Stock Market Discussion, Chat About the Latest Market Action

[MJ DeMarco]

Thought it would be cool to have a separate stock market discussion thread, like the "Random Thoughts/Chat" thread -- this is the thread to post in if you want to discuss any stock market trading day, including any insights or forecasts you might have. Or, this is the place to post random economic activity information, posts, tweets, etc.

Here is the thread to vote on where 2022 will end:

INVESTING - Your 2022 Stock Market Predictions? Vote (Closed)

Where will the 2022 stock market end up on Dec 31st, 2022? Please vote your thoughts and feel free to comment. For voting purposes, the stock market to predict is the Dow Jones Industrial Average... On Dec 31st, 2021, it looks to close around 36,000 Where will it be on December 21st, 2022?

www.thefastlaneforum.com

So I'll start...

Which is to say that we're having a pretty interesting start to 2022! Is this just a minor correction, or something more ominous? This downdraft is caused by interest rate speculation, and that the FED will start raising them.

 

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[MJ DeMarco]

I've seen you post mocking the idea that indexes will fair well over the long term and how using history to assume this isn't smart. Can you expand on your point of view? More specifically I would press on the following:

• If you believe the market will crash/stagnate from now on or for a very long term... This implies that the USA economy as a whole is no longer growing and is starting to shrink. Of course this is possible, but this begs the next question. What possible investments don't have this exposure and if the market tanks forever what investment could possibly be safe. We aren't just talking about this in a vacuum. The context is if not X then Y. Considering what portion of the USA's wealth is tied up in markets, it would ripple across nearly all investable markets. The stock market is just a collection of most of the most successful businesses afte rall. The housing market has been on fire because of cheap money and insane market growth (which is from insane business growth). Do you think houses will keep going up in price when the market halves and stays there?
• If you believe there will just be sour returns for many years.....Does it really matter for the long term investor? I'm in the market for the next 50 years. Decade long ruts have happened before and its no big deals as the roaring decades follow to make up for it. Maybe I'm just incorrectly assuming you are also investing for long term growth and/or passive income?

Obviously building your own business is always the best option. But if you are talking about investing in assets outside of your direct control for passive long term income.... I just don't know how the market isn't always among the best options. No matter what is happening in the market at the time.

The United States is a country in decline, and I'm not just referring to that economically. I'd expand on that truth but don't want to say something that might come back to haunt me. I don't want to be cancelled.

As far as I'm concerned, only two things buttress the American economy (and its stock market) and that is our reserve currency status, and that the stock market hosts 1000s of multi-national corporations with global footprints.

So yes, never before in human history has the world been so interconnected which is kinda my point. So when it collapses, there will be no safe investment haven. Your post alludes that I might know what investment that is, I do not. I do not have an answer to what the best "long term" investment will be other than my own business, and my own home.

Furthermore, world powers do not want a vibrant middle-class that can climb the economic ladder. World powers want a peasant class, and a ruling class (you'll own nothing and be happy).

Ray Dalio's The Changing World Order, book will do a much better job at explaining why I think we're in for a period of time never before experienced. So yes, "buy the dip now because it always comes back" is entirely an opinion, not fact, and based on historical premises where the USA was a superpower on the rise, or interested in solidifying its worldly presence as one.

That is no longer true.

Why billionaire Ray Dalio thinks another economic disaster is coming — and how he recommends preparing for it

Hedge fund billionaire Ray Dalio gives advice on how to prepare yourself for future financial catastrophes — and what could tank the American economy next.

www.cnbc.com

 

[MJ DeMarco]

How low do you guys think SPY will go. Will we close above or below the September lows?

I have no idea.

Lots of moving parts right now: potential war, inflation, COVID, bubbles, rampant corruption in both corporate board rooms and government, and the Fed tightning with higher rates.

All this says a big move lower. Which means actually the market will rebound and reach new highs.

