General Investing and Economics Discussion - No Politics

[LibertyTurns]

Oh my, doggie is running. $0.27 this morning!

 

[RonJohn]

Oh my, doggie is running. $0.27 this morning!

Well on the way to $1.00 now.

 

[LibertyTurns]

Well on the way to $1.00 now.

I’m glad I’m alone on my office (a rarity). I can’t stop laughing.

I have my plow horses like JNJ that I just keep adding to the pile year over year, but I actively manage normally between 20 and 50 hot runners.

My standard MO is I pick up $3-5k, take profits, wait for another to pop and repeat the process.

Damn doggie is rivaling AMAT as my biggest cash generator of the year. I will probably need to hit $2 to outrun AMAT since Q3 of last year as I’ve been milking that cow like there’s no tomorrow, but never would I have thought something so comical would get into serious money.

 

[BuzzStone]

Sold out of Doge at .392 hope that was the right move put 25% of profits back in at .3801

 

[Deleted member 2897]

Unemployment Rates for States

www.bls.gov

30 states are at or beyond full employment - 5%s or lower. 12 states have unemployment in the 3%s or lower. Several are in the 2%s. Nearly every asset class is in bubble territory. The economy and stock market are at all time highs. And every other month we’re passing multi-trillion dollar stimulus and rescue plans like we’re in a depression.

 

[dtm1997]

Unemployment Rates for States

www.bls.gov

30 states are at or beyond full employment - 5%s or lower. 12 states have unemployment in the 3%s or lower. Several are in the 2%s. Nearly every asset class is in bubble territory. The economy and stock market are at all time highs. And every other month we’re passing multi-trillion dollar stimulus and rescue plans like we’re in a depression.

A friend (& fellow GT grad) can't get enough good people to staff up for outdoor dining at his NJ diner. Good news is that his takeout orders are through the roof and at 50% capacity with proper social distancing, they're doing well enough to be doing well enough.

Also, they have spectacular baked goods.

 

[Deleted member 2897]

BTW, if anybody was wondering why inflation is so utterly out of control and why nearly every asset class is in the Tulip Craze zone, take a look at the M1 money supply chart. Yes it is correct - after having 1 to 4 trillion of money in supply over the last 30-40 years, we essentially have printed FOURTEEN TRILLION MORE DOLLARS last year.

 

[awbuzz]

The LIKE above is for providing the information, not because I like what the FED has done.

 

[Coloradojacket]

Ah a great topic. I invest for income as I need it. I have some closed end funds, a few bond funds, a few REIT funds and stocks and MLPs. I have some MLPs paying 10% return of capital and yes they have freat cash flow with the price of oil at $63.00. Some Tickers......SHLX, OMP, IEP, CIM, ETV,GNL. This is in no way a recommendation, just an FYI.

 

[Deleted member 2897]

More signs the economy is firing on all cylinders.

Goldman Sachs' current GDP estimates (https://www.forexlive.com/news/!/goldman-sachs-2021-us-gdp-forecasts-are-huge-q2-is-11-20210312):

• Q1 5.5%
• Q2 11.0%
• Q3 8.5%
• Q4 6.0%

That is rocket ship growth.

Tax revenue through the first half of this fiscal year (Oct-Mar) came in at an all time record of $1.7T. Thats up almost 50% from 1 decade ago. That's a massive amount of cash rolling in.

The majority of the states' unemployment numbers are actually flashing warning signs for overheating (https://www.bls.gov/web/laus/laumstrk.htm). And that's really the big worry here - most every asset class is in Tulip Craze zone. How do you cool things off without crashing the economy? Going back several decades, the issue we've always run into is overprinting money, holding interest rates artificially low, overheating the economy, and then we increase interest rates and the economy tanks.

 

[RonJohn]

More signs the economy is firing on all cylinders.

Goldman Sachs' current GDP estimates (https://www.forexlive.com/news/!/goldman-sachs-2021-us-gdp-forecasts-are-huge-q2-is-11-20210312):

• Q1 5.5%
• Q2 11.0%
• Q3 8.5%
• Q4 6.0%

That is rocket ship growth.

Tax revenue through the first half of this fiscal year (Oct-Mar) came in at an all time record of $1.7T. Thats up almost 50% from 1 decade ago. That's a massive amount of cash rolling in.

