Investing Thread

[Herman Cain]

That's disappointing that Monday was an existential commentary on the future of man and all we get is 'snap-back' on Tue.

Jamie Dimon is on his annual Bus Tour. I was invited to attend one of the receptions and Q and A's  ( with about 300 others ) . Among other topics. He gave his usual bearish commentary. Believes inflation can only be beat with Volker type rates. Believes recession likely. Said he was not interested in Secretary of Treasury as he likes his job.

[MU82]

Great advice for investors from Steve Sosnick, chief strategist at Interactive Brokers:

If Monday's sell-off in particular "freaks you out, you're carrying too much risk."

[Skatastrophy]

Great advice for investors from Steve Sosnick, chief strategist at Interactive Brokers:

If Monday's sell-off in particular "freaks you out, you're carrying too much risk."

Slight disagree. If a blip freaks you out, you should consider working with a fee only financial advisor to help you manage your risk and keep you from making emotional decisions.

[MU82]

Yahoo Finance chart of the day: CEOs see recession as unlikely.

[SoCalEagle]

Great advice for investors from Steve Sosnick, chief strategist at Interactive Brokers:

If Monday's sell-off in particular "freaks you out, you're carrying too much risk."

Hey, didn't some really smart poster already note that somewhere in this thread? 

All kidding aside, the stock market is not for everyone.  Some people just absolutely cannot stand to lose 5%, 10%, or 20% (or more!!!) of the money they have invested.  If I lose 20% next week, I would not blink.  Others would panic and lose out on a great opportunity to make money.  Think of how you reacted after the Dot Com Crash, or after the the Great Financial Crisis, or when the market was tanking when COVID 19 first became a household term.  I have noticed that sometimes these events cause people to panic, while others see it as a great opportunity.  It's easy to look back in time to see that these were great opportunities, but in the moment how did you feel?  If you can honestly tell yourself that you were adding money to the market when others were pulling money out, then equities are for you. 

Continued good luck in the markets my friends .....

SCE

[MU82]

Hey, didn't some really smart poster already note that somewhere in this thread? 

All kidding aside, the stock market is not for everyone.  Some people just absolutely cannot stand to lose 5%, 10%, or 20% (or more!!!) of the money they have invested.  If I lose 20% next week, I would not blink.  Others would panic and lose out on a great opportunity to make money.  Think of how you reacted after the Dot Com Crash, or after the the Great Financial Crisis, or when the market was tanking when COVID 19 first became a household term.  I have noticed that sometimes these events cause people to panic, while others see it as a great opportunity.  It's easy to look back in time to see that these were great opportunities, but in the moment how did you feel?  If you can honestly tell yourself that you were adding money to the market when others were pulling money out, then equities are for you. 

Continued good luck in the markets my friends .....

SCE

Great post.

It's not easy, and I struggled for many years. I infamously reacted to Black Monday in 1987 by moving everything in my 401k to the plan's money-market fund. So I managed to experience the entire loss while experiencing none of the rebound. Brilliant!

It took me many more years and a couple more market crashes for my style to evolve, and I'm glad I've gotten here. By the time the pandemic plunge came in 2020, I viewed it purely a buying opportunity and it really helped cement our portfolio for a worry-free retirement.

As you said, if one psychologically can't take a big drop, one probably shouldn't even have 50% of one's portfolio in stocks - and that includes passive stock funds.

[rocket surgeon]

Despite the hysteria that would make some think the market was closing up shop, the S&P 500 is up 10% so far this year. A double-digit gain over 8 months - yes, a true disaster!

Oh, and futures are up another 1% this morning.

  where is the hysteria and panic??  first thing i told my guy was to figure out what's on sale!!

[SoCalEagle]

  where is the hysteria and panic??  first thing i told my guy was to figure out what's on sale!!

Smart man, Rocket.  Scoop up what's on sale and let the rest take care of itself .... over time.

ABC = always be compounding

[tower912]

The solution to high prices is....high prices

https://www.yahoo.com/news/americans-refusal-keep-paying-higher-201839369.html


Also, after last Monday, genuinely surprised to not see this posted...

https://www.foxbusiness.com/economy/bank-america-no-longer-predicting-recession-ceo-says

[rocky_warrior]

Also, after last Monday, genuinely surprised to not see this posted...

Not that specifically...but...

[MU82]

Promising inflation reports on successive days. Yesterday's PPI report sent the market soaring. The market is just chilling after today's solid CPI report. There continue to be few if any signs of recession, and the Fed appears poised to start cutting rates next month.

