Stock Thread (42 Viewers)

[fantasycurse42]

Just to note, we have all have different goals, I’m looking to establish long long term positions, so when I’m posting, that’s my mindset. I noted we might be setting up for a good short earlier, that isn’t a long term position, FYI, just a fairly quick trade. 

For long term stuff, I won’t buy the bottom, nor will I sell the top, but by paying attention to fundamentals and technicals, I think I’ll give myself the best time to start building my positions. You can start buying now, but I’d stay small and nimble. 

If we aren’t 12-24 months out from a recession, I’m convinced we’re building a bigger credit bubble, so I think patience right now will pay off. 

 

[stbugs]

RSI is at 42,, I saw it at 27.5 when buyers stepped in. Technically they consider 70 overbought. 

You can use TA as you see fit, but once the RSI rises another 10 points or so, I think the technical traders step out of the way. They step in when they see oversold, which by rule is around 30.

At a bare minimum, I’d think they’ll want to test that bottom again, so if you’re a buyer, I’d recommend patience. 

I think the top is in on this cycle, so I’m not a buyer as of yet, as I see a clear ceiling in place, but that’s just me.

I remember selling AMZN at 1500 and then thinking I was an idiot. Glad I sidestepped this volatility. They released to the press this was a record holiday season... WELL no ####!!! I’d hope it was for a growth retailer trading at a P/E of like 100. That doesn’t really say much when you dive in. Company would’ve been better off not showing profits and continuing to invest in growth, then we couldn’t peg a valuation to them.

Stop on AMZN. The P/E is @ 80 right now and that’s with last year’s Q4. I don’t have a crystal ball but based on their earnings growth next year’s P/E at this price should be around 50, maybe lower. I disagree completely about showing profits when your earnings are growing well.

I know you are on the negative side but it helps when you get the numbers in your argument right or like Shopify get the name of the company you want to short correct. 

 

[Capella]

Stop on AMZN. The P/E is @ 80 right now and that’s with last year’s Q4. I don’t have a crystal ball but based on their earnings growth next year’s P/E at this price should be around 50, maybe lower. I disagree completely about showing profits when your earnings are growing well.

I know you are on the negative side but it helps when you get the numbers in your argument right or like Shopify get the name of the company you want to short correct. 

I really don’t know what you typed out. Good news?

 

[stbugs]

I really don’t know what you typed out. Good news?

Lol. It was more fact related than good news. Until the earnings reports come out it’s conjecture but I just don’t like when facts are thrown out that are wrong. Internet has a way of making stuff reality.

 

[fantasycurse42]

Stop on AMZN. The P/E is @ 80 right now and that’s with last year’s Q4. I don’t have a crystal ball but based on their earnings growth next year’s P/E at this price should be around 50, maybe lower. I disagree completely about showing profits when your earnings are growing well.

I know you are on the negative side but it helps when you get the numbers in your argument right or like Shopify get the name of the company you want to short correct. 

If AMZN never showed a profit, we wouldn’t be able to judge them, could’ve just kept investing in growth. To me, a pretty concrete argument when looking at share price. They easily could’ve flipped that profit into R/D.

You didn’t expect Q4 of 2018 to be higher than Q4 2017? To me, putting that out smells of desperation

 

[fantasycurse42]

I know you are on the negative side 

And yes, this is correct, but can anyone really dispute the debt factor in society? Where is any growth anywhere in the world without massive debt? Japan has reached a point of no turning back, they have more debt than they’ll ever be able to pay back, I’d prefer we don’t get there. I’m sick of kicking the can, let’s deal with it already. 

 

[fantasycurse42]

What prolongs the cycle here?

This is a serious question, answer it without including more debt.

 

[NREC34]

Nothing can prolong the cycle. We are witnessing the start of a global collapse. 

 

[stbugs]

If AMZN never showed a profit, we wouldn’t be able to judge them, could’ve just kept investing in growth. To me, a pretty concrete argument when looking at share price. They easily could’ve flipped that profit into R/D.