 

[MJ DeMarco]

Doesn't looks like Bitcoin or Crypto is holding up as an inflation or a safe haven asset. It's just as correlated to the rest of the market.

Gold remains the stalwart.

 

[MJ DeMarco]

For the last 6 months I've heard, we could be in a recession in 6 - 9 months...

Reminds me when we heard, "this inflation is transitory" for a year.

The key thing is to deny something that is real and already here.

In short, at the point they admit we're in a recession is the point you should probably start buying stocks again.

 

[p0stscript]

As much chance of going up as down, ask the experts....

 

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[MJ DeMarco]

Interesting that it feels like the market has been sliding for months, and the SPY still sits at a lofty 432.

Also, check out this chart... it's the commodity index. I got in at 15 and been using it as an inflation hedge. It's now at 27. Mind you, this index moves very slowly ... this type of move in such a short time is very rare. I also mentioned that I own the Swiss Franc as another hedge. That holding has done poorly as the USD has strengthened.

 

[MJ DeMarco]

I suddenly realised most of my Telegram trading groups I join are getting quieter or shutting down.

Yes, when the WallStreetBets Reddit forum disappears or is graveyarded it will symbolize a BOTTOM.

To be honest, that's how I'm gauging market tops and bottoms -- when all these retail stock traders lose their shirts and stop trading. This happened in 1999-2000 -- everyone was day-trading. By 2002, no one was left.

It marked a great time to buy.

 

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[MJ DeMarco]

The quarter ended today.

It was the WORST first half of a year since 1970.... 52 years, down 21%.

A time when teenagers when getting killed in Vietnam.

The good news is, I haven't seen a "This 38 year old couple retired early because they've ate Ramen most of their lives while living in their parent's backyard toolshed!" article in a few months.

 

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[socaldude]

LOL the last one on the survey is my biggest fear. Although in reality the biggest risk is probably not even on the list LOL.

 

[ljean]

I went from being down $70,000 this morning to up $50,000 by close.

 

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[MJ DeMarco]

The senile old man scheduled to speak at 12:30EST, expect markets to fall during and after, that seems to be the pattern any time he butchers the teleprompter with bumbling incoherentness.

 

[AceVentures]

Hyper-inflation or recession with rising unemployment? Neither dem or rep want to admit to their constituents that we need 10% unemployment and several years of hardship to bring inflation under control. They quite literally need to destroy demand, this is the simple answer that is being constantly massaged to appear otherwise to the average American. "Soft-landing" "transitioning" lol.

To tame inflation, it would appear we need tremendous leadership that is willing to tackle both the demand and the supply side of the problem: address demand by way of reducing access to credit, effectively resulting in only profitable value-additive ventures being able to spin that credit, and improved supply by way of innovation (which it seems would also be made possible by tightening access to credit). I struggle to see how any of our elected representatives have the knowhow or the courage to practically tackle the problem with real leadership. Who wants to be the one to tell an entire generation of broke millennials that they not only can't have a home or a car, but they can also no longer enjoy a cushy job pushing buttons at corporations that can only afford to employ them thanks to free money?

Is hyper-inflation the obvious alternative to lack of leadership in this situation? It remains to be seen, but if history is a teacher, it would suggest it is the inevitable path for the USD as has been for all the other failing fiat currencies around the world (past and present).

What the markets wants to do with this whole mess is anybody's guess, and I'm personally tired of trying to guess. I used to be this guy in the below meme - but now I try to let go of the nonsense and focus solely on one thing: innovation. It's the only way out of this mess. We've got to continuously produce and innovate, to bring costs of goods and services down and to deliver a higher quality of life to as many people as possible.

 

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[fastlane_dad]

If you guys are worried about the 'current' market conditions you are not grasping investing, or being in the markets for the 'long term'. Everything else is just gambling and speculation. What is happening now is not only totally NORMAL but EXPECTED!

