Have We Hit The Top?

[Parsad]

On 9/21/2023 at 1:57 PM, changegonnacome said:

Forget bonds & equites….get 24ct gold bars this week at Costco…i shit you not just got the notification on my phone and had to look…...takes the treasure hunt aspect of Costco to the next level - $1,979…no idea if that’s good….Costco 14% margin is there for sure…then the Suisse Lady needs to get paid too!!!!

 

 

https://finance.yahoo.com/news/costco-says-1-ounce-gold-224912291.html

 

Cheers!

[whatstheofficerproblem]

How long till OpenAI values itself at more and more money? Raising money at $90B!? Is the reason they're mostly doing private raises because they know that once the company goes public, given the burn on the balance sheet, such lofty valuations would be impossible?

 

I don't know what to say here, this most definitely is the top. But then again, OpenAI is a blackswan.

[Castanza]

https://podcasts.apple.com/us/podcast/odd-lots/id1056200096?i=1000628671006
 

Thought this was an interesting perspective that highlights some of the current mindset people have with markets. Helps me flesh out the difference in sentiment vs metrics. 
 

Is anyone else noticing (maybe just the algos for me) on fintwit the divvy portfolio push? Seeing a lot of people pushing dividend income over longterm share appreciation. It’s like a “rent your income” type of thing… Seems like a byproduct of people’s obsession with the “coming market crash”, economic outlook, housing market, etc. and as a result reaching for income security in the short term. 

[Gregmal]

I just dont know why people keep making claims about "the top"...Last I checked we never regained ATHs. And last I checked, the last couple months tons of stuff is wayyyy off the highs. Is this again just a byproduct of people staring at the index trackers or are they not paying attention to whats really going on?

[Castanza]

20 minutes ago, Gregmal said:

I just dont know why people keep making claims about "the top"...Last I checked we never regained ATHs. And last I checked, the last couple months tons of stuff is wayyyy off the highs. Is this again just a byproduct of people staring at the index trackers or are they not paying attention to whats really going on?

Good exercise is to look at retail stocks…then go look at Wabuffo’s Twitter account. 

[Gregmal]

3 minutes ago, Castanza said:

Good exercise is to look at retail stocks…then go look at Wabuffo’s Twitter account. 

What’s he saying? Haven’t kept up with Twitter since they required an account to view stuff. Always valued wabuffos thoughts. 

[Castanza]

1 minute ago, Gregmal said:

What’s he saying? Haven’t kept up with Twitter since they required an account to view stuff. Always valued wabuffos thoughts. 

Pretty much consumer spending looks good (sales up yoy). Retail inflation coming down (COST CEO). Housing looks better, consumer debt not really that bad etc. 

 

Dont want to speak for you @wabuffo but just highlighting the data you highlight on twitter vs the sentiments we see blasted across the media. 

[Gregmal]

So the media is lying again? Go figure 

[changegonnacome]

8 hours ago, Parsad said:

 

https://finance.yahoo.com/news/costco-says-1-ounce-gold-224912291.html

 

Cheers!

 

Good deal

[changegonnacome]

2 hours ago, Gregmal said:

I just dont know why people keep making claims about "the top"...Last I checked we never regained ATHs. And last I checked, the last couple months tons of stuff is wayyyy off the highs. Is this again just a byproduct of people staring at the index trackers or are they not paying attention to whats really going on?

 

Yep lets take a step back here........SPY has gone absolutely no where for over two years..........we were at this level back in June 2021.......its never regained its interim high of 4800.

 

Lets also be clear......SPY earnings have fallen during this period......in nominal terms by a descent amount......and in real inflation terms by double digits. This has all occured during a period when the economy & consumer has remained surprisingly resilient....which is to say earnings have been falling in a 'good' economy...no bueno...which is just never a good thing and certainly doesn't IMO presage a new bull market (whatever that means)

 

The index itself in recent years has become heavily skewed by large cap tech as everybody knows.......the mini AI bubble of early 23 + admittedly more robust earnings by what I would call the 'monopoly 7' as opposed to the magnificent 7 is a function of (1) the surprisingly good economy that was way more rate resislant that anybody had forecasted & (2) well they are monopolies they have unlimited pricing power that they can flex on the pricing side & they have to a certain extent untapped OpEx flexibility too.....because well.....they're monopolies.

