Superfluous Demand concept

On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

On Wednesday, April 29, 2020 at 1:53:16 PM UTC-4, dagmarg...@yahoo.com wrote:
On Wednesday, April 29, 2020 at 12:39:40 PM UTC-4, George Herold wrote:
On Wednesday, April 29, 2020 at 12:00:38 PM UTC-4, jla...@highlandsniptechnology.com wrote:
I'd been thinking about this, but it has official status now.
"Superfluous Demand".

https://www.zerohedge.com/markets/superfluous-demand-free-fall-whats-upside-re-opening-small-business

My idea is that the Marxist concept of the surplus product of labor
has been going not so much to fat-cat capitalists, but to workers who
spend their wages on silly stuff like premium cable, essential scented
oils, $500 basketball seats, $70K ugly trucks and SUVs, boats that are
rarely used, cruises, wine tours, art studios, like that.

I've noticed the kinds of small businesses that are going under now
and may never come back. Many were silly things like weird nutrients,
strange dance studios, knitting specialties, psychic councelling,
exercize studios next to hilly parks, wine tasting boutiques,
hop-heavy brewpubs, gift stores full of hideous junk.

There's lots of silly electronics and phone/web apps too, highly
derivative ideas that create money-losing angel companies but that
people don't really need. Like $1200 phones.

Mo has two units at ActivSpace, a big building full of small units
rented to anyone at high cost per square foot. It's full of tattoo
artists, art studios, crafts, repair services, skin and hair care, all
kinds of marginally-profitable weird stuff. It rents month-to-month
and people are not paying.


Hmm.. OK I tend to be a frugal type. But I wonder if everyone (in US)
will be a bit more frugal after this? And that will mean less money
moving around... lower GDP...
I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.

If the thing has intrinsic value, and we continue to respect property
rights (the right to own something and not have it confiscated), then
things with intrinsic value should maintain their relative value,
regardless.

But if government starts taking assets -- savings, investments, land,
companies, etc. (and they have many insidious methods and pretexts for
doing so) -- then it's time to buy a big lump of gold and try nibbling
a little chunk of it every night, to see it if fills your belly.

Cheers,
James Arthur

Right. I should take my money out of the stock market... hold it
in cash for a bit... and invest in test equipment during the next
sell off.
(there's no way I can use that much test equipment. :^)

I've got a nice house, sm. barn, nice land...
Well the land is sorta crappy for farming*.. heavy clay..
But there's a beautiful creek that runs along the back end.
(1/2 of it's trees/woods and the other half is slowly turning
into trees. :^)

And then gold, Right. Is gold high now?
(or some other precious metal?)
I was going to ask my broker, I have no idea, but my
first guess is he's not going to suggest gold.
(but what do I know?)

George H.

*a neighbor, ex-farmer, said it was good haying fields.

I think of the stock market as a safe-haven, actually. If we
have inflation, the dollar-denominated value of quality companies
you own should track, over time. Short-term, no, but long term,
they do. Plus they grow, and produce earnings. But short-term,
possibly a few years, or possibly not, they're a panic-meter,
that's true.

All that said, I traded a bit of fiat cash for a few real goods -- Rigol
has their DS1202Z-E (200 MHz, 2ch, 1GSPS) 'scope on COVID-special for
$299, shipped.

https://www.rigolna.com/products/digital-oscilloscopes/1000z/

(Plus I got some 6W/5V solar panels for charging USB stuff.)

Cheers,
James Arthur

 

[Ricky C]

On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:

On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

The researchers invented the ultimate computer to provide information to make money in the stock market. They finally had it ready and turned it on allowing it to crunch for hours until it produced its result, "Buy low, sell high." Not much detail in that.

--

Rick C.

---- Get 1,000 miles of free Supercharging
---- Tesla referral code - https://ts.la/richard11209

 

On Tuesday, May 5, 2020 at 1:12:20 PM UTC-4, Ricky C wrote:

On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

See "The Intelligent Investor," Benjamin Graham, 1949.

Cheers,
James Arthur

 

[amdx]

On 5/5/2020 12:12 PM, Ricky C wrote:

On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

You know my motto, don't pick, buy the market. VTSAX, or the S&P 500, or
any other Total stock market fund, if America does well you do well.

The researchers invented the ultimate computer to provide information to make money in the stock market. They finally had it ready and turned it on allowing it to crunch for hours until it produced its result, "Buy low, sell high." Not much detail in that.

Funny, started buying in the late 89s early 90s, guess what, I bought
low! Had to sell some today, sold high, daughters dental tuition is
coming due.

Mikek

 

On Sat, 2 May 2020 17:42:16 +1000, Clifford Heath <no.spam@please.net>
wrote:

On 2/5/20 3:12 pm, Ricky C wrote:
On Saturday, May 2, 2020 at 12:28:08 AM UTC-4, Clifford Heath wrote:
On 2/5/20 1:08 pm, Ricky C wrote:
On Friday, May 1, 2020 at 10:33:16 PM UTC-4, dca...@krl.org wrote:
Gold does not generate income.
Neither do a lot of companies. But the stock appreciates just as gold appreciates. It's called capital gains

Stock-holders might call it that, but if the stock appreciates, that's
mostly due to one of three things:
* the company has made capital investments (spent its earnings on
something durable or worthwhile)
* "retained earnings" i.e. earnings that have not been distributed as
dividends.
* Changes in market sentiment, which can go either way.

