Gregmal

1) is political and there’s a good likelihood voters choose something else in November 2) COVID is over, China will get the message too. 3) this is a fair point 4) debatable, but in the face of shortages and imbalance greed will prevail. Biden has already talked about pulling back tariffs. 5) the is massively bullish for the average person and especially the consumer. In addition, pretending the market dropped 20% because nothing changed is a little off. The drop to them clearly signals uncertainty and expectation of higher rates and longer inflation otherwise, if the expectation is the same as last year, 1) why the sell off and 2) how do you reconcile -20-40% in many names over a 1-2 year expectation. Didn’t we learn during COVID that longer term, 1-2 years of earnings, even 0 earnings, doesn’t translate to very much off the long term DCF derived valuation of that market? Many wise folks, I believe Brooklyn Investor one of the first, ran a 0 scenario and came to the conclusion that MAYBE, 10% deserves to come off. So we ll see. But saying the expectation is the exact same as last year despite overall market reaction and sentiment is something I’d bet heavily against. Everyone has their own take but generally, at least over the past two years, I’ve read this whole thing like a book. And the recent action seems exactly in line with what one would expect if all the transitory people from last year all of a sudden came to the conclusion that oh shit we were wrong and now this is going to be higher for longer….exactly the position you would have wanted(and I did) take last year, but this year…fade it.

Liberals are basically the confidence termites of the American system. There’s nothing they won’t hollow out and destroy. $6 a gallon gas is great cuz, well, you should be driving an EV anyway. And it’s an excuse to nationalize big oil profits.

Interesting timing, but this piece sums it up well. At some point you really do have to wonder if it is deliberate. https://nypost.com/2022/05/26/team-biden-might-be-purposefully-crushing-the-middle-class/

Decided to take your suggestion on this. Expectations are high

Im not sure the quality will matter in the end. Its currently a duopoly and LYFT is a dumpster fire. People need to get around, and they'll do what's easiest. Funny personal story, but maybe 2003 or so I was in the city with some friends. We had a late night yellow cab take us back to Jersey. For context, this was shortly after 9/11 and the height of Islamaphobia. So as we're driving back the driver, a big Arab dude, full turban, the whole 9, turns up the music, middle eastern stuff IDK, and then gets a phone call and starts shouting in a foreign language into the phone for a few minutes. One of the girls we were with, wasted, starts panicking and asking to be let out and screaming about how she doesnt want to die LOL. It was definitely a bizarre encounter. But the next week we took the yellow cab again. Its simple. You need a ride, what will you do? What are the alternatives. UBER put a lot of people out of business and I think that was the plan. Recently you've been starting to see the "horror" stories of the price increases. Even that Goldman dude who was killed on the subway last week, apparently just started taking subways because Uber doubled their rates. So the money should come. They've got an excellent network. Logistic possibilities that probably rival(or complement) Amazon. There is so much they can do. Whether they do it or not, IDK. But when I look at tech stocks right now, Im looking for multibaggers, not 15% on GOOG or whatever. If we're in the 2001-2004 post tech wreck period, I wanna be looking for Pricelines, not Microsofts or Ciscos.

I keep coming back to UBER and being awed by the optionality and potential. Market cap ain’t huge and valuation is ok.

Ya. Common sense is really the largest and most useful input. But not everyone has it. Weirdly, most financial types I’ve run into are all WAYYY too academic or anchored to textbook shit and business school or CFA type nonsense. All I’ve heard since I’ve started my career, 2010 or so, is “you’ve never seen a bear market” and “your generation doesn’t appreciate cycles and risk management”…but whenever shit hits the fan, at least so far the past decade, Im always like “well you have and I haven’t, how come I’m still doing better than you? Lower drawdowns. Quicker recoveries. Using meaningful amounts of margin and never holding cash, and holding concentrated positions! How is it possible?” And really, as you said, it’s about being sensible and knowing what you’re buying in the context of the current macro backdrop. Then applying common sense.

This is always sad. That last drop is the toughest one. Especially when there’s no reliever in the bullpen

It is often helpful to be contrarian but its also just as important to end up on the right side of things. It was consensus from February-October 2020 to "sell everything" because of covid. Yes, now I know everyone bought tons of shit during the height of the hysteria, but in real time, that was hardly the case. It was consensus that housing was a bubble about to get destroyed in 2020, in 2021 it was consensus housing would do well. It did well both years. Now its consensus that rates will kill housing but that isnt happening either. You can have biases and get feelings and they evolve and you just go with it. Last year everyone slept on rates rising and blew off absolutely outrageous real world inflation. Now its a headline and everyone is obsessing about it but it seems pretty obvious we have taken the punches of the worst of it. I dont know what "the market" is pricing in because Ive never bought indexes or "the market". But people claiming we're getting a 30-50% correction because of 3-5% inflation are out to lunch. As long as Ive been a member here, every couple months, people need something to be afraid of. And every time we have a 5% or more market decline, people start making up reasons for it. So IDK. I kinda just like to focus on where there's money to be made and ignore the noise. No one makes much money doing what everyone else is doing. Wasn't it like 12 months ago and even recently where everyone was drooling over Amazon at $3200 when they had Berkshire staring them in the face? Right now I dont see how you can go wrong buying good cash flows or hard assets with a growth profile. Who cares about everything else?

