Rolling US Economy Into The Shitbin Thread

I plan to just hold what I have for 30 years as well. But I've also held out 85% of savings last 0.5 year for going in at the next big discount. now how do I know it's arrived? Hoping yerac will let us know tbh.

I have no clue! I am only guessing. I never would've bet the market would've gone straight up after that terrible election.

yeah i have a decent chunk uninvested rn that I've been skittish on putting in because i was convinced we were headed to the shitbin but also i don't feel capable of understanding anything anymore after these past couple years

But I mean if there is a company you love for longterm, like for example SQ hit $100 recently now at ~$70, BABA hit over $200 recently now around $~140, I still think they are too high, ran up too fast especially from where they were at the beginning of 2016. But I am starting to think of buying a first small lot/tranche soon, but hoping to get further away from the price I sold both of them at. I can always average down if it dips far greater. I really don't know what's going to happen to the markets because of the Nov elections. And the market tends to be dead in Dec. except for people selling for tax purposes.

I would like to get in on the waitlist for The Yerac Fund as well btw

Have been buying BABA at various levels since they went public, probably a bit overinvested at this point, but the dips are very attractive to me. I'm a firm believer that whatever happens in the short term, this one has legs.

yeah it's too late Yerac, we're all relying on you to untangle the web now

I had BABA when it was around $68 and sold out of it way too soon, traded it here and there but have been waiting for it to tank again. I trade a lot but I have time to watch the market every day so my timelines on things are different. I also don't like to buy new positions on Fridays or hold a lot going into the new year because of 2016 where the first trading days of the year China's circuit breakers kept going off and the market just dove for almost the entire quarter. I also think I handle money stress better than a lot of people. I wasn't kidding where I said I felt like I am The Big Short but only the beginning part on repeat. This market after the election has been stupid.

Not I am the big short, but watching the big short. I feel christian bale's pain.

but what's the subprime mortgage crisis this time?

student debt?

There have been so many terrible IPOS. snapchat, blue apron, gopro, fitbit, switch. It would be nice if something like fb would just collapse, but that is purely dreaming.

all that VC-fueled tech unicorn BS. Occasionally a story pops up of Twitter shopping for buyers. I wonder if their Nazi-sympathizing CEO might be a poison pill.

I think the driver of the market downturn is pretty clear, although perhaps difficult to short. We've shoveled huge piles of money to the richest of the rich while middle and working-class earnings have stayed flat. Pile on a bunch of unnecessary tariffs, and you have a recipe for disaster. Prices are going up and no one is making enough money to keep up.

Everything just seems completely unsustainable at the moment.

calm down everyone. we'll cut taxes some more

what's the subprime mortgage crisis this time?

this is more of a stock market bubble, as a secondary effect of the Fed's enormous easing after the subprime bubble burst.

as I see it, the subprime bubble 'created' a sea of money in the form of financial paper. the real economy could not justify that sea of money, but the banks ignored that reality. when the Fed saved the banks from their greed and folly, they reconstituted that same sea of money and reinjected it into the economy over a number of years. over those years the real economy grew enough to absorb some of that reflated money, but the US stock market was far ahead of real growth even in 2016. after the 2016 election and the enormous tax cut the US stock bubble has really taken off. It was benefitting from the lack of 'safe havens' that gave investors an attractive return.

The Fed's raising of interest rates is altering that equation. Bonds now appear safe and growingly attractive, while the stock market looks like it is suspended in midair with no underpinning in the real economy. Investors are poised at a tipping point between greed and fear, and fear is starting to grab the steering wheel and drive the market on more days. Eventually it will drive the stock market into a precipitous decline, often called a crash. Let's hope the banking system is less deeply in thrall to this bubble than it was to the subprime catastrophe.

not moving anything already in, but my 401k contributions for the rest of the year are going into bonds

Such a good thing that Dodd-Frank was partially repealed in the past year.

I'm allocated 60% stocks, 20% bonds, 20% cash for 401k contributions right now. I figure as stocks drop I'm buying the dips, so no need to get completely out of stocks.

fair point. i'm dumb but i hate the stock market.

What is the 20% cash? Just in a money market? If you are nowhere near retirement, you're totally fine.

is the stock market much more than legalized, taxpayer-insured gambling for the rich? honestly

Even though this may not be relevant, if your company gives you company stock as compensation in your 401k, don't hold too much of it. I had to work with the Lehman people for a couple of years and I always heard how their 401ks were wiped out because they were holding too much LEH stock.