On the individual-stock front, Starbucks zoomed nearly 25% yesterday after announcing they had stolen Chipotle's CEO. As a long-time SBUX holder, I like the move - and the stock-price appreciation. But, as often happens, it is giving back a few percent of those gains today. Alphabet is also under pressure today due to reports that the Justice Department might pursue litigation that would eventually lead to breaking up the company.

[jesmu84]

Promising inflation reports on successive days. Yesterday's PPI report sent the market soaring. The market is just chilling after today's solid CPI report. There continue to be few if any signs of recession, and the Fed appears poised to start cutting rates next month.

On the individual-stock front, Starbucks zoomed nearly 25% yesterday after announcing they had stolen Chipotle's CEO. As a long-time SBUX holder, I like the move - and the stock-price appreciation. But, as often happens, it is giving back a few percent of those gains today. Alphabet is also under pressure today due to reports that the Justice Department might pursue litigation that would eventually lead to breaking up the company.

Why is a rate cut good? Doesn't that fuel speculative investing and "free money"?

[MU82]

Why is a rate cut good? Doesn't that fuel speculative investing and "free money"?

Corporations, even extremely healthy ones, use debt a lot - for acquisitions, facility improvements, etc. When the cost of borrowing goes down, that's good for corporations. And what's good for corporations is usually good for investors in said corporations. Also, certain industries are even more rate-sensitive - utilities and real estate leap to mind.

I know you don't like corporations, and I respect that. Just answering your question why Mr. Market generally prefers a low-rate environment.

[Skatastrophy]

Corporations, even extremely healthy ones, use debt a lot - for acquisitions, facility improvements, etc. When the cost of borrowing goes down, that's good for corporations. And what's good for corporations is usually good for investors in said corporations. Also, certain industries are even more rate-sensitive - utilities and real estate leap to mind.

I know you don't like corporations, and I respect that. Just answering your question why Mr. Market generally prefers a low-rate environment.

Everyone that likes competitors challenging megacorps for market share should want cheaper debt to be available.

[MU82]

Everyone that likes competitors challenging megacorps for market share should want cheaper debt to be available.

True.

It can lead to some unwise speculation, like jesmu said, but it also can lead to big success stories.

[TSmith34, Inc.]

Alphabet is also under pressure today due to reports that the Justice Department might pursue litigation that would eventually lead to breaking up the company.

As a shareholder, I'm not sure this would necessarily be a bad thing in the long run.

[MU82]

As a shareholder, I'm not sure this would necessarily be a bad thing in the long run.

Hard to say without knowing what any stand-alone companies would look like post-breakup.

I wouldn't worry about it much short-term or even medium-term, though. If the Justice Dept follows through, it would then be in the courts for years.

More than two decades ago, Microsoft went through something similar but ended up winning in court and never did have to split into separate companies. That has worked out pretty well for MSFT investors, though maybe a breakup would have, also. We'll never know.

[MU82]

It was a big week of economic reports, and all of them have produced good news for America.

Two more good ones came out this morning: Jobless claims are down, retail sales are up, "easing recessionary fears and setting up the Federal Reserve for a rate cut next month."

https://seekingalpha.com/news/4140257-sp500-nasdaq-dow-jones-outlook-stock-market

Mr. Market is reacting favorably pre-market.

[Hards Alumni]

https://fortune.com/2024/08/15/jamie-dimon-warren-buffett-rule-tax-income-national-debt/

[rocky_warrior]

https://fortune.com/2024/08/15/jamie-dimon-warren-buffett-rule-tax-income-national-debt/

Without paywall..
https://www.aol.com/jamie-dimon-wants-hit-millionaires-095457899.html

[Hards Alumni]

Without paywall..
https://www.aol.com/jamie-dimon-wants-hit-millionaires-095457899.html

Strange, I don't pay and I don't have a wall.  Probably because I usually open news links in private browsing by default.

[Skatastrophy]

Jamie Dimon, the socialist bear. What a weird timeline.

[rocky_warrior]

Strange, I don't pay and I don't have a wall.  Probably because I usually open news links in private browsing by default.

Maybe they know my IP too well.  Was blurred out even in incognito.  But I was amused to find it openly available on AOL...of all websites.  lol.

Jamie Dimon, the socialist bear. What a weird timeline.

He seems pretty good at running his own company, but I have a hard time taking his economic ideas (soundbites) seriously.

[tower912]

Rocky, when are you going to start suing companies for not advertising on scoop?

[Hards Alumni]

He seems pretty good at running his own company, but I have a hard time taking his economic ideas (soundbites) seriously.

He's very frequently wrong.  I agree with him here that we should be properly taxing the wealthy, but I don't agree that we need to do that to funnel more money into the military or to reduce debt substantially.

He's just a crank who read something one morning that caused him to yap about this specifically.