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(Business Insider)   Yesterday: Stonks are set to reach an all-time high. Today: Stonks are set to drop by Great Depression levels. Tomorrow: Stonks are set to dance on Sprockets   (markets.businessinsider.com) divider line
    More: Facepalm  
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780 clicks; posted to Business » on 07 Jul 2020 at 4:24 AM (4 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2020-07-07 12:58:02 AM  
It's gambling.

The house always wins. In this case, the house is the 0.01%.

Everyone else loses.
 
2020-07-07 1:20:29 AM  
Sounds like famed economist is doing his best to manipulate the market.
 
2020-07-07 1:28:14 AM  
Some monkeys will know what it is to be touched that day, I tell you.
 
2020-07-07 1:41:29 AM  
Why "stonks"? This seems to be a recent thing, but I must have missed the meme-o.
 
2020-07-07 2:51:42 AM  

TwowheelinTim: Why "stonks"? This seems to be a recent thing, but I must have missed the meme-o.


Believe it or not, this stupid thing...

Fark user imageView Full Size
 
2020-07-07 3:07:33 AM  
Fark user imageView Full Size


The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.
 
2020-07-07 4:18:22 AM  

NewportBarGuy: TwowheelinTim: Why "stonks"? This seems to be a recent thing, but I must have missed the meme-o.

Believe it or not, this stupid thing...

[Fark user image 425x455]


I was wondering if Donnie the Demented had misspelled it in a tweet or something.
 
2020-07-07 4:18:34 AM  

Kat09tails: [Fark user image 365x362]

The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.


The only reason there was liquidity to buy up the dip was the Fed's zero-interest 2-year checks it's been writing to pretty much anyone, essentially backed by... wait for it... mortgages. Yes, mortgages, because what could possibly go wrong with those during economic downturn?

401ks will be decimated. Absolutely decimated, because they've weakened COI regulations. This will go down as one of the biggest legal robberies in history, with the rich getting richer and the poor losing their retirement (those that had any) and then bailing out the rest that weren't in on the heist.
 
2020-07-07 4:32:47 AM  

koder: Kat09tails: [Fark user image 365x362]

The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.

The only reason there was liquidity to buy up the dip was the Fed's zero-interest 2-year checks it's been writing to pretty much anyone, essentially backed by... wait for it... mortgages. Yes, mortgages, because what could possibly go wrong with those during economic downturn?

401ks will be decimated. Absolutely decimated, because they've weakened COI regulations. This will go down as one of the biggest legal robberies in history, with the rich getting richer and the poor losing their retirement (those that had any) and then bailing out the rest that weren't in on the heist.


I know you're lying because I've been told by top men that 401ks will only drop in the short term ever and the housing market can never fail again.

/Top. Men.
 
2020-07-07 5:04:37 AM  
I've been looking for a way to protect my tech-heavy investment portfolio, but nothing seems viable right now.

Case in point, MSFT. It closed at $210.70, and October 16th puts at $180 are priced at $4. So I'd have to pay close to 2 percent to insure against a 15+ percent value drop within the next three months. On Microsoft. During normal times I'd be paying maybe a third of that? It's like the market knows that it may all come crashing down any minute now.

I may just forget about it and ride it out, but I feel like we've got a second drop coming. It's just hard to know when.
 
2020-07-07 5:04:42 AM  

Alphax: NewportBarGuy: TwowheelinTim: Why "stonks"? This seems to be a recent thing, but I must have missed the meme-o.

Believe it or not, this stupid thing...

[Fark user image 425x455]

I was wondering if Donnie the Demented had misspelled it in a tweet or something.


No, we've just gotten really, really dumb as a species. But, I'll go with it because these stupid things make me laugh.
 
2020-07-07 5:27:42 AM  

GitOffaMyLawn: It's gambling.


I don't know why someone feels the need to say this in every stonks thread. Everything is gambling.


Kat09tails:
The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.

This is what I keep telling myself, but man that FOMO is irritating.

The problem is, where would the money go when "this all comes due"? So far I haven't heard a very convincing answer. Stocks are basically relying at this point on how farked everything else is; what's going to drastically improve in the next few months?
 
2020-07-07 5:36:14 AM  
Fark user imageView Full Size
 
2020-07-07 6:35:01 AM  
I'd say you have better odds in roulette, but a lot of the casinos are still closed. Game's too nutso for me at this point.
 