You didn’t expect Q4 of 2018 to be higher than Q4 2017? To me, putting that out smells of desperation

Ok, now I know that you don’t follow the stock at all. They do these announcements after every big season, such as Prime Day. Also, of course I expect Q4 2018 earnings to be better. That’s literally what I was inferring that their P/E ration was already 80 compared to the incorrectly mentioned 100+ (25% is a big difference) and that did not include Q4 2018 yet. From the estimates the P/E will be in the 70s after Q4. Last point, I’m fairly certain they are still plowing quite a bit into R&D and showing solid earnings growth.

 

[fantasycurse42]

Ok, now I know that you don’t follow the stock at all. They do these announcements after every big season, such as Prime Day. Also, of course I expect Q4 2018 earnings to be better. That’s literally what I was inferring that their P/E ration was already 80 compared to the incorrectly mentioned 100+ (25% is a big difference) and that did not include Q4 2018 yet. From the estimates the P/E will be in the 70s after Q4. Last point, I’m fairly certain they are still plowing quite a bit into R&D and showing solid earnings growth.

I do follow the stock.

I was incorrectly looking back at Q2 18 - Q3 17, so you are right it isn’t 100, it’s between 83-84. 

Did you read the release or just the headline? If the former, you’ll note they touted over 1 billion Prime shipments for the holiday season of 2018. If you compared it to previous holiday letters, you’ll find they also touted over 1 billion Prime shipments during the holiday season of 2016. 

They also note 10 of millions of signups for Prime trials or subscriptions over the holiday season versus a best of 4 million during one week of 2017 (no specifics given). 

The best selling product? An Echo dot, which Best Buy was giving away or slashing the price on with certain accompanying purchases and was selling for like $19. I have 3 of them, I didn’t pay for any of them. 

I’m well aware of their R/D investments, but you’re ignoring my point, we now have a frame of reference to value them, and they’ll mature into that valuation. Before showing real profits as they have done for the previous 3 quarters, we couldn’t do that. While a P/E comparison of a company like Walmart prob doesn’t make sense, one for a maturing tech company like Google might. That would mean either more incredible growth, or some slowing of share price. 

I love the company, but I highlighted something very important in their Q3 release months ago - the low end of their guidance calls for just 10% YoY ($60.5 Q4 17 vs $66.5 low end of guidance for Q4 18). If you look at the revenue per quarter, you notice this is a trend and their revenue growth is maturing, which could be a problem for a company with a P/E currently in the 80s. 

Look, I’m not bearish on the stock, but I think even with the current fall, there is still a healthy amount of optimism priced in. If they produce $75B of revenue in Q4, I’ll rethink and say some of that optimism is well placed. If they do a dollar under $70B (maybe even under $72.5B, which is the high end of guidance and would be 20% YoY) in revenue in Q4, I think the price could crater. 

 

[stbugs]

I do follow the stock.

I was incorrectly looking back at Q2 18 - Q3 17, so you are right it isn’t 100, it’s between 83-84. 

Did you read the release or just the headline? If the former, you’ll note they touted over 1 billion Prime shipments for the holiday season of 2018. If you compared it to previous holiday letters, you’ll find they also touted over 1 billion Prime shipments during the holiday season of 2016. 

They also note 10 of millions of signups for Prime trials or subscriptions over the holiday season versus a best of 4 million during one week of 2017 (no specifics given). 

The best selling product? An Echo dot, which Best Buy was giving away or slashing the price on with certain accompanying purchases and was selling for like $19. I have 3 of them, I didn’t pay for any of them. 

I’m well aware of their R/D investments, but you’re ignoring my point, we now have a frame of reference to value them, and they’ll mature into that valuation. Before showing real profits as they have done for the previous 3 quarters, we couldn’t do that. While a P/E comparison of a company like Walmart prob doesn’t make sense, one for a maturing tech company like Google might. That would mean either more incredible growth, or some slowing of share price. 

