Investing Thread

[Hards Alumni]

Classic snap-back. Rollercoaster market has been here for a bit now.

Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

[JWags85]

Hards

I would normally agree with you on feeling the effects of the lockdown in the upcoming weeks, but these are crazy times. I believe businesses are already feeling the effects and the consumer is lagging way behind. The entire supply chain mess has been impossible to figure out and I still do not feel the previous issues were 100% baked into cost of goods. I am far from a logistics expert, but containers costing 4-6x times normal cost and taking an extra 30-60 days should have translated into much higher costs than we have seen, IMO. I have accused the Chinese of funny accounting for 20+ years and now I wonder about our accounting in the USA. I guess I have grown very cynical on the topic after dealing with it over the past two years.

Yep, and its shocking the entire system.  Talking to my contacts in India, the prices for both rough and polished diamonds in the market are about 25-30% higher than normal.  That hasn't gotten to the retailer or consumer yet, so they aren't quite able to push those costs fully down the chain, so production is grinding to a halt or orders are thinning out cause its not sustainable.  Not to mention orders taking 5-6 weeks longer than normal.

Inflation in part is being driven by free money for big business (read firms buying up all real estate driving up home prices, and equivalently in a lot of markets buying up old affordable apartment buildings and replacing them with ones that have double the rent). And inflation is being driven by supply chain issues, leading to big business being able to raise prices to increase profits.

For this to be true, you are saying that big businesses are not affected at all by the supply chain issues, so its simply prices being raised for sole profit sake...which is simply not true.

And to echo Hards, I don't care who its distributed to or what means testing is done, shotgunning a bunch more money into the system right now, to citizens or companies, is not going to abate inflation in any way, and likely only stoke the flames more severely.

[Hards Alumni]

For this to be true, you are saying that big businesses are not affected at all by the supply chain issues, so its simply prices being raised for sole profit sake...which is simply not true.

Disagree here.  There is a ton of price gouging going on that companies are blaming on inflation.  These publicly traded companies are required to acknowledge this in their shareholder meetings, and they have.

[forgetful]

For this to be true, you are saying that big businesses are not affected at all by the supply chain issues, so its simply prices being raised for sole profit sake...which is simply not true.

And to echo Hards, I don't care who its distributed to or what means testing is done, shotgunning a bunch more money into the system right now, to citizens or companies, is not going to abate inflation in any way, and likely only stoke the flames more severely.

First, as you well know, this is not my arena, so speaking mostly to hear replies and learn from those that know more.

As I see it, right now it is the bottom 50% of the nation that is suffering the most, while big businesses are raking in record profits. Raising interest rates disproportionately negatively impacts the bottom 50%. So they get doubly screwed right now.

So what is the solution? Just let the bottom 50% take double damage for a decade of funneling cash to big business and the upper classes (which was our monetary policy to avoid a recession)?

The way I look at it, right now the problem is not caused by an increase in demand, rather supply chain issues, and companies still not increasing production post-COVID, because they realized in some places, there was a surplus of supply and no need to go back to that point, have let to a supply crisis.

Demand isn't increasing, because the bottom middle 50% has no money, they are over leveraged as it is. Even giving them more money will just lead to them paying off existing debt, not increasing purchases. So giving them more money will not impact prices (no change to supply; no changes to demand), it just lessens the blow they are taking right now.

It is an alternative approach to the idea of pumping money into the economy via low interest rates and QE. All that extra money went to the rich and large corporations. So it didn't increase prices (except for stock prices), or cause inflation, because the money was being sequestered out of the goods part of the economy. The difference is where the money starts (it ends up in the same place at the top).

Starting at the bottom allows the bottom 50% to de-leverage a bit, and actually afford the housing they are currently living in. The money flows to the top.

That's my uneducated view on it. Curious where you (and others that are better experts) find my fatal flaws in reasoning.

[The Hippie Satan of Hyperbole]

Didn't we pump a bunch of money into the economy via the bottom 50% during Covid?  The payments were means tested.  The child tax credits disproportionately helped the bottom 50%.  Student loan deferrals help those who are younger and less well off.

And I think its wrong to state that demand isn't a problem.  Try to buy a durable good.  Try to get a contractor to your house. 

There is a lot of money being spent in the economy right now.

[Hards Alumni]

Didn't we pump a bunch of money into the economy via the bottom 50% during Covid?  The payments were means tested.  The child tax credits disproportionately helped the bottom 50%.  Student loan deferrals help those who are younger and less well off.

