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Stock-Age: Stocks, Options and Dividends oh my!
- Thread starter koam
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Defense
Construction / heavy industry
Non-renewable energy
Small caps & companies that primarily do domestic business
Ether_Snake
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I think we are in for a bubble. There will be a lot of dumb hype as people think it will be deregulation galore, but we're already at a high and it looks extremely unlikely that a Trump administration would benefit the middle class, so there's a lot more downside risk. The actions they are going to take will likely just precipitate a recession.
Whatever they do will be self-destructive, as always, and I don't think it will take years for this to materialize. You have a populist government in place too that would seek to maintain power and legitimacy by blaming others, so trade wars become far more likely.
I wouldn't trust any rally to last a year into Trump's presidency.
There's always the unlikely possibility that Trump's administration would invest massively in infrastructure and actually somehow give a lasting boost to the economy, but I'm sick of thinking "maybe Trump will do the right thing soon", so I don't expect that.
Whatever they do will be self-destructive, as always, and I don't think it will take years for this to materialize. You have a populist government in place too that would seek to maintain power and legitimacy by blaming others, so trade wars become far more likely.
I wouldn't trust any rally to last a year into Trump's presidency.
There's always the unlikely possibility that Trump's administration would invest massively in infrastructure and actually somehow give a lasting boost to the economy, but I'm sick of thinking "maybe Trump will do the right thing soon", so I don't expect that.
Agreed. A shorter's dream scenario is being set up here.
Ether_Snake
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Wtf indices are barely down yet all my stocks are plunging big time. Everything is apparently going into bank stocks.
Captain Smoker
Member
I have Synchrony Financial stocks.
+ 18% in the last five days.
Don't know how long this ride is going upwards and when to sell. xD
Everything else is going downhill, especially First Solar, fuckin' Trump.
Large Professor
Member
The bank rally is insane. I'm glad I bought some JPM calls on friday.
(edit) Bank of America just broke $20 for the first time since the GFC.
It sure is tempting to get more calls on the sector (maybe some C or WFC), but who knows how long this will last. The market is currently very much focused on the positives (for corporate profits/wall street) of a Trump Presidency/Republican control of the Congress, and doesn't seem aware of the negatives (increased protectionism isn't exactly bullish).
(edit) Bank of America just broke $20 for the first time since the GFC.
It sure is tempting to get more calls on the sector (maybe some C or WFC), but who knows how long this will last. The market is currently very much focused on the positives (for corporate profits/wall street) of a Trump Presidency/Republican control of the Congress, and doesn't seem aware of the negatives (increased protectionism isn't exactly bullish).
The President cannot unilaterally raise tariffs, and it seems unlikely to me that Congress would approve of it. The change in the power dynamic is that if the Republican Congress passes something, it's now less likely to get vetoed. And regulatory bodies with appointed members will now be Republican controlled.
Now it is entirely possible that repealing financial regulations could lead to another crisis, but that will not happen in the short term, and Wall Street is about the short term.
Ether_Snake
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So Trump is likely to get rid of Yellen and put someone else in charge, just for the sake of putting someone at the head of the Fed himself. But what does it mean for interest rates? If the big infrastructure spending spree goes forward, you'd think they'd want to put that on hold, but the Republicans are crazy about wanting higher interest rates, or were they just asking for higher rates because Obama was president?
It probably means very little. Yellen's term as chairwoman isn't up until 2018. Interest rate decisions aren't made just by the chairperson. And there is a good chance they will vote to raise rates anyway, as they have been talking about it all year.
Ether_Snake
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Oh right for some reason I thought it was up in a few months but that wouldn't make sense.
Unknown Soldier
Member
I've always been tech-heavy, as it's what I am most familiar with. Despite the DJI and S&P looking all roses, it's been a bloodbath for me.
I'm trying to stanch the bleeding as best I can but you don't just turn a portfolio around on a dime and I'm not really sure if anything I do will even be in time at this point.
I'm trying to stanch the bleeding as best I can but you don't just turn a portfolio around on a dime and I'm not really sure if anything I do will even be in time at this point.
ClosingADoor
Member
If they are healthy companies, I'd just wait it out and collect the dividend along the way.
