patrick.net

TrumpingTits says

Misc says

Again this is free money given to the rich.

Fine. Let's have an experiment.

Say, have Calizuela tax the shit out of cap gains. Like 100%.

See how much tax revenue the state loses. I'd say it will be enough to KILL the entire state government.

We could also run an experiment where we remove all social spending for residents of Cali and see what happens. Yes, America is addicted to free money policies for both the poor and the rich.

AD says

TrumpingTits says

Again this is free money given to the rich.

Its not free money. It is a reward for making a risky investment.

A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield; an asset's risk premium is a form of compensation for investors who tolerate the extra risk, compared to that of a risk-free asset, in a given investment.

I think the benchmark is 5% over inflation for someone willing to invest in an asset like a stock, real property, etc.

If government policy has been pretty much to continuously reduce interest rates to prop up "risk" asset prices, then it is manipulation by the government in favor of the rich (hence trickle down) not any risk premium inherent in the investment itself.

Misc says

AD says

TrumpingTits says

Again this is free money given to the rich.

Its not free money. It is a reward for making a risky investment.

A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield; an asset's risk premium is a form of compensation for investors who tolerate the extra risk, compared to that of a risk-free asset, in a given investment.

I think the benchmark is 5% over inflation for someone willing to invest in an asset like a stock, real property, etc.

If government policy has been pretty much to continuously reduce interest rates to prop up "risk" asset prices, then it is manipulation by the government in favor of the rich (hence trickle down) not any risk premium inherent in the investment itself.

I agree on the low interest rate policy, but that is a world-wide addiction because politicians long ago abandoned telling their constituents the truth, the countries are racing each other with ZIRP/NIRP. Wrt to speculation I have to disagree, many of the companies trade at reasonable forward P/S ratios, except for a few there's no bubble or over-speculation. The US economy simply has been running hot and people who invested accordingly got rewarded. I'm very critical of TSLA but I don't understand why you would want to tax all the people's gains away - it took a lot of guts, foresight and patience to invest your hard earned money in a company like TSLA while many called for bankruptcy and $5 stock price. Capital gains are nothing but double taxation and thus ideally only those who have no regular income or get the majority of their income from cap gains should be paying cap gains taxes, as explained above simple sliding scale with a maximum would take care of excess.

Patrick says

The real irony in Trump's presidency is that the corporate-owned Democrats who hate him so much were all taking bribes from businesses to drive down wages by importing illegals from Mexico ("Sanctuary!") and exporting jobs to China ("Free trade!").

Still sticking with this lie I see. Oh well.

Misc says

We could also run an experiment where we remove all social spending for residents of Cali and see what happens.

Illegals would move out. Homeless would move on. Sounds pretty good, actually.

AMZN trades at 4 times sales
MSFT trades at 8 times sales
FB trades at 8 times sales
NFLX trades at 8 times sales

The stock price of these could lose 50% and they could still be considered expensive. That is over a trillion dollars of fluff valuation. There are plenty of others trading at unrealistic prices. However, the laws of physics were violated on September 17th so the Fed went into crisis mode again.

The_Weeping_Ayatollah says

Misc says

We could also run an experiment where we remove all social spending for residents of Cali and see what happens.

Illegals would move out. Homeless would move on. Sounds pretty good, actually.

It wouldn't go smoothly. It would be Venezuela. Removing $200 billion from the state economy would cause unintentional side effects.

Misc says

If government policy has been pretty much to continuously reduce interest rates to prop up "risk" asset prices, then it is manipulation by the government in favor of the rich (hence trickle down) not any risk premium inherent in the investment itself.

Yes, I remember in high school during the 1980s how certificates of deposit offered attractive rates of return above inflation.

The fiat currency governments have to keep interest rates low. Think about if the 10 year note rose to 4% or 5% and its impact perhaps on debt service by the US government.

As a result, I agree, they essentially force the senior citizen or retiree savers to at least invest in a "fund of funds" like Vanguard Target Income Fund (30% stocks/70% investment grade bonds) or Vanguard Lifestrategy Conservative Growth Fund (i.e., 40% stocks/60% investment grade bonds). The target income fund averages about 5.5% a year since 2003.