My point is that company earnings doesn't have to get distributed as
cash. It's still income.

Gold doesn't generate earnings, but being a commodity, demand for it
varies, and sentiment goes up and down.

The point is, which you seem to completely miss, is that capital gains only requires one thing, gains in the capital value.

Stocks often gain value because of, as you say, "market sentiment". In fact, that is essentially the only reason why stocks gain value.

Bulldust! People invest in companies because they *produce* value; ore
from a mining license, steel from ore, washing machines from steel, etc.

People buy stocks because they think the value of the stocks will
increase. It has to do with enthuisam and sentiment, not productivity
or value.

Some companies choose to pay out the created value as dividends, some
build market share, some just bank the cash for future projects, and
some buy back their own shares to boost the value of the remaining ones.

None of that change in value is related to market sentiment, or the
whole market would be *a zero sum game* - which it's not.

Buybacks just increase share prices in the market. Dividends are real
money and are, unfortunately, taxed twice.

Companies may be making excellent profits, but if one of the many quarterly numbers misses by a penny, the stock drops precipitously. Not because the company value has declined in any calculable way, but because the "market" was disappointed.

And some companies keep losing, maybe always will, are arguably
useless, and their share prices increase.



--

John Larkin Highland Technology, Inc

Science teaches us to doubt.

Claude Bernard

 

On Saturday, May 2, 2020 at 3:42:24 AM UTC-4, Clifford Heath wrote:

On 2/5/20 3:12 pm, Ricky C wrote:
On Saturday, May 2, 2020 at 12:28:08 AM UTC-4, Clifford Heath wrote:
On 2/5/20 1:08 pm, Ricky C wrote:
On Friday, May 1, 2020 at 10:33:16 PM UTC-4, dca...@krl.org wrote:
Gold does not generate income.
Neither do a lot of companies. But the stock appreciates just as gold appreciates. It's called capital gains

Stock-holders might call it that, but if the stock appreciates, that's
mostly due to one of three things:
* the company has made capital investments (spent its earnings on
something durable or worthwhile)
* "retained earnings" i.e. earnings that have not been distributed as
dividends.
* Changes in market sentiment, which can go either way.

My point is that company earnings doesn't have to get distributed as
cash. It's still income.

Gold doesn't generate earnings, but being a commodity, demand for it
varies, and sentiment goes up and down.

The point is, which you seem to completely miss, is that capital gains only requires one thing, gains in the capital value.

Stocks often gain value because of, as you say, "market sentiment". In fact, that is essentially the only reason why stocks gain value.

Bulldust! People invest in companies because they *produce* value; ore
from a mining license, steel from ore, washing machines from steel, etc.

Nicely stated. +1.

Some companies choose to pay out the created value as dividends, some
build market share, some just bank the cash for future projects, and
some buy back their own shares to boost the value of the remaining ones.

None of that change in value is related to market sentiment, or the
whole market would be *a zero sum game* - which it's not.

Yup. It's surprising how many 'investors' do not understand the basic
operation of creating value that they're investing in.

Companies may be making excellent profits, but if one of the many quarterly numbers misses by a penny, the stock drops precipitously. Not because the company value has declined in any calculable way, but because the "market" was disappointed.

That happens in the short term, but the in the long term it steadies
out. And even in the short term, sudden changes are due to *unpredicted*
variations. The market is generally pretty good about making
predictions, so a stock only jumps when a prediction proves wrong.

Exactly. Or as Warren Buffett's mentor put it,
"In the short run, the market is a voting machine but in the long run,
it is a weighing machine." ― Benjamin Graham

Betting on the voting machine is gambling. Calculated betting on the
weighing machine, after inspecting the machine and the things to be
weighed, is investing.

Yes, you have described the value of gold well, but it's not substantially different from any traded commodity or stock, the value depends on what people are willing to pay for it and so does it's "capital" gain or loss. There is little point in distinguishing the two.

The difference with gold is it's historical (sentimental) place, and in
the fact that it's durable but not very much gets used, and not much
gets mined each year. Common salt is a commodity too, but it can be
produced in whatever amount might be needed for fairly low cost. The
same is not true of gold - both supply side and demand side is rather
special compared to other commodities.