If your tech company operates virtually like a monopoly with high barriers of entry and a stronghold around the world, you can just ride it out.
RumblingRosco
Member
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Ether_Snake
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The Snapchat IPO is coming late, should have happened a year ago. Since Instagram added stories, I see no reason why anyone would stick to Snapchat other than to make funny faces.
RumblingRosco
Member
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I barely every scroll down to see pictures in instagram anymore, i just watch stories. I have no idea if that's common or not, but its true for me. I don't ever look at snapchat but then again i'm an old man at this point at 38
Unknown Soldier
Member
NVDA is exploding. All I see now is Greenspan warning us about irrational exuberance.
I should buy more NVDA.
I should buy more NVDA.
Ether_Snake
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Accounts I follow use it a lot and its the sale stuff you see on snapchat. Shops use it a lot too.
Whatever the case at some point people are going to chose where to upload vids and not constantly go over both apps.
I see much kess consistent use of snapchat than I do of Instagram. And one way or another. there used to be no alternative to Snapchat and now there is, a popular app too.
No way would I consider Snapchat more valuable now than before Instagram added stories. Soccer moms, kids and porn folks might use it a lot, but monetization-wise Instagram is much better positioned, plus it's part of Facebook.
Captain Smoker
Member
Fuck, First Solar tanked even more after new guidance, come on. -.-"
But I bought AMD shares right before it soared +11% yesterday.
But I bought AMD shares right before it soared +11% yesterday.
Ether_Snake
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On interest rates, Trump kept whining that the fed was helping Obama by keeping interest rates low, but now he is in power so presumably he would want them to stay low.
Republicans have been constantly attacking the fed for the past few years too.
Even if the fed is independent it sounds like some intervention from the government will happen in some way.
Republicans have been constantly attacking the fed for the past few years too.
Even if the fed is independent it sounds like some intervention from the government will happen in some way.
ClosingADoor
Member
All solar is down. Low oil prices, Trump with his coal focus got elected, prices falling so less profit to be made. First Solar is letting go 25% of their workforce, so I don't think they expect a good outlook in the near future.
No clue if it is a good investment at the moment. You'd think it has dropped enough this year already (-50%), but it's risky to catch a falling knife.
killertofu
Member
So about two years ago I opened up an Ameritrade account and put some money in there because I was doing a lot of freelance work and a coworker told me that putting money into that would help me with taxes.
Now I've been at a salaried job with a 401k and whatnot and just remembered that I had money in there. It looks like nothing has really changed in value.
Can I withdraw the money and put it back into my account without penalty? Is it even worth it for a few grand?
Now I've been at a salaried job with a 401k and whatnot and just remembered that I had money in there. It looks like nothing has really changed in value.
Can I withdraw the money and put it back into my account without penalty? Is it even worth it for a few grand?
Ether_Snake
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I would see no reason why you would have penalties.
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Tesla is really tempting at this price.
Don't want to move cash in USD thought since the Cad is already so low, but I feel in could fall in the high 60s still.
The Vanguard Canadian etfs suck ass, even the etfs that don't track Canada are really limited.
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Tesla is really tempting at this price.
Don't want to move cash in USD thought since the Cad is already so low, but I feel in could fall in the high 60s still.
The Vanguard Canadian etfs suck ass, even the etfs that don't track Canada are really limited.
Dolla Dolla
Member
Is it an IRA account? If so, you could potentially roll it into your current retirement account. If it's just a normal account, go ahead and withdraw, no penalties.
The 30 year bonds have crashed incredibly hard since the election, presumably because rates will be going up. IF the economy is growing fast like Trump is saying his goal is, rates will have to go up to match that.
The red line is where we are now, and the blue is post brexit in july.
Ether_Snake
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Why would the election make an interest rise more likely though?
And of course the economy won't grow like Trump says it will, lol.
Let me answer your question with a question:
Given that the Fed has been talking about rate increases all year, and the given that the stock market not only didn't crater the news of a Trump win but has rallied to near all-time highs, what possible excuse does the Fed have for not raising rates?
Got paid out some money that I'd like to invest. I already have a small portfolio of single stocks, but I really want to get some money into index funds to make my investment more general.
