patrick.net

Eric Holder says

One moderate Dem senator balks and even simple majority is gone. Besides, any serious shit will need a filibuster-proof majority. Good luck getting that.

Not even moderate. Opportunistic or needs to get reelected in a state where winning isn't a slam dunk in '22 or '24. We saw it with Republicans and they did have a majority under Trump (Romney, Collins, etc.).

Biden will mainly be a lame duck. Remember the House lost seats as well. I don't see that trend reversing in 2022, Dems will lose more. The usual cycle recently has been for the losing party for POTUS to take the House back 2 years later.

We also still have to see what the census did I believe. That kind of got swept under the rug with Covid. Many urban areas lost a lot of population. Where did those people go? Were they D's or R's? That could push some purple districts red as I think most moving out of urban areas are sick of the leftist shit.

mell says

the next euphoria will be re-opening of businesses and retail

Much of that is already priced in during the last couple months. A big missing piece after re-opening will be business reinvestment. What retail or small/medium business will invest in an environment that can be shut-down at a moment's notice for made-up excuses? The big techs will be facing a big problem expanding into foreign countries because all the other countries now have seen the regime risk in allowing them in. It's trivial to reverse-engineer the big social media firms to create something similar in their own countries.

Reality says

mell says

the next euphoria will be re-opening of businesses and retail

Much of that is already priced in during the last couple months. A big missing piece after re-opening will be business reinvestment. What retail or small/medium business will invest in an environment that can be shut-down at a moment's notice for made-up excuses? The big techs will be facing a big problem expanding into foreign countries because all the other countries now have seen the regime risk in allowing them in. It's trivial to reverse-engineer the big social media firms to create something similar in their own countries.

Many other countries had similar or even worse shutdowns and lockdowns. I don't think the US has a problem here although I am certainly disappointed with the fear porn and the lockdowns, but not surprised by the blue states being the most retarded and fascist about it. I can see a correction but it will be short lived. There is no long term recession in sight and I am not an uber bull by any means. Once you see big tech posting lackluster earnings or even losses and start seeing layoffs then maybe. One could argue it may be too late by then to get out if the market is anticipating it, but as we have seen in 2007 it's often too late, not too early

That being said, I do anticipate a correction as some names are just way too lofty, lol look at tsla at 900, and the earnings expectations for tech are very high. Have taken out a loan here and there as I anticipate they can be repaid by restocking the 401k with cheaper shares. That and taking some gains off the table, going from 0% cash to 10%-20% cash.

mell says

look at tsla at 900

Biden in his speech/Q&A mentioned 100's of Billions of tax payer money for American steel, ports/bridges/infrastructure, battery tech, biotech and clean energy.
He also specifically said "electrifying Americas fleet" and investments in battery tech in the US....This has TSLA and maybe GM written all over it.

Nancy Pelosi bought a buncha Tesla options late last year. She knew the fix was in. They'll push the $7500 rebate and Tesla goes even higher.

(Full disclosure: I own Tesla Stock. Wish I had bought more :)

same here....thinking of opening a position in F and possibly GM as well.

G36 says

same here....thinking of opening a position in F and possibly GM as well.

What is F?

GlocknLoad says

G36 says

same here....thinking of opening a position in F and possibly GM as well.

What is F?

F(ound)O(n the)R(oad)D(ead)

The technicals on F line up nicely (gotta be patient though) plus Ford's going electric...hopefully big.

BTW, 30B out of GM's marketcap (~76B) is for cruise (autonomous vehicle company with the ability to produce fully integrated self-driving vehicles at global manufacturing scale) which is also partnering with Microsoft.

True tsla is riding the tailwind from green tech but will soon have to face reality and fierce competition as margins erode. But look at AH today another broad earnings beat with many big names up. There's no crash or correction in the very short term.

absolutely no crash in sight. the opposite. I used to keep cash for opportunities/emergencies/whatever. I keep almost all in stocks nowadays besides my investments in RE/Crypto.
TSLA is 10 years ahead of everyone else. "GM wont catch TSLA" - Jim Cramer. I think he's got a point.

The only risk I see is an increase in interest rates which we already know wont happen anytime soon.
The velocity of money is like half of what it was before covid, despite the money printing....what does that tell you? People dont spend left and right....they either keep the cash or tie it up in investments. Tons of opportunities to make a killing during those market conditions IMO.
https://fred.stlouisfed.org/series/M1V

gold and cash holders are losing, losing and losing. The funniest dummies are those that think the FED will just stop at some point and let the economy crash. We'll be able to make fun of those people for more than a decade.

G36 says

absolutely no crash in sight. the opposite. I used to keep cash for opportunities/emergencies/whatever. I keep almost all in stocks nowadays besides my investments in RE/Crypto.
TSLA is 10 years ahead of everyone else. "GM wont catch TSLA" - Jim Cramer. I think he's got a point.

