OT: Stock and Investment Talk

[RUDead]

If a wind farm gets built with the help of tax credits it is still a real wind farm. And no, real GDP growth hasn’t been negative because that would mean we are in recession/depression. But yes, for a variety of reasons, deficits are too high.

Also….Inflation by many measures is already down to the 2 to 2 1/2% range.

Recessions are measured by nominal GDP, not REAL GDP.

The latest inflation numbers were almost 3.5% which is roughly the same as the latest GDP. So the REAL GDP is basically zero. I said it was negative because I think the inflation numbers aren't accurate and inflation is higher than reported.

Government spending exploded in 2020 (almost 50%) and has stayed near its modern day highs since. It's currently accounts for 1/3 of GDP. That takes a while to make its way through the economy and accounts for the majority of the inflation we've seen in recent years. We continue to spend at a really high rate despite a healthy economy. We will see the effects of this spending for years to come.

I'm not sure what your point was about the wind farm, but wind and solar are more expensive than fossil fuels so they are also inflationary.

 

[T2Kplus20]

This makes no sense at all. Inflation persists because of out of control deficit spending. All of the "growth" we have seen in recent years has been the result of government spending and real growth has been negative because inflation has outpaced GDP growth.

Powell will stay higher for longer and probably won't cut at all this year. Between the sharp rise in commodities and base effects in the coming months the YOY inflation numbers will start climbing again soon.

if he does cut, inflation will explode, yields on US gov't debt will rise and he won't be able to get the genie back in the bottle.

Makes perfect sense. For the first time in 15 years, money is failing from the money market fund tree. People love "free" money. Also, high interest rates have trapped people in their homes and dried up supply. Most will not trade in a 3% mortgage for a 7-8% mortgage. This is the Fed artificially keeping shelter costs higher than normal.

If you want inflation to go down, cut rates.

 

[T2Kplus20]

Tsla numbers out. Looks like it was priced in. Up 7% after hours, clearly on news that they still hold $700M of Bitcoin.

View embedded media

The market is all about expectations, not absolute value or performance. The stock may go to the moon if Elon can get through the conference call without saying something stupid. LOL!

 

[T2Kplus20]

If a wind farm gets built with the help of tax credits it is still a real wind farm. And no, real GDP growth hasn’t been negative because that would mean we are in recession/depression. But yes, for a variety of reasons, deficits are too high.

Also….Inflation by many measures is already down to the 2 to 2 1/2% range.

PCE core, which is all the Fed cares about is 2.8% YoY. Not bad at all. Powell already said cuts will start prior to hitting 2%.

 

[RUDead]

Makes perfect sense. For the first time in 15 years, money is failing from the money market fund tree. People love "free" money. Also, high interest rates have trapped people in their homes and dried up supply. Most will not trade in a 3% mortgage for a 7-8% mortgage. This is the Fed artificially keeping shelter costs higher than normal.

If you want inflation to go down, cut rates.

That makes less sense than the article you posted.

 

[Knight Owl]

Recessions are measured by nominal GDP, not REAL GDP.

The latest inflation numbers were almost 3.5% which is roughly the same as the latest GDP. So the REAL GDP is basically zero. I said it was negative because I think the inflation numbers aren't accurate and inflation is higher than reported.

Government spending exploded in 2020 (almost 50%) and has stayed near its modern day highs since. It's currently accounts for 1/3 of GDP. That takes a while to make its way through the economy and accounts for the majority of the inflation we've seen in recent years. We continue to spend at a really high rate despite a healthy economy. We will see the effects of this spending for years to come.

I'm not sure what your point was about the wind farm, but wind and solar are more expensive than fossil fuels so they are also inflationary.

You still haven’t realized that nominal GDP is running well north of 5% no matter what inflation numbers you use. I’m just going to assume that you are a conservative legal scholar and are just a little shaky on the math stuff.

 

[RUDead]

You still haven’t realized that nominal GDP is running well north of 5% no matter what inflation numbers you use. I’m just going to assume that you are a conservative legal scholar and are just a little shaky on the math stuff.

It was 5% for one qtr. Much less than that if you look at the bigger picture.

Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)

www.bea.gov

 

[T2Kplus20]

That makes less sense than the article you posted.