I love the company, but I highlighted something very important in their Q3 release months ago - the low end of their guidance calls for just 10% YoY ($60.5 Q4 17 vs $66.5 low end of guidance for Q4 18). If you look at the revenue per quarter, you notice this is a trend and their revenue growth is maturing, which could be a problem for a company with a P/E currently in the 80s. 

Look, I’m not bearish on the stock, but I think even with the current fall, there is still a healthy amount of optimism priced in. If they produce $75B of revenue in Q4, I’ll rethink and say some of that optimism is well placed. If they do a dollar under $70B (maybe even under $72.5B, which is the high end of guidance and would be 20% YoY) in revenue in Q4, I think the price could crater. 

I read most everything and that quote was in reply to the other guy who read my post wrong and acted like this announcement was a new thing. They do it after every big shopping season. Simple as that. Also, I think their actual best selling product is either the prime memberships or web services. Kind of like how Costco’s main profit driver is the membership fees. I still think the earnings growth will continue to get that P/E ratio down and make the PEG make sense. If they were still not showing a profit with all of the strictly non-retail there would be way bigger of an issue. Oh well. 

 

[fantasycurse42]

I read most everything and that quote was in reply to the other guy who read my post wrong and acted like this announcement was a new thing. They do it after every big shopping season. Simple as that. Also, I think their actual best selling product is either the prime memberships or web services. Kind of like how Costco’s main profit driver is the membership fees. I still think the earnings growth will continue to get that P/E ratio down and make the PEG make sense. If they were still not showing a profit with all of the strictly non-retail there would be way bigger of an issue. Oh well. 

At the end of the day, I still think revenue is going to be the key driver of share price here. If they come in at the low end of guidance (which I cautiously think they’ll beat), regardless of all other metrics, a lot of optimism is going to come out of the price, imo.

 

[Sand]

Two asset classes that did work.  I wonder if there is an ETF for those...

 

[eoMMan]

Two asset classes that did work.  I wonder if there is an ETF for those...

And let us not forget cocoa. Up 20 something percent for the year.

 

[NREC34]

Two asset classes that did work.  I wonder if there is an ETF for those...

Not an etf but a cool idea

 

[Sand]

Not an etf but a cool idea

I'd get fleeced like the sheep that I am in that arena.

And let us not forget cocoa. Up 20 something percent for the year.

Oh, man, how did I not see this coming?  

 

[fantasycurse42]

AAPL just warned on Q1 results, as you'd expect, getting taken to the woodshed. 

I gotta be honest, unless you think the company is in the early stages of death, I'm debating nibbling here. Obviously there is more downside, but buying this one in tranches, especially for an investment looking many years out might be a very smart play. 

 

[culdeus]

down 11 after hours.  Jesus.

Looking at May 2017 valuation at this point.

 

[fantasycurse42]

https://www.macrotrends.net/stocks/charts/AAPL/apple/pe-ratio

I read an article over the summer on some obscure site that I kind of chuckled about, need to find it, but man was it spot on. It basically was screaming sell Apple when the P/E gets over 18 and buy when it is around 10. Some good charts backing that up too.  

It'll be getting close to that soon. 

 

[fantasycurse42]

As I said earlier, unless you feel they might be in the very early stages of death, you have to think a lot of the bad news is almost priced in. 

 

[humpback]

So what specifically is the bull case?

Bump?

I thought maybe the next earnings season coming up in a few weeks could help stabilize things, but if Apple is any indication, oof.....

 

[NREC34]

It’s going to be a bad bloodbath tomorrow. 

Except for select, certain things. 

 

[Bob Sacamano]

Thanks Obama!

 

[Mario Kart]

As I said earlier, unless you feel they might be in the very early stages of death, you have to think a lot of the bad news is almost priced in.

I only have 8 shares, so my investment is not much, however, if I buy more now, my average will go down a lot. If I double my investment, my average will fall to about $170. That'd be about a $20 drop in average for me. My thought is to buy more.