 

Dont have time to go look at the median stock in the S&P and hows it performed......dont need too....it hasnt been great.....and again when everybody talks about SPY being flat for two year.....yeah great....but thats not the truth....cause in those two years you had nice big chunks of inflation lets call cumulatively perhaps 15%.....so SPY looks flat over two years....but you actually lost 15% of your purchaisng power. Not good.....but it doesn't feel as bad as your account saying your down 15%.

 

Like I've talked about for an extended period on here......the sources of funds for folks are being slowly constrained...much slower than I appreciated given rate insensivitiy....long duration stuff had a rally as it appeared through the final fall off of transitory inflation in the data that somehow inflation was done (minus any pain) and that a soft landing was incoming. That game is over now........inflation is rising again on the volatile stuff (energy/food) the issue is that volatility upwards is sitting on a foundation of core made in america monetary inflation that was hiding out the whole time and didnt budge in response to 500bps of rate rises......it didnt budge for the exact reasons I outlined in earlier threads.....it was monetary inflaiton driven by too much money chasing too few goods in a economy that was growing nominal spending way in excess of productivity growth such that inflation couldnt go down on this core number.......it is more correctly called wage-price-producvity inflation.....rising wages dont push up prices if productivity is rising by a commensurate amount..what we've had is nominal wages rising feeding into nominal spending that is rising far excess in of productivity such that we breach 2%.......that sticky underlying monetary inflation at around 3.5% is now the basis from which we will take unexpected and uninvited trips back up to 4 or even 5%+ on the headline number unless we tackle this core monetary....there is no painless way to tackle this core inflation....falling credit creation solves a tiny fraction of the nominal spending problem....but it isnt the main source of funds in the economy.....the main source of funds that become nominal spend is wages.

 

The setup remains the same as 2022 IMO.......value is the way you play this......not growth.......and given stagflation is looking more and more likely given I see Powell + Fed board beginnnig to chicken out already......I think you play this more & more with hard assets & commodities....that old dog Buffett buying oil & monoploies like Apple is spot on......I've come to appreciate JOE as a bit like OXY......oil in the ground & land in the panhandle will always command a steady percentage of the endeavours of others......the same way an hour with the best doctor in town will always be exchanged for whatever the nominal sum is that would secure about 8hrs of lowly unskilled labor.....that barter relationship remains constant....its just the quoted nominal price of the currency that intermediates that exchange changes over time.  

[Gregmal]

16 minutes ago, changegonnacome said:

The setup remains the same as 2022 IMO.......value is the way you play this......not growth......

Yea it’s a great market. It really just seems like no one has a clue what they’re doing. You have growth and trillion dollar size being bid like a Barry Honig stock promotion, people still paying single digit cap for junk like Realty Income, and cash, which is the ultimate depreciating asset, being called king. I have started doing a bit more on the negative/neutral side. Oil and water can’t mix. 

Edited September 28, 2023 by Gregmal

[UK]

https://www.bloomberg.com/news/articles/2023-09-29/fink-sees-large-opportunities-for-deals-to-transform-blackrock?srnd=premium-europe&leadSource=uverify wall

 

Speaking at the Berlin event, he said he expects 10-year borrowing costs to stay at 5% or higher for some time because of embedded inflation. He added that investors are underestimating how the changes in geopolitics are structurally inflationary. Fink said he has been telling every business and political leader he meets that they need to help create more “certainty” and “hope,” whose absence creates recession. Some economies are likely to enter recession early, he added, without elaborating. The US economy may be entering a recession by 2025, he said. “Whatever recessions we’re going to have are going to be modest, so I’m not that fearful,” he said.

 

Edited September 29, 2023 by UK

[sleepydragon]

I think what investors are getting wrong is most are expecting a recession, in particular a mild one, which will lead to lower interest rate, thus market hasn’t tanked yet.

