Investing General Discussion

Blazin

Blazin

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OU Ariakas said:
I have not looked at any of my portfolio's since the beginning of this year. I am passive only because I do not have the time or knowledge to do what you all in this thread do. I know that if I look at it then I am going to start really caring about the markets moving until they go back positive and it is just not good for my psyche.

I comfort myself with the knowledge that I won't even be able to access that money for 20+ more years.

LET 'ER RIP.
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That's a good attitude to have. Every big decline there will be emotions that tell people it's going to get much worse and it becomes hard to see getting to the other side. No matter how many times this repeats the human response is the same, each time the drivers of the decline seem more intractable, the future more dire.

"It's different this time!"

I think retail investors have become smarter, some of them anyway. They have learned the right thing to do is just stop looking at it rather than panic selling then walking away which can be far more disastrous in the long run.
 
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Sanrith Descartes

Sanrith Descartes

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The ostrich investing strategy works well. Invest and then put your head in the sand and dont look until retirement.
 
OU Ariakas

OU Ariakas

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PREFACE: I am mainly ignorant of the inner workings of the stock market and how it allows companies to be valued and then that value to translate to shares that are used to vote for "public" actions at board meetings even though they are dominated by insiders.

Through many years of working in large (re: Fortune 100) companies I have come to really appreciate the way that giant corporations with more money and power than small countries wield their power over the marketplace and distort the main balancing effects of capitalism. I have often wondered if there is some way to set up a corporation so that it is actually beholden to the people that work there even when they become multi-billion dollar enterprises.

Is there some way to offer shares in a company to employees that grant voting rights that would gain value like stocks and grant them a say in the corporations direction but that only last as long as that person is with the company? There could even be a mechanism where they could "loan" the share to the stock market so that they can make real some sort of interest off their shares but it would not transfer the voting rights to whoever was leasing the shares. That way you could have institutional investors make their money off the stock but not have those same investors working against the company since the share was not a vote, just an investment mechanism.

I really think that there is a way to go back to the "company man" model of working at the same place for your whole career that would be financially beneficial to the company and the employees without having to go into pensions and other scams to get workers to stay.

Am I just being pants on head retarded?
 
Jysin

Jysin

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TWTR just spiked and halted. TSLA dumping.

12:05 [TWTR] CEO Musk reportedly proposes in letter to Twitter to proceed with deal at $54.20 - press
 
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C

Captain Suave

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OU Ariakas said:
I have not looked at any of my portfolio's since the beginning of this year. I am passive only because I do not have the time or knowledge to do what you all in this thread do. I know that if I look at it then I am going to start really caring about the markets moving until they go back positive and it is just not good for my psyche.

I comfort myself with the knowledge that I won't even be able to access that money for 20+ more years.

LET 'ER RIP.
Click to expand...
I've mentioned this a few times, but one of my business school professors was a behavioral economist who studied investment psychology. He found that for the vast majority of people, the optimal approach, both for perceived satisfaction and for long-term returns, was to interact with your portfolio about every six months to make sure diversification was maintained. Returns did not increase on average for shorter interaction periods (though the variance went way up; if you're Blazin it can obviously work) and the least satisfaction was reported by people who checked their portfolios daily.
 
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Blazin

Blazin

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OU Ariakas said:
PREFACE: I am mainly ignorant of the inner workings of the stock market and how it allows companies to be valued and then that value to translate to shares that are used to vote for "public" actions at board meetings even though they are dominated by insiders.

Through many years of working in large (re: Fortune 100) companies I have come to really appreciate the way that giant corporations with more money and power than small countries wield their power over the marketplace and distort the main balancing effects of capitalism. I have often wondered if there is some way to set up a corporation so that it is actually beholden to the people that work there even when they become multi-billion dollar enterprises.