And I think its wrong to state that demand isn't a problem.  Try to buy a durable good.  Try to get a contractor to your house. 

There is a lot of money being spent in the economy right now.

Anecdotally, we've held off building things or replacing things for a couple of years now because I can't justify the cost of materials, presently.

[Spotcheck Billy]

Didn't we pump a bunch of money into the economy via the bottom 50% during Covid?  The payments were means tested.  The child tax credits disproportionately helped the bottom 50%.  Student loan deferrals help those who are younger and less well off.

And I think its wrong to state that demand isn't a problem.  Try to buy a durable good. Try to get a contractor to your house. 

There is a lot of money being spent in the economy right now.

We've hired 2 contractors in the last month for some home improvements. We had multiple contractors bid for both projects. This wasn't difficult at all unlike buying a new fridge a year ago.

[JWags85]

Disagree here.  There is a ton of price gouging going on that companies are blaming on inflation.  These publicly traded companies are required to acknowledge this in their shareholder meetings, and they have.

Sure, just like companies raised costs or cut services "due to COVID" when it was really to just save money, and haven't walked it back as things have changed.  But I don't think either is broad brush.  Some companies are raising prices and blaming in on inflation, absolutely.  Some are also being hammered by supply chain and inflation issues.  Trying to say its all one or the other is annoying and untrue. 

I also take what publicly traded companies show in the short term with a grain of salt cause they can creatively account and show profits when in reality they are rotting from the inside.  You can get away with if for a few quarters, but if its systemic or longer lasting, suddenly chickens come home to roost.

First, as you well know, this is not my arena, so speaking mostly to hear replies and learn from those that know more.

As I see it, right now it is the bottom 50% of the nation that is suffering the most, while big businesses are raking in record profits. Raising interest rates disproportionately negatively impacts the bottom 50%. So they get doubly screwed right now.

So what is the solution? Just let the bottom 50% take double damage for a decade of funneling cash to big business and the upper classes (which was our monetary policy to avoid a recession)?

The way I look at it, right now the problem is not caused by an increase in demand, rather supply chain issues, and companies still not increasing production post-COVID, because they realized in some places, there was a surplus of supply and no need to go back to that point, have let to a supply crisis.

Demand isn't increasing, because the bottom middle 50% has no money, they are over leveraged as it is. Even giving them more money will just lead to them paying off existing debt, not increasing purchases. So giving them more money will not impact prices (no change to supply; no changes to demand), it just lessens the blow they are taking right now.

It is an alternative approach to the idea of pumping money into the economy via low interest rates and QE. All that extra money went to the rich and large corporations. So it didn't increase prices (except for stock prices), or cause inflation, because the money was being sequestered out of the goods part of the economy. The difference is where the money starts (it ends up in the same place at the top).

Starting at the bottom allows the bottom 50% to de-leverage a bit, and actually afford the housing they are currently living in. The money flows to the top.

That's my uneducated view on it. Curious where you (and others that are better experts) find my fatal flaws in reasoning.

Didn't we pump a bunch of money into the economy via the bottom 50% during Covid?  The payments were means tested.  The child tax credits disproportionately helped the bottom 50%.  Student loan deferrals help those who are younger and less well off.

And I think its wrong to state that demand isn't a problem.  Try to buy a durable good.  Try to get a contractor to your house. 

There is a lot of money being spent in the economy right now.

Yea, Ive been open about thinking there was far too much QE done by the Fed.  Business support and liquidity is good, but it was far too much and for too long.

But like Fluffy said, its nowhere near as bleak as you frame it.  Look at airlines and travel.  Its not just rich and elite traveling, airports and planes are packed.  All sorts of consumer goods are sold out or on back order.  The home improvement/home building sector has been well described as over-saturated with demand.

The job market is robust, so you're not supplementing people disproportionately out of work.  I'm not at all trying to say wage imbalance or not keeping pace with inflation isn't an issue, but just giving cash as a "catch up" is only going to make things more of an issue.  Not sure where its going to get spent that's not already seeing plenty of turnover.

[jesmu84]

Execs caught on calls to investors/shareholders admitting to raising prices "because they can".

Price gouging is absolutely happening. Conveniently using inflation (which is real) as a cover. Monopolies in certain sectors play into this.

I've definitely seen articles saying costs to consumers are more impacted by price gouging rather than inflation/supply chain.

We gonna mention all the PPP loan free money/fraud and it's impact on inflation?

Anyone here in the bottom 10/20/25% of the nation economically that can tell us their experience with paying for necessary goods like fuel/food/rent? Would a stimulus right now help?

