OT: Stock trading

[B1GEast]

I think the fed is completely and utterly wrong on inflation being transitory. I don't think they even believe it. They just don't have the political will to raise rates when employment isn't where they want it (even though we have high unemployment and a massive labor shortage).

I agree. I don't think it's transitory either, so if inflation continues to rise, then the Fed has to raise rates to combat it, which, as Michael Burry predicted, the Bond market will fall first.

Burry is hedged in an inverse Bond fund. I went with a Russell 2k inverse fund.

Right now, there are 3 bubbles and the real estate bubble might pop first.

 

[tentoes4rings]

You have to think it's time to consider a big correction. If inflation is not transitory as the Fed thinks, rates could rise.

The Fed haa already indicated that it will be tapering.

I'm in an inverse now and mighy jump into a few more. Definitely not for the faint of heart

The market looks far ahead. Fed tapering is already priced in.

 

[Vowelguy]

I think the fed is completely and utterly wrong on inflation being transitory. I don't think they even believe it.

Majority of economists believe it's transitory as well so Fed is hardly an outlier in that.

 

[Jay-Bone]

Depends if J-Pow tapers in congruence with coming out of delta. Sounds like that's what he's doing. As long as there isn't another mutation and no sudden surprises from the Fed, sectors will vary, but total collapse can be avoided. Nevertheless I'm DCA'ing VXX as a hedge.

 

[Jay-Bone]

Booooo

Haha, its like taking insurance at the blackjack table. Kills the mojo.

 

[HuskyHawk]

Majority of economists believe it's transitory as well so Fed is hardly an outlier in that.

I'd be more interested in the views that exclude central bankers who have a vested interest in monetization of the debt. I lived through the 1970's and 80's and have not seen anything like this since then. Now, I don't want interest rates at 16% (I had 16.25% on my first passbook savings account as a kid). But near zero, when we have no problems at all with economic growth at the moment except the massive brake caused by labor shortages and supply shortages, that is irrational. Rates need to come up.

The only reason we aren't doing it (IMO) is that nobody is buying U.S. Debt except the fed, so we want to keep the borrowing cost low. This is an experiment in applying modern monetary theory, and so far I'd give it a about a D-.

 

[B1GEast]

I'd be more interested in the views that exclude central bankers who have a vested interest in monetization of the debt. I lived through the 1970's and 80's and have not seen anything like this since then. Now, I don't want interest rates at 16% (I had 16.25% on my first passbook savings account as a kid). But near zero, when we have no problems at all with economic growth at the moment except the massive brake caused by labor shortages and supply shortages, that is irrational. Rates need to come up.

The only reason we aren't doing it (IMO) is that nobody is buying U.S. Debt except the fed, so we want to keep the borrowing cost low. This is an experiment in applying modern monetary theory, and so far I'd give it a about a D-.

The Fed has been buying corporate bonds and has propped up the market during the pandemic.

A lot of companies used that money to buy back shares instead of hiring people or reinvesting in their companies.

Stock prices rose because of simple supply and demand with the buy backs.

There are a lot of zombie companies that the Fed has kept alive.

I don't like this market at this level and once the Fed turns off the tap, all bets are off.

There's no justification for the current market level other than the Fed pump.

Just my two cents

 

[Dogdeacon]

I agree. I don't think it's transitory either, so if inflation continues to rise, then the Fed has to raise rates to combat it, which, as Michael Burry predicted, the Bond market will fall first.

Burry is hedged in an inverse Bond fund. I went with a Russell 2k inverse fund.

Right now, there are 3 bubbles and the real estate bubble might pop first.

I assume by 'the real estate bubble' you mean residential based on low interest rates and pandemic suburban demand - price run?
I don't see how that pops given everyone has had 18 months to lock in super low interest rates. Given locked in low rate mortgages how does that crash?
Meanwhile commercial apartments are also seeing huge rent increases in cities and suburbs.

It is possible that office buildings are still in a bubble as rents haven't gone down that much (as they arguably should given paradigm shift) and the Delta-related stalled return to office is going to further decrease demand. So many companies and people are frustrated that the return to a 25% or less occupied office is fruitless = more current and future work from home.

 

[uconndogs]

The market looks far ahead. Fed tapering is already priced in.

Agree with this, but the Fed is attempting to thread a needle. If the market consensus outlook is longer-term core inflation or, conversely, economic slowdown or contraction, I would have to believe we will see a severe pull back in the market. Couple that with a lot of folks who are new to the market and "trading rather than investing" and I think movements could be very extreme. To be honest, I think those scenarios are quite likely.

 

[the Q]

The Fed has been buying corporate bonds and has propped up the market during the pandemic.

A lot of companies used that money to buy back shares instead of hiring people or reinvesting in their companies.

Stock prices rose because of simple supply and demand with the buy backs.

There are a lot of zombie companies that the Fed has kept alive.

I don't like this market at this level and once the Fed turns off the tap, all bets are off.

There's no justification for the current market level other than the Fed pump.

Just my two cents

I agree. That’s why I’m keeping a decent amount in cash for when they turn it off and there’s a small crash

 

[B1GEast]

I agree. That’s why I’m keeping a decent amount in cash for when they turn it off and there’s a small crash

An inverse ETF with a 3X return might be better than cash.

