Stock Market

[thegenius]

I mean geez.

Fed going to have Zero%
interest rates forever

Fed is buying up all the junk corporate bonds

Fed is backing mortgages

Savings rates are going to be Zero% forever

Government is bailing out all the corporations

Government gave free money to everyone (except high income)

Inflation is going to be low

This can do nothing but juice the stock market. What else can absorb all this new money?

Yup the poor will keep their jobs but not make any more money, and the rich will make GOBS of more money. So they can all sit around and wipe their arses with benjamins. It's a sick system.

Will the fed back jumbo home mortgage loans?

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[Siggy]

How are those triple leveraged long funds doing today?

 

[thegenius]

Well they would be doing terribly. But why would you buy any long position today?

those triple leveraged ETFs are day trading vehicles for the most part. And today is a day not to buy them, unless you feel tomorrow it’s going to go up.

 

[Siggy]

Yet people are advocating buying and holding 3x bull stocks. I mean... I got lucky and bought some SPXS last night before close, but I'm already debating selling it today or tomorrow (definitely holding through today if we go over 5% down).

 

[thegenius]

So as of right now you made 12% in one day. Why not just take the money and run?

Let’s say you had $1,000 and then you gave it to someone. They turn around and give it right back to you, 24 hours later, plus an additional $120. So you got back $1,120.

Take the money and run! Isnt there a song about that?

 

[GeneralVeers]

Down 1500 points today on "Fears of Second COVID Spike". Any time the stocks are down based on "Fears" it's a good time to buy.

 

[cyanide12345678]

Time for a second round of aggressive buying.

Orders placed for $6500 for today. In addition to the baseline 10k monthly investments as dollar cost averaging.

 

[Siggy]

Down 1500 points today on "Fears of Second COVID Spike". Any time the stocks are down based on "Fears" it's a good time to buy.

I think there's bigger issues than a second wave. First, the concern over a second wave is important since we're seeing more cases in Texas, Arizona, and Florida. Arizona has straght up told their hospitals to go onto a crisis standing.

However I think the bigger issue is retail traders. Traditionally retail traders are/were considered to be too small to move the market. However you'll have to explain why Hertz, a bankrupt company, somehow jumped over 500% and still is up over 100% from 6/3/20. Airlines and cruise lines are through the roof despite there being serious questions regarding both the return of leisure travel and long term concerns over the return of business travel (Why pay for business class if we can just use Zoom?). Cruise ships are still not allowed to sail from the US.

 

[Siggy]

So as of right now you made 12% in one day. Why not just take the money and run?

Let’s say you had $1,000 and then you gave it to someone. They turn around and give it right back to you, 24 hours later, plus an additional $120. So you got back $1,120.

Take the money and run! Isnt there a song about that?

"Know when to hold it, know when to fold it, know when to walk away, know when to run."

Also, what's the saying, "Be greedy when people are fearful and be fearful when people were greedy"? People are just turning from greedy to fearful if this trend last past today.

Oh, don't get me wrong, I'm not holding long term, and I'm going to turn around and quickly rebuy a lot of what I sold yesterday... the only question is how quick.

 

[thegenius]

I think there's bigger issues than a second wave. First, the concern over a second wave is important since we're seeing more cases in Texas, Arizona, and Florida. Arizona has straght up told their hospitals to go onto a crisis standing.

However I think the bigger issue is retail traders. Traditionally retail traders are/were considered to be too small to move the market. However you'll have to explain why Hertz, a bankrupt company, somehow jumped over 500% and still is up over 100% from 6/3/20. Airlines and cruise lines are through the roof despite there being serious questions regarding both the return of leisure travel and long term concerns over the return of business travel (Why pay for business class if we can just use Zoom?). Cruise ships are still not allowed to sail from the US.

Yup.

"Know when to hold it, know when to fold it, know when to walk away, know when to run."

Also, what's the saying, "Be greedy when people are fearful and be fearful when people were greedy"? People are just turning from greedy to fearful if this trend last past today.

Oh, don't get me wrong, I'm not holding long term, and I'm going to turn around and quickly rebuy a lot of what I sold yesterday... the only question is how quick.

Yup.

the stock market is not reality.

 

[Siggy]

After a banner day yesterday for SPXS, it had a little discount this morning... so I panic sold premarket... and then quickly rebought it plus quite a bit more...

Today's purchase of SPXS is now up 5%... good luck with your discounted buys, but it looks like roast bull for dinner again today.