Edit: https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/

[forgetful]

Sure, just like companies raised costs or cut services "due to COVID" when it was really to just save money, and haven't walked it back as things have changed.  But I don't think either is broad brush.  Some companies are raising prices and blaming in on inflation, absolutely.  Some are also being hammered by supply chain and inflation issues.  Trying to say its all one or the other is annoying and untrue. 

I also take what publicly traded companies show in the short term with a grain of salt cause they can creatively account and show profits when in reality they are rotting from the inside.  You can get away with if for a few quarters, but if its systemic or longer lasting, suddenly chickens come home to roost.

Yea, Ive been open about thinking there was far too much QE done by the Fed.  Business support and liquidity is good, but it was far too much and for too long.

But like Fluffy said, its nowhere near as bleak as you frame it. Look at airlines and travel.  Its not just rich and elite traveling, airports and planes are packed. All sorts of consumer goods are sold out or on back order.  The home improvement/home building sector has been well described as over-saturated with demand.

The job market is robust, so you're not supplementing people disproportionately out of work.  I'm not at all trying to say wage imbalance or not keeping pace with inflation isn't an issue, but just giving cash as a "catch up" is only going to make things more of an issue.  Not sure where its going to get spent that's not already seeing plenty of turnover.

The number of daily flights worldwide is still down 30% compared to before COVID. What you are observing in terms of things being packed is a supply issue. They can make more money with fewer flights, and COVID was an excuse to cut supply (no sense right now to grow the flight supply; and a lot of pilots left the business and don't want to return).

Even some resorts are doing the same. A conference I am supposed to go to can't get the resort to release more rooms, because they know wealthy people want a vacation and have the money to spend, so they are saying they are "full" so they can charge the wealthy 5-8x what a normal room costs (and get them to pay). They are better off with 20 rooms left unreserved, when they can get 5-10 rooms rented at 5-8x book rate. (yes this is anecdotal; and yes it is sound business practice)

The bolded is an interesting one. Again, anecdotally, where I live there is a major labor shortage. But it is specific to the area I live, where people paying even $15 an hour can't fill jobs. That is because of the cost of rent or houses. The closest affordable housing for those people is 1.5 hours away (if you have a car), or far longer 2-3 hours each way if you do not. In those cheap neighborhoods, there are no jobs to be found.

What I see is we have a major problem, and I'm honestly not sure of what the solution should be. In general, I lean towards wanting to help those that are suffering the most, until we can figure out a longer term solution.

[JWags85]

We gonna mention all the PPP loan free money/fraud and it's impact on inflation?

How many PPP loans do you think were actual "fraud" that went undetected?  The total PPP loan program totaled just under $600B.  If half of that was fraud, which is not in any way true, that would be $300B which isn't enough to meaningfully cause any real inflation.

But go ahead and tell us other reasons all businesses are greedy and that the PPP money should have been definitely given straight to people cause having $5K is better than having a job.

Also, your last query is like asking a 24 year old if total student debt forgiveness is a good idea economically and for fiscal policy.

[JWags85]

The number of daily flights worldwide is still down 30% compared to before COVID. What you are observing in terms of things being packed is a supply issue. They can make more money with fewer flights, and COVID was an excuse to cut supply (no sense right now to grow the flight supply; and a lot of pilots left the business and don't want to return).

Using worldwide flight traffic is silly when major population centers in places like China or SE Asia are still not open.

US passenger traffic in 2022 so far has been down about 8-10% from 2019.  But up 50-60%+ from 2021.  Jan/Feb travel was up nearly 100% from 2021.  Flights being packed may be a supply issue, but airports being packed is not.

Anecdotal evidence is ineffective in job market situations like this, same as everyone flamed people for saying that they knew a restaurant owner who couldn't find workers cause they would rather sit home and collect unemployment.

[jesmu84]

How many PPP loans do you think were actual "fraud" that went undetected?  The total PPP loan program totaled just under $600B.  If half of that was fraud, which is not in any way true, that would be $300B which isn't enough to meaningfully cause any real inflation.

But go ahead and tell us other reasons all businesses are greedy and that the PPP money should have been definitely given straight to people cause having $5K is better than having a job.

Also, your last query is like asking a 24 year old if total student debt forgiveness is a good idea economically and for fiscal policy.

Try not to conflate.

Business greed/price gouging today is a different subject than PPP fraud.

All for-profit businesses are greedy. By definition. That's what they do. Generate profit. But, again, that has nothing to do with the PPP money.

Also, PPP fraud doesn't matter?

