I am happy to have cash in money market getting interest while I wait for the markets to crash and then "buy low". I have gone through enough market crashes - feeling like 2008 to me.
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- Thread starter pmclaine
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I can understand your perspective. I did pull up some reminders of that period in time (link below).
I have given thought to other comments about the similarity of today"s environment to that period in time.
During 2008 there was still, somewhat, trust in Government. Obama was going to save the country. That trust is gone today and there is no savior on the horizon.
Americans remembered The Great Inflation period that came to an end once Fed chair Paul Volcker pursued a bold but painful contractionary money policy to control it. Now, Jerome Powell will never make such a bold move.
In 2008 -09 American's would "swallow their pride" and go work at a crappy job for a lower wage to keep their family, financially, afloat. The wife would go to work. Today the wives are working to keep the families head above water.
In 2008 there had been restrictions on illegals crossing into America... For the past several years, there has been "open boarders".
I can go on, (de-fund the police, transsexuals, Government bailouts,, etc) but my point is made. Lastly, this situation is worldwide, not just a problem for America.
Anyone have a feasible plan ? I will listen.
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Top 10 Events That Changed the World in 2008
The top economic events in 2008 included the collapse of Lehman Brothers and the stock market, and government rescue of several financial firms.
Two big differences between 2008 and now:
1) We were sitting on "only" $10 trillion in federal debt then, and now it's $33 trillion with $1.8T more coming before the end of this calendar year.
2) Inflation wasn't generally an issue in the run-up to the '08 crash (other than in certain commodities), and quickly tipped to deflation in early '09. Today, were still haven't seen a flat CPI number much less any sort of revision, and things so far look like they're following the triple-hump pattern from the '70s.
The net impact is the Fed has much less room to ease.
1) We were sitting on "only" $10 trillion in federal debt then, and now it's $33 trillion with $1.8T more coming before the end of this calendar year.
2) Inflation wasn't generally an issue in the run-up to the '08 crash (other than in certain commodities), and quickly tipped to deflation in early '09. Today, were still haven't seen a flat CPI number much less any sort of revision, and things so far look like they're following the triple-hump pattern from the '70s.
The net impact is the Fed has much less room to ease.
For those of you with "Self Directed" retirement accounts.... Today is the day to roll over all those high fliers into a crappy 4% APR account.
Benchmark this post. It will be discussed many times over the next 4 years.
Benchmark this post. It will be discussed many times over the next 4 years.
When the SHTF you will be welcome in my camp.Move me to Montana and I’ll help you with hard labor.
Bring your own ammo. I have no 6.5......... LOL
20% EV market share in 2025 implies a ramp to ~3M units that year in the US alone. Nope, ain't buying that story. This seems far more realistic:
www.goldmansachs.com
Goldman Sachs | Cars 2025
Cleaner, smarter, cheaper: Learn about technologies and trends that are reshaping the automobile and the auto industry.
The DXY is being propped up with "credit"........... The debt of the United States is growing ....... Robbing Peter to pay Paul is not long term strategy...... Only election year strategy.
Pull up those Big Girl panties.
Watches of Switzerland shares plunge by a quarter after Rolex buys retailer Bucherer
The Watches of Switzerland Group lost a quarter of its value on Friday after luxury watchmaker Rolex announced a deal to buy watch retailer Bucherer.
Waiting for the flight to safety to push down our LT rates. If DXY is not highlighting the flight the safety trade, I wonder what it will break. 110? Banks are not forecasting a strong dollar in 2024. I wonder what their thesis is.
Are you OK ? In such a short posting you used the word "wonder" twice.
I will be the first to admit, before my first sip of coffee in the morning I wonder about several topics.
That prepares me for the "unknown" events of the day.
The method of calculating the "DXY" is a fallacy which can be changed randomly (like the Dow) to get a politically pleasing number.
The unhinging of the UDS to oil (petrodollar) cast even more doubt on the DXY.
The EUR and CHF dismal performance makes the DXY look good.
Understanding the U.S. Dollar Index (USDX)
The index is currently calculated by factoring in the exchange rates of six foreign currencies, which include the euro (EUR), Japanese yen (JPY), Canadian dollar (CAD), British pound (GBP), Swedish krona (SEK), and Swiss franc (CHF).The euro is, by far, the largest component of the index, making up 57.6% of the basket. The weights of the rest of the currencies in the index are JPY (13.6%), GBP (11.9%), CAD (9.1%), SEK (4.2%), and CHF (3.6%).2
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What Is the U.S. Dollar Index (USDX) and How to Trade It
The U.S. dollar index (USDX) is a measure of the U.S. dollar's value relative to the majority of its most significant trading partners.