I put a lot of time into a comment on this in another thread, so I'm going to repost it here in response to what I see as the silliness of your argument.

Patrick says

taking bribes from businesses to drive down wages by importing illegals from Mexico ("Sanctuary!") and exporting jobs to China ("Free trade!").

In my view, this is fantasy island propaganda. As I tried to explain in another thread, but I know you don't want to hear it:

It's true that it's harder for poor folks to make a decent living then 50 years ago, but here are several bigger factors leading to this other than some ridiculous corporate America conspiracy to keep poor people down by bringing in cheap labor.

1) Real Estate, housing in general has been bid up in price - primarily the land component of the price - as population of US nearly doubled in the the past 50 years.

2) Women going to work en masse. Immigrants coming in pale in comparison in adding to labor supply

3) Globalization. We now compete globally as manufacturers with cheap labor from all over the world. WE won the war against communism based in large part on the idea of global free trade and capitalism.

I'm sure there are others, but in the end immigrants are not nearly the biggest factor in how hard it is to for many to make a decent living in America. It's not just a small factor in how we got here, but undoing it (AS IF ?) is not going to fix it.

The truth is that yes, we need those workers. You complain about service from non-white people at airports ? I don't think you could imagine the service you would see out there if all of those permanently unemployed types had to pick up the slack.

The real fact of the matter: We need those workers becasue our system depends on economic growth. That's the real reason it happens, not just here but in Europe too. We are so fortunate to have our southern neighbors ! It's not conspiracy to keep the poor poor. It's not even a conspiracy. IT's simply a continuation of growth based policies. The necessity of growth is so built in to our economic system, that nobody ever tries to argue how we continue (with debt build up etc) without continued exponential growth in the economy.

No offense, but from my point of view, you must know these things or have an inkling of what's really going on, but out of fear of changing demographics, you make up these laughable arguments that make absolutely no sense whatsoever.

:
I'm not arguing for open borders when I say that we needed those workers. But if there is a reason it has been allowed to the extent it has, it's becasue of that.

With the advent of robots, perhaps that era is coming to an end. But robots don't consume or pay taxes, so the problem isn't solved.

Misc says

AMZN trades at 4 times sales
MSFT trades at 8 times sales
FB trades at 8 times sales
NFLX trades at 8 times sales

The stock price of these could lose 50% and they could still be considered expensive. That is over a trillion dollars of fluff valuation. There are plenty of others trading at unrealistic prices. However, the laws of physics were violated on September 17th so the Fed went into crisis mode again.

Nasdaq.com allows you to check the price to earnings to growth (PEG) ratio for these companies. PEG was used by Peter Lynch to select stocks for his Magellan Fund.

Misc says

AMZN trades at 4 times sales
MSFT trades at 8 times sales
FB trades at 8 times sales
NFLX trades at 8 times sales

The stock price of these could lose 50% and they could still be considered expensive. That is over a trillion dollars of fluff valuation. There are plenty of others trading at unrealistic prices. However, the laws of physics were violated on September 17th so the Fed went into crisis mode again.

Why? Those are normal multipliers for profitable companies. No fluff there. Tsla is fluff.

Patrick says

But trickle up works, because the working class spends the income, then businesses benefit, and profits go up.

Agree, but what did the Republican party of whomTrump has almost total control do to make this happen? Ok the USMCA is a minimal improvement over NAFTA, the Chinese phase one is quite unclear as to its results. And? I suppose if you consider fucking up the enviromental regs. to allow more extraction and pollution helps the working man. Yeah until they die from environmentally caused disease. He gave 28 billion mostly to rich farmers is that trickle up or down or just buying votes?

The signature issue and definitely most important economic program was the tax bill. And it was mostly trickle down, even Trump would say that, though not in those terms.
While the Dems use trickle down too though less, it is the fundamental idea that infoms Republican economic ideology.

Chiromancer says

Patrick says

But trickle up works, because the working class spends the income, then businesses benefit, and profits go up.

MEanwhile the government is running trillion dollar deficits, so claiming that it's corporations that benefit is disingenuous.

Again, it's simply about our growth based system.

Population growth

Consumption growth

GDP growth.

Immigration adds to all of these, but I still say illegal immigration is not encouraged, it's not a conspiracy. In fact border security has been increasing steadily for 10 years now.

