Market Philosophy

Harvey said:
The dynamic with the indices that @MC2 pointed out makes complete sense.
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What, the ‘stuck at home, now not stuck at home’ dynamic?

I was actually going to say...I was a bit disappointed in that particular analysis (I’ve come to expect more of MC!). The overall story may not be as simple as he suggests, but maybe he’ll convince me.

Yes, from Disney to Delta, Retail (online, as much as brick and mortar) to Realty (Commercial)....companies that had been trading lower and who will profit from COVID recovery have surged, can’t argue with that. Of course, there are likely other factors helping those gains (stimulus bill progress among them), but recovery and that half of the dynamic does make sense.

It’s the ‘now not stuck at home’ side of his dynamic that may be an over simplification of what is dragging the tech markets down. Before today Tesla, which trades on the Nasdaq, has been a big drag, but as much for their Bitcoin investment as anything else. The issue for tech stocks like Apple, Microsoft, and Amazon continues to be valuation, especially now that investors are looking for lower priced (better valued) ‘recovery’ stocks.

I wonder if ‘now not stuck at home’ is really all that big a factor in the tech drag we’ve seen. While more people will be ‘less stuck’ at home as COVID wanes, work from home and virtual meetings will be a much bigger part of the workplace going forward than they were pre-COVID, everyone who bought real estate in the country isn’t likely to sell it and head back to the big cities full time, and a year away from dying malls only assured they will stay dead......so any ‘stuck at home’ factor that had been contributing to tech gains isn’t going to just vanish.

Lastly, does the Nasdaq being up nearly 4% today throw a little cold water on MC’s ‘now not stuck at home’ assumptions regarding tech drag? Hmmm....:unsure:
 
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JTG said:
What, the ‘stuck at home, now not stuck at home’ dynamic?

I was actually going to say...I was a bit disappointed in that particular analysis (I’ve come to expect more of MC!). The overall story may not be as simple as he suggests, but maybe he’ll convince me.

Yes, from Disney to Delta, Retail (online, as much as brick and mortar) to Realty (Commercial)....companies that had been trading lower and who will profit from COVID recovery have surged, can’t argue with that. Of course, there are likely other factors helping those gains (stimulus bill progress among them), but recovery and that half of the dynamic does make sense.

It’s the ‘now not stuck at home’ side of his dynamic that may be an over simplification of what is dragging the tech markets down. Before today Tesla, which trades on the Nasdaq, has been a big drag, but as much for their Bitcoin investment as anything else. The issue for tech stocks like Apple, Microsoft, and Amazon continues to be valuation, especially now that investors are looking for lower priced (better valued) ‘recovery’ stocks.

I wonder if ‘now not stuck at home’ is really all that big a factor in the tech drag we’ve seen. While more people will be ‘less stuck’ at home as COVID wanes, work from home and virtual meetings will be a much bigger part of the workplace going forward than they were pre-COVID, everyone who bought real estate in the country isn’t likely to sell it and head back to the big cities full time, and a year away from dying malls only assured they will stay dead......so any ‘stuck at home’ factor that had been contributing to tech gains isn’t going to just vanish.

Lastly, does the Nasdaq being up nearly 4% today throw a little cold water on MC’s ‘now not stuck at home’ assumptions regarding tech drag? Hmmm....:unsure:
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My point was not that the analysis was right or wrong, but that I have no interest trying to guess at what the marketing will do.

I also think that those here who think they can consistently out guess wall street pros are... mistaken.
 
Harvey said:
My point was not that the analysis was right or wrong, but that I have no interest trying to guess at what the marketing will do.

I also think that those here who think they can consistently out guess wall street pros are... mistaken.
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100% - Also, the PROS who think they can consistently out guess the market may be mistaken, too. Someone could make the argument that a Warren Buffet out guesses the market, but the point is consistently outguessing the market (an my ability to guess which manager will outperform over time). He is the only person I can think of that has outperformed the market over time. Maybe the guy who ran Fidelity Magellen years ago, but even that was only over a 10 year period and ended I think in the mid 2000s.

If you look at performance over time, professional public equity managers that do well at picking stocks tend to be streaky. It may not help my portfolio to have a 40% return one year and a negative 20% return the next, if Total Stock Market returns 11% each of those years, even before the difference in fees.

And as we all know given 2006-2008 and March 2020, there will be times where there are annual losses at 25% - it really isn't a black swan event anymore, or something you knew happened during the Depression.
 
DomB said:
100% - Also, the PROS who think they can consistently out guess the market may be mistaken, too. Someone could make the argument that a Warren Buffet out guesses the market, but the point is consistently outguessing the market (an my ability to guess which manager will outperform over time). He is the only person I can think of that has outperformed the market over time. Maybe the guy who ran Fidelity Magellen years ago, but even that was only over a 10 year period and ended I think in the mid 2000s.

If you look at performance over time, professional public equity managers that do well at picking stocks tend to be streaky. It may not help my portfolio to have a 40% return one year and a negative 20% return the next, if Total Stock Market returns 11% each of those years, even before the difference in fees.

And as we all know given 2006-2008 and March 2020, there will be times where there are annual losses at 25% - it really isn't a black swan event anymore, or something you knew happened during the Depression.
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I could be convinced that the top tier of financial managers are worth the money they charge. But most people who'll ever read this can't afford that person, and I certainly can't. 95% of financial managers are worse than the index, over time. It's a little crazy to me that they still exist in an age of AI.
 
JTG said:
Lastly, does the Nasdaq being up nearly 4% today throw a little cold water on MC’s ‘now not stuck at home’ assumptions regarding tech drag? Hmmm....:unsure:
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For the record, I think both the NASDAQ & Russ 2K will go up, I just think that the tech stocks rose a lot more than traditional companies in the last year and if I was a guy who bought individual stocks, I would look outside of tech because I don’t like to buy high (in a relative sense, or course... GOOG & AAPL are fine to buy now if you are going to hold them for 10 years and think they’ll keep going up)
 
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MC2 said:
For the record, I think both the NASDAQ & Russ 2K will go up, I just think that the tech stocks rose a lot more than traditional companies in the last year and if I was a guy who bought individual stocks, I would look outside of tech because I don’t like to buy high (in a relative sense, or course... GOOG & AAPL are fine to buy now if you are going to hold them for 10 years and think they’ll keep going up)
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Agreed!
 
Uhhh....guys....he and have been agreeing more than disagreeing lately, not that there’s all that much either way.
 
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