 

[the Q]

An inverse ETF with a 3X return might be better than cash.

I was also looking at these covered call etfs with like a 12% yield but I am gonna have to look into this idea you proposed and see if this can be a thing

 

[B1GEast]

I was also looking at these covered call etfs with like a 12% yield but I am gonna have to look into this idea you proposed and see if this can be a thing

It's a very risky play if you get it wrong. I only invested what I'm willing to loose.

 

[Scot-e]

It appears that no one really is interested in HEX but I thought I would give everyone a little more info- Im doing this because it has been an excellent long term add for me and is different from lots of things out there.
In January of this year HEX was .01- today it is at .254
Hex is not a crypto although it is block chain based. It was created by a English guy named Richard Hart.
Hex is a certificate of deposit that simply runs an algorithm which is designed to created a 30% return annually. It has averaged well over 1000% a year as you can see from the movement since January.
I think hedges against inflation and safe heavens for both the US dollar and people who are looking to lock away some gains and protect them are not going to go out of favor anytime soon.
You can also lock up your HEX and get an additional 15% of HEX over about a year- it can be unlocked (un-staked) at anytime although you do have to pay an exit fee if you remove it early.
There are tons of videos on Youtube if you want more info.
Not trying to push it on anyone but it seems to have great long term potential and wanted to give you all a bit more info to chew on- I have had a hard time looking for something to put some gains into and this has turned out to be a real winner.
Hope everyone is doing well and healthy. GO UCONN!!! Cheers.

 

[Da_Aisijimo_Gou]

Depends if J-Pow tapers in congruence with coming out of delta. Sounds like that's what he's doing. As long as there isn't another mutation and no sudden surprises from the Fed, sectors will vary, but total collapse can be avoided. Nevertheless I'm DCA'ing VXX as a hedge.

Zero chance exists of no additional SARS-2 variants. Example, Mu aka B.1.62 initially identified in Columbia, then in other S American nations, and now hitting South Africa. And, C.1.2, "a new and potentially more contagious variant" identified in South Africa. Severity and initial suggestions of not responding to existing SARS-2 vaccines to be confirmed. B.1.621: WHO monitoring another new Covid-19 variant of concern

 

[Da_Aisijimo_Gou]

An inverse ETF with a 3X return might be better than cash.

Puts on SPY and QQQ are considerations, lower cost & risk. 3X inverse ETFs ==> higher risk, higher potential reward.

 

[Da_Aisijimo_Gou]

The market looks far ahead. Fed tapering is already priced in.

Gradually turning off the tap is priced in, yet still gradually selling highest cost HYG shares at it hits highs.

 

[tentoes4rings]

Agree with this, but the Fed is attempting to thread a needle. If the market consensus outlook is longer-term core inflation or, conversely, economic slowdown or contraction, I would have to believe we will see a severe pull back in the market. Couple that with a lot of folks who are new to the market and "trading rather than investing" and I think movements could be very extreme. To be honest, I think those scenarios are quite likely.

A lot has changed though since the correction from late February to early Spring. A lot of newbie Robinhood investors were heavily leveraged on margin and many got shaken out. RH and other platforms in turn significantly reduced margin amounts. Couple that with extraordinary earnings, especially in the tech sector, and many younger investors moving into crypto, which significantly reduces the risk of a major correction in my opinion. I think we will see a correction within the next month, but not a really severe one.

 

[uconntoatl]

Investment of a life time

Chainlink: Undervalued and Under-Hyped (Cryptocurrency:LINK-USD)

Chainlink is fundamental to the long-term growth of the cyber-economy, and has the most potential to eventually flip Bitcoin.

seekingalpha.com

 

[tentoes4rings]

Investment of a life time

Chainlink: Undervalued and Under-Hyped (Cryptocurrency:LINK-USD)

Chainlink is fundamental to the long-term growth of the cyber-economy, and has the most potential to eventually flip Bitcoin.

seekingalpha.com

Good to see it moving today, I know many of us got frustrated with it recently. I converted out some that I bought under 14 last month to Solana the other day. I should have probably kept all my LINK but I have enough left that I’ll still be happy if it is eventually worth hundreds per coin. Thanks for the share.

 

[Jaker]

We are in a Perma Bull, this things not coming down.

 

[Jay-Bone]

So if the jobs report is good tomorrow, tapering may come sooner, and stocks go down. If the jobs report is bad, tapering may be delayed and stocks go up. Fascinating times.

 

[HuskyHawk]

Investment of a life time

Chainlink: Undervalued and Under-Hyped (Cryptocurrency:LINK-USD)

Chainlink is fundamental to the long-term growth of the cyber-economy, and has the most potential to eventually flip Bitcoin.

seekingalpha.com

So you think it's still a buy at $30? I'm torn.

 

[B1GEast]

So if the jobs report is good tomorrow, tapering may come sooner, and stocks go down. If the jobs report is bad, tapering may be delayed and stocks go up. Fascinating times.

My guess is that the report will be positive since there are

So you think it's still a buy at $30? I'm torn.

I would not trust anything from seeking alpha

 

[the Q]

My guess is that the report will be positive since there are


I would not trust anything from seeking alpha

It depends on the writer for sure