The stock market

[Brock Beauchamp]

Scottrade here. It's fine. I've used E-Trade in the past and it was also fine.

[Mike Sixel]

Golly tech stocks do not like this election......but my employer does so far!

[Brock Beauchamp]

 

Golly tech stocks do not like this election

Nope. I'm getting skewered in the market.

[gunnarthor]

 

Nope. I'm getting skewered in the market.

WFC (and other banks) had a pretty nice week until today.  Probably not a bad idea to throw some money into banks and oil for a bit.  

[Willihammer]

Yeah the market is anticipating a pickup of inflation under Trump.

Oil I would stay away from.

[Mike Sixel]

Pharma and banks should do well....probably.

 

I wonder what other industries might be privatized? Or do well in deficit situations (still my assumption)?

[Brock Beauchamp]

I was thinking of jumping deeper into Amazon yesterday - the stock was down 25%, I think - but decided I don't have enough financial flexibility to really do that right now.

 

Damned kitchen remodel. Meh.

[Mike Sixel]

Heh, I just sold some stuff in my retirement accounts (I manage them) and bought Goog, FB, and Amzn. 

 

I still, somehow, believe in the future of tech....

 

I did not go TSLA, as they are way too dependent on their leader, imo.

[Willihammer]

 

Heh, I just sold some stuff in my retirement accounts (I manage them) and bought Goog, FB, and Amzn. 

 

I still, somehow, believe in the future of tech....

 

I did not go TSLA, as they are way too dependent on their leader, imo.

Musk has about 900 different ventures going on and I do worry about how much time he is or isn't devoting to TSLA. But I have 100% confidence in him, the man has vision and aims incredibly high. He is Steve Jobs 2.0 IMO.

 

TSLA is down and GM is up. The market likes gas prices to stay low, due to a strong dollar and pro-shale policies keeping the supply glut up. That will be good for GM's SUVs. TSLA is taking a hit, good time to get in. Gas prices are a secondary concern for its target market.

[Mike Sixel]

 

Musk has about 900 different ventures going on and I do worry about how much time he is or isn't devoting to TSLA. But I have 100% confidence in him, the man has vision and aims incredibly high. He is Steve Jobs 2.0 IMO.

 

TSLA is down and GM is up. The market likes gas prices to stay low, due to a strong dollar and pro-shale policies keeping the supply glut up. That will be good for GM's SUVs. TSLA is taking a hit, good time to get in. Gas prices are a secondary concern for its target market.

 

I own some TSLA, I just worry Musk IS TSLA, and I'm in for the long run on these investments....

 

And, I have thought about getting in further, just haven't.

 

I own GM (just sold all my Ford today)....

[Craig Arko]

The proposed reduction in H-1B visas by The President-elect is going to drive high-tech either way down, or overseas, or both.

[gunnarthor]

Another note of worry on TSLA is that they were (arguably) somewhat dependent on tax credits and rebates for solar power that a Trump presidency might not continue.  

[Mike Sixel]

 

Another note of worry on TSLA is that they were (arguably) somewhat dependent on tax credits and rebates for solar power that a Trump presidency might not continue.  

 

True, but if they can keep up with the demand for cars, and build great batteries, that is a nit...

Edited November 15, 2016 by Mike Sixel

[glunn]

I am going through every item in my portfolio and selling/trimming with the expectation of a potential recession. 

[Willihammer]

 

I am going through every item in my portfolio and selling/trimming with the expectation of a potential recession. 

Why do you think there will be a recession?

Edited November 16, 2016 by Willihammer

[Mike Sixel]

 

I am going through every item in my portfolio and selling/trimming with the expectation of a potential recession. 

 

You might want to wait a bit......

 

But, I do agree.

 

1. We are overdue

2. We are overdue for market correction

3. Massive tax cuts, no real spending cuts=massive deficits

4. Rising interest rates

5. Fear

[gunnarthor]

 

Why do you think there will be a recession?

