[Tyga11]

Originally Posted by Donatello.

What is everyone buying this week? I've got some $ sitting in my IRA that I would like to buy some stocks and/or ETFs

Disney for sure

[other_evolved]

Originally Posted by David70

Agree. If you aren't trying to time the market and instead look medium/long term there is never anything to be scared about when it comes to the stock market.

My favorite is the people talking about a future recession but not giving a date or even a range. Somewhere in the future they will say they predicted it.

A broken clock is right twice per day!

[David70]

Originally Posted by other_evolved

A broken clock is right twice per day!

Get enough people guessing at something, some will get it right and we will call them a genius.

[Donatello.]

Originally Posted by Tyga11

Disney for sure

Why Disney? I've held some of it for a bit now & keep watching it decline

[G35POPPEDMYCHERRY]

i have to reiterate, that is you are getting stock tips from anyone regarding short-term trading....you WILL lose money period

[Tyga11]

Originally Posted by Donatello.

Why Disney? I've held some of it for a bit now & keep watching it decline

I was joking lol

[Tyga11]

Originally Posted by G35POPPEDMYCHERRY

i have to reiterate, that is you are getting stock tips from anyone regarding short-term trading....you WILL lose money period

Not really. I'm up 45% YTD - that's pretty good

[G35POPPEDMYCHERRY]

Originally Posted by Tyga11

Not really. I'm up 45% YTD - that's pretty good

did you sell or paper gains?

[Tyga11]

Originally Posted by G35POPPEDMYCHERRY

did you sell or paper gains?

I sold profits in tech and have been....

[XutvJet]

Originally Posted by David70

Agree. If you aren't trying to time the market and instead look medium/long term there is never anything to be scared about when it comes to the stock market.

My favorite is the people talking about a future recession but not giving a date or even a range. Somewhere in the future they will say they predicted it.

I've been in the stock market since the late 1990s. Weathered all those storms, lost my ass many times, and made many mistakes including have a financial advisor and having actively managed fund. I am definitely in the group that a recession is closing in on us. While I have definitely enjoyed seeing my portfolio grow massively since around 2013, the market right now makes absolutely no sense to me. As a person that supports international transactions on a daily basis, the US market is bonkers. It just can't keep going up and up. The further it goes, the harder it's going the fall and worse, you will not see it coming at all. It will happen over the course of a couple of weeks and will be a bloodbath, probably one of the worst we will have seen in decades.

People are stretched thin. Buying a house gets further and further away for the majority. Same goes for buying new and newer used cars. People are relying more and more on credit cards to make ends meet as well. Businesses can't keep increasing prices and using tips to offset the wages they pay. The upcoming recession will hit from multiple angles including the sliding China economy.

When will it happen? I thought for sure it would have happened by now. I am now thinking within a year and it's going to suck. I am in this for the long haul, but it always takes a few years to get the portfolio back to where it was and then it snowballs again. I'd love to retire in 4 years (at 53), but I fear the impending recession will push that out a bit.

[Chick Webb]

Originally Posted by Tyga11

I imagine a lot of posters in here missed on the rally...

Missed? No, but I got some participation and have shored up my mid-/long-term bond positions. Never out of the market, and have owned NVDA for quite some time. Likewise MSFT, QQQ, SPY and some others. I've actually added a few new positions, as well. And I have a fair chunk of stock in the company that I've worked for the last 17 years, and it's up 37% this year. That does not suck. Overall up a bit more than the S&P, which given the level of risk I've assumed is quite satisfying.

But, I have been and remain defensive, in part because I'm getting close to retiring and have to engage in wealth preservation to an extent. The good news is that cash is a great alternative (finally) and I've bought up some 2-/5-/10-year Treasuries that are yeilding between 4-5%. That's a pretty safe place to put 20-30% of a portfolio and get decent yield when you're retiring in a couple of years.

