Armed Polite Society
Main Forums => The Roundtable => Topic started by: Ben on March 20, 2020, 12:07:59 PM
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I heard some interesting talk on the Fox Business this morning regarding economic trends that could create investment opportunities.
In general, this scare is apparently causing the US to look at bringing a bunch of manufacturing back here, or at least out of China.
Specifically, there is an action in Congress to push (don't know if it's stick or carrot) for drug and drug precursor manufacturing to move back to the US. It seems like this will be bound to happen. If not all, at least some critical mass. I have no idea what chemicals make up drug precursors and if we have any abundance of them, but it seems like identifying and investing in the drug components could, maybe, be profitable. At least for the semi-short term. We all know how "memory" works, and when this is all forgotten in five years, people may be looking to China again for cheap stuff.
They were talking about battery components and manufacturing coming back this way too. Maybe that will make my Cobalt stock finally go back up again. :laugh:
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"Specifically, there is an action in Congress to push (don't know if it's stick or carrot) for drug and drug precursor manufacturing to move back to the US."
After what the Chinese said a week or two ago, that they just might cut us off from critical medications during this crisis, we'd be *expletive deleted*ing insane not to bring back medical manufacturing.
Something like 96% of all of our antibiotics from from China.
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Something like 96% of all of our antibiotics from from China.
I've seen the number vary from the 70% to 90+% ranges, but either way, we should have no more than 50% foreign reliance for critical *expletive deleted*it like that. 90% or more is, as you say, insane.
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Think about it. What created the severe nationalism in the US between the world wars?
A pandemic and a depression.
It won't be hard to sell to a populace that American investment in homegrown businesses and manufacturing isn't a bad thing in this global age.
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I heard an interesting conversation on the teevee this morning about the government helping businesses. The main points were the usual liberal talking point about just bailing out and tossing money at big businesses and the conservative talking point about loaning money instead so the taxpayers get most or some of their money back.
An interesting third point was the government buying stock in publicly traded companies. I didn't catch what the legalities of that would be, but the thought was interesting. Instead of bailing out American Airlines, the gov buys a million shares of their stock, and five years from now, when it has doubled, you sell it and put the profit back in the gov kitty - something targeted like debt reduction or emergency response.
Again, I'm not sure of what the legalities would be, or potential "separation of business and state" issues, but as long as there were guidelines preventing the gov from becoming a majority stockholder or otherwise interfering with said business, it's an interesting thought experiment alternative to just throwing taxpayer money at stuff with no hope of return.
Edit: Oh, another use for the profits I just thought of would be reimbursing the gov coffers for stuff like these $1200 checks we're all going to get. At least I won't feel as bad when I use that dough to buy guns the day after the check arrives if I know it's all a prepayment for stock profits. :laugh:
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I posted to the wrong thread about this yesterday, but check out thermo fisher scientific (TMO)- a good stick in good times, and hasn’t fallen off too much, plus we are making test kits for the foreseeable future
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I heard an interesting conversation on the teevee this morning about the government helping businesses. The main points were the usual liberal talking point about just bailing out and tossing money at big businesses and the conservative talking point about loaning money instead so the taxpayers get most or some of their money back.
An interesting third point was the government buying stock in publicly traded companies. I didn't catch what the legalities of that would be, but the thought was interesting. Instead of bailing out American Airlines, the gov buys a million shares of their stock, and five years from now, when it has doubled, you sell it and put the profit back in the gov kitty - something targeted like debt reduction or emergency response.
Again, I'm not sure of what the legalities would be, or potential "separation of business and state" issues, but as long as there were guidelines preventing the gov from becoming a majority stockholder or otherwise interfering with said business, it's an interesting thought experiment alternative to just throwing taxpayer money at stuff with no hope of return.
