Gregmal

I mean even the simple concept of inflation, shouldn't really apply to first world countries due to the principles of capitalism. It happened here, because of covid, because government started screwing around with stuff. Locking people in their homes, handing out money, putting companies out of business. This isnt obvious to people? When we had black market snout protectors selling for $30 a pop...making masks was incentivized and now we have so many they are given away for free. This same thing can be applied virtually everywhere. Especially commodities which are driving the end products higher. We are basically through the covid shenanigans everywhere in the world except for China. Even there, stuff will normalize. And as it does, all this stuff comes down. Is the very picture of that chart on these inflation inputs not the overridingly dominant theme of the past two years? It doesnt just apply to Zoom stock. Down, huge spike up, then normalization. Seems simple and obvious to me.

Do people really think inflation is going to continue at 8% for the next several years? Its funny to me how last year there were like 2-3 people here tops who said this would happen, everyone else was in the transitory, camp. Now, everyone thinks its 5-10% a year in perpetuity. I guess thats why markets move and sentiment is powerful. But again, most of this "inflation", is fixable. So yea, tech stock based comp will blow for a few years. But the idea that markets need to price in 5%+ inflation OFF OF the already elevated base, seems to a little ridiculous to me. Similar to the housing market, the labor market is so tight that people ARE getting meaningful raises simply due to supply/demand imbalances. We all know the government lies about inflation. But again, theyre handling it right now, exceptionally well. Dining, travel, home improvement. AT THESE PRICES. So we can talk generally about "oh inflation"...great. Plug in x% inflation in perpetuity and get a crazy bearish picture. Tell me how stupid shit like 2x4s, automobiles, desktop computers, etc....are going to go parabolic on prices for the next half decade? I'd take the other side of that bet all day. Energy and housing will take time, but Im pretty certain policies will start shifting either soon, or starting in November to be more favorable on that front too. It just seems like we have big and popular story, and people are getting carried away with applying it to the future.

Which to me sounds like you are implying that there’s still a huge wave of folks getting big pay bumps? So they’ll be joining the new car, boat, home improvement, and travel/vacation/entertainment party as well.

Blantons on the night fishing trip.

I have a hard time seeing the market as a whole get back to highs any time soon. Energy would have to play a part in that and I think energy pushing significantly higher would be bad for everything else. Same time tech is probably fairly valued now, by and large. A lot of consumer stuff is dirt cheap based on the recession fears so my guess is that does ok cuz the real world economy is still strong. So compared to other declines I don’t think this is done per say, but I don’t see how it’s warranted to go materially deeper. Most of those other things had some sort of crisis or chaos. Here, literally nothing has happened and the underlying economy is strong. People are lazy and blame the Fed, but why? They did exactly what they’ve been telling everyone they’d do. That’s a false narrative IMO. This unwind I think really started/topped on the November 2020 vax announcement. It’s when the “world will be different” stocks, most tech stuff like ZM, PTON but even Z, NFLX, ROKU type stuff too, gapped down hard and then just whimpered and eventually got brought back to reality. Eventually the other non fundamental drivers discussed in other threads, details by muscleman among others, kicked in. Anyone see how brutally funds like Tiger have been annihilated? Nope they just focus on ARK. The confidence termites came. But there are few of those left who haven’t been punished severely. Even the crypto bros got it. Wednesday and Thursday I found myself genuinely looking at some stuff and saying wow these are unconditionally great values which I have had a hard time doing for the past year outside of select special situation stuff. So again, idk. Real world is strong. Outside of the rich schmucks like Ackman lobbying for economic destruction so they can profit personally, I don’t see anything really hurting people. They bitch about car prices but still buy new cars. Grocery bills up 30% but that’s a few hundred bucks a month for most, so what? Gas higher, maybe $20 a tank more, manageable. Housing? Well that took a generational GFC crisis and a decade of underbuilding to create and there’s no way to reverse that freight train. It’s hard to claim though that the majority of the market is massively overvalued anymore.

Yea I think it’s a no brainer and you can spin it by taking in tons of useful Eastern Europeans. At least compared to the other option which some are suggesting….basically maim the lower-upper middle class so rich people can buy cheap assets…

Yea but Powell doesn’t have control over most of the stuff influencing inflation. Energy is a result of stupid politicians and tension with Russia. Consumer products are COVID supply chains. Labor you could argue is influenced by high asset prices but also could be solved with incentives and immigration. The whole inflation thing IMO is easily solvable.

