Investing

[gehringer_2]

52 minutes ago, Deleterious said:

Can someone beat the market on a consistent basis?

I am talking about someone with very average intelligence.  Doesn’t do this as a job.  Can put 12-20 hours in a week reading/learning. 

I don’t mean you luck boxed your way to amazing 1–2-year returns.  I mean you beat the market for 10, 15, 20 years.  Can it be done?

 

Can you pick sticks to buy and hold for long term gains that will beat the general market? I think so, but probably not by enough to get too excited about. Can you beat the market as day-trading technical investor? I wouldn’t try it, but SB’s take would more interesting. 

Edited July 4, 2022 by gehringer_2

[Screwball]

2 hours ago, Deleterious said:

Can someone beat the market on a consistent basis?

I am talking about someone with very average intelligence.  Doesn’t do this as a job.  Can put 12-20 hours in a week reading/learning. 

I don’t mean you luck boxed your way to amazing 1–2-year returns.  I mean you beat the market for 10, 15, 20 years.  Can it be done?

 

Always a great question, and since G2 brought me up I will take a stab at this.

I bolded the part I want to address.  In a word; no.  At least not at the beginning.  If they put forth that kind of work over a period of time that could change.

First, we must quality how they go about beating the market. Are they like most people and control their 401k account (or whatever) through their work? Or do they have a live trading account and maybe on margin (betting money you don't have in your account).  Margin accounts can make you filthy rich in a short period of time, but the inverse is also in play.

Margin accounts use option contracts to lever up money, while at the same time protect against the downside. Shit goes south and someone is going to get ripped, and it won't be Wall Street.

But let me give an example. I'm retired so I have nothing to hide and don't much give one good shit about too many things at this point anyway.  I don't remember the exact year (when this happened), but 2015-2016 maybe.  I worked for WHR. We had Vanguard as our retirement caretaker.  We could change our plan every three months.

I put in what they matched, and every 3 months we could change what they did with our account.  They would stick all the three month money in WHR stock.  At the time the stock was going up, and the people I worked with were buying the snot out of it, and of course I was making money too, but I knew it was an illusion.

In February of that year the stock price hit $204 after an earning report (listen to them, so cool and informative) and a month later hit $211.  The people were buying the shit out of it, while I was selling the shit out of it.

Why? Because the top 10 execs, who must disclose buys/sells were also selling the shit out of it.  In July it was $145.

Until you really have a grasp on how things really work your going to get you ass handed to you. We are now finding out how bad the Robinhood people and other scams have raped people. Image that!  They have no fucking clue what they are doing, and more importantly, what they are dealing with.

Read about fiduciary duty.  They probably took it out of the dictionary.

To the technical side of trading; charts are history, they show what happened, and a really clever way of doing so.  Great read on how it became popular, Japan was a large contributor. It's about how to "look around the corner."  Trades are easy when you know what's going to happen, but we don't.  Great effort has been spent trying to figure out an "edge."  TA is an offspring.

They serve as indicators, entry/exit points, and very worthwhile. And why not, Wall Street uses it (the algos (HAL 9000)), so do all the traders. Examples above posted of charts. TA is a tool, not a get rich scheme, but a worthy tool just the same.

[Tiger337]

Oil down 9% today.  

[1776]

We monitor 30 year fixed mortgage rates through Wells Fargo. Staying with one source provides a consistent and single source to go on. Since the middle of June their 30 year fixed mortgage has gone from 6% to 4.875% this morning. 
Fed minutes this afternoon will definitely be interesting. The 10 year benchmark was under 2.8% earlier today. 

[Deleterious]

Even the recessions are polite in Canada.

 

[chasfh]

Most current signs point to inflation abating which, while not necessarily an anti-recession sign, is nevertheless bad news for Republicans, who want to keep it high and in front of people for at least the next four months.

[Screwball]

 

-1.9

And since we must bring politics into it - fuck your politics

[Deleterious]

 

[Screwball]

Released today from the Fed;

Consumer Credit - G.19

Quote

In May, consumer credit increased at a seasonally adjusted annual rate of 5.9 percent. Revolving credit increased at an annual rate of 8.1 percent, while nonrevolving credit increased at an annual rate of 5.2 percent.