The majority of the states' unemployment numbers are actually flashing warning signs for overheating (https://www.bls.gov/web/laus/laumstrk.htm). And that's really the big worry here - most every asset class is in Tulip Craze zone. How do you cool things off without crashing the economy? Going back several decades, the issue we've always run into is overprinting money, holding interest rates artificially low, overheating the economy, and then we increase interest rates and the economy tanks.

It is all interconnected. Interest rates will have to rise to stem off inflation. Spending will then decrease which will cause at least recession if not depression. I am not an economist, but from my take it appears to me that the government has spent much more than required to make up for losses during the shutdowns. At this point, many places are having problems finding workers. I have heard of a few places where workers are leaving companies en masse to get to higher paying jobs, which causes those places to raise wages. All of the companies involved will have to raise prices. That is going to result in higher prices, which will severely dampen the benefit to the higher wages. Eventually inflation will occur and things will settle down. There will be a temporary bump for some as wages rise, but when it is all past the ups and downs, people in relative job categories will be in exactly the same relative position that they are now.

 

[Deleted member 2897]

It is all interconnected. Interest rates will have to rise to stem off inflation. Spending will then decrease which will cause at least recession if not depression. I am not an economist, but from my take it appears to me that the government has spent much more than required to make up for losses during the shutdowns. At this point, many places are having problems finding workers. I have heard of a few places where workers are leaving companies en masse to get to higher paying jobs, which causes those places to raise wages. All of the companies involved will have to raise prices. That is going to result in higher prices, which will severely dampen the benefit to the higher wages. Eventually inflation will occur and things will settle down. There will be a temporary bump for some as wages rise, but when it is all past the ups and downs, people in relative job categories will be in exactly the same relative position that they are now.

I work for a software company with 250 employees. We have 75 open positions. It’s freaking Tulip Craze wacky. Companies with no proven business model are raising $100m.

Dogecoin which has no intrinsic value itself and its product has no intrinsic value either and was founded as a joke has a similar market cap as companies like Ford and Delta Airlines. LOL.

 

[dtm1997]

I work for a software company with 250 employees. We have 75 open positions. It’s freaking Tulip Craze wacky. Companies with no proven business model are raising $100m.

Dogecoin which has no intrinsic value itself and its product has no intrinsic value either and was founded as a joke has a similar market cap as companies like Ford and Delta Airlines. LOL.

Also adding to labor constraints - retirements.

Between asset inflation & pain of COVID work environment, if you were close to retirement, you're pulling the plug to go enjoy life while you can.

Losing not only the butts in seats, but knowledge & experience.

 

[RonJohn]

Also adding to labor constraints - retirements.

Between asset inflation & pain of COVID work environment, if you were close to retirement, you're pulling the plug to go enjoy life while you can.

Losing not only the butts in seats, but knowledge & experience.

If I were close to retirement, I would be concerned that cost of living inflation is likely to overcome any asset inflation that has occurred in my nest egg.

 

[RonJohn]

I work for a software company with 250 employees. We have 75 open positions. It’s freaking Tulip Craze wacky. Companies with no proven business model are raising $100m.

Dogecoin which has no intrinsic value itself and its product has no intrinsic value either and was founded as a joke has a similar market cap as companies like Ford and Delta Airlines. LOL.

There is a problem with comparing cryptocurrency "market caps" with public company market caps, especially Dogecoin. Cryptocurrency is set up basically as a money replacement. People are speculating on it, but Bitcoin wasn't set up as an asset in and of itself to trade. It was set up as an anonymous alternative to government currency. The guy that started Bitcoin has something like $54 billion worth and his wallet has never been used. There are plenty of theories about who he is, but one of the most credible is that he has died an acquaintance of his is spending millions of dollars on crypto experts to hack into his wallet. If that is actually true, that means that 5% of Bitcoins will never be used or sold. There are plenty of people who have lost their wallets, or lost access to their wallets, so there are more Bitcoins that will never be used or sold. The "market cap" might show $1 trillion, but there isn't near that much that is actually trading. It isn't an accurate number of the actual value of actually available coins.

Dogecoin has other issues. Every minute 10,000 new Dogecoins are produced. That means that currently $364,000 worth of new coins are produced daily. It can't possibly rise significantly in value for long. If it were to reach $1,000 then $10 million worth of coins would be produced every single minute. The money flowing into the market could not keep up with the coin generation.

