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Off-Topic Stock Market & Crypto Discussion

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I was actually thinking companies like Appfolio and Paycom which are in the 20b or less market cap range instead of those near or around 1T.
 
90scane said:
What is used to determine networth for QP? All assets or just liquid?
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A Qualified Purchaser (QP) is: An individual or family business that owns $5M or more in investments; A trust sponsored and managed by other qualified purchasers; An individual or entity that invests at least $25M, either for their own accounts or on others' behalf; or.

Also, the large WS firms usually only deal with QP's, even on real estate.
 
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Alan Greenspan shared his opinion on Wednesday in a blog postcalled “Gresham’s Law.” The former Federal Reserve chair described Gresham’s law in his op-ed, and he noted that it can be “colloquially simplified to ‘bad money drives out good.’” Greenspan now serves as a senior economic adviser to Advisors Capital Management, and he believes a strong wind blowing in the direction of the greenback will continue to bolster the U.S. dollar.
Even if, as some prognosticators expect, U.S. inflation crests in the first half of 2023, and the Federal Reserve can slow or even stop the pace of rate increases, the U.S. dollar will still have a monetary tailwind to support it,” Greenspan wrote on Wednesday. He also said that fiat currencies have made examples of Gresham’s law a lot more scarce.
 
90scane said:
The FED wants to go high enough to see inflation decline for multiple months before they slow the hikes. I believe they will keep raising rates and if November Core doesn't drop they could do another .75 in December. The market has priced in .5-1 of hikes. If they do a .75 in December, it will be a massive sign to the market that the FED is going to keep crushing demand until inflation is under control.

The two non-inflation factors are: treasuries and unemployment!
Treasuries will break before inflation IMO due to all of the softness in the INT markets. Unemployment isn't as likely to fly higher as of now for the factors stated above.

At this point, we are all looking for the bottom and I'm holding cash (my defensive position) until the FED truly pivots (stops raising rates). Sure I could be behind the curve but I also have enough risk in other investments that I don't need to put my cash at risk as well.
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How big a factor do you think the Rs picking up the House and Senate will be for the market?
 
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GladeCane said:
How big a factor do you think the Rs picking up the House and Senate will be for the market?
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Traditionally it has been a big factor but there are outliers as well. My opinion is this will be an outlier year OR we could have a Q4 bounce with a 2023 drop back to below today's values. Long term- Rs will likely unlock oil allowing us to have more energy independence. I'm not sure if either party wants to build more nuclear. Sadly, we gave the licensing to our best battery/storage tech to CHINA (vanadium redox flow battery). Energy is the key to freeing us up to grow at a lower input cost. If we can pump more oil, build more nuclear, build EV infrastructure (including massive storage), and keep working on alternatives... we should be able to greatly reduce energy input costs. Imagine paying $100/month for all your energy needs vs $400. That $300*12 is now either spent on other items in our economy OR invested in US companies both likely increasing US GDP.

There is a study that says the business cycle is real estate. With rates going higher, real estate will keep cooling (not dropping off a cliff price-wise). This means less spending, real estate-related jobs, and less GDP overall. Since inflation isn't likely to go away, we are looking at Spike's comment: stagflation. Higher inflation, lower to no growth of GDP. Energy input is a BIG factor with real estate: save $300/month on energy and people can afford more home or an actual home.

We could see big INT money flowing into the US stock market helping to prop up values but that will slow in time. Thus, it could actually flatten the decline and prevent an outright crash. As the INT inflow starts to dry up, hopefully, the FED pivots giving our economy some legs to grow even with inflation staying higher than they like. That would be the "soft landing" which is nearly impossible to hit with all of the variables at play. Heck, we are already seeing large-cap tech stocks down 30-50%.

As of today, a number of INT central banks have trillions in US Treasuries. IF They all sold them it would force the FED to pivot to buy them (increase balance sheet) while they keep hiking rates. The INT central banks wouldn't have another lever to pull and the FED would let inflation burn off the purchases. This is very important as it isn't as much about what the FED does this recession but what happens during the next one. The US Government better get it's **** right including energy policy, SS, Medicare, over spending on **** that doesn't matter OR we will be looking at a major default.
 
A few more points on Energy:
If the USA can develop technology that allows for the collection, storage, and transportation of energy that isn't OIL and is cheaper than OIL, the world will be a much safer place. This isn't as much about OIL = BAD as it is simple economics. Cheaper energy = less civil unrest as more people can live above the poverty level and have more goods/services than they currently can afford. This is true everywhere! The upside for the USA would be less global leadership needed, a big GDP upside, and less need for Navy superpower status as we wouldn't have to secure OIL transportation.
 