But looking at all the top indices at all time highs, I fear that there is little upside but potential for a lot of downside over the next couple of years. What do you guys think I should do? Save more cash and wait for the next '09?
But looking at all the top indices at all time highs, I fear that there is little upside but potential for a lot of downside over the next couple of years. What do you guys think I should do? Save more cash and wait for the next '09?
ClosingADoor
Member
Difficult question. At the moment I'm 50/50 in investments and cash myself in my stock account. But it depends on your goals. Is this money for long term (let's say at least 10 years), then timing the market becomes a lot less valuable. The next crash might happen tomorrow, it might happen next year, or it might happen after those 10 years. You simply can't say.
Large Professor
Member
That's the 1 million dollar question. Nobody knows when the next crash is.
Market valuations are currently stretched, but that doesn't mean stocks can't gain another 10% or 20%.
It's just about what the market thinks. If you are in a high growth economy, you raise rates. If you need to prop up a slow growing economy, you lower rates. The market is pricing in a rate increase, and in a big way.
Ether_Snake
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Well I have a few issues with that.
#1: Unemployment is really low already. So for the economy to kick into high gear, you'd have to magically move a lot of people to better jobs, because at this point there is little room to lower unemployment. It's not like massive investment is going to make people work twice as many hours, so unless you import labor and force them to spend all their money locally, I don't see how the economy would boom.
#2: The big infrastructure spending spree. If it does happen, again we have low unemployment, so it will just make labor more expensive as demand increases at a time where workforce supply is constrained. Normally, you would invest significantly in infrastructure at a time when unemployment is really high, which would put a lot of people back to work, reducing unemployment, and then reap the productivity-enhancing benefits of the improved infrastructure as projects end. In parallel to that, employment for infrastructure ramps down, but the infrastructure itself leads to employment, so it's a smooth progression from government investment to free market investment, with unemployment staying low or going lower.
Right now the plan is to invest massively in infrastructure while unemployment is really low. So it will have a moderate to negative effect where it would usually have a positive one (lowering unemployment in hard hit sectors, usually construction), even if people jump from one failed sector into construction for some time as demand increases. But since the economy is already doing fairly well, there seems to be far more downside than upside ahead, so the risk is that the economy will start to contract as the projects are going through or ending. Then you end up with a fucked up situation: no money going in all those tolls and whatever scheme they have in mind to make a return on their investment, maintenance costs that go unfunded so infrastructure already starts to deteriorate, and if it happens sooner than later projects get canceled or corners get cut along the way as investors (government or private, same shit with a Trump administration) run for the exits.
Whatever the case, you'd almost hope for an economic crisis before this whole thing goes into motion. Right now it all seems more likely for the economy to go down more than up.
And yeah, raising rates doesn't sound like it would contribute positively, yet it's coming.
#1: Unemployment is really low already. So for the economy to kick into high gear, you'd have to magically move a lot of people to better jobs, because at this point there is little room to lower unemployment. It's not like massive investment is going to make people work twice as many hours, so unless you import labor and force them to spend all their money locally, I don't see how the economy would boom.
#2: The big infrastructure spending spree. If it does happen, again we have low unemployment, so it will just make labor more expensive as demand increases at a time where workforce supply is constrained. Normally, you would invest significantly in infrastructure at a time when unemployment is really high, which would put a lot of people back to work, reducing unemployment, and then reap the productivity-enhancing benefits of the improved infrastructure as projects end. In parallel to that, employment for infrastructure ramps down, but the infrastructure itself leads to employment, so it's a smooth progression from government investment to free market investment, with unemployment staying low or going lower.
Right now the plan is to invest massively in infrastructure while unemployment is really low. So it will have a moderate to negative effect where it would usually have a positive one (lowering unemployment in hard hit sectors, usually construction), even if people jump from one failed sector into construction for some time as demand increases. But since the economy is already doing fairly well, there seems to be far more downside than upside ahead, so the risk is that the economy will start to contract as the projects are going through or ending. Then you end up with a fucked up situation: no money going in all those tolls and whatever scheme they have in mind to make a return on their investment, maintenance costs that go unfunded so infrastructure already starts to deteriorate, and if it happens sooner than later projects get canceled or corners get cut along the way as investors (government or private, same shit with a Trump administration) run for the exits.