 

what if we don’t have a recession, just a very slow growth economy,  and we keep have inflation and Feds have to keep raise interest rate? In that case, what will happen to the stock market? I think it will tank but who knows…

[Dinar]

53 minutes ago, sleepydragon said:

I think what investors are getting wrong is most are expecting a recession, in particular a mild one, which will lead to lower interest rate, thus market hasn’t tanked yet.

 

what if we don’t have a recession, just a very slow growth economy,  and we keep have inflation and Feds have to keep raise interest rate? In that case, what will happen to the stock market? I think it will tank but who knows…

Yes, people know the drivers of inflation - deglobalization, increased government spending in the US, rising oil price, aging population, more aggressive labor unions and workers, green new deal.

What about drivers of deflation in the US?   Reduced demand for goods and services in the US driven by student loan repayments - $70bn per year as well as higher interest rates (car payments are going up, so are new mortgages), perhaps flat government spending in the US in nominal terms if Republicans can hold the line on spending.  Automation.  Perhaps if the pendulum starts swinging the other way and soft on crime policies reverse, then losses & inflation due to theft will go down, and people might actually need to get a job rather than steal with no consequences?

Rising debt burden - inflationary or deflationary?

Inflation is almost always with us due to loose fiscal and monetary policy (look at Switzerland to see how to avoid inflation).  I think raising rates here is a huge mistake, the full impacts have not worked through the economy yet.  Between  increase in rates & Fed shrinking portfolio, tightening has been faster than due Paul Volcker era if I am not mistaken.  

[Gregmal]

Yea what’s concerning me here is that we have no more real rate sensitive inflation at all. It’s housing and energy and even with those two being robust we re at like 3 and that’s gonna stay around those levels or go lower. What’s really changed though is NOW all these suited bozos are admitting most of the inflation was supply chain based! Which in other words, meant for that stuff to resolve, they didn’t even need to hike in the first place, at all! So not only were they hiking for something they didn’t need to be hiking for, but now they’re staring down an arbitrary number of 2%, yes totally made up and not based on anything, and like Kaskari or whomever that bald dope was making the rounds earlier in the week, they are now blatantly threatening that if the economy stays strong they are going to try to stop it. So as I suspected awhile ago, much of this has nothing to do with inflation, certainly not much to do with actual Fed controlled inflation, and seems to be something much more agenda driven.
 

Imagine you have government officials openly rooting against the economy and telling us if we get raises or if millions don’t lose their jobs they’re gonna keep trying to hurt us? And where is the sleeping, slipping, stumbling President? No where to be seen.

Edited September 29, 2023 by Gregmal

[Jaygo]

20 minutes ago, Gregmal said:

So not only were they hiking for something they didn’t need to be hiking for, but now they’re staring down an arbitrary number of 2%, yes totally made up and not based on anything, and like Kaskari or whomever that bald dope was making the rounds earlier in the week, they are now blatantly threatening that if the economy stays strong they are going to try to stop it. So as I suspected awhile ago, much of this has nothing to do with inflation, certainly not much to do with actual Fed controlled inflation, and seems to be something much more agenda driven.

 

Dont forget the great depression was caused by government interventions.

 

Interest rates were raised quickly to stem a stock market driven inflationary boom. That boom was drawing money from around the globe making it more difficult for Germany and a lot of emerging markets to continue to fund their economies, as rates rose those economies basically froze up. At the same time as the stock market crash happened a different level of government was enacting deglobalizing trade barriers called the smoot hawley act that started as tariffs on agg  to protect farmers but other countries got pissed and enacted more trade barriers as a tit for tat retaliation. 

 

Each seemingly good idea cascaded into a worse unintended consequence. A classic big government issue.

 

Dont ever underestimate the damage these dummies can have on the common man. At least it isn't another war. 

 

 

[Gregmal]

Yea I think the million dollar question is whether this is an insider job meant to basic reset everything for 95% of people and implement a new agenda..such as all this ESG nonsense, or if its just their excuse to escape post GFC world monetary policy and just get back to kinda what everyone of that age believes normal is, IE 5% rates on savings and whatnot.