What is the 20% cash? Just in a money market? If you are nowhere near retirement, you're totally fine.

― Yerac, Friday, October 26, 2018 2:39 PM (eight minutes ago) Bookmark Flag Post Permalink

Dry powder if there's a big drop.

is the stock market much more than legalized, taxpayer-insured gambling for the rich? honestly

― Nhex, Friday, October 26, 2018 2:42 PM (five minutes ago) Bookmark Flag Post Permalink

While I'm no fan of stock market-based retirement as a replacement for pensions, I don't think this characterization is accurate. The stock market has at least some tether to the real economy, so if you invest broadly (e.g. in an index fund) and over the long term it's a way of capturing some of the fruits of the country's economic growth. It has risks too but not on the level of playing blackjack at the casino. If you invest broadly. If you're trading individual stocks, then yeah you might as well be gambling.

Also not sure what you mean by "taxpayer insured"

I’m the last person you should take investment advice from, but beaten-down EM stocks like VNM and ECON and EWY are looking pretty cheap.

Because the banks always get bailed out for their negligent speculative jizzing? Except LEH, heh. And the tax code written so you can carry over your losses.

the banks get bailed out but it's not like stock traders do

and the banks aren't losing money trading stocks, that's not what causes the collapses

I’m the last person you should take investment advice from, but beaten-down EM stocks like VNM and ECON and EWY are looking pretty cheap.

― o. nate, Friday, October 26, 2018 2:51 PM (eight minutes ago) Bookmark Flag Post Permalink

Looking cheap based on what?

is the stock market much more than legalized, taxpayer-insured gambling for the rich? honestly

― Nhex, Friday, October 26, 2018 2:42 PM (five minutes ago) Bookmark Flag Post Permalink

You are actually gambling that the United States dollar will continue to exist as an accpted form of tender until your death

Based on my utterly unsubstantiated feeling of where they should trade.

I mean "price is lower than it was last month" = "cheap" is kind of a classic stock market mistake.

also *pushes up pedantry glasses on nose* those are ACTUALLY ETFs and not stocks

I assumed they are talking about investment bank bailouts and everyone who caused it or wasn't affected by it, not the average retail investor. Like, all those people who were responsible, they all found other jobs, got their multi-million dollar bonuses. Everyone's private placements weathered it out.

I just had to look up what Bob Diamond was doing since he had to resign after the libor scandal. He founded "Atlas Mara Limited, formerly referred to as Atlas Mara Co-Nvest Limited, is a financial services holding company formed to undertake the acquisition of target banks in Africa." cool.

Co-N-Vest

Con-Vest

Dick Fuld still gets to have his own asset management firm.

I assumed they are talking about investment bank bailouts and everyone who caused it or wasn't affected by it, not the average retail investor. Like, all those people who were responsible, they all found other jobs, got their multi-million dollar bonuses. Everyone's private placements weathered it out.

― Yerac, Friday, October 26, 2018 3:11 PM (twenty minutes ago) Bookmark Flag Post Permalink

Yeah, but the stuff that sunk those investment banks was not mere stock market trading, it was much heavier and more toxic stuff that mere mortals like us don't even have access to.

accredited investors/the superrich do have access. but nhex can probably clarify their meaning.

oh, i think i get what you are trying to say. Like, when I get mad at people for saying they work on wall street when most of the main buildings are nowhere near there.

admittedly i'm definitely too ignorant to mean what Yerac is going for, but sorta that is the direction
like if the stock market has the power to destroy our economy every ten years why are we doing it is my naif question
unless of course... that's the point

I mean "price is lower than it was last monthyear" = "cheap" is kind of a classicthis year's stock market mistake.

― Fedora Dostoyevsky (man alive), Friday, October 26, 2018 1:08 PM (one hour ago) Bookmark Flag Post Permalink

I swear this market cannot die soon enough.

market myers going to bounce back on halloween thanks to candy sector's strength

I have a lot of haribo stocked up.

That was just before the dot-com bubble burst, followed by recession, weak recovery/expansion, and the Great Recession. Of course past performance is no guarantee of future results. https://t.co/Bw3EalVbDH

— Doug Henwood (@DougHenwood) October 30, 2018