Here is some more QUICKLY pulled up statistics: Declines of 10%-20% have happened 29 times (about once every 2.5 years since 1946), 20%-40% nine times (about once every 8.5 years) and 40% or more three times (every 25 years) ( reference).

Where do you think the long term market gains come from, and the 'risk' that is involved in achieving that!? Well we are there!

Enjoy the ride and don't pay too much attention to all the noise in the headlines. And most important STAY THE COURSE!!

 

[MJ DeMarco]

Watch closely the market's action Thursday and Friday, I believe we will make another huge leg down. Or, it will bounce back strongly. There will be big movement... question is, which direction?

Reserve currency or not, it's hard to run away from our natural resources, military, and demographic

Natural resources we refuse to use? A military that keeps shrinking and focuses more on cultural BS than actual military preparedness? Demographics? You mean a massive group of people who don't want to work, or want to get paid $500/hour for pulling weeds and pouring coffee? You mean 66% of the population who is obese and/or addicted to something, can't focus for longer than 5.2 seconds, and will have massive needs for medical care?

At the moment, everything you mentioned was a historical advantage. It no longer is today.

 

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[NeoDialectic]

Yes, China.

China can play the long-game, the US and the EU cannot. For instance, when Trump became President and started strong-arming China, all China had to do was wait 4 or 8 years, and play the long game. Elections do not allow democratic powers to stand ground on any one policy as internal power struggles move in flux.

China doesn't have elections, they have plans that stay firm and don't change with elections. So they can play long-games, while the rest of the world is playing short. Do you think China is OK with poor economic growth for 10 years if they emerge as the dominant superpower? Hell yes. Long game. China plays CHESS, the rest of the world is playing CHECKERS.

I will be the first to admit that I'm no expert on the matter, so I could be the one that is wrong. But if I am right, I think you may have been misled by whatever media you are consuming. It is a common idea that China is building up to be a powerhouse, but it isn't supported by the facts. The fact's seem to show that they are peaking in their power and panicking to hold onto whatever they can before a strong decline.

First thing to look into is their demographics. They absolutely screwed themselves with their past 1 child limit. Seriously. Their population is getting older and they are on the brink of disaster when it comes to having enough people to replace the current working population to support the upcoming wave of retiring elderly.

I can't expand on the demographics idea enough in posts on a forum, but Peter Zeihan 's book does a fantastic job. I know it sounds like not your cup of tea if you're dead set on China overtaking things, but give hearing the other side of the argument a chance with an open mind. He goes into alot more than just demographic's.

The other thing I disagree with is the way you're characterizing China's govt advantages. There are advantages and disadvantages to planned economies and authoritarianism. You pointed out an advantage. I am actually 100% in agreement with your view on their major advantage in this regard. But you left out all the disadvantages (that you do espouse in other posts when talking about socialism/communism). It is easier for them to do long term planning and get shit done. But they also have no checks on whether what they are getting done is right (1 child policy being prime example). Democracy like in the USA is extremely slow moving and inefficient. But that's by design. It's a mirror of a market solution. It stumbles it's way to the finishing line and truth. Eventually. We have obviously socialized some parts of our economy and it's not exactly market. But it's much closer to it than China, et al.

Just my 2c I suppose.

 

[MJ DeMarco]

you may have been misled by whatever media you are consuming.

I don't consume media, I don't read any media outlets (unless it assaults me here or in some newsletter) as much as you won't find me shooting up heroine daily. I consider myself more of a studious student of history and human behavior.

That said, you make valid points and I hope you are right, and I am wrong. I welcome it.

 

[MJ DeMarco]

NOTE: The VIX has finally moved significantly on this down day after not budging for months, even amidst rising rates and wars.

Of note: Silicon Valley Bank has failed and was closed with FDIC taking receivership.

Resembles 2008 and it is how a contagion begins.

