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Off-Topic Stock Market & Crypto Discussion

If we want disinflationary growth, then one of the only long-term solutions is a significant increase in energy production along with better technology. Technology can be disinflationary, including AI, but at the end of the day, it’s cheap energy that really helps get aggregate prices under control faster, especially for the developing world. Oil prices are increasing, natural gas prices have jumped to the point of causing major issues in developing countries (see Pakistan), nuclear was looked at as an evil solution thus limited new supply has been brought online, and alternatives are very costly compared to all of the others mentioned. The combination of high (public) debt, high FED funds rates (on debt), aging demographics, geopolitical tensions, and tight energy supplies are likely to result in inflation when demand suppression isn't used.

More waves of QE followed by QT which leads us to recessions or sell-offs followed by QE until we have better energy solutions and more advancements in technology.
 
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SpikeUM said:
www.reuters.com

U.S. labor market resilient; inflation hotter in fourth quarter

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a persistently tight labor market, and further fueling fears that the Federal Reserve could raise interest rates higher than anticipated.
www.reuters.com www.reuters.com
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Yes, inflation was higher in the last quarter, BUT the economic indicators are showing that the consumer is resilient and the economy is strong enough for a soft landing, figuring in 25 rate increases.
For the first time I heard Jamie Dimon talk about a soft landing and he was as bearish as they come.
I know I’m probably the only optimist on this board, but the economy is strong enough to price in smaller rate hikes and housing, food and energy are dropping for now.
Don‘t neg me bros…
kevin farley juggling GIF
 
mr.h said:
NLY is down 50% from 2020..
be careful.
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I've been following it for years. I started buying it after the crash in 2020. I trade it and also hold it when I get it low. I know this sounds crazy but I try to buy low and sell high. Even the shares I bought higher than its current price I am even or profitable on because of the coupon. Profitable while we've watched the S&P go from 4700 to 4000. Considering market conditions, the drop from ~$24 to $21 makes it attractive right now - IMHO.
 
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Economic indicators:
Consumption and spending up = demand
personal income down.
not a good indicator, but could be temporary.
consumer sentiment up
5 year inflation stays at 2.9
yields up
gold, oil down
vix at 22
Fed speak coming.
 
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Cryptical Envelopment said:
I've been following it for years. I started buying it after the crash in 2000. I trade it and also hold it when I get it low. I know this sounds crazy but I try to buy low and sell high. Even the shares I bought higher than its current price I am even or profitable on because of the coupon. Profitable while we've watched the S&P go from 4700 to 4000. Considering market conditions, the drop from ~$24 to $21 makes it attractive right now - IMHO.
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No disrespect intended, I know you are a smart guy, but NLY is a high risk, high beta stock, not appropriate for 99% of the porsters in this forum.

Also, I assume you are trading in a tax deferred account, otherwise its all ordinary income.
 
SpikeUM said:
No disrespect intended, I know you are a smart guy, but NLY is a high risk, high beta stock, not appropriate for 99% of the porsters in this forum.

Also, I assume you are trading in a tax deferred account, otherwise its all ordinary income.
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Disrespect never taken from you. Is NLY really high beta compared to most of the stocks people buy, though? Is it high beta compared to Tesla (down 50%), Netflix (down over 50%), Amazon (down 45%), even Disney which dropped almost 50% in under a year? Especially when NLY is spitting out, depending on what price you buy it at, say 15% annually in cash (my return is higher)? So in two years, whatever the stock price is, higher or lower, your returns are buttressed by 30% in DIVs which means if it dropped 30% in value, you'd still be even in a market where your growth stocks probably went to ****.

2nd part: tax-free situation on it for me. Complicated, but advantageous. Not comfortable saying more.
 
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Cryptical Envelopment said:
Disrespect never taken from you. Is NLY really high beta compared to most of the stocks people buy, though? Is it high beta compared to Tesla (down 50%), Netflix (down over 50%), Amazon (down 45%), even Disney which dropped almost 50% in under a year? Especially when NLY is spitting out, depending on what price you buy it at, say 15% annually in cash (my return is higher)? So in two years, whatever the stock price is, higher or lower, your returns are buttressed by 30% in DIVs which means if it dropped 30% in value, you'd still be even in a market where your growth stocks probably went to ****.

