Stock Market Resiliency

[JohnC]

1 hour ago, Bill from NYC said:

My son in-law is a prominent attorney and a very, very smart guy. He told me that Russian multi-millionaires bought up the Manhattan apartments for millions and were virtually unconcerned about prices. He say it is their way of hiding money from the Russian government.

 

I don't know at all if this is true but he swears by it.

Trust your attorney son-in-law's knowledge on where a lot of Russian money went in NYC. A lot of that same sourced money went into Florida, California (LA and San Fran) etc, England/ London and other locations. This information isn't much of a secret. It is well known by a lot of people. When the English government was considering stopping dirty Russian money investment in England (mostly London real estate) after a number of Russian sponsored murders there the real estate industry revolted against their government so the Russian money continued to flow in. 

 

I'm sure that your son-in-law is knowledgeable about the Deutsche Bank being the intermediary of cleaning dirty Russian money and directing it to real estate investments around the world. Or another way of saying it is that it was the vehicle to launder money. 

https://www.cnbc.com/2019/04/18/deutsche-bank-shares-slip-amid-20-billion-russian-money-laundering-allegations.html

 

Edited April 29, 2020 by JohnC

[JohnC]

2 hours ago, Bill from NYC said:

Real estate confuses me now. We have been looking in NC for a while now. I called our broker and she said that she does NOT expect a sharp decrease, and I was very surprised to hear this. If people have no jobs, how will they buy houses? She even thinks that the market will hold steady, and I cannot see how.

I would love to know how others view the real estate market for now and the next few years.

Gotham Bill, If you are looking to invest in real estate in NC, SC or Fla or near the east coast the one issue that you have to be aware of the issue of flooding and the eroding coast line. You need to do your research on that issue or you can end with a water damaged property or property that you can't sell. Due to climate change and environmental risk the cost of rising insurance should be a consideration. 

[Bill from NYC]

Just now, JohnC said:

Gotham Bill, If you are looking to invest in real estate in NC, SC or Fla or near the east coast the one issue that you have to be aware of the issue of flooding and the eroding coast line. You need to do your research on that issue or you can end with a water damaged property or property that you can't sell. Due to climate change and environmental risk the cost of rising insurance should be a consideration. 

Thanks but we have been looking in the suburbs of Charlotte.

[snafu]

2 hours ago, bbb said:

 

I would think the exact same thing as you.  I would think the broker always wants to paint as rosy a picture as possible.

 

Does anybody know how real estate prices have done in the last few months?  

 

Real estate here in NYC and Long Island has frozen. Nothing is moving one way or the other.

I'm curious to see what happens in two months (July/August).  There's always going to be investors coming in to make low offers -- but nobody wants to sell at this point because it remains to be seen how quickly the economy ramps back up.  If sellers think that this intentional shutdown of the economy is a blip, then they will hold steady with prices.  I think most of all it will it really depend upon whether the employment numbers improve dramatically and quickly.  I think the extra $600/week kicker ends in July -- if that gets extended, then the whole economy will remain badly distorted.  Employees sitting on the sidelines until the free money stops flowing will be looking for their jobs back and it remains to be seen if employers will be there to accommodate.

 

Time will tell, but you won't have to wait long to find out.

 

 

[Bill from NYC]

If I am not mistaken, agents in North Carolina are not even allowed to show houses. They take buyers on virtual tours. I wouldn't buy a house that way.

[Augie]

No need to critique or correct from a political or economic standpoint ....I just got a kick out of this and figured I’d stick it here.   

 

 

It is a slow day in the small Saskatchewan town of Pumphandle, and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk, saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the  Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything. No one earned anything...   However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that is how a Stimulus package works.

 

 

 

.

Edited April 29, 2020 by Augie

[K-9]

24 minutes ago, Augie said:

No need to critique or correct from a political or economic standpoint ....I just got a kick out of this and figured I’d stick it here.   

 

 

It is a slow day in the small Saskatchewan town of Pumphandle, and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk, saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the  Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything. No one earned anything...   However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that is how a Stimulus package works.

 

 

 

.

