Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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eufo
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Re: Stock scream room

Post by eufo » Mon Apr 30, 2018 7:25 am

sophie wrote:the market is the sum total of millions of individual actions, responding to a set of circumstances that is unique to any given time period and will never recur in the same way again.
I like this one.

Also, another one I like, but forget the source (and I'm paraphrasing)..

"The past doesn't repeat itself, but it rhymes."
Don't agree with me too strongly or I'm going to change my mind
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Kriegsspiel
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Re: Stock scream room

Post by Kriegsspiel » Mon Apr 30, 2018 8:48 am

I believe it is the custom, when the source is unknown, to attribute quotes to Mark Twain.
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Re: Stock scream room

Post by dualstow » Mon Apr 30, 2018 9:16 am

I just looked it up. Yeah, erroneously attributed to Mark Twain. It was found in a book of poems by a poet, a guy named Colombo -- no, not the Lieutenant. Colombo. But the poet claimed he wasn't the original source either.
RIP Marcello Gandini
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Re: Stock scream room

Post by Tortoise » Mon Apr 30, 2018 7:32 pm

If the past rhymes, then are those who are doomed to repeat history lyrical geniuses?
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sophie
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Re: Stock scream room

Post by sophie » Tue May 01, 2018 7:49 am

Alternatively, you can always quote Yogi Berra:

"It's tough to make predictions, especially about the future."

My personal favorite though is one that might also apply to investing:

"Nobody goes there. It's too crowded."
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Kriegsspiel
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Re: Stock scream room

Post by Kriegsspiel » Tue May 01, 2018 8:27 am

Eufo makes a mistake attributional
Tortoise wonders if we're simply rapper tools
But it's history that rhymes
The people are just lines
And now we're off topic like usual
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Re: Stock scream room

Post by Cortopassi » Tue May 01, 2018 8:44 am

No one is making any money this year so far it seems....
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Re: Stock scream room

Post by buddtholomew » Tue May 01, 2018 12:23 pm

True Corto, but look the PP is no better.
We need to internalize this.
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Re: Stock scream room

Post by Tortoise » Wed May 02, 2018 8:26 pm

Kriegsspiel wrote:Eufo makes a mistake attributional
Tortoise wonders if we're simply rapper tools
But it's history that rhymes
The people are just lines
And now we're off topic like usual
Image
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Re: Stock scream room

Post by dualstow » Thu May 03, 2018 12:48 pm

Haha O0
Makes me miss Medium Tex's drawn-out rap lyrics.
RIP Marcello Gandini
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Re: Stock scream room

Post by buddtholomew » Thu May 17, 2018 11:39 am

Although I’ve been 70/30 in retirement accounts I want to thank Tyler for opening my eyes on the benefit of SCV and how it complements the PP portfolio. Making that change towards GB has made all the difference.
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Re: Stock scream room

Post by buddtholomew » Fri Jun 01, 2018 2:32 pm

Come on stocks, you can offset the losses in GLD and TLT.
I can, but only if you hold more of me than the other assets.
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Re: Stock scream room

Post by Tortoise » Fri Jun 01, 2018 7:38 pm

Has anybody here ever compared the total market capitalization of stocks, LTTs, gold, and cash?

If we assume that money "sloshes" between those four assets -- i.e., that if it flows out of one, a roughly equal amount must flow into one or more of the others -- then the portfolio would maintain a constant value only if the four assets were allocated according to total market capitalization, right?

It would be interesting to see those four percentages...
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Re: Stock scream room

Post by Kriegsspiel » Fri Jun 01, 2018 8:52 pm

Tortoise wrote:
Fri Jun 01, 2018 7:38 pm
Has anybody here ever compared the total market capitalization of stocks, LTTs, gold, and cash?

If we assume that money "sloshes" between those four assets -- i.e., that if it flows out of one, a roughly equal amount must flow into one or more of the others -- then the portfolio would maintain a constant value only if the four assets were allocated according to total market capitalization, right?

It would be interesting to see those four percentages...
Well If, for instance, all assets were worth $25, and everyone wanted to sell stocks, they'd keep dropping in value until someone felt like buying them. If nobody wanted to buy them until they were at $5, then the total market cap of this economy would be $80. So some money went from, say, cash to stocks, but $20 of value is gone.
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Re: Stock scream room

Post by Tortoise » Tue Jun 05, 2018 12:34 am

Kriegsspiel wrote:
Fri Jun 01, 2018 8:52 pm
Tortoise wrote:
Fri Jun 01, 2018 7:38 pm
Has anybody here ever compared the total market capitalization of stocks, LTTs, gold, and cash?

If we assume that money "sloshes" between those four assets -- i.e., that if it flows out of one, a roughly equal amount must flow into one or more of the others -- then the portfolio would maintain a constant value only if the four assets were allocated according to total market capitalization, right?

It would be interesting to see those four percentages...
Well If, for instance, all assets were worth $25, and everyone wanted to sell stocks, they'd keep dropping in value until someone felt like buying them. If nobody wanted to buy them until they were at $5, then the total market cap of this economy would be $80. So some money went from, say, cash to stocks, but $20 of value is gone.
If the "total market cap of this economy" includes cash, then it wouldn't change if people "sell" cash to buy stocks, or vice versa, right? As I said, the assumption in this thought exercise is that money sloshes around between the four assets, meaning the total amount of money sloshing around remains constant.

