Down goes the Dow

Maserati wrote:

Metals are only partly inflation plays, it depends on how you invest.

I am still riding my 3-fund portfolio, and absolutely killing it—however, I am not proud of it. Like in The Big Short, I am making a killing off collapse, off the demise of others. I have essentially been shorting the USD with 2 funds, foreign RE, and foreign currency. I will diversify into some foreign stocks, but there already are some in the 2 funds.

Bond funds are just as much of a joke as are most US stocks, maybe more. Get out now. I have told you many times, something has to give, and that something will be, and is, the dollar.

I think the argument is add:

1) employed people's normal wages that never changed

+

2) Big checks from the governments in EU and USA

+

3) People getting their jobs back

+

4) likely infrastructure bills and other spending from Biden

= A tsunami of spending that will drive prices up.

agip wrote:

Racket wrote:

Here's the thing though - what are the "too few goods?" It's not oil, cheap plastic toys and trinkets, or even food and other regular consumer items.

Housing supply is certainly diminishing and the lack of supply combined with everyone trying to gtfo of cities certainly reflects in housing prices. Equity prices are inexplicably high considering the GDP forecast we're expected to hit at the end of the month but again, every investor in the world wants to park their money in the US to some capacity.

I think the argument is add:

1) employed people's normal wages that never changed

+

2) Big checks from the governments in EU and USA

+

3) People getting their jobs back

+

4) likely infrastructure bills and other spending from Biden

= A tsunami of spending that will drive prices up.

That'll just take us back to 2019. It's clear that hyper-globalization and highly vertically integrated companies like Amazon helped to basically stall inflation in traditional consumer goods and to be honest it doesn't look like that will change any time soon

There will be inflation in some areas such as houses, mid tier cars (because people love to buy cars and trucks they can't afford) and certain services.

Don’t forget inflation in mega cap tech?

Your point?

Your wasted troll attempt?

Asking for your reasoning behind your posts is not trolling. Do you have a point, or not?

I'm also curious what point you're trying to make.

You're basically confirming what I "predicted" (if that's the right word) from near the beginning of the pandemic, namely that big tech would outperform, given current global pressures, since we need to innovate our way through the crisis.

I suspect you're trying to say something different than that, maybe along the lines that investing either in big tech or the market as a whole is a bad (risky) idea?

VS-SJW-IR-TS idiot wrote:

I'm also curious what point you're trying to make.

You're basically confirming what I "predicted" (if that's the right word) from near the beginning of the pandemic, namely that big tech would outperform, given current global pressures, since we need to innovate our way through the crisis.

I suspect you're trying to say something different than that, maybe along the lines that investing either in big tech or the market as a whole is a bad (risky) idea?

I am posting interesting points that run counter to the Bullish narrative. For example, Tesla made more from selling energy credits than profitability. Five companies are performing better on speculation than the other 495. The reality of MSFT, NFLX, and TSLA earnings is they are not performing any better than Kimberly Clark, a maker of toilet tissue. You and other investors think there is some magic in technology and are willing to pay a high multiple for it. That is all.

Opps, on TSLA sub “cars” for “profitability”

hah - now it's clear why Tesla sold all those credits...this makes a 4th straight Q of profitability, which clears a hurdle to allow it to be included in the SP500.

Hundreds of new billions of dollars will come into the stock now, via those monster SP500 funds.

Just Elon's way of stomping on the shorts yet another way.

agip wrote:

hah - now it's clear why Tesla sold all those credits...this makes a 4th straight Q of profitability, which clears a hurdle to allow it to be included in the SP500.

Hundreds of new billions of dollars will come into the stock now, via those monster SP500 funds.

Just Elon's way of stomping on the shorts yet another way.

Musk is stomping on shorts thru accounting gimmicks. Nothing but a sign of the times.

For example, Q2 2020 MSFT GAAP EPS is -15% lower than one year ago when the stock was trading at $140 a share.

The facts don’t lie. Of course stock investors are speculating that the Fed and government stimulus can affect the current trajectory of the economy. The Fed can buy as many corporate bonds of zombie companies, and it will do nothing other than postpone bankruptcy. Gold, bonds, and most stocks are telling a different story than a handful of tech stocks.

of all of my concerns about your analysis Igy, your reliance on GAAP is one of my strongest concerns.

Ghost of Igloi wrote:

I am posting interesting points that run counter to the Bullish narrative. For example, Tesla made more from selling energy credits than cars. Five companies are performing better on speculation than the other 495. The reality of MSFT, NFLX, and TSLA earnings is they are not performing any better than Kimberly Clark, a maker of toilet tissue. You and other investors think there is some magic in technology and are willing to pay a high multiple for it. That is all.

So some companies perform better than others and some companies diversify. This is not news or an “interesting point”. And it certainly has nothing to do with your so-called “bullish narrative”.

Now we know that your point is pointless.

Ghost of Igloi wrote:

For example, Q2 2020 MSFT GAAP EPS is -15% lower than one year ago when the stock was trading at $140 a share.

Transfer of Intangible Properties. In the fourth quarter of fiscal year 2019, in response to the TCJA and recently issued regulations, Microsoft transferred certain intangible properties held by its foreign subsidiaries to the United States and Ireland. The transfers of intangible properties resulted in a net $2.6 billion tax benefit recorded in the fourth quarter of fiscal year 2019, as the value of future tax deductions exceeded the current tax liability from foreign jurisdictions and United States Global Intangible Low-Taxed Income (GILTI) tax.

So the tax benefit contributed .34 to EPS; $1.37 - $1.71 in the 4th quarter 2019.

Another point, MSFT is not an overleveraged corp. There are only 2 AAA rated companies left - JNJ and MSFT. They have $136.527 billion cash on hand, up $2.708 billion from last year despite returning $38.105 billion to shareholders. Debt reduced; $72.178 to $63.327 billion.

Incidentally, this is not meant to be a buy recommendation.

- Minus 15% GAAP EPS was a Q2 2020 to Q2 2019 comparison

-Total liabilities $184 Billion, leverage high at 2.8 times versus information technology average of 1.9

-AAA ratings were given to mortgage back securities last cycle

agip wrote:

of all of my concerns about your analysis Igy, your reliance on GAAP is one of my strongest concerns.

My concern of your’s would be the opposite. MSFT purchase of Nokia’s mobile business was a loss, any company that has an extra ordinary costs for Covid-19 is an expense, stock based compensation reduces profits, etc.