Edit: Oh, another use for the profits I just thought of would be reimbursing the gov coffers for stuff like these $1200 checks we're all going to get. At least I won't feel as bad when I use that dough to buy guns the day after the check arrives if I know it's all a prepayment for stock profits. :laugh:
I'm going to go ahead an announce my financial illiteracy. In your example, how does that actually help American Airlines? Okay, so the government artificially inflates the stock price by buying a lot of it. How does that help American, who's income won't have changed because of the higher stock price (still low bookings), and expenses won't have changed because of the higher stock price (Same expenses still exist).
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An interesting third point was the government buying stock in publicly traded companies. I didn't catch what the legalities of that would be, but the thought was interesting. Instead of bailing out American Airlines, the gov buys a million shares of their stock, and five years from now, when it has doubled, you sell it and put the profit back in the gov kitty - something targeted like debt reduction or emergency response.
I don't think the gov should own businesses (socialism) or give bailouts (crony capitalism).
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I'm going to go ahead an announce my financial illiteracy. In your example, how does that actually help American Airlines? Okay, so the government artificially inflates the stock price by buying a lot of it. How does that help American, who's income won't have changed because of the higher stock price (still low bookings), and expenses won't have changed because of the higher stock price (Same expenses still exist).
They're putting money into the company the same as you or I would. Buying stock is giving the company money to use with the expectation that you'll get some return on investment. I just think it's better than giving them free taxpayer money that they never have to give back, or less worse, an interest free loan with my tax money.
This would at least be the government investing tax dollars in expectation of some return. Obviously as I said above, the gov can't become a majority stockholder or have say in how the company does business. Also there would be an expectation of a competent government that didn't sell all the shares at once, causing a panic, and that also then made best use of any stock profits for the taxpayers. So it's obviously a low probability, but an interesting discussion versus the gov just throwing our money at things willy nilly, never to be seen again.
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I close on the house a week from tomorrow. I have three funds I'm watching in each of my selected categories. All are essentially equal in long-term returns so I'll drop the money into the one down the most in each group. Hoping to make some bank on the rebound and jump-start the process.
Brad
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I'm going to go ahead an announce my financial illiteracy. In your example, how does that actually help American Airlines? Okay, so the government artificially inflates the stock price by buying a lot of it. How does that help American, who's income won't have changed because of the higher stock price (still low bookings), and expenses won't have changed because of the higher stock price (Same expenses still exist).
Really simple, AA issues stock and the .gov buys it, not from the exchanges. Many companies have been buying their stock back with profits, so there should be some company owned stock they could sell. Scary part is depending how much stock Uncle Sam owns, the .gov could control the corporate board.
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They're putting money into the company the same as you or I would. Buying stock is giving the company money to use with the expectation that you'll get some return on investment. I just think it's better than giving them free taxpayer money that they never have to give back, or less worse, an interest free loan with my tax money.
If you or I buy stock in American Airlines, we are not actually giving money to American Airlines. We are buying a percentage of the company from a third party who already owns that percentage. The money you pony up for the stock goes to some other investor, not American Airlines unless it's an IPO or they are issuing more shares.
Really simple, AA issues stock and the .gov buys it, not from the exchanges. Many companies have been buying their stock back with profits, so there should be some company owned stock they could sell. Scary part is depending how much stock Uncle Sam owns, the .gov could control the corporate board.
This follows. And hey, doesn't every other country have a national flag carrier? :P
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Scary part is depending how much stock Uncle Sam owns, the .gov could control the corporate board.
I agree. I don't think the government should buy stock in private companies for this reason.
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Dow really rallied today, on news of a stimulus package near closing.
I've decided to take the other side of this, and took on significant short positions. I believe that this rally will be reversed, and then some as the virus picks up steam, and more of the country closes down. I may have been premature, probably should have waited until the deal actually passed.
We'll see if I get screwed!
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I don't think the gov should own businesses (socialism) or give bailouts (crony capitalism).
Generally speaking, I agree that govt shouldn't give bailouts, but this case is different. The govt forced/prevented the airlines from flying to certain cities and countries. It is not AA's fault that they can't fly to all of their nomal destinations.
