So the Dow was down triple digits this morning if I understand correctly because of improving economic news fueling fears of an interest rate hike. In emphasizing 401Ks, thrift savings plans and the like we probably have the largest class of people in the US that are stock holders than ever before. So have we gotten to the point where you root for bad economic news so that your stock holdings go up at the expense of the overall health of the economy?
Does this system we seem to have created make sense to anyone any more? It just seems like a house of cards.
Just read my doozy initial post. All I said is that investors in their accumulation phase should be HAPPY to pay lower prices for stocks (buy low) and be looking for higher prices only after they've retired (sell high).
Not exactly a difficult concept to follow. But one that most investors don't get. They get all excited by a rising market (like the one we have now) when in fact they are still years away from retirement and simply OVER PAYING for stocks with their weekly contributions. They would be so much more better off with LOWER stock prices, not HIGHER.
This isn't a philosphy. This isn't a PLAN. But somehow it is difficult for people to wrap their brains around.
But - the LAST thing anyone should want is for stocks to go UP. You want stocks to go DOWN, not UP (again, unless you are retired and no longer a contributor, but a spender of your portfolio).
So, CHEER when the market goes down and you are buying more shares with your weekly contribution. And Pray that next week stocks get cheaper still, so you buy even MORE shares. And my goodness, if you can possibly be fortunate enough to be contributing when there is an actual CRASH (say a 40-50% drop), borrow money on your house, beg borrow and steal, do whatever you can to BUY BUY BUY cheap stocks. And pray for it to go down even further.
Investing is very counter intuitive. But it is damn important to your future. If you don't understand the reasoning behind anything I've said above, then you owe it to yourself to read a few of the basic investing books recommended by most universities (Chicago School of Economics is probably the best and I'm sure they have a great finance section with recommended books. Random Walk Down Wallstreet is a great starter).
But - remember - you should be pissed off when stock prices rise because your weekly contribution is now purchasing fewer shares. And you should be pleased as punch when prices fall, because your contribution is purchasing more shares (and remember - the GOAL is to accumulate the most SHARES, not dollar value - the dollar value will come when the price of the shares eventually rises - which it will do over a 40 year investment period - but meanwhile, you want to buy LOTS of shares, and the lower the stock market goes, the more shares you will be buying).
baadbill - a lot of assumptions in your post here. You might assume that all investment portfolios are built the same way, but you'd be wrong about that. What I've managed to accumulate was built over time, and included weekly investment contributions. But that's not where the bulk of my portfolio came from.
Have you ever heard of stock options? I worked for a firm that payed a sizeable annual bonus, regularly the size of my annual salary. It was paid in stock options with a three-year vesting schedule. I didn't get to control that portion of my investment portfolio, but if you do the math you can see that roughly three times my annual salary was invested in a single company - the firm that I worked for.
Now I know that no advisor would encourage someone to take such a large position on a single company, but I don't know anyone turning that money down either.
You know what really sucks? When your shares vest right after positive economic news that drops your share price overnight.
I sure as heck was not rooting for my firm's price to go down.
You're right that I don't know much about investing. Let's put it this way - I know enough about investing to know I can't give advice on investing and/or lecture others on their investments.
On the surface what you say isn't that bad - that in theory one should desire lower prices during purchase periods and prices to rise during selling periods.
From reading through this thread I see two reasons for the very negative reactions to your post.
First, the way you come across should embarrass you. Do you really think other posters on this thread know nothing about the market?
Second, you miss your mark with your statement. I understand the idea of looking for the silver lining to a market downturn - "hey, it's a great time to be buying!", as does everyone else on this thread. That's a far cry from how you came across, suggesting we should cheer market declines unless we are retired. Posters in the know here have tried to illuminate why to you.
Do yourself a favor and remove the impression you've got that you're talking to a bunch of simpletons. Work on finding more gracious ways to discuss the market with others. You'll find that you not only make more friends, but you may learn more about the market along the way.
On the surface what you say isn't that bad - that in theory one should desire lower prices during purchase periods and prices to rise during selling periods.
From reading through this thread I see two reasons for the very negative reactions to your post.
First, the way you come across should embarrass you. Do you really think other posters on this thread know nothing about the market?