Joe add omg add htl add aiv add msge add hhc starter

The inflation that most people believed last year was transitory obviously wasn’t. The reason this was obvious is because there were still a lot of idiots playing the COVID game. Give out money and restrict activity and this is the byproduct. Now you are starting to see that reverse. It will unwind and correct itself regardless of what the Fed does. The Fed is just helping send the crypto bros and tech savants back to their by the hour w2 jobs.

Plus a bunch of my position is the $5 2024s which have held a little better than the shares and have idiot proof downside protection at $5.

Still like it. Have more stock hitting 12 month hold period Friday through next week so gonna be hitting that too. No rush right now. Market is giving prices that are pretty remarkably cheaper than I’d have expected across the board, so I’m good just layering in with PSTH and APTS proceeds over the next 2-3 months.

Dumped a few more tax lots of APTS and cycled into more PCYO, VRE, Nintendo, RBLX, CPNG and put some aside for Disney sub 90 after earnings lol.

Prem, among others, giving up shorting was one of the markers we were nearing the top.

If folks can’t handle volatility they shouldn’t be in the stock market. Yellen is correct.

It does feel a little different but ultimately seems a lot like the late 2018 flash crash. Everyone had a “reason” why they thought it happened, but really, nothing happened and momentum just kind of built up and puked. The only effects I see of this market swoon in the real world are people talking about it. Not much behaviorally different. Still can’t get restaurant bookings or a cheap vacation home any of that fun stuff that usually becomes more accessible to the privileged folks during hard times for the common man. On the bright side, the next cycles 10-20 baggers are already probably buyable. Hard to find them though when everything looks like a turd. I close on some Ripple shares this week. Hooray private market liquidity!

I think that’s the key here. Why bother with stuff you don’t have a hood handle on?

More PCYO

The majority of those things haven’t really changed. Consumers are still doing extremely well. Job market is awesome for lower and middle class. Meh for upper middle but not bad, and cooling for super high end, but they re fine regardless. Maybe some tech engineers will need to put on hard hats. Oh the horrors. Rates are still low. And more importantly well below inflation. So yea, 15% isn’t a big number. Under the surface energy has buoyed a good chunk of that. Much of tech minus the big ones have been annihilated. I think the excess in the market has to a degree been squeezed out. Fundamentals seems relatively healthy. There’s just always a reason for folks to get carried away. Maybe Mr Market is waiting for me to panic…IDK, been bored more than anything. But we are starting to see some real good opportunities. So idk guess we ll just have to see. I suppose too we ll have a few moments like BXC last week. Where the market and the computers get carried away and then they report numbers and for a moment it’s like “hey the real world just called and said what’s up”.

Spoke with another local agent this morning. This is an hour from nyc highlights: me: there’s like 50 listings right now, usually this time of year there’s triple that Her: Well they were actually 35 listings and out of those 35 seven have an accepted offer so the inventory is the lowest I’ve ever seen it. me: my tenants have been looking to buy for about 6 months. They say it’s virtually impossible her: We’re seeing an average of 15 offers some houses 30 to 45 offers there’s so much cash out there it’s crazy people are buying everything up with cash if you don’t have cash it’s hard to compete hopefully it changes because it’s been a real hard time selling homes as an agent

The GFC in regards to US housing was basically a once in a lifetime event. Which is why it’s laughable when I see people dramatically declaring “recession”, pausing to wait for gasps, and then baselining models off of “this is what happened in 2008”. Folks would be better off completely throwing 2008 type stuff out the window. Using it and letting it influence future investment decisions likely has, and only will continue to be, to your own detriment. It is soo hard to default on a mortgage, let alone have so many of them come at the same time it effects the macro. Give it up folks.

Confidence termites. Over time this has proven quite prescient. @muscleman kind of hit it too. First the grim reaper comes for the crap. Then it takes the overvalued and overowned quality. Then it washes out all the weak hands. Nothing has shown this to not be the case. It’s played out almost exactly as the textbook would have indicated it should.

Yea 47.5b and 50 bps on the Fed funds rate, or….bubble that started busting over a year ago continues to burst and similar to almost every bubble in history, the slow melt phase accelerates into a widespread panic phase…. you tell me what’s driving the market? Folks often need reasons for things so there is a need to draw them up. Best example is on CNBC or Seeking Alpha where the headline is “abc is down today, here’s why” and then you look and it’s flat or up. Fed doesn’t set the stock market returns as part of its policy. It’s just kind of acts as a buffer to keep things generally going the way they need to be. The easy money just sloshes around. Right now it’s in energy.

This is a great point and certainly something worth investigating. The whole rate argument for housing often falls short of any contextual exploration and relies too much on basic first level spread sheet inputs.

Don Julio 1942. Don’t even really like tequila, but figured I’d throw some back in honor of all the fallen techies.

Added 50% to Z position.