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Dow really rallied today, on news of a stimulus package near closing.
I've decided to take the other side of this, and took on significant short positions. I believe that this rally will be reversed, and then some as the virus picks up steam, and more of the country closes down. I may have been premature, probably should have waited until the deal actually passed.
We'll see if I get screwed!
If it has a lot of what the Democrats are demanding, you will get screwed in the end.
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Dow really rallied today, on news of a stimulus package near closing.
I've decided to take the other side of this, and took on significant short positions. I believe that this rally will be reversed, and then some as the virus picks up steam, and more of the country closes down. I may have been premature, probably should have waited until the deal actually passed.
We'll see if I get screwed!
Bear trap.
We aren't anywhere near the bottom yet. The massive stimulus only made small gains, which should tell you that something is fundamentally wrong beyond COVID-19.
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Bear trap.
We aren't anywhere near the bottom yet. The massive stimulus only made small gains, which should tell you that something is fundamentally wrong beyond COVID-19.
If people are worried about "missing the bottom", they'll have only to wait until Q2 results are in. We might not drop back to last week's lows by then, but from everything I'm seeing, it will be the bloodbath of 2020 reporting. It will probably also be the last chance for real bargain hunting for a while. After that, people start going on Summer vacations as usual, then start buying Christmas presents as usual, and I'm betting Q4 will rally the market.
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If people are worried about "missing the bottom", they'll have only to wait until Q2 results are in. We might not drop back to last week's lows by then, but from everything I'm seeing, it will be the bloodbath of 2020 reporting. It will probably also be the last chance for real bargain hunting for a while. After that, people start going on Summer vacations as usual, then start buying Christmas presents as usual, and I'm betting Q4 will rally the market.
I've read that January 2021 Puts on indices at the current level outnumber Calls by a ratio of 5:1 right now...
It might be a year or more before we see any kind of significant recovery. The longer we are shut down, the longer that recovery is going to take.
Continually buying into IRA or 401k funds from here on out would be a legitimate good strategy, in 5 years that will pay off.
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I've read that January 2021 Puts on indices at the current level outnumber Calls by a ratio of 5:1 right now...
It might be a year or more before we see any kind of significant recovery. The longer we are shut down, the longer that recovery is going to take.
Continually buying into IRA or 401k funds from here on out would be a legitimate good strategy, in 5 years that will pay off.
I've been hearing 36 months from the "experts", which actually sounds pretty reasonable when comparing to past big drops, given that things are semi back to normal by Summer. Look three years out from every "crash" since the 80s, and the numbers are pretty impressive. In five years for sure anyone that has thrown money in now will be sitting pretty.
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Dow really rallied today, on news of a stimulus package near closing.
I read it as the big investment houses plowing stagnant cash into low-cost funds, then selling off on the day's gain. It'll be happening a lot in the near future.
Brad
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I read it as the big investment houses plowing stagnant cash into low-cost funds, then selling off on the day's gain. It'll be happening a lot in the near future.
Brad
Yup. That's why you're going to see 2 steps up and 3 steps back for the foreseeable future. The big boys are sucking all the wealth away from anyone who decides that its a good time to get back in. They also have the advantage of trading after hours when the big moves are being made.
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I mis-timed a large buy of June put options a week ago, buying on a small upward swing, but volatility was too high. I'm currently down 100K on that mistake mainly because volatility got crushed with the announcement of Federal relief and stimulus. (If I would have bought them yesterday instead, I'd be sitting really good in the next month... time will tell.
I'm just going to hold those positions for now, as I've lost about 80% of the value, in a week, things can change very drastically. I would need a 10% drop overnight or for the price of SPY to go to around 215 (S&P down to 2150) to break even at this point.
I knew the risk going in, and was looking to hit another grand slam. As it is, the loss is a fraction of what I've made in the last month. I'm more concerned about breaking even in my taxable account because losses would be counted as a wash sale, which is going to hurt at tax time.
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http://thezman.com/wordpress/?p=20130
A different take on the stimulus bill.