 

[WJK]

I remember back when C0vid happened it was brought to my attention job openings at the CDC for jobs like “Viral Disease Specialist” were already being offered in Nov 2019 before the 2020 pandemic. It’s anybody’s guess if that’s a coincidence. LOL

Anyways, I did see some job openings on Indeed for positions like “Recession Relief Program Processor”. LOL OK.

Will “something” happen this year? Will they pull the plug on something?

I don’t see a recession although I am hearing about a lot of people being laid off even on this forum.

Should we be cautious about this bullish market?

The retail sales number are up. But, so is the use of credit. I don't what is going to happen.

The RE office markets in big cities are collapsing and that is going to sink a bunch of regional and mid-sized banks. That also means that's a drop in those cities' income streams for public services. I have seen up to a 40% estimated drop in tax revenues for New York City. There are a lot of moving parts to these issues. I have been waiting for this shoe to drop since the beginning of Covid.

The last time this happened was in the 1990s; it took out the whole Savings and Loans and Thrift network. In Los Angeles, we had "see-through" buildings -- vacant highrise office buildings. And the warehouse buildings were also hit really hard. I could write a whole article on the how and why of that crash. Our mantra was, "Stay alive until 95." 1995 came and went with no relief in sight. The downturn lasted just about the whole decade.

But, think about this... it was the stock market and Wall Street that picked up the slack and started funding RE securities through TDs and bonds. And they were happy to pick up where the Savings & Loans and Thrifts met their demise. They are on the hook this time...

 

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[ljean]

I'm not much for discussing opinions or making predictions, I'd rather just make my bets and see how the chips fall. I will say my top 10 industries by exposure (50% of portfolio) are currently:

Specialty Retail

Oil & Gas E&P

Trucking

Education & Training Services

Furnishings Fixtures & Appliances

Residential Construction

Apparel Retail

Oil & Gas Midstream

Diagnostics & Research

Specialty Industrial Machinery

Chemicals

My top 10 positions by exposure (32% of portfolio) are:

AZO, PTSI, SMP, MMI, PFE, WHR, HI, HPQ, TOL, CNHI

 

[Guest-5ty5s4]

Somehow I missed this entire thread...gotta catch up.


If you like day trading, someone on r/WSB analysed Jim Cramer's recommendations:

https://www.reddit.com/r/wallstreetbets/comments/mtehdq View: https://www.reddit.com/r/wallstreetbets/comments/mtehdq/i_analyzed_all_700_buy_and_sell_recommendations/


Turns out that his picks performed generally well on a one-day timeframe...but sank badly for long-term trades.

So you can just buy his picks quickly and sell them tomorrow...so he's a pump and dump shill.

Which reminds me of my Malaysian stock market.
I kept in touch with a veteran trader who's 20 years in the markets...and he told me simply that this market was only good for FIFO and moderate term trades (six months holding period max).

"I've written for the Malaysian financial newspapers...and they just write news to paint trick stories to trick investors with fables." he said. "Long term investing? Not in Malaysia. Do it for the US markets."

This got me thinking...then what was the point of putting a single cent in my local Malaysian markets then? Even for trading?

Even technical analysis traders rely on FA for some strength in the indicators...otherwise rallies won't last. And some believe you can predict incoming FA events by looking at charts performance-- which is sometimes hit or miss I'd admit.

That being said...a few tin and silicon (mining) companies in local have been moving upwards against the red. I was surprised to see tin prices flying up...apparently it is a very underrated metal for soldering in electronics and EV battery parts. We also do not have many listed players locally for the duo...so I guess the institutional funding gets all concentrated.

I'm thinking to start buying them while the other semiconductor stocks are still in red or begging for a re-accumulation phase on the price chart. And could be a good proxy for tech themes (while the real tech stocks are still correcting).

Also, the oil and commodities prices have been ripping up these days-- even though US or China offloads surplus to force them down in the short term. Malaysia used to be the world's biggest tin producer until other countries fought their way in and we moved on to other industries post- British...it would be interesting to see its tin industry make a comeback.