 

[fantasycurse42]

Bump?

I thought maybe the next earnings season coming up in a few weeks could help stabilize things, but if Apple is any indication, oof.....

I asked how do we prolong the expansion without some more gasoline on the debt fire, I got no response.

For Apple though, I’m going to be the contrarian and say they don’t reflect Q4 as much as most would expect, I think this is more of an Apple problem than a macro problem.

They can blame China, emerging markets, or whatever else TC wants to come up with as long as that 9 figure salary (total including options) keeps rolling in, but to me, Apple is a story of saturation and pricing yourself out.

They’re trying to eat from both sides of the table on one product. They want to feed this services ecosystem, but they raised prices to a point that some consumers need a 72 month low APR loan to get through the door. They’d be better off slightly lower for the iPhone and feeding that high margin ecosystem more, but I’m obviously no TC, so I don’t fully understand the end game with crazy prices like they have.

I’m a little thriftier with my funds, so my original thoughts were consumers are dumb and maybe they’ll just keep ponying up $1200 every 2 years, it looks like that was wrong. I bought an iPhone 6 when it first came out, broke it 23.5 months later, used my Apple Care and rode it out until it died this summer. I’ve got an X now, I’ll ride it until next summer, do the same, and then go for another 2 years. That gives me an average of $350 a year for my phone, not great, but not bad either, and I am not a consumer who suffers from sticker shock. 

 

[fantasycurse42]

I only have 8 shares, so my investment is not much, however, if I buy more now, my average will go down a lot. If I double my investment, my average will fall to about $170. That'd be about a $20 drop in average for me. My thought is to buy more.

If you think this cycle is a bump in the road, buy 4 more today and 4 more in like 6 months (or 2 a quarter for the next year).

I really can’t make the judgement, idk. I sold AAPL for like $177 last Jan and haven’t looked back. My fear for being a long term holder here has always been the displacement/disruption of the one product. Technology moves fast, but I have no idea when that’ll actually happen.

 

[humpback]

I asked how do we prolong the expansion without some more gasoline on the debt fire, I got no response.

For Apple though, I’m going to be the contrarian and say they don’t reflect Q4 as much as most would expect, I think this is more of an Apple problem than a macro problem.

They can blame China, emerging markets, or whatever else TC wants to come up with as long as that 9 figure salary (total including options) keeps rolling in, but to me, Apple is a story of saturation and pricing yourself out.

They’re trying to eat from both sides of the table on one product. They want to feed this services ecosystem, but they raised prices to a point that some consumers need a 72 month low APR loan to get through the door. They’d be better off slightly lower for the iPhone and feeding that high margin ecosystem more, but I’m obviously no TC, so I don’t fully understand the end game with crazy prices like they have.

I’m a little thriftier with my funds, so my original thoughts were consumers are dumb and maybe they’ll just keep ponying up $1200 every 2 years, it looks like that was wrong. I bought an iPhone 6 when it first came out, broke it 23.5 months later, used my Apple Care and rode it out until it died this summer. I’ve got an X now, I’ll ride it until next summer, do the same, and then go for another 2 years. That gives me an average of $350 a year for my phone, not great, but not bad either, and I am not a consumer who suffers from sticker shock. 

Sure, it's a combination of both. Even if it's 75% an Apple specific problem and 25% a China problem, that doesn't bode well for multi-national companies going forward. It's plainly obvious that these trade wars are having a negative impact on everyone involved, heck even Trump seems to finally get that. Now it's starting to show up in the economic data- China manufacturing contracting, ISM index with a huge miss today, etc.

It's obviously more nuanced than this, but the macro picture is basically slowing growth, tighter monetary policy, and political turmoil. How can people be so bullish with that backdrop?

