Ah, I hope you feel better making fun of my slovenly life. At least this 70 year old is retired, oh but this poor guy is only driving a Cayman. That’s right, God chose you to be an AMZN employee. Divine intervention, for the moment. Anyway, wish you well.
I did purchase XLE last Friday 10/2. In my view it should do quite a bit better than AMZN/tech over the next year. Of course that may not happen if the Fed/Congress continues to flood the markets with $Trillions of excess liquidity. In that case the madness continues, but the rebalancing of the economy will be that much more severe. Bookmark this if you like.
Igy
Good call overall, but you do recognize that over the last year, they have performed virtually the same, and YTD, Amazon is killing XLE.
Good call overall, but you do recognize that over the last year, they have performed virtually the same, and YTD, Amazon is killing XLE.
OK, fair enough. Just pulled up the post for fun. It was a valuation call at the time, just as I am currently unsuccessfully shorting Tech and Sox, but successfully invested in EM Bond CEFs. Fortunately the later my largest position.
This one is a little complicated but an epically bad call...it's from 3 months ago - april 2023. The gist of it is:
1/ The economist had a cover praising the US economy. "Riding High" it says.
2/ Jim Bianco (577k views on this tweet!) thought otherwise. He saw a recession starting.
3/ So Bianco said 'buy bonds until your hands bleed!' because when the economy rolls over, rates would fall and the value of old bonds would rise.
4/ But, alas, Bianco has been very very wrong and the Economist has been very very right. The US economy IS riding high and rates have risen sharply and econ activity is ratcheting up. The curve is as inverted as ever. Anyone buying bonds in April has lost money.
3m
Bonds -2%
Stocks: +7%
So another bad call from our bearish friend Jim Bianco. Who has had this schtick since at least the 1990s. Nice work if you can get it. Being wrong all the time and still have everyone hang on your words. Just sounds so much smarter to be bearish.
Jim Bianco @biancoresearch This week's Economist cover is out just now. Contrarian Call ... Buy bonds until your hands bleed. Buy the belly of the curve (around the 7-year). The bell has just been rung. The economy will now hit the brick wall! Plunging rates and a steepening curve (a "wheelie") are coming
This week's Economist cover is out just now.
Contrarian Call ... Buy bonds until your hands bleed. Buy the belly of the curve (around the 7-year).
The bell has just been rung. The economy will now hit the brick wall!
The three biggest sectors by market cap in SP500 are tech (28.3%), health care (13.4%) and financials (12.4%). The three smallest are utilities (2.6%), materials (2.5%) and real estate (2.5%). Consumer discretionary is in 4th place at 10.7%.
These proportions are from a recent source but may be off by small amounts as of today.
Best performer over 2 and 3 years, by far, is energy. Tech dominates over every other time period to 30 years back, including 1 year. Energy's dominance would be, I think, mainly a result of war in Ukraine. Remember our discussion with mas at the outset of the war? I was encouraging moving money into TSX 60, an energy/utilities/materials sub-index.
I'll add a few comments to this. In my third paragraph, I was referring to overall performance to the current date. So, for example, the tech sector increased an average of about 12.9% annually over 30 years since summer 1993, compared with SP500 having increased about 7.9% annually over the same time period. However, if I pick the summer of 2000, at the peak of the tech bubble, average annual return to this summer is just under 6%, compared with just under 5% for SP500. However, the tech sector didn't actually catch up with SP500 after summer 2000 until 2020. So, while on average tech outperforms the whole index, there was a 20 year period (20 years!) when it underperformed, and returns of the tech sector were negative from summer 2000 for more than 16 years.
This thread is often a polarizing discussion between the majority bulls and the very small minority bears (maybe just Igy and K5/GC/newname?), and it's easy to distill the markets into a simplistic either / or and pick a side, but the reality is that there's important nuance. Markets DO go up *most* of the time, but there is always a risk of a decline, and sometimes the decline can be severe, or sustained, or both. I think a thoughtful investor ought to balance market optimism with a dose of caution and protect themselves, in a way that makes sense for them, against risks while taking best advantages of market rewards.
