Investing Thread

[JWags85]

Google usury and Christianity.  It was a sin until it was conveniently not a sin.

Like a lot of things 

What does loan sharking in biblical/medieval times have to do with businesses trying to charge as much as the market allows for their products and services?

[MU82]

Just saw this interesting (and seemingly contradictory) note:

A new report by SoFi reveals that despite positive economic indicators and the Federal Reserve's stance, two-thirds of investors believe the U.S. is already in a recession. However, optimism towards the markets remains high, with three-quarters of investors being bullish on their current market outlook.

[Golden Avalanche]

Just saw this interesting (and seemingly contradictory) note:

A new report by SoFi reveals that despite positive economic indicators and the Federal Reserve's stance, two-thirds of investors believe the U.S. is already in a recession. However, optimism towards the markets remains high, with three-quarters of investors being bullish on their current market outlook.

Eerily similar to the survey response where 75% of respondents say their personal financial situation has never been better but 68% of those same respondents say the U.S. economy is presently the worst they've ever experienced in their lifetime. 

Shrug

[MU82]

Goldman Sachs says the Fed will start lowering rates again in Q2 2024, serving as stimulus to the market.

https://seekingalpha.com/news/4002183-goldman-now-expects-first-fed-rate-cut-in-second-quarter-2024

I have no idea what GS's track record is on predicting such moves, so caveat emptor.

[Coleman]

Goldman Sachs says the Fed will start lowering rates again in Q2 2024, serving as stimulus to the market.

https://seekingalpha.com/news/4002183-goldman-now-expects-first-fed-rate-cut-in-second-quarter-2024

I have no idea what GS's track record is on predicting such moves, so caveat emptor.

Goldman has been one of the most positive voices on the economy over the past couple of years. They have consistently said the chance of recession is lower than pretty much every other institution on the street. So far, they appear to have been correct. Take that for what it is worth.

[Goose]

I think the state of the China economy is going eventually cause issues elsewhere. Their economy is in tough shape and not much hope for any short term fix. I am watching things over there very closely.

[tower912]

The one child policy is finally coming home to roost.    The effects are not quickly reversed.

Yes, China has many challenges.    Can their government multi-task these opportunities.

[Goose]

tower

The one child policy has caused issue, but a major slowdown in exports, slow domestic economy, real estate issues and high debt is far more troublesome. They have serious issues to tend to at the moment and I think they are a serious threat to the global economy.

[tower912]

Potentially.   From a global perspective, the search for cheap production will lead to other places.    It will take a while, but if done right it can be turned into a net positive.

All while China goes through its growing pains.

[Goose]

tower

Cheap labor is the least of their problems. Zombie companies, crazy debt a major real estate bubble likely to pop again are the issues they need to address. Their banking system is facing serious headwinds.

[MU Fan in Connecticut]

tower

Cheap labor is the least of their problems. Zombie companies, crazy debt a major real estate bubble likely to pop again are the issues they need to address. Their banking system is facing serious headwinds.

They reap what they sow.

I think it's more authoritarianism catching up with itself.  China thought they can continue to push/pull their way and get away with and it wouldn't effect the economy and everyone would just conform to their new way.   Instead the West says "bye-bye" and is leaving what only needs to be in China for China business, tied in with post "0" Covid policy, plus mass real estate construction of buildings to cities with no one to live in them, and all the other stuff you mentioned. 

China's loss will be someone else's gain.

[tower912]

Athough, to be fair, what isn't doomed these days?

[MU82]

Teal wasn't necessary on that one, tower.

[Skatastrophy]

Teal wasn't necessary on that one, tower.

Man on Scoop you can't be too careful

[Skatastrophy]

Consumers still buying like crazy, more rate raises in our future.

I'm starting to second guess keeping these tech companies in my portfolio. They're early-stage enough growth companies that they're still dependent on debt raises for growth. Way too late to sell them now, I'm going to have to continue weathering this storm.

Edit: I'm still buying the full US market with my money, I'm holding very little cash like normal. Just funny watching tech companies get hammered by rate raises.

[tower912]

A series of articles around the web echoing Goose about China.

[TSmith34, Inc.]

Consumers still buying like crazy, more rate raises in our future.

I'm starting to second guess keeping these tech companies in my portfolio. They're early-stage enough growth companies that they're still dependent on debt raises for growth. Way too late to sell them now, I'm going to have to continue weathering this storm.

