OT: Stock Market

[superjohn]

We are back to that level at most things if not more.

• US GDP up something like 40%; unfortunately, that's against a national debt increase of 120% or so.
• That doesn't even include the unfunded liabilities (some ridiculous trillion dollar number).
• Housing debt similar levels
• Student debt massively higher, unsustainable bubble.

This is all on top of a worldwide national debt increase north of 60% iirc.

And this has been the 2nd longest expansion in US history. We are overdue.

The big difference is we don't have the same types of tools available to fight it. Deficit is already massive, so pumping cash in the system is going to have some seriously detrimental effects. And interest rates can't go much lower (they are desperately trying to raise them now in anticipation of needing to lower them in the not so far future).

Ray Dalio and some others have been hammering away at a crash worse than the Great Depression coming and nobody has done anything about it.

 

[intlzncster]

I am in a small minority who thinks long-term Treasury bonds will trade up to significant new highs next year as a recession and bear market sends investors across the globe scurrying for the safety of the U.S. government guarantee. The same doesn't hold true for corporate bonds, particularly lower quality corporate bonds as they will likely be hit hard in the recession as spread widen. I actually like gold a lot here and think it is likely to outperform most assets for the next several months. But beyond this rally gold is likely to trade back down to new lows during the coming bear market so it's not likely to protect investors during that downturn. I don't like real estate here. Cycle appear to be nearing a top.

Agree with a lot of this. I think gold will rise, eventually spike, but find a new trading channel higher than it is now (1600/1900/whatever it might be) similar to how it has behaved for the last 20 yrs or so. Historically low interest rates being a driver here.

I'm not interested in Treasury bonds long term, but they could very well be successful short/intermediate. I agree with the safe haven play, as the US will be the last to go, but it will go. I just have no idea what time frame that will be. I'm not big on it only because of the uncertainty and interconnectedness of all the world economies.

For myself, I'm busy raising cash atm, as good buys will be available in the the next few years in many different markets.

 

[CTBasketball]

Depends on your current income and how comfortable you are to shell out __ amount of money each week/month to trading. Building a really good portfolio takes time.

I would advise against day trading, its very risky and like others have pointed out you are behind the 8 ball. Your little app or account on Robinhood or Charles Schwab will always be delayed and you'll be suckered into wrong selections.

What I've done in the past is stay with blue chips that give good dividends. Its probably not the best strategy, but its worked out OK for me.

 

[intlzncster]

Ray Dalio and some others have been hammering away at a crash worse than the Great Depression coming and nobody has done anything about it.

And if we are being honest, nobody will, as it's not politically expedient. Not beforehand anyway*. Sad but true.

*the only thing being done from this perspective, is the Fed trying to raise rates minimally at best, without hurting momentum, in anticipation of having to lower them during the next downturn.

 

[Fairfield_1st]

What are your thoughts on orange juice futures?

- Hey, hey. The Dukes are trying to corner the market.

- They know something.

- Let's get in on it.

 

[Uconnfanatic]

Agree with a lot of this. I think gold will rise, eventually spike, but find a new trading channel higher than it is now (1600/1900/whatever it might be) similar to how it has behaved for the last 20 yrs or so. Historically low interest rates being a driver here.

I'm not interested in Treasury bonds long term, but they could very well be successful short/intermediate. I agree with the safe haven play, as the US will be the last to go, but it will go. I just have no idea what time frame that will be. I'm not big on it only because of the uncertainty and interconnectedness of all the world economies.

For myself, I'm busy raising cash atm, as good buys will be available in the the next few years in many different markets.

We're 37 years into a bond bull market so this final flight to safety run into Treasuries in the next six to nine months will be the last hurrah into a final secular top. In coming years, bonds will reverse much of the last 37 years of gains as inflation goes to ever higher levels in the 2020s. The disinflation cycle that began in the early 1980's is coming to an end. It will likely be followed by a short, sharp deflationary downturn next year to be followed by an inflation-driven recovery cycle. In this short-term deflationary downturn, we'll likely see some involuntary debt liquidation in the form of corporate bankruptcies and bank failures around the globe. The world's central banks will respond with even more QE than we've seen in this cycle and it will jumpstart the first inflation cycle we've seen since the 1970's. The next cycle will be led by a whole different set of stocks. Industrial and commodity stocks will lead the way, not growth stocks. The indexes that have done so well with disinflation and falling interest rates will be weighed down by last (this) cycle's leaders and their performance will greatly lag the industrial and commodity stocks. It is important to look forward and not extrapolate past trends when investing. Every cycle involves a change in leadership. Last cycle's winners become next cycle's losers. But first there is a last hurrah blow-off coming for this cycle's leaders that should carry tech and the indexes into year-end. At least that's my expectation.