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You are ALL WRONG. I'd post my prediction too, but I'd be wrong, too. :angel:
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Highest unemployment numbers in history, by 4 fold. Stocks rally!
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Highest unemployment numbers in history, by 4 fold. Stocks rally!
Yeah, I'm trying to figure that one out. I was expecting to bargain shop again today.
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Highest unemployment numbers in history, by 4 fold. Stocks rally!
Markets are forward looking. This isn't surprising news and was (some of) the cause of the previous drops.
They are expecting bailouts and Fed actions to prevent the next month from looking the same. Thus, the market is rising.
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Markets are forward looking. This isn't surprising news and was (some of) the cause of the previous drops.
They are expecting bailouts and Fed actions to prevent the next month from looking the same. Thus, the market is rising.
Bailouts, consumer bailouts, and even bad news when it’s predicted is good news for the market.
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Money printers go brrrrtt, stocks go up.
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http://thezman.com/wordpress/?p=20130
A different take on the stimulus bill.
That is spot on correct.
The big money (market makers, hedge funds) can’t move very fast because of inertia. The Fed has been buying them time at first, to pull out, and now to save them from the imminent crash.
Market Makers usually have deep enough pockets to ‘pin’ stocks at price most advantageous to them on options expirations date, or even manipulate prices and trends to sucker retail investors into buying or selling, but they don’t have the type of power the Fed has when things get really bleak. The Fed just stopped another dozen firms from going bankrupt (remember Lehman bro’s?).
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House sale funded late Tues. Got all the transfers in place yesterday and they processed overnight. Aside from what was used to pay off the truck, Vanguard now has it all.
Ended up distributing monies equally across three funds, one each small-, mid-, and large-cap (VTMSX, VMVAX, and VWNDX, respectively). They all had a minimum ~10% lifetime return over at least 30 years and are down significantly in the last 30 days (the least was 27%, the highest, 32%). It's more risk than I had initially intended but we decided to go that route since we both also have employer-based 401K and SWMBO has a significant amount in more modest risk categories from another firm.
Brad
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House sale funded late Tues. Got all the transfers in place yesterday and they processed overnight. Aside from what was used to pay off the truck, Vanguard now has it all.
Ended up distributing monies equally across three funds, one each small-, mid-, and large-cap (VTMSX, VMVAX, and VWNDX, respectively). They all had a minimum ~10% lifetime return over at least 30 years and significantly on the year (the least was 27%, the highest, 32%). It's more risk than I had initially intended but we decided to go that route since we both also have employer-based 401K and SWMBO has a significant amount in more modest risk categories from another firm.
Brad
This was quite a fortuitous time to have such a windfall to invest in the market. Good job.
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Nicely done, Brad. Talk about great timing.
I've been keeping my eye on Marathon Petroleum Corporation (MPC).
Before the spit hit the spam they were trading in the mid to high 60s.
They dropped back as low as the mid teens week before last. I picked up on them a bit late. They've been trading in the low 20s the last few days. I set up a 60-day limit order for it at $18.50 a share with Vanguard.
It's up today given the general rise in oil prices and the monkey chattering that happened when Trump said he'd try to get a three way chat going between the US, the Saudis, and the Commies to work out an end to the oil war that's going on right now.
I don't expect that sentiment to last very long before it collapses and the price comes back down.
If it sticks in the low $20s for the next couple of weeks I may cancel my limit order and just make the buy.
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AND *expletive deleted*ck!
It's coming across CNBC that Trump is saying that the Saudis and Commies have reached an accord of some type. MPC is jumping.
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Some info from Zacks Investments on potential bear market length:
How Bad are Event-Driven Bear Markets?
Generally speaking, there are three types of bear markets: structural, cyclical, and event-driven. Every bear market has a unique set of drivers, of course, but throughout history most of them fall into one of these three categories:
Structural – These are bear markets like the 2008-2009 downturn, which are driven by financial bubbles, too much leverage, credit market dislocations, and other structural imbalances.
