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Posted on 8/13/22 at 7:04 pm to Im4datigers
quote:
am warming up slowly to the thought that the bottom has passed. And then I check my bank account and see that the cost of living is still as high as giraffe arse and I make damn good money. No clue how anybody making sub 6 figures makes it these days.
Agreed
Posted on 8/13/22 at 7:50 pm to Zachary
One thought comes to mind is the wall of worry. Things “look” horrible, but the market just keeps going up. You don’t want to be on the sidelines as it herks and jerks through a recovery and then new highs.
But then again, you see the inverted yield curve, more fed rate hikes, a decreasing money supply, new corporate income and stock buyback taxes in the Inflation Reduction Act, international warfare, and you gotta wonder how the market can’t see some more downside from here.
It’s been a bad downturn. But has it been absolutely painful for investors just yet? We need total capitulation before we can call a bottom, yeah?
But then again, you see the inverted yield curve, more fed rate hikes, a decreasing money supply, new corporate income and stock buyback taxes in the Inflation Reduction Act, international warfare, and you gotta wonder how the market can’t see some more downside from here.
It’s been a bad downturn. But has it been absolutely painful for investors just yet? We need total capitulation before we can call a bottom, yeah?
Posted on 8/13/22 at 8:25 pm to Bard
You seem smart, I like you
Posted on 8/13/22 at 8:55 pm to Bard
quote:
All of this taken together is why I think any "bottom" we've seen is a false bottom.
Agree with what you said, and I have been blasted on here for telling people the economy is not great for those reasons. Yield curve at -.415 bps is very concerning, too.
Having said that, the things you mentioned are indicative of a slowing economy, but won’t necessarily slow the stock market IMO. Liquidity is key to this market. The economy was going gangbusters from last November through this May, but the stock market tanked during that time. The economy is not directly correlated to this market and not nearly as correlated as liquidity. Liquidity is still king.
People are unwinding bearish plays. Massive outflows from TIPS and sizable inflows to tech are important to note.. (admittedly this is self-serving statement t because I am in the group that has moved to tech over the last couple of weeks). Vix has been falling for four weeks, too. If this continues it will mean even more equity liquidity as this will lead to unwinding of volatility hedges/plays.
September is historically bad month, but if we get through September without a big drop we may have seen the worst IMO. Growth also outperforms value in a recession, which leads to bigger returns for the overall market.
Crypto moving up is also going to help. That seems to be overlooked.
This post was edited on 8/13/22 at 9:40 pm
Posted on 8/14/22 at 8:38 am to StringedInstruments
quote:
September is historically bad month, but if we get through September without a big drop we may have seen the worst IMO. Growth also outperforms value in a recession, which leads to bigger returns for the overall market. Crypto moving up is also going to help. That seems to be overlooked.
Totally agree with this. Crypto moving up and Fuel prices staying within a reasonable price point. If Oil goes back over 100 market will drop.
quote:
Not to mention the fact that the government suddenly believes my house is worth $125k more than when I bought it in 2020, so they want those sweet property taxes.
Been dealing with this since i got in my house 10 years ago. Property taxes are up to 6k a year now doubled what they were when i got my house.
Basically a blank check for the county. This post was edited on 8/14/22 at 8:43 am
Posted on 8/14/22 at 8:52 am to Zachary
I think we might test the highs before we come back down to the lows.
Posted on 8/14/22 at 12:23 pm to Zachary
I think we’ll hit another bottom after election cycle.
Posted on 8/14/22 at 1:39 pm to kaaj24
Point of this thread no one has a clue
Posted on 8/14/22 at 11:31 pm to slackster
quote:
We’re 2 months removed from that date and things simply aren’t as bad as feared then.
Not picking at you slackster but asking a general question.
Why is “beating estimates” considered a good thing when the estimate is a poor result to begin with?
For instance, if the government predicted a 20% foreclosure rate on homes and the actual number came in at 18.5% - the talking heads say “it was not as bad as believed so it is good”.
I don’t get it.
Posted on 8/15/22 at 7:59 am to SECdragonmaster
quote:
Why is “beating estimates” considered a good thing when the estimate is a poor result to begin with?
Because the price is based on those very low expectations. If we thinks things suck, and we’re pricing things accordingly, we have to adjust the price if things suck less.
Posted on 8/15/22 at 8:21 am to SECdragonmaster
quote:
Why is “beating estimates” considered a good thing when the estimate is a poor result to begin with?
For instance, if the government predicted a 20% foreclosure rate on homes and the actual number came in at 18.5% - the talking heads say “it was not as bad as believed so it is good”.
I don’t get it.
Like Slackster said, it's already priced in. Not a perfect fit, but think of it in terms of a hard asset. Let's say you're looking at a commercial building listed at $1M. Eyeballing it, you think it needs 100% mold remediation, foundation repair, and a rezoning push, so you price it in your head at $500k. But once you have it inspected, you realize that while it still needs mold remediation, the foundation is fine and your concept can fit within current zoning regs. Naturally, the purchase price in your head goes up, even though it's still "bad" that the building needs mold remediation, because it's "not as bad as believed".
Stock market is similar. When a 20% foreclosure rate is projected, investors behave as though that, essentially, has already occurred. If the number gets better, their behavior changes. Things also work the other way. If a company projects a 15% increase in profits year over year, that gets priced in. If it turns out they "only" increased profits 10%, their stock price will go down, even though a 10% increase in profits is objectively good news. Doesn't matter, because the 15% has already been priced in.
Posted on 8/15/22 at 8:41 am to Zachary
I think there is a whole lot of politics involved in policies that help or hurt the economy. That will make the outcome of the mid-terms highly significant to market and business confidence. Biden and his leftist puppet masters are an extreme wet blanket on the economy and the market. If he is put in hobbles due to the mid-term elections, confidence should increase significantly and we should see key indicators start to float.
Posted on 8/15/22 at 9:41 am to Zachary
The craziest conspiracy theory i see on here is that everything’s gonna be alright
Posted on 8/15/22 at 10:32 am to Joshjrn
Thanks to you and slackster.
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