Lucky for you, this is America, so you have the right to be wrong.
:)

 

[Knight Owl]

Tsla numbers out. Looks like it was priced in. Up 7% after hours, clearly on news that they still hold $700M of Bitcoin.

View embedded media

Cathie Wood’s gang is pushing the robotaxi “AI” And Tesla is also promising a 20K-30K priced car in 2025. Bitcoin is the least of their worries.🤣

 

[T2Kplus20]

You still haven’t realized that nominal GDP is running well north of 5% no matter what inflation numbers you use. I’m just going to assume that you are a conservative legal scholar and are just a little shaky on the math stuff.

Speaking of "real" versus "nominal". Take a look at inflation. Wages have increased almost as much as inflation over the past few years. As such, real inflation is way under 2%. Barely 1% last I checked. No big deal.

 

[Knight Owl]

It was 5% for one qtr. Much less than that if you look at the bigger picture.

Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)

www.bea.gov

Dude, those are real GDP numbers so the inflation impact has already been removed. The right wing has been crying recession for three years now but it doesn’t make it true.😂
And many major infrastructure projects are still in beginning stages and haven’t even broken ground yet.
My region stands to gain the addition of TWO new passenger rail lines…one of which would connect directly to Philly and the other line directly to NYC.

 

[RUDead]

Dude, those are real GDP numbers so the inflation impact has already been removed. The right wing has been crying recession for three years now but it doesn’t make it true.😂
And many major infrastructure projects are still in beginning stages and haven’t even broken ground yet.
My area stands to gain the addition of TWO passenger rail lines…one of which would connect directly to Philly and the other line directly to NYC.

You're right, my mistake. I don't what you are talking about with recession and right wing comments.

The point of the article was that the Fed should be cutting rates to lower inflation. Is that what you are arguing?

 

[Knight Owl]

You're right, my mistake. I don't what you are talking about with recession and right wing comments.

The point of the article was that the Fed should be cutting rates to lower inflation. Is that what you are arguing?

I think they should do a .75% cut and pause just to allow for an uninverted yield curve. Barring really bad global economic news the long end of the yield curve wants to at the very least stay up where it is.
A 4.5%+ ish Fed funds rate seems like a sweet spot to me for now and would still be well above even the harshest inflation estimates.

 

[RU-05]

You mean a dead cat bounce

Well we got a bounce, now we can wonder if it is of the dead cat variety.

$160ish was a bit of a support level, now let's see if it provides resistance. $161 this morning.

 

[Knight Owl]

I think they should do a .75% cut and pause just to allow for an uninverted yield curve. Barring really bad global economic news the long end of the yield curve wants to at the very least stay up where it is.
A 4.5%+ ish Fed funds rate seems like a sweet spot to me for now and would still be well above even the harshest inflation estimates.

Guest from Stifel this morning visiting the barely sentient Joe Kernen as well as the rest the Squawk Box gang also isn’t a fan of permanently inverted yield curves and basically agreed with my assertion. Of course car insurance rates will continue to go up bigly and keep inflation high (it was a major driver last period) as long as folks continue driving at high speed while texting.
At least Elon realizes he should never drive himself…and he deserves credit for his self-awareness.

 

[T2Kplus20]

Guest from Stifel this morning visiting the barely sentient Joe Kernen as well as the rest the Squawk Box gang also isn’t a fan of permanently inverted yield curves and basically agreed with my assertion. Of course car insurance rates will continue to go up bigly and keep inflation high (it was a major driver last period) as long as folks continue driving at high speed while texting.

+1
One large cut to right the ship and get rates closer to neutral is a good idea.

 

[RU-05]

As long as the economy and inflation remain this strong/high I am not seeing the reasoning for cuts.

Fed should keep that shit in their pocket.

 

[T2Kplus20]

As long as the economy and inflation remain this strong/high I am not seeing the reasoning for cuts.

Fed should keep that shit in their pocket.

At 4.5%, still plenty of shit in their pocket to use in the future. Doing so now just lessens the possibility of screwing up the economy. Remember, by the time you see warning signs, it is likely too late.

 

[jtung230]

Well we got a bounce, now we can wonder if it is of the dead cat variety.