Interesting take on inventory today. Basically he's saying companies have too much inventory now. Supply is opening. Manufacturing accounted for a rise in jobs..
That doesn't seem inflationary. An overedge of inventory will bring prices down and Christmas is coming with consumers having jobs and cash.
 
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mr.h said:
consumers having jobs and cash.
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Jobs- yes.
Cash- not really. Even the credit card balances have grown a bunch in 2022.

I'm not sure how you took any of that video as a positive. Inventory levels are actually very low at 1.2%. Jobs at 3.5% means the FED will continue to march on with higher rates. Three factors will force them to pivot: higher unemployment, lower inflation over many months, AND most likely treasuries market failure.
 
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90scane said:
Jobs- yes.
Cash- not really. Even the credit card balances have grown a bunch in 2022.

I'm not sure how you took any of that video as a positive. Inventory levels are actually very low at 1.2%. Jobs at 3.5% means the FED will continue to march on with higher rates. Three factors will force them to pivot: higher unemployment, lower inflation over many months, AND most likely treasuries market failure.
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Well inventories are rising which means the supply side is opening up
and yes, the economy is still strong, but that doesn’t equal 75bps increases until we reach the level where we need to be. The job numbers show that there are new jobs popping up. Hourly earnings are up could equal ca$h. The fact that a lot of the job numbers come from new manufacturing jobs is also good.
you are just assuming that everything that is positive is bad. I see it as a chance of a soft landing. Also inflation numbers are backward looking.
Jmo
 
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I've been a bull for most of my adult life. Maybe I'm getting old as I haven't purchased equities since Feb 2020. Sure I missed out on doubling my money with the massive infusion BUT I'm now actually ahead of my exit price and I'm not one to time the market. Instead, I didn't like the market cap to GDP and still don't with all of the risk and geopolitical issues.

I am fine with you being right and stocks being at the bottom now. It just means I'll miss on a little upside when I finally jump back in. I'm also ok with them dropping more as I don't own stocks. To me, it is more important to focus on the overall instabilities of the markets and governments. Instabilities mean more risk so I want bigger returns for the bigger risks. Otherwise, I'll just keep investing in small business, real estate, and holding defensive positions of cash (maybe bonds). You may be in a much different position in life and willing to look past all the risks. I just take a ton of risks in small business and real estate so Stocks shouldn't be risky and right now they are.
 
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90scane said:
I've been a bull for most of my adult life. Maybe I'm getting old as I haven't purchased equities since Feb 2020. Sure I missed out on doubling my money with the massive infusion BUT I'm not actually ahead of my exit price and I'm not one to time the market. Instead, I didn't like the market cap to GDP and still don't with all of the risk and geopolitical issues.

I am fine with you being right and stocks being at the bottom now. It just means I'll miss on a little upside when I finally jump back in. I'm also ok with them dropping more as I don't own stocks. To me, it is more important to focus on the overall instabilities of the markets and governments. Instabilities mean more risk so I want bigger returns for the bigger risks. Otherwise, I'll just keep investing in small business, real estate, and holding defensive positions of cash (maybe bonds). You may be in a much different position in life and willing to look past all the risks. I just take a ton of risks in small business and real estate so Stocks shouldn't be risky and right now they are.
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I might be in a different position because I’m holding for the long term. Like you said, eventually the mkt will rise and I’m seeing oversold stocks. I bought a little Google yesterday and Amazon today. They are still not as cheap as other stocks, but they are sitting on billions. These are not big purchases but just adding to my position. Where we disagree is whether we have a soft landing or a deep recession to bring down inflation.
I don’t think we need to put millions of people out of work. We are in a better position than Western Europe and China.
We will see lessening demand and we might need to see if we did enough.
 
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mr.h said:
I might be in a different position because I’m holding for the long term. Like you said, eventually the mkt will rise and I’m seeing oversold stocks. I bought a little Google yesterday and Amazon today. Not big purchases but just adding to my position. Where we disagree is whether we have a soft landing or a deep recession to bring down inflation.
I don’t think we need to put millions of people out of work. We are in a better position than Western Europe and China.
We will see lessening demand.
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My only point: 1931 highs weren’t reached again until the mid 50s. even buying at 45% down in the 1930s meant you had to wait 20 years to get to that number outside of a couple years the market peaked near it before dropping again.