Mike hit on the smart points but does the economy really feel that secure to anyone?  These last few years, I've been very surprised by how well the stock market has been doing vs. how I feel the economy should be doing.  I think the economy should take a hit.*

 

* Again, I'm just some idiot on the internet.  

[Willihammer]

I'd still like to hear what Glunn has to say but regarding the above:

 

GDP grew 2.9% last quarter, the highest of Obama's administration.

Inflation is still really low.

Running deficits in a near ZIRP environment is not a huge deal, and it can be an economic stimulus.

"We're overdue" I disagree. If anything we're overdue for >3% growth which has been the historical norm.

[Willihammer]

If Trump's policies do cause a spike in inflation, which the market is pricing in somewhat  as bond yields are creeping up, then investors will flood out of the market into safer asset. But as far as entering a recession I see no sign of that.

[Brock Beauchamp]

I don't know whether we'll see a legit recession but I know someone who works in purchasing at a major retailer and their sales slumped almost to the minute with election results. The company is worried that it could extend through the holiday season and a soft holiday could really damage retailers, many of which are already on shaky ground.

[Mike Sixel]

 

I'd still like to hear what Glunn has to say but regarding the above:

 

GDP grew 2.9% last quarter, the highest of Obama's administration.

Inflation is still really low.

Running deficits in a near ZIRP environment is not a huge deal, and it can be an economic stimulus.

"We're overdue" I disagree. If anything we're overdue for >3% growth which has been the historical norm.

 

We are WAAAAAAAAAAY overdue for a market correction....not sure about a recession per se.

[Willihammer]

 

We are WAAAAAAAAAAY overdue for a market correction.....

Based on?

[Mike Sixel]

 

Based on?

 

over 100 years of history.

[Willihammer]

In the short term the #1 thing I would keep an eye on is inflation. We are going to get a rate hike at the Dec meeting of 1/4 percent - that's already been priced in. If the Fed were to raise rates 1/2% or higher it would shake the markets a bit, but the Fed would only do that because of higher than expected inflation. But reports such as this one suggest inflationary pressure is still low.

[Willihammer]

 

 

over 100 years of history.

How many times in the last 100 years have we had an extended run of zero or near-zero interest rates?

[DaveW]

Nvidia keeps going up up up up

 

Still time to hop on this train!

[glunn]

 

You might want to wait a bit......

 

But, I do agree.

 

1. We are overdue

2. We are overdue for market correction

3. Massive tax cuts, no real spending cuts=massive deficits

4. Rising interest rates

5. Fear

These are the reasons that I am apprehensive about a recession, especially the fact that it seems overdue. I would add that the fundamentals seem weak to me and there is huge political uncertainty in the United States and Europe.

[Willihammer]

 

These are the reasons that I am apprehensive about a recession, especially the fact that it seems overdue. I would add that the fundamentals seem weak to me and there is huge political uncertainty in the United States and Europe.

You gotta do what you gotta do but I'd be curious to know what exactly in the fundamentals has you worried.

[glunn]

 

You gotta do what you gotta do but I'd be curious to know what exactly in the fundamentals has you worried.

The price to earnings ratio of the S&P.

 

http://www.multpl.com/

 

https://www.advisorperspectives.com/dshort/updates/2016/11/01/is-the-stock-market-cheap

[Willihammer]

 

The price to earnings ratio of the S&P.

 

http://www.multpl.com/

 

https://www.advisorperspectives.com/dshort/updates/2016/11/01/is-the-stock-market-cheap

Ah. Yeah it is high but (I know I sound like a broken record) with interest rates historically low, we should expect that to be the case.

 

This article does a good job describing the correlation between P/E and interest rates:

https://finance.yahoo.com/news/much-interest-rates-affect-markets-222845806.html

 

This is the tl;dr:

 

s the market overvalued based on an absolute historical basis? Absolutely. Is the market overvalued given current ultra-low interest rates? No. It is trading around fair value, and possibly a bit lower.

 

Edited November 18, 2016 by Willihammer