Whatever the case, you'd almost hope for an economic crisis before this whole thing goes into motion. Right now it all seems more likely for the economy to go down more than up.
And yeah, raising rates doesn't sound like it would contribute positively, yet it's coming.
Night Hunter
Banned
So, maybe someone here can help me understand. I really have no idea about the stock market at all, but I've been watching the $/ exchange rate since the election, and why is it that the $ is actually up?
I just have a hard time wrapping my head around this, and as I said, no clue about the stock market. I mean the pound pretty much collapsed after the whole Brexit thing, I expected the same with the election of Donald Trump.
I just have a hard time wrapping my head around this, and as I said, no clue about the stock market. I mean the pound pretty much collapsed after the whole Brexit thing, I expected the same with the election of Donald Trump.
Ether_Snake
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Interest rates are going to go up so the dollar streghtens, and a lot of other countries are keeping low or negative interest rates. If Europe was doing great the euro would strengthen but it looks like there is no reason to expect rates to go up there.
You have to look at interest rates in the context of the entire economy rather than just short-term stock prices. Some of the main concerns about the current low rates:
1. They may encourage excessive risk-taking. For instance, retirees who have most of their portfolio in stocks because bond yields are too low.
2. They are hard on certain institutional investors, such as pension plans, which may be legally required to keep a certain amount of money in treasuries or other low-risk vehicles.
3. They may be creating a credit bubble, where people take on more principle debt than they can reasonably pay back because they can afford the low monthly interest payments.
4. They leave the Fed with almost no power to stimulate the market.
Ether_Snake
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Sure, if Hillary won I would expect rising rates to be likely. But the GOP has been trying to make the Fed less independent, they are constantly attacking Yellen, to her face. You'd think a big Republican win and Trump's stated belief that the fed helped Obama with low rates sets the stage for him to attack the fed to influence them, somehow.
That's politics. And technically he was attacking her for not raising rates sooner.
You should actually be more worried about Trump influencing Yellen if he started praising her, as that might present the impression that she could get appointed to another term in 2018 if she stays on his good side. If she is getting constantly attacked, then she might as well do what she wants for the next 2 years, because she's getting replaced either way.
Ether_Snake
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No, Trump was for reducing the rates much faster when Bernanke was in place (there is a vid on youtube being interviewed by the idiot market guy on NBC I forget the name of) where he is saying Bernanke needs to drop rates by 1%, go bold and see what happens. Later he was saying the fed was keeping the rates low to help Obama, which means again that he believes low rates help prop the economy.
If he and the GOP attack Yellen, she would get pressure from other fed members behind the scene to be careful. If she pisses them off, once she is out the fed would be in trouble if it wants to stay independent. She can't give Trump the finger.
If he and the GOP attack Yellen, she would get pressure from other fed members behind the scene to be careful. If she pisses them off, once she is out the fed would be in trouble if it wants to stay independent. She can't give Trump the finger.
That's politics.
The Republicans have been attacking the Fed for ages. "Audit the Fed! blah blah blah." This is what happens when the head of an agency was appointed by the opposing party. Trump is going to appoint one of the investment bank guys on his economics team to be Fed chair in 2018, and that's that.
Ether_Snake
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Sure he will, but you're telling me the rates will go up as much as they would have otherwise? I'd doubt it. He'll push to keep them down. Which means markets are likely overestimating future interest rates.
Who knows. If you had asked me what would happen if Trump was President before the election, I probably would have said that the market would panic and sell off, and the Fed would not raise rates because of that. And the opposite has happened.
Now that he's President, who knows if he decides to do something that tanks the market like pulling out of NAFTA. If that happens, it could undo a rate increase. I don't particularly think hot campaign rhetoric is going to make a difference, though.
anonymous_abc
Member
You're not making a thread titled come in click my website and give me money. You should be ok.
Two things. 1) Forget anything trump said years ago. 2) Bond yields are still on the low side of history, so when you say they are overestimating future interest rates, that's not really true. They've made a big move only because they were all all time lowest rates in the history of our country, but as of right now they aren't pricing in more than a small rate increase.