Stock Market Discussion, Chat About the Latest Market Action

[WJK]

So on-time inventory destroyed demand for warehouse space in the 90's - just like covid and remote work destroyed demand for office space recently.

It sounds like AI might have the same effect now as PC's had in the 90's: lots of jobs gone. If AI destroys as many jobs as predicted, that will further reduce demand for office space and hurt the residential market at the same time (layoffs mean people can't pay rent/mortgage).

I can see those laid off people selling off stocks in their retirement accounts to get by - possibly also tanking the stock market if enough of them do it all at once. Dominoes...

It gets more profound than that in the cities for the housing markets. If people don't work in those office buildings, they don't need to live close by. Traditionally extra office and warehouse space has become housing. This time there this no longer looks like a backstop option. I read an article where the writer was saying that only the trophy and some of the class-A office buildings in NY will survive. The rest will be torn down. Uh?

Commercial RE used to be golden and so were the guys who played in that arena. Now the entire segment is questionable.

See, it's not just the housing near the office buildings that will be affected. It's the retail space and the spaces for support businesses. It's a whole commercial support economy that is at risk as well.

Retail space has been questionable for a long time with the advent of online shopping and changes in social trends. The biggest company that owned regional malls has gone broke. Now what do we do with those properties and all of those acres of parking lots? They used to be one of the main sources of sales tax revenues in many communities. We have a very high vacancy rate nationally for retail and office spaces of all sizes. This is the reality in cities and small towns. Do we need to rethink our community zoning maps and allocation of resources? How are we going to handle these changes?

You mentioned 401Ks and such. It goes much deeper than that. A bunch of the paper (mortgages) on these distressed properties were bundled by the stock market in the form of bonds and securities. The risk is not confined to the banking industry anymore. (Remember 2008 and that whole mess with the subprime housing market? Here we go again on a much bigger scale.) These securities are being sold and traded worldwide. What happens when the buildings lose their value and those securities are backed by a bunch of hot air? As Buffet says, when the tide goes out, we'll see who has been swimming without their bathing suit.

 

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[loop101]

I expect two crashes, the stock market followed by the US dollar. They would have already stopped QE if they thought they could without crashing the market, and now they have to stop it. They also have to raise interest rates. Either one of these would cause problems in the market, combined I think they will crash it. I also expect other nations to devalue the USD since we've given up on paying back our National debt, or even not running a deficit.

 

[MJ DeMarco]

Market finishes like today that occur on Thursdays usually foretell a horrible Friday... its a pattern I've seen all too often. There was more than a 10 point reversal on the SPY today (100 on SPX).

EDIT: WOW, Netflix down 17% in the after hours after earnings.

 

[MJ DeMarco]

Political approval ratings at big lows, looks like the folks in DC will need a war to improve them. SMH.

Carnage on D-Street as Nifty ends below 17,200, Sensex drops 1,545 pts; IT, metal, realty worst hit.

I moved your post to the Market Discussion thread.

 

[MJ DeMarco]

A long SPX option I bought for $85 is now worth $5,100 -- unfortunately I sold it when it was worth $600.

 

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[MJ DeMarco]

Here ya go @Kak, I know you're a big fan of Kathie Wood...

Coming into Monday trading, the ARK Innovation (ticker: ARKK) ETF was down almost 55% from its 52-week high and down 22% year to date. That compares to the Nasdaq Composite, which is down 14% from its 52-week high and 11% in 2021.

 

[MJ DeMarco]

Indian shares were set for the sixth session in red on Tuesday amid interest rate worries and geopolitical tensions. However, after the gap-down start, the indices staged a smart rebound to recover most losses amid low-level buying in stocks.

Zomato had bought around 9 per cent stake in Grofers (now Blinkit). Kotak says, “Zomato had $1.9 billion in cash as of September 2021. Zomato is in a better position to fund its losses and make fresh investments in Grofers.

You need to stop creating new threads with stock market nuances. There is a daily thread where you can post about market action, both in the US, and in your country. If you continue to create new threads about daily market action, you will be removed from the forum. This is the last time I'll move your post to the daily chat thread. And this is your last warning.

 

[MJ DeMarco]

WIX down 25%+ post earnings. SHOPIFY is down 18% after earnings. Stock is down 60% since its November highs. Interesting that these eCom/stay-at-home tools are suffering poor earnings as they should have thrived during COVID.

 

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[Kak]

The primarily gold, guns and oil portfolio has treated me very well over the last 6 weeks or so.

My big losers are FB (after the big crash I bought) and Coinbase.

 

[MJ DeMarco]

I think the markets are closed on Monday, if Russia doesn't invade Ukraine in the next 3 days, you can probably expect a pretty big up day in the markets on Tuesday. Right now I feel most of the volatility relates to potential war, not interest rate increases.

