OT: Stock and Investment Talk

[RU-05]

Here's a broader question.

If the Fed had acted earlier, and started raising interest rates as well as starting the QE to QT transition say in Sept of last year, do we think that would have had a significant effect on inflation? And if so would it's effect on slowing the economy not countered the benefit of lower inflation?

 

[rutgersdave]

Here's a broader question.

If the Fed had acted earlier, and started raising interest rates as well as starting the QE to QT transition say in Sept of last year, do we think that would have had a significant effect on inflation? And if so would it's effect on slowing the economy not countered the benefit of lower inflation?

The Fed should have raised the rates much higher in 2019-2020 when the economy was doing so well.

 

[RU-05]

The Fed should have raised the rates much higher in 2019-2020 when the economy was doing so well.

I wasn't following at the time, but I thought at that point the economy was showing some signs of weakness.

But I was talking post covid.

 

[rutgersdave]

I wasn't following at the time, but I thought at that point the economy was showing some signs of weakness.

But I was talking post covid.

No, the interest rate wasn’t raised because of the election. This was before covid. When covid hit, rates needed to be lowered. It could have been raised a little earlier with the covid recovery. However, the effect would probably be the same as now. Soft landings are hard to come by.

 

[jtung230]

The job market is giving the Fed cover to raise rates. Some of the hikes are baked in but nobody knows how many hikes are coming. If it’s 4 50-bp hikes = bear market (20+%).

 

[T2Kplus20]

Here's a broader question.

If the Fed had acted earlier, and started raising interest rates as well as starting the QE to QT transition say in Sept of last year, do we think that would have had a significant effect on inflation? And if so would it's effect on slowing the economy not countered the benefit of lower inflation?

No.
Most inflation is due to supply chain and overspending by DC.

 

[T2Kplus20]

If it’s 4 50-bp hikes = bear market (20+%).

^^^^^ Great fear porn right here! I heard it may be 6 0.75% rate hikes. :)

 

[jtung230]

^^^^^ Great fear porn right here! I heard it may be 6 0.75% rate hikes. :)

Fed already signal they wants rates to be at 1.75 to 2.0% by YE. Guys like Jamie Diamond also said he expects rate to higher than that. Should follow the market more 😀.

 

[rutgersdave]

I see Cramer basically saying aggressively sell tech stocks. I guess he saw my earlier post and decided to broadcast my decision.

Jim Cramer says he's 'aggressively' paring back on tech stocks — CNBC

'Mad Money' host Jim Cramer reacts to recent a recent warning from Philadelphia Federal Reserve President Patrick Harker that inflation is 'widespread' and 'running far too high.'

apple.news

 

[jtung230]

I see Cramer basically saying aggressively sell all your tech stocks. I don’t know how to add the video. I guess he saw my earlier post and decided to broadcast my decision.

Jim Cramer says he's 'aggressively' paring back on tech stocks — CNBC

'Mad Money' host Jim Cramer reacts to recent a recent warning from Philadelphia Federal Reserve President Patrick Harker that inflation is 'widespread' and 'running far too high.'

apple.news

High growth and no earnings = sell.

 

[rutgersdave]

High growth and no earnings = sell.

I think even growth with PE got to worry. The PE are even going lower.

 

[Joey Bags]

My wife and I are on the market right now for our first home. Absolutely crushed it the past 5 years from a personal finance perspective and now it looks like we’ll be paying 6+% on a fixed 30 year for a 600k home that was worth 520k at 3% last fall (jersey’s market has risen 11% since january). Really disheartening.

 

[rutgersdave]

My wife and I are on the market right now for our first home. Absolutely crushed it the past 5 years from a personal finance perspective and now it looks like we’ll be paying 6+% on a fixed 30 year for a 600k home (jersey’s market has risen 11% since january). Really disheartening.

My nephew just brought his last month with the lower rates and the next week the rates soared. If you wait long enough, the house prices should be coming down.