 

[uconndogs]

We're 37 years into a bond bull market so this final flight to safety run into Treasuries in the next six to nine months will be the last hurrah into a final secular top. In coming years, bonds will reverse much of the last 37 years of gains as inflation goes to ever higher levels in the 2020s. The disinflation cycle that began in the early 1980's is coming to an end. It will likely be followed by a short, sharp deflationary downturn next year to be followed by an inflation-driven recovery cycle. In this short-term deflationary downturn, we'll likely see some involuntary debt liquidation in the form of corporate bankruptcies and bank failures around the globe. The world's central banks will respond with even more QE than we've seen in this cycle and it will jumpstart the first inflation cycle we've seen since the 1970's. The next cycle will be led by a whole different set of stocks. Industrial and commodity stocks will lead the way, not growth stocks. The indexes that have done so well with disinflation and falling interest rates will be weighed down by last (this) cycle's leaders and their performance will greatly lag the industrial and commodity stocks. It is important to look forward and not extrapolate past trends when investing. Every cycle involves a change in leadership. Last cycle's winners become next cycle's losers. But first there is a last hurrah blow-off coming for this cycle's leaders that should carry tech and the indexes into year-end. At least that's my expectation.

If you are that sure on the timing you should own the world by the time that all shakes out

 

[intlzncster]

We're 37 years into a bond bull market so this final flight to safety run into Treasuries in the next six to nine months will be the last hurrah into a final secular top. In coming years, bonds will reverse much of the last 37 years of gains as inflation goes to ever higher levels in the 2020s. The disinflation cycle that began in the early 1980's is coming to an end. It will likely be followed by a short, sharp deflationary downturn next year to be followed by an inflation-driven recovery cycle. In this short-term deflationary downturn, we'll likely see some involuntary debt liquidation in the form of corporate bankruptcies and bank failures around the globe. The world's central banks will respond with even more QE than we've seen in this cycle and it will jumpstart the first inflation cycle we've seen since the 1970's. The next cycle will be led by a whole different set of stocks. Industrial and commodity stocks will lead the way, not growth stocks. The indexes that have done so well with disinflation and falling interest rates will be weighed down by last (this) cycle's leaders and their performance will greatly lag the industrial and commodity stocks.

It is important to look forward and not extrapolate past trends when investing. Every cycle involves a change in leadership. Last cycle's winners become next cycle's losers. But first there is a last hurrah blow-off coming for this cycle's leaders that should carry tech and the indexes into year-end. At least that's my expectation.

Not sure on your timing, as it's impossible to do so with certainty, but much of what you say there makes sense. However, some of the effects are difficult to predict because of humans inherent ability to act irrationally. Many times, in economic panics, people tend to run into burning buildings.

 

[jibsey]

We are back to that level at most things if not more.

• US GDP up something like 40%; unfortunately, that's against a national debt increase of 120% or so.
• That doesn't even include the unfunded liabilities (some ridiculous trillion dollar number).
• Housing debt similar levels
• Student debt massively higher, unsustainable bubble.
• etc

This is all on top of a worldwide national debt increase north of 60% iirc. Not to mention the quadrillions of derivatives floating around in the world which will do god knows what in a downturn.

And this has been the 2nd longest expansion in US history. We are overdue.

The big difference is we don't have the same types of tools available to fight it. Deficit is already massive, so pumping cash in the system is going to have some seriously detrimental effects. And interest rates can't go much lower (they are desperately trying to raise them now in anticipation of needing to lower them in the not so far future).

China tariffs now in place is 10% but going to 25% by year end. Car prices could be up $2000-5000 as well as a zillion other things. If things start to go bad it could happen quickly.

 

[Ewekon]

Today's investing technology enables anyone to profit in a down market. Forever's investing human psychology generally stops most from moving to short positions. Investing is primarily an optimistic sport. That said, the pure quant types basically have not out performed a long term dollar cost averaging into the S&P strategy. Quants remove emotion and emotion is a powerful force in markets.