What this should prove is common sense:

Hyping a stock to an audience of millions of people pumps the stock price.

What this shows is basic stock market manipulation. Thanks Jim Cramer

 

[MJ DeMarco]

The beginning of the end for Facebook? Down 25% on terrible earnings. Perhaps people are waking up that FB is not a net positive for humanity. Would love nothing more than for the platform to disappear and the stock go to zero. I can also dream about rainbows and unicorns.

 

[MJ DeMarco]

ARKK down another 4% today. Oh Cathie...

 

[MJ DeMarco]

The senile old man scheduled to speak at 12:30EST, expect markets to fall during and after, that seems to be the pattern any time he butchers the teleprompter with bumbling incoherentness.

When the president started speaking, SPY was down 3.10.
When the president finished speaking, SPY was down 3.10

The president has imposed not just sanctions, but "STRONG" sanctions. Woah, that ought to scare 'em!

 

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[MJ DeMarco]

Netflix taking a bath post earnings, down 25%. Perhaps too much woke bullshit.

After worst quarter for shares in nearly a decade, Netflix executives say that loss of 200,000 subscribers in first quarter will grow to a loss of 2 million in the second quarter, and 'revenue growth has slowed considerably'


Netflix Inc. disclosed Tuesday that it lost streaming subscribers overall for the first time since the service was in its infancy, and executives expect the same to happen this quarter on a wider scale, news that sent the stock plunging again in extended trading.


Netflix (NFLX) reported a net loss of 200,000 paid subscribers in the first quarter, while analysts on average were forecasting 2.5 million net additions, according to FactSet, which was what Netflix executives had forecast. The decline arrived after a price increase in the U.S. and Canada, and executives guided Tuesday for a loss of 2 million subscribers in the current quarter, while analysts were expecting net adds of 2.55 million.

 

[MJ DeMarco]

More and more things are starting to resoundingly say "recession" -- layoffs, inflation, lowered earnings...

Netflix Lays Off Estimated 150 Staffers in New Round of Cuts

The majority of the cuts were made in the U.S.

www.hollywoodreporter.com

 

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[MJ DeMarco]

Big inflation report tomorrow, I think I’m more interested in the “spin” that will be offered than the actual report. The markets, however, will speak the truth as money talks, bullshit talks to CNBC.

 

[MJ DeMarco]

Earnings don't move the overall market; it's the Federal Reserve Board... focus on the central banks, and focus on the movement of liquidity... most people in the market are looking for earnings and conventional measures. It's liquidity that moves markets.
Stanley Druckenmiller

 

[MJ DeMarco]

That surprises me. I'd assume that Republican taking the wheel would get rid of most of the socialist dynamics and most likely lead to very different outcomes.

Democrats are honest to their socialist and authoritative tendencies and act accordingly. Republicans like to decry socialist tendencies and preach "freedom!" but still govern like democrats. In other words, one party likes to be bold in its economic destruction, another likes to be duplicitous about it. If Republicans were the solution, they would have been able to navigate the Trump presidency for the better. Instead they blew it, as expected. Both are appendages unto the same corrupt machine.

 

[MJ DeMarco]

Economically speaking, who do you bet on if not the US, the EU ? LOL don't even get me started on this unelected mafia ran shitshow. China ?

Yes, China.

China can play the long-game, the US and the EU cannot. For instance, when Trump became President and started strong-arming China, all China had to do was wait 4 or 8 years, and play the long game. Elections do not allow democratic powers to stand ground on any one policy as internal power struggles move in flux.

China doesn't have elections, they have plans that stay firm and don't change with elections. So they can play long-games, while the rest of the world is playing short. Do you think China is OK with poor economic growth for 10 years if they emerge as the dominant superpower? Hell yes. Long game. China plays CHESS, the rest of the world is playing CHECKERS.

 

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