CH

Cheers,
James Arthur

 

[Ricky C]

On Tuesday, May 5, 2020 at 1:04:08 PM UTC-4, jla...@highlandsniptechnology.com wrote:

On Sat, 2 May 2020 17:42:16 +1000, Clifford Heath <no.spam@please.net
wrote:

On 2/5/20 3:12 pm, Ricky C wrote:
On Saturday, May 2, 2020 at 12:28:08 AM UTC-4, Clifford Heath wrote:
On 2/5/20 1:08 pm, Ricky C wrote:
On Friday, May 1, 2020 at 10:33:16 PM UTC-4, dca...@krl.org wrote:
Gold does not generate income.
Neither do a lot of companies. But the stock appreciates just as gold appreciates. It's called capital gains

Stock-holders might call it that, but if the stock appreciates, that's
mostly due to one of three things:
* the company has made capital investments (spent its earnings on
something durable or worthwhile)
* "retained earnings" i.e. earnings that have not been distributed as
dividends.
* Changes in market sentiment, which can go either way.

My point is that company earnings doesn't have to get distributed as
cash. It's still income.

Gold doesn't generate earnings, but being a commodity, demand for it
varies, and sentiment goes up and down.

The point is, which you seem to completely miss, is that capital gains only requires one thing, gains in the capital value.

Stocks often gain value because of, as you say, "market sentiment". In fact, that is essentially the only reason why stocks gain value.

Bulldust! People invest in companies because they *produce* value; ore
from a mining license, steel from ore, washing machines from steel, etc.

People buy stocks because they think the value of the stocks will
increase. It has to do with enthuisam and sentiment, not productivity
or value.

Sometimes people buy stocks for the dividends. While expectations of capital gains is also common, there is no reason to say it is based on "enthuisam[sic] and sentiment". Often the expectation of growth of market value is based on careful consideration of the many factors involved in market pricing. As others have pointed out it frequently is related to producing goods and profit even if there are no dividends. It is only a few stocks where the value is based on optimism of appreciation without concrete support. Tesla is one where there is some traditional support (such as GAAP profits) for expectation of appreciation, but there is a huge factor of enthusiasm simply because it is a new technology and Tesla is the market leader. The former has risk because profits can change due to market forces (such as recessions) and the latter has huge risk if the market doesn't turn out or others in the market take the lead down the road.

Some companies choose to pay out the created value as dividends, some
build market share, some just bank the cash for future projects, and
some buy back their own shares to boost the value of the remaining ones.

None of that change in value is related to market sentiment, or the
whole market would be *a zero sum game* - which it's not.

Buybacks just increase share prices in the market. Dividends are real
money and are, unfortunately, taxed twice.

Every dollar is taxed many, many times as it goes around the economic cycles.

Companies may be making excellent profits, but if one of the many quarterly numbers misses by a penny, the stock drops precipitously. Not because the company value has declined in any calculable way, but because the "market" was disappointed.

And some companies keep losing, maybe always will, are arguably
useless, and their share prices increase.

That is a rare case of course because at some point the cash in a company will be gone and the company has to close it's doors. That is often an opportunity for the company's stock price to decrease.

--

Rick C.

---+ Get 1,000 miles of free Supercharging
---+ Tesla referral code - https://ts.la/richard11209

 

[Ricky C]

On Tuesday, May 5, 2020 at 1:37:03 PM UTC-4, amdx wrote:

On 5/5/2020 12:12 PM, Ricky C wrote:
On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

You know my motto, don't pick, buy the market. VTSAX, or the S&P 500, or
any other Total stock market fund, if America does well you do well.

It's still a matter of picking your times to buy and sell. If you are talking long term the indexes are only so good. No one got rich on buying index funds for long term holding.

The researchers invented the ultimate computer to provide information to make money in the stock market. They finally had it ready and turned it on allowing it to crunch for hours until it produced its result, "Buy low, sell high." Not much detail in that.


Funny, started buying in the late 89s early 90s, guess what, I bought
low! Had to sell some today, sold high, daughters dental tuition is
coming due.

After holding since 1990 you would need a return of 100% just to keep up with inflation. I earned that in a little over year by picking the right stocks. I find these opportunities maybe once in two years. It adds up very quickly even if I don't get 100% or 200% profit like I did on Tesla.

Heck, investing in real estate can pay a lot more by both appreciating in value (roughly equal to inflation) and paying "dividends" in the form of rent. If you are at all intelligent and don't buy during a bubble, it's hard to go wrong in the long term with real estate.

Hmmm... I just realized that we get taxed on inflation. When we have interest earnings that just keep up with inflation, we are taxed on that. When we have capital gains that are a result of inflation, we are taxed on that.

That sucks!

--

Rick C.

--+- Get 1,000 miles of free Supercharging
--+- Tesla referral code - https://ts.la/richard11209

 

On Tuesday, May 5, 2020 at 3:16:03 PM UTC-4, Ricky C wrote:

Heck, investing in real estate can pay a lot more by both appreciating in value (roughly equal to inflation) and paying "dividends" in the form of rent. If you are at all intelligent and don't buy during a bubble, it's hard to go wrong in the long term with real estate.

Hmmm... I just realized that we get taxed on inflation.

Welcome to 2020! Where have you been?

When we have interest earnings that just keep up with inflation, we are taxed on that. When we have capital gains that are a result of inflation, we are taxed on that.

That sucks!