Also contains a chart on other credit stuff. 

[gehringer_2]

Yahoo seldom has much on it's finance page that's interesting, but this is a nice recap on why GDP, it's rise and fall, and thus what are technically called economic growth and recession, are nearly completely uncoupled from the population's real economic well-being. For years, GDP went up and we called it growth even though the average worker continued to lose ground and all the income went to investors. Today, GDP is slumping but it's largely investors that are taking losses in the market while conversely the average wage earner's outlook is improving by better measures of the general population's economic well-being than GDP.

https://finance.yahoo.com/news/millions-get-jobs-as-gdp-falls-155824972.html

 

Quote

In fact, the BEA says GDP contracted at a 1.6% rate in Q1, and the Atlanta Fed’s GDPNow model is pointing to a 1.2% contraction in Q2....

“If the economy is in a recession, employers have not seemed to notice,“ Wells Fargo economists wrote on Friday.....

...The BLS also has a metric called the index of aggregate weekly payrolls, which is the product of jobs, wages, and hours worked. It’s a rough proxy for the total nominal spending capacity of the workforce. This metric increased by 0.6% month-over-month in June to a record high of 172.4, reflecting a 9.4% jump from a year ago. Before the pandemic, the annual growth rate was trending at around 5%.

 

Edited July 12, 2022 by gehringer_2

[Screwball]

GDP, a blast from the past.  GDP was argued by pages in the old boards investment page. Was it in fact a good indicator of our economy, or not, or whatever?

***

Speaking of which, that brings back memories. Del started the "Investment" thread on the old board.  I remember some of the people.  Rhino, Ballmich, Greenwit, a guy named Dan I think, and others I can't remember because I'm old and stupid. Those guys were badasses.

***

The guy who wrote this article is a clueless fuck.  Why is he trying to define a recession? It doesn't matter what you call it (or how you define it (example; 2 negative GDP prints)) - what matters are the numbers we see going forward - and what happens to the American consuming public.

This is a wild time.  There are jobs out there, and the labor numbers are not fugly, when you just look at the stats - so I will give him that.  But too many jobs (or 2) aren't getting it done. People are struggling.

I don't see any "wage earner's outlook" looking too good.  Sure, some will make more, won't matter, costs eat it up.

They even fuck us old people.  We get a few percent SS raise, but our supplemental goes up X3. Thanks.

All we need to watch is how we treat our veterans, our elderly, and our homeless.

Besides, why invest in people when you can print gobs of money and make the right people rich?

***

FTR; I spent 5 hours Friday and today dealing with my bank. All because of a purchase I made (have done several times before with no issues) that, this time, threw up a flag.

Benny Hill would be proud

And I'm a bit pissy

 

[gehringer_2]

36 minutes ago, Screwball said:

Why is he trying to define a recession? It doesn't matter what you call it (or how you define it (example; 2 negative GDP prints)) - what matters are the numbers we see going forward - and what happens to the American consuming public.

Sadly it still matters because american media, which is also economically illiterate,  still fixates on GDP, and that fixation will drive political outcomes.

[Screwball]

11 hours ago, gehringer_2 said:

Sadly it still matters because american media, which is also economically illiterate,  still fixates on GDP, and that fixation will drive political outcomes.

The only reason the media is fixated on GDP is because that's what narrative they want to push.  It's easy to massage into what they want to propagandize using GDP numbers instead of more rigid metrics.  This hack is just putting lipstick on a pig.

***

Crude oil getting hammered today, down over %6.

Small Business Expectations for Future Conditions Hits All-Time Low - June report

Related and interesting; Kaiser Aluminum Declares Force Majeure at its Warrick Rolling Mill Due to Limited Availability of Magnesium

Can shortage?  Oh goody.

Shit ain't good, go long lipstick (and bullshit).