Talk about dollar velocity!

[Augie]

1 minute ago, K-9 said:

Talk about dollar velocity!

 

Taco Bell does something similar to me! 

[plenzmd1]

6 hours ago, bbb said:

What is a good way to diversify OUT of the stock market.  I have way too much tied up in the stock market for somebody who would hope to retire in the next 5 years, give or take.

 

But, I don't know what else to put it into to balance things out.  CDs and savings bonds seem have to horrible rates.............I don't know crap about real estate.  But, wondering if REITs are a way to get into that?  

REITs to me would be hard now. If focused on retail space , dead. If focused on converting old malls to “ experience “ centers, dead. Commercial office space? On one hand, WFH seems demand would be less, but distancing rules mean more space is needed? 
 

in other words, I have no clue. 

5 hours ago, Bill from NYC said:

Real estate confuses me now. We have been looking in NC for a while now. I called our broker and she said that she does NOT expect a sharp decrease, and I was very surprised to hear this. If people have no jobs, how will they buy houses? She even thinks that the market will hold steady, and I cannot see how.

I would love to know how others view the real estate market for now and the next few years.

Well, mortgage rates for one are at historic lows. 2, I still think supply is way down, who is listing their house now? ( although my forensic in a bitter divorce listed hi last week). 3, massive divide right now from folks working from home and just fine and spending prolly 50-75 less in discretionary spending , and people losing their paychecks and not able to work from home. 

[Niagara Bill]

5 hours ago, Jauronimo said:

Markets have gotten over heated well before MBAs and algo trading.  Most institutional investors are getting judged on performance quarterly and annually so the incentive is there to hit your numbers short term.  Longer term strategies are more common in the VC, PE, and hedge fund space which is off limits for the average investor since you need to have considerable net worth.

  

I think the market cycles are only going to get more dramatic since more than half of the money in the game is now passively traded by way of ETFs.  Much of the trading activity is not informed investors setting the price of an equity but ETFs re-balancing to mimic the performance of another asset, commodity, or index. Also, we have central banks propping up equity markets.  Many investors have felt the market has been overheated and growing despite suspect fundamentals for years but sitting on the sidelines you would have missed out on a 30% run.  So I guess you just keep playing, see how far the market can run, and have your plan for when the music stops.

Again valid stuff, but the issue of MBAs, algorithms,  fund investors, etc has changed the market...all short term video games, market fundamentals have nothing to do with a valued company...but valued companies today have no value today...Cargill is no better or worse company than 2 months ago, nor is Amazon. Commodity companies like oil should be affected as their raw material is in flux with no understandable future, Ford should fall because they are a totally flawed company, like GM, but there is no reason Eaton to feel any affect.

Anyway...if you are 35...a great time to be an investor...if you are 75 and comfortable, good time to not be an investor. 

[plenzmd1]

Or, could look at it like Presidente. 
 

NSFW language. 
 

 

[Lurker]

50 minutes ago, Augie said:

No need to critique or correct from a political or economic standpoint ....I just got a kick out of this and figured I’d stick it here.   

 

 

It is a slow day in the small Saskatchewan town of Pumphandle, and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk, saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the  Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything. No one earned anything...   However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that is how a Stimulus package works.

 

 

 

.

 

Nah.  Somebody is always a bag holder.   In this case, it's the hotel owner who's still out $100 to the prostitute--and now has very little possibility of collecting on the credit he extended to her and will have to write it off.

 

Do that enough and he'll have to shut the hotel, eliminating a potential sale to the butcher, who'll then need to cut back with the hog farmer, who'll....

[Augie]

11 minutes ago, Lurker said:

 

Nah.  Somebody is always a bag holder.   In this case, it's the hotel owner who's still out $100 to the prostitute--and now has very little possibility of collecting on the credit he extended to her and will have to write it off.

 

Do that enough and he'll have to shut the hotel, eliminating a potential sale to the butcher, who'll then need to cut back with the hog farmer, who'll....

 

You either didn’t read the first sentence, or you’re not a very good rule follower!  

 

(And he DID get his $100 from the prostitute.) 