To the bold question, Yes! But why is this over and over a recurring theme? Everything the government starts meddling in, gets fucked up. Then they turn around and tell us that the obvious as day reasons(them!) arent really the issue, but rather its something else, and that something else always happens to be a self aggrandizing or serving position. Biden now blaming Putin for high gas prices even though the barrel was already up 50% year over year, but hey, now to solve this, we need to promote more green energy shit! Or look at the grandstanding at this hearing. Or the "greed at the pump" hearing. Its about creating problems, blaming someone else, and then getting your moment in the sun where you can create sound bytes and Twitter likable quips. I absolutely believe they shut shit down for no reason, look at energy! We rag on China for their "zero covid" stance, but didnt we just have the same sort of shit going on in NY/NJ/CA just presented through the media differently? This time last year I still couldn't freely go into a restaurant in NJ. So overall you have, just in the past few years, bipartisan actions: shut shit down and tell people to stay home, create economic/health/quality of life problems. give out free money, create supply and demand shit storms. hostility toward energy, soaring energy prices. meddle in Ukraine, create a war. campaign on an open border and create a border crisis starting on "move in" date illogical gun laws, lead the developed world in shootings restrict/hostile zoning/building, housing shortage mandate fire people for not getting the flu shot, making shorthanded companies even more shorthanded close largest baby formula factory, now have baby formula shortage Seriously, fuck these people.

Dude I need JPow to kill the economy. Monkfish should not be $15/lb!

I have found though, as the market got crazy for a while, one of the best value bourbons is Angels Envy. $45 and probably better than most bottles double that price.

So shutting one of the largest baby formulas factories in the country had nothing to do with a baby formula shortage following? No one thought to maybe have contingency plans? Or was the contingency plan to just hold hearing and blame the company?

I got put on the order list at the local store recently. They said it only recently became more available, never goes on the shelf, and it takes a week or two to get in upon order. First reservation, first serve. $82. Cautiously optimistic. Prior I’d been getting it for $150 from a local guy who runs a massive chain of stores. Didn’t like paying that, but what are you gonna do? Need something to wash down the Natty Lights. Those are still the bargain of the century at $18.99 a 30 pack. 20 years ago I was buying that same 30 pack for $14.99.

Yea I was the other way around. Always liked smoky type scotches. Glenfiddich Fire and Cane is awesome. Lagavulin. Then kind of just moved over to bourbon.

Nah. It’s like the crime surge in NY. Bail reform? Nah too obvious, so the media, in cahoots with the politicians, creates some “other” excuse. Blatant lies and distractions. I believe gaslighting is the word liberals use. Of course it’s not the obviously stupid stuff we did, it’s actually something else! Bottom line is yea there were issues at the plant, but shutting it down and then, wouldn’t ya know, having a baby formula shortage? Dur da dur. Same thing happen now as happened with energy. They create the problem, and then hold hearings blaming the oil companies for negligence and greed….

I think to a certain degree, some liquor markets can provide a good look through on consumer behavior, supply chain, and generally supply and demand. Q42021/Q1 22 it was virtually impossible to get certain bourbons. Blantons was a ghost and if found, a $200 bottle. Eagle Rare similar. A $35 bottle pre COVID now $80 IF you can find it and happen to be one of the first few in line after the drop off. Lately these are back on the shelves at normal prices, although they still move quick. Even with bourbons that require an aging process, capitalism wins. So hard to see how 2x4s and trucks don’t follow suit.

You happen to live in the real world. Nothing to be ashamed of.

Bump. just thought I’d remind everyone how wild and whacky sentiment gets sometimes, and how it’s not reality.

Which is nonsense and just indicative of the general market looking for excuses to sell. Which is generally what happens when stuff is over owned. I’m kinda getting tempted on some of these, but not really. I think they stabilize and become dead money for a bit.