2020-07-07 6:47:37 AM  

TwowheelinTim: Why "stonks"? This seems to be a recent thing, but I must have missed the meme-o.


lmgtfy
 
2020-07-07 7:23:36 AM  

neaorin: I've been looking for a way to protect my tech-heavy investment portfolio, but nothing seems viable right now.

Case in point, MSFT. It closed at $210.70, and October 16th puts at $180 are priced at $4. So I'd have to pay close to 2 percent to insure against a 15+ percent value drop within the next three months. On Microsoft. During normal times I'd be paying maybe a third of that? It's like the market knows that it may all come crashing down any minute now.

I may just forget about it and ride it out, but I feel like we've got a second drop coming. It's just hard to know when.


Have you looked at SQQQ? I have no idea what your port looks like, but it worked pretty well for me back in March.
 
2020-07-07 7:31:59 AM  

GitOffaMyLawn: It's gambling.

The house always wins. In this case, the house is the 0.01%.

Everyone else loses.


Fark user imageView Full Size
 
2020-07-07 7:33:40 AM  

Kat09tails: [Fark user image image 365x362]

The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.


McConnell is now flipping on his promise not to allow a second bailout for consumers.
He and the other GOP members of the senate, who's poll numbers are tanking with only months before the election, will simply print a few more trillion.
Image they do nothing.  A few million homes go into default, ten+ states and many cities declare bankruptcy and Donald Trump gets to pick the custodians who decide who gets paid (pssst, it's the wealthy investors, retirees and tax payers get screwed).  The health care system collapse spreads and COVID-19 numbers soar.  States start to seriously discuss secession.  Riots are more widespread, looting and burning.
/not gonna happen.
 
2020-07-07 7:40:06 AM  

Marcos P: [Fark user image 252x307]


The stonks want to touch my monkey.
 
2020-07-07 7:44:56 AM  
You see, it makes perfect sense.  Yesterday, the wind was blowing Southeast-ish.  Today, the wind is blowing Southeast-ish.  Tomorrow?  Probably back to Southeast-ish.

Pay attention, and you'll get RICH!

Fark user imageView Full Size
 
2020-07-07 7:55:07 AM  
This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.
 
2020-07-07 8:09:22 AM  

neaorin: I've been looking for a way to protect my tech-heavy investment portfolio, but nothing seems viable right now.

Case in point, MSFT. It closed at $210.70, and October 16th puts at $180 are priced at $4. So I'd have to pay close to 2 percent to insure against a 15+ percent value drop within the next three months. On Microsoft. During normal times I'd be paying maybe a third of that? It's like the market knows that it may all come crashing down any minute now.

I may just forget about it and ride it out, but I feel like we've got a second drop coming. It's just hard to know when.


I bought a small handful of TSLA around $250 so I know a thing or two about the irrational market and not having a clue how to read what to do. I am long on them mostly because I suspect they'll eventually emerge as an energy company that owns a car company. But I feel that today's valuation is high personally and kinda want to sell and rebuy in a couple of months when Elon does something stupid again. But even that seems to have less of an impact on the stock these days. So I'll probably just keep holding
 
2020-07-07 8:12:43 AM  

Kat09tails: [Fark user image 365x362]

The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.


The markets may be overvalued, but I don't think they are as overvalued as people think.

-The stock market only directly reflects the health of publicly traded companies; all of the small businesses that are closed aren't really reflected in it.

-A lot of the behemoths that prop up indices having been unaffected by COVID-19 or are benefiting from it. Do you think that Amazon, Apple, Microsoft, etc. are all lying about their revenues?

-The people who are out of work are low-income earners who weren't pumping a lot of money into the economy -they weren't buying new cars, homes, going on destination vacations, etc.

-Some of the hardest hit sectors, such as airlines, don't contribute nearly as much to GDP as people think. But they get a lot of attention because they're public facing.

-Trump and red state governors have been pretty clear that they will keep the economy open at the expense of human life. So I think it's reasonable for investors to assume that there won't be another shut down, even if we go back up to thousands of people dying a day.
 
2020-07-07 8:16:41 AM  

thornhill: Kat09tails: [Fark user image 365x362]

The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.

The markets may be overvalued, but I don't think they are as overvalued as people think.

-The stock market only directly reflects the health of publicly traded companies; all of the small businesses that are closed aren't really reflected in it.