GDP Growth, population growth, etc. does not automatically translate into improvement of standard of living or quality of living.

mell says

Why? Those are normal multipliers for profitable companies. No fluff there. Tsla is fluff.

Facebook's PEG is 1.27.

A PEG of 0 to 1 means undervalued, 1 to 1.5 is fairly valued, and above 1.5 is overvalued. That is what Peter Lynch used to pick stocks.

https://www.nasdaq.com/market-activity/stocks/fb/price-earnings-peg-ratios

Amazon's PEG is 2.79

https://www.nasdaq.com/market-activity/stocks/amzn/price-earnings-peg-ratios

AD says

GDP Growth, population growth, etc. does not automatically translate into improvement of standard of living or quality of living.

In fact, we will need a stabilized population if we want to keep a 1st World lifestyle. I am amazed at the cognitive dissidence of the Left who keep banging the drum of unfettered immigration while complaining about man made global warming. Obviously, more industrialized population means more pollution, more resource depletion, more demand on housing, and so on. Kinda shows that for the Left it is really about cheap labor and packing the voter roles.

AD says

mell says

Why? Those are normal multipliers for profitable companies. No fluff there. Tsla is fluff.

Facebook's PEG is 1.27.

A PEG of 0 to 1 means undervalued, 1 to 1.5 is fairly valued, and above 1.5 is overvalued. That is what Peter Lynch used to pick stocks.

https://www.nasdaq.com/market-activity/stocks/fb/price-earnings-peg-ratios

P/E is different from P/S you must be talking about P / S where for growth stocks anything 10 and below is normal and not overvalued at all for fast growth sectors. You can't find a 1/1 valued stock that is profitable. P/E for profitable stocks can be anywhere from 10-100+. I believe Lynch was mainly talking about utility and AG sectors and other old school sectors where 1-3 multipliers are more common as growth is generally not anywhere as fast as in tech or pharma stocks for example.

At a P/ E of 1 for a profitable co. you could buy it out for a multiplier of 2-3 and make tons of money if you keep selling/making profit at the same rate for at least 5-10 years. 1 is extremely cheap. I only found 1 biotech trading at 1 currently, that is NEOS. And I screened many.

HeadSet says

Kinda shows that for the Left it is really about cheap labor and packing the voter roles.

I agree. Its a perfect storm between the open border Democrats and the growth-at-any-cost, chamber-of-commerce Republicans. They both allowed the immigration crisis to occur.

For the Dems its cognitive dissonance as they cynically rather trade off the ill-effects of population growth if they can make America more representative of the 3rd world and less European in origin.

They want to see Central America and Mexico benefit at the expense of the USA's middle and working class. How ? We send our jobs to them and they in turn send their unwanted, illiterate masses to the USA in exchange. That is how they become richer as 35% of their countries are illiterate, that is cannot read and write in Spanish.

Where are all the Democrats promoting abortion services in 3rd world regions like Central America ?

Ah PEG is p/E divided by growth rate. That is an entirely different measure. P/E alone is like 50.

mell says

P/E is different from P/S you must be talking about P / S

I agree earnings and sales growth are both important. You need to make sure the company is steadily growing sales as well and not just relying on cost cutting, stock buy backs, etc. Part of that may be investing in a company with an "economic moat".

But I rather focus on earnings growth that is why I like P/E to Growth ratio (PEG) as a company can be very unprofitable yet be a leader as far as sales or revenue.

I think the same Peter Lynch rubric for PEG applies to technology companies as it does to banks and real estate companies.

mell says

Ah PEG is p/E divided by growth rate. That is an entirely different measure. P/E alone is like 50.

Exactly Mell. A company can have a high PE ratio (trailing 12 months) but its forecasted 12 month earnings growth rate that is very high.

So a company with a stock price of $50 and earnings per share of $1 has a PE ratio of 50 (i.e., $50 per share / $1 earnings per share).

If its forecasted 12 month earnings growth rate is 10%, then its PE to Growth ratio (PEG) is 50/ 10 or 5.

Since the PEG is over 2 then it is extremely over valued.

I think some analysts use a forecasted annual growth rate for the next 5 years instead of next 12 months.

