Financial News

[iDumb]

I think Santa Clause Rally is on. The biggest two fears of rising interest rates and tensions from trade war with china eased significantly.

I can't believe I am saying this but Trump is controlling this market. This guy has some voodoo magic on ppl.

[mufi_02]

Originally Posted by iDumb
I think Santa Clause Rally is on. The biggest two fears of rising interest rates and tensions from trade war with china eased significantly.

I can't believe I am saying this but Trump is controlling this market. This guy has some voodoo magic on ppl.

well that didn't last long. market realized within 24 hours that there was no concrete deal and wiped all the gains from yesterday.

rest of 2018 and all of 2019 will be a bumpy ride.

Trump has absolutely no clue wtf he is doing. Calling himself "tariff man" today and screamed "make america rich again" in some tweet. he needs to stop tweeting. it only pleases his redneck base. does nothing to real policy or economy.

[iDumb]

^yeah it's all about sentiment. There are some model predicting 67% or so chance of a recession. historically market is up around this time and wth positive news things tend to repeat. Too bad market is not sustaining and is in get out before it's too late mentality is on.

up until yesterday i was able to reduce my losses significantly to the point of couple of more +sessions to be ahead - i think it's back to the gutters again .

this trade war can be devastating if persisted on.

[iDumb]

Future is down. May get ugly today . Brace yo self .

[zman]

As I indicated couple of months back, the writing was on the wall. With the bull run getting long in the tooth, stocks getting historically overpriced, the looming trade war with China and the possibility of Dems winning the house, the markets were bound to crash. I didn't even take into consideration the inverted yield curve. If anything the bull run lasted longer than it was supposed to because of Trump.

Glad I bought all those put options to protect myself. Just when I started thinking they'd expire without any value I find myself down only a few percentage points from the market highs. The US economy is doing great and will continue to do fine for some time. Fact is the stocks got overvalued at some point. I think at 27,000 Dow stocks were trading at 18 PE where historically they traded at 12 - 15 times. Now they're already down to 15-16 PE. I think most people got complacent in the last few years as one didn't need to think too hard to make easy money. Going forward there will be plenty of opportunities. We just have to research harder and identify them.

[mufi_02]

what is tariff man gonna do now? dow and sp both negative YTD. Stoxx had worst day since brexit 2016.

this is almost entirely trump's making. but its fine as long as he keeps on tweeting and retweeting about the mexican caravan, funded by Soros, coming into US plundering and taking our jobs in the process.

last 2 years had no credible economic policy. the tax cut was a hogwash that only benefited the rich.

[zman]

I'm curious to know if anyone is looking into any new sectors or any new companies that are working with new ideas and/or innovative technologies

[al Furqaan]

Originally Posted by iDumb

this trade war can be devastating if persisted on.

Anyone who thinks you can win a trade war with China has no clue about Chinese culture, discipline, and values.

I know nothing about economics. In fact outside of cricket, some basic pathophysiology, and some basic theology, I know almost nothing.

But thinking sanctions will sway the North Koreans or tariffs will coerce the Chinese is as effective as thinking misery will overwhelm Palestinians.

Even if the Chinese economy dies, 90% of chinese people can survive on eating grass and squirrels...can Americans tolerate only having 2 cars to drive instead of 5???

However strong the economy is is 99% due to things that happened during Obama's 8 years. Trump has zero contribution. DOW was at 8,000 when Obama took office and nearly tripled during his 8 years. By the time Trump leaves office, the DOW will probably have lost unless Trump policies are reversed.

Foreign policy is in shambles. North Korea is still building missiles. Iran won't be going nuclear for a while - that was never an imminent credible threat despite what Netanyahoo might say. Now with the MBS-Kashoggi scandal, the US is in a bind. If Congress gets their way, the Saudis might pull their billions out of our markets. Conversely, KSA is crucial in the US-Israeli-GCC alliance against Iran. If Trump gets his way, MBS will only become emboldened further as his immunity will be solidified. The EU already knows they are largely on their own in world affairs. Russia is still being Russia and Putin knows he's in control of the chess board.

[SportingBD]

Couple of days ago was doing some analysis. Came across to realise that the debt to cash ratio for most US companies are worse than the time of recession. It seems like, we are heading towards another recession. Not sure how far we are from it though.

[mufi_02]

Originally Posted by al Furqaan

Even if the Chinese economy dies, 90% of chinese people can survive on eating grass and squirrels...can Americans tolerate only having 2 cars to drive instead of 5???

lol that was classic.

trump has no clue whatsoever. he will tweet something totally unrelated now and distract the conversation. or go to one of those MAGA rallies and get cheers from rednecks to get some confidence.

