and is heading downward so they lock in a gain. Same is true in an upward moving investment. For those of us who hold that same investment that buy/sell price combo is the new value for us. But until we choose to sell we are holding paper gains or losses. Which can be scary, because nobody likes to see a loss in value, whether it is ExxonMobil stock, bitcoin, or your house. That is why it is so critical to understand your risk tolerance and investment horizon.

[pumpernickel]

It would be easier if we were in a digitally monogamous relationship (or had a go pro and 6' ladder) but I will give it a shot...

IF you invest in the markets then you win with increases and lose with decreases. Most advanced countries have a bourse (market). So globally there is a shit ton of money invested. From folk like Fidelity to the lost souls of the recently closed thread.

When god flushes his toilet everything spins down. We look at NASDAQ etc but that is happening around the world.

KEY point...NOBODY loses $ unless they sell in a panic. If you hold onto you positions you have a paper loss, but still have chance for shares to rebound.

Main point is $23 TRILLION is a fuckload of paper losses, and society needs to see production return and lift stocks. That will take a real recovery, but because this is a fake (as in temporary and not systemic issue) crisis it is quite possible economy recovers in 2020. We have NEVER had a pandemic-incurred recession. This will be the first, but it will also be short-lived.

Make sense?

Never had isn't really the same as never can happen.

I'm of belief you'll see it all still be net flat for a year. The uptick happens q3 2021. Other triggers that should've started a recession a year or so ago should be heavily exposed now.

My real short term concern is Russia vs. Saudia Arabia. This needs a solution FAST. Or it's going to add even more to a bad economy.

They need to shut up, and have a plan to put out another 8-10 bbls by q2, 10-12 bbls by q3. Ramadan will be their tell take, Saudi can't support this for their general economy mid term but short term for their oil specific economy. Russia can't do this much longer, would be surprised past June. But this needs a fixing ASAP.

[pumpernickel]

The players will all tell you it is superior analytics...

In truth, it is a bit of both. In this day and age we all have access to the same news, so it is almost impossible to get a jump on the market. It is how we view that same news and whether or not we choose to act on it that makes the difference between winners and losers.

As hawhawhaw said you can always buy an index. The merit in that is the Alpha that active investors seek is relatively small compared to the overall market, because over time their successful "guesses" or good timing is offset by their unsuccessful "guesses" or bad timing. Playing the overall market protects you from that, but not from macroeconomic, geopolitical shitstorms like we currently face.


I should also be more clear when I discuss paper losses. They aren't paper losses to everyone. Somebody decided it was time to sell at a given price (or was a short and forced to sell but that's a bit too heady for Sunday morning), and when somebody bought it that created the new "mark" for that particular investment. Every time somebody tries to buy on the cheap and finds a seller who thinks it is time to get out it moves a bit lower. The seller may have lost money, or maybe made money because he/she bought it low and held it a long time but now it peaked and is heading downward so they lock in a gain. Same is true in an upward moving investment. For those of us who hold that same investment that buy/sell price combo is the new value for us. But until we choose to sell we are holding paper gains or losses. Which can be scary, because nobody likes to see a loss in value, whether it is ExxonMobil stock, bitcoin, or your house. That is why it is so critical to understand your risk tolerance and investment horizon.

Yup, that's why speculate with what you're willing to see go to $0.

It feels like shit, you don't sell. You hang tight. You only sell when you're green. How green? Up to you. So you never really materialize a loss. Ever.

You basically speculate with what you're willing to burn right in front of you for no reason at all.

[R1966]

Yup, that's why speculate with what you're willing to see go to $0.

It feels like shit, you don't sell. You hang tight. You only sell when you're green. How green? Up to you. So you never really materialize a loss. Ever.

You basically speculate with what you're willing to burn right in front of you for no reason at all.

Agree with you on the speculation statement. Generally agree with not selling at a loss but sometimes it makes sense in an after tax account towards the end of the year for tax purposes or if your initial investment thesis is proven wrong.

[chloevankatie]

I really enjoyed this talk with Chamath Palihapitiya. He touched on a lot of things that I had questions about.

https://www.youtube.com/watch?v=_hA3TV1bGsg

[Ben Rhimene]

Welcome back.

Just a bit of caution...he joined Facebook when it was a year old...none of us need to be any good if we could say the same. Not to say he isn't brilliant, but jumpstarts like that definitely help.

[chloevankatie]

So when they say that inflation will bring the value of the dollar down, but the value of assets will rise....real estate is considered part of those assets rising in value?

[Lovinglifeinaustin]

So when they say that inflation will bring the value of the dollar down, but the value of assets will rise....real estate is considered part of those assets rising in value?

Stocks and real estate are generally good inflation hedges. Cash and bonds not so much.

[Ben Rhimene]

Inflation does NOT bring the value of the USD down!!!

Fuck. So he is NOT brilliant. Gonna dumb it down...easier for me...please nobody take offense.

Imagine a closed economy. USD is not impacted by outside sources. If we grow then our economy grows. That growth means expectations of sharing in growth grows. People want to participate in the growth via higher wages, bonuses, stock, etc. That pushes costs up, so to balance that prices increase. In essence, that is how COLA adjustments are DESIGNED to work.

If you have COLA adjustments that ONLY increase that is a problem cuz if sales don't rise but costs do...

So with that framework add another country. They are doing the same shit.

The value of the USD moves in conjunction with the relative strengths of economy. If we are outperforming them the USD strengthens, and the opposite if we fall behind.

Our real estate really cannot be compared with any other (it is locationally special...domestically as well as internationally!!!).

Sometimes pundits oversimplify things.

[chloevankatie]

Inflation does NOT bring the value of the USD down!!!

Fuck. So he is NOT brilliant. Gonna dumb it down...easier for me...please nobody take offense.

Imagine a closed economy. USD is not impacted by outside sources. If we grow then our economy grows. That growth means expectations of sharing in growth grows. People want to participate in the growth via higher wages, bonuses, stock, etc. That pushes costs up, so to balance that prices increase. In essence, that is how COLA adjustments are DESIGNED to work.

If you have COLA adjustments that ONLY increase that is a problem cuz if sales don't rise but costs do...

So with that framework add another country. They are doing the same shit.

The value of the USD moves in conjunction with the relative strengths of economy. If we are outperforming them the USD strengthens, and the opposite if we fall behind.

Our real estate really cannot be compared with any other (it is locationally special...domestically as well as internationally!!!).

Sometimes pundits oversimplify things.

Palihapitiya didn't say that, the guy interviewing him did, just FYI.

But I don't the guy interviewing him was saying the value of the US dollar versus other markets change, but that there is general decrease in the purchasing value of money.

[Lovinglifeinaustin]

https://www.investopedia.com/ask/ans...alue-money.asp

https://www.officialdata.org/us/inflation/1800?amount=1

[Ben Rhimene]

Palihapitiya didn't say that, the guy interviewing him did, just FYI.

Fair enough. I didn't watch the whole thing.

The investopedia article James sent is helpful, but that is also within a closed loop economy.

In a global economy everybody is trying to grow. If the Brits grow faster than we do then the GBP should strengthen versus the USD. If they are slower then the converse is true.

Mind you, that is only a portion of what is going on. Country monetary policy impacts all of this. Central banks set different interest rates. This is designed to spur growth. So if the FMOC in the USA undercuts the BOE rate the USA SHOULD see growth versus England, IF all else is equal. But all else is never equal...too many levers at play.

[chloevankatie]

https://www.investopedia.com/ask/ans...alue-money.asp

https://www.officialdata.org/us/inflation/1800?amount=1

I wonder how much a BNG was in 1635?