 

[Timmy C]

In times like these, I just don't look at my crypto or stock portfolio.
I may be down a hell of a lot of money, but I don't have bombs being dropped on me.
Going for a nice walk in the sunshine and enjoy the rest of my day.

BTFD.

 

[Mathuin]

I know how much y’all love Cramer.

 

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[WJK]

History question, looking to learn something from someone older or who has read about this...

In the past (40-100 years ago), banks paid a lot more interest and this interest was enough to be considered a real return, right? What kind of person was investing in the stock market and why? Was it mostly speculation or were the returns actually superior? Obviously today bank interest is effectively zero, or negative accounting for inflation.

Real curious as to the 1910s through 1960s because that seems to be before stocks went mainstream.

Hmm, this article was interesting. It says 1920s spurred stock growth because it was the first sign for Americans that their savings were not safe from inflation:

Why Did People Buy Stocks In The 1920s?

Because the dollar got wobbly.

www.forbes.com

The interest rates used to be a lot higher. It actually went on a lot longer than the 1960s. When I bought my first house in 1976, the interest rates on mortgages were 9.5%. The savings world and real estate mortgage business were controlled by privately owned banks, saving & loans, and thrifts. Only about 20% of mortgages were sold to the secondary market. Most mortgages were held in the banking system portfolios. Only very rich people invested in stocks when I was young. We all had passbook savings accounts. And investing in savings bonds was common. (I still have a couple of those small bonds in my safe from those days. I just haven't cashed them in.) Interest rates made the return reasonable since it was all based on private money.

Then the 1990s crash came and it broke the backs of the banking industry. The stock market monetized the banking industry and the mortgage business. Now, 80% of mortgages are sold on the secondary market. The commercial real estate market became funded by Wall Street bonds. And all kinds of new security instruments were created.

I could write a book on how and what happened in the commercial/office/warehouse real estate market during that time. A lot of it was in response to business changes that were spurred by computerization and the move to on-time delivery. Also, Japan's manufacturing industries failed and their stock market crashed. The consumers in the US turned against Japanese goods like turning off a light switch. The Japanese were heavily invested in the downtown office/commercial in Los Angeles. They sold everything off at steep discounts or they walked away leaving the banking community on the hook. And it all happened at the same time. Our saying in the RE business was "Stay alive until 95." 1995 came and went with no relief. The deep recession lingered on until close to the end of the decade.

The old banking community was further cut down to size by lower and lower interest rates as Wall Street took over. Those low-interest rates were used to suck any remaining money in the banking businesses. It redirected those funds into the stock market. SO many people were financially ruined in that crash. At times, I was hired by RTC, the government corporation, that went in and took over the whole Savings and Loan industry and the Thrifts. I was on some of the audit teams that the government sent in to seize those businesses. I had a front-row seat to the carnage. Private investors went from owning banking entities that managed huge portfolios of mortgages that were supported by everyone's saving accounts. These men were the titans of banking. Most ended up being deal broke. and unemployed.

Does that help answer your question?

 

[biophase]

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

Just so much competition now. I just counted the number of streaming accounts I have and it's crazy.

Netflix, Amazon, HBO Max, Hulu, Disney+, Apple+, Paramount+, AMC+, YoutubeTV, Youtube Premium & Showtime.

What I noticed myself is that Netflix used to be my goto app when I was bored and needed to find something new to watch. Now, I actually go to Youtube first and then to the others. Netflix is now lumped in with HBOMax and Disney for me. Paramount+ is starting to climb up my ranks. The last app I check is Hulu. If I needed to cancel the first 3 to go would be Hulu, AMC and Apple for me.

It would be interesting to know if you could only have 3, which is everyone's can't cancel.

 

[Andy Black]

Just so much competition now. I just counted the number of streaming accounts I have and it's crazy.

Netflix, Amazon, HBO Max, Hulu, Disney+, Apple+, Paramount+, AMC+, YoutubeTV, Youtube Premium & Showtime.

What I noticed myself is that Netflix used to be my goto app when I was bored and needed to find something new to watch. Now, I actually go to Youtube first and then to the others. Netflix is now lumped in with HBOMax and Disney for me. Paramount+ is starting to climb up my ranks. The last app I check is Hulu. If I needed to cancel the first 3 to go would be Hulu, AMC and Apple for me.

It would be interesting to know if you could only have 3, which is everyone's can't cancel.

Same. I go to YouTube before Netflix now. I can spend an hour wandering around Netflix trying to find something to watch, giving up, and then heading to bed. And I don’t like the way they change the thumbnails for movies.

 

[c4n]

Inflation this time is caused by the supply disruption globally by covid and Ukraine war. And there is nothing the U.S. gov could do much about it.