Cyclical – Cyclical bear markets happen more as a function of the business cycle, when growth leads to inflation, interest rates go up too fast, the yield curve flattens or inverts, loan activity declines, demand wanes, etc.
Event-Driven – These bear markets are triggered by an exogenous event, like an energy crisis, political instability, war, or in the case of the current bear market, a global pandemic.
Looking back at data going back to the 1800’s, here’s what we know about the relative magnitude and duration of each category of bear market:
(https://ci5.googleusercontent.com/proxy/pu0dH7PftcDFEJ2AU12M5dhI4sZzSEKyDVs_NexwNRH1WOgW4ZqOCVx9ziNFvpg7btFvf3ut1oilgHtXvGj2CwkQUKtYuUwXMG15GaQMb2i505OkSSDd_fOZ9P-mMgLtSQ=s0-d-e1-ft#https://image.s7.sfmc-content.com/lib/fe9513727c63057d75/m/1/MOTM-04042020.png)
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Just caught this on the teevee: Trump has ordered the TSP (fed.gov 401k) to remove Chinese investments from the funds.
It will be interesting to monitor my account and see how/if this affects it. I can kinda agree with it, just as we've talked here about buying less Chinese stuff. On the other hand, maybe I'm being a bit of a hypocrite, because I've gone on tirades when it has been suggested to "green" the TSP (or Vanguard, or whoever) with "socially responsible" funds, which I am very much against, because I don't want undefinable "social justice" from mucking up my retirement..
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My investing strategy has been to just let my 401k and Roth 401k contributions be pulled from my paycheck. My boss decided to buy out my vacation time for the rest of the year so I made a nice chunk of extra contributions a few weeks ago. Would have been nice to make that extra contribution closer to the bottom, but whatever.
As of yesterday my current 12 month rate of return is 20.94%. I'm about 50/50 in a Vanguard S&P 500 Index and a Vanguard US Growth. Measuring from a peak in mid February I'm down a few grand (all in my S&P 500 index fund) but measuring from just about anywhere outside that peak and I'm doing okay.
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Yeah, I'm doing pretty okay too. I'm almost kicking myself for being timid during the big drop. I could have thrown double the cash into my Vanguard funds than I did, but was afraid it might be too soon.
I did take a gamble on Norwegian Cruise Lines with my "play money", buying 1000 shares at an average of ~$9. I'll probably sell a third pretty soon to recover some of my principal and let the profit ride for a year or so.
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Surprising jobs numbers yesterday, Dow up nearly another thousand. The MSM is scrambling to address the jobs numbers, including claiming that the administration falsified and manipulated data to make the numbers look good.
Also, this old video of Obama is making the rounds. I didn't catch it at the time, but it looks like Obama was one of the punks who refused to say Trump's name. I also notice this occurred on "unbiased" PBS. PBS has, since Trump, become one of the most biased "news" organizations out there.
https://youtu.be/BRTGQUISjI0?t=19
Also, man, do I wish I wasn't such a "toe dipper" during the big drop. It's killing me that I didn't throw more dough into NCLH.
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My Marathon stock has doubled since I purchased it.
Another one I'm looking at throwing a chunk of money into is Occidental Petroleum (OXY). It's also hugely undervalued right now.
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My Marathon stock has doubled since I purchased it.
Another one I'm looking at throwing a chunk of money into is Occidental Petroleum (OXY). It's also hugely undervalued right now.
I was actually looking at that one myself. Though my regular oil stock, BP, is still pretty low and has that juicy dividend, so I might just bolster my position there.
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A couple of months ago I noticed that my TSP was losing money (12 month performance was in the negative). Last week it is once again in the black.
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Through sheer luck of timing, I'm up 36% on the Vanguard funds I puchased with house sale proceeds back in early April. In actual dollars it's the rough equivalent of two-thirds of my annual salary. Not bad for a 60-day return. The funds I'm in are noticeably volatile and bounce around significantly, sometimes as much as ten percent per day, but it's still on a net upswing.