That's why capital gains are taxed at a lower rate. Otherwise if
you buy a house and sell it forty years later for 5x the price, its
value after inflation has barely changed, yet you are taxed on 4/5ths
of what you paid for it as if it were new money coming in, instead of
your own money after inflation.

If your state and local taxes total 50%, your investment reward
for buying, holding, paying taxes on, insuring, and maintaining
a property -- contributing to your community -- for forty years
is a net loss of 40% of your principal, a financial disaster.

For that reason, capital gains can amount unfairly to confiscating
someone's investment, which is bad. Human progress requires
investment.

Cheers,
James Arthur

 

[amdx]

On 5/5/2020 2:15 PM, Ricky C wrote:

On Tuesday, May 5, 2020 at 1:37:03 PM UTC-4, amdx wrote:
On 5/5/2020 12:12 PM, Ricky C wrote:
On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

You know my motto, don't pick, buy the market. VTSAX, or the S&P 500, or
any other Total stock market fund, if America does well you do well.

It's still a matter of picking your times to buy and sell. If you are talking long term the indexes are only so good. No one got rich on buying index funds for long term holding.


The researchers invented the ultimate computer to provide information to make money in the stock market. They finally had it ready and turned it on allowing it to crunch for hours until it produced its result, "Buy low, sell high." Not much detail in that.


Funny, started buying in the late 80s early 90s, guess what, I bought
low! Had to sell some today, sold high, daughters dental tuition is
coming due.

After holding since 1990 you would need a return of 100% just to keep up with inflation. I earned that in a little over year by picking the right stocks. I find these opportunities maybe once in two years. It adds up very quickly even if I don't get 100% or 200% profit like I did on Tesla.

Heck, investing in real estate can pay a lot more by both appreciating in value (roughly equal to inflation) and paying "dividends" in the form of rent. If you are at all intelligent and don't buy during a bubble, it's hard to go wrong in the long term with real estate.

Hmmm... I just realized that we get taxed on inflation. When we have interest earnings that just keep up with inflation, we are taxed on that. When we have capital gains that are a result of inflation, we are taxed on that.

That sucks!

The Nasdaq was 458 in 1990 is it 8,809, I think that's 100%, I'm not
very good at math. 1800% is pretty close.
I'm 65, no sense in my starting to speculate in individual stocks
now, but many people do, even money managers and they don't beat the
market in the long run, and they charge people to do that.
Mikek

 

[Lasse Langwadt Christense]

tirsdag den 5. maj 2020 kl. 22.57.39 UTC+2 skrev dagmarg...@yahoo.com:

On Tuesday, May 5, 2020 at 3:16:03 PM UTC-4, Ricky C wrote:

Heck, investing in real estate can pay a lot more by both appreciating in value (roughly equal to inflation) and paying "dividends" in the form of rent. If you are at all intelligent and don't buy during a bubble, it's hard to go wrong in the long term with real estate.

Hmmm... I just realized that we get taxed on inflation.

Welcome to 2020! Where have you been?

When we have interest earnings that just keep up with inflation, we are taxed on that. When we have capital gains that are a result of inflation, we are taxed on that.

That sucks!

That's why capital gains are taxed at a lower rate. Otherwise if
you buy a house and sell it forty years later for 5x the price, its
value after inflation has barely changed, yet you are taxed on 4/5ths
of what you paid for it as if it were new money coming in, instead of
your own money after inflation.

If your state and local taxes total 50%, your investment reward
for buying, holding, paying taxes on, insuring, and maintaining
a property -- contributing to your community -- for forty years
is a net loss of 40% of your principal, a financial disaster.

that would also severely restrict mobility, few is going to sell
their house and move if taxes means they can't buy another
similar house for the money they sold the old house for

 

[Bill Sloman]

On Wednesday, May 6, 2020 at 3:04:08 AM UTC+10, jla...@highlandsniptechnology.com wrote:

On Sat, 2 May 2020 17:42:16 +1000, Clifford Heath <no.spam@please.net
wrote:

On 2/5/20 3:12 pm, Ricky C wrote:
On Saturday, May 2, 2020 at 12:28:08 AM UTC-4, Clifford Heath wrote:
On 2/5/20 1:08 pm, Ricky C wrote:
On Friday, May 1, 2020 at 10:33:16 PM UTC-4, dca...@krl.org wrote:
Gold does not generate income.
Neither do a lot of companies. But the stock appreciates just as gold appreciates. It's called capital gains

Stock-holders might call it that, but if the stock appreciates, that's
mostly due to one of three things:
* the company has made capital investments (spent its earnings on
something durable or worthwhile)
* "retained earnings" i.e. earnings that have not been distributed as
dividends.
* Changes in market sentiment, which can go either way.

My point is that company earnings doesn't have to get distributed as
cash. It's still income.

Gold doesn't generate earnings, but being a commodity, demand for it
varies, and sentiment goes up and down.

The point is, which you seem to completely miss, is that capital gains only requires one thing, gains in the capital value.