-A lot of the behemoths that prop up indices having been unaffected by COVID-19 or are benefiting from it. Do you think that Amazon, Apple, Microsoft, etc. are all lying about their revenues?

-The people who are out of work are low-income earners who weren't pumping a lot of money into the economy -they weren't buying new cars, homes, going on destination vacations, etc.

-Some of the hardest hit sectors, such as airlines, don't contribute nearly as much to GDP as people think. But they get a lot of attention because they're public facing.

-Trump and red state governors have been pretty clear that they will keep the economy open at the expense of human life. So I think it's reasonable for investors to assume that there won't be another shut down, even if we go back up to thousands of people dying a day.


Good time to invest in coffin manufacturers and embalming fluid producers.
 
2020-07-07 8:27:57 AM  

Monkeyfark Ridiculous: GitOffaMyLawn: It's gambling.

I don't know why someone feels the need to say this in every stonks thread. Everything is gambling.


Kat09tails:
The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.

This is what I keep telling myself, but man that FOMO is irritating.

The problem is, where would the money go when "this all comes due"? So far I haven't heard a very convincing answer. Stocks are basically relying at this point on how farked everything else is; what's going to drastically improve in the next few months?


People keep saying it's gambling because the people in charge keep pretending it isn't.
 
2020-07-07 8:29:22 AM  

BMFPitt: GitOffaMyLawn: It's gambling.

The house always wins. In this case, the house is the 0.01%.

Everyone else loses.

[Fark user image image 425x340]


You can do that at "real" casinos too, if you can find someone to take the bet.
 
2020-07-07 8:29:30 AM  

hestheone: This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.


Bullshiat. Don't throw around terms like "smart money" and "dumb money" if you have no idea what you're talking about.

Yes, Trying to time the market is too risky for the average investor, but the average investor should not be buying individual stocks. You're absolutely 100% wrong with your assessment of long term investing. It's not about "crossing your fingers and hoping the market will be up". You're showing a fundamental misunderstanding of long term investing. The average person should be saving for retirement and investing in a balanced, diversified portfolio of ETFs from across the board, paying fat farking dividends that compound over time. Market volatility is absolutely irrelevant. The younger you are, the heavier your equity weighting's, and the older you are the heavier your fixed income (bond) weightings. Every month, put away what you can and ignore the numbers. Rebalance once a year, maybe. It's not supposed to be exciting.
 
2020-07-07 8:31:34 AM  

hestheone: This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.


There is no such thing as "smart money". There is just "lucky money".
 
2020-07-07 8:50:19 AM  

GitOffaMyLawn: It's gambling.

The house always wins. In this case, the house is the 0.01%.

Everyone else loses.


What the hells does that mean?

If you bought VTI, an index fund, at the beginning 2008 and then just say on it, you'd be up 130 percent today despite the 2008 recession and the current downturn (and that doesn't include the dividend payments).

But keep telling yourself that it's all rigged.
 
2020-07-07 8:51:09 AM  

hestheone: This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.


Fark user imageView Full Size
 
2020-07-07 8:57:57 AM  

hestheone: This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.


There's like 100 years worth of data that shows that the S&P 500's average annual return is ~10 percent. Maybe that goes down in the future (which is also why your portfolio should include index funds for foreign indices), but if it completely flatlines or worse, that means we have much bigger problems than your 401k tanking.
 
2020-07-07 9:06:33 AM  

Baron Krelve: hestheone: This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.

Bullshiat. Don't throw around terms like "smart money" and "dumb money" if you have no idea what you're talking about.

Yes, Trying to time the market is too risky for the average investor, but the average investor should not be buying individual stocks. You're absolutely 100% wrong with your assessment of long term investing. It's not about "crossing your fingers and hoping the market will be up". You're showing a fundamental misunderstanding of long term investing. The average person should be saving for retirement and investing in a balanced, diversified portfolio of ETFs from across the board, paying fat farking dividends that compound over time. Market volatility is absolutely irrelevant. The younger you are, the heavier your equity weighting's, and the older you are the heavier your fixed income (bond) weightings. Every month, put away what you can and ignore the numbers. Rebalance once a year, maybe. It's not supposed to be exciting.


Came to say this, you said it better.

If you've invested for 30+ years you should have made a decent return based on historical averages.  Conventional wisdom says you shouldn't be heavily invested in stocks or other risky investments the closer one gets to retirement.  Rebalance every few years depending on your risk tolerance.