I'm not claiming the assumption is necessarily realistic, but it does seem to be implicit in some discussions about the PP concept. The idea seems to be that money has to go somewhere, and if you're invested in stocks, bonds, and gold, it's probably flowing into at least one of your assets -- unless it's one of those nasty beasts known as a "tight-money recession" where money disappears into a black hole :o
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Re: Stock scream room

Post by Kriegsspiel » Tue Jun 05, 2018 9:09 am

Tortoise wrote:
Tue Jun 05, 2018 12:34 am
Kriegsspiel wrote:
Fri Jun 01, 2018 8:52 pm
Well If, for instance, all assets were worth $25, and everyone wanted to sell stocks, they'd keep dropping in value until someone felt like buying them. If nobody wanted to buy them until they were at $5, then the total market cap of this economy would be $80. So some money went from, say, cash to stocks, but $20 of value is gone.
If the "total market cap of this economy" includes cash, then it wouldn't change if people "sell" cash to buy stocks, or vice versa, right? As I said, the assumption in this thought exercise is that money sloshes around between the four assets, meaning the total amount of money sloshing around remains constant.

I'm not claiming the assumption is necessarily realistic, but it does seem to be implicit in some discussions about the PP concept. The idea seems to be that money has to go somewhere, and if you're invested in stocks, bonds, and gold, it's probably flowing into at least one of your assets -- unless it's one of those nasty beasts known as a "tight-money recession" where money disappears into a black hole :o
Oh, yea maybe if you assume the amount of "money" is constant then sure, everything sloshes into a different asset in equal amounts (like assuming a can opener), but then that isn't really a free market, with market clearing prices. I figure (?) you'd also have to assume stable productivity/wage growth/inflation also, so that some of those resources in financial markets aren't diverted to things like food/smartphones/cars or whatever.
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Re: Stock scream room

Post by boglerdude » Thu Jun 21, 2018 3:22 am

Say a company has a net worth (market cap?) of 100 million. 100 owners (shareholders) each with a million dollar share. The company spends 50 million cash savings to buy out half the owners/shareholders. Now the company's net worth is 50 million?

There are now 50 owners/shareholders, each share still worth 1 million?

But the company's income stream hasn't changed. Earnings per share has doubled? And so the PE ratio "improves" (looks cheaper to buy)?
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Re: Stock scream room

Post by dualstow » Thu Jun 21, 2018 8:36 am

I don’t think just moving money around would halve the net worth.
RIP Marcello Gandini
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Re: Stock scream room

Post by Tortoise » Thu Jun 21, 2018 7:34 pm

If demand for that company's stock among investors remains the same, but supply of that stock suddenly halves, then we would expect the price of each share to roughly double, right? So total market cap of the company should remain roughly the same.
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Re: Stock scream room

Post by ochotona » Thu Jun 28, 2018 6:04 am

Industrial metals, emerging markets, China, Italy collapsing. Even gold. 10 year bond yields backing down. Trade war rhetoric.

I smell deflation again, and a rough patch for stocks. Think Summer 2015.

If the Fed can't raise rates again this year, it means the growth narrative is a lie.
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Re: Stock scream room

Post by dualstow » Thu Jun 28, 2018 7:42 am

ochotona wrote:
Thu Jun 28, 2018 6:04 am
Industrial metals, emerging markets, China, Italy collapsing. Even gold. 10 year bond yields backing down. Trade war rhetoric.

I smell deflation again, and a rough patch for stocks. Think Summer 2015.

If the Fed can't raise rates again this year, it means the growth narrative is a lie.
It's hard to figure out, isn't it. Some day the trade wars are dragging down gold. Others say gold's drop is a sign of confidence in the economy. It feels like anything could happen.
RIP Marcello Gandini
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Re: Stock scream room

Post by ochotona » Mon Jul 09, 2018 8:12 pm

I heard an interesting explanation for why stocks have been going up since the "trade war" began. Some people are viewing it as a short squeeze, that so many people had gone short in advance of the trade war starting that they were too many short, and they could be taken advantage of by short squeeze.

Another reason to not try short term trading!
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Re: Stock scream room

Post by Cortopassi » Mon Jul 09, 2018 10:37 pm

ochotona wrote:
Mon Jul 09, 2018 8:12 pm
I heard an interesting explanation for why stocks have been going up since the "trade war" began. Some people are viewing it as a short squeeze, that so many people had gone short in advance of the trade war starting that they were too many short, and they could be taken advantage of by short squeeze.

Another reason to not try short term trading!
True about the short term trading, but makes no sense overall! This is not a one day event. These tariffs are going to take a long time to play out and can screw a lot of things up.

Those who thought yeah, I'll get short and got burned over the course of a couple days deserve it. They will likely be right long term, however.
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Re: Stock scream room

Post by buddtholomew » Tue Jul 10, 2018 6:54 am

Cortopassi wrote:
Mon Jul 09, 2018 10:37 pm
ochotona wrote:
Mon Jul 09, 2018 8:12 pm
I heard an interesting explanation for why stocks have been going up since the "trade war" began. Some people are viewing it as a short squeeze, that so many people had gone short in advance of the trade war starting that they were too many short, and they could be taken advantage of by short squeeze.

Another reason to not try short term trading!
True about the short term trading, but makes no sense overall! This is not a one day event. These tariffs are going to take a long time to play out and can screw a lot of things up.

Those who thought yeah, I'll get short and got burned over the course of a couple days deserve it. They will likely be right long term, however.
Short squeeze is the excuse bears use when the market moves against them...any long-time Zerohedge lurker will tell you that. Investors do sell leading up to media driven events that spark emotion then come rushing back in when the event doesn’t materialize
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Re: Stock scream room

Post by Don » Wed Jul 11, 2018 3:55 pm

ochotona wrote:
Mon Jul 09, 2018 8:12 pm
I heard an interesting explanation for why stocks have been going up since the "trade war" began. Some people are viewing it as a short squeeze, that so many people had gone short in advance of the trade war starting that they were too many short, and they could be taken advantage of by short squeeze.

Another reason to not try short term trading!
Stocks have been going up because profits are through the roof and economic optimism is off the charts.
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