Second, you miss your mark with your statement. I understand the idea of looking for the silver lining to a market downturn - "hey, it's a great time to be buying!", as does everyone else on this thread. That's a far cry from how you came across, suggesting we should cheer market declines unless we are retired. Posters in the know here have tried to illuminate why to you.
Do yourself a favor and remove the impression you've got that you're talking to a bunch of simpletons. Work on finding more gracious ways to discuss the market with others. You'll find that you not only make more friends, but you may learn more about the market along the way.
The thing currently called the market; isnt.
Warren Buffet no longer invests in the same market of information and opportunity that anymore than 3 people get to come their way. Much less access to the political cooperation required to risk adjust.
Market and investment analysts produce collateral for salespeople and sell wearing cloaks anyone can see through. Whose name is on the transaction record is secondary to who participated in the go to market strategy of institutions whose purpose is to generate transactions from the pool of possible funds.
The thing currently called the market; isnt.
Warren Buffet no longer invests in the same market of information and opportunity that anymore than 3 people get to come their way. Much less access to the political cooperation required to risk adjust.
Market and investment analysts produce collateral for salespeople and sell wearing cloaks anyone can see through. Whose name is on the transaction record is secondary to who participated in the go to market strategy of institutions whose purpose is to generate transactions from the pool of possible funds.
Nothing against selling or buying. It's a good thing. We need it. As long as no one is fooled as to what it is.
The thing currently called the market; isnt.
Warren Buffet no longer invests in the same market of information and opportunity that anymore than 3 people get to come their way. Much less access to the political cooperation required to risk adjust.
Market and investment analysts produce collateral for salespeople and sell wearing cloaks anyone can see through. Whose name is on the transaction record is secondary to who participated in the go to market strategy of institutions whose purpose is to generate transactions from the pool of possible funds.
Nothing against selling or buying. It's a good thing. We need it. As long as no one is fooled as to what it is.
Argumentation is selling. the record of that ( a transaction) is just that...a record of who was assigned or who brought the emotion stirred by the argument into action
...then our local experts jump all over his ass with the mis-attributed understandings of what he was trying to say
...then he comes back with more knowledge than they assumed...they get hackles up, having made an assumption about his ignorance that was a little bit excessive..and it is on.
Forgetting the specifics, but before any alleged hate speech (I missed it), GWG spoke about some stuff, regulars did not initially see that he had some bona-fides (agreeing or not) and the rest was a retrenchment from that initial imbroglio.
Dan is right. Poor badbill was presumptuous and arogant, the very traits that get consistently humbled when playing the market. No point in arguing his hyptothetical, because its hypothetical. Lessons from '08 - '09 aren't likely to be be too valuable going foward, particularly since Fed policy favors high asset values. But badbill's contrarian element style is exactly what helps maintain a market. Every seller needs a buyer. Go for it Badbill!
and on the relationship between monetary policy and national debt in light of what is the most important part for the nation work on and what to do next and why
I would speculate there's a strong correlation between ATC and decreasing wages as a % GDP. But what it means going forward for a wage earner or investor is beyond me.
check out the chart at about 10:35am yesterday and comment for me.
Stat!
Think about it. Just list what you know of the Brazil in the last decade. It's easy. That's the best way to learn. Don't assume monetary policy is at work. Then add that collection of variables. Everything after that is debate over snapshots from a still moving picture. Imho.
and as far as GWG. Forget the post you did not see. As if that means it did not exist. Forget who started what. ..does not matter...is not analyzable. Was his presence highly likely to allow debate or discussion or not? And what percent of the time and what percent of the posters.
A data point on one thread that you have what was a good discussion for you is not a trend or a pattern or a probability.
Imho. And I did not get into any disputes with him I remember. To me he was one of the few folks every year that wreck too many threads and are resistant to feedback. And seeking refuge in the idea that he was just contrarian is facile and incorrect. A wide range of views honorable discussed has been tolerated on the site for a long time.
Just food for thought
''Household disposable income includes income from economic activity (wages and salaries; profits of self-employed business owners), property income (dividends, interests and rents), social benefits in cash (retirement pensions, unemployment benefits, family allowances, basic income support, etc.), and social transfers in kind (goods and services such as health care,, education and housing, received either free of charge or at reduced prices). Across the OECD,''
(OECD Better Life Index)
don't have a clue, exploring
Accelerating Technological Change
More economic value is being created by automated processes.
