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Old 06-20-2018, 09:54 AM
 
741 posts, read 404,354 times
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Quote:
Originally Posted by Lizap View Post
But the market is heavily influenced by economic trends.
No, markets today are heavily influenced by "corporate cheating", share buybacks, companies buying their own stock. The FED policies have short-circuited classic capitalism which honors a kind of "economic law of the jungle", a survival of the fittest - with economic depression being the jungle and only companies able to survive on their own being worthy of survival.

FED Socialism - jacking interest rates to zero - so that ALL corporation with any collateral could survive the Economic Winter simply by borrowing money - this is NOT free money, we must remember, but money hijacked from the taxpayers, as always - truly, SOCIALISM FOR THE RICH - and pretending that it was revenue. Borrow money for nothing, funnel it in to corporate survival - and for those companies with LOTS of COLLATERAL - buy back shares, which made it look like the depression was over.

This form of cheating will come back to bite us in a big way. Company BUYBACKS "cheat" because they camouflage earnings weaknesses, they provide corporate ATM "free money" to investors and they divert money out of the company to shareholders, away from workers, away from capital planning for infrastructure retooling and acqusitions, away from the future and back to the present only.

There is an ETF that invests in companies with the highest share of BUYBACKS, PKW, BUYBACK ACHIEVERS POWERSHARES, which has gone straight up since 2009
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Old 06-20-2018, 10:09 AM
 
17,634 posts, read 12,234,437 times
Reputation: 12870
Quote:
Originally Posted by Gene Starwind View Post
Source?
Source for what? The Dow is only 30 names and price weighted and the s&p 500 is a much broader and diverse index that is market cap weighted. The s&p is a far superior index to use to see how the market is doing
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Old 06-20-2018, 11:03 AM
 
467 posts, read 244,614 times
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Quote:
Originally Posted by Lowexpectations View Post
The s&p is a far superior index to use to see how the market is doing
I know it's hard for you to believe but not everything you say is correct or factual.

So where is the supporting documentation to prove what you are saying isn't just your two cents.

You loving asking others for their proof so expect it to happen to you
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Old 06-20-2018, 11:14 AM
 
17,634 posts, read 12,234,437 times
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Quote:
Originally Posted by Gene Starwind View Post
I know it's hard for you to believe but not everything you say is correct or factual.

So where is the supporting documentation to prove what you are saying isn't just your two cents.

You loving asking others for their proof so expect it to happen to you
Are you suggesting the DJIA is a better gauge of the market? Iím not sure what you are asking I prove. The way the DJIA is calculated giving higher impact to higher priced securities and the fact its only 30 names makes it subpar when trying to see what the market is doing. The S&P 500 on the other hand 500 companies with much more diversity and is market cap weighted making it a far superior measure of what the market is doing. Iím not sure what supporting documentation you would like as what Iíve stated is true, if would like to dispute it by all means please do so.
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Old 06-20-2018, 12:21 PM
 
467 posts, read 244,614 times
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Quote:
Originally Posted by Lowexpectations View Post
Are you suggesting the DJIA is a better gauge of the market? Iím not sure what you are asking I prove. The way the DJIA is calculated giving higher impact to higher priced securities and the fact its only 30 names makes it subpar when trying to see what the market is doing. The S&P 500 on the other hand 500 companies with much more diversity and is market cap weighted making it a far superior measure of what the market is doing. Iím not sure what supporting documentation you would like as what Iíve stated is true, if would like to dispute it by all means please do so.
Please stop deflecting and provide evidence to support your statement.
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Old 06-20-2018, 01:17 PM
 
64,731 posts, read 66,226,110 times
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the ny times summed it up pretty well as to why the dow is really not representative of the markets .

https://www.nytimes.com/2017/08/12/b...ck-market.html
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Old 06-20-2018, 06:13 PM
 
Location: Ohio
18,045 posts, read 13,258,699 times
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Quote:
Originally Posted by Lowexpectations View Post
I wish people would stop quoting the Dow as the market indicator. The market shouldnít be 30 names of unequal weighting
That's exactly right.

Quote:
Originally Posted by greywar View Post
So we've seen the tariffs show up, often followed by a quick dip in the DOW in the morning, that quickly recovers. Is it just that the prospects of a trade war seems to be unlikely, or that its believed that if one occurs it wont be extremely harsh to the bottom line? I'm trying to understand the economics of this better as far as the DOW goes.
You would need to examine specifically stocks in those sectors of the economy, or individual businesses, that are affected by tariffs to draw any real conclusions.