 

[fantasycurse42]

Sure, it's a combination of both. Even if it's 75% an Apple specific problem and 25% a China problem, that doesn't bode well for multi-national companies going forward. It's plainly obvious that these trade wars are having a negative impact on everyone involved, heck even Trump seems to finally get that. Now it's starting to show up in the economic data- China manufacturing contracting, ISM index with a huge miss today, etc.

It's obviously more nuanced than this, but the macro picture is basically slowing growth, tighter monetary policy, and political turmoil. How can people be so bullish with that backdrop?

For those unaware, Bernanke/Yellen are going to be doing a panel at an economic forum tomorrow with Powell. 

I think he might finally oblige investors tomorrow with some much more dovish comments. Considering Free Money Janet will be one of the guests, I think the stage might be set for that. 

 

[stbugs]

If you think this cycle is a bump in the road, buy 4 more today and 4 more in like 6 months (or 2 a quarter for the next year).

I really can’t make the judgement, idk. I sold AAPL for like $177 last Jan and haven’t looked back. My fear for being a long term holder here has always been the displacement/disruption of the one product. Technology moves fast, but I have no idea when that’ll actually happen.

I’m not surprised at all. We are a big Apple family but my youngest are still using my old iPhone 6s (plural not the s version), my wife the 7 plus I got her new because of a new job/using phone for work and an 8/8 plus for me and my son because he wanted a new phone and it was BOGO free. I’ll likely get new batteries down the line but the new phones are so expensive and not necessary. I did get an Apple Watch for Christmas and love it and I will likely be getting one for my wife’s birthday but I can’t see us getting new phones any time soon.

It reminds me of the Dell/Gateway stocks. Those went crazy for years because Intel chips and Microsoft/Apple made leaps and bounds every couple years. The difference in computing power was night and day. The came Web Browsers/SaaS/Cloud computing/etc. The new laptops and Office were nice, but 95% of what you did could be done on the laptop you had. Corporations didn’t need wholesale upgrades, just upgrade when a laptop was broken or it actually got way too old.

iPhones are at that point as well. Maybe something cool can come out but they pretty much do what you need and my bank app or other apps aren’t so bloated that I can’t use an iPhone 6 still.

Apple knew about this in their Q4 report. Remember other tech stocks giving a bit more honest guidance? Apple took our the per unit numbers and only a month later are revising guidance? They knew and just held out more but probably didn’t realize the market decline and that the news broken up might be worse.

This is the interesting part of down markets. It drives everything down because Apple is so big, but it really is an Apple issue and their big suppliers.

 

[culdeus]

I’m not surprised at all. We are a big Apple family but my youngest are still using my old iPhone 6s (plural not the s version), my wife the 7 plus I got her new because of a new job/using phone for work and an 8/8 plus for me and my son because he wanted a new phone and it was BOGO free. I’ll likely get new batteries down the line but the new phones are so expensive and not necessary. I did get an Apple Watch for Christmas and love it and I will likely be getting one for my wife’s birthday but I can’t see us getting new phones any time soon.

It reminds me of the Dell/Gateway stocks. Those went crazy for years because Intel chips and Microsoft/Apple made leaps and bounds every couple years. The difference in computing power was night and day. The came Web Browsers/SaaS/Cloud computing/etc. The new laptops and Office were nice, but 95% of what you did could be done on the laptop you had. Corporations didn’t need wholesale upgrades, just upgrade when a laptop was broken or it actually got way too old.

iPhones are at that point as well. Maybe something cool can come out but they pretty much do what you need and my bank app or other apps aren’t so bloated that I can’t use an iPhone 6 still.

Apple knew about this in their Q4 report. Remember other tech stocks giving a bit more honest guidance? Apple took our the per unit numbers and only a month later are revising guidance? They knew and just held out more but probably didn’t realize the market decline and that the news broken up might be worse.

This is the interesting part of down markets. It drives everything down because Apple is so big, but it really is an Apple issue and their big suppliers.

This has been true really since their last breakthrough phone, the 4s.  There hasn't been a defined reason to stay up to date with the latest releases for reasons outside of form factor since the 4s.  You can buy a 6/6s on craigslist for 200 bucks and can get the battery changed out with OEM for 45 and those will run everything you need.   