Frickin' bank machines can take 2-3 bucks on a transaction with no humans required, other than mainatainence. That stuff adds to GDP but not wages. And accelarate that.
This has been true for decades and decades and good time and bad.
It's how a guy making 70 and a guy making $170 feel equally under pressure to just make their ends meet. Perception being reality.
2. There are probably other factors leading to the stagnation in wages as a part of GDP and DPI ..
...in -addition- to the technology thing you guys mentioned, and 'international wage/currency arbitrage' (is that a thing?) that people talk about.
Factors such as increasing cost of living makes the decision to work less rational,
factors to do with the relative benefits of a work/saving lifestyle as opposed to the invest entrepreneurial lifestyle.
OR something I don't understand to do with the monetary, as the charts imply, 'the chicken or the egg', it looks like inflation did not hurt us as much as we like to think back in the 'bad 1970's', since the wages grew slightly faster.
and break them out, then look at those in charts (charts that typically only show the whole unit (DPI) not broken down suchly)...and therefore perhaps which are not as enlightening.
I am not looking at how the DPI is split up AFTER it is earned, looking for sources of.
You're not taking into account the negative impact inflation had on home ownership and the tax impact of bracket creep.
maybe I should go back to wages as % of GDP, but...
...if nobody can gain disposable from wages...
that is the entire problem in a nutshell.
as you can see in the chart, wage increases covered inflation, just enough to provide for them to do some feedback of their own into the business cycle, and however small per household, it was widespread, not clumpy.
Quote:
it looks like inflation did not hurt us as much as we like to think back in the 'bad 1970's', since the wages grew slightly faster.
You're not taking into account the negative impact inflation had on home ownership and the tax impact of bracket creep.
And also the fact that these increases in wages are generally quite uneven, as are the other ancillary "benefits" such as increased home prices (your home doubles in nominal price even as your fixed-rate mortgage payment holds steady). So what is a boon for some may be devastating for others.
and, if I understood bill2 correctly, wage people have not had disposable in forever, so that is an obvious problem.
how can the nation make policy if it looks at big, lumpy, contradictory units of measure such as GDP and DPI without looking at the very divergent parts of them?
I am suggesting that 'income' ought not be all lumped as equal, it is not.
But the fact that true disposable- discretionary- income has been steady and scarce for decades is not bad at all. People spend it. And the more things there are to spend it on, the better. It enriches their lives and drives the ecomony. 2/3 of GDP is consumer-driven. It also motivates people to earn more and be more productive. We are the most productive society in the world, as well as the biggest consumers. A materialistic heaven!
...then our local experts jump all over his ass with the mis-attributed understandings of what he was trying to say
...then he comes back with more knowledge than they assumed...they get hackles up, having made an assumption about his ignorance that was a little bit excessive..and it is on.
Forgetting the specifics, but before any alleged hate speech (I missed it), GWG spoke about some stuff, regulars did not initially see that he had some bona-fides (agreeing or not) and the rest was a retrenchment from that initial imbroglio.
This pretty much sums it up. As for GWG, IMHO he was underestimated with regard to potential contribution. His attacking style no doubt turned many off, but he too was attacked regularly and often unwarranted because "he deserved it". I also missed any overt "hate speech", but on BBI, falling into the category of hate speech is all too easy. I disagreed with much of his philosophy and stated views, but coupling those views with an aggressive attacking style doomed him as a poster.
The attacks are an unfortunate aspect of BBI, but valuable discourse still manages to come through.
but...what about all these charts showing more jobs during the whole inflationary high rates periods? somebody please splain me all those charts, and how we get good old fashioned wages back into the business cycle.
But it looks like what you have is prices going up, without being pushed by wages going up (or is it wages staying very low despite prices going up that might pull them?).
I guess, what you have is that wages in -China- went up around that time,
so WE, big consumers of Chinese products, felt a form of 'inflation' (another wacked out unit of measure that probably needs to be looked over and broken down) while not enjoying the benefits of increased participation rates and weekly wage raises that used to correlate with it in days of yore, when we had a more singular economy.
But, then, people are probably arguing right now about what 'inflation' even -means- anymore when things and this discombobulated.
In addition, prices still increase on speculation, if you look at the increased inclusion of / access to commodities into markets (or, more accurately, to more financial groups and institutions due to IT and trading technology, as well as the continued huge un-deployed pool of cash which drove the distortions in the first place) as well as speculation on housing a such.
so, local demand was not pushing that, thus the gap at he end of the chart, which looks new.