Quote:
Originally Posted by greywar View Post
The DOW in this case for me is a indicator of what the big money people are thinking. But theres a ton of complex interactions going on as well. I do comprehend that the DOW and the overall market and economy are different.

Today it seems like we're not getting the bump after the drop.
These are the 30 companies that make up the DOW:

3M
Intel
American Express
Johnson & Johnson
Apple
JPMorgan Chase
Boeing
McDonald's
Caterpillar
Merck
Chevron
Microsoft
Cisco
Nike
Coca-Cola
Pfizer
Disney
Proctor & Gamble
EI Du Pont De Nemours & Co
Travelers Companies
Exxon Mobil
United Technologies
General Electric
UnitedHealth
Goldman Sachs
Verizon
Home Depot
Visa
IBM
Walmart

The only companies even remotely affected by tariffs would be Boeing and Caterpillar.

I suppose you could argue Chevron and Exxon-Mobil, but that's a bit of stretch, since neither builds wells, derricks or platforms, or the supporting infrastructure of pipes, valves and terminals (they contract oil service companies to do that work), and in any event, it's not going to cause oil prices to rise or gasoline prices to rise either, for that matter.

Home Depot would be the only other possibility, since they do sell durable goods. However, consumers are likely to only delay buying a water heater, refrigerator, washing machine, dryer or dishwasher by a few months, rather than not buy at all.

Whatever is causing those 30 stocks to stall for the last several months is not tariffs.

Quote:
Originally Posted by andywire View Post
The stock market is not the economy.
Quote:
Originally Posted by Lizap View Post
But the market is heavily influenced by economic trends.
During the 1928 Recession, the stock market set records. It was only after the recession ended and the economy began to recover that stock prices started slipping.

In another instance, even though quarterly GDP was averaging 2.5%, which was not stellar, but at the very least adequate, the stock market lost 45.1% of value. And, no, there wasn't a recession.


There are many examples just like that.



If you bet the market based on what the economy is doing, you'll lose every single time.

You purchase stocks only after carefully examining a company's financials, its standing, its leadership, the products or services offered, and the potential for long-term growth. If any of those factors changes, then you need to re-evaluate and consider selling to realize a profit.
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Old 06-21-2018, 01:59 AM
 
64,731 posts, read 66,226,110 times
Reputation: 43124
tariffs can suck money away from the purchase of goods and services of those companies not involved since more dollars have to be spent on the items that are involved . there is fear that will hurt corporate profits on lots of other stocks even though they are not involved in the tariff's directly . they are more the casualty of .
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Old 06-21-2018, 12:09 PM
 
24,956 posts, read 11,634,183 times
Reputation: 11663
The problem with looking at a single stock affected by tariffs is that too many external forces make them noisy. Plus it gives a exaggerated view of just one single affected market rather then the overall market.

I do appreciate the discussion of the S&P vs the dow. It seems that the S&p might be better in some ways because it captures a wider swath of the market then the DOW does, but its not clear how much they diverge.



It does appear that recent tariff announcements are being taken more seriously as the bounce back of prior tariffs is not happening. But its hard to say that is true as the cause for the market drops is not easily pointed too. Yes the news points to it, but I have found that often what the news reports as the cause, does not reflect what occurs. Sometimes because the news is already baked in, sometimes because what the news thinks is important is only a small part of whats occurring.
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Old 06-21-2018, 07:40 PM
 
Location: Upstate, NY
455 posts, read 188,495 times
Reputation: 449
Quote:
Originally Posted by Mircea View Post
That's exactly right.



You would need to examine specifically stocks in those sectors of the economy, or individual businesses, that are affected by tariffs to draw any real conclusions.



These are the 30 companies that make up the DOW:

3M
Intel
American Express
Johnson & Johnson
Apple
JPMorgan Chase
Boeing
McDonald's
Caterpillar
Merck
Chevron
Microsoft
Cisco
Nike
Coca-Cola
Pfizer
Disney
Proctor & Gamble
EI Du Pont De Nemours & Co
Travelers Companies
Exxon Mobil
United Technologies
General Electric
UnitedHealth
Goldman Sachs
Verizon
Home Depot
Visa
IBM
Walmart
No more GE. Instead, add Walgreens.
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