Edit: I'm still buying the full US market with my money, I'm holding very little cash like normal. Just funny watching tech companies get hammered by rate raises.

Another rate increase will kill the economy IMO. Currently both the betting market and the big houses like JPMC and GS and predicting rate decreases by next year, which is another indicator to me that the Fed has already overshot.

So short term I think the market is fully valued if not slightly overvalued. Long term no change, of course, I'm fully invested, but I don't see a lot that I am excited to buy at the moment.

[Goose]

tower

I talk with our team in China everyday and country manager is the most pro-China and optimistic guy I know. He has been sounded the alarm on the economy on a daily basis and that is very uncommon for him to do. I think the situation in China is a potentially serious risk to the global economy.

[MUBurrow]

I think the situation in China is a potentially serious risk to the global economy.

This seems potentially true, but also a good and needed correction?  It would result in some short term pain domestically, but would be good for onshoring and/or recalibrating foreign production to less politicalloy problematic trading partners?  Plus given how much American debt China holds, might help a bit with the national debt service as well? 

[Goose]

Burrow

It all depends on how much pain people can handle. My belief the pain may be more than people could handle. Onshoring is not going to happen in a big way, IMO. If it did, the cost of goods would make the inflation of the past couple of years look like a walk in the park. That being said, India is going to prove to be a real competitor to China on the manufacturing front over the next few years.

[Skatastrophy]

Burrow

It all depends on how much pain people can handle. My belief the pain may be more than people could handle. Onshoring is not going to happen in a big way, IMO. If it did, the cost of goods would make the inflation of the past couple of years look like a walk in the park. That being said, India is going to prove to be a real competitor to China on the manufacturing front over the next few years.

Yep, manufacturing rotation out of China to Africa & S Asia started in earnest during the pandemic (for the companies I was working with).

[MU82]

Consumers still buying like crazy, more rate raises in our future.

I'm starting to second guess keeping these tech companies in my portfolio. They're early-stage enough growth companies that they're still dependent on debt raises for growth. Way too late to sell them now, I'm going to have to continue weathering this storm.

Edit: I'm still buying the full US market with my money, I'm holding very little cash like normal. Just funny watching tech companies get hammered by rate raises.

Which tech companies do you own, Ska?

My biggest two are MSFT and AAPL, positions I've held (and built upon) for years. In the last few years I've added GOOGL, AMZN, TSLA and ADBE. Also MA, V and ADP if one considers those tech. Also have a little LRCX in the grandkids' college fund. I did dabble with some "disruptors" when I got a little FOMO in 2021; that didn't turn out well and I bailed when the losses were only small, thankfully. Trying to stay in my lane, which is mostly boring, blue-chip, dividend-growing companies with a handful of large-cap growth thrown in.

[Dr. Blackheart]

Yep, manufacturing rotation out of China to Africa & S Asia started in earnest during the pandemic (for the companies I was working with).

How did that "No limits" moment turn out?  Great for cheap oil but it was a major misstep that signaled the need for risk diversification accentuated by the COVID lockdown to Western economies.

[Skatastrophy]

Which tech companies do you own, Ska?

My biggest two are MSFT and AAPL, positions I've held (and built upon) for years. In the last few years I've added GOOGL, AMZN, TSLA and ADBE. Also MA, V and ADP if one considers those tech. Also have a little LRCX in the grandkids' college fund. I did dabble with some "disruptors" when I got a little FOMO in 2021; that didn't turn out well and I bailed when the losses were only small, thankfully. Trying to stay in my lane, which is mostly boring, blue-chip, dividend-growing companies with a handful of large-cap growth thrown in.

I'm only holding NET right now, but I sold about half of my position earlier this year when it was clear that rates were going to continue rising to lock in a 4x gain.

I wont hold AAPL/MSFT/AMZN because they're already such a huge % of my portfolio by holding indexes. Like, ITOT and its equivalents are like 70% of my holdings and ITOT is 6% AAPL, 5.5% MSFT, 3% AMZN, 2% GOOG. I feel like I'm good on tech heavyweights, most people are if they're holding broad indexes.

https://etfdb.com/etf/ITOT/#holdings

[Goose]

82

What are your thoughts on Michael Burry's $1.6b short position on the market? It says that 90% of his portfolio is betting against the market. He is a strange dude, but that is one big bet.