What is a good tool is to compare actual PEG to forecasted PEG to see how accurate the forecasting is. I think you can plot that using Guru Focus without having to pay for a subscription.

Chiromancer says

Agree, but what did the Republican party of whomTrump has almost total control do to make this happen? Ok the USMCA is a minimal improvement over NAFTA, the Chinese phase one is quite unclear as to its results. And? I suppose if you consider fucking up the enviromental regs. to allow more extraction and pollution helps the working man. Yeah until they die from environmentally caused disease. He gave 28 billion mostly to rich farmers is that trickle up or down or just buying votes?

The signature issue and definitely most important economic program was the tax bill. And it was mostly trickle down, even Trump would say that, though not in those terms.
While the Dems use trickle down too though less, it is the fundamental idea that infoms Republican economic ideology.

1)the 28 billion paid to farmers care out of the 125 billion collected from the tariffs. It is the cost of having a trade war. A trade war that all the elite assholes said was UN winnable. A trade war that Trump won.
2)Yes, trickle down is a GOP ideology. Trump has been working to change that prevailing theory and bring the Republicans into a new era of supporting working families.

Offshoring and illegal-immigrant labor is a form of tragedy of the commons. If only a single company does it, that company gets the benefits but they tiny downside is felt by everyone. If every company does it, then downside becomes enormous and completely outweighs the benefits. A tragedy-of-the-commons situation is something where government might have a useful role in either outlawing the situation or reworking the laws so that the beneficiaries of the bad behavior are the ones that feel the entire effect of the downside.

AD says

GDP Growth, population growth, etc. does not automatically translate into improvement of standard of living or quality of living.

Who said it has to?

marcus says

I still say illegal immigration is not encouraged, it's not a conspiracy.

You don't think that, for example, offering free healthcare for illegal immigrants or having sanctuary cities encourage illegal immigration?

Heraclitusstudent says

You don't think that, for example, offering free healthcare for illegal immigrants or having sanctuary cities encourage illegal immigration?

When Anderson Cooper asked the Democrat candidates (ie., Biden, Sanders, Warren, Klouchbar, et al.) to raise their hands if they would provide free health insurance to illegal immigrants, all the Democrats raised their hands.

All these Democrat candidates want the USA to become like California.

SunnyvaleCA says

Offshoring and illegal-immigrant labor is a form of tragedy of the commons. If only a single company does it, that company gets the benefits but they tiny downside is felt by everyone. If every company does it, then downside becomes enormous and completely outweighs the benefits. A tragedy-of-the-commons situation is something where government might have a useful role in either outlawing the situation or reworking the laws so that the beneficiaries of the bad behavior are the ones that feel the entire effect of the downside.

Great insight @SunnyvaleCA

Yes, if one American company moves manufacturing to China and then sells in the US, they win. But if all American companies do that, then they all lose because they just impoverished their own customers by outsourcing their jobs.

Protect yourself or hedge against offshoring by investing in an S&P 500 index fund. Most of the companies offshore and/or benefit from globalization.

Meanwhile benefit from this by buying cheap consumer goods at Costco, Dollar Tree, and Walmart.

Unfortunately due to illegal immigration, globalization and offshoring, more and more of the USA economy has mostly underwent bifurcation, the rich and the poor with a shrinking middle.

Heraclitusstudent says

You don't think that, for example, offering free healthcare for illegal immigrants or having sanctuary cities encourage illegal immigration?

I would agree that if you removed those things, illegal immigration would be less attractive. But I do not believe those things exist for the purpose of attracting illegal immigrants. And I it is a fact we have steadily increased border security over the past decade.

I think health care policies and sanctuary cities exist in support of millions (YES MILLIONS) of illegals already here. Do those people need a path to citizenship or should we somehow send them back (whatever that means?) when they have spent decades building families and a foundation here ?

THat is the question.

I'm sure some are for genocide.

Let's get real.

In my opinion it's off the charts retarded propaganda to suggest that sanctuary cities and health care for the poorest of the millions of illegal immigrants already here is in fact actually happening for the purpose of attracting more illegal immigrants. So stupid. Asinine really.

marcus says

In my opinion it's off the charts retarded propaganda

Just because?

