Investing Thread

[jesmu84]

Turns out that if you just price gouge you make more money!

I assume that extra profit is being given to the workers?

[Skatastrophy]

I assume that extra profit is being given to the workers?

Yes, CEOs are workers

[SoCalEagle]

Guys, contrary to the last few posts, we are in an earnings recession right now.  Yes, revenue is up, but overall earnings have been down for the last two quarters and are expected to be down again for 2023 Q2 (which is being reported now). 

And extra profit is not going to workers (can't since profit / earnings are down).  However, extra revenue is going to workers as wages are up year / year. 

[rocket surgeon]

Turns out that if you just price gouge you make more money!

  who has been "price gouging"?

[MU82]

  who has been "price gouging"?

Three of the many examples:

https://investorplace.com/2023/05/what-is-greedflation-3-examples-of-greedflation-in-2023/

Guys, contrary to the last few posts, we are in an earnings recession right now.  Yes, revenue is up, but overall earnings have been down for the last two quarters and are expected to be down again for 2023 Q2 (which is being reported now). 

And extra profit is not going to workers (can't since profit / earnings are down).  However, extra revenue is going to workers as wages are up year / year. 

As I said, earnings season got off to a pretty nice start this week, but next week a ton of companies are reporting so we'll see what's what.

[4everwarriors]

How's Budweiser and Target doin', hey?

[MuggsyB]

How's Budweiser and Target doin', hey?

Budweiser stock hasn't done much for a long time.   I see a return of -1.9% in 10 years. 

[MU82]

How's Budweiser and Target doin', hey?

Not sure why you're trying to politicize the investing thread. But I'll let the facts answer your question and turn this back to investing ...

Those who bought TGT on June 14, 2016 -- when the stock bottomed out 2 months after boycotts began in protest of Target's transgender bathroom policy -- and held the stock through now would have 137% total return. And those who had the good timing to have sold TGT before Amazon's horrific Q1 2022 earnings report spooked investors about the entire retail industry would have pocketed an eye-popping 316% total return.

And as Muggsy pointed out, AB InBev stock has been struggling for more than a decade (total return -19% since 7/14/14). Even Bud Light being the most popular beer in the world for several years running couldn't help the company overcome its problems.

Disclosure: I own neither TGT nor BUD. Neither company has the kind of competitive economic advantages ("moats") that I like from my investments; I own Costco and Home Depot in retail and Constellation Brands in the alcoholic beverage industry.

As for making investments based on one's political leanings ...

There were many who dumped their stocks when Obama was elected, figuring the market would tank. There also were were many who dumped their stocks when Trump was elected, again figuring the market would tank. Both of those groups of investors missed out on opportunities to create significant wealth during one of the great bull-market runs ever.

The market is up another 34% (SPY total return) since media outlets (including Fox News) declared Biden the winner on Nov. 7, 2020. So those who dumped their stocks when he was elected were burned, too.

Having stated the facts, I'll now offer an opinion: Intelligent investors invest with their brains, not with their partisan political hearts.

[MuggsyB]

Not sure why you're trying to politicize the investing thread. But I'll let the facts answer your question and turn this back to investing ...

Those who bought TGT on June 14, 2016 -- when the stock bottomed out 2 months after boycotts began in protest of Target's transgender bathroom policy -- and held the stock through now would have 137% total return. And those who had the good timing to have sold TGT before Amazon's horrific Q1 2022 earnings report spooked investors about the entire retail industry would have pocketed an eye-popping 316% total return.

And as Muggsy pointed out, AB InBev stock has been struggling for more than a decade (total return -19% since 7/14/14). Even Bud Light being the most popular beer in the world for several years running couldn't help the company overcome its problems.

Disclosure: I own neither TGT nor BUD. Neither company has the kind of competitive economic advantages ("moats") that I like from my investments; I own Costco and Home Depot in retail and Constellation Brands in the alcoholic beverage industry.

As for making investments based on one's political leanings ...

