Gregmal

Why is it, that even after a decent sized decline, the ONLY reason that its believed the market can stabilize or go up are these things like "hopium", "optimists", and "dreams about rate cuts"? Couldn't the market have simply reset, and thats what it is now? Is there just a quintessential underpinning belief that the market should always be going down? Its a weird phenomena Ive seen with lots of assets. "Bitcoin keeps ripping"...eh it went from $65k to $16k and now is at $19k...ripping? Not what I'd describe that as. "Meme stocks are back"...oh we mean overvalued stocks that have cratered and been shorted by every two bit hedge fund out there now have some short covering? BBBY $40 to $1, but rally to $4 and "we're back to euphoria? Its just a weird portrayal of things.

It’s all so simple and obvious. Shit even do the math on the average monthly wage of a typical stimulus recipient. Then weigh that versus the average monthly stimulus check. Then shut down some supply chains. It’s a total no duh. Oh rents went up 40% over two years? Oh! Really? Weird coincidence! Same with monthly car payments! Double weird. All this other random shit that wasn’t there prior to stimulus didn’t just magically show up. To move forward on the inflation/rate hike thesis, you need to believe it did. Not that run of the mill single digit pay raises that white collar folks aren’t even seeing will cause the 1970s. There’s some asshole on Twitter lecturing about the Taylor rule. Like that’s the nonsense you need to start incorporating into all of this to keep it going. My guess is the Fed eventually gets the message that the real world is fine and once they have a few more months(basically by April or so) on plummeting inflation it’s over. Which is why the markets are easing up a bit.

Totally agree. Things are back to a state of normal. Time to shut up and back off and stop listening to people who have literally just made shit up now since the day the word “inflation” became a free pass to start pushing the doomsday porn. I mean seriously, in 2023 we re gonna have these folks talking about how further hikes are needed to solve the orange juice shortage. It’s such a blatant crock of shit.

I mean there’s not just two options. Option 3 and what’s most appropriate is simple. Back the fuck off. No hikes, no cuts. It’s one thing to deliberately take action to prevent bad things from happening, IE cutting in March 2020, it’s another to just whimsically cause harm cuz some hedge fund guys sent a paid consultant a book report with a made up story about how it’s gonna be 1970 all over again.

Almost all of the inflation is attributed to stimulus checks going out for almost two years. As those are wearing off, there is a direct correlation to inflation declining. What’s left? End of the day will be little more than what was existing pre COVID. College costs insane, medical stuff a problem. But otherwise, if we weren’t sending missiles at normal people’s livelihoods in 2019, we shouldn’t be now, and the reason we are, is because folks are completely fabricating the idea that there is some new inflation that’s unrelated to stimulus present, that wasn’t, in say 2018 or 19. Even above, in scenario two, you say “historically….” Except in this scenario historically is basically a cherry picked point in time, and void of a real application to todays situation.

Ain’t this the problem. You have these elitist academics wantonly fucking around with the lives of about 1 million people, on little but speculative theory, and not losing a wink of sleep.

The thing thats still weirdly trendy and lingering in the market and perhaps with the Fed is largely things that are entirely made up. For instance, if inflation isnt tempered, it will "flare up" again. Except...proof? This is purely speculation with zero proof or evidence. If wages go up, inflation will go up...proof? If we dont kill jobs, inflation will persist...proof? To continue this path, there needs to continue to be deliberate destructive activity from the Fed, with the basis for it, simply being an imagination and a theory rather anything where theres evidence.

Man Im disappointed. Was hoping for a big selloff so some jerk off could tell us how significant some .1 or .2 figure was.

