After a long time, seeing an investment deal - even with WFH this is attractive!

Bay Area
21

Printing money will help as a short term fix.

The real long term solution is productive people making goods and services. This is blocked by prolonged coronavirus.

During 2007-2008 the unemployment was around 12%, took 3-4 years to recover.

Presently, it is 13.3% unemployment, it takes similar situation. But recovery starts after some medicine found. Until then prolonged impact. It will take easily 4-5 years to recover for the economy.

The current one is bigger than 2008 and definitely follow the same trend.

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22

The thing I don’t understand is how the market can stay disconnected from that unemployment number for so long to follow the Obama trajectory. Seems like there needs to be a major dip somewhere along the line for that to be possible…

23

Obama’s first term blew Donnie out of the water. What’s so bad about Obama first term?

Obama did it without trillions in deficit too.

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24

S&P 500 was almost cut in half around the time Obama took office. Right now the S&P is about 6% off its all-time high. Maybe I’m naive but something doesn’t add up for me.

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25
  • 2016 - $585 billion budget deficit
  • 2015 - $439 billion budget deficit
  • 2014 - $514 billion budget deficit
  • 2013 - $719 billion budget deficit
  • 2012 - $1.1 trillion budget deficit
  • 2011 - $1.3 trillion budget deficit
  • 2010 - $1.3 trillion budget deficit
  • 2009 - $1.4 trillion budget deficit

His first four years were all over $1T deficit.

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26

Donnie is not done yet. Still has until Jan 2021 to mess things up. If you believe in reversion of the mean his return will fall quite a bit to be near Carter’s.

27

Ever heard of the Great Recession?

Trump did it before Covid was even on the radar and by now we lost count.

29

You literally said he did it without trillions in deficit his first term. Every single year was over $1T in deficit.

30

Wtf. I took your advice to buy one per year and sold a bunch of AAPLs. Never listen to any bloggers esp @manch :exploding_head:

Tell us to buy but you quietly sold :face_with_symbols_over_mouth:

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31

Huh? Since Mar 23 is a new multi decade bull market. The bear market is fairly short, mid Feb to end Mar.

Market may retest Mar low but won’t break below. So long Mar low is not broken, Mar low is the start of multi decade bull run.

32

Obama’s first term was high deficit period started (but that is already started now), extra-ordinary unemployment, steep loss in real estate (it was RE downturn). It took four years (2008-2012) to bring up the USA. Almost 250+ small/medium banks are closed/bankrupt first 4 year term.

Exactingly similar situation, higher than 2008 unemployment, steep loss in services, entertainment, consumer sector (not RE), lot of bankruptcy will continue, and it will take unlimited funding, minimum 4 years to bring up the economy. This is the only focus of next government.

This is obama+ repeat term (Either Biden or Trump), they have to solve one problem to another until their first term.

Economist John Maynard Keynes: “The market can remain irrational longer than you can remain solvent.”

Stock Market in the long run (2 to 5 years) matches the economy, but in short run potentially stocks will be out of sync with economy. Both upside and downside, they go extreme ends like over bought and over sold position. This is commonly known as Market inefficiency and will always be there in any market and any country.

I got this message from “Margin of Safety” by Seth Klarmann. Most of the well known funds/investors use this concept to buy individual stocks/etfs or investments. Still market inefficiency theory works and people (Hedge funds/Billionaires) - waiting on sideline for opportunity - makes money.

If anyone experienced wants to know: For next 30 days, Stop reading news paper “Why market is down or why market is up”, but watch the market, you will clearly identify when the market goes up and when it comes down…like the way hanera does with EW.

Market behaves cyclically,with demand and supply, but news paper assigns some interesting news as reason which may or may not be right.

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33

Obama was culmination (and epitome) of the beliefs that started in 1960s (or even earlier). He was otherwise not a presidential material. He appeared like someone trying to solve the problems of 2010 by the thinking of 1950s. That is why Donnie was able to reverse pretty much everything Obama did in less than one term. Donnie on other hand came to power because there was enough voting mass who did not want more of the past 50 years.

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34

Had Obama sit quietly and let the market work its way through, the economic crisis of 2008 could not have last longer than a year or so. The last thing you want to do when economy is in distress is to stand in its way while the economy tries to resolve itself.

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35

I am not telling Obama was bad, but during his first term, country struggled. Same is the case for next president+congress, but country people (we…) will face similar struggle, economy issue, jobless, business revenue…etc.

The current stock run will have out of sync for short term (Many bullish people here do not like this last statement ! )

36

That seems to be a possibility. Key is when medicine is found.

As you said earlier, this has nothing to do with who is in power(except the reversal of the tax cut thing by Biden)

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37

I was thinking about selling RE. Now it looks like exburbs price may go up a lot especially in Tahoe.
These are uncertain times. Nobody except Mr Covid19 knows what will happen. Stocks could take a big dump anyday. At least RE is more stable. And safer if not leveraged.

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38

I am seeing two stream of thoughts on this forum.

1st: Coronavirus and economic disruption it has caused is real and here to stay unless some kind of vaccine is found.

2nd: Coronavirus is an innocuous virus no more dangerous than common flue. Most people have immune system good enough to not need a vaccine or medication to fight it. So, economic slowdown and the future course it takes will be least affected by coronoavirus itself.

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39

Tahoe might have a bull run for quite awhile as the businesses go WFH/ remote. No idea how long. Austin is also benefiting :slight_smile: Anyhoo my Austin rentals are in suburbs, none in the city.

I am not good at predicting, so I always go for diversification. I have a target Stock: RE allocation, so far still need to buy more RE :slight_smile: because AAPL keeps climbing :money_mouth_face:

40

I just sold a boat dock for 80 grand. I was offered $45k a couple of years ago. There is plenty on cash sloshing around.

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41

Reversal of tax cut would be tip of the iceberg if he got the house and senate along with it. We’d see the new deal 2.0 with social programs that would rack up even more debt.

I would actually support a fair and honest discussion about those topics. The problem is it’s sold as we can tax the 1% and get all the benefits of Sweden. It completely ignores that our median income family has an effective income tax rate of 2-5% vs 40% in Sweden. Americans overwhelmingly think their their bracket is their effective tax rate and don’t realize how credits and deductions significantly lower it. Then there’s VAT which is double been the highest state sales tax. People need to be presented with factual numbers about what it would mean to their take home pay.

I think our tax forms need re-done. There’s should be a results part that shows:

Total income
Tax liability and percent of income without any deductions or credits
Tax liability and percent of income after deductions and credits
Delta between the two tax liability numbers which is taxes avoided

That should be single enough that just about anyone can understand it.

I’m pretty sure if people saw what they pay now vs what they’d pay in Sweden’s system, then they’d realize they wouldn’t be able to afford their mortgage/rent and car payments. Maybe people are just too irrational to process it.

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