YMMV and all...
 
2020-07-07 9:17:56 AM  

GitOffaMyLawn: It's gambling.

The house always wins. In this case, the house is the 0.01%.

Everyone else loses.


Guess I am part of the .01%
 
2020-07-07 9:27:09 AM  
Ok, a little historical perspective here.

Most of you are too young to remember 'normal' interest rates, where corporate bonds would return ~4-6%.  That was considered 'normal'.  Mortgage rates were around 5-7%, and savings bonds would yield around 2.

Now, with the fed thinking that near zero interest is a good thing (it's not) everything market-related is is all gambling.  Sit on cash and bonds until the crash is over. The buying opportunities will be great.

The US stock market hasn't been 'normal' in nearly 30 years.  It's about time for a return to normal.
 
2020-07-07 9:29:43 AM  
Turn off your ad blocker. Do it now.
Bye bye.
 
2020-07-07 9:55:38 AM  

hestheone: This is not rocket science.  Smart money buys in long enough for the dumb money to join the sure thing.
After enough of the rubes are in, the smart money vacates leaving the dumb money out of the money.

Lather - rinse - repeat.

And yes, market timing is for suckers.  And so is greed.  If you think that just staying in long term and keeping your fingers crossed that the market will be up when you retire....well...good luck with that.


Market timing is for suckers, but the smart money knows the right time to go in and out of the market? Interesting.
 
2020-07-07 9:58:18 AM  

Random Anonymous Blackmail: Sounds like famed economist is doing his best to manipulate the market.


"If you can get Trump elected, you can certain f*ck with the market."  -- hard to attribute.  Major names in the running Mercer, Thiel, Bannon, and a whole ton of hedge fund activists you've never heard of.
 
2020-07-07 10:01:02 AM  
Tomorrow: Stonks are set to dance on Sprocket

Poor guy....

Fark user imageView Full Size
 
2020-07-07 10:20:19 AM  

A Cave Geek: Ok, a little historical perspective here.

Most of you are too young to remember 'normal' interest rates, where corporate bonds would return ~4-6%.  That was considered 'normal'.  Mortgage rates were around 5-7%, and savings bonds would yield around 2.

Now, with the fed thinking that near zero interest is a good thing (it's not) everything market-related is is all gambling.  Sit on cash and bonds until the crash is over. The buying opportunities will be great.

The US stock market hasn't been 'normal' in nearly 30 years.  It's about time for a return to normal.


It's almost as though access to financial markets/tools and society in general has changed in the last 3 decades...
 
2020-07-07 10:24:50 AM  

Tyrone Slothrop: You can do that at "real" casinos too, if you can find someone to take the bet.


You can put money on "the sun will rise tomorrow" if you can find someone to take the bet.

But there is no equivalent at a real casino to buying an index fund.
 
2020-07-07 10:32:51 AM  
I thought this guy was dead and not a famed economist
Fark user imageView Full Size
 
2020-07-07 10:54:31 AM  
I like the volatility.  S&P500 hits about 3,100 - 3,200 and then corrects.  Rinse, lather, repeat.   I've made some decent returns on the tech stonks.  But I'll sell when I make a gain because I just don't trust these levels and I don't want to be the last chump on this pyramid scheme of a market   I wish I had gotten Tesla but that shiat scares me too much.  Yeah, I missed out big time.

OTOH, my bet is a major correction in the next few months. I don;t know if it'll be March crash levels... but it'll be something.  I've been slowly cashing out my index ETFs.  And also some of my more risky positions that I bought pre-Covid  I'll get out just at even or slight loss because I don't think some of those stocks are going back to pre-covid levels for a long time. I have some bank stocks and they're awful.
 
2020-07-07 11:04:37 AM  

Farkn Yaj Yenrac: A Cave Geek: Ok, a little historical perspective here.

Most of you are too young to remember 'normal' interest rates, where corporate bonds would return ~4-6%.  That was considered 'normal'.  Mortgage rates were around 5-7%, and savings bonds would yield around 2.

Now, with the fed thinking that near zero interest is a good thing (it's not) everything market-related is is all gambling.  Sit on cash and bonds until the crash is over. The buying opportunities will be great.

The US stock market hasn't been 'normal' in nearly 30 years.  It's about time for a return to normal.

