Down goes the Dow

agip wrote:

Ghost of Igloi wrote:

It would be very significant, since the rest of the market has gone nowhere since January 26, 2018.

This is sort of true...excluding dividends, the equal weighted SP500 has no return since January 2018.

but 3 year and 5 year total returns for the equal weighted SPX are each in the 7-8% per year range. The 'no return for 2.5 yrs' claim is cherry picked and doesn't count dividends.

Racket wrote:

Actually Mas I do have a good investment idea. Banks have been absolutely hammered and haven't recovered yet so I think the larger ones like BofA and JP Morgan are good investments for buying the dip right now.

I'm also operating from the premise that the Illuminati doesn't control the world banking system too so maybe we won't be able to see eye to eye there

There's the economy and then there's the double secret economy that Maser lives in.

agip wrote:

Ghost of Igloi wrote:

It would be very significant, since the rest of the market has gone nowhere since January 26, 2018.

This is sort of true...excluding dividends, the equal weighted SP500 has no return since January 2018.

Dow closed 1/26/2018 at 26,616.71.....speaking of index return, not dividends....clearly, indisputable, any significant gains are from a handful of mega cap tech companies....

Lol yes.

Racket the main banks are primary instruments of the illuminati.

That said, I also thought about the banks, considering how low they are, considering that they are always granted a skim of gov money that is being distributed, considering that the Fed will probably mot raise rates for a long time, etc they are interesting. But for me, DB and other banks provide a cautionary tale.

But yes they are worth keeping in mind, and I am watching them—but not yet buying.

Btw I don’t live in it, although I would like to. But I do know those who do live in it, and it is a form of torture to see it.

Any recos from the agip?

Maserati wrote:

Any recos from the agip?

hah

I know you people use me as a reverse indicator.

heck I use myself as a reverse indicator.

I'm totally on the back foot and have been since March. Flubbing almost everything except gold.

Maserati wrote:

Lol yes.

Racket the main banks are primary instruments of the illuminati.

That said, I also thought about the banks, considering how low they are, considering that they are always granted a skim of gov money that is being distributed, considering that the Fed will probably mot raise rates for a long time, etc they are interesting. But for me, DB and other banks provide a cautionary tale.

But yes they are worth keeping in mind, and I am watching them—but not yet buying.

DB is indeed a mess but also there's a 0% chance the Germans will let it fail so consider that. JP Morgan and some of the other large banks are actually pretty well capitalized this time around. It'll be hard for them to make money since interest rates will be zero until 2022 but they have smart people working for them. It'll be a long game for sure

agip wrote:

Maserati wrote:

Any recos from the agip?

hah

I know you people use me as a reverse indicator.

heck I use myself as a reverse indicator.

I'm totally on the back foot and have been since March. Flubbing almost everything except gold.

I will say I'm thinking about purchasing a hedge so I can be more aggressive in stocks. Maybe a fund like TAIL, that owns puts and treasuries. I've seen hedges cost people vast fortunes over the years though...

what do you think about the thesis that smart young people aren't going into finance anymore? I mean some are, but in the 80s and 90s GS and whatnot could have their pick. Now tech companies get the smartest young people. Creating a brain vacuum at finance. I mean it's downright embarrassing for a 20 something elite kid to even interview at a bank, let alone work there.

Whereas tech companies have an immediate stamp of 'this is a smart person.'

You joke about illuminati, but they are features of devote Mormon underwear. Tech material or cotton, in two pieces. One symbol over each nipple of the top, and on the short bottoms just above the knee. Historically it goes back to the founding of the LDS church when the Freemasons had elaborate ceremonies for induction, as well as symbolism derived from Rosetta Stone discovery in Napoleonic Egypt.

Personally, I don't really buy it because I don't think you can lose what you never had. The smartest people were never really on Wall Street, but rather toiling away, usually for peanuts, in government labs and agencies or in heavy research based companies like IBM.

Wall Street banks and consulting firms got the second tier people who didn't really like the subject matter enough to bury themselves in academia. Still pretty smart, don't get me wrong, but not motivated or smart enough to publish consistently. The same is happening now with tech companies. A lot of them are becoming the new sort of management consultant type except they're selling sh!t ideas like "big data," advertising schemes, and other mostly meaningless made up paradigms. Pays pretty well though.

That being said, I think banks might be more susceptible because of large establish nepotism ladders that have been established over the past few generations. Eventually you reach a point where everyone who works their only got a job because their dad worked their, and he got the job because his dad worked their. That's probably overly pessimistic

well my point wasn't really that banks used to get the very smartest..it was that they used to get kids ranked v. high on the totem pole. Now banks get people lower on the totem pole.

I think that has to be a serious negative for US finance, given how brain-intensive finance is.

Wall Street likes greedy people willing to take risks. Has little to do with brains other than driven to make a lot of money.

All Country World Index ETF (ACWI) closed at 77.54 on 1/26/2018

I may have to file suit against Racket—he’s stealing all of my material!

Except that I don’t think that rates have to go up for banks to benefit. They work on spread, and in theory, the lower the rates, the higher dollar value in loans that is made, all other things being equal.

I just don’t see the differential stimulus that will cause bank stocks to outperform, unless everything else tanks while bank stocks stay even. Really, bankers are all about making money for themselves. That’s a sector where I think that conditioning their compensation on profitability really matters.

“As a final note, with respect to the very largest glamour stocks, my impression is that investors should consider the opposite implications of “market share” arithmetic. Presently, the largest 5 stocks in the S&P 500 comprise about 23% of the market capitalization of the index, easily eclipsing the 2000 peak, when the big 5 represented just over 16% of index capitalization. Here’s the thing. Investors now require these stocks to maintain their current market share, relative to the index as a whole.

Consider a bear market that brings valuations only to 2002 levels – the highest level of valuation observed at the end of any market cycle. If the S&P 500 was to decline by 50% overall, and the largest 5 stocks moved back to the 2000 extreme of 16% of the index (which they represented as recently as 2019), the implied loss for these stocks would be 0.5(.16/.23)-1 = -65%, while the implied loss for the rest of the S&P 500 would be 0.5(.84/.77)-1 = -45%. That’s not so much a projection as an implication of arithmetic, so we should at least consider this possibility given that the market cap of the largest 5 stocks has become unusually skewed.“

John Hussman, Market Commentary August 2020

Umm, it’s still July. Does this nut live in the future?