Gmthebeau

Total A-hole move. He wasted a shitload of money on twitter so now he wants the Tesla shareholders to eat his mistakes. Honestly, at this point I think Tesla would be better off firing him and getting an adult CEO. He didn't even found the company like most people think. It already existed. The Tesla Roadster already existed. Between twitter, apparently doing drugs according to the WSJ, spaceX, and his other assorted companies how much can he actually be working anyway?

Agree. Over 30 years almost nobody beats an index fund. The world changes to much to commit to something for 30 years. Even Berkshire may become dicey once Buffett is gone.

Charlie always sounded like he was miserable really when he was interviewed. He never sounded happy like Buffett. Charlie probably could have used a big house or something to make him more happy.

Yes, most people sell the winners way too quickly. I owned NVDA a couple of times at much lower prices and should have just kept it obviously.

I would agree there is pretty good demand around 5%, but I think we will see it again probably in late 2024 but as fast as markets move (or get manipulated) who knows maybe by mid-year. Nobody is going to buy 30 year bonds at 4%, despite all the TV pundits trying to get you to buy the ones they would like to sell. Core inflation is still around 4%, so rates are again to low on the 10-30 year part of the curve. The only way it makes sense is if inflation totally collapses (very unlikely) soon.

Cramer is a complete idiot. If you followed his advice you would be flat ass broke long time ago. He is nothing but entertainment tv. I would say at least 95% of what you see on CNBC is just entertainment and has no practical application to investing.

This is definitely Buffetts preferred approach especially if he owns the entire company. He never spins off or sells something despite owning some real losers. He has constant cash flow though will allows him to use this approach. If you dont have constant cash flow you will need to cut the losers.

Everyone and their dog saying lock in long term rates here at 4%, but virtually nobody saying it at 5%. Rest assured the crowd always wrong, and we will likely see persistent inflation and despite Jerome salivating to cut rates, the 30 year will likely re-approach 5% sometime in 2024.

Even if it doesn't under report it is still nearly double the target. However, yes most believe it under reports. Congress has essentially directed the BLS to change the calculations in the past so that it reduces social security payments.

lol, the government numbers are 3.7% which is almost double their target, and everyone knows the government numbers under report actual inflation.

Housing is definitely an inflation hedge, due to what you cited the replacement costs. If we have persistent inflation which seems likely you will continue to have pressure on commodity prices, labor costs, all of which goes into the replacement cost. The FED itself does not expect to hit a 2% inflation target until 2026! With the massive debt the government has they have no choice but to try to inflate away the debt. Many people believe they intentionally let inflation get out of control and have been intentionally slow to deal with it because they don't intend to get to 2% even by 2026. I mean their projections are notoriously way off!

Right, I have no opinion on JOE, not really looked at it. Stocks can move far beyond fundamentals at times due to emotional trading so if their business of selling new homes goes south looking at a chart I could see it hitting $20.

Exactly, this is my point. Sales dropped but not prices. I believe this is what we will continue to see for years. Slow sales, but continued increase in prices due to lack of supply. Obviously, if you are a supplier of housing materials this may impact your business adversely. If you are selling new homes business may slow, but none of that means anything to or impacts existing housing prices.

Affordability doesn't determine prices if there is a shortage. It is just like oil. If they Saudi's stop pumping prices go up because there is less available (assuming nobody else starts pumping). They said the EXACT same thing in the late 1970s, houses were unaffordable yet prices continued higher. https://www.gao.gov/products/ced-78-101

Yep, affordability and sales may very well drop...but prices will still go up because of limited supply. We will likely be supply constrained for quite a few years in single family housing. Prices already corrected (10-20%) in the hot markets, like Austin, San Francisco, etc...those areas may correct a bit more but probably not much. In most areas prices will just keep going up.

I love when people post things like this, because most people have severe recency bias. They think that whatever happened from 2009 to today is the entirety of history, instead of the abnormality that is actually was. It is interesting to note that I looked back at median home prices during this timeframe (1976-84) and they nearly doubled.....which is also not what most people think is going to happen.

2.5% risk free real is very good deal today. I think there is a chance it could get as high as 3%, which would be back up the truck moment.

yea, 2.375 on a 30 year fixed is amazing. We locked in 2.625 on a 30 year fixed rate for the house I planned to retire at. I am now retired. Can buy treasury bonds paying 5% to pay off the house and the difference is profit. The banks will be eating losses on these loans for decades.

What you suggest may eventually happen but I think it will take many years maybe even a decade. I don't think we are going back to low rates again, as that would set off inflation again which has still not even been reversed. I would agree buyers today have a poor risk/reward, but most people who buy just want a house and many times people are willing to overpay just to get the house they want. I don't know how "housing affordability" is calculated but I suspect there have been changes in the economy, peoples benefit packages etc that make those comparisons today to be irrelevant to decades ago. For example, UPS workers with no degree are reportedly making 180k. I find it hard to believe there is a housing affordability problem. Auto workers asking for 30-40% pay increase. Health care workers going on strike. Most people today want a new home (or mostly new) compared to decades ago when people bought homes that were older. I don't think the comparisons are accurate.

My first mortgage was 8% years ago, so I would say that the endless stream of people saying people won't buy are wrong. This was NORMAL decades ago. The recent 15 years was an ANOMALY. There will be less buyers but there are also less sellers and low inventory. I think residential at worst just goes sideways in price. I don't prices will come down in any significant way.

I think the banks will go lower there is nothing but bad news coming for them. The FED will stay higher for longer until the job market cracks. The higher rates will eventually bite it just takes awhile when people have termed out debt at low rates, but all the zombies will eventually be forced to pay higher rates, bankruptcies will increase, unemployment will go up, people won’t put as much money into 401ks when they don’t have jobs, people will have to start repaying their student loans, housing is leveling off and may eventually crack but probably just go sideways for years, stocks will eventually reprice lower as the PE is way to high at these interest rates.

Agree, Dalio is just trying to remain relevant in some way. He has been dead wrong in virtually everything he says for a really long time. Bill Gross is another billionaire trying to remain relevant. He rode a massive bond bull market to fame, had nothing to do with skill.

hard landing is most likely because it will be hard to bring inflation back to 2% without it, and the FED won't fail because they would lose all credibility.

If you don't think the FED will get inflation back to 2% TIPS are a better value, but if you think they will be successful and with the massive amount of debt out there, if we ever have any fiscal discipline (compared to what Trump/Biden did) then if we even have a year or so of deflation then regular treasuries will be better than TIPS.

It depends on your time horizon. If you buy treasuries and hold to maturity you are not going to lose money. Sure they could be down 50% at some point, but they will mature at PAR value and you will get the interest payments. If you buy a bond index you can figure you will get at least the starting yield to worst if you hold it for at least 2x the duration of the fund. If rates continue rising and you reinvest it will shorten how long you need to hold. But yea, it's hard to lose money in bonds if you hold them to maturity. If you try trading in and out of them thats a different story.