Talking Stocks 2.0

[huncho]

Originally Posted by SDGT3

It was nearly 3 years since the peak of January 2021 since we hit a fresh new high so I get your point.

The market rally was supposed to broaden out, but the Russell 2000 was down as much as 5% today and finished at -4%.

yeah it's a weird high since it's mostly driven by 6 tech stocks and a few of the dow companies. it's scary to think where we'd be without apple/meta/nvidia. nvidia pretty much single handedly saved the market from the whole banking meltdown last april/may which is hilarious to think about (in a sad way). russell 2000/ARKK stocks looked great in december but then that quickly got erased in the first 2 weeks of january lol

[superdog]

Originally Posted by BraveBold

You misunderstood. Or have you been a permabear temporarily? Seems contradictory… a permabear is a terrible approach to markets. Some out there provide views that are “permabear” but just do it for media attention.

Cramer is a moron. Cathie Woods an even bigger idiot.

What is a goldilocks setup? I said the market is pricing goldilocks. I am not. I am hyper conservative and expect a correction…

No sir. Not contradictory. And more recently.

Have always been concerned. Have always been skeptical. I’ve seen too many people lose it. Went from wealthy to not. Quick. That won’t be me.

I became much more conservative recently, while investing, as I’ve liquidated many assets. I’m determined to keep it. So I’m happy to remain conservative and keep guaranteed gains rather than chase big ones.

Thanks for clarifying your point.

[Romeojk]

Originally Posted by austinp

I wish Bshannon was still around. He was always a voice of reason regarding investing. I hope he’s doing well.


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I wish he was still around as well. I built a nice portfolio from piecing together what he was holding. I've done well with it overall, but it's time for some adjustments.

It was good to hear his thoughts. He should have a podcast.

[superdog]

this is no secret. everyone knows it is coming. has known for a while. but appears everyone thinks there will be a bailout of some sort. because no one appears to be doing anything....

https://www.yahoo.com/finance/news/9...214157689.html

[superdog]

I just bought a bunch of Symbotic (SYM) stock.

As some of you guys know, I am in the logistics business. We build automation and storage systems.

I am very small and a very minor player. However, we work with many large ones. And some very large customers.

While visiting a Walmart I got to see Symbotic in action. Impressive to say the least. I wish I bought the stock then. It was around 12. Then it went up to 60. Recently it came down to 40, so I decided to buy.

Of course, I know nothing of the company internally. But I know what they do, and I know the industry. I also know they have grown dramatically and have an incredible team.

So I bought some. Food for thought for you guys....

[superdog]

^^^

That said, seeing some shifts in the economy and the rising cost of food, I am starting to thinking buying into the food industry might be a good bet.

More specifically, I am thinking supermarket chains. Restaurants are getting crazy expensive. Tipping expectation is out of control, customer service quality is down and even the food quality seems less so than it has been (my personal experience).

I am thinking the easiest way for people to cut back on expenses is eat at home more. So I am asking if any of you guys have any opinions on this theory and on any good quality stocks or ETF's to buy.

Thank you,

[SDGT3]

Originally Posted by superdog

^^^

That said, seeing some shifts in the economy and the rising cost of food, I am starting to thinking buying into the food industry might be a good bet.

More specifically, I am thinking supermarket chains. Restaurants are getting crazy expensive. Tipping expectation is out of control, customer service quality is down and even the food quality seems less so than it has been (my personal experience).

I am thinking the easiest way for people to cut back on expenses is eat at home more. So I am asking if any of you guys have any opinions on this theory and on any good quality stocks or ETF's to buy.

Thank you,

Generally speaking, margins in the supermarket chain stores are very thin, even with the cost of food skyrocketing. In the US, Walmart is the largest seller of groceries and Costco has a large chunk of sales as well. Very tough business.

I'm in 100% agreement with your assessment of restaurants and the dining experience. It seems since Covid, the costs have gone up, which is to be expected with the cost of food going up, but the quality of both the meals and service has significantly declined. We've haven't consciencely said we're not going to go to restaurants, but we've naturally found ourselves doing it simply because I can make better meals to home, regardless of price point.

