changed to "wealth inequality"

[JohnRoberts]

I think POTUS would really like to keep them low for a bit longer, I read.

wouldn't be the first time I disagreed with him here, but once more for the cheap seats, I think President Trump is wrong about that... we need to normalize interest rates, the sooner the better, so we'll have some dry powder for the next time the economy needs help (there is always a next time).

Bond market is not attractive enough yet. Completely distorted by QE. In the EU, it's hopeless and will most likely stay like that for longer, while yields of EU CDs are still below (hidden) inflation rate.

I recently bought a couple relatively short term (2 yr or less) CDs because I had too much cash sitting around losing even more value.  The CDs are barely keeping up with whatever (they say)  inflation is.

As usual my problem is timing... I'm too old to be buying common stocks, but nothing else makes sense so I am still long on several positions I can't force myself to sell.

I can easily find dividends higher than CD rates but that ASSumes the market doesn't go down. Two of my stock positions are higher yield than the shortest CD  I own, with better appreciation prospects.  8)

Historically high amount of short positions on anything gold at the moment. Might be counter-indicative. Or not.
A smoking hot investment Not recommendable to most people cos very high risk(!), unless they really know what they are doing.

Gold is supposed to be the lowest risk thing out there, but remains chronically suppressed from previous highs.  I might buy a little more because my position is such a tiny fraction of my total, and nothing stays down forever.

I have a theory that some people are buying bitcoin as a gold replacement, which doesn't make much sense (to me). If/when bitcoin crashes again maybe more of them will rotate back into the real currency hedge...

I just own enough gold to buy some ammunition come the revolution, but a golf ETF probably won't cut it for that use. I may need to buy some physical gold, and I already have lots of ammo.  8)

===

I feel bad talking about pot stocks because they have already run so much... Long term I like canopy, but it was too expensive for me when I bought medreleaf a few months back, and they have already been gobbled up by another pot company (I don't even remember the name of).  The big beer companies are getting into the pot infused drink business, to hopefully offset their declining beer sales.

JR

 

[Script]

Yeah, pot stocks remind a bit of the 'tech boom' -- albeit on a small scale.

Chance of high ROI  vs.  high risk of loss !!


Let me quote:
"Don't - don't - don't - don't - don't believe* the hype."
(Flavor Flav from Public Enemy)

* = Need to stay skeptical and very well-informed.

 

[JohnRoberts]

Yeah, pot stocks remind a bit of the 'tech boom' -- albeit on a small scale.

Bitcoin seems more like a dot.com bubble than pot...(people didn't understand the dot.com technology either. )

Chance of high ROI  vs.  high risk of loss !!

to repeat I am not advocating pot stocks now, they have already run a bunch since i took my flyer on a small position in a small company that has already been bought up by a bigger pot company.

Let me quote:
"Don't - don't - don't - don't - don't believe* the hype."
(Flavor Flav from Public Enemy)

* = Need to stay skeptical and very well-informed.

The major beverage (beer) companies believe the writing on the wall and are buying up pot companies, but like i said the prices are already getting high (pot humor).

JR

 

[Script]

I know you wouldn't advocate any single stock in particular. But thanks for sharing.

The major beverage (beer) companies believe the writing on the wall and are buying up pot companies, but like i said the prices are already getting high (pot humor).

And so probably are quite a few 'professional' analysts, 'media' talkheads and 'invested' experts, some of who seem to be pushing those (and similar) stocks like dope.

Unlike casinos, stock markets are about (1) analyzing information, (2) managing risk, and (3) making informed decisions. Falling short in only one of the three and failure/loss is sure awaiting. And nobody needs to be an expert on the 300,000 or more stocks that exist. A dozen or a few handful can be just fine...

 

[Script]

But I will say if you look at the last 200 yrs, there was ALWAYS something to be really bearish about. Is this time different? hard to know.

This one somehow stuck with me.

When looking at the roughly 140 years of the Dow, has there also ALWAYS been something to be really bearish about?

 

[Script]

Read the other day that Elisabth Warren wants to ban members of Congress from owning individual stocks etc.

Not too bad an idea, if you asked me. I'd go even further and ban state servants from running any private business in parallel, as well as receiving any money other than from activity commissioned by the state directly. Meaning: full servants of the state. And then also ban them from chasing private business affairs again for five or ten years after serving. We'd have to pay them royally of course, both while serving and afterwards.

I know, any idiot then might want to become a politician. Maybe, but only the good one's will prevail and only those get paid royally.

And yes, so-called experts would then never want to enter the political circus in the first place. Well, they could be consulted at any time though.

Way too radical, I know. But as a tendency...

 

[dmp]

I know you wouldn't advocate any single stock in particular. But thanks for sharing.
And so probably are quite a few 'professional' analysts, 'media' talkheads and 'invested' experts, some of who seem to be pushing those (and similar) stocks like dope.