Why remain defensive? Well, below is a chart that I lifted from an article on consumers' declining balance sheets from the WaPo this morning. It shows an obvious trend from the I-got-my-gov'mint-money highs of early 2021. The red line is mine; I wanted to extrapolate to see where we'll likely cross the y-axis. Considering that 70% of our economy is consumer spending this both explains why we haven't had a recession yet, and when we might get one. Consumer credit is already at all-time highs and delinquencies are increasing, so Plan B looks a little shaky. Job losses are going up, even in the service sector, and hours worked are going down. It's hard for me to see how we do not have an earnings recession coming, and that is not going to be good for the markets, since it doesn't seem to be priced in at this point.

Most importantly, inflation remains sticky (4.8% core PCE this month) and wage growth alone is driving 2% of the overall rate. It's hard to imagine how we get to 2% inflation in that environment, and I continue to believe that the Fed won't quit until we get unemployment up by 1-2%, which is what it's going to take to quell that wage inflation. Unfotrunately, growth will fall first, and we'll likely end up with a not-insignificant period of stagflation before we reach that 2-ish% inflation number. I say 2-ish b/c the pressure on the Fed to give up and start cutting rates when growth slows is going to be tremendous, especially in an election year, so they'll likely at some point say that 2-3% is "good enough", at least for now. But, trust me, we do not want stagflation.

[Chick Webb]

Originally Posted by Tyga11

Disney for sure

If you want to take a short-term bet on Iger (who is now going to stay until 2026, apparently), DIS would be something to buy. But, you would be gambling on his brilliance, which may be fading, and even if it's not the economy for the next 2-3 years might just not be favorable to the discretionary spending Disney relies on. Gambling's OK. Just don't call it investing. Now, if you told me you wanted to buy and hold for 10 years, I'd say at $85 you'd probably do OK. It's a great franchise, after all. And what better place for your Tik Tok vids than one of their parks!

[Donatello.]

I guess I'll just park mine in cash & wait till the crash then

[ASAP]

Originally Posted by Chick Webb

Missed? No, but I got some participation and have shored up my mid-/long-term bond positions. Never out of the market, and have owned NVDA for quite some time. Likewise MSFT, QQQ, SPY and some others. I've actually added a few new positions, as well. And I have a fair chunk of stock in the company that I've worked for the last 17 years, and it's up 37% this year. That does not suck. Overall up a bit more than the S&P, which given the level of risk I've assumed is quite satisfying.

But, I have been and remain defensive, in part because I'm getting close to retiring and have to engage in wealth preservation to an extent. The good news is that cash is a great alternative (finally) and I've bought up some 2-/5-/10-year Treasuries that are yeilding between 4-5%. That's a pretty safe place to put 20-30% of a portfolio and get decent yield when you're retiring in a couple of years.

Why remain defensive? Well, below is a chart that I lifted from an article on consumers' declining balance sheets from the WaPo this morning. It shows an obvious trend from the I-got-my-gov'mint-money highs of early 2021. The red line is mine; I wanted to extrapolate to see where we'll likely cross the y-axis. Considering that 70% of our economy is consumer spending this both explains why we haven't had a recession yet, and when we might get one. Consumer credit is already at all-time highs and delinquencies are increasing, so Plan B looks a little shaky. Job losses are going up, even in the service sector, and hours worked are going down. It's hard for me to see how we do not have an earnings recession coming, and that is not going to be good for the markets, since it doesn't seem to be priced in at this point.

Most importantly, inflation remains sticky (4.8% core PCE this month) and wage growth alone is driving 2% of the overall rate. It's hard to imagine how we get to 2% inflation in that environment, and I continue to believe that the Fed won't quit until we get unemployment up by 1-2%, which is what it's going to take to quell that wage inflation. Unfotrunately, growth will fall first, and we'll likely end up with a not-insignificant period of stagflation before we reach that 2-ish% inflation number. I say 2-ish b/c the pressure on the Fed to give up and start cutting rates when growth slows is going to be tremendous, especially in an election year, so they'll likely at some point say that 2-3% is "good enough", at least for now. But, trust me, we do not want stagflation.

I personally still don't see where people are getting this money to spend from these days... i get people are making more money than before but everyone you go it's still crowded etc... the only way this is possible is if people are just putting themselves into consistent positions of debt... the median income of the country does not currently support the spending that I've been seeing everywhere...

[Chick Webb]

Originally Posted by ASAP

the median income of the country does not currently support the spending that I've been seeing everywhere...