Stocks often gain value because of, as you say, "market sentiment". In fact, that is essentially the only reason why stocks gain value.

Bulldust! People invest in companies because they *produce* value; ore
from a mining license, steel from ore, washing machines from steel, etc.

People buy stocks because they think the value of the stocks will
increase. It has to do with enthuisam and sentiment, not productivity
or value.

Some people do. Others have more sense.

Some companies choose to pay out the created value as dividends, some
build market share, some just bank the cash for future projects, and
some buy back their own shares to boost the value of the remaining ones.

None of that change in value is related to market sentiment, or the
whole market would be *a zero sum game* - which it's not.

Buybacks just increase share prices in the market. Dividends are real
money and are, unfortunately, taxed twice.

Not in Australia they aren't. The company tax paid by the company is divided up and distributed with the dividends as "imputed tax" and I can use it to to pay off the income tax I owe on those dividends. They are also known as "franking credits" and retired people love them.

Companies may be making excellent profits, but if one of the many quarterly numbers misses by a penny, the stock drops precipitously. Not because the company value has declined in any calculable way, but because the "market" was disappointed.

And some companies keep losing, maybe always will, are arguably
useless, and their share prices increase.

Some investors haven't got much sense but there are some companies - Amazon seems to come to mind - who plowed back all their profits for quite a while in pursuit of rapid growth, and it can work.

--
Bill Sloman, Sydney

 

[Clifford Heath]

On 6/5/20 5:15 am, Ricky C wrote:

On Tuesday, May 5, 2020 at 1:37:03 PM UTC-4, amdx wrote:
On 5/5/2020 12:12 PM, Ricky C wrote:
On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

You know my motto, don't pick, buy the market. VTSAX, or the S&P 500, or
any other Total stock market fund, if America does well you do well.

If you are talking long term the indexes are only so good.

My, you do talk a lot of nonsense!

Analysis of a dozen well-known strategies for predicting winners and
losers shows that against the last 40 years of trading history, every
single strategy did worse (or no better) than simply buying the index.

"You cannot predict the market because the market *is* a prediction".

My concern is that someone will come up with a cunning way to subvert
Vanguard, and one day they'll just say "oops, we know you bought he
index, but lost your money. It seems to have fallen into my pocket
instead." Since your country is being run by gangstas and crooks, that
might go completely unpunished.

> No one got rich on buying index funds for long term holding.

The demented orangutan currently running your government would be nearly
twice as rich if he'd simply put Daddy's money into the index, and gone
to the Bahamas for four decades, instead of borrowing billions and
bankrupting all his creditors multiple times. Worst businessman ever?

CH

 

[Clifford Heath]

On 6/5/20 8:14 am, Lasse Langwadt Christensen wrote:

tirsdag den 5. maj 2020 kl. 22.57.39 UTC+2 skrev dagmarg...@yahoo.com:
On Tuesday, May 5, 2020 at 3:16:03 PM UTC-4, Ricky C wrote:

Heck, investing in real estate can pay a lot more by both appreciating in value (roughly equal to inflation) and paying "dividends" in the form of rent. If you are at all intelligent and don't buy during a bubble, it's hard to go wrong in the long term with real estate.

Hmmm... I just realized that we get taxed on inflation.

Welcome to 2020! Where have you been?

When we have interest earnings that just keep up with inflation, we are taxed on that. When we have capital gains that are a result of inflation, we are taxed on that.

That sucks!

That's why capital gains are taxed at a lower rate. Otherwise if
you buy a house and sell it forty years later for 5x the price, its
value after inflation has barely changed, yet you are taxed on 4/5ths
of what you paid for it as if it were new money coming in, instead of
your own money after inflation.

If your state and local taxes total 50%, your investment reward
for buying, holding, paying taxes on, insuring, and maintaining
a property -- contributing to your community -- for forty years
is a net loss of 40% of your principal, a financial disaster.

that would also severely restrict mobility, few is going to sell
their house and move if taxes means they can't buy another
similar house for the money they sold the old house for

That is the actual situation here in Australia... except that we have a
capital gains tax exemption for the primary residence. Along with large
(state) stamp duty increasing the cost of flipping houses, we don't have
a very mobile population.

Of course, all our politicians own a house for themselves, and a house
for the wife's "primary residence", and sometimes one for each of their
adult children too... except that they may actually live together,
they're simply rorting the system.

If I understand the US system, it's much more rational. The home accrues
capital gains, but the gains can be rolled over when you move house
(within some period like 12 months), so the effect is that the gains
become subject to an estate tax after death. That would be a much better
way (than Australia's) of mitigating excessive intergenerational wealth
transfer.

CH

 

[Clifford Heath]

On 6/5/20 4:04 am, Ricky C wrote:

On Tuesday, May 5, 2020 at 1:04:08 PM UTC-4, jla...@highlandsniptechnology.com wrote:
On Sat, 2 May 2020 17:42:16 +1000, Clifford Heath <no.spam@please.net> wrote:
On 2/5/20 3:12 pm, Ricky C wrote:
Stocks often gain value because of, as you say, "market sentiment". In fact, that is essentially the only reason why stocks gain value.

