I suppose this is the anti-inflation case: That the much-discussed 'end of globalism' is a phony concept. The evidence is that global trade just keeps going up. Which implies that the invisible hand is still at play and will find ways to increase supply to capture profits while ever-lowering costs. Which will reduce inflation. By finding cheaper places to build widgets and exporting technologies to make mfgrs more efficient and lower prices.
The other case is that the invisible hand is in a cement cast because companies no longer want long, diverse supply chains and will have to pay more for goods because low cost won't be the most important characteristic - dependability will be. In other words, paying high-wage Americans to make low-margin stuff will make final goods more expensive but more dependable. That would increase inflation I suspect. Higher cost supply chains = higher cost to consumers.
I heard a provocative presentation today. On dividends and value vs tech.
Someone asked why the old rule has been tossed - that when interest rates rise you SELL utilities and dividend stocks because you can get a safer yield in bonds now. Because rates have risen and bonds are safer than stocks.
But now, with rates rising, we get the opposite: dividend payers rule the roost. mostly up for the year.
So what gives? Why has the old rule been tossed out?
the answer was lame...it was 'well you can't ignore what the market is doing. The market is using discounted cash flows and high valued stocks with no dividend are severely disfavored by DCF. So go with that.
I mean ok yes well...aren't we supposed to find investing truths, fundamentals and go with those? Not just listen to whatever the market has done the last 3 months and considered that to be somethign that will continue? Maybe the market will wake up, realize that you can get 3% from bonds, and sell dividend paying stocks and back up the truck on bonds.
I see that as almost likely. So...maybe buy tech now?
Big disagree, but don't have time to reply in full. Remind me to come back to this. But also, since when is politics and economics mutually exclusive?
I don't understand the 'since when is politics and economics mutually exclusive?' comment. It seems to be a non-sequitor.
From the headline implying that "de-gloablization" is just a political whim and not an economic one. This is one of those topics that will be interesting to read about 10 years from now once the full effects have played out and we've had time to really analyze everything
looking through JPM's always excellent Guide to the Markets.
Junk bond defaults at record low. I've buying short term junk as a defense against rising rates.
US rig count rising fast, and US oil production rising fast also. Should help at some point with inflation.
US Value stock valuations around a PE of 15. Seems like good pickings there. About normal compared to last 25 years. Growth has PE of 27...compared to 25-year average of 21.
looks like lately there have been very little share buybacks....no longer a driver in EPS growth. So that bear case is not valid anymore.
Top 10 stocks in the SP500: 31% of the market cap of the SP500. Ouch. So risky. Same 10 stocks just 24% of the profits. I might be selling some big cap indexes. But there's such career risk there...if the Sp500 rips up and I don't...I lose clients. In theory. But I never lose clients.
growth in workforce set to be zero for a long time. That has to be bearish.
US fed deficit should be back to normal 3-4% of GDP this year. Good news.
Household debt service/disposable income at near historical lows. Consumer is fine.
over the last 20 years the sp500 has risen during every Fed rate rise cycle
EM credit ratings at near al-time highs. EMD might benefit from this.
US has outperformed global for 14 years. Longest streak ever. Contrarians might want to look overseas.
Non-US stocks at average valuations. US stocks much higher than average. Another reason to buy foreign.
# of US listed companies rising slowly but steadily
So many affirmative statements, too many for meaningful discussion or response. agip you seem to try to get a sense of the totality, and then support it with “facts”. This is otherwise known as sentiment.
It just seems like you are scrambling. I get the sense that you’re bunkered.
Are you talking here about your own investments, or those of your clients?
Seven of eight indexes on our world watch list posted losses through April 18, 2022. The top performer is London's FTSE 100 with a YTD gain of 3.14%. India's BSE SENSEX is in second with a loss of 1.87%, and Tokyo's Nikkei 225 is in third with a loss of 6.92%. Coming in last is China's Shanghai with a loss of 12.21% YTD.
So many affirmative statements, too many for meaningful discussion or response. agip you seem to try to get a sense of the totality, and then support it with “facts”. This is otherwise known as sentiment.
It just seems like you are scrambling. I get the sense that you’re bunkered.
Are you talking here about your own investments, or those of your clients?
pls pick a definition of 'affirmative.' I'm not sure what you are trying to say.
1)agreeing with or consenting to a statement or request:
2) stating that a fact is so; making an assertion: Contrasted with negative and interrogative.
3) supportive, hopeful, or encouraging:
And maybe define 'bunkered' too.
Honestly, I understand clearly only around 3/4 of what you write. Why is that?
I do a broad mishmash of commentary on lrc. sometimes talking about my trading account, sometimes about my overall personal portfolio, sometimes just some clients, sometimes all clients. I play fast and loose.
So many affirmative statements, too many for meaningful discussion or response. agip you seem to try to get a sense of the totality, and then support it with “facts”. This is otherwise known as sentiment.
It just seems like you are scrambling. I get the sense that you’re bunkered.
Are you talking here about your own investments, or those of your clients?
pls pick a definition of 'affirmative.' I'm not sure what you are trying to say.