[austinp]

Originally Posted by superdog

^^^

That said, seeing some shifts in the economy and the rising cost of food, I am starting to thinking buying into the food industry might be a good bet.

More specifically, I am thinking supermarket chains. Restaurants are getting crazy expensive. Tipping expectation is out of control, customer service quality is down and even the food quality seems less so than it has been (my personal experience).

I am thinking the easiest way for people to cut back on expenses is eat at home more. So I am asking if any of you guys have any opinions on this theory and on any good quality stocks or ETF's to buy.

Thank you,

Costco has been a great stock for me over the years. Not sure if that falls in your super market chain category or not. Also Walmart sells a lot of food and a solid stock. I agree with you about restaurants. The only restaurants we seem to go to now are ethnic foods we aren’t good at making at home.

[superdog]

Originally Posted by SDGT3

Generally speaking, margins in the supermarket chain stores are very thin, even with the cost of food skyrocketing. In the US, Walmart is the largest seller of groceries and Costco has a large chunk of sales as well. Very tough business.

I'm in 100% agreement with your assessment of restaurants and the dining experience. It seems since Covid, the costs have gone up, which is to be expected with the cost of food going up, but the quality of both the meals and service has significantly declined. We've haven't consciencely said we're not going to go to restaurants, but we've naturally found ourselves doing it simply because I can make better meals to home, regardless of price point.

Originally Posted by austinp

Costco has been a great stock for me over the years. Not sure if that falls in your super market chain category or not. Also Walmart sells a lot of food and a solid stock. I agree with you about restaurants. The only restaurants we seem to go to now are ethnic foods we aren’t good at making at home.

Thanks guys. I appreciate the input. I think the Walmart play makes sense in that they are a huge distributor of all things...including grocery. And investing in their automation seems to have a LOT more upside. These systems are beyond anything I have currently seen and they are very advanced. They also can cost between 30-50 million a pop. And Walmart bought into the company. They have a huge runway. I don't see how they do not grow massively as automation becomes more and more necessary.

I will also put some into Costco.

I bought a small bit of QQQ yesterday seeing a dip and I have been slowing putting into an S&P ETF.

As I have said, I am risk averse with the money I have. But I am going to start aggressively investing new loot. Setting up a weekly withdrawal from my checking account and each week I am going to buy. I like this as a balance to how I am currently allocated.

[Krash]

I love reading this thread but don’t comment that much. The reason for me not commenting is that I don’t choose stocks for myself anymore. I’m on autopilot. I’ve been on autopilot for about 15 years.

My financial advisor handles all my investments. I’m 60, retired and 75% in stocks. I’m not conservative at all when it comes to my portfolio. Looking back, I think it was a mistake being as financially conservative as I was. I’m not worried about any bubble either. The situation we’re in today is not the same as it was back in 1999. Back then, the valuations in tech stocks were utterly ridiculous. It’s just not the same thing right now.

Will the market go eventually down? Of course it will.

Will the market go back up? Yes, absolutely.

He has me invested in about 100 different stocks, ETFs, and MFs. Here are the top 30 in terms of value in my portfolio:


MSFT
VGT
BAC
AAPL
AGG
LQD
XLY
XLV
AMZN
MBB
NVDA
META
VIS
GOOGL
DVY
JPM
AVGO
LLY
FDN
XLF
VB
SKYY
VDC
IEFA
MCD
IEMG
NFLX
PGX
HD
COST


Some of these stocks have lost money, but overall, he’s made a lot of great decisions for me.


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[superdog]

Originally Posted by Krash

I love reading this thread but don’t comment that much. The reason for me not commenting is that I don’t choose stocks for myself anymore. I’m on autopilot. I’ve been on autopilot for about 15 years.

My financial advisor handles all my investments. I’m 60, retired and 75% in stocks. I’m not conservative at all when it comes to my portfolio. Looking back, I think it was a mistake being as financially conservative as I was. I’m not worried about any bubble either. The situation we’re in today is not the same as it was back in 1999. Back then, the valuations in tech stocks were utterly ridiculous. It’s just not the same thing right now.

Will the market go eventually down? Of course it will.

Will the market go back up? Yes, absolutely.