 

[thegenius]

DOW Stock market futures down 766 points (or 3%) in advance of tomorrow's trading.

 

[wamcp]

DOW Stock market futures down 766 points (or 3%) in advance of tomorrow's trading.

My taxable acct: /ES 2800 Jun EOM puts are printing. Also holding /RTY short.

Deferred accts: Changed to all cash on Thurs before the steeper end of day sell off. Hoping for further broad sell off to pour those funds into corona proof stocks (SaaS companies, gaming, FAMNG)

also, these rare 5 standard deviation one day selloffs are great example why you don’t hold 100% in leveraged funds long term as I mentioned earlier in the thread

 

[Siggy]

I don't touch my deferred accounts... time in market is more important than timing the market. I still haven't rebought after selling my short term stocks on Tuesday and Wednesday.

Still in mostly in cash and BND. Futz around trying to play the dip and the recovery on Friday and instead of ending up $3-400 on 600 shares of SPXS, only netted $80. However I ended up rebuying 200 shares of SPXS at the end of the day.

Bear printer goes BRRRT.

 

[thegenius]

Going down the road feelin' bad.......
it's going to go down more I reckon in the near term.

I did buy a little more JETS (Airline ETF) today as it's 50% off the high.

 

[Porfirio]

I am thinking of buying more tech than I normally do.

 

[thegenius]

I am thinking of buying more tech than I normally do.

That is sound. I'm in VTI (ETF for total stock market)...and looking at the top ten holdings it's mostly tech:
Microsoft CorpMSFT4.71%
Apple IncAAPL4.28%
Amazon.com IncAMZN3.47%
Facebook Inc AFB1.82%
Alphabet Inc AGOOGL1.46%
Alphabet Inc Class CGOOG1.39%
Johnson & JohnsonJNJ1.32%
Berkshire Hathaway Inc Class BBRK.B1.18%
Visa Inc Class AV1.12%
Procter & Gamble CoPG0.97%

All pretty sound companies IMO. They will not only survive, but they will thrive.

 

[GeneralVeers]

I own VTI as well. VBR and VLUE in addition.

One overlooked area are closed-end funds. I've been buying a lot of PCM and PTY which right now are producing a nice 9-10% annual distribution. If you can get these on a down day at a discount, it's a great way to generate passive income. PCM has produced a monthly dividend every month for 20+ years, even during the great Recession. Best part is that it's taxed at capital gains 23% instead of the 39% from an interest-bearing account.

 

[Porfirio]

Tech is printing money. This is going to be the tech take over this year - if this continues.

 

[SeekerOfTheTree]

Tech is printing money. This is going to be the tech take over this year - if this continues.

How long can tech fly high. It's been flying high for a long time.

 

[Porfirio]

How long can tech fly high. It's been flying high for a long time.

No, idea. But the high is real nice.

 

[thegenius]

I feel like the market is ready to pop or deflate at the slightest hint of news. Like "we have a vaccine" --> POP it goes up 15%. Or "hospitals are now overcrowded and people being sent home to die" ---> PPPSSSSSTTT down 15%

I recently bought WYNN. Just a little position. I'm ready to gamble.

 

[wamcp]

Beautiful continued global stock market rally.

Markets, given enough time, are able to see straight through the panic-demic and the media exaggeration. “CAsEs aRe EXplODiNg!!!! This is a SECOND WAVE!!” is literal fear mongering.

Deaths are not currently rising even when given a lag time for the case explosion. COVID doesn’t meet cdc definition of an epidemic anymore. Markets can see this.

https://pbs.twimg.com/media/EcNTfLJWAAIHeJk?format=jpg&name=large

It is a shame there are investors out there who missed out on the 2009 monster rally from the bottom who will again miss out on a similar incredible rally in 2020 because they follow the emotions driven by mass media. And I say this as a millenial who wasn’t even in college during the GFC - charts are forever there to learn from.

 

[thegenius]

I have no idea what you are talking about. Markets can’t see ****. They are just controlled or used by a bunch of people, most of whom are not that smart, who execute trades based on fear and greed.

It’s not like the market has special eyes or x-ray vision, or has access to a shamen that can see the future.

the only thing the market does do is reflect what it thinks the state of the economy will be in 9-12 months. Or maybe 6-9 months.

so the market is banking on, in the next 6-12 months:
- unemployment rate going down
- consumer confidence going up
- increased consumer spending in several industries
- better drug treatments
- maybe a vaccine
- low inflation
- low interest rates

all of the above are quite reasonable expectations during that time frame.

the market does not represent actual economic truth.

