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PeakOil is You

Dow Jones Stock Market 2017

Discussions about the economic and financial ramifications of PEAK OIL

Re: +21000 on the Dow

Unread postby Ibon » Sun 05 Mar 2017, 13:09:53

Cog wrote:Half of new businesses fail within five years. 2/3rds of businesses fail within ten years. The business world is tough and the weak are eliminated. You better know what you are doing if you are going to advise your kids to start a business.


"Hey, let's open up a pet grooming store in that there strip mall down the street".

I agree if that's what you mean. There are a lot of folks opening up businesses with no clue. They actually deserve to fail since this failure is the closest they may ever get to a real education.

If you have integrity, study and do solid due diligence, work hard, and use your own money and not a loan from a bank, and start a business, your odds are better. If you are a parent loaning funds to your child, you better not be giving this loan as an indulgence to your kid, it better be understood for what it is.

There is an element to the survival of the fittest. Losers don't go to debters prison. They can try again. This is one of great things about America and the American cultural orientation of trying, failing, and trying again.

Sitting on your but in front of a digital screen trading stocks is not going to make America Great Again.
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Re: +21000 on the Dow

Unread postby Outcast_Searcher » Sun 05 Mar 2017, 13:23:10

Ibon wrote:Sitting on your but in front of a digital screen trading stocks is not going to make America Great Again.


I certainly respect what you've done. And it's certainly good that adventurous risk takers do things like that.

But in a huge, complex, first world democratic economy, pretending like there is only room for the young aggressive folks to build stuff, and that no capital is needed to invest and grow the economy, is myopic at best.

The reason America has "worked" economically over the long run, is the diversity and freedom it provides, and the incentives for people to succeed. And the RESOURCES for people to succeed.

If you think that a successful career, followed by investing capital in the markets and using a good chunk of that capital (and its earnings) to help young people succeed and unfortunate people have a better life has nothing to do with "making America great" (and paying lots of taxes on top of that for one's entire adult life), then with respect, I don't think you understand much about how the economic system works.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: +21000 on the Dow

Unread postby Ibon » Sun 05 Mar 2017, 13:30:38

pstarr wrote: Good land is the only real asset. The rest is a mirage.


That worked for me better than the stock market. The value is not just monetary. You have a relationship with land. You can't have a relationship with stocks beyond the greed and fear of valuations going up and down.
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Re: +21000 on the Dow

Unread postby Newfie » Sun 05 Mar 2017, 13:57:59

Ditto that Ibon and Pete.

I don't know it's the ONLY investment but it's surely one of the best. And you have the opportunity, through sweat equity, to make it work.

I'm in the Bahamas, in some more remote islands. LOTS of fallen down places and broken dreams. But even in some upscale places real estate is crazy. Many places for sale, the investment didn't work as planned, but many more being built. Can see how that's gonna work.

So even real estate is iffy, unless you do some good research.

A while ago my daughter was looking for an investment property. I was her sounding board. I was truly shocked that the majority of starter homes for sale in Philadelphia propper were being marketed as investment properties, not to individual home buyers to actually own. That kind of tells me money folks were looking to get out of the market. Might be something similar driving development here.
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Re: +21000 on the Dow

Unread postby Ibon » Sun 05 Mar 2017, 14:01:22

Outcast_Searcher wrote:
If you think that a successful career, followed by investing capital in the markets and using a good chunk of that capital (and its earnings) to help young people succeed and unfortunate people have a better life has nothing to do with "making America great" (and paying lots of taxes on top of that for one's entire adult life), then with respect, I don't think you understand much about how the economic system works.


To a certain degree I did this as well so I am not really debating that. And good for you for having been an enabler. I am suggesting though the merits of having a bit more tangible relationship with ones wealth beyond the ups and downs of stock valuations. More to the point though, what percentage of stocks are in the hands of folks like you and me (who have taken assets and made tangible investments with them) and what percentage of stocks are held by extremely wealthy institutions and individuals who lock these assets into long term investments that do not serve society at large and being locked up do not circulate this wealth in the economy.

We are small fish.

Most of the wealth is in the hands of folks who would poop their pants if they took the percentage of their wealth that I did and risked it putting in infrastructure at the end of a 4WD road up some mountain in the developing world with no gate and guard at the entrance..... :)
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Re: +21000 on the Dow

Unread postby Newfie » Sun 05 Mar 2017, 14:33:57

The other point though is, if you have a major portion of your investments in a tax shelter retirement fund ((IRA, 401k) then you are tax limited in what you can do with that. Apparently there are ways to get that money into specific investments but they are not easy and are regulated.

So guys like Cog and myself are stuck in the markets. And that accounts for a Majority of most folks nonhousing assets.
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Re: +21000 on the Dow

Unread postby Cog » Sun 05 Mar 2017, 15:05:29

If you roll over your 401k's or IRA's into a stock brokerage IRA, there is literally nothing you can't invest in. Anything that is traded on the NYSE. You still have the limitation that every dollar you pull out is taxed but until you do all dividends and stock sales are untaxed and not reported on your yearly income tax. You can tailor your investments based on your assessment of risk. Bond heavy or equity heavy. Even buy mutual funds if that is your pleasure.

I just remembered a limitation on IRA's. I do not believe you can do options or short sell. But if you are doing either with an IRA account, you have more guts than I do.
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Re: +21000 on the Dow

Unread postby Newfie » Sun 05 Mar 2017, 17:56:44

But you can't go buy a house, even a rental property for investment without incurring the tax penalty or setting up some legal gizmo for shelter.
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Re: +21000 on the Dow

Unread postby Cog » Sun 05 Mar 2017, 19:13:31

Newfie wrote:But you can't go buy a house, even a rental property for investment without incurring the tax penalty or setting up some legal gizmo for shelter.