 

The only thing that is clear, is that when people are acting, and their actions and words make zero sense, they are lying to you. And these guys have been lying to us for a while now. I mean it makes no sense to be saying inflation is entrenched and hike to hell on that premise and then after 70% of it disappears go "oh it was just supply chain driven". It doesnt make any sense to complain about shelter and housing being elevated when YOU are the single biggest contributor to that. So in a way its gonna be the ultimate exercise in deductive reasoning and dot connecting and from there you just gotta figure out how to express it in a way that makes money. 

[no_free_lunch]

50 minutes ago, Gregmal said:

Yea what’s concerning me here is that we have no more real rate sensitive inflation at all. It’s housing and energy and even with those two being robust we re at like 3 and that’s gonna stay around those levels or go lower. What’s really changed though is NOW all these suited bozos are admitting most of the inflation was supply chain based! Which in other words, meant for that stuff to resolve, they didn’t even need to hike in the first place, at all! So not only were they hiking for something they didn’t need to be hiking for, but now they’re staring down an arbitrary number of 2%, yes totally made up and not based on anything, and like Kaskari or whomever that bald dope was making the rounds earlier in the week, they are now blatantly threatening that if the economy stays strong they are going to try to stop it. So as I suspected awhile ago, much of this has nothing to do with inflation, certainly not much to do with actual Fed controlled inflation, and seems to be something much more agenda driven.
 

Imagine you have government officials openly rooting against the economy and telling us if we get raises or if millions don’t lose their jobs they’re gonna keep trying to hurt us? And where is the sleeping, slipping, stumbling President? No where to be seen.

I've said it before, we need to trim the fed way, way back.  You probably need to get rid of it and replace it with something because the corruption will just grow back otherwise.  There is never an audit of their success rates, and it's hard to do.  We just take it on theory that they are better than the alternative.  Yet we claim to be capitalists and otherwise trust the free market.  It's really bizarre.

 

I say establish some sort of fund, pay into it each year a little bit and pay it out when we hit a recession.  Something simple like that but clearly we need a reset.

[TwoCitiesCapital]

34 minutes ago, no_free_lunch said:

I've said it before, we need to trim the fed way, way back.  You probably need to get rid of it and replace it with something because the corruption will just grow back otherwise.  There is never an audit of their success rates, and it's hard to do.  We just take it on theory that they are better than the alternative.  Yet we claim to be capitalists and otherwise trust the free market.  It's really bizarre.

 

I say establish some sort of fund, pay into it each year a little bit and pay it out when we hit a recession.  Something simple like that but clearly we need a reset.

 

They should go back to what they were established for - a lender of last resort that prevents cascading bank failures. 

 

Giving them dual mandates of money supply and unemployment was a foolish endeavor. As if a handful of people can properly manage an economy of 350 million....

Edited September 29, 2023 by TwoCitiesCapital

[dealraker]

Heck, since I'm less in the moment than Wall Street I tune in intermittently.  For years now things seem quicker and more absolute as to what is profiled as "happening" in the economy.  So one day I tune in and a sector is hot, business media has the hot sector believers and CEO's on chanting it up.  I sort of think about stuff that I own and say to myself one of but not both of the following, "Hell...I'm smart as hell to believe and hold this sector," or, "Hell-chit-fire, I'm left out completely, I'm an idiot."

 

But I don't have time nor interest in going further with thoughts or action and off I go to my real life.  A few days later I come back and the stuff that I felt a hero holding has collapsed and the stuff I felt left out of because it had soared is now garbage...and business media has another bunch on chanting it all up.  Joe K is almost letting someone he interviews get in a word or two, but then.....yet another interview that isn't and Joe's bias gets even more airtime.

 

Then there Ray D. China's photo on the CNBC site, he's left China for a while to freak us out about the debt crisis.  Perfect move...if you've blown up countless times on the China-to-dominate obsession...to sling others off the topic of your utter wrongness.

 

You guys are young.  How do you keep up with it all.  Hell, I guess I once did.  Just don't remember those years too much now.  I'm over there with Greg's "Sleepy Joe" or whatnot.   

 

Can't wait, you know that "treasuries mode" we all hear is the safe thingy...to when the next pres slings out them default words while of course all over the business world the experts (read Brookfield) are doing just that.  The dance of "walk away" is the NEW NEW THING I think...

