patrick.net

I’m not a financial expert but I “feel” the same way. But “feeling” something doesn’t make it true.

Saying that, it is certainly true that the Gods of finance and monetary policy have true power. It’s obvious because they tell you what they’re doing. Well, at least they tell you some of what they’re doing. I’m sure there are many happenings going on in the background as well.

The question, as far as I’m concerned, is how long can “they” control the ups and downs? And if/when they can’t control those ups and downs anymore, what will happen? There is no shortage of “experts” telling us all hell is going to break loose.

Personally, I think “they’ve” found a way to forever kick the can down the road and the economy will become more and more bifurcated.

The new thing to do, is for CEO's to direct their companies to gouge the fuck out of everyone. Which in turn their suppliers gouge them, the commodity futures gouge us, the producers gouge us, there are no sound economic reason for it. The more they gouge the more their customer base has to cut back, the less they sell. You would be fool to invest in this market.

I remember in the 80's and 90's even when the country was having inflation and economic down turns. Companies based their value on numbers, the volume of goods they moved. As that was the bench of a healthy economy as a whole. What good is a widget company that sells one item for as much as they can, while their suppliers only benefit from them on the rare occasion they need more materials. The business mantra then was "I would rather a million loaves of bread with a thin margin, than sell only a hand few with a large margin."

Today the corporate norm is to chase the few sales with a large margin. Even though if their suppliers weren't chasing that same goal, they could sell a hell of a lot more, for a hell of a lot less, and make a hell of a lot more.

You can't fix stupid, but you can wait it out.

It’s a market filled with land mines. I tend to invest in high momentum stocks for maybe 30% of my portfolio and never fall in love with them. The problem in today’s market is wild volatility, so placing a 10% stop on a company can end up hurting you, because it might bounce back two hours later. I currently believe the 2nd half of 26 will be a Runaway train to the upside, after the changes Trump has made kicks in and interest rates drop. ON the other hand, making any predictions is foolhardy, as I’ve learned time and again.

SharkyP says

It’s a market filled with land mines. I tend to invest in high momentum stocks for maybe 30% of my portfolio and never fall in love with them. The problem in today’s market is wild volatility, so placing a 10% stop on a company can end up hurting you, because it might bounce back two hours later. I currently believe the 2nd half of 26 will be a Runaway train to the upside, after the changes Trump has made kicks in and interest rates drop. ON the other hand, making any predictions is foolhardy, as I’ve learned time and again.

What are the specific changes Trump has made that make you feel this way?

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within 10% of 2000-dot.com-bubble valuations

https://www.multpl.com/shiller-pe

Just one speculative bubble after another, as expected like going back to the dot com bubble bursting around 2000 and leading to the Clinton recession.

Just have to not get sucked into it and lose your ass, and expect a +35% drop such as with the S&P 500 and just stay the course. Everything will drop, settle, and return to the mean with the S&P 500 historically returning around 11.5% a year.

I did the same in 2000 and 2008 as I knew the S&P 500 would adjust (i.e., the top companies decreasing in market cap and its ranking in the S&P 500) and recover.

AD says

Just have to not get sucked into it and lose your ass, and expect a +35% drop such as with the S&P 500 and just stay the course. Everything will drop, settle, and return to the mean with the S&P 500 historically returning around 11.5% a year.

I did the same in 2000 and 2008 as I knew the S&P 500 would adjust (i.e., the top companies decreasing in market cap and its ranking in the S&P 500) and recover.

In 1999, after tax corporate profits were 7.7% of GDP. In 2024, they were about 12%. To achieve that 11.5% growth rate would further decimate the living standards of working Americans.

Misc says

In 1999, after tax corporate profits were 7.7% of GDP. In 2024, they were about 12%. To achieve that 11.5% growth rate would further decimate the living standards of working Americans.

Joe Rogan questioned whether increased taxes on wealthy individuals would actually help struggling Americans. “Are the poor people going to get that money? No. Are their services going to improve? No, you're just going to get more government,” he said.

https://www.yahoo.com/news/articles/joe-rogan-asks-happens-tax-000042966.html

That's about $3.6 trillion flowing to people who do no work, simply own shares of stock,

If it was at the 7.7%, it still would be $2.3 trillion.