Your approach is called dollar cost averaging. It isn’t a bad approach so long as you can keep buying no matter the price point of entry and exit. This in fact is what drives markets higher until populations decrease happens leaving less people to invest and less profits to be made by companies. Hint: China and Europe. The USA is just over 1:1 and could be in trouble in future generations.
 
90scane said:
My only point: 1931 highs weren’t reached again until the mid 50s. even buying at 45% down in the 1930s meant you had to wait 20 years to get to that number outside of a couple years the market peaked near it before dropping again.

Your approach is called dollar cost averaging. It isn’t a bad approach so long as you can keep buying no matter the price point of entry and exit. This in fact is what drives markets higher until populations decrease happens leaving less people to invest and less profits to be made by companies. Hint: China and Europe. The USA is just over 1:1 and could be in trouble in future generations.
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Good points, but are in a much better state than Europe and China And this is not 1931. I keep basically saying the same thing. Yes keep raising interest rates, but at a slightly lower rate which will give us a chance of a lighter recession.

Business advisor

When Will the Fed Slow Down?​

Fed Chairman Jerome Powell was asked if the pace might slow in December — maybe to half a percentage point, rather than three-quarters.

“That time is coming,” Powell said. “It may come as soon as the next meeting or the one after that. No decision has been made. It is likely we’ll have a discussion about this at the next meeting.”
A December slowdown might make sense, experts say: The balance of the economy is a moving target, and the Fed doesn’t want to take any options off the table.

The next meeting is in December And maybe Powell give us a Christmas present. I’m hoping for lower prices for the holidays because of inventory.
 
Yahoo News- morning brief..

More
And Mastercard’s CEO Michel Miebach tells me there is nothing in his business that suggests recession is imminent.

"Currently, based on the data that we have, there is no such indication [of a recession]," Miebach said. "The consumer is resilient, and that resilience will last. We have no indication that there is a near-term recession."

All of this brings me to think that perhaps recession talk is overblown. Maybe consumers will come out and spend, spend, spend this holiday season. Maybe investors need to better embrace the solid data they are getting hit over the head with today instead of eyeing a potential future of doom and gloom.

Keep in mind, all of these rosy feels could change on a dime when we get earnings from Walmart, Target, and other retailers in a few days. But for now, perhaps embrace the positive vibes.
 
90scane said:
Traditionally it has been a big factor but there are outliers as well. My opinion is this will be an outlier year OR we could have a Q4 bounce with a 2023 drop back to below today's values. Long term- Rs will likely unlock oil allowing us to have more energy independence. I'm not sure if either party wants to build more nuclear. Sadly, we gave the licensing to our best battery/storage tech to CHINA (vanadium redox flow battery). Energy is the key to freeing us up to grow at a lower input cost. If we can pump more oil, build more nuclear, build EV infrastructure (including massive storage), and keep working on alternatives... we should be able to greatly reduce energy input costs. Imagine paying $100/month for all your energy needs vs $400. That $300*12 is now either spent on other items in our economy OR invested in US companies both likely increasing US GDP.

There is a study that says the business cycle is real estate. With rates going higher, real estate will keep cooling (not dropping off a cliff price-wise). This means less spending, real estate-related jobs, and less GDP overall. Since inflation isn't likely to go away, we are looking at Spike's comment: stagflation. Higher inflation, lower to no growth of GDP. Energy input is a BIG factor with real estate: save $300/month on energy and people can afford more home or an actual home.

We could see big INT money flowing into the US stock market helping to prop up values but that will slow in time. Thus, it could actually flatten the decline and prevent an outright crash. As the INT inflow starts to dry up, hopefully, the FED pivots giving our economy some legs to grow even with inflation staying higher than they like. That would be the "soft landing" which is nearly impossible to hit with all of the variables at play. Heck, we are already seeing large-cap tech stocks down 30-50%.

As of today, a number of INT central banks have trillions in US Treasuries. IF They all sold them it would force the FED to pivot to buy them (increase balance sheet) while they keep hiking rates. The INT central banks wouldn't have another lever to pull and the FED would let inflation burn off the purchases. This is very important as it isn't as much about what the FED does this recession but what happens during the next one. The US Government better get it's **** right including energy policy, SS, Medicare, over spending on **** that doesn't matter OR we will be looking at a major default.
Click to expand...

Hard to disagree with anything you wrote. In inflation/stagflation, you generally want to be overweight in cash and hard assets (commodities/real estate).
 
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