[Lurker]

28 minutes ago, Augie said:

 

You either didn’t read the first sentence, or you’re not a very good rule follower!  

 

(And he DID get his $100 from the prostitute.) 

 

The point is, he didn't get to keep it.   So it was never his to begin with.

 

And I did indeed read the first sentence.    But found the logic train to be fake news, so....

[Augie]

1 minute ago, Lurker said:

 

The point is, he didn't get to keep it.   So it was never his to begin with.

 

And I did indeed read the first sentence.    But found the logic train to be fake news, so....

 

He eliminated a debt with it. He won. That improved his balance sheet. 

 

I’m not going round and round on this. This is why I hesitated to post it, but I just found it amusing, so, against my better judgement.....

[Lurker]

1 minute ago, Augie said:

He eliminated a debt with it. He won. That improved his balance sheet. 

 

He eliminated a debt but is out $100 for the fair market value of the original room, so who's the loser here?   

 

He extended $100 in credit to the lady of the night.  The $100 in room revenue represented by this credit was never received, however, since he ultimately didn't get to keep the money the 'tire kicker' temporarily put down on his counter.    The room the prostitute used then became a writeoff--he got nothing for the exchange when he potentially could have rented it to another customer who would have payed him $100 for it.    His balance sheet is immaterial in this example...

[Augie]

2 minutes ago, Lurker said:

 

He eliminated a debt but is out $100 for the fair market value of the original room, so who's the loser here?   

 

He extended $100 in credit to the lady of the night.  The $100 in room revenue represented by this credit was never received, however, since he ultimately didn't get to keep the money the 'tire kicker' temporarily put down on his counter.    The room the prostitute used then became a writeoff--he got nothing for the exchange when he potentially could have rented it to another customer who would have payed him $100 for it.    His balance sheet is immaterial in this example...

 

Yes, it WAS received, you are just failing to look at it properly. She DID GIVE him the money. Can you deny that? Read again.  Maybe it’s the order you are struggling with? 

 

The balance sheet is never immaterial. As a banker for decades, I promise you that. All money circulates. Because it is not in his bank account does not mean he didn’t benefit.  THAT is how it works. 

 

I’m done here, you’ve already made me regret posting that, even with a request to NOT to do exactly what you have done. 

[Lurker]

14 minutes ago, Augie said:

 

Yes, it WAS received, you are just failing to look at it properly. She DID GIVE him the money. Can you deny that? Read again.  Maybe it’s the order you are struggling with? 

 

The balance sheet is never immaterial. As a banker for decades, I promise you that. All money circulates. Because it is not in his bank account does not mean he didn’t benefit.  THAT is how it works. 

 

I’m done here, you’ve already made me regret posting that, even with a request to NOT to do exactly what you have done. 

 

LOL!   Sorry, he's out $100.   It has nothing to do with circulation.   The money she gave him is the equivalent of a bounced check.   And I'm sure you know who bears the liability in those instances.   

 

I'm done here too.    But if your bank would lend me $100, I'd happily take it.   See how long it would remain as an asset on your balance sheet, however, when I pay it back with monopoly money...

 

 

 

 

 

Edited April 29, 2020 by Lurker

[Augie]

7 minutes ago, Lurker said:

 

LOL!   Sorry, he's out $100.   It has nothing to do with circulation.   The money she gave him is the equivalent of a bounced check.   And I'm sure you know who bears the liability in those instances.   

 

I'm done here too.    But if your bank would lend me $100, I'd happily take it.   See how long it would remain as an asset on your balance sheet, however, when I pay it back with monopoly money...

 

 

 

 

She gave him a $100 bill. They don’t bounce. He used it to pay his debt, but in advance which seems to be confusing you. 

 

DONE. 

 

. 

Edited April 29, 2020 by Augie

[Lurker]

Just now, Augie said:

 

She gave him a $100 bill. They don’t bounce. He spent it to pay his debts, but in advance which seems to be confusing you. 

 

DONE. 

 

$100 which he couldn't keep, spend or return to his shareholders.   It may as well been printed on Elbonian toilet paper...