 

[Joey Bags]

My nephew just brought his last month with the lower rates and the next week the rates soared. If you wait long enough, the house prices should be coming down.

Sadly not in the Somerset/Hunterdon/Morris region. Cutting offers from 30-40 to 10-20 per home won’t change prices and buying a house that involves serious work is a losing proposition with 12-24 month shortages and associated markup.

 

[RUinPinehurst]

Fed hikes 25 bps in May, per Bloomberg. Fear of disrupting markets amidst Ukraine crisis wins out vs aggressively tackling inflation. Hints of multiple 50 bps hikes to come. Weak move? We'll see.

 

[Rutgers Chris]

Sadly not in the Somerset/Hunterdon/Morris region. Cutting offers from 30-40 to 10-20 per home won’t change prices and buying a house that involves serious work is a losing proposition with 12-24 month shortages and associated markup.

Same thing in parts of Bucks, PA. A house in New Hope was listed last Thursday. 50-100 people at the open house on Saturday and was under contract by Monday. Evidently it went for $100k over ask, all cash. Location, location, location.

 

[T2Kplus20]

Fed already signal they wants rates to be at 1.75 to 2.0% by YE. Guys like Jamie Diamond also said he expects rate to higher than that. Should follow the market more 😀.

That range is very positive for stocks. Anything up to 2.5% is full party mode.

 

[T2Kplus20]

Fed hikes 25 bps in May, per Bloomberg. Fear of disrupting markets amidst Ukraine crisis wins out vs aggressively tackling inflation. Hints of multiple 50 bps hikes to come. Weak move? We'll see.

Based on the last Fed meeting and Powell's Q&A. The plan is for 0.25% increases for now. They expect inflation to peak and inflect down in June/July (so reported in July/August). If no down tick by then, the Fed will go with a 0.50% increase.

This is what Powell said just a few weeks ago. Can this change? Of course. However, over the past year, Powell has essentially stuck to his well publicized plan.

 

[rutgersdave]

Sadly not in the Somerset/Hunterdon/Morris region. Cutting offers from 30-40 to 10-20 per home won’t change prices and buying a house that involves serious work is a losing proposition with 12-24 month shortages and associated markup.

My nephew was looking for 1.5 years and was living with his mom for about a year before making the decision, so few houses available and others have such outrageous listing prices. With the second kid due this July, the wife just had to get out of the mother in law house.

 

[jtung230]

My wife and I are on the market right now for our first home. Absolutely crushed it the past 5 years from a personal finance perspective and now it looks like we’ll be paying 6+% on a fixed 30 year for a 600k home that was worth 520k at 3% last fall (jersey’s market has risen 11% since january). Really disheartening.

Congrats! Just keep focusing on the positive (personal perspective). A house is only partial investment. Look at it from use perspective and vs rent you’ll be paying. I would suggest an ARM instead of 30 yr fixed. Rarely do people stay long term in their 1st home. Plus, you continue to do well, you’ll want to trade up.

 

[ScarletNut]

My wife and I are on the market right now for our first home. Absolutely crushed it the past 5 years from a personal finance perspective and now it looks like we’ll be paying 6+% on a fixed 30 year for a 600k home that was worth 520k at 3% last fall (jersey’s market has risen 11% since january). Really disheartening.

With these rates, I think you'll see housing prices drop. Just be patient. High home prices with low mortgage rates usually evens out with lower home prices and higher mortgage rates.

 

[Joey Bags]

With these rates, I think you'll see housing prices drop. Just be patient. High home prices with low mortgage rates usually evens out with lower home prices and higher mortgage rates.

You may be right, but if prices drop 10-20k but 30 yr fixed rates get to 8%, its still a net increase.

 

[tom1944]

You may be right, but if prices drop 10-20k but 30 yr fixed rates get to 8%, its still a net increase.