Fear and greed. Always has been, always will be.

 

[Apollyon]

I have no idea what you are talking about. Markets can’t see ****. They are just controlled or used by a bunch of people, most of whom are not that smart, who execute trades based on fear and greed.

It’s not like the market has special eyes or x-ray vision, or has access to a shamen that can see the future.

the only thing the market does do is reflect what it thinks the state of the economy will be in 9-12 months. Or maybe 6-9 months.

so the market is banking on, in the next 6-12 months:
- unemployment rate going down
- consumer confidence going up
- increased consumer spending in several industries
- better drug treatments
- maybe a vaccine
- low inflation
- low interest rates

all of the above are quite reasonable expectations during that time frame.

the market does not represent actual economic truth.

Fear and greed. Always has been, always will be.

"When the market is greedy, be fearful. When the market is fearful, be greedy."

Honestly, history bears out that you will always win with that strategy.

 

[wamcp]

"When the market is greedy, be fearful. When the market is fearful, be greedy."

Honestly, history bears out that you will always win with that strategy.

Only works if you can identify what is greedy and what isn’t. Stock rally does not equate greed. Sentiment does. Lots of investors make this mistake, don’t fall into that trap. The market is not in greed mode if you look at P/C ratio, AAII sentiment, BoFA bull/bear etc.

There are many skeptics of the rally including lots of posters here. This is a good sign. The best investing or trading advice you will get is trends are driven by disbelief.

Look at 2009 for example when Warren Buffet gave an interview to cnbc on his sour outlook. US economy has no bounce: Buffett - Indian Express
BUFFETT: Everything that I see about the economy is that we've had no bounce...in terms of the economy coming back, it takes awhile. I said the economy would be in shambles this year and probably well beyond. I'm afraid that's true.

BECKY: We hear people on our air all the time who talk about the "green shoots" that they're seeing. Are you seeing any of those green shoots?

BUFFETT: I looked. We're not seeing them. Whether it's retailing, manufacturing, whereever. We have a big utility operation. Industrial demand is down like we've never seen it for a simple thing like electricity. So it hasn't happened yet.

At the time of the interview on June 24, 2009, the S&P was already 43% off the March 2009 bottom and would never come close to retesting the lows again.

The market is forward looking. The economy in its current state is not what the market is going to focus on.

 

[Shufflin]

I have no idea what you are talking about. Markets can’t see ****. They are just controlled or used by a bunch of people, most of whom are not that smart, who execute trades based on fear and greed.

It’s not like the market has special eyes or x-ray vision, or has access to a shamen that can see the future.

the only thing the market does do is reflect what it thinks the state of the economy will be in 9-12 months. Or maybe 6-9 months.

so the market is banking on, in the next 6-12 months:
- unemployment rate going down
- consumer confidence going up
- increased consumer spending in several industries
- better drug treatments
- maybe a vaccine
- low inflation
- low interest rates

all of the above are quite reasonable expectations during that time frame.

the market does not represent actual economic truth.

Fear and greed. Always has been, always will be.

It's beyond fear and greed. 60% of trades are made by computers using advanced algorithms on less volatile days, and up to 80 to 90% of trades on very volatile days. The behemoths we know as investment firms have made this science so advanced that the computers can even read headlines and execute trades at light speeds, faster that a human can respond. Mere mortals are along for the rides.

It's not human-driven anymore. Maybe 7 years ago. Now computer driven.

Your other points are on point. The stock market has priced in the economic landscape 6 to 9 months into the future.

 

[HoosierdaddyO]

I guess this is the closet thread to money questions, without having to open a new thread. But what would you guys fill out for your tax allowances on your w4 if you’re a single fella... 0 or 1 for your federal, state and local items lol!!! I know if you place a 1 now you’ll get a little more per paycheck but likely a less refund, vs a 0 where ones paycheck may be slightly less but a larger refund at the end. Any thoughts ?

 

[GeneralVeers]

A "refund" is a scam. Its basically an interest-free loan to the government. Your goal should always be to give the government the minimum you are required to.

"Tax Refund Culture" is a big problem in the US as it makes people not save and spend all their paychecks knowing they get a refund at the end of the year.

Tax preparation is a scam in general. The government knows how much we all make, so why do we have to pay a professional to tell them what they already know? Its because of the multi-billion dollar tax preparation lobby. Other countries tries dont do taxes in the insane wasteful way that we do.