He has me invested in about 100 different stocks, ETFs, and MFs. Here are the top 30 in terms of value in my portfolio:


MSFT
VGT
BAC
AAPL
AGG
LQD
XLY
XLV
AMZN
MBB
NVDA
META
VIS
GOOGL
DVY
JPM
AVGO
LLY
FDN
XLF
VB
SKYY
VDC
IEFA
MCD
IEMG
NFLX
PGX
HD
COST


Some of these stocks have lost money, but overall, he’s made a lot of great decisions for me.


Sent from my iPhone using Tapatalk

this is my exact concern today. but I am simply not willing to take too many risks with what I have, unless I see a big drop. so I am confident I won't regret it. it is a very conscious decision.

that said, I have 10 years until I get to 60. And I plan on being aggressive with all new loot going forward.

currently at 14% for the last 12 months. hard to complain.

I also do think that we are overvalued. a lot. I am up over 2000% on my NVDA stock.

maybe not as ridiculous as in the past, but I cannot see how the markets just keep going up, while the greater economy is struggling. I see it everywhere. but I realize I know very little. so as with all things...balance.

I also agree, when it drops, it will come back.

[904VT]

Originally Posted by superdog

this is my exact concern today. but I am simply not willing to take too many risks with what I have, unless I see a big drop. so I am confident I won't regret it. it is a very conscious decision.

that said, I have 10 years until I get to 60. And I plan on being aggressive with all new loot going forward.

currently at 14% for the last 12 months. hard to complain.

I also do think that we are overvalued. a lot. I am up over 2000% on my NVDA stock.

maybe not as ridiculous as in the past, but I cannot see how the markets just keep going up, while the greater economy is struggling. I see it everywhere. but I realize I know very little. so as with all things...balance.

I also agree, when it drops, it will come back.

NVIDIA imo is a structural growth story. What they do isn’t super dependent on the cyclical economy aka beta. Some past examples over the years in big tech when expanding have come up near 6000% if I remember correctly. Not advice, but thought you’d be interested in that background Seth.

[eanzenberg]

Anyone have opinions over the recent FOMC report? My short position got pretty burnt. I was expecting a hawkish performance and 1-2 cuts in 2024. It looks like the Fed instead pivoted to accepting: low unemployment (4%), high inflation (2.9%), and 3 cuts this year. Frankly I was surprised by the pivot ergo my short positions got burned. I’m wondering if Powell said what he did without meaning it- I can’t believe he will cut 3 times because I do believe higher sustained inflation is worse. However, I believe he said the contradictory things so the market wouldn’t tank. If the markets tanked he’d have to cut earlier than he wants. Opinions on the past week?

[superdog]

Originally Posted by 904VT

NVIDIA imo is a structural growth story. What they do isn’t super dependent on the cyclical economy aka beta. Some past examples over the years in big tech when expanding have come up near 6000% if I remember correctly. Not advice, but thought you’d be interested in that background Seth.

I do appreciate it brother.

And hope it goes the same way. Heck, I hope it all keeps going north.

[BraveBold]

Originally Posted by eanzenberg

Anyone have opinions over the recent FOMC report? My short position got pretty burnt. I was expecting a hawkish performance and 1-2 cuts in 2024. It looks like the Fed instead pivoted to accepting: low unemployment (4%), high inflation (2.9%), and 3 cuts this year. Frankly I was surprised by the pivot ergo my short positions got burned. I’m wondering if Powell said what he did without meaning it- I can’t believe he will cut 3 times because I do believe higher sustained inflation is worse. However, I believe he said the contradictory things so the market wouldn’t tank. If the markets tanked he’d have to cut earlier than he wants. Opinions on the past week?

I consider it all pretty simple but it has to be extended beyond the past week. The great fear for markets over the past couple years was stagflation. Every datapoint that negates that fear is a positive. The second great fear was (is) a disconnected Fed. That is, a Fed unwilling to respond quickly enough to changes in condition. As the stagflation fear has mostly subsided (with inflation on a clear downward trend) the question is whether the Fed will adequately respond to rapid declines in demand.

So commentary last week on watching labor markets was seen as dovish. In other words, a labor market softening portends demand declines - and that would solidify the view that rates must adjust lower in response.