 

[gehringer_2]

47 minutes ago, Screwball said:

Related and interesting; Kaiser Aluminum Declares Force Majeure at its Warrick Rolling Mill Due to Limited Availability of Magnesium

there is a bad metallurgy joke in there about the "The diecast isn't cast"

[Screwball]

Central Bank Digital Currency: Stability and Information
 

Quote

 

One often cited concern about central bank digital currency (CBDC) is that it could make runs on banks and other financial intermediaries more common. This working paper identifies two ways a CBDC may enhance rather than weaken financial stability. First, banks do less maturity transformation when depositors have access to CBDC, reducing their exposure to depositor runs. Second, monitoring the flow of funds into CBDC allows policymakers to react more quickly to periods of stress, which lessens the incentive for depositors and other short-term creditors to withdraw assets (Working Paper no. 22-04).

Abstract

We study how introducing a central bank digital currency (CBDC) would affect the stability of the banking system. We present a model that captures a concern commonly raised in policy discussions: the option to hold CBDC can increase the incentive for depositors to run on weak banks. Our model highlights two countervailing effects. First, banks do less maturity transformation when depositors have access to CBDC, which leaves them less exposed to runs. Second, monitoring the flow of funds into CBDC allows policymakers to identify and resolve weak banks sooner, which also decreases depositors’ incentive to run. Our results suggest that a well-designed CBDC may decrease rather than increase financial fragility.

 

Fuck you!

[gehringer_2]

5 minutes ago, Screwball said:

Central Bank Digital Currency: Stability and Information
 

Fuck you!

I'd have a hard time coming up with a dumber idea than central bank issued bit coin. Solution in search of problem.

[1776]

Dividend payouts set another record in the second quarter, a reassuring sign to investors who have flocked to steady, income-generating stocks during the market downturn this year.

The companies in the S&P 500 paid out a record $140.6 billion in dividends in the most recent quarter, according to S&P Dow Jones Indices. That’s up from $137.6 billion in the first three months of the year and $123.4 billion in the same quarter last year.
WSJ

keep’em coming

[gehringer_2]

1 hour ago, 1776 said:

Dividend payouts set another record in the second quarter, a reassuring sign to investors who have flocked to steady, income-generating stocks during the market downturn this year.

The companies in the S&P 500 paid out a record $140.6 billion in dividends in the most recent quarter, according to S&P Dow Jones Indices. That’s up from $137.6 billion in the first three months of the year and $123.4 billion in the same quarter last year.
WSJ

keep’em coming

Stocks should pay more dividends. The historically long appreciation in stock values after the 80's inflation followed by the IT/tech business explosion and the long, long period of continually falling interest rates left the market willing to forego dividends because valuations kept climbing. If we reach an era where things calm down, and esp if you have a level or slowly increasing interest rate environment for an extended period of years, it makes sense that demand by shareholders for regular dividends will increase.

[1776]

Inflation up 9.1% as reported this morning. 

[Deleterious]

They were predicting 8.8%.  What a mess.

 

[Deleterious]

So the two that dropped were airfare and hotels.  

 

[1776]

I would think this cements a 75 bps hike this month. The next question is, would they go a full 100 bps? 
The 10 yr benchmark jumped from 2.954 to 3.057 on the news. 

[Deleterious]

They meet in two weeks, right?

If oil continues to drop I think they stay with the 75 bps hike.  Although, we are getting close to midterms and the Fed usually likes to stay silent near elections.  They might go 100 bps as an attempt to take a big swing now and hope they can back off closer to November and not have to do anything in September.  

[gehringer_2]

2 minutes ago, Deleterious said:

They meet in two weeks, right?

If oil continues to drop I think they stay with the 75 bps hike.  Although, we are getting close to midterms and the Fed usually likes to stay silent near elections.  They might go 100 bps as an attempt to take a big swing now and hope they can back off closer to November and not have to do anything in September.  

Meh. It’s all psychological play at this point. Which doesn’t mean it doesn’t matter, but probably has little functional effect on business behavior at anything below 3% so it’s more a matter of trying to devine animal spirits than make an economic analysis. 

Edited July 13, 2022 by gehringer_2

[Hongbit]

Fuel costs are going down and Americans seem to getting back on with their normal lives of excess. Demand is coming back.   I wonder how many of these sectors are still reeling from material and supply chain disruption versus how many are back to the corporate greed mode and continue to raise prices under the guise of inflation to maximize profit.

Edited July 13, 2022 by Hongbit