 

[HoosierdaddyO]

While I totally don’t disagree with you... do I put a darn 1 or a 0 lol?!?

 

[GeneralVeers]

While I totally don’t disagree with you... do I put a darn 1 or a 0 lol?!?

Put a 1. That is your standard personal deduction which will result in less withholding.

 

[thegenius]

A "refund" is a scam. Its basically an interest-free loan to the government. Your goal should always be to give the government the minimum you are required to.

"Tax Refund Culture" is a big problem in the US as it makes people not save and spend all their paychecks knowing they get a refund at the end of the year.

Tax preparation is a scam in general. The government knows how much we all make, so why do we have to pay a professional to tell them what they already know? Its because of the multi-billion dollar tax preparation lobby. Other countries tries dont do taxes in the insane wasteful way that we do.

Well here is a topic I agree with you.

The refund is a total scam. People who love getting 5K back at tax time are just missing out on having and extra ~$400 a month in their bank account. The government would love to hold onto your money and give it back to you.

The best way to organize your taxes and W4 is you pay nothing and own nothing at tax time. 0 dollars. That means you have paid the right amount to the govt and you haven't been giving them a loan.

It can be hard to do, especially if you are a 1099 or a corporation. But each of the years that I've been a 1099, I've gotten a small yearly refund (1-3K) from fed and state which makes me happy given that I have erratic monthly incomes and pay estimated quarterly taxes.

Tax prep is a total idiotic scam. The average person or family should be able to do their taxes in 10 minutes.

There are lots of scams in our society. There is tons of stuff we don't need yet are peddled to us as necessary. Real Estate agents. Travel agents. Just about any agent. The majority of people don't need them.

Real estate agents in most cases are not necessary. Why do they take 5-6%? I just bought a house in California and the house we bought sold in under a month. Commission was ~80K. Ridiculous they didn't do even 1/10 of the work to justify that commission.

 

[GeneralVeers]

Real estate agents in most cases are not necessary. Why do they take 5-6%? I just bought a house in California and the house we bought sold in under a month. Commission was ~80K. Ridiculous they didn't do even 1/10 of the work to justify that commission.

Don't forget: car dealers, insurance agents, title companies, and financial planners.

Anyone who's taking a chunk of a transaction, but adds little or no value is redundant.

Props to Tesla for moving the auto industry away from car dealers. In the age of the internet, these useless people provide nothing but a 5-10% markup over retail. Too bad most of them are enshrined in state laws due to lobbyists.

I also don't get financial planners who take a percentage of the total value. If I have $500,000 or $1,000,000 in assets the work is the same, so why are they taking more with more assets?? Should be a fixed price based on the goals and complexity of the assets.

Realtors are literally the worst. The paperwork and effort to sell a $200,000 house is the same as for a $3,000,000 house. In fact, the more expensive house is often easier as there are fewer showings, and usually no open houses. In the future you should just hire an agent for a flat feet to put your house on MLS, charge a fee per showing, and then a fee once sold. These people cause nothing but inflation.

 

[thegenius]

Imagine a plumber called to fix a toilet at a home valued at $300,000 vs $3,000,000. It's not like the job of fixing a toilet is 10x harder at the $3,000,000 home. Should cost more or less the same.

Problem is if all plumbers charge many x more, what is a home owner of a 3M home supposed to do? Technically you bid them down against each-other (but that is time consuming and prob not worth your time).

Title insurance is a CROCK OF ****. One of the lowest frequency claims made on all forms of insurance.

 

[GeneralVeers]

Imagine a plumber called to fix a toilet at a home valued at $300,000 vs $3,000,000. It's not like the job of fixing a toilet is 10x harder at the $3,000,000 home. Should cost more or less the same.

Problem is if all plumbers charge many x more, what is a home owner of a 3M home supposed to do? Technically you bid them down against each-other (but that is time consuming and prob not worth your time).

Title insurance is a CROCK OF ****. One of the lowest frequency claims made on all forms of insurance.

Right. And the title company fees are tied to the price of the home.....despite the work being identical.

 

[hundreddaysoff]

I used to be real hardcore about this anti-tax-prep ideology thing. Completely agree that if the tax prep lobbyists are not behind this, they might as well be.

But then I broke down and bought TurboTax this year because I couldn't figure out my frickin' 199A deduction. How's that for some political irony?

