Stock market tips and experiences

[DrVenture]

Originally Posted by other_evolved

I watched him live and read the transcript this morning. He did not concede any such thing lol. Revisions to labor market data have happened for as long as they've captured labor market data. He said multiple times that we are close to full employment, the LFPR is strong and that when UE is too low it creates inflationary pressures.

Exactly correct. A basic concept of economics is supply and demand. Low unemployment means more money chasing after goods. This is inflationary if supply cannot keep up.

LFPR has been rising steadily since bottoming in April 2020. Way too many unknown factors to know what drives this number.

Ironically many complained when headline inflation (Aug annualized 2.5%) was higher than core inflation (August annualized 3.2). Now it is the opposite and some are still complaining. The reason for this difference is the drop in food and energy prices. BLS releases these and other inflation numbers monthly. No single measure tells the whole story.

[Tyga11]

Originally Posted by DrVenture

Please post the exact quote that you are referring to.

Really not that hard to find. Literally everyone was talking about it yesterday.

CHAIR POWELL. So we will continue to look at that broad array of labor market data,
including the payroll numbers. We're not discarding those. I mean we'll certainly look at those,
but we will mentally tend to adjust them based on the QCEW adjustment, which you referred to.

[DrVenture]

Originally Posted by Tyga11

CHAIR POWELL. So we will continue to look at that broad array of labor market data,
including the payroll numbers. We're not discarding those. I mean we'll certainly look at those,
but we will mentally tend to adjust them based on the QCEW adjustment, which you referred to.

The key concepts are bolded. It doesn't pay to try and infer things from Fed minutes.

"Economics can be defined in a few different ways. It's the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it's not all about money."

This is a subset of psychology, as it involves people's behavior.
As such, and being extremely complex, it is as much art as science. Hence, words like "mentally tend".

[DrVenture]

Originally Posted by XutvJet

I've stayed in the whole time (always have for 30 years) and even bought more in the last 5 years, but I fully believe a 15-20% drop is closing in fast. It's been WAY too long. You can only tweak the dials for so long. The crash will likely be the culmination of a number of things in the US as well as abroad.

Not sure what your definition of "closing in fast" is.

We had a recession in 2020, just 4 years ago.

2022 brought a near 25% S&P correction that lasted 287 days. Less than two years ago.

We also saw a 13% drop (correction) in the Nasdaq this year, along with an 8.5% S&P drop.

[DrVenture]

Originally Posted by Tyga11

Really not that hard to find. Literally everyone was talking about it yesterday.

CHAIR POWELL. So we will continue to look at that broad array of labor market data,
including the payroll numbers. We're not discarding those. I mean we'll certainly look at those,
but we will mentally tend to adjust them based on the QCEW adjustment, which you referred to.

I try not to infer people's meanings. Gives them too much wiggle room. lol

Yes, "people talk". I generally ignore them.

[other_evolved]

Originally Posted by Tyga11

Really not that hard to find. Literally everyone was talking about it yesterday.

CHAIR POWELL. So we will continue to look at that broad array of labor market data,
including the payroll numbers. We're not discarding those. I mean we'll certainly look at those,
but we will mentally tend to adjust them based on the QCEW adjustment, which you referred to.

I don't know how one interprets that to mean the numbers are faked, at all. We've had QCEW revisions for decades but now all of a sudden it's "fake"

[other_evolved]

Originally Posted by DrVenture

Not sure what your definition of "closing in fast" is.

We had a recession in 2020, just 4 years ago.

2022 brought a near 25% S&P correction that lasted 287 days. Less than two years ago.

We also saw a 13% drop (correction) in the Nasdaq this year, along with an 8.5% S&P drop.

Historically we get a 10%+ correction every 4-5 quarters and we were quite overdue for the vol we saw earlier this year, and I wouldn't be surprised if we saw more as we get closer to early November.

[2000cs]

The biggest risk to the market now is either a serious war (WWIII or very close), or the port/dock strike that is threatened. The strike could once again wreck supply chains and drive inflation. Should be transitory but might cause the FED to hold or even tighten, especially if the strike is prolonged.

Market seems to be unconcerned with the election; I might detect a slight preference for Trump (probably less risky for corp taxes). If the Congress and Prez all go D, there might be some sell-off post-election. But I don’t think that will be much more than a re-pricing. Divided government is usually good for the markets.

The normal mid-September through mid-October market softness or malaise did not occur this year. That could mean the typical Q4 rally (and post cut rally) won’t be as strong. But overall I would anticipate a good market for the balance of the year, absent either of the risks I mentioned at the outset.

[2000cs]

Originally Posted by other_evolved

Historically we get a 10%+ correction every 4-5 quarters and we were quite overdue for the vol we saw earlier this year, and I wouldn't be surprised if we saw more as we get closer to early November.

There are several variations of the Paul Samuelson quote, “The market has called 9 of the last 5 recessions”.

The market is reactive, and only predictive to the extent of other available predictive information. Historical patterns are not much of a guide, as they tend to dissipate (as we’ve seen already with the lack of a September-October slump this year). In that sense, we are never overdue for a correction or a rally; either will happen when there is substantive catalyst in the news and economic data.

[DrVenture]

Originally Posted by other_evolved

Historically we get a 10%+ correction every 4-5 quarters and we were quite overdue for the vol we saw earlier this year, and I wouldn't be surprised if we saw more as we get closer to early November.

How many of those corrections occurred in the face of a FED committed to lowering rates? With strong GDP and job numbers? Rhetorical questions, of course.

Still, no matter, as I view +10% corrections as opportunities and happen to have more cash than usual ready to deploy. My guess is as good as anyone else's. And my guesses are pretty much useless.