The elites wouldn't even miss that extra $1.3 trillion per year,

Trickle down economics is a failure unless you are one of the elites.

Rogan has a vested interest in his views.

FortWayneHatesRealtors says

For years, analysts have predicted major corrections based on fundamentals

That could be explained as possible clickbait.

Tenpoundbass says

Today the corporate norm is to chase the few sales with a large margin.

I remember when it was just the home builders that did this...

Misc says

That's about $3.6 trillion flowing to people who do no work, simply own shares of stock,

Nothing prevents you from owning shares of stock. So why all the whining?

FortWayneHatesRealtors says

For years, analysts have predicted major corrections based on fundamentals,

Yeah. They successfully predicted 180 recessions out of recent 8.

Nobody knows nothing.

Eric_Holder says

FortWayneHatesRealtors says

For years, analysts have predicted major corrections based on fundamentals,

Yeah. They successfully predicted 180 recessions out of recent 8.

Nobody knows nothing.

That's my point. They look at Fundamentals, which do show that it's all fake and crap. But they can't predict the tricks government will play to keep it going. Hence, my point. All predictions are useless, it's just a game until government fails to bail out THE bubble.

FortWayneHatesRealtors says

Eric_Holder says

FortWayneHatesRealtors says

For years, analysts have predicted major corrections based on fundamentals,

Yeah. They successfully predicted 180 recessions out of recent 8.

Nobody knows nothing.

That's my point. They look at Fundamentals, which do show that it's all fake and crap. But they can't predict the tricks government will play to keep it going. Hence, my point. All predictions are useless, it's just a game until government fails to bail out THE bubble.

S&P 500 crashed +55% starting around 2001 and 2008. I know some that got sucked into the mania and lost a lot of money on paper but not all their money but still recovered about 10 years later.

Eric_Holder says

Misc says

That's about $3.6 trillion flowing to people who do no work, simply own shares of stock,

Nothing prevents you from owning shares of stock. So why all the whining?

Buying stock is exchanging your own productive labor for the productive labor of the people who created the company.

That seems fair to me. Like buying a windmill in the old days. A windmill produced income.

What's not fair is "non productive rent-seeking", usually the demand for payment to use a natural resource that no one created, like land or a river.

The classic example is feudal lords who would put a chain across a river and demand payment to let boats pass

https://en.wikipedia.org/wiki/Rent-seeking

An example of rent-seeking in a modern economy is spending money on lobbying for government subsidies to be given wealth that has already been created, or to impose regulations on competitors to increase one's own market share.

The concept of rent-seeking would also apply to corruption of bureaucrats who solicit and extract "bribe" or "rent" for applying their legal but discretionary authority for awarding legitimate or illegitimate benefits to clients.[24] For example, taxpayers may bribe officials to lessen their tax burden. According to Anne Krueger, the political forces that lead to debt difficulties are powerful.

Another example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and occupational licensing. According to some libertarian perspectives, taxi licensing is a textbook example of rent-seeking. To the extent that the issuing of licenses constrains overall supply of taxi services (rather than ensuring competence or quality), forbidding competition from other vehicles for hire renders the (otherwise consensual) transaction of taxi service a forced transfer of part of the fee, from customers to taxi business proprietors.

Eric_Holder says

othing prevents you from owning shares of stock. So why all the whining

My Dad wasn't rich.

@Patrick

A great example of rent seeking is the price of a NYC taxi medallion. In inflation adjusted 2025 dollars the price was $68,000 in 1950, peaked at 1.8 million in 2013-2014, and is now trending below $150k after a steep drop once Uber showed up.

I highlight this example to illustrate that even deeply entrenched government enabled monopolies can be destroyed by innovation and entrepreneurial animal spirits.

I hope this is soon visited on the AMA.

stfu says

I hope this is soon visited on the AMA.

I second that.

I agree as well.

And on the realtors.