So they deliberately push a recession? Big whoop. We ve had plenty before and will have plenty in the future. I’m still not even sure they’d have the gall to do such a thing to normal people, but that’s the system. Anyone notice that most of the layoffs aren’t companies effected by anything the Fed is doing but simply companies that completely misread the COVID disruptions and hired wayyyy too many people or got too aggressive expanding? Like clockwork, that gets unwound. Same as the inflation. The Fed isn’t/wasn’t needed in any of this. You’ve got at most 2-3 more CPI reads where folks can play games but then every last datapoint has rolled and it’s totally done and we probably go negative in the summer. Meanwhile grown men cower with fear of what the computer boys will do to the index in the short term. The same folks who call the Fed incompetent claim that all we need to do is follow the Fed but nevertheless always seem positioned the same way. Why would we follow incompetents? Are the “smart guys” really this simple or is it just a scheme? Egg on destruction while profiting from it with the intention of picking up the pieces to profit from that too? The most telling aspect is for instance folks like that shitbreak from Morgan Stanley. Big bad crash coming but year end target of 3900….in other words, transact, transact, transact! Even though you don’t need to. Because you too, can be a macro market wizard! Including tomorrow, it’s February and then March are the last CPI where folks can try to dishonestly scream about meaningless “unacceptability” of face value inflation reads. You’ve got two Fed meetings. All these things should they result in scare tactic sell offs seem like gifts to an investor. Inflation is done and we either have a still robust economy, or one of the most orchestrated and manipulated run of the mill recessions, ever. THATs! What all the fuss the last 12 months has been about? Seems pretty dumb now that we re nearing the end of the story.

Didnt they just have a shot at getting in a new gov? And they voted for the woman who prioritizes banning foie gras and gas stoves.....I just cant believe this is whats happening to such an important part of the country. At least Weisselberg is at Rikers though...keeping him off the streets is a sure sign we have law and order once again.

About the only thing going for NYC is hospitality/dining. Now they wanna ban gas stoves lol. These losers deserve to fail.

So pay bumps in January will result in the purchase of more medical services and textbooks/college courses? Childcare doesnt happen overnight. In fact, I'd say the hysteria of the past 12-18 months largely emerged because all the housing and below line items went bananas. Not the top red.

The flaw IMO, as we ve talked about is that essentially all of this hinges on the idea that wage growth = supply and demand imbalances, which just isnt really all that obvious or true to me. Targets got a lotta stuff still, so does Macys, so does Walmart....if one gets a raise and feels inclined to splurge. So what? It aint moving the inflation metrics. They've got tons of goods for ya. The reason so much of the cyclically driven inflation bursts occurred is because the covid cycle effectively shut down certain segments of the world, country, supply chain, etc. So you had a lot of artificial shortages that were because more couldn't be produced in a real sense, its just that the pipelines were jammed up. This phenomena one by one hit pretty much everything in waves. To make this worse, all the demand, because of stupid government, was often harnessed and directed right at these areas of congestion. Remember masks and toilet paper? That was the first one. Why? Total nonsense. Then the scattered reopenings. Everyone gets stimulus checks and pointed at cars/houses(anything you can lease/rent with an elevated monthly payment) and restaurants and told to go get em. Theres no way people getting pay raises, which we are told are needed just to maintain the status quo, then go out and go ballistic on the entire spectrum of goods and services enough to cause a widespread inflation spike. Maybe if it was a specific area, say WS guys and Ferraris....youd see the imbalance, but widespread like we just saw during covid? No chance. I mean my buddy is looking to do a fishing trip with me in FL in a few weeks. Looked up flights...from EWR to FLL round trip is like $125....These were double/triple a year or two ago. The game is over. I think the best angle if you still had a boner on the inflation thesis and a desire to stalk it would be energy prices. Thats where it'll come from, if anything, on the back half of the year, IMO. But even there, no one has answered for me why we didnt have an inflation crisis earlier in the decade when oil was in the $100s several times. So we could theoretically even get high energy prices that dont translate to higher inflation.

Guys I might have found a 6 cap all the experts predicted! A 1960 built collection of 1 bed 1 baths in Delaware County PA! first they said “rate hikes will move cap rates 1:1” then “it’s a lagging effect, just wait” then the goal posts moved to “cap rates are off 50 bps after 300 bps on FF, I knew it!” what a hilarious serious of events this all was As always the winners are the owners of good assets, not the pindickers trying to cause short term panic

I dont think it really matters without properly observing the context of it all. Ive seen companies pay out dividends that arent close to covered, for far longer than you'd expect. Vector Group was probably one of the best examples. Alexanders too. Ive seen companies refuse to do anything...Berkshire. Ive seen companies that do it once in a while...National Beverage. Same with buybacks. The only thing I think is absolute is that if you find a company that has a long track record of truly being committed to returning capital, it almost always turns out well. Whether its the old school dividend aristocrat stocks, or stuff like AZO, DDS, NVR.