$160ish was a bit of a support level, now let's see if it provides resistance. $161 this morning.

He is an excellent salesman. Decreasing revenues and a 65 P/E ratio doesn’t sound cheap to me. But looks like a good trade.

 

[T2Kplus20]

He is an excellent salesman. Decreasing revenues and a 65 P/E ratio doesn’t sound cheap to me. But looks like a good trade.

Talking fundamentals for TSLA is pointless. It's purely a sentiment stock. When Elon/EV sentiment is positive, stock go up. When it is negative, stock go down. It's that simple.

 

[jtung230]

Talking fundamentals for TSLA is pointless. It's purely a sentiment stock. When Elon/EV sentiment is positive, stock go up. When it is negative, stock go down. It's that simple.

To a degree. But fundamentals always win over long term.

 

[RU-05]

Talking fundamentals for TSLA is pointless. It's purely a sentiment stock. When Elon/EV sentiment is positive, stock go up. When it is negative, stock go down. It's that simple.

Nah, slowing growth and now shrinking rev's-eps are definitely a major part of this 2.5 year 50+% draw down.

Just as their fantastic growth, and becoming EPS+ was a major part of it's run up.

 

[RU-05]

At 4.5%, still plenty of shit in their pocket to use in the future. Doing so now just lessens the possibility of screwing up the economy. Remember, by the time you see warning signs, it is likely too late.

Been hearing that the Fed is being too aggressive for 1.5 years now.

Yet the economy keeps growing.

 

[RU-05]

Dude, those are real GDP numbers so the inflation impact has already been removed. The right wing has been crying recession for three years now but it doesn’t make it true.😂
And many major infrastructure projects are still in beginning stages and haven’t even broken ground yet.
My region stands to gain the addition of TWO new passenger rail lines…one of which would connect directly to Philly and the other line directly to NYC.

To be fair everyone(well mostly everyone) was predicting a recession for 2 of those years.

 

[Knight Owl]

At 4.5%, still plenty of shit in their pocket to use in the future. Doing so now just lessens the possibility of screwing up the economy. Remember, by the time you see warning signs, it is likely too late.

Yeah…Two year treasury auction was strong and hopefully is stronger just after Memorial Day. Yellen needs to start marketing her stuff like Elon markets garbage like Dogecoin.😂

 

[Knight Owl]

To be fair everyone(well mostly everyone) was predicting a recession for 2 of those years.

Not if you were paying attention to all the new bills in DC…

 

[rutgersguy1]

Nah, slowing growth and now shrinking rev's-eps are definitely a major part of this 2.5 year 50+% draw down.

Just as their fantastic growth, and becoming EPS+ was a major part of it's run up.

Fast money traders thought it's a relief rally and will eventually fade. The analyst they had on, Gene Munster, thought it would fade and settle maybe after 2 weeks or so. He also thought it deserved an AAPL like multiple which would put it in the mid 20s. Auto companies are usually single digits/low doubles IIRC.

 

[RU-05]

Fast money traders thought it's a relief rally and will eventually fade. The analyst they had on, Gene Munster, thought it would fade and settle maybe after 2 weeks or so. He also thought it deserved an AAPL like multiple which would put it in the mid 20s. Auto companies are usually single digits/low doubles IIRC.

GM is 5.5x.

Now I never liked the idea of comparing their respective multiple's as TSLA was growing like mad, while GM (and F) were beyond stagnant.

I also think that TSLA has those other "tech" elements that had to be considered, even if TSLA is an auto company.

Bearish TSLA guy on now, thought margin's were a positive surprise.

Thinks robotaxi is difficult to underwrite, a lot of regulatory and other unknown concerns. FSD is easier in this regard.

 

[RU-05]

Not if you were paying attention to all the new bills in DC…

Just the same, vast majority of pundits were predicting a recession.

Can we say that's what the bond market has been predicting? Or the stock market in 2022, early 2023 for that matter?

 

[rutgersguy1]

GM is 5.5x.

Now I never liked the idea of comparing their respective multiple's as TSLA was growing like mad, while GM (and F) were beyond stagnant.

I also think that TSLA has those other "tech" elements that had to be considered, even if TSLA is an auto company.