Since the money going into an IRA or 401K was not taxed when it went in, the government is going to make sure it is when its taken out. Such is life. But if you have no debt, a modest lifestyle, you can take out just enough to be below certain taxing thresholds and reduce your tax hit that way.
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Re: +21000 on the Dow

Unread postby Outcast_Searcher » Sun 05 Mar 2017, 23:18:46

Newfie wrote:The other point though is, if you have a major portion of your investments in a tax shelter retirement fund ((IRA, 401k) then you are tax limited in what you can do with that. Apparently there are ways to get that money into specific investments but they are not easy and are regulated.

So guys like Cog and myself are stuck in the markets. And that accounts for a Majority of most folks nonhousing assets.

Ah. I see what you meant now. My bad for missing that obvious idea.

That's true. Unless you want to take a 10% early withdrawal penalty AND pay capital gains taxes on 100% of what you take out of a deferred account, then that's a bad idea. (Which is why the rule is in place).

But unless your 401-K is REALLY terrible, you should have a cash or near-cash option.

So you should be able to take X from the stock market and move it to, say, money markets with no penalty and no taxes. You just can't get at it to spend short term without tax penalties (unless you set up an IRS approved annuity, follow their rules, etc. which gets complex).

http://money.usnews.com/money/retiremen ... al-penalty
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: +21000 on the Dow

Unread postby Outcast_Searcher » Sun 05 Mar 2017, 23:28:39

Ibon wrote: More to the point though, what percentage of stocks are in the hands of folks like you and me (who have taken assets and made tangible investments with them) and what percentage of stocks are held by extremely wealthy institutions and individuals who lock these assets into long term investments that do not serve society at large and being locked up do not circulate this wealth in the economy.

We are small fish.

Most of the wealth is in the hands of folks who would poop their pants if they took the percentage of their wealth that I did and risked it putting in infrastructure at the end of a 4WD road up some mountain in the developing world with no gate and guard at the entrance..... :)

On these principles I agree wholeheartedly. And stocks are predominantly owned by wealthy folk/institutions, which correlates with the fact that US income taxes are predominantly paid by the wealthy.

I still think the capital in the markets does some good for the economy. How many people could buy a home without access to capital to borrow, for example? How many people could start and grow a business? Go to a top college/grad school? But no doubt, more spreading it around in thoughtful manner by those with the resources/health/energy/intelligence to do so would be better for the economy and society overall.

Good exchange of ideas. It's too bad there isn't more of that (vs arguing) on this site.
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Re: +21000 on the Dow

Unread postby EdwinSm » Wed 08 Mar 2017, 14:01:05

.... a few days later and the Dow index has now drifted down (fall is too strong a word in this case) to below 21 000.

It has been a long rise since around 18 000 in November, so is this relative pause a pause to gather breath to go higher or the calm before a storm?
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Re: +21000 on the Dow

Unread postby Ibon » Wed 08 Mar 2017, 14:59:41

EdwinSm wrote:
It has been a long rise since around 18 000 in November, so is this relative pause a pause to gather breath to go higher or the calm before a storm?


This is what you no longer have to worry about when you are no longer playing the market. That is freedom!
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Re: +21000 on the Dow

Unread postby Newfie » Wed 08 Mar 2017, 19:24:05

FWIW....because of this thread I had a conversation with my broker. My retirement account had been 50/50 equites/fixed income. I'm now 100% fixed income, at least until the adjustment.

Fool or genius, it's what I've done.
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Re: +21000 on the Dow

Unread postby onlooker » Wed 08 Mar 2017, 19:27:44

Newfie wrote:FWIW....because of this thread I had a conversation with my broker. My retirement account had been 50/50 equites/fixed income. I'm now 100% fixed income, at least until the adjustment.

Fool or genius, it's what I've done.

I vote genius :)
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Re: +21000 on the Dow

Unread postby onlooker » Tue 21 Mar 2017, 17:23:57

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Re: +21000 on the Dow

Unread postby Cog » Tue 21 Mar 2017, 19:16:00

I would consider 2500 points on the DOW a big correction and not justified by the economic data. Maybe we will see something in the 1000 point range but I'm doubtful of that. Anyway a big drop is a good buying opportunity.
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Re: +21000 on the Dow

Unread postby EdwinSm » Wed 22 Mar 2017, 09:47:43

Advice you can disregard as I don't play the stock market:- It looks like the dip might go lower, at least until the Trump rally is corrected. Now it seems that people are starting to look past the rhetoric to what might actually be possible.

BBC live feed wrote:The Dow Jones industrial average took up where it left off last night - in negative territory.

The index shed 65.40 points to 20,602.61 on concerns that Donald Trump's administration may struggle to deliver on its tax cut and infrastructure spending promises following the difficulty it has faced with its healthcare reforms.
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Re: +21000 on the Dow

Unread postby Ibon » Fri 24 Mar 2017, 19:11:27

Prediction: The minute the stock market drops any further Trump will twitter that George Soros and other elite democrats rigged the market to discredit him. This is Ibon's prediction on March 24th, 2017.

I might refer back to this post. You heard it first here.
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Re: +21000 on the Dow

Unread postby onlooker » Fri 31 Mar 2017, 15:45:26

As Hartnett explains, the catalyst for bull in equity and credit markets since 2009 was the "revolutionary monetary policy of central banks" who, since Lehman, "have cut rates 679 times and bought $14.2tn of financial assets." And, once again, he warns that this central bank “liquidity supernova” is coming to an end, as is "the period of excess returns in equities and corporate bonds, as is the period of suppressed volatility."
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