Business, Economics, and Taxes: Capitalism. Yay? >=(

[Kepler]

Banks destroy the housing industry and entire economy? Here's cash and some oversight we'll forgot about in eight years.

A single hedge fund maybe shuts down? Can't have that.

"He who has the gold makes the rules."

 

[French Rage]

I've said something similar for a year or two now. The hedge funds aren't necessarily long TSLA because it's a good company. THey're long TSLA because they have found a way to monetize someone else's money and their stupidity. That's been their frontier for a while. It's a pump 'n dump done legally, I guess, because it's too slow. They've found a way to turn it into a cult and we've seen it take off*.

TSLA will come down. It's price to book is 50. FIFTY. Alphabet's is 6. Twitter is 5. Amazon's has never gone above 28. Apple is getting there at 33**. Moderna's is 22. For reference, GME is 68, trading around 1 for the last three years. GME and TSLA are a lie and ripe for a deep sell-off.


*Same thing with Apple to some extent. Maybe not so much now since AAPL how grown large enough and rich enough to actually control their destiny. Almost like the market sent them soaring fast enough to reach financial escape velocity. Maybe Tesla does this too. I don't know and I don't intend to bet my own money on it. I think AAPL had two things going for it: An absolute stable, but ruthless, genius running the show AND a market that didn't exist because no one thought of downloading you life into a phone. Tesla doesn't have that yet. Maybe with some of the battery tech, but I'd be betting on some VC firm run by an MIT finance grad who knows a guy in their materials science and electronics programs who invents the real next gen battery. Anyways...

**Holy crap. I didn't realize AAPL now had a market cap of $2.5T.

Yeah I mean I know that sometimes people have gotten onto momentum trades at the right time and it's worked for them, but that's not something I want to base my future off of. I want there to be actual revenue and earnings behind what I put my money into. Even though Apple's overpriced now, they had enough of a crazy run of new products that made them more and more money, and continue to earn well for them, that there's something there, albeit maybe not at the current price. Tesla, though, no, not even close.

 

[aparch]

Oh boy, here comes Cramer.

Edit: bah, it's some sane chick.

Oh, it's the Fast Money host. Cramer probably is pulling a Tucker Carlson and is "on vacation" at a critical time he's needed.

 

[Kepler]

"Populist envy" is the theme on CNBC. It's our job to labor our entire lives for these f-cks' luxury, and to shut up about it.

These people should all DIAF.

 

[Jimjamesak]

"Populist envy" is the theme on CNBC. It's our job to labor our entire lives for these f-cks' luxury, and to shut up about it.

These people should all DIAF.

Yeah, they’ve been trying to tie this to Dump and et al. Of course Reddit jettisoned most of the Dump fanatics a long time ago so it’s a dumb assertion.

Are they expecting sympathy on the “oh noes my retirement!” front?

 

[BassAle]

I’ve been subscribed to WSB for over a year, but mostly lurk. Right now I can no longer browse it. Looks like they may have booted s bunch of people and taken it private (this has happened a another times after a new rush in subscribers, then there was a mod fight and the person that took it private got kicked out and they made it public again)

 

[dxmnkd316]

Lol wow

why would they go private?

 

[Handyman]

Oh, it's the Fast Money host. Cramer probably is pulling a Tucker Carlson and is "on vacation" at a critical time he's needed.

Cramer is never needed. The man is a fraud and should be forced to get owned by Jon Stewart every day.

Jimjamesak is absolutely right...this is the crap funds and banks have been pulling forever and all the clowns on CNBC rave about it. Dare to Democratize it and its the devil! Like when the Trumpers got maced by cops they couldn't understand why since they weren't dark skinned!

As for my investments...I am of the opinion if I buy something I look rarely and usually only if something happens that piques my interest. I mean I didn't even realize some worthless little stock I bought in 2019 is now 22x as valuable as it was. I love gambling but I would rather do it in Vegas where I drink for free and they have epic dispensaries!

 

[Handyman]

Lol wow

why would they go private?

Probably to avoid trolls...

 

[St. Clown]

TSLA will come down. It's price to book is 50. FIFTY. Alphabet's is 6. Twitter is 5. Amazon's has never gone above 28. Apple is getting there at 33**. Moderna's is 22. For reference, GME is 68, trading around 1 for the last three years. GME and TSLA are a lie and ripe for a deep sell-off.

Back when I was in school, back in the 90s and before the tech bubble had fully bubbled over, a historically normal P/E ratio for the S&P 500 was around 16, but if you look now it's about 34. If you look at when recessions have hit, the P/E ratios for the market have been much higher than that. As of 09/30/20, the P/E for the market as a whole was 34.24. Right around the time a recession hits, and shortly before it, we see that ratio get high.

Wikipedia has a chart going back to 1988. You should be able to spot a trend, if you can recall when recessions hit. https://en.wikipedia.org/wiki/Price–earnings_ratio

 

[BassAle]

Lol wow

why would they go private?

Looks like technical difficulties. It’s back.

 

[Jimjamesak]

Cramer is never needed. The man is a fraud and should be forced to get owned by Jon Stewart every day.

Jimjamesak is absolutely right...this is the crap funds and banks have been pulling forever and all the clowns on CNBC rave about it. Dare to Democratize it and its the devil! Like when the Trumpers got maced by cops they couldn't understand why since they weren't dark skinned!