2nd part: tax-free situation on it for me. Complicated, but advantageous. Not comfortable saying more.
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Just to let everyone know...I do dabble in higher dividend preferred stocks, which is like a bond and stock hybrid. When they come out they are at $25 par value. You can google "Preferred stock list-High Yield dividends"
I found these on NLY:
IssuerTickerCurrent PriceCouponCurrent YieldQuar Dividend (Rounded)Earliest Call Date***Dividend Payment Dates
Annaly Capital 6.50% Fix-to-Float PreferredNLY-G$24.856.50%6.54%$0.413/31/2023YLD 3,6,9,12
Annaly Capital Management 6.95% Fix-to-FloatNLY-F$25.356.95%6.85%$0.439/30/2022YLD 3,6,9,12
Annaly Capital Management 7.5%NLY-D#N/A7.50%#N/A$0.479/13/2017YLD 3,6,9,12
Annaly Capital 6.75% FTF PrefeNLY-I$24.476.75%6.90%$0.426/30/2024YLD 3,6,9,12
I usually look at whether it is a set rate or fix to float, the float is usually tied to the Libor. I will only buy Cumulative indicated with a Yes or No, meaning that dividends continue to accrue if they have been suspended, but they are not paid until the company decides to pay them after suspension. I also look for later call dates. These divys are paid before the regular stock divy and have low activity which means lower volatility.
Right now I'm holding Duke Energy- PA..
PS- there is always risk involved.
 
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SpikeUM said:
www.wsj.com

Welcome to the 5% World, Where Yield Chases You

The dark cloud of rising interest rates comes with some significant silver linings.
www.wsj.com www.wsj.com
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I really think the 6 and 12 month bonds are the way to go for anyone with uninvested money. Risk free guaranteed income yielding over 5%. I haven’t seen those kinds of numbers in decades. I imagine that when they mature there will be more risk free high yielding opportunities then as well.
 
In a shaky market, stock buybacks are increasingly popular -- and the target of political attacks.

Stock buybacks by companies in the S&P 500 are projected to top $1 trillion in 2023 for the first time in a calendar year, according to S&P Dow Jones Indices. Authorizations for repurchases are picking up pace: As of Feb. 17, they totaled more than $220 billion, a record for that point in the year, according to a Goldman Sachs analysis of S&P 500 and Russell 3000 companies.

One major fan of repurchases is billionaire Warren Buffett. While he rarely uses his annual letter to shareholders to lobby for policies that benefit him, he made an exception on Saturday, explains Heard on the Street columnist Spencer Jakab. “When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” wrote Mr. Buffett.


 
TheEye said:
I really think the 6 and 12 month bonds are the way to go for anyone with uninvested money. Risk free guaranteed income yielding over 5%. I haven’t seen those kinds of numbers in decades. I imagine that when they mature there will be more risk free high yielding opportunities then as well.
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I do not disagree, but the best way to buy bonds are with laddering your bonds to mature at different dates. I would Go as far out as 10 years.
 
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mr.h said:
I do not disagree, but the best way to buy bonds are with laddering your bonds to mature at different dates. I would Go as far out as 10 years.
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Good strategy but perhaps not for todays market, the fear right now is that inflation is accelerating again, and that the 10 year might match the 2, instead of vice versa.
 
todays economic indicators:
Home prices down
Richmond Fed Manufacturing down.
 
mr.h said:
I do not disagree, but the best way to buy bonds are with laddering your bonds to mature at different dates. I would Go as far out as 10 years.
Click to expand...
So long as the yield curve is inverted, I think stacking new cash to maturity 6 to 12 months ahead of time as you acquire new income make the new deposits. I don’t like the yield of the 10 year.
 
We are in all new territory. The world printed a MASSIVE amount of money. I just read that JAPAN printed more money than the FED and is still doing QE in the face of inflation over 2% for the first time in 40-50 years. The new chairman of the BOJ starts in April so we shall see if he joins the other central banks in raising rates. The BOJ position offset all of the QT by the FED which could be another reason Q4 saw a bounce vs drop. Combine that with the oil reserves and Jance dumping $1T into the market...

The FED likely can't go above 6% without massive pressure from Capitol Hill. Tax revenue is already on the decline and interest payments on the debt are likely to become the largest line item in the federal budget. Congress needs to move fast to increase the energy supply (nuclear, shale, alternative, natural gas) as that is one of the best ways to beat down inflation long term. Not to mention handling spending.

I'm not sure we will see a real tanking of the stock market as the economy is just too hot. It looks like we will have some cooling to do but there will be big winners in 2023 with some big losers.

Bitcoin demand is likely to jump not because of capital inflows from big money but instead due to developing economies that have currencies nearing failure. IF Bitcoin continues to grab more and more bottom-end market share from the USD, it could end up with a large percentage of world transaction volume on main streets vs wall streets. That would align it more with Visa/Mastercard than the FED. The US government could slow the adoption of crypto in the USA which will further push big money away from it in the near term.
 
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