Intended or not
marcus says

sanctuary cities and health care for the poorest of the millions of illegal immigrants

Attracts more poor ignorant illegals who compete with poor ignorant citizens for jobs.

marcus says

Do those people need a path to citizenship or should we somehow send them back (whatever that means?) when they have spent decades building families and a foundation here ?

The Democrats don’t want them to have a path to citizenship, and never ever seriously work on such a bill unless they put enough poison pills in there to ensure that Republicans will definitely vote against it. But no effort is ever made for a bipartisan solution, even when Trump asks for one, suggests several, and even demands a solution. Nope, Democrats don’t want it. They just want an executive/judicial level of a stay of execution for the illegals, to keep the illegals knowing that they have to vote for Dems if they want to stick around. Also because illegals are cheap labor without many rights, and wealthy Democrats (and Republicans) enjoy having that cheap labor.

Once again, Democrats have created a permanent slave class. And they want the dispossessed citizenry to pay for their upkeep (welfare, housing, medical).
It’s super unfair, but if you object, some idiot math teacher will call you a racist.

marcus says

millions (YES MILLIONS) of illegals already here

Lol, not just millions.

TENS OF MILLIONS

https://thehill.com/latino/407848-yale-mit-study-22-million-not-11-million-undocumented-immigrants-in-us

Some estimate 40 million. It's utterly insane.

marcus says

I think health care policies and sanctuary cities exist in support of millions (YES MILLIONS) of illegals already here.

Ok suppose I'm an immigrant, came here legally with a H1-B, after years got a green card. Can I get free healthcare?
Nope.
Suppose I'm an American born here, but flipping burgers for a living. Can I get free healthcare?
Nope.
Doesn't it sound bizarre that the criteria for giving a benefit would be to have violated the law. It's a reward for violating the law, is it not?

And I'm sorry there are poor people everywhere. There are destitutes, uneducated , beaten down peeps everywhere. There are people living on trash heaps, waiting for the next dumpster truck to scratch for fresher food. This is the reality of the world. The solution cannot be to let them in illegally. If you want them in, then at least do it officially and give them the same crappy benefits and responsibilities as everyone else.


Shaman says

wealthy Democrats (and Republicans) enjoy having that cheap labor

Yes many wealthy people are worried for their nannies and gardeners if the law was ever applied. That's about the extent of their concern.

Shaman says

But no effort is ever made for a bipartisan solution,

Not since Trump arrived but there was a bipartisan bill passed out of the Senate while Obama was President, not perfect by any means but a decent compromise of border security and a difficult path to citizenship. The Republican House leadership would not bring it up for a vote, why? Because it would have passed.

marcus says

I think health care policies and sanctuary cities exist in support of millions (YES MILLIONS) of illegals already here. Do those people need a path to citizenship or should we somehow send them back (whatever that means?) when they have spent decades building families and a foundation here ?

Amnesty was tried in 1980's, and did not solve any problems - we still have illegals. So...no amnesty or path to citizenship. Otherwise it will continue again - citizenship for illegals, more illegals come in, 30 years later more citizenship for illegals etc. Furthermore, I am a very LEGAL immigrant. I paid the goddamn fucking taxes, YUUGE immigration lawyer fees, did not break any laws other than speeding, never took a dime in welfare or other subsidies, and somehow I now am an idiot for following the expensive rules?

marcus says

retarded propaganda to suggest that sanctuary cities and health care for the poorest of the millions of illegal immigrants already here is in fact actually happening for the purpose of attracting more illegal immigrants

Try feeding deer ans see if more of them come to feeder every time or not. Same logic.

citizenship for illegals, more illegals come in, 30 years later more citizenship for illegals etc.

That is the goal. The left just hides that fact behind lies claiming that sanctuary cities and other enticements are merely to help just the illegals already here.

California ranks last on just about every quality of life issue and it is 100% Democrats fault. We rank at the bottom of almost every stat even though we are taxed the most, where is all of our tax dollars going? How could we go from having some of the best K-12 to the worse? How could we have the largest imbalance of poor and rich? We all know the answer, what did anybody think would happen with importing uneducated third world ditch diggers from south of the boarder to replaced the native middle class that was once a staple of CA.