Unlike casinos, stock markets are about (1) analyzing information, (2) managing risk, and (3) making informed decisions. Falling short in only one of the three and failure/loss is sure awaiting. And nobody needs to be an expert on the 300,000 or more stocks that exist. A dozen or a few handful can be just fine...

don't forget (4) wild irrational speculation    ;D

The interesting thing about Pot stocks is the stuff grows like a weed, from what I've read. It is very cheap to produce.  I don't understand the business case for it being either high growth or high value - since the majority of the value right now is due to regulation. For instance, I think pot sells for about $50/oz, while hops sells for $3/oz, as a comparison.  Maybe the assumption is it will continue to be a 'captured' market, in economic terms, so it will not have competition to drive down the price. Because if it becomes highly competitive, I think it will be about as valuable as dandalions.

 

[JohnRoberts]

Read the other day that Elisabth Warren wants to ban members of Congress from owning individual stocks etc.

I am OK with them owning stocks, but their trading activity needs to be under a microscope. A congressman just got busted for insider trading and not the first time it happened.

How do so many of our legislators become millionaires on thousandaire salaries?

Not too bad an idea, if you asked me. I'd go even further and ban state servants from running any private business in parallel, as well as receiving any money other than from activity commissioned by the state directly. Meaning: full servants of the state. And then also ban them from chasing private business affairs again for five or ten years after serving. We'd have to pay them royally of course, both while serving and afterwards.

there are rules about that, but could always be stricter.  They should probably be paid 10x, considering the magnitude of the spending decisions they routinely make to perhaps reduce some of the temptation.

I know, any idiot then might want to become a politician. Maybe, but only the good one's will prevail and only those get paid royally.

already do and done.

And yes, so-called experts would then never want to enter the political circus in the first place. Well, they could be consulted at any time though.

It is hard to understand the motivation. Public service is a factor, but it seems pursuit of power and wealth is in there.

Way too radical, I know. But as a tendency...

It is really hard to tell voters what they want to hear, with a straight face.  :

JR

 

[dmp]

I am OK with them owning stocks, but their trading activity needs to be under a microscope. A congressman just got busted for insider trading and not the first time it happened.

This is a significant problem - the lure of wealth and power of political office is not in the interest of the people.
The criminal activity of politicians is the worst characteristic of the swamp (even if they de-criminalize insider trading, there is no way to argue it is fair or just) .

Trump's statement yesterday about that congressman:
"Two long running, Obama era, investigations of  two very popular Republican Congressmen were brought to a well publicized charge, just ahead of the Mid-Terms, by the Jeff Sessions Justice Department. Two easy wins now in doubt because there is not enough time."

 

[JohnRoberts]

don't forget (4) wild irrational speculation    ;D

as the popular joke goes, the market can remain irrational, longer than investors can remain liquid. 

The interesting thing about Pot stocks is the stuff grows like a weed, from what I've read. It is very cheap to produce.

how expensive do you think Budweiser is to make?

I don't understand the business case for it being either high growth or high value - since the majority of the value right now is due to regulation.

the wave of legalization and new regulation is the investment stimulus. Right now smart players are developing pot brands, just like the beer business and likely why there is so much interest from brewers (not to mention declining beer sales, some no doubt lost to pot).

For instance, I think pot sells for about $50/oz, while hops sells for $3/oz, as a comparison. 

I pay $2 oz for imported european hops, but the hops don't make any buzz all by themselves.  ;D  Pot was $15 an oz back in the 60s. These days I buy hops not pot.

There is also a whole new class of medical applications for cannabis related active ingredient extracts. I am talking about real medical applications, not the sham medical sales to recreational users. This could be a decent separate market all by itself, ignoring the recreational business.

Maybe the assumption is it will continue to be a 'captured' market, in economic terms, so it will not have competition to drive down the price. Because if it becomes highly competitive, I think it will be about as valuable as dandalions.

There will be profit for who ends up at the top of the hill(s)... still unclear, but Constellation Brands (beer and beverage) buying Canopy Growth (pot), is strong evidence of that trend...  Canopy is already too expensive to touch, but Constellation may be a stock play (for a younger person than me). I sold my one beer stock (Sam Adams) probably 10 years ago or more.

I repeat I am not touting pot stocks, I got lucky in my early days investment (up 69%). I probably need to sell half (or all) of it to lock in profits, but it's not a large enough position to worry about. When I bought Medreleaf it was profitable, the company that bought them Aurora Cannabis is not, so I wouldn't buy it now with all your money.  I guess if I wouldn't buy it, I need to sell it. Thanks for helping me clarify that.  8)

JR

[edit  done.. sold the pot stock this morning.. now some more cash sitting around not working. [/edit]

 

[JohnRoberts]

This is a significant problem - the lure of wealth and power of political office is not in the interest of the people.
The criminal activity of politicians is the worst characteristic of the swamp (even if they de-criminalize insider trading, there is no way to argue it is fair or just) .

and those are just the obvious abuses we see and know about... In private industry managers spending that kind of money could be paid an order of magnitude more, because their spending decisions have very expensive consequences. 

Congress office budgets are $1M, and they get paid less than $200k 

Trump's statement yesterday about that congressman:
"Two long running, Obama era, investigations of  two very popular Republican Congressmen were brought to a well publicized charge, just ahead of the Mid-Terms, by the Jeff Sessions Justice Department. Two easy wins now in doubt because there is not enough time."