1)agreeing with or consenting to a statement or request:
2) stating that a fact is so; making an assertion: Contrasted with negative and interrogative.
3) supportive, hopeful, or encouraging:
And maybe define 'bunkered' too.
Honestly, I understand clearly only around 3/4 of what you write. Why is that?
I do a broad mishmash of commentary on lrc. sometimes talking about my trading account, sometimes about my overall personal portfolio, sometimes just some clients, sometimes all clients. I play fast and loose.
but agreed, I am scrambling. The market could rise 20% or fall 20% in a year and I'd say 'yeah well that was obvious in retrospect.'
so many crosscurrents right now...if you aren't scrambling you might not be thinking clearly, or just overconfident.
So many affirmative statements, too many for meaningful discussion or response. agip you seem to try to get a sense of the totality, and then support it with “facts”. This is otherwise known as sentiment.
It just seems like you are scrambling. I get the sense that you’re bunkered.
Are you talking here about your own investments, or those of your clients?
pls pick a definition of 'affirmative.' I'm not sure what you are trying to say.
1)agreeing with or consenting to a statement or request:
2) stating that a fact is so; making an assertion: Contrasted with negative and interrogative.
3) supportive, hopeful, or encouraging:
And maybe define 'bunkered' too.
Honestly, I understand clearly only around 3/4 of what you write. Why is that?
I do a broad mishmash of commentary on lrc. sometimes talking about my trading account, sometimes about my overall personal portfolio, sometimes just some clients, sometimes all clients. I play fast and loose.
1–using figures as representative of truths.
Bunkered, like rationalizing that your hands are tied and unwilling/unable to adapt to changed conditions, or at least not sufficiently quickly or often. That’s why I asked if it was for you or your clients, because that could make a difference.
pls pick a definition of 'affirmative.' I'm not sure what you are trying to say.
1)agreeing with or consenting to a statement or request:
2) stating that a fact is so; making an assertion: Contrasted with negative and interrogative.
3) supportive, hopeful, or encouraging:
And maybe define 'bunkered' too.
Honestly, I understand clearly only around 3/4 of what you write. Why is that?
I do a broad mishmash of commentary on lrc. sometimes talking about my trading account, sometimes about my overall personal portfolio, sometimes just some clients, sometimes all clients. I play fast and loose.
1–using figures as representative of truths.
Bunkered, like rationalizing that your hands are tied and unwilling/unable to adapt to changed conditions, or at least not sufficiently quickly or often. That’s why I asked if it was for you or your clients, because that could make a difference.
yes, it's true I rely on numbers and try to disregard emotions. I believe that is the best way to manage money over long periods of time. I am a gawdawful market timer. Like 5th percentile. 100 being the best. Because I am a poor market timer, I try to make as few moves as possible. I regard this is a positive, self-aware statement.
I suppose you are arguing that econ stats are all inaccurate. I'd agree that they are not nearly as precise as advertised. But I think they are close enough to make decisions with.
So my hands are only sort of tied. I could go 100% in stocks then 100% to cash then 100% to gold, all in the same week. The same day. But I believe that I can get the best returns by making minimal trades and relying on the long term positive return of markets to get a satisfactory return. So I don't make many changes. Just around the margins. Owning tips instead of treasuries. Eliminating EM stocks from the portfolio. Shortening duration. Mixing in some value.
And this has worked for the 22 years I've had this as my profession.
Fed's GDP Now just bumped up again. Steady better numbers from that source.
Up to +1.3% for the 1Q.
Most economists think the rest of the year will accelerate after the 1Q.
1st draft of 1Q GDP comes out April 28, but expect material revision because of inflation and flux in the economy.
Measuring inflation is pretty much impossible. To Maser's point, mismeasurement of inflation has skewed econ stats for 100 years. 20 bps of mismeasured inflation can change a stat completely over a few decades.
Honestly, I understand clearly only around 3/4 of what you write. ....
You're doing better than me, I think I follow less than 50% of what he writes. Either I'm too dumb, he's too smart, or we are speaking a different language. I'd like to think it's the latter...
I try to be economical because this is a message board.
So it’s time for me to say good-bye to DGTD, at least for a while. I have accepted a role that will not afford me the ability to make public disclosures or opine on matters often addressed in this thread. Thanks for the back-and-forth, I hope to reconnect at some point in the future, and find out what has happened to you regulars in the intervening year/years.
I try to be economical because this is a message board.
So it’s time for me to say good-bye to DGTD, at least for a while. I have accepted a role that will not afford me the ability to make public disclosures or opine on matters often addressed in this thread. Thanks for the back-and-forth, I hope to reconnect at some point in the future, and find out what has happened to you regulars in the intervening year/years.
Best of luck to everyone 💪
arrivederci Maser. Best of luck in your new role and I hope to catch up in the future.
Also, 35 yr reunion coming up in '23, give it some thought. You can belly up to the bar and tell me who you are! :-)
I've only been to one before, the 25th. I was at the bar getting drinks and a guy who I won't name came up and excitedly greeted me, "Hey, IDIOT / NEARLY RETIRED!!!" He seemed really excited to say hello, and I had no clue who he was or how we'd been connected. This was not my finest moment...