The only risk I see is an increase in interest rates which we already know wont happen anytime soon.
The velocity of money is like half of what it was before covid, despite the money printing....what does that tell you? People dont spend left and right....they either keep the cash or tie it up in investments. Tons of opportunities to make a killing during those market conditions IMO.
https://fred.stlouisfed.org/series/M1V

gold and cash holders are losing, losing and losing. The funniest dummies are those that think the FED will just stop at some point and let the economy crash. We'll be able to make fun ...

At this stage it may be prudent to keep 10%-30% in cash IMO. Even though the Fed won't stop some valuations are just too lofty. This is a big tech earnings week so we will know more. Also pay attention if results are good and stocks pop AH but give it back the next day in a red market, also a sign of a potential correction. Going to be an interesting week.

TSLA is 10 years ahead of everyone else. "GM won't catch TSLA" - Jim Cramer.

Similarly, Amazon (Bezos) is trying to slow down Musk with his Starlink sat internet. Musk requested additional altitudes for new sats, and Amazon (and others) are trying to stop his efforts. These companies don't even have any working satellites, much less anything is space, or a payload delivery vehicle!

I hope Musk crushes them all. I'll be investing in Starlink Day 1.

mell says

This is a big tech earnings week so we will know more. Also pay attention if results are good and stocks pop AH but give it back the next day in a red market, also a sign of a potential correction. Going to be an interesting week.

Shopify (SHOP) will report earnings on Feb 10th.

I frankly have too much in Shopify because they've done so well, but have not managed to bring myself to sell. So their earnings will be super interesting to me. Maybe it will punish me for not selling when I have an excellent gain, or maybe it will justify my paralysis.

Actually, most likely thing I think is that the stock won't move at all.

The correction is here. I think it will be short lived but nonetheless watch out. 10%-20% cash would be prudent here at the minimum.

Patrick says

mell says

This is a big tech earnings week so we will know more. Also pay attention if results are good and stocks pop AH but give it back the next day in a red market, also a sign of a potential correction. Going to be an interesting week.

Shopify (SHOP) will report earnings on Feb 10th.

I frankly have too much in Shopify because they've done so well, but have not managed to bring myself to sell. So their earnings will be super interesting to me. Maybe it will punish me for not selling when I have an excellent gain, or maybe it will justify my paralysis.

Actually, most likely thing I think is that the stock won't move at all.

To a certain degree earnings don't matter right now. Only the speculative fever or lack thereof. Short term this is driven by sentent with this volatility.

https://www.longtermtrends.net/sp500-price-earnings-shiller-pe-ratio/
P/E is spiking... to "extreme bubble" range, expect market crash in very likely in 2021.

Still, last time I got entirely out, 2008, I missed some of the downturn, but then one of the greatest subsequent bull runs ever.

I'll sell some, but not all that much.

Blue says

https://www.longtermtrends.net/sp500-price-earnings-shiller-pe-ratio/
P/E is spiking... to "extreme bubble" range, expect market crash in very likely in 2021.

Think the fear of inflation is driving cash anywhere it can find a home. Everything is way out of wack.

I don't look at this stuff all that often.

I was flabbergasted today to see that some of the stocks in my account had climbed to P/E a bit over 30. For comparison I looked at SP500. According to this website it was 39 (https://www.multpl.com/s-p-500-pe-ratio). A different page on that website has the dividend yield at 1.50%

Holy freaking crap.

Yes, on the one hand things look very bubbly, but on the other hand, shit, what is the latest bailout, another 1.5 TARPs?

Maybe people are fleeing to equities in expectation of inflation. I don't really know.

Patrick says

Maybe people are fleeing to equities in expectation of inflation. I don't really know

In the runup to 2008, which anyone with any critical thinking could see was coming, during that time I read everything I could find about the Weimar inflation. Learned a lot. In addition to esoteric books buried in university libraries about Weimar, there's a long discussion about the hard times there in a recent biography of Oppenheimer. He was a grad student in Weimar during that time (it was where he made many contacts that he tapped in the Manhattan Project).

Germans who saved in mark bank deposits or Weimar treasury debt were completely wiped out. Those who had equities lost hugely, like about 80% or something like that. That's a horrible loss, but at least they retained some purchasing power compared to the marks.

Patrick says

Maybe people are fleeing to equities in expectation of inflation. I don't really know.

Thats what I'm doing. Was in bonds. I fled to foreign stock, New Administration is going to remove any Trump policies, and redouble its export philosophy. Alibaba etc is going to fucking rip, Unfortunately I'm stuck in a 401k thing that gives me very little control .

ThatGuy says

Unfortunately I'm stuck in a 401k thing that gives me very little control .

Is it with your current or former employer?

If it's a former employer, you should immediately roll it into a self-directed 401k rollover. There's no tax on that, and then you can invest your money as you see fit.

But if it's a current employer, you're kind of fucked, which I think was the exact intention of the 401k law: to trap employees in employer plans with limited high-cost choices that benefit the financial institution running the plan.

Its a current employer... I do have an IRA option, Fidelity for what its worth.

I've been using the 401k to re-finance existing loans.

For example, 2 years ago I had bought a new travel trailer at 6%, roughly $30k.