He did have factoids he wove into opinions ( at this point he is no different than any poster at all) on matters which demand give and take for all opinions on the matters discussed have a 35% or greater " uncertainty" factor.
Therefore certainty and dismissiveness are unwarranted. Nor did he discuss topics he often went after poster after poster on threads which later then drew the ire of many. Intolerance plus posting in rage plus drunk posting ( his words) plus contempt made it very hard to overcome the later one or two threads which showed potential. I submit that not all the interactions were seen before erased by the original OP.
I don't have difficulty with difficult posters. I do with those who fault or not presence wrecks most threads they are on. We had more than one very well informed but unable to discuss kinds of posters over the years. It's a shame. Best hope is a time and self awareness next time around. All imho. After all this is unfair for he is not here. Obviously we all wish to take back things we posted and times we were not at our best. Fair is fair. But for this season as a group we did not lose on the exchange. Again. Most of the time there is a next time.
Hope you are well my friend
but...not without context that there was a base of economic activity very different from the one that exists today, (participation and % of wages in GDP)
so, what is the view on that, do we have to go back to 1970, to get to '76 to get to '80?
Btw, I had recommended "the Second Machine Age" as a book early last year that linked ATC to some of the economic issues. My new favorite is "The Rise of the Robots: Technology and the Threat of a Jobless Future." Lousy title, excellent book. It really isn't mostly about robots. It's about all of the main ways that ATC is likely to affect jobs and the economy. It was on the cover of the Times Book Review a couple of weeks ago.
Linked.
Link - ( New Window )
Link - ( New Window )
since they 'thought their shit did not smell' during that long expansion in weekly earnings growth, a long party basically, in some sectors, which has been nudged into forgotten history by simplistic views on econ and society then.
(the death of the inner city and all that, true, truem but...the 1970's were much much more complex than that, it was gravy for many, again, the chart and anecdotally from family, and no, we were not rich)
The tech thing...it has made the investors themselves much, much much, more efficient and far reaching as well (in the lnk) ...so that is a multiplier effect on commodity prices...
as well as a cause of the decoupling of wage from GDP that I think you mentioned.
I am trying to learn about the upside of the rate increases in a broad, no values attached kind of way.
Or at least look at historic correlations, and have you guys parse the correlations from causes.
He did have factoids he wove into opinions ( at this point he is no different than any poster at all) on matters which demand give and take for all opinions on the matters discussed have a 35% or greater " uncertainty" factor.
Therefore certainty and dismissiveness are unwarranted. Nor did he discuss topics he often went after poster after poster on threads which later then drew the ire of many. Intolerance plus posting in rage plus drunk posting ( his words) plus contempt made it very hard to overcome the later one or two threads which showed potential. I submit that not all the interactions were seen before erased by the original OP.
I don't have difficulty with difficult posters. I do with those who fault or not presence wrecks most threads they are on. We had more than one very well informed but unable to discuss kinds of posters over the years. It's a shame. Best hope is a time and self awareness next time around. All imho. After all this is unfair for he is not here. Obviously we all wish to take back things we posted and times we were not at our best. Fair is fair. But for this season as a group we did not lose on the exchange. Again. Most of the time there is a next time.
Hope you are well my friend
Thanks Bill. I agree that threads he was on usually went downhill rapidly, and perhaps BBI is better off without him. And also perhaps he was the main reason the threads went downhill, but he wasn't the only reason. I hate to see anyone banned, especially if they've shown some value potential. But I concede that his approach made banning inevitable. "certainty and dismissiveness are unwarranted" ... should be in the code of conduct :)
And I am doing very well thank you. Had my best day ever flyfishing the other day. My 2 sons and I got about 80 trout on flies (obviously released), and I spent most of the time tending to my grandson while my sons fished :). I hope you are doing just as well or better!
since they 'thought their shit did not smell' during that long expansion in weekly earnings growth, a long party basically, in some sectors, which has been nudged into forgotten history by simplistic views on econ and society then.
(the death of the inner city and all that, true, truem but...the 1970's were much much more complex than that, it was gravy for many, again, the chart and anecdotally from family, and no, we were not rich)
Well if you want to go back to gas rationing and 16% mortgage rates, go for it.
I am not stating a position...looking to learn