What I’m getting at is, Dollar strength is near all time highs. Flight to safety has not happened. Banks are forecasting a weakened USD in 2024. Their forecast vs. spot cast a very large spread.
How would you identify a "flight to safety" ? There has been a lot of flight to safety but the calculations for the DXY are against the "market basket" of other currencies. In those countries that make up the market basket there were flights to safety for each country.
Even tracking the DXY against "gold" won't work since so much gold is simply paper gold.
Gold buying by central banks reached its highest level in 55 years this February 2023, according to the World Gold Council.
These Countries Are Buying up the World’s Gold – 24/7 Wall St.
Gold buying by central banks reached its highest level in 55 years this February 2023, according to the World Gold Council. The uptick in gold buying is part of a decades-long shift away from the U.S. dollar as the world’s primary reserve currency, and has coincided with the strengthening of...
247wallst.com
Flight to safety is a strengthening USD and strong demand for Treasuries.How would you identify a "flight to safety" ? There has been a lot of flight to safety but the calculations for the DXY are against the "market basket" of other currencies. In those countries that make up the market basket there were flights to safety for each country.
Even tracking the DXY against "gold" won't work since so much gold is simply paper gold.
Gold buying by central banks reached its highest level in 55 years this February 2023, according to the World Gold Council.
These Countries Are Buying up the World’s Gold – 24/7 Wall St.
Gold buying by central banks reached its highest level in 55 years this February 2023, according to the World Gold Council. The uptick in gold buying is part of a decades-long shift away from the U.S. dollar as the world’s primary reserve currency, and has coincided with the strengthening of...
It’s probably a good time to start buying bonds, not likely to be much if any more tightening before the economy slows and they have to start easing. Hence the forecast for a weaker dollar.
The sale on preferred, baby bond and bonds has been a hoot during this rate cycle. I waited 15 years for this kind of yield and am finger tapping waiting on another big drawdown to clean off my ticker list. Had deep trot line orders in yesterday hoping Powell would have a moment at the microphone.
I'd be very careful buying bonds in the current environment:
1) Inflation is following a similar pattern to the 70s, which indicates potential for a head-fake followed by another upwards rip. Remember that we're not dealing with just the Covid money printing, but rather 15 years of ultra-loose monetary and fiscal policy.
2) Much to the dismay of many (myself included), the economy continues to chug along despite all the potential reasons it should be crashing.
3) There are still way too many signs of irrational behavior - art and jewelry values continue to climb, BTC doubled in over a seven-month period, etc etc etc.
4) The Fed itself says that it's willing and able to raise rates, and its actions in March indicate that it's also willing to bail out certain sectors of the banking industry that may be affected.
5) The US federal government budget will require a couple billion each year from now until conservatives grow a spine (so indefinitely). The Fed does not appear willing to monetize the full sum, so there will need to be a sufficiently high interest rate to attract outside investment.
All of this would seem to apply continued upwards pressure on rates.
Yes inflation is currently trending with the 70s but the head fake in the 70 was due to unanchored inflation expectations (Burr flip flopped rate-setting), removal of price caps that artificially lowered inflation in prior years, oil-price shocks, and leaving of the gold standard without successful precedent.
I could not care less if my fixed income prices move south more I'm already getting the yield I want way under par. I'll just add more if they move south. I don't buy any fixed income hoping to sell it for more than I bought it for b/c I don't own a dime of it that isn't well below par. In point of fact I don't want any of my preferreds to ever be called even though it would result in cap gains...I want them to keep pumping out divs. Of course I know my baby bonds/bonds will mature at some point and then my problem is finding replacement yield as tasty as what's on sale now. I don't have a single fixed income instrument that wasn't purchased way below par during the 'don't buy anything the world ends tomorrow' mantras of the last 3 years. Having said that for people who can't stomach watching daily liquidation values oscillate up and down yea it may not be best to buy.
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What sort of baby bonds are you buying? I just started buying small amount of 4wk treasuries paying almost 5.5%, but looking where to put larger amounts.
BDC's, energy, healthcare and financial services. BDC's have been killing it and with the new BASEL requirements for the banking industry they are set to do even better. Just sent you a link to a decent free resource where you can do your homework on risk tolerance etc. Not everything you'd want to look at, but will give you a start as it has sections for CEFs, preferreds etc. All the info I have is behind a paywall.
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I read a very simple explanation of why the USD is looking strong.
It is simply due to inflation.