The lagged impact of rate reductions this cycle is simply that, a lag. The lag is longer because of the stimulus boost to excess savings and the persistence of spending even as that savings pool depletes. Once the demand side eases down further we can expect an even more rapid decline in inflation.

[BroncoOne]

Originally Posted by 904VT

NVIDIA imo is a structural growth story. What they do isn’t super dependent on the cyclical economy aka beta. Some past examples over the years in big tech when expanding have come up near 6000% if I remember correctly. Not advice, but thought you’d be interested in that background Seth.

Powell keeps saying “higher for longer” on rates and the 500 basis points of hikes have generally not harmed a strong economy so I don’t expect any large rate cuts absent a huge economic event.

Remember that the Fed has also been tightening by shedding assets on its balance sheet. That is a fairly unprecedented thing,so I expect extreme caution from the Fed.

[eanzenberg]

Originally Posted by BraveBold

I consider it all pretty simple but it has to be extended beyond the past week. The great fear for markets over the past couple years was stagflation. Every datapoint that negates that fear is a positive. The second great fear was (is) a disconnected Fed. That is, a Fed unwilling to respond quickly enough to changes in condition. As the stagflation fear has mostly subsided (with inflation on a clear downward trend) the question is whether the Fed will adequately respond to rapid declines in demand.

So commentary last week on watching labor markets was seen as dovish. In other words, a labor market softening portends demand declines - and that would solidify the view that rates must adjust lower in response.

The lagged impact of rate reductions this cycle is simply that, a lag. The lag is longer because of the stimulus boost to excess savings and the persistence of spending even as that savings pool depletes. Once the demand side eases down further we can expect an even more rapid decline in inflation.

Thanks for this viewpoint, but I still don’t understand cutting rates with an expected 2.9% inflation rate. GDP and unemployment both look good, so I still fail to see why cutting rates won’t ramp inflation back up, especially since the last percent will be hardest and longest to come down.

[SMD]

So many on here would benefit from reading and adopting bogle’s principles.

[BraveBold]

Originally Posted by eanzenberg

Thanks for this viewpoint, but I still don’t understand cutting rates with an expected 2.9% inflation rate. GDP and unemployment both look good, so I still fail to see why cutting rates won’t ramp inflation back up, especially since the last percent will be hardest and longest to come down.

The reason is the transmission of rate policy through the economy isn’t instantaneous. That means the peak level of rates has yet to be fully felt. Particularly because of the excess savings position.

There are some other technical reasons but I doubt most care enough to understand those details.

[BraveBold]

Originally Posted by SMD

So many on here would benefit from reading and adopting bogle’s principles.

I think it’s a great idea to read and get educated on these topics. Learning the fundamentals at minimum for those not otherwise receiving sound financial advice or (at minimum) sticking to broad index funds.

My approach is most heavily influenced by value investing principles but also strongly influenced by my macroeconomics background and experience on trading desks.

Have met many of the greats and all are fallible. The key is recognizing limitations and managing risk so that even mistakes are recoverable from.

All my opinion.

[eanzenberg]

Originally Posted by SMD

So many on here would benefit from reading and adopting bogle’s principles.

I believe the vast majority of people in this thread put the vast majority of their assets adopting those principles, including myself. Making short term moves from a side “fun” account is what we’re talking about here :)

[eanzenberg]

Originally Posted by BraveBold

The reason is the transmission of rate policy through the economy isn’t instantaneous. That means the peak level of rates has yet to be fully felt. Particularly because of the excess savings position.

There are some other technical reasons but I doubt most care enough to understand those details.

Ok but are we around 2.9% inflation today? If expected inflation remains flat till the rest of the year, what is the point of lowering rates given the risk to increased inflation? Or is your argument that because these lag so much, if rates remained constant, would the risk of a slowdown or stagflation increase?

I’m genuinely interested to understand this viewpoint. It looks like the goalposts of 2% terminal got moved up to 3%, or it looks like Powell is not actually going to lower rates 3-4 times this year. The bond market is favoring the former at this point. Or, is the argument that lowering rates this year will still yield lowered inflation into next year?

