J. Hardy wrote:
Stock prices are determined by how much someone is willing to pay. Buyers do not purchase because they believe the stock will lose value. Rather they purchase a stock that they believe will increase in value....in the future.
+2 ( to be a sucker or not to be...wink wink)
Romans believed their borders would never shrink long-term. They were right for a thousand years lol.
Ghost of Igloi wrote:
J. Hardy wrote:
I did not say their vision is always accurate. Obviously it isn’t. That does not change the fact that the market is priced according to what is expected.
OK, then you should agree the “market is forward looking” is a meaningless statement.
Since I just said the exact opposite, obviously I do not agree.
Agree with the Ghost, forward looking is meaningless if the “look” doesn’t have meaning; we are arguing the look ahead is purely speculative & also wrong.
What do you guys think of this? Ray Dalio says we are at the beginning of a New World Order, a fundamental change in the World's financial system. What the hell does that mean?
Also, Warren Buffett is STILL sitting on tons of cash (around $128 billion) and is actually borrowing MORE cash (about $2 billion on top of what he already has). Despite the S&P 500 falling to 2,237, he still did not buy in. What does that say?
PRD wrote:
Also, Warren Buffett is STILL sitting on tons of cash (around $128 billion) and is actually borrowing MORE cash (about $2 billion on top of what he already has). Despite the S&P 500 falling to 2,237, he still did not buy in. What does that say?
That he is a psychopath.
He has several billions of $$ and, instead of using his massive wealth to help so many people who are in dire straits, he is trying to get even richer.
There are several scenarios.
Historically, all debts were regularly cancelled on the ascension of a new regime. Money itself is a recent invention. Interest payments are only one way of settling debts, other methods are used even in today’s world.
I’m no Buffett, but I’d certainly wait as well. He sure made a sweet deal by propping up Goldman Sachs in ‘08 with a mountain of cash/credit/credibility.
Giles Corey wrote:
PRD wrote:
Also, Warren Buffett is STILL sitting on tons of cash (around $128 billion) and is actually borrowing MORE cash (about $2 billion on top of what he already has). Despite the S&P 500 falling to 2,237, he still did not buy in. What does that say?
That he is a psychopath.
He has several billions of $$ and, instead of using his massive wealth to help so many people who are in dire straits, he is trying to get even richer.
Buffett has pledged to give away 99% of his fortune. Try to keep up.
Since agip is unlikely to give us the rolling four-week average unemployment claims:
Today’s numbers are over 8 times the previous record. Ouch.
jesseriley wrote:
Agree with the Ghost, forward looking is meaningless if the “look” doesn’t have meaning; we are arguing the look ahead is purely speculative & also wrong.
It is forward looking. Forward looking with the implicit acknowledgement that it might be wrong. The degree to which one can do it accurately in terms of direction, magnitude, timing, and with sufficient resources will determine the level of returns.
Now that wasn't so hard, was it? (Hint, more of a rhetorical question than an actual one).
The question was whether forward looking is meaningful or meaningless.
jesseriley wrote:
The question was whether forward looking is meaningful or meaningless.
define meaning.
Some people use the practice very successfully.
Some sources say the market is simply trusting that trump or the fed or illuminati, etc will re-open economies without long-term damage.
Wishful thinking...
If you're talking about why the rebound in light of the fact of the possibility (however likely) of a retracted economic downturn, a lot of investors have a long enough investment horizon to withstand the chance that the market might revisit lows or even sink further than it did at the bottom. They would rather take the risk of going underwater for a while rather than miss this once in a generation opportunity of a particularly attractive entry point.
seattle prattle wrote:They would rather take the risk of going underwater for a while rather than miss this once in a generation opportunity of a particularly attractive entry point.
+100
I know things look scary right now. People in my firm looking at business operations have done a fair bit of good research into the economic effects of past pandemics. I'm placing my bets on the basis of their advice, which aligns with what SP just wrote.
you tell me what to make of this: small caps are getting decimated. Nasdaq holding up much better. Their levels of meaning worth considering beneath the surface, too.
The implications there are fairly easy to dissect. But it starts me wondering if this isn't an actual opportunity for the larger caps or mid caps to take market share away from small business, not just in the short term, but in a more fundamental, ongoing way.
I think the safe-ish bet in the near term is mega-cap tech.
yeah, for sure, but for the long shot, small caps are like the hidden treasure wrapped in an opportunity. Might be a matter of timing, but worth watching.
It seems to me that the effective reproduction number of covid-19 is still 99% of what it was back in Feb. Parts of our economy can open back up if we are able to practice social distancing, etc., but aside from that some parts of our economy are not coming back for at least 1.5 years, and some parts are not coming back period.
seattle prattle wrote:
jesseriley wrote:
Agree with the Ghost, forward looking is meaningless if the “look” doesn’t have meaning; we are arguing the look ahead is purely speculative & also wrong.
It is forward looking. Forward looking with the implicit acknowledgement that it might be wrong. The degree to which one can do it accurately in terms of direction, magnitude, timing, and with sufficient resources will determine the level of returns.
Now that wasn't so hard, was it? (Hint, more of a rhetorical question than an actual one).
The “market is forward looking” is nothing more than one of those cliches that are used to understate investment risk. No different than a real estate agent telling a prospective purchaser “it is always a good time to buy.” The market has no predictive ability, especially when measured against the last twenty years of meager bond like returns. Another often used phrase is “cash on the sidelines” which on examination is equally false and useless.