 

[hundreddaysoff]

Real estate agents in most cases are not necessary. Why do they take 5-6%? I just bought a house in California and the house we bought sold in under a month. Commission was ~80K. Ridiculous they didn't do even 1/10 of the work to justify that commission.

Well, I'm trying to buy without an agent in Nocal right now. Biggest issue is just finding the listings without being local. Not a lot of stuff on the market.

Yes, in theory an all-cash deal is very simple without an agent. Make a deal with the owner, then call the escrow/title company, then coordinate the inspector and insurer, then sign all the papers. Normally my middleman would make like $15k off this easy work.

Actually hoping that if listing agent knows they can make 6% rather than 3% off of "me", then they will subconsciously persuade their client to sell to me vs others who have buyer's agents.

It's also convenient that Nocal closings generally go thru title companies, no? I imagine they will try to sell me title insurance at a very affordable rate. If they're great salesmen they'll tell me that the seller customarily pays for it...

 

[thegenius]

I used to be real hardcore about this anti-tax-prep ideology thing. Completely agree that if the tax prep lobbyists are not behind this, they might as well be.

But then I broke down and bought TurboTax this year because I couldn't figure out my frickin' 199A deduction. How's that for some political irony?

even turbo tax is superior to CPAs. It’s 50-100 bucks vs 500. Still for 60-75% Americans, doing your taxes should take less than 30 minutes and really should cost anything.

I know people gotta work, but we makes our lives needlessly complicated necessitating all the “agents” we use to make our lives easier. In reality they suck your money.

 

[thegenius]

Well, I'm trying to buy without an agent in Nocal right now. Biggest issue is just finding the listings without being local. Not a lot of stuff on the market.

Yes, in theory an all-cash deal is very simple without an agent. Make a deal with the owner, then call the escrow/title company, then coordinate the inspector and insurer, then sign all the papers. Normally my middleman would make like $15k off this easy work.

Actually hoping that if listing agent knows they can make 6% rather than 3% off of "me", then they will subconsciously persuade their client to sell to me vs others who have buyer's agents.

It's also convenient that Nocal closings generally go thru title companies, no? I imagine they will try to sell me title insurance at a very affordable rate. If they're great salesmen they'll tell me that the seller customarily pays for it...

if you don’t come with an agent, I think you just make an offer contingent to refunding a 2.5% - 3% sellers credit at close for not using an agent. Most argue that sellers pay the commission, but its coming from the buyer.

Or just make an offer that is 3% lower than what you normally would, and explain it’s the job of the seller to reduce the commission rate with their listing agent.

My understanding is that who pays escrow fees is regional. In SoCal I think it’s typically 50/50, in NorCal the buyer usually pays 100% of escrow. But it is all negotiable.

 

[thegenius]

Once daily cases reaches a peak and continues its downtrend, if it is even possible one can do that, the market will explode by 10%. Get your buying in over the next week or two.

 

[HoosierdaddyO]

“allowances are no longer used for the redesigned Form W-4. This change is meant to increase transparency, simplicity, and accuracy of the form. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.”

Apparently you can’t even count your self as a withholding anymore ???

 

[thegenius]

“allowances are no longer used for the redesigned Form W-4. This change is meant to increase transparency, simplicity, and accuracy of the form. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.”

Apparently you can’t even count your self as a withholding anymore ???

Do they still allow you to withhold money? If so you can still keep more money out of your paycheck. You just can't say "2".

 

[HoosierdaddyO]

Hey I can’t seem to get an answer anywhere lol, I could ask my accountant but whatever’s. Are your FICA taxes (Social and medicare) taxed at your after deduction income or are they taxed at your before deduction income lol?! I know my state and fed are after deductions but was never really sure about fica?!

 

[hundreddaysoff]

Hey I can’t seem to get an answer anywhere lol, I could ask my accountant but whatever’s. Are your FICA taxes (Social and medicare) taxed at your after deduction income or are they taxed at your before deduction income lol?! I know my state and fed are after deductions but was never really sure about fica?!

Before deduction income --- except for health insurance premium, HSA, and a few other special costs, which are deductible from Medicare.

And this only applies to sole proprietor. If you are taxed as a corporation (eg S-corp) then only the 1099 income that you call "salary" is SS+Medicare taxable. The rest of your 1099 income, called "distribution", is not SS+Medicare taxable but is income-taxable.

WCI has a great old post here explaining this S-corp trick better. But I tried an S-corp to get this tax break and found that the amount of extra bureaucracy and paperwork outweighed my tax benefits, which were ~5k. So now I'm back to sole proprietor.