You've mentioned multiple times that adding more money to the situation would be a bad decision.

I'm so glad we've come to this conclusion after giving it all out to those at the top and now we realize giving out money is bad. So don't give anything further out to those who might really need it.

Decisions like that, repeated over and over, have f*cked the bottom of society for decades.

Lastly, if $300B isn't anything that would cause inflation, I'm sure you'll be happy to know that the previous stimulus checks were $272B, $142B and $389B. So, we can easily do another round of checks and not impact inflation. Perfect.

[JWags85]

Try not to conflate.

Business greed/price gouging today is a different subject than PPP fraud.

All for-profit businesses are greedy. By definition. That's what they do. Generate profit. But, again, that has nothing to do with the PPP money.

Also, PPP fraud doesn't matter?

You've mentioned multiple times that adding more money to the situation would be a bad decision.

I'm so glad we've come to this conclusion after giving it all out to those at the top and now we realize giving out money is bad. So don't give anything further out to those who might really need it.

Decisions like that, repeated over and over, have f*cked the bottom of society for decades.

Lastly, if $300B isn't anything that would cause inflation, I'm sure you'll be happy to know that the previous stimulus checks were $272B, $142B and $389B. So, we can easily do another round of checks and not impact inflation. Perfect.

Nobody ever said PPP fraud didn't matter.  But you act like it was a huge portion of the funds allocated and that its a significant factor driving inflation.

Way to completely dodge the point, not answer the question, and go for a gotcha.  Look forward to another completely unbiased YouTube video in response, probably on the glories of MMT.

[jesmu84]

Nobody ever said PPP fraud didn't matter.  But you act like it was a huge portion of the funds allocated and that its a significant factor driving inflation.

Way to completely dodge the point, not answer the question, and go for a gotcha.  Look forward to another completely unbiased YouTube video in response, probably on the glories of MMT.

Lol.

You dodged nearly everything I posted and cherry picked what you wanted. Just like you've also ignored several people stating price gouging was occurring. Which is by definition a greedy act.

I tried to respond to anything you asked about. You're only question was how much of the loans do I think was fraud. The answer is below.

Regarding PPP fraud, here's what I found: https://www.nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664

Now, if even all of the highest end is accurate, 500B, then I'll agree with you that it's unlikely to influence inflation.

Since we both agree that 300 or 500B is unlikely to influence inflation, then we would both agree that sending out stimulus checks again to combat inflationary price increases would: 1. not influence inflation further and 2. Help those in-need afford basic goods.

[JWags85]

Lol.

You dodged nearly everything I posted and cherry picked what you wanted. Just like you've also ignored several people stating price gouging was occurring. Which is by definition a greedy act.

I tried to respond to anything you asked about. You're only question was how much of the loans do I think was fraud. The answer is below.

Regarding PPP fraud, here's what I found: https://www.nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664

Now, if even all of the highest end is accurate, 500B, then I'll agree with you that it's unlikely to influence inflation.

Since we both agree that 300 or 500B is unlikely to influence inflation, then we would both agree that sending out stimulus checks again to combat inflationary price increases would: 1. not influence inflation further and 2. Help those in-need afford basic goods.

I didn't dodge anything.  I said that it was not all logistic/supply chain related nor was it all purely price gouging.  People seem to want to bucket it all or nothing.  There are many people in the business industry on this board who are directly speaking to inflationary effects in their industry or sector, as well as supply chain issues directly impacting costs, and then you're saying its all price gouging cause of some shareholder calls.  I never denied anything.

That link says 10% of the PPP program.  Which I think is pretty high, but still, less than $100B.  Then it lumps in unemployment fraud which is a completely separate issue.  Speaking of conflation...

If you really think a single round of sub-$2000 checks  is going to help everyone catch up and combat the damage that inflation has caused, I'm not sure what to say.  Cause thats the $250B you're talking about.  And I don't think that would occur in a vacuum.

[jesmu84]

I didn't dodge anything.  I said that it was not all logistic/supply chain related nor was it all purely price gouging.  People seem to want to bucket it all or nothing.  There are many people in the business industry on this board who are directly speaking to inflationary effects in their industry or sector, as well as supply chain issues directly impacting costs, and then you're saying its all price gouging cause of some shareholder calls.  I never denied anything.
That link says 10% of the PPP program.  Which I think is pretty high, but still, less than $100B.  Then it lumps in unemployment fraud which is a completely separate issue.  Speaking of conflation...