There were many who dumped their stocks when Obama was elected, figuring the market would tank. There also were were many who dumped their stocks when Trump was elected, again figuring the market would tank. Both of those groups of investors missed out on opportunities to create significant wealth during one of the great bull-market runs ever.

The market is up another 34% (SPY total return) since media outlets (including Fox News) declared Biden the winner on Nov. 7, 2020. So those who dumped their stocks when he was elected were burned, too.

Having stated the facts, I'll now offer an opinion: Intelligent investors invest with their brains, not with their partisan political hearts.

I agree with much of what you've stated and the Dow has had a nice little run the last 1.5 years.  It is now in the vicinity of where it was but the Nasdaq is still pretty far from it's peak.  I also think Covid in 2020 impacted the overall numbers pretty significantly.  As to index funds/stocks it's also important to note that the numbers are skewed because they don't take into account distributions in their overall return percentages.

[MU82]

I agree with much of what you've stated and the Dow has had a nice little run the last 1.5 years.  It is now in the vicinity of where it was but the Nasdaq is still pretty far from it's peak.  I also think Covid in 2020 impacted the overall numbers pretty significantly.  As to index funds/stocks it's also important to note that the numbers are skewed because they don't take into account distributions in their overall return percentages.

I actually included dividends/distributions -- hence "total return." I use a site called YCharts, which offers data either including or not including dividends.

Totally agree about Covid's impact on the economy and the stock market.

[SoCalEagle]

I actually included dividends/distributions -- hence "total return." I use a site called YCharts, which offers data either including or not including dividends.

Totally agree about Covid's impact on the economy and the stock market.

Just look at the markets through this lens and tune out the noise.  Doing so will lead to big rewards if you simply stay the course.  Take inflation as one example.  A simple internet search will show you this post COVID impact to the economy was completely predictable and has worked its way through our massive economy.  MU82, your approach is also one way to find big rewards.  Invest the bulk of your money in companies with proven track records that continue to generate increasing profit margins over many years / decades.  Then, once in a while, with a small portion of your overall portfolio, take a shot at a high flyer and see if it pays off. Rinse and repeat. 

[MU82]

Just look at the markets through this lens and tune out the noise.  Doing so will lead to big rewards if you simply stay the course.  Take inflation as one example.  A simple internet search will show you this post COVID impact to the economy was completely predictable and has worked its way through our massive economy.  MU82, your approach is also one way to find big rewards.  Invest the bulk of your money in companies with proven track records that continue to generate increasing profit margins over many years / decades.  Then, once in a while, with a small portion of your overall portfolio, take a shot at a high flyer and see if it pays off. Rinse and repeat.

Yessir.

I'm a pretty boring investor -- identify well-run, high-quality, blue-chip businesses (and they aren't all that hard to identify because they're huge companies that everybody's heard of), try to buy them when they are decently valued, hold for years, reinvest dividends, buy more when opportunities present, etc etc.

I have taken a few shots, but as much as I'd love to say I bought AAPL, GOOGL or AMZN at their IPOs, I can't! I did buy some TSLA years ago, but in retrospect wish I had bought more. My most recent spec play was DraftKings (DKNG) -- it shot out of the box pretty good but it's been down until the recent rally got me back to break-even. My plan was to give it 5 years, so 2 more to go and then we'll re-assess. But that kind of company isn't a normal investment for me.

As you said, there's a lot of common sense to investing.

[MuggsyB]

I actually included dividends/distributions -- hence "total return." I use a site called YCharts, which offers data either including or not including dividends.

Totally agree about Covid's impact on the economy and the stock market.

Oh....that slipped over me on total returns.  My bad.  Those that have bailed anticipating the market under certain presidents have been quite foolish.  I also think it's dumb when a president takes credit for the market during their time in office.  You never hear them take any blame during periods of tanking.   In the grand scheme of things I think they honestly play a minimal role.  It's the Fed and basically we the people.  There certainly are world-wide events that can play a part, especially in  the short-term, but it isn't dependent at all on mainstream Republican or Democratic policies imo. 