I think the argument is that you should sell, short, stay in cash til the “index” hits 3000 or whatever widely used mathematical fair value it arrives at, then, cover and go long, and then sell at the next mathematically derived fair value. Of course this involves getting a lot of hard to predict values and inputs consistently correct; something nobody I’m aware of has been successfully able to do…nevertheless, almost everyone thinks they can. In the meantime I’ve just been catching Pokémon and saving Princess Peach on the Nintendo Switch with my kids this week. Might miss the fluctuations. But I’ll live.

Yes, but then also completely ignoring that much of the market already went down 30-50%, pushing the idea that the "overall" index multiples should be in the teens at the trough when historically theyre significantly higher, and that everything flatlines and doesnt recover for a really long time. Last year was a nice and well orchestrated scheme, but the data will no longer allow it to continue. The only way things get much worse than whats priced in now occurs if the Fed just goes completely rogue and despite a total lack of real inflation basically just says we're going to wreck peoples lives and take down the economy just cuz....a path that IMO just isnt worth betting on. You can see it clearly with a lot of the bear rhetoric. They got their rate hikes but the economy held up as inflation collapses so now they need to throw fits and root for an economic collapse. In fact for many, they push the economic collapse as a necessary thing LOL. Greed meets gaslighting I guess. All along it made sense to attribute the inflation duration to the length of the monthly stimulus payments, give or take a few months. Thats totally playing out. Its not about 2014s money printing thesis or ill conceived notions about QE...its plain and simple that covid distorted pretty much everything, and good ole time and return to normalcy would solve it.

One of the rules of life is to never be the first guy to get to the party or the last guy to leave. At this point the inflation bear thesis keg is running on empty and it’s never really advisable to overstay your welcome because there might be a stale 6 pack in the basement somewhere.

Yea idk but I’d say it’s probably a pretty big stretch to say that the majority of the market isn’t expecting and fully comfortable with rates 50-75 bps in either direction of here. If the bear case is another 100 bps is needed to temporarily get a 10-15% index drawdown and payoff that’s not really a wager worth making imo, especially since new leadership has already very clearly emerged.

I don’t know. But I do know stuff throughout history often rhymes. And the rhyme repetitious and redundant throughout almost all great compounding businesses is universally this fear of competition/displacement. Once you are this big, it’s pretty damn hard to be displaced.

Lol yea whenever it is.

Right like tomorrows CPI. Imagine it’s bad. Imagine how any people will feel compelled to increase their conviction because they “knew” the market was going down(a 50/50 thing day to day)…but don’t dare ask them what the CPI print was in December of 2014 or it’s relevance to Apples share price since then.

Yup. Markets are dynamic. They are constantly evolving. One of my favorite aphorisms is something along the lines of “it’s always true until it’s never true”. You just can’t short this market is true, until it’s not. Stuff like that. To successfully trade you need to be plugged in, obsessively, 24/7. Everyone thinks they can do it because short term, right or wrong, something either goes up or down and your odds of being right short term are close enough that you can confuse your strategy, most likely a strategy that’s neither unique or long term viable, as having merit. Same way my friend did when gambling in his 20s cuz he won a lot until he didnt. Same things the Reddits did with GameStop cuz they knew it was going up due to its bright fixture! Same thing the so called smart money did last year with many individual companies. I was bearish and the stock went down therefor I knew it! However to be a successful investor, as dealraker notes, you don’t really have to do all that much besides using some common sense and discipline.

Its like all these people talking about analyst estimates for the index....I wouldnt even know where to start with such nonsense. Or gander why I should give a shit. I would nearly guarantee I outperform most if not all of those analysts who make the forecasts though. But I guess we should care because the computers will rule the day to day.

I think that kind of stuff is contrary to a productive exercise in which one derives their own expectations. If the stock goes down on figures you are pleased with then that seems like a pretty good opportunity to invest.