It's almost as though access to financial markets/tools and society in general has changed in the last 3 decades...


In the end, it all comes back to the fundamentals.  All the financial gimmicks and tricks in the world can't save a bad company from lack of profit margin.  If you're not pulling positive cash from operations, you are a bad company, and deserve to go under. Companies that privatize profits while socializing risk are all bad companies...and all deserve to go under.
 
2020-07-07 11:34:19 AM  

A Cave Geek: Farkn Yaj Yenrac: A Cave Geek: Ok, a little historical perspective here.

Most of you are too young to remember 'normal' interest rates, where corporate bonds would return ~4-6%.  That was considered 'normal'.  Mortgage rates were around 5-7%, and savings bonds would yield around 2.

Now, with the fed thinking that near zero interest is a good thing (it's not) everything market-related is is all gambling.  Sit on cash and bonds until the crash is over. The buying opportunities will be great.

The US stock market hasn't been 'normal' in nearly 30 years.  It's about time for a return to normal.

It's almost as though access to financial markets/tools and society in general has changed in the last 3 decades...

In the end, it all comes back to the fundamentals.  All the financial gimmicks and tricks in the world can't save a bad company from lack of profit margin.  If you're not pulling positive cash from operations, you are a bad company, and deserve to go under. Companies that privatize profits while socializing risk are all bad companies...and all deserve to go under.


The "bad companies" represent a vanishingly small part of the market.  The S&P 500 is 70%+ of the total market cap of US equity markets.  Here's the S&P 500 sorted by market cap.  How far down that list do you have to go before you find a company that had its earnings meaningfully impacted by the pandemic? In the top 50 (which is over 50% of the S&P 500 in total weight), I see Disney, Exxon, Chevron, Nike and NextEra and that's about it.

As bad as things are for restaurants and hotels and bars and airlines, the companies that actually matter for equity markets indices are largely unaffected and are making as much money as they have been.
 
2020-07-07 11:53:10 AM  

thornhill: Kat09tails: [Fark user image 365x362]

-The people who are out of work are low-income earners who weren't pumping a lot of money into the economy -they weren't buying new cars, homes, going on destination vacations, etc.

-

You have it completely wrong.

The low income earners spend all of their money.  Those on the high end save their money. Spending by the high incomers has collapsed during this pandemic.

You might think, well, they don't buy houses or new cars, so if they are unemployed it can't effect those markets.  But they do rent houses and buy used cars.   If those markets collapse, the trickle up effect will work its way thru the markets.
 
2020-07-07 12:05:33 PM  

TedCruz'sCrazyDad: thornhill: Kat09tails: [Fark user image 365x362]

-The people who are out of work are low-income earners who weren't pumping a lot of money into the economy -they weren't buying new cars, homes, going on destination vacations, etc.

-
You have it completely wrong.

The low income earners spend all of their money.  Those on the high end save their money. Spending by the high incomers has collapsed during this pandemic.

You might think, well, they don't buy houses or new cars, so if they are unemployed it can't effect those markets.  But they do rent houses and buy used cars.   If those markets collapse, the trickle up effect will work its way thru the markets.


OTOH, the money low-income earners do spend (all their money) is spent because they HAVE to spend it. Those who weren't furloughed for COVID continued to earn, sometimes more than they used to. Those who were collected unemployment and some bonus money. The only areas they wouldn't be spending are areas that are closed, same as the rest of us.
 
2020-07-07 12:11:28 PM  

A Cave Geek: Farkn Yaj Yenrac: A Cave Geek: Ok, a little historical perspective here.

Most of you are too young to remember 'normal' interest rates, where corporate bonds would return ~4-6%.  That was considered 'normal'.  Mortgage rates were around 5-7%, and savings bonds would yield around 2.

Now, with the fed thinking that near zero interest is a good thing (it's not) everything market-related is is all gambling.  Sit on cash and bonds until the crash is over. The buying opportunities will be great.

The US stock market hasn't been 'normal' in nearly 30 years.  It's about time for a return to normal.

It's almost as though access to financial markets/tools and society in general has changed in the last 3 decades...

In the end, it all comes back to the fundamentals.  All the financial gimmicks and tricks in the world can't save a bad company from lack of profit margin.  If you're not pulling positive cash from operations, you are a bad company, and deserve to go under. Companies that privatize profits while socializing risk are all bad companies...and all deserve to go under.