It appears he is in full midterm election campaign mode...

I hung up on a republican phone call this morning, but i hang up on  every spam phone call. I appreciate that they are calling people like me, just not them calling me.  8)

JR

 

[dmp]

appears he is in full midterm election campaign mode...

No, it is blatant corruption - total disregard for the rule of law and the principles of the US Constitution.

His actions tell the same story.

 

[Script]

don't forget (4) wild irrational speculation

Oh that one, yes, I almost forgot. 
But heard that dandalion tea helps -- with detox and stuff  ;D

Met two people in my life who are real daytraders with investment firms. It's a sickening world from what I heard. Dudes playing like endless rows of Tetris everyday, shovelling millions from left to right and back again at an expected margin of one pip, while making deals on the phone at the same time and trying to hit end-of-day,  -week and -month target profits. Being good is not enough, they also have to be fast. You fail too often and it's game over! Time for tea.

 

[dmp]

I just read "fooled by randomness" by Taleb, which is an interesting book. He spent time as a trader and talks about the role of chance on market traders. And biases, particularly survivorship bias (we say good traders are the ones that didn't go broke). Convincing argument.

 

[JohnRoberts]

Oh that one, yes, I almost forgot. 
But heard that dandalion tea helps -- with detox and stuff  ;D

Met two people in my life who are real daytraders with investment firms. It's a sickening world from what I heard. Dudes playing like endless rows of Tetris everyday, shovelling millions from left to right and back again at an expected margin of one pip, while making deals on the phone at the same time and trying to hit end-of-day,  -week and -month target profits. Being good is not enough, they also have to be fast. You fail too often and it's game over! Time for tea.

The CBOE just got approval to add a speed bump (delay) to thwart high speed traders.

High speed traders steal from regular traders by arbitraging small price moves, that they often create with sham trades. Lock them up and throw away their martinis.

JR

 

[s2udio]

The CBOE just got approval to add a speed bump (delay) to thwart high speed traders.

High speed traders steal from regular traders by arbitraging small price moves, that they often create with sham trades. Lock them up and throw away their martinis.

JR

Absolutely
Rogue Capatalism at its best.........
Those Syrian/Iranian War's need funding you know ...........Whats next Russia ?
Time for change ?

 

[Script]

"Stop Bad Employers by Zeroing Out Subsidies"

https://www.washingtonpost.com/business/2018/09/05/bernie-sanders-introduces-stop-bezos-act-senate/?noredirect=on&utm_term=.a830ddeadef3

Just as I suggested. Taxes are more flexible than just regulations.

Oh, and we need to tax robots and automation too 

 

[JohnRoberts]

"Stop Bad Employers by Zeroing Out Subsidies"

https://www.washingtonpost.com/business/2018/09/05/bernie-sanders-introduces-stop-bezos-act-senate/?noredirect=on&utm_term=.a830ddeadef3

Bernie vs Bezos..  : :  (sorry I couldn't force myself to read it). 

Jeff Bezos just made his first major contribution to a PAC supporting military candidates. For now it is supporting candidates from both parties. Why not he has lots of money and can use help from both sides?

There is a fair argument that big tech including Amazon is getting too big to allow a competitive environment. Facebook, google et al just gobble up promising small competitors. Amazon is truly formidable to compete against.

Just as I suggested. Taxes are more flexible than just regulations.

Methinks that is a bit optimistic. Corporations hire people to game tax incentives. The legislators and regulators are not the smartest people in the room.

Oh, and we need to tax robots and automation too 

Old saying if you want less of something tax it... Robots and automation seem generally positive contributors to productivity and economics growth, both good things IMO.

Tax pot and booze.... the tobacco companies even coopted governments to become so dependant on cigarette taxes that they don't want to kill the cash cow giving them tax revenue. 

JR

 

[Script]

I think Washington Post is owned by Bezos.

Japan has introduced minimum wage to tackle this very problem, which looks like the better solution cos it addresses the downside mentioned in the article, namely of companies stopping to hire certain people in first place.

 

[JohnRoberts]

I think Washington Post is owned by Bezos.

Yes it is

Japan has introduced minimum wage to tackle this very problem, which looks like the better solution cos it addresses the downside mentioned in the article, namely of companies stopping to hire certain people in first place.

OK you made me look at it....  typical legislative claptrap.

Taxing workers benefits will just incentivize companies to hire less such workers, just like higher minimum wage salaries are driving increasing automation in fast food (like burger flipping machines).

I am not a fan of paying people to do nothing. Just like taxing stuff makes less of it, incentivizing people to not work will create more of that.  Politicians OTOH like creating populations dependant on government largess.

If we collectively feel like we need to provide a minimum income to all citizens, we need to engineer this in such a way that it is neutral and doesn't impact their ability to also be employed. Entry level minimum wage jobs is how people get onto the employment ladder, to gain experience and climb up that ladder.  Higher minimum wages makes that bottom rung too high for many people/employers.

Japan appears to be a leader at replacing workers with robots (even robot pets).

JR