If you really think a single round of sub-$2000 checks  is going to help everyone catch up and combat the damage that inflation has caused, I'm not sure what to say.  Cause thats the $250B you're talking about.  And I don't think that would occur in a vacuum.

1. We agree? Here's what I said:

I've definitely seen articles saying costs to consumers are more impacted by price gouging rather than inflation/supply chain.

I then provided link above.

2. I don't believe a single round of checks would help in-need folks catch up or fully combat damage from inflation. But I'm also sure it would greatly help them. If the total amount given out wouldn't impact inflation, why not do it?

[Hards Alumni]

Would strongly encourage all to get into AMRN, ASAP - as in Monday.  I put 50% of my portfolio into it back in July and used another 25% to buy the dips the last 5 months for dollar cost average of $18 per share.

AMRN's Vascepa will revolutionize the way we treat heart disease, diabetes, strokes, and potentially dementia.

Other strong biotech play:  IGMS

Stock I took a flier on and kind of like is WRTC.

I felt like revisting this hot stock tip from a couple of years ago.

https://finance.yahoo.com/quote/AMRN/

Sitting currently at 1.35

RIP Musk's retirement

Full disclosure, I bought a lot of Coinbase at IPO and am in the tank as well. 

[forgetful]

Using worldwide flight traffic is silly when major population centers in places like China or SE Asia are still not open.

US passenger traffic in 2022 so far has been down about 8-10% from 2019.  But up 50-60%+ from 2021.  Jan/Feb travel was up nearly 100% from 2021.  Flights being packed may be a supply issue, but airports being packed is not.

Anecdotal evidence is ineffective in job market situations like this, same as everyone flamed people for saying that they knew a restaurant owner who couldn't find workers cause they would rather sit home and collect unemployment.

Thank you for the responses. I appreciate it.

Also, I agree on anecdotal stories (which is why I always preface my statements with it), but it is the best measly old me had access to.

I'll hang up now and just take in the info from the thread.

[TSmith34, Inc.]

I felt like revisting this hot stock tip from a couple of years ago.

https://finance.yahoo.com/quote/AMRN/

Sitting currently at 1.35

RIP Musk's retirement

Full disclosure, I bought a lot of Coinbase at IPO and am in the tank as well.

Full disclosure, my mini-portfolio of gene editing stocks is performing like the Cathie Woods' favs that they are. They were up 50%, too, in the first month and I thought long and hard about taking my profit and running, and well...I'm bad at selling.

But if Ners really had 75% of his portfolio in AMRN as he claimed...that's an expensive lessen about diversification.

[Skatastrophy]

Full disclosure, my mini-portfolio of gene editing stocks is performing like the Cathie Woods' favs that they are. They were up 50%, too, in the first month and I thought long and hard about taking my profit and running, and well...I'm bad at selling.

But if Ners really had 75% of his portfolio in AMRN as he claimed...that's an expensive lessen about diversification.

Lessen is a wonderful typo, in context

Edit: Cloudflare (NET) just hit 52-week lows on updated guidance that they will beat YoY revenue and miss profitability, and I'm buying again.

[Goose]

It is time for the Fed to make a bold move to combat inflation. In addition, the tariffs on goods imported from China need to be removed ASAP. That would do wonders for the cost of goods purchased in the US.

[MuggsyB]

It is time for the Fed to make a bold move to combat inflation. In addition, the tariffs on goods imported from China need to be removed ASAP. That would do wonders for the cost of goods purchased in the US.

So much for that optimistic inflation report Goose. 

[Goose]

Muggsy

Unless tariffs are removed and the Fed acts responsibly we are in for a long haul. The Fed claims they are not in business to protect the stock market, but they fully realize how a watered down 401k will affect the economy. They padded the market for two decades with QE and cheap money and now have to figure out how to create a healthy balance. My bet, they are forced to get more aggressive.

[MuggsyB]

Muggsy

Unless tariffs are removed and the Fed acts responsibly we are in for a long haul. The Fed claims they are not in business to protect the stock market, but they fully realize how a watered down 401k will affect the economy. They padded the market for two decades with QE and cheap money and now have to figure out how to create a healthy balance. My bet, they are forced to get more aggressive.

Agreed.  And this is just one component of our economic issues right now. People can deny it all they want and the administration can continue their la-la-land narrative, but the fact remains that people may very well be hurting for some time.  I'm also wondering how this will impact recent retirees?  Many in the past few years have left the work force and retired earlier than they planned because of covid.  What I do know is we may be waiting awhile for inflation just to go away.  That "transitory" narrative is looking worse and worse every day.