 

...at least for me for the next 5 minutes, given I wanna be just like Ray D China, now Ray D Default, and the financial media.  I'll be on something new in a day or two.  

[Santayana]

2 hours ago, Gregmal said:

It doesnt make any sense to complain about shelter and housing being elevated when YOU are the single biggest contributor to that.

The problem with that argument is that it ignores the extreme housing inflation we've had for the past 10 years while rates have been extremely low almost that entire time. 

[james22]

22 hours ago, changegonnacome said:

The setup remains the same as 2022 IMO.......value is the way you play this......not growth.......

 

The market was significantly down by the beginning of 4Q 2022, it's up now.

 

I expect a catch-up trade in Tech as or more likely as anything else.

[Gregmal]

3 minutes ago, Santayana said:

The problem with that argument is that it ignores the extreme housing inflation we've had for the past 10 years while rates have been extremely low almost that entire time. 

It ignores it because it doesnt exist. There was no meaningful inflation in housing over the decade covering 2010-2020 and surprise, surprise, only started showing up when the government got involved. Then, right when every two bit builder is about to blow us into oblivion with new supply, they interfere again and trap everyone via the high rates that are "said" to be the answer LOL. If it sounds too farfetched to be true, thats because it is, and what theyre after isnt what theyre telling us theyre after. 

[Gregmal]

13 minutes ago, dealraker said:

Heck, since I'm less in the moment than Wall Street I tune in intermittently.  For years now things seem quicker and more absolute as to what is profiled as "happening" in the economy.  So one day I tune in and a sector is hot, business media has the hot sector believers and CEO's on chanting it up.  I sort of think about stuff that I own and say to myself one of but not both of the following, "Hell...I'm smart as hell to believe and hold this sector," or, "Hell-chit-fire, I'm left out completely, I'm an idiot."

 

But I don't have time nor interest in going further with thoughts or action and off I go to my real life.  A few days later I come back and the stuff that I felt a hero holding has collapsed and the stuff I felt left out of because it had soared is now garbage...and business media has another bunch on chanting it all up.  Joe K is almost letting someone he interviews get in a word or two, but then.....yet another interview that isn't and Joe's bias gets even more airtime.

 

Then there Ray D. China's photo on the CNBC site, he's left China for a while to freak us out about the debt crisis.  Perfect move...if you've blown up countless times on the China-to-dominate obsession...to sling others off the topic of your utter wrongness.

 

You guys are young.  How do you keep up with it all.  Hell, I guess I once did.  Just don't remember those years too much now.  I'm over there with Greg's "Sleepy Joe" or whatnot.   

 

Can't wait, you know that "treasuries mode" we all hear is the safe thingy...to when the next pres slings out them default words while of course all over the business world the experts (read Brookfield) are doing just that.  The dance of "walk away" is the NEW NEW THING I think...

 

...at least for me for the next 5 minutes, given I wanna be just like Ray D China, now Ray D Default, and the financial media.  I'll be on something new in a day or two.  

All these scoundrels leech off each other. Yesterday a prime example. So we get the CNBC crew, holding their annual weasels in suits conference...making a big deal of it. Headliner? That guy with a financial position banking on higher rates. He introduces this position by touting it on Twitter where everyone gets whipped into a frenzy and bids the market towards his desired finish line. He then gets billed "headliner" with all his snippets retweeted and highlighted all over the media. Again, he's pushing this position that the media helps come to fruition. In return the media gets your eyeballs, which they benefit from. When his position is revealed to have made "lots of money", then they get to do it all again, this time adding in the featured presenter was "the guy who called xyz"...making it even more market moving and cant miss. You ask yourself what really changed in the month or two since "headliner" revealed his rate rise wager? The answer, fundamentally? Absolutely nothing!!! LOL Meanwhile where are the enforcement agencies? Oh theyre trying to convince us MaraLago is worth $18M and that its time to go get your covid booster again.....

[Gregmal]

Then the other really big news event, is how we should celebrate that some lady hogged a senate seat, not only well past her years of usefulness, but literally until death!