So only established companies with huge balance sheets should exist? High growth companies are responsible for much of the innovation in the world and run in the red all the time. Some eventually become profitable. Some don't and go under. One way they get money to survive the growth phase is through corporate bonds that pay a higher rate than typical bonds because of the increased risk. Another way is through IPOs and secondary stock offerings. Both of these options are far easier to access than they were 30 years ago. Neither of those things is privatizing profits while socializing risk.
 
2020-07-07 12:23:33 PM  

Farkn Yaj Yenrac: A Cave Geek: Farkn Yaj Yenrac: A Cave Geek: Ok, a little historical perspective here.

Most of you are too young to remember 'normal' interest rates, where corporate bonds would return ~4-6%.  That was considered 'normal'.  Mortgage rates were around 5-7%, and savings bonds would yield around 2.

Now, with the fed thinking that near zero interest is a good thing (it's not) everything market-related is is all gambling.  Sit on cash and bonds until the crash is over. The buying opportunities will be great.

The US stock market hasn't been 'normal' in nearly 30 years.  It's about time for a return to normal.

It's almost as though access to financial markets/tools and society in general has changed in the last 3 decades...

In the end, it all comes back to the fundamentals.  All the financial gimmicks and tricks in the world can't save a bad company from lack of profit margin.  If you're not pulling positive cash from operations, you are a bad company, and deserve to go under. Companies that privatize profits while socializing risk are all bad companies...and all deserve to go under.

So only established companies with huge balance sheets should exist? High growth companies are responsible for much of the innovation in the world and run in the red all the time. Some eventually become profitable. Some don't and go under. One way they get money to survive the growth phase is through corporate bonds that pay a higher rate than typical bonds because of the increased risk. Another way is through IPOs and secondary stock offerings. Both of these options are far easier to access than they were 30 years ago. Neither of those things is privatizing profits while socializing risk.


Also, just because, if you had bought 1 share of the Amazon IPO at $18/share you would have would have 12 shares worth about $36,000 and if you would have bought a corporate bond from them that was somehow still paying out and returned a fantastic 10% you'd have about $145.
 
2020-07-07 12:32:55 PM  

koder: Kat09tails: [Fark user image 365x362]

The stock market is completely irrational right now. Basically any gains are little more than a case of denial and speculation. This all comes due, I supect due by the end of summer when we've had 3 months or more of loan payments missed on real estate and school doesn't go into session.

The only reason there was liquidity to buy up the dip was the Fed's zero-interest 2-year checks it's been writing to pretty much anyone, essentially backed by... wait for it... mortgages. Yes, mortgages, because what could possibly go wrong with those during economic downturn?

401ks will be decimated. Absolutely decimated, because they've weakened COI regulations. This will go down as one of the biggest legal robberies in history, with the rich getting richer and the poor losing their retirement (those that had any) and then bailing out the rest that weren't in on the heist.


I have always been an advocate of folks strengthening Social Security. Raise the contribution.income level to include folks making up to 200-thousand a year. If they make that much already, the SSI check will just be a nice supplement to their retirement income.

Investing your retirement in a system that relies on banks and the financial markets is something we gotta live with, I guess. But after Enron, did anyone ever think was a good idea? Are your 401ks protected from financial disasters? Or do you just hope that they will somehow still be there in the event of a world wife depression?

My company just discontinued it's 401k program. Discontinued it. I couldn't afford to put much in mine anyway. And I know Social Security may or may not still be around when I'm close to retirement. What's the new retirement age for Gen Xers? Ages 67, 70?

I have no idea what my future holds. No idea if anything will be left. I know a 61 year old janitor, and his 59 year old wife. They have been cleaning primary schools, and colleges since they were teens. They've got a house, and a couple of used trucks. He told me he still can't afford to retire. Medical expenses will destroy you.

I'm not sure what we Americans are planning for. I'm not sure most Americans have even considered the thought that their 401ks could be decimated by this downturn. But as long as we keep pretending like everything's fine, then it is.

No worries! Hakuna Matana y'all! Enjoy your summer. It'll be the last one you'll get to enjoy for quite awhile.
 
2020-07-07 12:38:06 PM  
Headed off to lunch with my broker so I'm getting a kick out of these comments.


/ anticipatory schadenfreude erections from the financial incels
// never take advice from those who are worse off than you
///  50% stocks, 45% real estate, 5% sports roadsters
 
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