[BraveBold]

Originally Posted by eanzenberg

Ok but are we around 2.9% inflation today? If expected inflation remains flat till the rest of the year, what is the point of lowering rates given the risk to increased inflation? Or is your argument that because these lag so much, if rates remained constant, would the risk of a slowdown or stagflation increase?

I’m genuinely interested to understand this viewpoint. It looks like the goalposts of 2% terminal got moved up to 3%, or it looks like Powell is not actually going to lower rates 3-4 times this year. The bond market is favoring the former at this point. Or, is the argument that lowering rates this year will still yield lowered inflation into next year?

If rates are held too long at current levels then the risk is an unnecessary recession. The lag of policy impact is a big part. Another part is that data is also lagged - so it may take time to realize a recession is in-motion. By then the remedy (cutting rates) is made even more difficult. This is because once recession takes hold, you will likely see a decline in inflation pressure. The Fed will attempt to stimulate - typically concurrent with fiscal policies. These are often poorly coordinated and (also frequently) overdone.

This starts the cycle again… overcorrection. Like a driver holding a corrective counter-steer too long and spinning out.

Personally, I expect we’ll get a minor recession. I think they are holding policy too tight for too long. Savings depletion is going to hit very soon (about 12 months behind schedule) and then the full bite of the rapid hike cycle will be felt. Some data is suggesting this already.

[BraveBold]

Btw, I think the Fed implied somewhere between 2 and 3 cuts (a slight edge to 3 cuts but from one voter). These projections are far from reliable… they are rather weak forecasters overall.

The bond market with 10 year yields easing a bit more suggests long term inflation expectations remain low. Just a bit above 2%… that isn’t exactly worrisome.

[SDGT3]

Originally Posted by eanzenberg

Anyone have opinions over the recent FOMC report? My short position got pretty burnt. I was expecting a hawkish performance and 1-2 cuts in 2024. It looks like the Fed instead pivoted to accepting: low unemployment (4%), high inflation (2.9%), and 3 cuts this year. Frankly I was surprised by the pivot ergo my short positions got burned. I’m wondering if Powell said what he did without meaning it- I can’t believe he will cut 3 times because I do believe higher sustained inflation is worse. However, I believe he said the contradictory things so the market wouldn’t tank. If the markets tanked he’d have to cut earlier than he wants. Opinions on the past week?

Forgive me for being long winded, but I’m a Fed watcher and masochist spending 3 hours listening to the House committee grill J Powell.. He does a great job trying to stay neutral and not give any fodder even though it’s primary a bully pulpit for both sides to sling mud at each other.

That said, I do have to comment on the lack of economic understanding House members have in today’s congress. Most, if not all, commented on the lack of housing affordability and blamed the Fed for raising rates while in the same sentence praising others for fiscally spending more than we have.


I then Spent another 2 hours listening to J Powell in front of the Senate. Overall, much more intelligent questions and not as political. With rare exceptions, the proposed Basel III Endgame is opposed by 97% due to increased capital requirements for the banks and what would be less loan activity to the lower income and minority sector. Elizabeth Warren of course, one of the 3% hoping to increase regulation.

Interesting statistics put forth from a couple Senators, interest payments on the national debt will go up by 32% this year and that alone will supersede the entire defense budget! The country is adding $1T to the national debt EVERY 100 days!!! The Fed balance sheet was $500B in 2005. It was $9 T just a couple years ago and now at $7.5T — the economy hasn’t grown that much in 19 years.

Fed Chair J Powell spoke again last week and revised the projected numbers: Growth higher, inflation higher, unemployment lower.

But still talking about 3 cuts this year. That’s a conflicting message that says they are not serious about getting inflation down anytime soon. He keeps harping on 2% inflation, but the rate of decline has stalled out and infact is going up.

Fed is also talking about slowing down QT “soon”. He wants to get rid of MBS and go back to only holding treasuries. He’s monitoring money market levels, describing them as overly abundant and if they get to just sufficient, they will stop QT. In the meantime, they’ll trim $95B per month.

El-Erian says that he doesn’t see inflation coming down for at least 2 more years.

Other economists say that the fiscal spending is 6% over where it should be in non recessionary conditions. Couple that with aggressive China stimulus and this all contributes to future inflationary pressures.

