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i just look for volatility . after a nice drop most of the time there is a pop up even if it does not hold .
that is true in most things . i think my losers last year were ibm and verizon .
they took a big dip , i bought then next day i got stopped out . but that is okay .
gbtc moved away from my target price but the day is still young lol . that price is a bit over a grand less than i bought last time and 1500 below where i sold it a few weeks ago , a day later . this is only our 2nd attempt at trading it.
No matter how well a sector or company is doing, which may result in idiosyncratic events that drive the price one way or the other, but ultimately, the price is dependent on central bank asset purchases.
All credible economists agree that central bank policy has an effect on the economy. The Fed and the US Treasury went to extreme, unprecedented lengths to prevent the US and World economy from falling into a horrible depression. Even so, we suffered from a severe recession.
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Originally Posted by Jobster
So if central bank asset purchases decline, we should expect the S&P 500 to decline on a systematic level.
Your "IF...THEN..." analysis is far to simple. The world is complex. There is no direct linkage between central bank asset purchases and stock prices. Stock prices are a function of the underlying business conditions, macroeconomic health, microeconomic health, etc etc etc etc -- all of which are reflected in estimates of future earnings and future interest rates.
All of that is already reflected in today's S&P 500 price and its multiple. All the expectations regarding future central bank asset purchase reductions have already been factored into the pricing model for equities. You do not have some special insight that for some reason professional money managers have missed.
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Originally Posted by Jobster
As you can see from that chart I presented, you can eyeball it and realize right away that correlation between the two is high. Since the assets on the balance sheets are comprised of both US equities and debt, I think it's safe to assume the causation is there too.
Let me answer your chart & point with my own chart & point. Please look at & study the following chart:
I'm now going to borrow your words: "As you can see from the chart I presented, you can eyeball it and realize right away that the correlation between the two is high... I think it's safe to assume the causation is there too."
By your logic, importing more lemons reduces traffic deaths. The R^2 is exceptionally high -- 0.97.
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Originally Posted by Jobster
I guess my point is that fundamentals don't really matter that much in my opinion.
You are incorrect. Fundamentals matter. They have always mattered. They will always matter. They matter because when you own a share of stock, you own a piece of an actual business.
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Originally Posted by Jobster
And in the absence of any future liquidity injections and even a draw-down I don't see any reason why capital would stay in the US, especially as the dollar is weakening.
In addition to studying economics, you should see an opthamologist.
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Originally Posted by Jobster
I don't know.
There. You & I finally agree on something.
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Originally Posted by Jobster
Additionally, I don't know how much faith you have in technical analysis or behavior finance techniques, but I have found it to be successful.
Regarding the application of behavioral finance to investing, I think the jury is out. Richard Thaler won the 2017 Nobel Prize in Economics for his pioneering work in behavioral economics. He has a boutique actively managed mutual fund company that uses the key insight that sometimes people overreact and sometimes people underreact to attempt to pick winners and losers in the stock market. https://www.fullerthaler.com/funds. At the end of the day, he is still attempting to pick winners and losers, and there is overwhelming evidence to suggest attempting to pick winners and losers over the long run is exceedingly difficult, and attempting to profit by doing so after transaction costs is even harder. I don't think I'll invest in them.
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Originally Posted by Jobster
but I have found it to be successful.
Please post your trade slips together with your rationale for engaging in the trade.
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Originally Posted by Jobster
I'm honestly thinking about selling the majority of my positions and entering a long gold and silver position. Do you think this is a bad idea?
You disagree with just about everything I post. Why in the world would you care what my opinion is?
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Originally Posted by Jobster
I'd really like to know your thoughts.
There is no evidence to support that. But I really want to see your actual trade slips.
Yeah, but did you see the chart? You know I've been half trolling asking where the money is going to come from? Well, this actually caught me by surprise. I didn't know of this de-coupling.
But that de-coupling looks like a divergence from reality. It only makes sense that money would flow to higher returns. If this market is no longer juiced, I think the money will flow out. Citi makes a great case.
What do you think will happen in the short term? If a bank doesn't come in and create a soft landing, I think we are due for an imminent correction. I'm talking within the next 3 months, but probably sooner.
In fact, I'm quite comfortable calling this the top. I suppose there could be another intervention, but I think it's time to find an exit.
There will be frontrunning before the asset purchases end, just as there was before their start. That was how the 2013 taper tantrum started when the end of the Fed's purchases was announced. Markets fell until bonds stabilized. Also, Japan announced they were starting their asset purchases.
CB purchase chart is missing the net issuance of debt and the amount of debt maturing off the CB balance sheet. I've seen charts that claim the flow will turn negative in Q4 2018 or in Q2 2019.
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There is no direct linkage between central bank asset purchases and stock prices.
Actually, the Fed did a study showing a direct linkage between QE and stock prices. The study went further and found that announcing them ahead of time was even more effective since it allowed market participants to bid up stock prices before the initial auction.
Companies might just continue to engage in share buy-backs and hording cash.
In the two weeks since the new tax law was passed, it already resulted in $70B of stock buy backs according the article.
That's not real growth. That's just BS.
Isn't anyone else getting sick of this nonsense? I'm going to take all my textbooks and burn them after this.
You are wrong.
Tax increases, and tax cuts, are not borne by businesses. Every penny of a tax increase or a tax cut flows through to a combination of customers in the form of higher or lower prices, employees in the form of lower or higher compensation, and business owners in the form of lower or higher profits. It always flows to people: quite literally there is nowhere else for it to go.
Share buybacks are one common way to distribute increased profits to the owners of the business. Share buybacks are not evil. They are a complete non-issue.
all these opposing points make just as much sense .
the point is no one knows what is next and to develop all these theories and counter theories is just an exercise in a big waste of time .
like i said in another post . learn to be good parents , and stop worrying about all the genetics and steps that go on in the womb . it will not help you be good parents .
Jobster, why don't you dollar-cost average into the market monthly...
In general, dollar cost averaging is not a good idea. Here's why. Imagine you have an unexpected windfall of, say, $25,000. The day before the windfall, you have an asset allocation, which includes some cash. The day after the windfall, your asset allocation has changed -- you are now more in cash than you were the previous day. To get back to your optimal allocation, you need to invest most of that $25K of new money.
If you you dollar cost average, you are spending more time with a sub-optimal asset allocation. It is far better to have your optimal asset allocation right away - the day after you receive the cash.
In general, dollar cost averaging is not a good idea.
Now if only we could get employers to give us an entire year's worth of pay upfront, on Jan 1, for the sake of not doing sub-optimal DCA investing, or better yet, give us 3 to 5 years upfront.
Rates are going up but bank stocks are down...wtf over
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