 

[intlzncster]

Today's investing technology enables anyone to profit in a down market. Forever's investing human psychology generally stops most from moving to short positions. Investing is primarily an optimistic sport. That said, the pure quant types basically have not out performed a long term dollar cost averaging into the S&P strategy. Quants remove emotion and emotion is a powerful force in markets.

Problem is quants haven't figured out how to reliably beat the market year in year out.

Wallstreet's biggest problem is two fold. 1) for the most part, they have to be in the market in some form or fashion all the time. One of the biggest advantages a private investor has is to be able to be out of a market for stretches. Then profit on bigger up/down swings. 2) they are largerly quarterly driven, and their investing strategy/timeline reflects that. This forces them in and out of positions at less than favorable (higher) rate Private investors can look longer term, and do not have to churn their accounts.

 

[QDOG5]

@Kemba'sYogurt, I agree with most in this thread that I would strongly urge you not to day trade. It will detract from your other job and might effect relationships in ways you wouldn't have thought of beforehand. Having active positions in the market can become all consuming. If you're bound and determined to give it a try I would make a few recommendations. If you want to try trading I would look to expand your time horizon. The trades you enter should have a longer time horizon than a day. Also, do you intend to trade fundamentally or technically? That needs to be figured out because seat of the pants trading is doomed to failure. Will you have fixed price points for entering and exiting trades? Those are a few of the many questions before you begin. Possibly, you should paper trade before you start actual trading(you have honest with yourself on the results). When you do start trading you need to keep your commission fees as low as possible. You need to research that area completely, too. (Take a look at Interactive Brokers for one) Finally, as a futures trader with 25+ years of experience I can't tell you that there is a surefire way make money but I can guarantee how you would lose money. The phrase is called adding to a loser. If you bought at $10 to sell it at $13 and it goes to $8 DON'T buy more. This strategy make work on occasion but I've seen many a good trader go belly up because they got stubborn with adding to a position. Many of your best trades will be trades that cover a losing position.

 

[Uconnfanatic]

If you are that sure on the timing you should own the world by the time that all shakes out

As I said, it is my expectation. I will adjust if I see the need to. Been calling markets and economic cycles professionally for a long time. Understanding the bigger picture is far more important than preciseness. Much more focused on preserving capital than "owning the world".

 

[intlzncster]

@Kemba'sYogurt, I agree with most in this thread that I would strongly urge you not to day trade. It will detract from your other job and might effect relationships in ways you wouldn't have thought of beforehand. Having active positions in the market can become all consuming. If you're bound and determined to give it a try I would make a few recommendations. If you want to try trading I would look to expand your time horizon. The trades you enter should have a longer time horizon than a day.

Actual day trading is a mugs game. If you want to actively 'trade', having a medium term time frame is probably your best bet. The daily vagaries of the market--especially with today's bots moving so fast in different directions and responding to seemingly random stimuli--will eat you alive.

Also, do you intend to trade fundamentally or technically? That needs to be figured out because seat of the pants trading is doomed to failure. Will you have fixed price points for entering and exiting trades? Those are a few of the many questions before you begin. Possibly, you should paper trade before you start actual trading(you have honest with yourself on the results).

This is a valuable piece of advice and very true. Whatever you do, you have to have some sort of defined system, and and stick to it. You're system will define your approach and should determine when to cut your losses, not your emotions/gut.

When you do start trading you need to keep your commission fees as low as possible. You need to research that area completely, too. (Take a look at Interactive Brokers for one)

I'll second IB. It's who I use. Most big brokers are the same, just different platforms and commissions. IB's are very low, and their interface and number of markets are good.

Finally, as a futures trader with 25+ years of experience I can't tell you that there is a surefire way make money but I can guarantee how you would lose money. The phrase is called adding to a loser. If you bought at $10 to sell it at $13 and it goes to $8 DON'T buy more. This strategy make work on occasion but I've seen many a good trader go belly up because they got stubborn with adding to a position. Many of your best trades will be trades that cover a losing position.

In other words, don't fall in love with your position and throw good money after bad.

Maxim one of trading: don't lose money.

 

[the Q]

And if we are being honest, nobody will, as it's not politically expedient. Not beforehand anyway*. Sad but true.