 

[Deleted member 2897]

Also adding to labor constraints - retirements.

Between asset inflation & pain of COVID work environment, if you were close to retirement, you're pulling the plug to go enjoy life while you can.

Losing not only the butts in seats, but knowledge & experience.

If I were close to retirement, I would be concerned that cost of living inflation is likely to overcome any asset inflation that has occurred in my nest egg.

We're in our 40s and thinking of retiring here soon because of all this. I emailed a good friend of ours that is a realtor. Normally in our 3 county area that comprises the metro area where I live (about 1 million people) we have about 7,000-8,000 homes on the market. They currently only have 950 homes on the market. My wife and I are thinking about retiring in 3 years when my son graduates high school (my daughter graduated last year). Its such a ridiculous situation I asked him if he thought we could ask $400,000 over what I think is fair value for my home and bank a truckload of cash (we'd then rent for a couple years before we move to wherever the hell we decide upon actual retirement - I don't want to buy something smaller knowing we'll probably sell it in a few years...plus there isn't anything on the market). He said he thought it was aggressive, but not crazy. In less than 24 hours (without listing the home), we got 2 showings and 2 offers.

The idea is to take that nest egg along with what we've saved and exit the high cost of living metro area for somewhere else. Buy a smaller home and then AirBnB it for most of the year when we're not there (might get an RV and travel around). Its much easier to control the cost of living outside the metro areas.

Its definitely a unique and fascinating challenge. I've built spreadsheets (because I'm a ****ing GT grad dork and we don't leave anything to chance) showing 50 years of retirement (again we're in our 40s) - investments+return vs expenses+inflation where you can tweak both (like 4% return, 4% inflation) and see what happens over time. We have no payment on our boat/sea doo/cars and so if we sold our house we'd have a few million in liquid assets with absolutely zero debt. Of course to your point about cost of living inflation versus asset inflation, the only real way to take advantage of asset inflation is to leave the immediate area, so you'll have to be ready to do that...or at least significantly downsize. The cost of living inflation I think you have a lot more control over than you'd think. If you have say $3m making 3%, you have $90,000 to spend every year before you touch principal. My wife and I have talked and talked and talked and talked through all this. Its actually a very tough decision leaving our little corner of paradise. We're on the coast, so in addition to taking a risk if we don't sell that the housing market cools for several years like it did a decade ago when we're wanting to sell, there is also a risk of sea level rise and hurricanes.

 

[Deleted member 2897]

This could also be posted in crazy world. Tesla released quarterly earnings results and made about $450 million. So their PE ratio stays over 1,000 LOL. But here's the thing buried in their results. They sold off a ton of Bitcoin and sold a ton of emissions credits to other car manufacturers. Those 2 items added $600 million to their bottom line. So technically you have a car company worth a $650 Billion market cap that still doesn't make any money selling cars. It will be interesting to watch that going forward, because most of Amazon's earnings don't come from selling books and other products online but through its web services business. If they find another avenue through which to make money, good for them.

 

[Deleted member 2897]

****, even ANOTHER $2T jobs plan - the third $2T bailout/stimulus bill in 4 months. The economy can’t take this. On the national news last night they had a story about how overheated everything like the housing market is. This **** is just getting crazy. GDP growth is supposed to be ****ing 10% this quarter - this is really getting dangerous. Gonna have to chew on this one awhile to figure out what the investment angle is for this. There are short ETFs around inflation (t-bills) and things like that, but that’s too risky for my taste.

 

[awbuzz]

Don't have people have responsibility!

Free Community College even for those that aren't "college capable" just means the costs will rise because someone else is paying for it. Ol' Joe says that 75% of the new jobs won't require college, so why does everyone need to go to college?

Money is free!!! Give it all away!!! Elect me or mine next election!!! Weeeeee!!!

 

[dtm1997]

Don't have people have responsibility!

Free Community College even for those that aren't "college capable" just means the costs will rise because someone else is paying for it. Ol' Joe says that 75% of the new jobs won't require college, so why does everyone need to go to college?

Money is free!!! Give it all away!!! Elect me or mine next election!!! Weeeeee!!!

Sorry, but what's the investment thesis here?