Caution is always advised. But long term investors needn't worry, is my usual position.

[dmatre]

Since I’ve been investing and following the financial markets (not a pro), people have been predicting crashes/calamities/catastrophies, regardless of whether the market was strong or weak.

If I sold out or refrained from contributing every time someone whined about how bad things were getting, i wouldn’t have nearly enough to retire. As it is, my retirement age is an option which I can exercise as I wish - mainly because I ignored all the nonsense and kept investing regardless of whether the market was up or down.

[Tyga11]

Originally Posted by other_evolved

I don't know how one interprets that to mean the numbers are faked, at all. We've had QCEW revisions for decades but now all of a sudden it's "fake"

You accused me of making things up previously. The quote is the quote. The revisions are more pronounced vs. in the past.

[dradernh]

In the 80s I worked for a top West Coast money manager whose clear advice was: unless you've got more than $2 million ($5.9 million today), stick with low-cost index funds if you wish to maximize your returns.

That advice has worked out well for me ever since. I pay little attention to the markets' ups and downs even though they can be dramatic in the moment or for a couple of years.

This is quite different than buying individual stocks, of course. Still, I retired at 45, am 76 now, and the modest portfolio I started out with continues to do quite well despite all the ups and downs of the past four decades.

As far as individual stocks go, I'm just too damm lazy to go there.

[tom2021]

Originally Posted by dradernh

In the 80s I worked for a top West Coast money manager whose clear advice was: unless you've got more than $2 million ($5.9 million today), stick with low-cost index funds if you wish to maximize your returns.

That advice has worked out well for me ever since. I pay little attention to the markets' ups and downs even though they can be dramatic in the moment or for a couple of years.

This is quite different than buying individual stocks, of course. Still, I retired at 45, am 76 now, and the modest portfolio I started out with continues to do quite well despite all the ups and downs of the past four decades.

As far as individual stocks go, I'm just too damm lazy to go there.

Would you like to share low-cost index funds that you invested in?
Thanks.

[ASAP]

Originally Posted by Tyga11

Powell conceded yesterday the numbers are fake and they are taking future measures to do their own analysis and make assumptions when Job reports come out.

The 50 is because they should have cut rates in July and realize that now.

Chair powell said that now immigration caused a boost in unemployment lol... so all the sw engineering and tech jobs went to those guys apparently.

The spin is absolutely next level.

[DrVenture]

Nice 13.5% pop in my CEG holding today. Now up 80% YTD.

[DrVenture]

Originally Posted by ASAP

Chair powell said that now immigration caused a boost in unemployment lol... so all the sw engineering and tech jobs went to those guys apparently.

The spin is absolutely next level.

The difference here being that he has the data to back that up. His detractors do not.

The irony is that some will both disbelieve and simultaneously want to use this as a political wedge. Can't have it both ways.

[DrVenture]

Originally Posted by tom2021

Would you like to share low-cost index funds that you invested in?
Thanks.

Not speaking for him, but virtually all index funds are low cost, as they are passively managed. In particular, Vanguard, Fidelity and T Rowe Price are low cost and well-regarded. I personally use PRUIX, among others. The net ER is .05%

[ASAP]

Originally Posted by DrVenture

The difference here being that he has the data to back that up. His detractors do not.

The irony is that some will both disbelieve and simultaneously want to use this as a political wedge. Can't have it both ways.

look, the reality is this... we are in a white collar job recession... office jobs, finance, tech anything of the sort that pays well... jobs are hard to find and wages have actually decreased... i have talked to so many people including recruiters on this... no one is switching job nows either because they are afraid...

the low wage jobs (service industry) are doing great however that's not really helping most of the middle class... and the upper end jobs have nothing to do w immigration... however the spin on this is everywhere... i agree w powell, that the unemployment numbers are fake and way too far revised but let's tell the truth not some nonsense like this

[DrVenture]

The reality is that a lot of tech companies over hired coming off CoVid. Now they are doing some force adjustments. This makes people skittish. "Not switching jobs", implies that people have jobs. Nor does it take into account that we are coming off of a record industry hiring spree in the recent past. I have lived through a few white collar "job recessions", including being smack dab in the middle of the Dotcom bust. I have first hand experience with such.

Calling into question published job numbers, without providing relevant conflicting data is simply not credible. BLS data is freely available.

https://www.bls.gov/ces/

Powell simply did not say that the numbers were faked. I work in tech, my son works in tech, many of my friends work in tech. Not seeing what you are seeing. The spin is definitely "next level", and smells political. But, you are free to post numbers, not anecdotes or observations. I am data-driven.

[ASAP]

Originally Posted by DrVenture

The reality is that a lot of tech companies over hired coming off CoVid. Now they are doing some force adjustments. This makes people skittish. "Not switching jobs", implies that people have jobs. Nor does it take into account that we are coming off of a record industry hiring spree in the recent past. I have lived through a few white collar "job recessions", including being smack dab in the middle of the Dotcom bust. I have first hand experience with such.

Calling into question published job numbers, without providing relevant conflicting data is simply not credible. BLS data is freely available.

https://www.bls.gov/ces/

Powell simply did not say that the numbers were faked. I work in tech, my son works in tech, many of my friends work in tech. Not seeing what you are seeing. The spin is definitely "next level", and smells political. But, you are free to post numbers, not anecdotes or observations. I am data-driven.

We are reading the same thing just not sure we are understanding it the same -

every single white collar and sales grouping is up over last year

2.1M people unemployed in one singular grouping or 400k more than LY

https://www.bls.gov/news.release/empsit.t13.htm