I took a loan against my 401k, now I pay myself 4%, That's a 10% swing.

Something like $5k in my favor in the end.

The internet is FILLED with hate for how I manage my finances.

Promises of 8% compounding are everywhere, but unfortunately I'm never realizing them.

I'm just paying off all my shit until its done I guess.

Paid debt with interest is the same as gaining said interest, no?

ThatGuy says

Paid debt with interest is the same as gaining said interest, no?

Yes. Tax-free to boot.

Fucking just spent that past 6 hours doing taxes. I'm about halfway done but not quite.

FuckCCP89 says

ThatGuy says

Paid debt with interest is the same as gaining said interest, no?

Yes. Tax-free to boot.

Right!

A penny saved is like 1.5 pennies earned, if you consider taxes.

Paying off a loan to save on interest is usually an excellent investment.

Fidelity has good mutual funds.

Re: debt

I ran up a credit card debt a couple of years ago and was going to pay it off by selling something, shares of a mutual fund or stock.

I decided to just let it ride; my investments went up 40%, but my debt decreased by a little bit.

I decided to delay paying it off until I left California so I would not pay 2 capital gains taxes to take money out of investments.

I redeem some shares only if necessary of my least favorite fund.

Eventually I have to start redeeming more shares to spend my money, otherwise why did I invest?

just_passing_through says

Fucking just spent that past 6 hours doing taxes. I'm about halfway done but not quite.

I spend 100 hours during the year and hopefully only an hour filing. Sent mine in last week and it was about 2 hours. I'll get my government loan back, which sucks I loaned it to them, but it's better than owing them this time of year. Seasonal income sucks. We learned owing close to $10k one year.

Situation is always so fluid as one job could be $20-30k swing for us in income. So great years we have to be careful with tax payments and withholdings and overpay. Don't know how it's possible, but this year is forecasting to be our best year ever. By a lot. Fingers crossed.

Patrick says

FuckCCP89 says

ThatGuy says

Paid debt with interest is the same as gaining said interest, no?

Yes. Tax-free to boot.

Right!

A penny saved is like 1.5 pennies earned, if you consider taxes.

Paying off a loan to save on interest is usually an excellent investment.

Patrick I have seen you have been strong advocate of paying of loan to save interest . Do you still advice the same in very low interest era like right now mortgage rate is 2.50% for 30 yrs and 1.99% for 15 yrs.
I feel fed already committed to keep the interest rates low till 2023 not sure if paying off partial loan or holding cash to investing in stocks will fetch more returns at the end of 30 yrs. I am still confused.

I am waiting for market correction, but so far have fetched good returns in 401K as my employer also allows to open brokerage link account in fidelity for self directed investment. I have been booking profits as and when market goes into greed to increase my cash position and invest when it goes into fear . I check this and it has paid off so far https://money.cnn.com/data/fear-and-greed/

Tix2fun says

Patrick I have seen you have been strong advocate of paying of loan to save interest . Do you still advice the same in very low interest era like right now mortgage rate is 2.50% for 30 yrs and 1.99% for 15 yrs.

Yes. Debt is slavery. As long as you have debt, you are not free.

Sure, interest rates are low, but nowhere can you find any investment with as much certainty as paying off debt. If you pay off 2% debt, then you save that 2% guaranteed, plus the taxes you would have to pay to get that 2% through work. So you're getting something like 2.5% guaranteed, immediately.

Or look at it this way, if you invest in US Treasuries, which are about as equally certain, you'd get only 2%, you'd have to pay federal income taxes on that 2%, and you'd be locked in and potentially losing to inflation.

Of course if you have any higher-interest debt, like credit card debt, pay that off first.

Or look at it this way, if you invest in US Treasuries, which are about as equally certain, you'd get only 2%,

10 year treasuries are about half that, which strengthens the argument of paying off existing debt first.

Thanks Patrick for your advice .I also agree being debt free gives you peaceful sleep and I am in favour of reducing debt when one is young vs extending it beyond 50 yrs of age. I have a target to reduce my debt to less than 40% when I turn 50. And by 55 yrs to less than 25%.I hope I can achieve my goals.

Peace of mind goes a long way. Only debt is my mortgage don't see getting out from that for now.

What should I do with the $50,000 in cash I have right now? I have no debt and I have a 401k with a current employer.

GlocknLoad says

What should I do with the $50,000 in cash I have right now? I have no debt and I have a 401k with a current employer.

Bitcoin/Ethereum....3x your money in the next 6month.

GlocknLoad says

What should I do with the $50,000 in cash I have right now? I have no debt and I have a 401k with a current employer.

Just save most of it for rainy day or after stock crash investment. Always good to have some cash in bank for lifes surprises.

RC2006 says

GlocknLoad says

What should I do with the $50,000 in cash I have right now? I have no debt and I have a 401k with a current employer.

Just save most of it for rainy day or after stock crash investment. Always good to have some cash in bank for lifes surprises.

This, and gamble a little in sectors that will do well in this administration, I'd recommend biotech (if you can handle the volatility).