Which is exactly what the chart shows and why I thought it was interesting. Clearly all of that Covid stimulus combined with reduced expenses during the 6-18 months of lockdowns put a lot of money in people's pockets, and they've been spending like drunken sailors on a weekend pass since. That also of course accounts for a lot of the inflation that we're seeing, but I digress.

Some, mostly in the bottom two quintiles, have already run out of thier excess savings, which is part of the balooning credit and defaults problem that's now occuring. But if the slope of that curve doesn't change, the "middle" is going to run dry soon. When it does the party will be over, I think.

[ASAP]

it's gonna be super interesting when the CPI report today shows inflation up YoY...

[chassis]

Originally Posted by ASAP

it's gonna be super interesting when the CPI report today shows inflation up YoY...

and…?

[ASAP]

Originally Posted by chassis

and…?

...well as expected, the spinning continues...

it came in at 3.2% or under the "expected" 3.3%... except it's higher than the month before and it's the first time we've seen it tick back up in months... and somehow market rallies... why? well no one knows... because there is no sense in anything anymore

[other_evolved]

Originally Posted by ASAP

...well as expected, the spinning continues...

it came in at 3.2% or under the "expected" 3.3%... except it's higher than the month before and it's the first time we've seen it tick back up in months... and somehow market rallies... why? well no one knows... because there is no sense in anything anymore

It's likely because nearly all of the increase came from shelter costs. Food and energy were nearly flat, airfare prices dropped considerably, used car prices dropped, etc. It's always more than just the headline figure

[ASAP]

Originally Posted by other_evolved

It's likely because nearly all of the increase came from shelter costs. Food and energy were nearly flat, airfare prices dropped considerably, used car prices dropped, etc. It's always more than just the headline figure

yes, and that's the largest expense most people have...

food and energy are necessary as is housing... arguably everything else is discretionary and it's easy to cut back on... not sure if no one gets this...

[dradernh]

Originally Posted by other_evolved

It's likely because nearly all of the increase came from shelter costs. Food and energy were nearly flat, airfare prices dropped considerably, used car prices dropped, etc. It's always more than just the headline figure

Specifically:

Monthly Changes in July

+3.0 Fuel oil
+2.0 Piped utility gas service
+2.0 Motor vehicle insurance
+1.0 Motor vehicle maintenance and repair
+0.5 Meats, poultry, fish and eggs
+0.5 Dairy and related products
+0.5 Medical care commodities
+0.5 Tobacco and smoking products
+0.4 Fruits and vegetables
+0.4 Rent of primary residence
+0.2 All items
+0.2 Food away from home
+0.2 Gasoline (all types)
+0.2 All items less food and energy
+0.2 Physicians’ services
+0.1 Alcoholic beverages
+0.0 Cereals and bakery products
+0.0 Nonalcoholic beverages
+0.0 Apparel
–0.1 New vehicles
–0.4 Hospital services
–0.7 Electricity
–1.3 Used cars and trucks
–8.1 Airline fares

Source: Bureau of Labor Statistics

[tgrundke]

And this is why the inflation issue has been hitting the lower and middle classes hardest: Airfare reductions benefit higher earners, whereas gasoline and natural gas and meat+pultry+fish+eggs hit the lower/middle much much harder.

Originally Posted by dradernh

Specifically:

Monthly Changes in July

+3.0 Fuel oil
+2.0 Piped utility gas service
+2.0 Motor vehicle insurance
+1.0 Motor vehicle maintenance and repair
+0.5 Meats, poultry, fish and eggs
+0.5 Dairy and related products
+0.5 Medical care commodities
+0.5 Tobacco and smoking products
+0.4 Fruits and vegetables
+0.4 Rent of primary residence
+0.2 All items
+0.2 Food away from home
+0.2 Gasoline (all types)
+0.2 All items less food and energy
+0.2 Physicians’ services
+0.1 Alcoholic beverages
+0.0 Cereals and bakery products
+0.0 Nonalcoholic beverages
+0.0 Apparel
–0.1 New vehicles
–0.4 Hospital services
–0.7 Electricity
–1.3 Used cars and trucks
–8.1 Airline fares

Source: Bureau of Labor Statistics