I don’t really have an opinion on “removing stimulus” or #5 you mention above, because I still don’t have an exact idea on what is being asked to be “removed”…it varies across the board depending on which inflation loonie you talk to. Ackman wants to crank rates so his CDS pay off. Dalio is long old economy stuff and short tech. Etc, etc. Should the Fed be buying asssets right now? Nope. Should we be putting liquidity into the system right now? Nope. Do we need to be aggressively jacking up rates? Nope. I’m not really of the opinion of anything for or against stimulus here, I think the Fed did it’s job and now just needs to sit tight and do little else but gets rates back to where they were pre COVID. You asked me above if they should “unwind the stimulus of the past decade” and my response was “why?”. I am still asking why, and also, define “unwind”. Jack up rates excessively for the purpose of solving an issue that won’t be solved by rates? And above you indicate I am saying do not remove stimulus now. Definite what you are asking to be removed in real terms? We want folks to repay $300 per kid child tax credit? All I’m saying is things are fine and folks have completely fabricated the severity of this inflation issue. All the smart folks last year said it was transitory and they weren’t wrong, they just missed the timeline. But psychology wise now, all those folks that were wrong now bought into the other side and are again off. It’s not “proof” of anything that after crazy demand retailers like Target ordered too much shit at high prices and now are gonna print a few shitty quarters. That’s been an overwhelming wax on wax off theme since COVID started. The other issues like energy, will be solved at the polls. It’s not a Fed solvable issue.

How one reacts to falling prices says a lot about where they are in their life. Fear or optimism? If you have a long horizon or are already in good financial shape it should be optimism and excitement. If you’re on the edge or not totally stable from a financial standpoint, it’s typically fear.

Put another way, there should be a net positive benefit to whatever actions get taken, all the time. Adding stimulus during rough economic times or liquidity during liquidity crunches IMO does that. Removing it when it’s no longer needed and the system is self supported, is rational. Taking an action to tackle an issue that is 90% unrelated to your proposed action, makes no sense. Shrinking the balance sheet “just cuz” IMO is pointless. What’s the net benefit? People continue to just throw out headline grab phrases about “curbing” inflation, but then bring up these proposed Fed actions that don’t create a net positive benefit when tackling it. I mean you could wreck the economy and send everyone’s asset values to hell and yea inflation will be “contained”….but like I said earlier; that only benefits the rich scum bags. I mean would you rather pay 5-10% more for goods and services over the next few years or see your retirement assets and home equity decline by half? Generally, at least in my lifetime following this stuff, the Fed tends to err on the side of caution and prefers a happy medium. If they see too much negative consequence, in addition to knowing that 1) inflation likely already peaked, and 2) what they are doing isn’t productive…they will react accordingly. If your dog has a tick on its head because you went to the woods for a camping trip what do you do? Remove it and realize you aren’t camping anymore so the situation is a one off but maybe there’s lingering effects of potential Lyme disease? Or cut it’s head off to “stomp out” the situation? Bizarrely, the later is metaphorically what a lot of people are thinking needs to be done and proposing the Fed will do.

Lol yea kinda. I guess I’ll elaborate my thought process. You had the GFC which largely destroyed the financial system. Printing and asset purchases were in many aspects intended to rebuild the banks and thus nurse the economy back to health. So stimulus essentially. Goal was to get back to something considered normal. Various points since, we ve had scares and freeze ups like 2h 2011 and like for instance with COVID, the system probably needed an oil injection to keep going and see the other side. We were probably much closer than folks think with the GameStop situation as well. But again, goal was to basically keep the system working. Now? System seems to be running fine. We have supply and demand problems which are government inflicted. There is some stuff the Fed can do but largely there’s not much it has at its disposal to handle this other than potentially things that are far more destructive than elevated living costs for a few years. People keep saying “inflation needs to be tackled”… but again, outside of the cute snippets trying to sound concerned for everyone well being, it’s hard to see that inflation is gonna be worse going forward than it already has been. So the worst is behind us unless you believe we will see hyper inflation. If you do, what evidence is there for that? I don’t see any. So you have a temporary problem in which the economy and consumer has already taken the hardest punch…money and jobs are out there for those that want them….what’s the problem? So I take all that and definitely ain’t in the wabuffo camp in terms of having that mental capacity or understanding to navigate every Fed action and where exactly it goes, but fall back on just wondering why they “need to unwind” anything, what is the hurry, or even if it has any material effects on anything relevant. There’s people who think a 50bps hike dropped the QQQ 30% ytd or whatever, I don’t. There’s people who think speculative excess is the reason for the job openings. I think that is probably partially accurate. But everything with a bow around it, I don’t see one way or the other what “undoing the printing” accomplishes assuming it is done or not undone in any sort of rational way. A healthy economy should be able to replace stimulus in its own right, and if it can’t, why would you take it? Is there some imaginary person you need to return it too lol? Government can basically borrow and print however they see fit.

Look at the headlines today….volume down big! Buried in there? Pricing? Median sales prices of new houses sold in April 2022 was $450.6K, up from $436.7K in March. The average sales price of $570.3K climbed from $523.9K in the prior month.