GM already announced huge US job cuts. 5 year treasuries are yielding less than 2 year. this inverted curve always predicted recession.

[al Furqaan]

Originally Posted by mufi_02
lol that was classic.

trump has no clue whatsoever. he will tweet something totally unrelated now and distract the conversation. or go to one of those MAGA rallies and get cheers from rednecks to get some confidence.

GM already announced huge US job cuts. 5 year treasuries are yielding less than 2 year. this inverted curve always predicted recession.

And I left out the biggest single thing.

The gradual, but sure erosion of democracy in America. Wisconsin is one of the very first states where democracy is ending. The GOP lost the governership and the AG post but still control the legislative branch. So they are pushing for laws that will strip the new incumbent Democrats of their powers and authority. This can't be undone until Democrats control the state senate and/or house.

Essentially, this is the end of American democracy. Because one state has been successfully able to do it, other states will follow. And also because rules and order only work if everyone (or the vast majority of people obey them), Democrats will have no choice but to to do the same thing in return.

The beginning of this process probably started when the GOP obstructed Obama's appointments, leading to the Democrats to push things through with a simple majority. The Republicans then followed suit using the nuclear option to get Supreme Court nominees Gorsuch and Kavanaugh elevated. So now everything will be done on a simple majority basis, which terminates the need for bipartisanship, which in turn just increases the D-R divide in the US.

We are about to enter a new era of psuedo-democracy. And if it happens in the US, it will most likely happen in Europe, Australia, Canada as well.

[mufi_02]

^^agreed.

but the biggest threat to democracy has been gerrymandering by the republicans in the last few years. they have redrawn districts that favors their candidates.

Democrats in North Carolina earned 48.3 percent of the total vote cast in House races but appeared to win only three seats; Republicans had 50.4 percent of the vote and won at least nine seats.

North Carolina and Ohio are two of the most gerrymandered states, said Michael Li, senior counsel in the Brennan Center for Justice’s Democracy Program. And in both of those states, Democrats failed to pick up a single House seat despite winning close to half of the popular vote. They hold only four of 16 seats in Ohio — and in the Ohio House, Republicans maintained a veto-proof supermajority with a bare majority of the popular vote.

By contrast, Pennsylvania, which voted under a new nonpartisan, court-ordered map, went from 13 Republicans and five Democrats to nine Republicans and nine Democrats. This didn’t quite match the popular vote, which broke for Democrats 55 percent to 45 percent, but the shift underscored that voting lines can matter as much as votes.

https://www.nytimes.com/interactive/...mandering.html

[G-man]

about 40 days to go until end of our year long game. Going to be an interesting finish.

[G-man]

[mufi_02]

Stocks accelerated to their lows after President Donald Trump's trade adviser, Peter Navarro told Nikkei that it would be "difficult" for the U.S. and China to arrive at a permanent economic agreement after a 90-day ceasefire in the trade tensions.

Here's a tally of the carnage:

The Nasdaq lost 7.4 percent on the week and is now 21 percent below its record reached in August, a bear market.
The S&P 500 lost 6 percent for the week and on Thursday hit a 14-month low. It's now down 17 percent from its record.
The Dow also lost 6 percent and more than 1,400 points on the week.
The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 11 percent each this month.
The Dow is on track for its worst month since February 2009.
The Russell 2000, which tracks the performance of stock of smaller companies, is on pace for worst month since October 2008 and also fell into a bear market this week.

Both the Dow and the S&P 500 are now in the red for 2018 by at least 8 percent.

yikes. not even daring to look at my 401k balances..

[iDumb]

Originally Posted by mufi_02
yikes. not even daring to look at my 401k balances..

Since u decided to stay the course i think increasing your contributions is the right approach. nothing else to do.

I contemplated getting out in nov but decided to stay the course for convenience automation - which was a wrong decision.

I think market was in bubble and it is correcting. More pain is coming.

I looked at all my accounts.. its bloodbath - I have seen through a lot of market down turns in my life as I been in market since age 12. But never with this amount of money.

But it's ok - I will cont to pour money in - and confident to come out ahead. US is not Japan. :p

[mufi_02]

^Don’t have a lot of option with 401k. Where else would I put my money? Plus I’m not withdrawing any money from there in the next 35-40 years. So should be okay.

But 2018 has been crazy. I mean YTD all indexes are down 5% or more.

Now the latest reports say Trump may fire Fed Chair Powell. If that happens, market will go apesh*t.

[iDumb]

Originally Posted by mufi_02
^Don’t have a lot of option with 401k. Where else would I put my money? Plus I’m not withdrawing any money from there in the next 35-40 years. So should be okay.

But 2018 has been crazy. I mean YTD all indexes are down 5% or more.

Now the latest reports say Trump may fire Fed Chair Powell. If that happens, market will go apesh*t.