[MU Fan in Connecticut]

In regards to AB Inbev, I swear I read sales of Budweiser, Michelob Ultra have been way up while Bud light has been way down ABI has a stake in Modelo also which is now the best selling beer in the USA.

[Uncle Rico]

In regards to AB Inbev, I swear I read sales of Budweiser, Michelob Ultra have been way up while Bud light has been way down ABI has a stake in Modelo also which is now the best selling beer in the USA.

They do.  ABI owns Grupo Modelo distribution outside the US but Constellation owns the distribution rights in the US.  They attempted to buy a decade ago but regulatory rules prohibited here in the states

[MU82]

Yes, Constellation, which unlike InBev has been a great investment the last decade, has the US rights to Modelo, Corona and Pacifico.

[MU82]

American consumers feel good about economy

https://finance.yahoo.com/news/americans-havent-felt-this-good-about-the-economy-in-almost-two-years-151453360.html?.tsrc=372

A commonly followed measure of consumer confidence in the US economy just increased to the highest level since September 2021.

The first July reading of the University of Michigan Consumer Sentiment Index showed a reading of 72.6 on Friday. The print came in significantly higher than the 65.5 economists had expected and reflected a 13% increase from the month prior. That marks the fastest pace since December 2005, when the economy was recovering from Hurricane Katrina.

"The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets," Surveys of Consumers director Joanne Hsu said in the release.

Consumers have had plenty to be bullish about recently, including a month of largely strong economic data, upbeat reports to kick off second quarter earnings, and waning fears of a second Federal Reserve rate hike in the back half of the year propelling the 2023 stock market rally higher.

A 19% surge in long-term business conditions and a 16% increase in short-run business conditions were the primary drivers behind Friday's surprise print, according to the University of Michigan. The report did, however, include a slight uptick in consumers' inflation expectations.

The expectations for inflation over the next year are now at 3.4%, up from 3.3% in June but down from the highs of 5.4% in April 2022. Analysts had anticipated one-year inflation expectations to tick down to 3.1%

"Easing concerns about a recession, which had been garnering a ton of headlines in the media for most of the year, may have helped push sentiment and expectation higher," Oxford Economics chief US economist Ryan Sweet wrote on Friday.

The Friday release follows a week of upbeat economic data. On Wednesday, the Consumer Price Index for June came in cooler than projected, rising at its slowest pace since March 2021. On Thursday, the Producer Price Index painted a similar picture. The labor market, meanwhile, continued to show resilience with weekly jobless claims of 237,000 coming in lower than expectations for 250,000 claims and below the week prior's 249,000 claims.

Last week's June jobs report showed the labor market is cooling with nonfarm payroll additions coming in short of expectations for the first time in 15 months. But economists were quick to note that the economy still added 209,000 jobs, the unemployment ticked lower to 3.6%, and average hourly earnings grew 4.4% from the year prior.

At scale, that data paints a picture of a tight labor market where Americans have jobs while prices for goods continue to decrease.

[The Hippie Satan of Hyperbole]

Yeah but what does Goose think the REAL stats are.

[HutchwasClutch]

American consumers feel good about economy

https://finance.yahoo.com/news/americans-havent-felt-this-good-about-the-economy-in-almost-two-years-151453360.html?.tsrc=372

A commonly followed measure of consumer confidence in the US economy just increased to the highest level since September 2021.

The first July reading of the University of Michigan Consumer Sentiment Index showed a reading of 72.6 on Friday. The print came in significantly higher than the 65.5 economists had expected and reflected a 13% increase from the month prior. That marks the fastest pace since December 2005, when the economy was recovering from Hurricane Katrina.

"The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets," Surveys of Consumers director Joanne Hsu said in the release.

Consumers have had plenty to be bullish about recently, including a month of largely strong economic data, upbeat reports to kick off second quarter earnings, and waning fears of a second Federal Reserve rate hike in the back half of the year propelling the 2023 stock market rally higher.

A 19% surge in long-term business conditions and a 16% increase in short-run business conditions were the primary drivers behind Friday's surprise print, according to the University of Michigan. The report did, however, include a slight uptick in consumers' inflation expectations.