For guys my age there was a time when 8% was a great rate

 

[Joey Bags]

For guys my age there was a time when 8% was a great rate

Were you closing in the 600-650k range for a 4 bedroom 2200 ft colonial?

 

[rutgersguy1]

WMT ATHs today, COST and the dollar stores strong days too. Mentioned CL a little while back possibly being at the bottom of a trading range and it's bounced nicely up to the 200DMA now and many of the other staples with a good day too. VZ mentioned 48-51 not a bad area possibly and now up a couple bucks pushing on the 200DMA as well. Tech hammered big time today but if those big names come in again I'm still willing to step in.

 

[RUinPinehurst]

For guys my age there was a time when 8% was a great rate

1981... 21%.

 

[RUinPinehurst]

WMT ATHs today, COST and the dollar stores strong days too. Mentioned CL a little while back possibly being at the bottom of a trading range and it's bounced nicely up to the 200DMA now and many of the other staples with a good day too. VZ mentioned 48-51 not a bad area possibly and now up a couple bucks pushing on the 200DMA as well. Tech hammered big time today but if those big names come in again I'm still willing to step in.

WMT and COST are both very expensive. Great companies, yes, but the p/e is too high.

 

[ScarletNut]

You may be right, but if prices drop 10-20k but 30 yr fixed rates get to 8%, its still a net increase.

My first home cost 199,900 with a mortgage at 12.75%, in 1990.

 

[tom1944]

Were you closing in the 600-650k range for a 4 bedroom 2200 ft colonial?

My salary ratio to the cost of a home was more difficult back then

 

[tom1944]

1981... 21%.

Yup

I looked at a condo in Edison

Westgate

I was making $15,000

 

[T2Kplus20]

I was making $15,000

A week?
:)

 

[RU-05]

No.
Most inflation is due to supply chain and overspending by DC.

But the fed has to do what it has to do knowing that DC has put a ton of cash in the system.

I do think the continued supply chain issues have been rather unexpected due to another winter wave of Covid and now the Russia invasion.

 

[RU-05]

WMT ATHs today, COST and the dollar stores strong days too. Mentioned CL a little while back possibly being at the bottom of a trading range and it's bounced nicely up to the 200DMA now and many of the other staples with a good day too. VZ mentioned 48-51 not a bad area possibly and now up a couple bucks pushing on the 200DMA as well. Tech hammered big time today but if those big names come in again I'm still willing to step in.

Thought you were harkening T2K.

 

[RU-05]

For guys my age there was a time when 8% was a great rate

Little before my time, but sounds crazy high right now.

I'd be surprised if we get there any time soon.

 

[T2Kplus20]

Thought you were harkening T2K.

You see the increased CL activity on the board when the market is down for a few days? LOL.

 

[ScarletNut]

You see the increased CL activity on the board when the market is down for a few days? LOL.

Have you ever experienced a prolonged bear market or recession? If so, do you DCA monthly or continue to buy while it’s dead money?

 

[T2Kplus20]

Prepare for the next rally:

Charts suggest the market could rally after its current ‘short-term volatility spike,’ Jim Cramer says

"The charts as interpreted by Mark Sebastian say we're currently in the middle of a short-term volatility spike," the "Mad Money" host said Wednesday.

www.cnbc.com

 

[tom1944]

A week?
:)

I didn’t make that much until I started Breaking Bad

 

[T2Kplus20]

Have you ever experienced a prolonged bear market or recession? If so, do you DCA monthly or continue to buy while it’s dead money?

Yes, started investing in late 2005. We kept buying every week like clockwork (401ks at first). Learned in 2008/2009 and 2020 to stick to the plan and keep buying. Gotta take advantage of the opportunities and position yourself for the rebound (because it always happens).

 

[RU in IM]

History = stocks go up 6 of the last 7 rate hike cycles

Rates went up 425 basis points during a 20 month period between late 2004 and 2006 to slow down the economy. The yield curve inverted, the economy slowed and not long after we had the Great Recession