That's not the issue. The issue is the carriers are no longer subsidizing the phone contracts.  That is what is murdering them.  People used to turn in their phones like it was their job, not anymore. Even programs like ATT Next are on life support.  

Apple needs to start a leasing program like they are renting a luxury car.  Getting more financing fees would help.  Alot.

 

[fantasycurse42]

https://www.marketwatch.com/story/fed-faces-critical-time-with-interest-rates-and-should-move-to-sidelines-kaplan-says-2019-01-03

They're already blinking. 

We've reached the cycle peak at 2.5%, amazing. 

The only real response to slowing growth is clearly more debt and more loans. What could go wrong? 

 

[fantasycurse42]

https://www.marketwatch.com/story/fed-faces-critical-time-with-interest-rates-and-should-move-to-sidelines-kaplan-says-2019-01-03

They're already blinking. 

We've reached the cycle peak at 2.5%, amazing. 

The only real response to slowing growth is clearly more debt and more loans. What could go wrong? 

PPT to save the day again

 

[humpback]

For those unaware, Bernanke/Yellen are going to be doing a panel at an economic forum tomorrow with Powell. 

I think he might finally oblige investors tomorrow with some much more dovish comments. Considering Free Money Janet will be one of the guests, I think the stage might be set for that. 

That's the other bull argument that I'm not buying. They are only going to get much more dovish if the economy isn't doing as well as hoped, how is that a good thing for the market? Today's terrible economic report should mean more dovishness from the Fed, but the market certainly isn't liking it...

Plus, if things get really bad, they have little to no ammo to counter it.

 

[fantasycurse42]

That's the other bull argument that I'm not buying. They are only going to get much more dovish if the economy isn't doing as well as hoped, how is that a good thing for the market? Today's terrible economic report should mean more dovishness from the Fed, but the market certainly isn't liking it...

Plus, if things get really bad, they have little to no ammo to counter it.

They'll find a way to inject more liquidity into the system, they'll drop rates (bc 2.5% is clearly restrictive , and much lower in other parts of the world   ), and the central banks around the world will lead us down the path until they topple it all. 

Just to add, the Nasdaq is up over 100 points since Kaplan's comments, the DJIA over 250. 

 

[fantasycurse42]

Well, this isn't good. 

https://www.cnbc.com/2019/01/03/us-issues-new-warning-over-china-travel-urging-increased-caution-.html

Thought those talks were going splendid 

 

[Warrior]

This thread is getting to be more like Fox News than a stock thread.

 

[stbugs]

This has been true really since their last breakthrough phone, the 4s.  There hasn't been a defined reason to stay up to date with the latest releases for reasons outside of form factor since the 4s.  You can buy a 6/6s on craigslist for 200 bucks and can get the battery changed out with OEM for 45 and those will run everything you need.   

That's not the issue. The issue is the carriers are no longer subsidizing the phone contracts.  That is what is murdering them.  People used to turn in their phones like it was their job, not anymore. Even programs like ATT Next are on life support.  

Apple needs to start a leasing program like they are renting a luxury car.  Getting more financing fees would help.  Alot.

It’s a little of both. The subsidies have been gone for years. The jump from the 4/5 iPhones to the 6 iPhones was their last huge jump IMHO. The Plus version was a huge change, but people with the 6 or 7 or 8 were more about what their upgrade cycle was. There’s very little difference. I like my 8 plus better than the 6 plus that I gave my middle son, but the only reason I upgraded was because I basically paid $350 for my son’s 8 and $450 for my 8 plus since we got his free. I just got the base 64GB for both. My wife’s phone is ready for an upgrade according to AT&T but I’ll just get a new battery and let her destroy it. I might upgrade my two youngest at some point but probably just buy a used 8/8 plus. Only new revenue I can see contributing any time soon (I’ve contributed a ton so far, although I was one of those hell yes for $199 I’ll get a new one and hand down the old one) is the Apple Watch for my wife. I love mine but I can already see the limitations where I won’t be buying the next one unless this one dies. 