Prices are inflated and it now takes more USD's to buy an item.
The "true value" of the USD is falling.
Certainly makes it look good on the DXY chart.
America does not have a strong dollar. Look at how many it takes to buy a gallon of milk or a loaf of bread.
Yes, I have been reading the "theories" but this is the real world. One example:
Today America reminds me of a credit card company that is borrowing money so it can lend money to it's customers.
Those credit card companies that are poorly run are loaning money that will never be repaid.
The rest of the world is watching and is asking itself "Do we want to invest in a poorly run operation"?
America reminds me of Comerica. Today, would you buy stock in CMA ?
Those credit card companies that are poorly run are loaning money that will never be repaid.
The rest of the world is watching and is asking itself "Do we want to invest in a poorly run operation"?
America reminds me of Comerica. Today, would you buy stock in CMA ?
If only bond ETFs
You are comparing equal currencies. The USD has strength due to the benefit of safety and carry trade. USD outperforms many G10 currencies as a carry trade. IE sell Yen and buy USD.
You are comparing equal currencies. The USD has strength due to the benefit of safety and carry trade. USD outperforms many G10 currencies as a carry trade. IE sell Yen and buy USD.
Why were you holding Yen in the first place ? I know, that is why the Petrodollar was established.
What I am seeing as a "Flight to Safety" is the move out of USD's and into other things. Not the move into USD's.
As much as I dislike it, those "Stock Buy Backs" are doing exactly that. Flight from the USD's into equities. Lack of confidence in the USD.
Similar to the guy who worked all his life, retired, took his 401k money and bought a new F-350 diesel. That truck will cost 10% more next year, maybe more.
I was into the Roth IRA's in the beginning... It was a great deal. Then the politician's changed the rules. Never put your money where a politician can change the rules. This is exactly what is happening with property taxes today... The rules are changing and they are not in your favor.
A lot of my money was invested in "myself". Packs easily and travels light.
# 1 - Invest in your health. Without it, no other investment matters. Look at Steve Jobs. He would have traded it all to still be alive today. part of health is your mind / outlook. Stroking out is not a good way to go.
# 2 - Invest in a skill that is not tied to a computer, Internet, TV or movies..... Start simple. Build a fire with flint and steel. Take some ditch water and purify it for drinking. Deal with that little scratch on your finger that will become infected (without going to the doctor).
# 3 - My back yard is my money hole. Priceless
Deer food for when I need to harvest one to survive
Shop and ability to keep things running
Cook without a kitchen
Things money can't buy.
We are talking FX markets. When you sell one currency and buy another, you get carry points depending on what side you take. If you sell Yen and buy USD for 90 days, you immediately receive the positive economics from holding USD which has higher interest rates.
Nah. As it is right now, almost all the worlds lithium is traded in USD. Which is great as we move forward with the electrification lifecycle I speak of.
Jeff Krimmel on LinkedIn: #renewableenergy #energy #solar
Solar power generation in the US is booming. But stocks are cratering. There’s reason to believe these stocks are poised for a recovery. Let’s look at…
www.linkedin.com
Solar power generation in the US is booming. But stocks are cratering.
There’s reason to believe these stocks are poised for a recovery.
Let’s look at Enphase Energy, an $18B giant at a 52-week low.
Here’s how management describes Enphase’s business in its most recent annual report:
“We have revolutionized the solar industry by bringing a systems approach to solar technology and by pioneering a semiconductor-based microinverter that converts energy at the individual solar module level and, combined with our proprietary networking and software technologies, provides advanced energy monitoring and control.”
Enphase caught my attention because while its stock price is down over 50% in the past year, its financial performance is booming.
Let’s look at four elements of Enphase’s performance and see what’s going on.
The top left chart below shows Enphase’s stock price since the beginning of 2020.
We see an initial high-volatility climb, resulting in a high of $330 in December 2022. Then we have the aggressive fall to today’s level near $130.
The bottom left chart shows Enphase’s trailing 12-month earnings per share (EPS).
Earnings remained mostly around $1 per share in 2020, 2021, and 2022. As we’ve made our way through 2023, EPS has shot up aggressively, and is now at $4, or three times what it was two years ago.
The top right chart shows Enphase’s price-to-earnings (P/E) ratio.
To say this stock has been expensive is putting it lightly. There was a two-year window where it traded north of 100X.
To put that in perspective, Tesla, a notoriously expensive stock, trades at around 60X earnings today.
Enphase’s P/E has come down aggressively alongside the stock price, and sits around 33X. According to the website multpl, the S&P 500 in aggregate is at a P/E of 25 right now. So Enphase is falling much closer in line with the market on the whole.