The expectations for inflation over the next year are now at 3.4%, up from 3.3% in June but down from the highs of 5.4% in April 2022. Analysts had anticipated one-year inflation expectations to tick down to 3.1%

"Easing concerns about a recession, which had been garnering a ton of headlines in the media for most of the year, may have helped push sentiment and expectation higher," Oxford Economics chief US economist Ryan Sweet wrote on Friday.

The Friday release follows a week of upbeat economic data. On Wednesday, the Consumer Price Index for June came in cooler than projected, rising at its slowest pace since March 2021. On Thursday, the Producer Price Index painted a similar picture. The labor market, meanwhile, continued to show resilience with weekly jobless claims of 237,000 coming in lower than expectations for 250,000 claims and below the week prior's 249,000 claims.

Last week's June jobs report showed the labor market is cooling with nonfarm payroll additions coming in short of expectations for the first time in 15 months. But economists were quick to note that the economy still added 209,000 jobs, the unemployment ticked lower to 3.6%, and average hourly earnings grew 4.4% from the year prior.

At scale, that data paints a picture of a tight labor market where Americans have jobs while prices for goods continue to decrease.

Keep up the fine work Joe, hey?

[tower912]

Amen and alleluia.

[MU82]

Keep up the fine work Joe, hey?

All I did was present a fact-based report from Yahoo. If you want to say "yay" or "boo" based on which team you root for, that's up to you.
 
When the economy was doing well from 2017-20, one team touted its leaders and the other team played it down. Now the exact same thing is happening but flip-flop the teams.

It happened when Obama, Dubya, Bubba, GHWB and Reagan were president, too. It's as American as apple pie.

IMHO, the economy is doing OK. Just about everybody who wants a job can get a job, unemployment is near historic lows, wages have been rising, the inflation rate is falling, infrastructure projects are being built, semiconductors are being manufactured in the U.S., consumer confidence is relatively high, the stock market is doing decently, early corporate earnings reports this quarter have been good, etc etc.

Things could always be better for more people. And things could be a lot worse.

[Herman Cain]

ATT reaching 30 year lows

May be  worth doing some research

Sometimes these kind of situations will trade down to a “Hat Size”

[rocket surgeon]

Yeah but what does Goose think the REAL stats are.

  well, you can start here-

https://budget.house.gov/press-release/fact-check-setting-the-record-straight-on-bidenomics


 

[21Jumpstreet]

  well, you can start here-

https://budget.house.gov/press-release/fact-check-setting-the-record-straight-on-bidenomics

I found this group and release interesting. Looks like the members are both R and D and that it is associated with the government, but the language is so charged and biased. I was surprised to see comparisons to the Trump administration and a full rebuke of Biden’s claims. I think it might seem more credible and thought provoking if the language was more neutral.

Obviously we cannot take any stat our government says as fact, certainly not a full, undisputed one. In fact, 86% of all stats are made up, so I’d guess the truth lies somewhere in the middle. I’d also say certain sectors are being impacted far differently which gives them the feeling/thought/anecdotal evidence that some the the budget facts are stone cold facr and some are phooey.

[lawdog77]

I found this group and release interesting. Looks like the members are both R and D and that it is associated with the government, but the language is so charged and biased. I was surprised to see comparisons to the Trump administration and a full rebuke of Biden’s claims. I think it might seem more credible and thought provoking if the language was more neutral.

Obviously we cannot take any stat our government says as fact, certainly not a full, undisputed one. In fact, 86% of all stats are made up, so I’d guess the truth lies somewhere in the middle. I’d also say certain sectors are being impacted far differently which gives them the feeling/thought/anecdotal evidence that some the the budget facts are stone cold facr and some are phooey.

This. Both sides can use fuzzy math. My informal survey. 60% of the people care about:
Do they have a job
What are the price of groceries and gas
Can I get a mortgage, apartment
Can my kids get a job/pay for college

20% far right
20% far left-each of these sides like to argue for the sake of argument