 

[fantasycurse42]

Can anyone figure out when Kaplan began soothing the markets today?

This thread is getting to be more like Fox News than a stock thread.

We have a good dynamic of wildly different opinions in this thread, which is important for seeing the complete spectrum when making investment decisions. We avoid politics unless it has a direct correlation to the markets, perhaps you are unaware the Fed is independent and not political? When posters who never come into this thread post, they usually offer very little, example in the bold or that Brady fellow who I put on ignore after about 4 posts.

 

[humpback]

They'll find a way to inject more liquidity into the system, they'll drop rates (bc 2.5% is clearly restrictive , and much lower in other parts of the world   ), and the central banks around the world will lead us down the path until they topple it all. 

Just to add, the Nasdaq is up over 100 points since Kaplan's comments, the DJIA over 250. 

To clarify, I don't doubt that they will become more dovish and try to do things to help if it comes to that, I just don't see how it's going to be enough to sustain a major market rally. Again, they would only do that if the economy got worse, so net/net it shouldn't be a big positive. Best case would be if the economy was so good that it could still grow at 3%+ while dealing with quantitative tightening, but clearly we aren't strong enough to handle that.

 

[culdeus]

I just bought 20k worth of a 1 year CD ladder in my 401k.  I'm either getting old, scared, or both.

 

[fantasycurse42]

It’s a little of both. The subsidies have been gone for years. The jump from the 4/5 iPhones to the 6 iPhones was their last huge jump IMHO. The Plus version was a huge change, but people with the 6 or 7 or 8 were more about what their upgrade cycle was. There’s very little difference. I like my 8 plus better than the 6 plus that I gave my middle son, but the only reason I upgraded was because I basically paid $350 for my son’s 8 and $450 for my 8 plus since we got his free. I just got the base 64GB for both. My wife’s phone is ready for an upgrade according to AT&T but I’ll just get a new battery and let her destroy it. I might upgrade my two youngest at some point but probably just buy a used 8/8 plus. Only new revenue I can see contributing any time soon (I’ve contributed a ton so far, although I was one of those hell yes for $199 I’ll get a new one and hand down the old one) is the Apple Watch for my wife. I love mine but I can already see the limitations where I won’t be buying the next one unless this one dies. 

I agree more with Culdeus on this one. AT&T stopped subsidizing at the start of 2016, it's been 3 full years, it is now full force. Kinda think his take on leasing makes sense too. 

I used to get a new phone every 2 years like clockwork, $300, you got it! I've now stretched my cycle to 4 years. 

 

[fantasycurse42]

To clarify, I don't doubt that they will become more dovish and try to do things to help if it comes to that, I just don't see how it's going to be enough to sustain a major market rally. Again, they would only do that if the economy got worse, so net/net it shouldn't be a big positive. Best case would be if the economy was so good that it could still grow at 3%+ while dealing with quantitative tightening, but clearly we aren't strong enough to handle that.

Of course not, we can only do it on cheap money and liquidity injections, it's a mirage. This is why I get so angry - we'll just keep kicking the can until it explodes. 

I agree with your sentiment, and my hopes are Powell is the guy to pull some of the hot air out of the system, but I'm not so sure he'll be able to keep withstanding the pressure.

They put an extra $3-$4T into the system and the market has done nothing but defy gravity, they pull $250B out of the system and world is coming to an end, it's ridiculous. 

 

[Don't Noonan]

My bull case is that earnings estimates have been sharply dropped which should make it easier to beat on earnings.  Market seems to be pricing in a recession in 2019, I don't see it, I see GDP growth slowing to 2-2.5%.  If economic data comes in supporting no recession market should rally.  Trade war can end at any time, which would obviously be a big catalyst.