As for my investments...I am of the opinion if I buy something I look rarely and usually only if something happens that piques my interest. I mean I didn't even realize some worthless little stock I bought in 2019 is now 22x as valuable as it was. I love gambling but I would rather do it in Vegas where I drink for free and they have epic dispensaries!

There's another element that I think the CNBC/Bloomberg types (and a few posters around here) can't really understand: There's a good amount of people in on this that likely don't care if they make money or not. They're just spending their disposable income on tanking a hedge fund instead of something else. I don't think they can comprehend that and that's why they've latched on this "Trump populism" schtick they're on.

 

[St. Clown]

There's another element that I think the CNBC/Bloomberg types (and a few posters around here) can't really understand: There's a good amount of people in on this that likely don't care if they make money or not. They're just spending their disposable income on tanking a hedge fund instead of something else. I don't think they can comprehend that and that's why they've latched on this "Trump populism" schtick they're on.

Most Americans don't have both the kind of disposable income to just toss around enough money to truly affect a big hedge fund, and the desire to do it. While not impossible, it's quite an improbable thought to most people.

(Most Americans can't cover a $1,000 emergency crisis - health issue, home or car repair, etc., without going into debt.)

 

[Jimjamesak]

Also, there's gonna be some GameStop Managers with new cars in the next week. Big upgrade over their usual perk of a pass to E3.

 

[Jimjamesak]

Most Americans don't have both the kind of disposable income to just toss around enough money to truly affect a big hedge fund, and the desire to do it. While not impossible, it's quite an improbable thought to most people.

(Most Americans can't cover a $1,000 emergency crisis - health issue, home or car repair, etc., without going into debt.)

I honestly think you underestimate some people, especially younger people, and the power of the internet and social media. This is entertainment. It's not any different than dropping a few hundred on video games or computer parts or Magic: The Gathering cards or whatever else people spend money on to get them through life. Multiply that by thousands, or even a million, and you've got enough to run against a Hedge Fund.

 

[dxmnkd316]

Back when I was in school, back in the 90s and before the tech bubble had fully bubbled over, a historically normal P/E ratio for the S&P 500 was around 16, but if you look now it's about 34. If you look at when recessions have hit, the P/E ratios for the market have been much higher than that. As of 09/30/20, the P/E for the market as a whole was 34.24. Right around the time a recession hits, and shortly before it, we see that ratio get high.

Wikipedia has a chart going back to 1988. You should be able to spot a trend, if you can recall when recessions hit. https://en.wikipedia.org/wiki/Price–earnings_ratio

I’m going to need to spend some quality thinking time with that article. Lots of good info there.

You can probably overlay a couple of the interest rate curves over that chart and see the patterns. I can’t remember which off hand, but I posted about one of the short term interest rates slowing spinning up then crashing.

on the other hand, we are living in a very weird time and what are old faithful signals may not be entirely reliable. It might have been you that posted about yield inversions not quite meaning what we think they mean right now.

 

[dxmnkd316]

One more thing. I’d really like to see the top ~100 components of the S&P broken down into like the to P/E for each and the weighted contribution to the overall P/E.

I have a spreadsheet that pulls in quotes for all 500 and breaks it down to various analyses. I’ve never used it to look for macro trends before.

You cost me my weekend.

 

[St. Clown]

Yield inversions might have been me, but there are a number of people here who understand them plenty well and could easily have been them. But you’re right, many things seem to have made traditional economic indicators divergent from the stock and bond markets. Still, underlying reasons for the P/E ratios should indicate that either prices have not yet adjusted to reduced earnings or there are issues in other investment markets to cause a flight to stocks, or overly confident investors in general. Perhaps there are other reasons, I don’t know, my brain is mush right now.

 

[Handyman]

Most Americans don't have both the kind of disposable income to just toss around enough money to truly affect a big hedge fund, and the desire to do it. While not impossible, it's quite an improbable thought to most people.

(Most Americans can't cover a $1,000 emergency crisis - health issue, home or car repair, etc., without going into debt.)

But these people can. I can't explain how (probably trust funds or something) but they definitely aren't doing it for the reasons that are being bandied about by The Establishment. This is not Trumper style terrorism...this is bored Millennials with too much time and money on their hands and the need to prove they are smarter than those that came before them. They are trying to crack the market to prove they can...like hackers who break into banks or the government but never steal anything. Think of them as Dude Bro Wall Street Wannabe Versions of Anonymous.

There is a reason "Hold the Line" is trending on Twitter and it isn't because of a Toto reunion concert. They don't care that things are fluctuating and they might be in for some serious loss they want to prove they can beat Melvin and some other supposed "Gurus" along with the TV experts who are trying to bully them into selling. (the memes are solid) They see the whole thing as a con and they are willing to take the heat if they prove their point. For now it is just a game...but it could become pretty dangerous if they get drunk on their own greatness.

I would bet 2 things right now:

1) A lot of these WSB guys are probably out of work traders or bankers.

2) some of these people will be tapped to work at hedge funds in the future. Like when the DOJ hires frauds and thieves to help catch other frauds and thieves. There is a bunch of Frank Abagnales in this group.

 

[aparch]

Lol wow

why would they go private?

CNBC said that Discord booted an organized group from WSB from their servers because of repeated hate speech violations.

I wanted to not believe Kepler when he mentioned the bored "incels" at the helm, but he might be right.