That's on the news alright. Thanks god for Putin, now we have someone to blame. It probably has nothing to do with trillions of USD printed in the last two years.

Besides, this thread is from April 2021, not sure if the Ukraine war was ongoing then?

HOT! - INVESTING - Hyperinflation starting? What's happening in your area? Post your ground reports.

I believe we are witnessing a massive hyperinflationary event underway as prices continue to skyrocket in all asset classes. Of course, this doesn't happen in 1 day or 1 week, but over the course of a year or two. Meanwhile, the Fed continues to say inflation is under control. :rofl: I've...

www.thefastlaneforum.com

 

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[YanC]

I wonder until when the Fed will play the rates hike game before backing off and going BRRRRRRRR again. Having a recession on your hands is not good for politics, but hey maybe they'll convince people it's because of Putin.

 

[Kak]

I've been thinking about opening a long position in silver for the past few weeks. It may have a nice run to catch up with the valuation of gold. How would you do it besides buying physical silver (I already own physical gold) ? I'm used to selling puts the MJ way, or rather buying calls ?

As you undoubtedly already know, this is no substitute for owning the physical bullion, but…

You can buy SLV and even trade covered calls on it.

My biggest position is reserved for GLD and trade the wheel on it. I sell a lot of covered calls and cash secured puts. You could do the same with SLV.

 

[Kevin88660]

The 2-10 yield curve is FULLY pricing in a recession. A 20 basis point spread. Stocks don't seem to be pricing that in.

TREASURIES-U.S. yields mixed, lower on long end, as Fed meeting looms

Its pretty weird these days. Fed is signaling and probably saying explicitly that they are willing to sacrifice asset prices for inflation.

The market seems not fully buying into that.

I am hearing far stretched opinion that Fed will save the market when recession comes, and hence there is no need to fear.

It seems to me the market participants think that the economy or stock market is “too big to fail”.

But I think they fail to consider that we are at a point whereas Fed has to choose to fight between the inflation (currency purchasing power) or saving asset prices.

The government and Fed can allow assets price to collapse. Rich people gettjng bankrupt and committing suicide is not something that the government cannot allow to happen. It happened many times in history. Bull market for the last 30 years seem to have cause people to forget about that.

Currency collapse due to inflation is something that the government cannot allow to happen. Because that will be game over for the entire nation.

 

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[Guest-5ty5s4]

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!!

This, but I’d also say start looking for bargains.

 

[MJ DeMarco]

I personally do worry about what will happen to the system. Currently people think that the indices will always rise in the long term ... and I am not so sure.

I'm with you. People too easily like to base future performance and past history. They see the markets returning to "normal" as a set of forgone conclusions.

A new set of never before scenarios are here, and we have no idea how the system will react, and if it can. In other words, just because history says the S&P500 will return to normal (what's normal? 4000? 4200?) doesn't mean in will. I forsee many years of dour returns, if any ... throwing the entire "investing" world on its head. My rationale is because the system behind the system and the politicians and oligarchies that run it, are severely corrupt. Morally bankrupt individuals and entities, will bankrupt the system, to the enrichment of themselves. Strap yourself in.

 

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[MJ DeMarco]

I expect this rally to reverse.

Still a few hours left in trading today, but as of now, this rally is on very low volume, haven't even reached half-volume yet, which tends to mean you are right.

 

[MJ DeMarco]

Once again a big rally and the VIX has barely budged. It's like the market is smiling and goading you back in while wearing a big sign on its chest that says, "I'm lying."

 

[Antifragile]

"Remember, when there’s nothing clever to do, the mistake lies in trying to be clever."
(Howard Marks, Mastering the Market Cycle)

 

[YanC]

When do you guys think this whole thing will bottom?

When the old men at the Fed decide so, as the recession narrative becomes stronger than the inflation narrative and political pressure is too strong.

 

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[Kak]

“lOgiC”

 

[Guest-5ty5s4]

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?



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.

I agree completely with every single negative thing you mentioned, but I also think Americans have a way of rising from the ashes. I'm cautiously optimistic.

Not on the people in power, no, they suck entirely. But on the people who will replace them.

 

[Goodfella999]

I recently finished the book "Creature from Jekyll Island" and if everything or even half of what that book claims about the FED and all our wars is true, as well as our money supply, were all screwed.

 

[MJ DeMarco]

View attachment 45664

Markets and the futures are still holding up though, as they have the last 3 rounds of bad news, first being MSFT/GOOG, META, now AMZN.

Bad news might already be priced in.

 

[MJ DeMarco]

Listening to J. Powell give his thoughts on the economy is just infuriating. This is the same clown that said "inflation was transitory" for 2 freaking years.

Like anyone can listen to anything he says, and make investment decisions because of thereof.