*the only thing being done from this perspective, is the Fed trying to raise rates minimally at best, without hurting momentum, in anticipation of having to lower them during the next downturn.

the thing to do is to hoard some money and go on a buying spree when things go down.

 

[huskyinfl]

"The market fixes itself"
I would also try to make friends with someone that had access to a Bloomberg terminal.
The data and computing power make the day trading of 10-20 years a joke.

Seriously go check out Wall Street bets on Reddit and see how foolish and fast people lose money.

 

[Dream Jobbed 2.0]

I’m too much of a whimp to put money into stocks.

I’m 30, just married with a decent income and pension. I’m pretty clueless about saving and investing. Met with a financial planner for the first time expecting to be kinda put down for not having as much as I feel like I should have put away. I was pretty shocked when he told me a lot of people my age don’t even have savings accounts, or if they do they pull from it for day to day stuff. I have no real credit card debt aside from rotating balances and I’m on schedule with my student loans. He said those few things alone but me way ahead of most people my age. Kinda scary.

He opened an IRA tied to mutual funds and set up a direct withdrawal of $250 a month that I would be putting into a savings and have just sitting there. Hopefully the growth is awesome.

 

[the Q]

I’m too much of a whimp to put money into stocks.

I’m 30, just married with a decent income and pension. I’m pretty clueless about saving and investing. Met with a financial planner for the first time expecting to be kinda put down for not having as much as I feel like I should have put away. I was pretty shocked when he told me a lot of people my age don’t even have savings accounts, or if they do they pull from it for day to day stuff. I have no real credit card debt aside from rotating balances and I’m on schedule with my student loans. He said those few things alone but me way ahead of most people my age. Kinda scary.

He opened an IRA tied to mutual funds and set up a direct withdrawal of $250 a month that I would be putting into a savings and have just sitting there. Hopefully the growth is awesome.

It is scary that he’s not wrong.

66% of Millennials have nothing saved for retirement

 

[the Q]

I get it man. I started behind the eight ball chasing my baseball related dreams. So I always feel behind. With a 13% contribution to 401k Plus a private Roth IRA at over 10% for the last 5 years. But I’m already in my early 30s cause of what I said before.

It could be ugly when the people in our and DJ2.0’s general age range hit retirement age.

 

[intlzncster]

I get it man. I started behind the eight ball chasing my baseball related dreams. So I always feel behind. With a 13% contribution to 401k Plus a private Roth IRA at over 10% for the last 5 years. But I’m already in my early 30s cause of what I said before.

It could be ugly when the people in our and DJ2.0’s general age range hit retirement age.

We are all gonna be retiring at 75+ anyway.

 

[the Q]

We are all gonna be retiring at 75+ anyway.

Facts.

 

[superjohn]

I get it man. I started behind the eight ball chasing my baseball related dreams. So I always feel behind. With a 13% contribution to 401k Plus a private Roth IRA at over 10% for the last 5 years. But I’m already in my early 30s cause of what I said before.

It could be ugly when the people in our and DJ2.0’s general age range hit retirement age.

You play minor league ball? I saw a Bryant Gumbel Real Sports segment on how minor league baseball players get paid nothing. The guy selling peanuts in the crowd made a lot more, it's insane how little they get paid.

 

[Huskygamble19]

It’s hard to see a market crash with a strong economy, but more importantly, sentiment hugely biased towards an impending crash. Crashes happen on excesses & especially optimism.

I am in the business and have tried day trading and still trade a lot in my personal accounts, but it is still easy to be humbled by the market. Be prepared to learn some expensive lessons early on. What has helped me is I keep a core bunch of positions and then trade other positions with less than half my working capital.

Whatever u do, steer clear of penny stocks and pump and dump schemes, that was an expensive lesson i learned when i stepped away from my computer for a vacation about a decade ago.

Good luck!

Penny stocks are strictly bought on hype. Once it dies down the stock dies with it. Follow the hype and watch the stock rise a bit and then sell it because it won't get much higher.

 

[the Q]

You play minor league ball? I saw a Bryant Gumbel Real Sports segment on how minor league baseball players get paid nothing. The guy selling peanuts in the crowd made a lot more, it's insane how little they get paid.

No. My startup Baseball agency. It’s brutal to startup. We borrowed a lot of money just to be able to go see players and sign them.

No savings during that entire time period.

But yes they make peanuts. It’s amazing what those guys all go through to make the big leagues.