New mortgage math is brutal. Say you buy a $1m house with $200k down at a 7% rate ($800k mortgage). Over the first three years you pay $193k ($5,322/mo.) After those $193k of payments your $800k mortgage is now at $774.5k. You paid $166k in interest, $25.5k in principle.
The three biggest sectors by market cap in SP500 are tech (28.3%), health care (13.4%) and financials (12.4%). The three smallest are utilities (2.6%), materials (2.5%) and real estate (2.5%). Consumer discretionary is in 4th place at 10.7%.
These proportions are from a recent source but may be off by small amounts as of today.
Best performer over 2 and 3 years, by far, is energy. Tech dominates over every other time period to 30 years back, including 1 year. Energy's dominance would be, I think, mainly a result of war in Ukraine. Remember our discussion with mas at the outset of the war? I was encouraging moving money into TSX 60, an energy/utilities/materials sub-index.
I'll add a few comments to this. In my third paragraph, I was referring to overall performance to the current date. So, for example, the tech sector increased an average of about 12.9% annually over 30 years since summer 1993, compared with SP500 having increased about 7.9% annually over the same time period. However, if I pick the summer of 2000, at the peak of the tech bubble, average annual return to this summer is just under 6%, compared with just under 5% for SP500. However, the tech sector didn't actually catch up with SP500 after summer 2000 until 2020. So, while on average tech outperforms the whole index, there was a 20 year period (20 years!) when it underperformed, and returns of the tech sector were negative from summer 2000 for more than 16 years.
This thread is often a polarizing discussion between the majority bulls and the very small minority bears (maybe just Igy and K5/GC/newname?), and it's easy to distill the markets into a simplistic either / or and pick a side, but the reality is that there's important nuance. Markets DO go up *most* of the time, but there is always a risk of a decline, and sometimes the decline can be severe, or sustained, or both. I think a thoughtful investor ought to balance market optimism with a dose of caution and protect themselves, in a way that makes sense for them, against risks while taking best advantages of market rewards.
Thus endeth the sermon. :-)
A fair and accurate summary. It is also clear that Fed activism coupled with Government stimulus has led to speculation in most asset classes. Investors have discounted the odds of something bad happening while continuing to move up the risk curve. There are plenty of historical examples of how such behavior ended in pain, and I see nothing that changes my belief that this will again be the case.
This is uncanny! In reading retiree's posts, I was reminded of an interview I heard on the radio yesterday or the day before on my local PBS station, and it was about this exact report and the fundamentals underlying it. Great segment, and I had spent the last 10 minutes trying to find it, but couldn't, and then Igy posts this.
I have to say, the premise bears consideration - that current and future generations of investors may lost interest in the markets in that, according to the article's author, we are coming to an end of easy stock market gains that have been due to decades of low interest rates and lower corporate tax rates.
Good call overall, but you do recognize that over the last year, they have performed virtually the same, and YTD, Amazon is killing XLE.
OK, fair enough. Just pulled up the post for fun. It was a valuation call at the time, just as I am currently unsuccessfully shorting Tech and Sox, but successfully invested in EM Bond CEFs. Fortunately the later my largest position.
The Emerging Market Bond CEF performance over most timeframes in the last year are not appreciably better or worse than the S&P500 performance, but vastly worse than that of the Nasdaq over most all timeframes.
It raises the question if it would been any different than just investing in a plain Jane S&P fund.
also, the US and the developed world are now basically a zero-growth places in terms of population - that has to be bad for stocks. Plus we all got so rich that we don't have to work anymore. That's not good for stocks either.
also, the US and the developed world are now basically a zero-growth places in terms of population - that has to be bad for stocks. Plus we all got so rich that we don't have to work anymore. That's not good for stocks either.
I've often wondered about that - and it comes to mind in the context of the smaller pool of workers paying into Social Security these days, and how it stresses the necessary reserves to keep paying out to new and current retirees. The same could be beset the markets.
This is why I consider it folly to assume that just because the markets have always just go up, we should not assume (nor assert like some here) that they always will. That is simply incorrect, and should be understood that markets are by definition imbued with the risk of loss.
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