Bulldust! People invest in companies because they *produce* value; ore
from a mining license, steel from ore, washing machines from steel, etc.

People buy stocks because they think the value of the stocks will
increase. It has to do with enthuisam and sentiment, not productivity
or value.

[Responding to JL here] Silicon Valley is rather special. There seems to
be more enthusiasm, and less need to produce actual value. The rest of
the world mostly doesn't work like that, and the investors who win are
the ones who seek the underlying value.

Buybacks just increase share prices in the market. Dividends are real
money and are, unfortunately, taxed twice.

Every dollar is taxed many, many times as it goes around the economic cycles.

Not in Australia they don't. Many dividends here are franked, meaning
that any company tax that has been paid doesn't get paid again. Or more
accurately, any part of the dividend on which the full corporate tax has
been paid doesn't attract any tax at whatever the recipient's marginal
tax rate is. (So some dividends might come only 50%, or 80% franked, for
example).

Strangely enough, failure to understand why this is correct and
consistent law has resulted in an outcry about franking credits being a
"free gift" to retirees etc, for whom dividends are the majority of the
income they earn on their life's savings. Their capital isn't "idle" or
ill-gotten - it's the culmination of a life of hard work and they should
be entitled to its full value, after any tax has been paid (once, not
twice). Grifters want double taxation, as long as it doesn't apply to
themselves.

Clifford Heath.

 

[david eather]

On 2/05/2020 12:10 am, Ricky C wrote:

On Friday, May 1, 2020 at 9:15:03 AM UTC-4, amdx wrote:
On 4/30/2020 11:13 PM, Ricky C wrote:
On Thursday, April 30, 2020 at 11:28:57 PM UTC-4, George Herold wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.
Hi Dan, you certainly have a lot of advice. :^)
Let me first say I'm neither as smart nor as rich as you.
(again with the smile. :^)

I guess I was just feeling that it looks like a very uncertain
situation in the future. And I'd like to tuck ~1/2 our
stock money away for a while... gold seems like the traditional
choice.

By whom? Gold is what people invest in when they are worried about civilization crashing although bullets may be better, but then you'd better have a gun to go with them.

I already posted data on the price of gold. Looks to me like it is near the all time high. It doesn't move quickly for the most part, but if you start to lose money on it at what price will you bail and what will you put it into?

I still say government bonds are the way to go. They can't drop in value much unless inflation starts to take off an interest rates run up. That also happens slowly and bonds are still more stable than gold.

I say, wait for Tesla to reach below 500 and buy. If it goes below 400 buy like crazy. Below 300 sell it all! No, just kidding. For anytime in the near future Tesla is a great buy at prices significantly lower than today's close of $780. Even with all the rampant losses in the market it still double it's price at the first of the year.

While the market has movements, it doesn't dictate the pricing of any individual stocks. Tesla doesn't move with the market so much. Once they announce the Fremont factory reopening the price will jump hugely. If you don't mind paying tax on it, you can make a lot of money off it. I prefer to pay less tax and buy/sell less often.


You seem to be pushing Tesla pretty hard, what percentage of your life
savings do you have in Tesla? What percentage do you recommend for others?
Mikek

I have maybe 10% invested in Tesla. I don't make recommendations for anyone else.

Maybe I haven't been clear. There is a lot of money to be made trading Tesla stock. But there is risk for sure. Not so much that you will lose your shirt because the company goes belly up. But because people will make the wrong decisions about when to buy and sell, mostly because they don't pay attention to the facts.

I'm not immune. Every logical thought was to invest when it dropped below 200. I put about half in but held back and didn't invest all I had set aside for this. From there it moved upward and I never saw that great an opportunity again.

Likewise I sold some that reached the long term capital gains point but missed out on the resent rise. Still, I made plenty on it. I really don't think the price will remain up with the present situation. The market is agreeing with me at the moment. I just need until the end of the month to sell the rest. Then in a quarter or two it will be ready to pop back up.

Regardless of what anyone thinks of the cars, the company has a very solid future ahead. The only threat I see is the long term effects from this virus. If the economy tanks and stays tanked, Tesla might not be able to sell all the cars they make. That would be bad with the debt they are taking on.

Something else?

Food
Guns
Gold
Cash

 

[amdx]

On 5/5/2020 6:08 PM, Clifford Heath wrote:

On 6/5/20 5:15 am, Ricky C wrote:
On Tuesday, May 5, 2020 at 1:37:03 PM UTC-4, amdx wrote:
On 5/5/2020 12:12 PM, Ricky C wrote:
On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com
wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org
wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold
wrote:
I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and
moving
~1/2 my assets in stocks to something else for a while.  But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value.  That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your  broker if it costs you
any money.

Something with intrinsic value. Partial ownership in a solid
enterprise ....

Sounds like buying stock.

Yes, that's what I meant.  Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details.  How do you pick the winners and
the losers?