Bearish TSLA guy on now, thought margin's were a positive surprise.

Thinks robotaxi is difficult to underwrite, a lot of regulatory and other unknown concerns. FSD is easier in this regard.

The "tech" elements are why Munster slaps an AAPL multiple (20s) on it but that's still lower than the multiple it has now. Mind you with AAPL not growing in the same fashion lately, some think that's even a premium multiple for AAPL.

 

[RU-05]

The "tech" elements are whey Munster slaps an AAPL multiple (20s) on it but that's still lower than the multiple it as now. Mind you with AAPL not growing in the same fashion lately, some think that's even a premium multiple for AAPL.

Longer term growth seems much more likely for TSLA imo. Which is probably why it has the higher multiple.

Conversely, while TSLA certainly has those who are loyal to the brand, I think it is in a market with many brands which have, I'd argue, even stronger loyalty. (nevermind Elon seemingly undermining his own brand loyalty).

I don't think a Samsung carries the same weight as a say BMW.

 

[T2Kplus20]

Yeah…Two year treasury auction was strong and hopefully is stronger just after Memorial Day. Yellen needs to start marketing her stuff like Elon markets garbage like Dogecoin.😂

US gov'ment to start accepting DOGE as tax payment! :)

 

[T2Kplus20]

Nah, slowing growth and now shrinking rev's-eps are definitely a major part of this 2.5 year 50+% draw down.

Just as their fantastic growth, and becoming EPS+ was a major part of it's run up.

So, their "fantastic growth" justified a $1T market cap in 2021? Sorry, pure sentiment.

 

[Knight Owl]

US gov'ment to start accepting DOGE as tax payment! :)

Nevah! If Janet can’t bite or lick it it is unacceptable!
I’m thinking of how Underdog used to bite the coin he receives as to make sure it wasn’t a Dogecoin.
And Dogecoin market cap is still like $23 BBBillion!😂 OMFG

 

[Rutgers Chris]

Nevah! If Janet can’t bite or lick it it is unacceptable!
I’m thinking of how Underdog used to bite the coin he receives as to make sure it wasn’t a Dogecoin.
And Dogecoin market cap is still like $23 BBBillion!😂 OMFG

$23 billion and the dog doesn’t even have a hat. If I’m going to invest in such a thing it damn well better have a hat.

What Is Dogwifhat (WIF) and Why Is It Up so Much? - Unchained

Discover the Dogwifhat (WIF) meme coin and learn why its recent increasing popularity has increased its value.

unchainedcrypto.com

 

[RUTGERS95]

https://www.cnbc.com/2024/04/24/why-the-fed-keeping-rates-higher-for-longer-may-not-be-such-a-bad-thing.html

 

[RU-05]

So, their "fantastic growth" justified a $1T market cap in 2021? Sorry, pure sentiment.

To some it did. As they thought growth would continue on indefinitely.

Also have to factor in the gov't subsidized market of that time period.

I'm not even sure what sentiment means really. Sounds kind of like long term fundamentals, which may or may not be more wishful thinking then reality.

 

[T2Kplus20]

Nevah! If Janet can’t bite or lick it it is unacceptable!
I’m thinking of how Underdog used to bite the coin he receives as to make sure it wasn’t a Dogecoin.
And Dogecoin market cap is still like $23 BBBillion!😂 OMFG

New meme coin:

janetwifhat

:)

 

[Knight Owl]

$23 billion and the dog doesn’t even have a hat. If I’m going to invest in such a thing it damn well better have a hat.

What Is Dogwifhat (WIF) and Why Is It Up so Much? - Unchained

Discover the Dogwifhat (WIF) meme coin and learn why its recent increasing popularity has increased its value.

unchainedcrypto.com

As long as it isn’t an NFT it may have great value!
How long before Elon pumps Dogwifhat just because he can?! I’m surprised… He missed his chance on 4/20.

 

[Postman_1]

Meta beat but issued a light forecast so dipping after hours. Seems it's all about future outlook with these earnings. Tesla puts out a loss but talks about a cheaper EV and they pump.

https://www.cnbc.com/2024/04/24/meta-meta-q1-2024-earnings-.html