There is not a high level of shorts on commodities and if fact commodities are rising fast.

Crude shot way past $80 here and $86 on Brent. Copper, cattle, cocoa, coffee, gold - all up. Equities at record highs as higher inflation seems to be a foregone conclusion.

B of A says that their customer's money market accounts are 40% higher than they were pre-covid. This is one of the gauges the Fed is using to see if they will end QT. Half the country is sitting on a ton of cash, half the country is about to default with the higher rates.

My conclusion, the Fed is signaling they are comfortable with higher than 2% target inflation as long as growth is still in tact. Everything points to higher for longer inflation.

[Krash]

Originally Posted by SDGT3

Forgive me for being long winded, but I’m a Fed watcher and masochist spending 3 hours listening to the House committee grill J Powell.. He does a great job trying to stay neutral and not give any fodder even though it’s primary a bully pulpit for both sides to sling mud at each other.

That said, I do have to comment on the lack of economic understanding House members have in today’s congress. Most, if not all, commented on the lack of housing affordability and blamed the Fed for raising rates while in the same sentence praising others for fiscally spending more than we have.


I then Spent another 2 hours listening to J Powell in front of the Senate. Overall, much more intelligent questions and not as political. With rare exceptions, the proposed Basel III Endgame is opposed by 97% due to increased capital requirements for the banks and what would be less loan activity to the lower income and minority sector. Elizabeth Warren of course, one of the 3% hoping to increase regulation.

Interesting statistics put forth from a couple Senators, interest payments on the national debt will go up by 32% this year and that alone will supersede the entire defense budget! The country is adding $1T to the national debt EVERY 100 days!!! The Fed balance sheet was $500B in 2005. It was $9 T just a couple years ago and now at $7.5T — the economy hasn’t grown that much in 19 years.

Fed Chair J Powell spoke again last week and revised the projected numbers: Growth higher, inflation higher, unemployment lower.

But still talking about 3 cuts this year. That’s a conflicting message that says they are not serious about getting inflation down anytime soon. He keeps harping on 2% inflation, but the rate of decline has stalled out and infact is going up.

Fed is also talking about slowing down QT “soon”. He wants to get rid of MBS and go back to only holding treasuries. He’s monitoring money market levels, describing them as overly abundant and if they get to just sufficient, they will stop QT. In the meantime, they’ll trim $95B per month.

El-Erian says that he doesn’t see inflation coming down for at least 2 more years.

Other economists say that the fiscal spending is 6% over where it should be in non recessionary conditions. Couple that with aggressive China stimulus and this all contributes to future inflationary pressures.

There is not a high level of shorts on commodities and if fact commodities are rising fast.

Crude shot way past $80 here and $86 on Brent. Copper, cattle, cocoa, coffee, gold - all up. Equities at record highs as higher inflation seems to be a foregone conclusion.

B of A says that their customer's money market accounts are 40% higher than they were pre-covid. This is one of the gauges the Fed is using to see if they will end QT. Half the country is sitting on a ton of cash, half the country is about to default with the higher rates.

My conclusion, the Fed is signaling they are comfortable with higher than 2% target inflation as long as growth is still in tact. Everything points to higher for longer inflation.

Great post!


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[eanzenberg]

Great info. I agree the Fed has to lower rates for the fundamental reason that the cost to service gov’t debt is tied to it. They also cannot print that money away to pay down the debt or else inflate the currency even worse. It is a very tight balance and the situation is not done any favors with trillion dollar spending deficits.

[TRS1]

I never thought the 2% target was realistic and that they would start cutting before.

[BraveBold]

The bond market is pricing about 2% inflation (about 2.25%) over the medium/long term. There is no conspiracy here. Just math.

Have to remember markets are forward looking.

The media just amplifies all the extreme positions. If someone followed most of the pundits that were most vocal over the past few years you would be massively underperforming the market.

I remember speaking to and being quoted in the financial press. Be careful with how you digest that info.

[BroncoOne]

Sqwack Box had two “experts” on today predicting opposite moves in interest rates with extreme confidence.

One happens to have an actual vote at the Fed. He’s higher for longer.