You know my motto, don't pick, buy the market. VTSAX, or the S&P 500, or
any other Total stock market fund, if America does well you do well.

If you are talking long term the indexes are only so good.

My, you do talk a lot of nonsense!

Analysis of a dozen well-known strategies for predicting winners and
losers shows that against the last 40 years of trading history, every
single strategy did worse (or no better) than simply buying the index.

"You cannot predict the market because the market *is* a prediction".

My concern is that someone will come up with a cunning way to subvert
Vanguard, and one day they'll just say "oops, we know you bought he
index, but lost your money. It seems to have fallen into my pocket
instead." Since your country is being run by gangstas and crooks, that
might go completely unpunished.

No one got rich on buying index funds for long term holding.

The demented orangutan currently running your government would be nearly
twice as rich if he'd simply put Daddy's money into the index, and gone
to the Bahamas for four decades, instead of borrowing billions and
bankrupting all his creditors multiple times. Worst businessman ever?

CH

I can't find Ricky C's post that you have responded to.
But I want to respond.

Ricky C, said, If you are talking long term the indexes are only so
good.

How long have you been buying stocks? I'd like to see your record
after 10 years of stock picking.
I'm sure there all winners and you will beat the indexes /s/


>>Ricky C said, No one got rich on buying index funds for long term holding.
I guess it depends on what rich means. Since 1981. I inflation adjusted
our income until 2018. added it up and divided by the number of years.
Our inflation adjusted average income was $71k a year. A little above
median income. But our index investing has put us in the 94th percentile
in net worth of the US population.
That may not be rich, but it is comfortable. We have more than we
earned during our working lives, because of index funds

 

[George Herold]

On Tuesday, May 5, 2020 at 12:33:07 PM UTC-4, dagmarg...@yahoo.com wrote:

On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:
On Wednesday, April 29, 2020 at 1:53:16 PM UTC-4, dagmarg...@yahoo.com wrote:
On Wednesday, April 29, 2020 at 12:39:40 PM UTC-4, George Herold wrote:
On Wednesday, April 29, 2020 at 12:00:38 PM UTC-4, jla...@highlandsniptechnology.com wrote:
I'd been thinking about this, but it has official status now.
"Superfluous Demand".

https://www.zerohedge.com/markets/superfluous-demand-free-fall-whats-upside-re-opening-small-business

My idea is that the Marxist concept of the surplus product of labor
has been going not so much to fat-cat capitalists, but to workers who
spend their wages on silly stuff like premium cable, essential scented
oils, $500 basketball seats, $70K ugly trucks and SUVs, boats that are
rarely used, cruises, wine tours, art studios, like that.

I've noticed the kinds of small businesses that are going under now
and may never come back. Many were silly things like weird nutrients,
strange dance studios, knitting specialties, psychic councelling,
exercize studios next to hilly parks, wine tasting boutiques,
hop-heavy brewpubs, gift stores full of hideous junk.

There's lots of silly electronics and phone/web apps too, highly
derivative ideas that create money-losing angel companies but that
people don't really need. Like $1200 phones.

Mo has two units at ActivSpace, a big building full of small units
rented to anyone at high cost per square foot. It's full of tattoo
artists, art studios, crafts, repair services, skin and hair care, all
kinds of marginally-profitable weird stuff. It rents month-to-month
and people are not paying.


Hmm.. OK I tend to be a frugal type. But I wonder if everyone (in US)
will be a bit more frugal after this? And that will mean less money
moving around... lower GDP...
I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.

If the thing has intrinsic value, and we continue to respect property
rights (the right to own something and not have it confiscated), then
things with intrinsic value should maintain their relative value,
regardless.

But if government starts taking assets -- savings, investments, land,
companies, etc. (and they have many insidious methods and pretexts for
doing so) -- then it's time to buy a big lump of gold and try nibbling
a little chunk of it every night, to see it if fills your belly.

Cheers,
James Arthur

Right. I should take my money out of the stock market... hold it
in cash for a bit... and invest in test equipment during the next
sell off.
(there's no way I can use that much test equipment. :^)

I've got a nice house, sm. barn, nice land...
Well the land is sorta crappy for farming*.. heavy clay..
But there's a beautiful creek that runs along the back end.
(1/2 of it's trees/woods and the other half is slowly turning
into trees. :^)

And then gold, Right. Is gold high now?
(or some other precious metal?)
I was going to ask my broker, I have no idea, but my
first guess is he's not going to suggest gold.
(but what do I know?)

George H.

*a neighbor, ex-farmer, said it was good haying fields.

I think of the stock market as a safe-haven, actually. If we
have inflation, the dollar-denominated value of quality companies
you own should track, over time. Short-term, no, but long term,
they do. Plus they grow, and produce earnings. But short-term,
possibly a few years, or possibly not, they're a panic-meter,
that's true.

Thanks for the settling words James. I kinda have two, back of my mind
worries. One is that the wheels come off of everything, and maybe making
a little pile of gold for me to nibble on daily is 'not crazy'.
The other is the US debt... which I guess is future inflation. And
stocks or other physical assets are perhaps the best hedge.