Things that worry me include the Fed balance sheet and the continued unwinding of the QEs.  If the Fed does it fact raise 2-3 times in 2019 along with the unwinding of the balance sheet it is possible we could see a recession in late 2019/early 2020.  Also, not sure the market is pricing in the good possibility Trump loses in 2020 and tax law is reversed.  This would be a big blow to the market.

 

[Iceman03]

As a relative noob is this how bear markets go? Every time there is a rally everyone forgets we’re in a bear market then goes crazy the next red day?

 

[humpback]

Of course not, we can only do it on cheap money and liquidity injections, it's a mirage. This is why I get so angry - we'll just keep kicking the can until it explodes. 

I agree with your sentiment, and my hopes are Powell is the guy to pull some of the hot air out of the system, but I'm not so sure he'll be able to keep withstanding the pressure.

They put an extra $3-$4T into the system and the market has done nothing but defy gravity, they pull $250B out of the system and world is coming to an end, it's ridiculous. 

We seem to agree for the most part, although I'm less optimist that there is anything that the Fed can say or do that will have a lasting positive impact on the markets (go back to our conversation during the last meeting). Outside of saying "the economy is red hot and we're going to make it hotter", which isn't going to happen, I don't see any scenario that is much better than net neutral (and some are certainly negatives).

Case in point, sure we're off the lows after Kaplan's comments, but we're still down quite a bit- less bad is still bad.

 

[culdeus]

As a relative noob is this how bear markets go? Every time there is a rally everyone forgets we’re in a bear market then goes crazy the next red day?

In a bear market any bad news is the end of the world, in a bull market bad news is just noise. hth

 

[fantasycurse42]

My bull case is that earnings estimates have been sharply dropped which should make it easier to beat on earnings.  Market seems to be pricing in a recession in 2019, I don't see it, I see GDP growth slowing to 2-2.5%.  If economic data comes in supporting no recession market should rally.  Trade war can end at any time, which would obviously be a big catalyst.

Things that worry me include the Fed balance sheet and the continued unwinding of the QEs.  If the Fed does it fact raise 2-3 times in 2019 along with the unwinding of the balance sheet it is possible we could see a recession in late 2019/early 2020.  Also, not sure the market is pricing in the good possibility Trump loses in 2020 and tax law is reversed.  This would be a big blow to the market.

Let's say you're right, and GDP stays around 2%-2.5% (which I believe might be a rosy outlook, but I'll concede for this discussion), and rates stay in a similar range. 

Current P/E levels stand still well above historical averages. Here they are on the WSJ . I'll summarize:

DJIA: 19.4

Nasdaq 100: 20.54

S&P 500: 19.6

Russell 2000: 39.85

I've heard the argument that they've contracted so much! It's bull####, it isn't where you're coming from, it is where you going. They went from ridiculously high to well above average. If we were at the beginning of a cycle, I could understand the argument, but towards the end, not so much. Don't even get me started on CAPE, still very very high and based on using it to chart returns, you're still looking at an abysmal entry point for a LT investment. 

So where does that leave us? Lower earnings estimates? That isn't good, no? We'll limp over a low bar, earning will grow 5-7% (if things don't fall apart, and everything stays how it has been). How much room does that leave these indexes to expand? Or do you expect the P/E to expand again? Where do you see the indexes going? 

 

[Sand]

Apple needs to start a leasing program like they are renting a luxury car.  Getting more financing fees would help.  Alot.

I thought Tim Cook said they were rolling something like this out during his interview yesterday.

 

[Sand]

Well, this isn't good. 

https://www.cnbc.com/2019/01/03/us-issues-new-warning-over-china-travel-urging-increased-caution-.html

Thought those talks were going splendid 

This has been a long standing problem.  Probably part of the negotiation dance, but the root issue doesn't come out of thin air.

 

[skycriesmary]

I just bought 20k worth of a 1 year CD ladder in my 401k.  I'm either getting old, scared, or both.

I might be doing the same for my Roth. Consider me 'both'.