All 401k should and does have options which has bonds and more importantly a cash fund/money market. With rising rates most of those yield in 2 to 2.5%. Ppl are moving money there from stocks - you can do that within 401k. you have to be pretty smart and lucky to be able to pull it off multiple x. Selling at top and re entering at a reasonable price can make huge difference but it's not so easy. It's however easier to pour more as market tanks when time horizon is that long.

Trump trying to exert too much hand in this market. In grand scheme of things, he is a tiny little man in trillion dollar market. If he thinks he can control it - he would be delusional. he took too much credit for it's upward momentum so it reflects bad on him if it goes down - so he is trying to point fingers.

ppl with money are smart - they don't play around with this bullshit.... if I sense chaos and uncertainy - i pull out till things are settled regardless of what is promised. i don't think any moves by anyone will do anything. Market made up its mind it's gonna trim - it's gonna trim. period. i don't think powel firing will do anymore harm than what it would be otherwise... Fed's job is to keep the economy going and stable - it is not in conflict with a sitting presidents goal. its really apolitical.

[al Furqaan]

Originally Posted by iDumb

I think market was in bubble and it is correcting. More pain is coming.

More pain? Think: recession. IDK if it will be as bad as 2008-09. Maybe will be worse. Lots of people are trying to buy into the market past couple days, but I have a feeling it will tank further.

Dow all time high was just a few weeks ago...a shade under 27,000. Now in the 22s. I predict by new year we may be nearing 20. May even fall under that.

Personally, I would wait before entering the market. But a golden time to enter the market is nearing.

[zman]

I don't see this recession being anything close to 2008-2009 levels. Prior to the last recession big banks and corporations were leveraged to stratospheric heights. 70X is the number that is thrown around, which means for each dollar collateral they owned they lent $70. Also mainstreet folks were buying homes as if they were candy with stated income, an euphemism for no income. The financial world was out of control and it was a matter of time before the bubble burst into flames. Markets can't keep going up forever. We need healthy pullbacks and recessions every now and then in order to avoid great depressions. This time we're better prepared. The fundamentals are sound enough to sustain headwinds for some time.

I also agree there will be great opportunities to invest in this market. Without getting into the weeds, here's a very high level analysis-- historically DOW/S&P trade at 12-15X P/E. At 27k, Dow was trading at 18X. Now that the correction has started, there's a chance it will over shoot on the down side and go all the way down to 12X P/E or 18k before the recovery truly begins. I doubt it'll go that far though. I expect a short rally in early January followed by a year long recession. So yes this could easily turn out to be the investment opportunity of a decade.

[iDumb]

Originally Posted by zman
. So yes this could easily turn out to be the investment opportunity of a decade.

i think the investment opportunity of the decade has just pass last decade

the algorithm trading makes for dramatic market move. 10% in a week. For the year dow is down only 10% - big deal.

if you think this is 2008 to 2009 level of activity you haven't properly lived through it probably saw from sideline.

will remain 100% stocks in 2019.. Full blown contributions are set in motion.

anyways, in your PE example you should be looking at forward PE. Based on that market was fairly priced. Can't really go with such rudimentary metrics.

[iDumb]

There you Go again. Dow set to drop 1k today.. Ppl starting to wake up and preservation mode is on. I am getting more convinced on my bubble theory.

[SportingBD]

You have to feel sad for people, especially in this difficult moments.
These are real human beings, that suffer from the loss.

Some people literally have no escape, since they already have lost enough.
They are still in the market (with minimal hope) of recovering a bit of value.

Those who already came out of the market, great job.

[iDumb]

Originally Posted by SportingBD
Those who already came out of the market, great job.

From my observation, most participants in this thread are side watchers.
and many claim many things after the fact, never before. For example, I can gurantee u that you still don't have a penny in market and you wont in next 5 years either. Even after this market eventually bottom even if it's at zero. Let us know if anything changes ahead of time not after the fact.

I have seen all sorts of investor. you my friend are a side watcher and will remain so forever.

Some people literally have no escape, since they already have lost enough.
They are still in the market (with minimal hope) of recovering a bit of value.

Yes there is. they can sell and preserve and get back in later. Market trimmed only 15% or so. It can trim 60%. It happened in the past.

[SportingBD]

Don't judge too early. I have my own expectation as to when to enter the market. Yes, I am a side watcher, and I have very good reasons for that, especially in the current situations of the market, not only in US, but with the Brexit issues etc. It's all about timing, in maximising your true value for investment (I am those kind of people, you either win big or don't get in at all).

I am those curious ones, waiting for the collapse.
And will only enter, when I feel, the collapse has reached such levels, that it can't get any worse.
It may take couple of years, who knows?