All that said, I traded a bit of fiat cash for a few real goods -- Rigol
has their DS1202Z-E (200 MHz, 2ch, 1GSPS) 'scope on COVID-special for
$299, shipped.

Nice, I paid over $400 for my slower one... years ago.
I should do the software hack to speed it up.

George H.

https://www.rigolna.com/products/digital-oscilloscopes/1000z/

(Plus I got some 6W/5V solar panels for charging USB stuff.)

Cheers,
James Arthur

 

[Ricky C]

On Tuesday, May 5, 2020 at 7:08:50 PM UTC-4, Clifford Heath wrote:

On 6/5/20 5:15 am, Ricky C wrote:
On Tuesday, May 5, 2020 at 1:37:03 PM UTC-4, amdx wrote:
On 5/5/2020 12:12 PM, Ricky C wrote:
On Tuesday, May 5, 2020 at 12:38:45 PM UTC-4, dagmarg...@yahoo.com wrote:
On Thursday, April 30, 2020 at 10:58:25 PM UTC-4, dca...@krl.org wrote:
On Wednesday, April 29, 2020 at 4:31:25 PM UTC-4, George Herold wrote:

I don't want to be a Cassandra, but I worry a crash might come.
And have been thinking about talking to my stock broker guy and moving
~1/2 my assets in stocks to something else for a while. But what
'something else'?

Something with intrinsic value, something people want and need, is
as good as you can do for storing value. That can include partial
ownership in a solid enterprise, too.


I highly suggest that you not talk to your broker if it costs you any money.

Something with intrinsic value. Partial ownership in a solid enterprise ....

Sounds like buying stock.

Yes, that's what I meant. Unless you're expecting total permanent
collapse, there will always be people who need things, and people
working in groups called 'companies' to supply those needs.

The difficulty is in the details. How do you pick the winners and the losers?

You know my motto, don't pick, buy the market. VTSAX, or the S&P 500, or
any other Total stock market fund, if America does well you do well.

If you are talking long term the indexes are only so good.

My, you do talk a lot of nonsense!

And you don't understand a single thing I write.

Analysis of a dozen well-known strategies for predicting winners and
losers shows that against the last 40 years of trading history, every
single strategy did worse (or no better) than simply buying the index.

"You cannot predict the market because the market *is* a prediction".

I never said anything about trying to predict the market. I've only talked about investing in individual stocks which is a way to make money without consideration of "the market". So you are off topic saying I am trying to predict the indices.

My concern is that someone will come up with a cunning way to subvert
Vanguard, and one day they'll just say "oops, we know you bought he
index, but lost your money. It seems to have fallen into my pocket
instead." Since your country is being run by gangstas and crooks, that
might go completely unpunished.

You seem to have gone off the deep end now. Try wearing water wings.

No one got rich on buying index funds for long term holding.

The demented orangutan currently running your government would be nearly
twice as rich if he'd simply put Daddy's money into the index, and gone
to the Bahamas for four decades, instead of borrowing billions and
bankrupting all his creditors multiple times. Worst businessman ever?

Why are you talking about Trump? Is he your example of investment genius?

--

Rick C.

-+-- Get 1,000 miles of free Supercharging
-+-- Tesla referral code - https://ts.la/richard11209

 

[Ricky C]

On Tuesday, May 5, 2020 at 6:14:56 PM UTC-4, Lasse Langwadt Christensen wrote:

tirsdag den 5. maj 2020 kl. 22.57.39 UTC+2 skrev dagmarg...@yahoo.com:
On Tuesday, May 5, 2020 at 3:16:03 PM UTC-4, Ricky C wrote:

Heck, investing in real estate can pay a lot more by both appreciating in value (roughly equal to inflation) and paying "dividends" in the form of rent. If you are at all intelligent and don't buy during a bubble, it's hard to go wrong in the long term with real estate.

Hmmm... I just realized that we get taxed on inflation.

Welcome to 2020! Where have you been?

When we have interest earnings that just keep up with inflation, we are taxed on that. When we have capital gains that are a result of inflation, we are taxed on that.

That sucks!

That's why capital gains are taxed at a lower rate. Otherwise if
you buy a house and sell it forty years later for 5x the price, its
value after inflation has barely changed, yet you are taxed on 4/5ths
of what you paid for it as if it were new money coming in, instead of
your own money after inflation.

If your state and local taxes total 50%, your investment reward
for buying, holding, paying taxes on, insuring, and maintaining
a property -- contributing to your community -- for forty years
is a net loss of 40% of your principal, a financial disaster.

that would also severely restrict mobility, few is going to sell
their house and move if taxes means they can't buy another
similar house for the money they sold the old house for

In the US we have an exception for capital gains on our primary residence if lived in for two years. So move every two years and your only expenses will be from real estate transactions and moving companies.

--

Rick C.

--++ Get 1,000 miles of free Supercharging
--++ Tesla referral code - https://ts.la/richard11209