Brad
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IRA values in 2020:
1/2/2020 starting 2020: $ 699,000
High point on 2/21/2020: $ 718,000
Low point on 3/23/2020: $ 556,000
Current on 6/5/2020: $ 702,000
Mid February to mid March was sporty.
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My 401(k) is still underwater but not by much. The funds are all up slightly now except the little bit of money I have in REITs, and that fund hasn't recovered at all yet so it's dragging my return down. Overall return is -2% for the year.
I really wish I had doubled-down on my ARCC stock when it was around $8, but I was in "don't sell anything, don't buy anything" mode at the time.
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https://www.npr.org/sections/coronavirus-live-updates/2020/06/08/872336272/its-official-scorekeepers-say-u-s-economy-is-in-a-recession?utm_campaign=npr&utm_term=nprnews&utm_medium=social&utm_source=facebook.com&fbclid=IwAR0fv7kOSklQUwJ70kKV8b3oEjFsnCoxJRR9VUlLB-KSGOamt47jdsmq0QQ
The Feds say we are officially in a recession as of February this year.
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https://www.npr.org/sections/coronavirus-live-updates/2020/06/08/872336272/its-official-scorekeepers-say-u-s-economy-is-in-a-recession?utm_campaign=npr&utm_term=nprnews&utm_medium=social&utm_source=facebook.com&fbclid=IwAR0fv7kOSklQUwJ70kKV8b3oEjFsnCoxJRR9VUlLB-KSGOamt47jdsmq0QQ
The Feds say we are officially in a recession as of February this year.
From the link:
At the same time, the committee noted the recession could be short-lived. The U.S. added 2.5 million jobs last month after losing more than 22 million in March and April. Many forecasters said they expect economic output to begin growing again in the third quarter.
I'm not real worried. The virus reaction was overblown and unprecedented. The above quote is pretty much what has been said all along by the "experts": First and (especially) second quarters will look brutal, but third quarter will be a positive pop. Last week's job numbers were already an unexpected good sign.
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A 3rd quarter market orgasm would be good for trump.
Look for Democrats to do anything possible to prevent that one.
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A 3rd quarter market orgasm would be good for trump.
Look for Democrats to do anything possible to prevent that one.
What do you think burning down cities is?
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From the link:
I'm not real worried. The virus reaction was overblown and unprecedented. The above quote is pretty much what has been said all along by the "experts": First and (especially) second quarters will look brutal, but third quarter will be a positive pop. Last week's job numbers were already an unexpected good sign.
With the upswing in the stock market, I have read much commentary that the market apparently thinks it will be a V-shaped recovery instead of a U-shaped recovery. This has confounded the economists.
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With the upswing in the stock market, I have read much commentary that the market apparently thinks it will be a V-shaped recovery instead of a U-shaped recovery. This has confounded the economists.
Regarding your previous link regarding the recession, interesting commentary this morning suggested that the recession has come and gone, starting in FEB and ending in MAY. There seem to be good indicators of that, though we're certainly still in "unknown territory" and anything can happen.
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I made some juggles in the 401k on the downswing and again on the upswing. I'm back in the green for the year by a little shy of 2% as of right now.
I just worked out the numbers and had I simply gone for leaving it alone to ride out and I'd still be pretty deep into the red had I done so. So I'll take it. I'd actually be having a darn good year for the 401k had I made the same moves a little earlier.
Sent from my SM-G973U using Tapatalk
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I bought a bunch of Occidental Petroleum stock...
Just in time for it to tank in the latest down cycle.
Sigh.
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What do you think burning down cities is?
Peaceful protest.
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With the upswing in the stock market, I have read much commentary that the market apparently thinks it will be a V-shaped recovery instead of a U-shaped recovery. This has confounded the economists.
The stock market is emotionally driven in large part. Maybe the majority of momentum, in either direction, is based on feelings rather than facts.