Finally, the bottom right chart shows the ratio of Enphase’s earnings yield to the yield on the 10-year Treasury.
Earnings yield is the inverse of P/E, i.e. E/P. Comparing the earnings yield to the yield on the 10-year Treasury helps us understand the relative value we’re getting with Enphase’s stock.
As Enphase’s earning yield grows relative to the yield we could get on Treasuries, the stock becomes more of a bargain.
Notice that right now, this ratio is the highest it has been since January 2021.
In other words, we haven’t seen this good of a deal on Enphase stock relative to interest rates in the better part of three years.
There’s no law of nature that says investors have to snap up this relative bargain. They may wait for an even better deal in the future.
Still, right now Enphase’s stock is the most attractive it has been since it got beat up during the pandemic. And with the company’s aggressive earnings growth trajectory, it would not be a surprise for investor sentiment to become more positive in the near future.
#renewableenergy #energy #solar Enphase Energy
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How much stock in the sector does Jeff Krimmel’s personally hold ?Jeff Krimmel on LinkedIn: #renewableenergy #energy #solar
Solar power generation in the US is booming. But stocks are cratering. There’s reason to believe these stocks are poised for a recovery. Let’s look at…
Solar power generation in the US is booming. But stocks are cratering.
There’s reason to believe these stocks are poised for a recovery.
Let’s look at Enphase Energy, an $18B giant at a 52-week low.
Here’s how management describes Enphase’s business in its most recent annual report:
“We have revolutionized the solar industry by bringing a systems approach to solar technology and by pioneering a semiconductor-based microinverter that converts energy at the individual solar module level and, combined with our proprietary networking and software technologies, provides advanced energy monitoring and control.”
Enphase caught my attention because while its stock price is down over 50% in the past year, its financial performance is booming.
Let’s look at four elements of Enphase’s performance and see what’s going on.
The top left chart below shows Enphase’s stock price since the beginning of 2020.
We see an initial high-volatility climb, resulting in a high of $330 in December 2022. Then we have the aggressive fall to today’s level near $130.
The bottom left chart shows Enphase’s trailing 12-month earnings per share (EPS).
Earnings remained mostly around $1 per share in 2020, 2021, and 2022. As we’ve made our way through 2023, EPS has shot up aggressively, and is now at $4, or three times what it was two years ago.
The top right chart shows Enphase’s price-to-earnings (P/E) ratio.
To say this stock has been expensive is putting it lightly. There was a two-year window where it traded north of 100X.
To put that in perspective, Tesla, a notoriously expensive stock, trades at around 60X earnings today.
Enphase’s P/E has come down aggressively alongside the stock price, and sits around 33X. According to the website multpl, the S&P 500 in aggregate is at a P/E of 25 right now. So Enphase is falling much closer in line with the market on the whole.
Finally, the bottom right chart shows the ratio of Enphase’s earnings yield to the yield on the 10-year Treasury.
Earnings yield is the inverse of P/E, i.e. E/P. Comparing the earnings yield to the yield on the 10-year Treasury helps us understand the relative value we’re getting with Enphase’s stock.
As Enphase’s earning yield grows relative to the yield we could get on Treasuries, the stock becomes more of a bargain.
Notice that right now, this ratio is the highest it has been since January 2021.
In other words, we haven’t seen this good of a deal on Enphase stock relative to interest rates in the better part of three years.
There’s no law of nature that says investors have to snap up this relative bargain. They may wait for an even better deal in the future.
Still, right now Enphase’s stock is the most attractive it has been since it got beat up during the pandemic. And with the company’s aggressive earnings growth trajectory, it would not be a surprise for investor sentiment to become more positive in the near future.
#renewableenergy #energy #solar Enphase Energy
No alternative text description for this image
Of course he is going to plug that sector since they sign his pay check.
Yep, yep, yep
Snug up... As Europe goes so goes the civilized world.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/JLB6H62RARMATPWZVX5BURSGG4.jpg)
Bank of England Bank Rate peak seen at 5.50%, but strong chance of 5.75%: Reuters poll
The Bank of England is now marginally predicted to make only one more increase to Bank Rate, taking it to 5.50% on Sept 21, though a significant minority of economists polled by Reuters still expect rates to go even higher this year.
www.reuters.com
One of my construction world sayings was this "put me with a partner who is consistent"....
I could work with craftsmen all over the personality spectrum.
Supervision was where my biggest personality clashes existed.
Thanks for the chuckle.