Is there some way to offer shares in a company to employees that grant voting rights that would gain value like stocks and grant them a say in the corporations direction but that only last as long as that person is with the company? There could even be a mechanism where they could "loan" the share to the stock market so that they can make real some sort of interest off their shares but it would not transfer the voting rights to whoever was leasing the shares. That way you could have institutional investors make their money off the stock but not have those same investors working against the company since the share was not a vote, just an investment mechanism.

I really think that there is a way to go back to the "company man" model of working at the same place for your whole career that would be financially beneficial to the company and the employees without having to go into pensions and other scams to get workers to stay.

Am I just being pants on head retarded?
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Employee owned business being mandated in some fashion to be a public corporation is an idea. You can game theory out some positives. THe system allows for this but we don't end up with it very often because many humans prefer now over later. Employees are excited to receive their stock options when a company they helped build goes public, and what do they do? THey sell their position so they can buy a big house and a fancy car. If employers polled employees and said will you take 10% less pay and instead receive capital ownership, you'd be surprised how many would say give me the cash instead.

Our capital system and our markets do create trillions in wealth and it's not hard to come up with "better" or "fairer" systems but they usually fail to pass the human in practice test. The greed motive is one of the most reliable human traits for us to build a complex system on because it's just so universally dependable to act in a consistent predictable manner.

There are some killer ideas that would work for savers who forego short term gain for long term reward, but trying to shoehorn that trait into people who are driven to do the opposite results in a lot of unintended consequences.
 
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Burns

Burns

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Sanrith Descartes said:
I am at the airport this morning. Any actual news driving markets today or is it just bottom callers dip buying?
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What I am reading is this is still partly due to the BOE choosing inflation over depreciation, and the Bank of Australia only increasing 25 points. So, "the markets" think the FED is going to blink and stop tightening or do something like a 25 point increase instead of the 75+ that the market has been pricing over the last week+.
 
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Sanrith Descartes

Sanrith Descartes

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OU Ariakas said:
PREFACE: I am mainly ignorant of the inner workings of the stock market and how it allows companies to be valued and then that value to translate to shares that are used to vote for "public" actions at board meetings even though they are dominated by insiders.

Through many years of working in large (re: Fortune 100) companies I have come to really appreciate the way that giant corporations with more money and power than small countries wield their power over the marketplace and distort the main balancing effects of capitalism. I have often wondered if there is some way to set up a corporation so that it is actually beholden to the people that work there even when they become multi-billion dollar enterprises.

Is there some way to offer shares in a company to employees that grant voting rights that would gain value like stocks and grant them a say in the corporations direction but that only last as long as that person is with the company? There could even be a mechanism where they could "loan" the share to the stock market so that they can make real some sort of interest off their shares but it would not transfer the voting rights to whoever was leasing the shares. That way you could have institutional investors make their money off the stock but not have those same investors working against the company since the share was not a vote, just an investment mechanism.

I really think that there is a way to go back to the "company man" model of working at the same place for your whole career that would be financially beneficial to the company and the employees without having to go into pensions and other scams to get workers to stay.

Am I just being pants on head retarded?
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Its actually a thing. Though in nearly all versions I have seen it is a union company. The union employees take an equity stake in the company. We actually had a merger fall through when the prospective merger target owner decided to sell a big chunk to his employees.
 
OU Ariakas

OU Ariakas

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Sanrith Descartes said:
Its actually a thing. Though in nearly all versions I have seen it is a union company. The union employees take an equity stake in the company. We actually had a merger fall through when the prospective merger target owner decided to sell a big chunk to his employees.
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I hate the term union because of its negative connotation with Public Unions and their ability to strike for anything since the people paying them are paying them with unlimited government coffers.

On the other hand, think of how different the Twinkie bakery union vs. company fight would have gone if the fucking bakers had a stake in the company that would have been affected if they went on strike and forced the company to declare bankruptcy.
 
Sanrith Descartes

Sanrith Descartes

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OU Ariakas said:
I hate the term union because of its negative connotation with Public Unions and their ability to strike for anything since the people paying them are paying them with unlimited government coffers.

On the other hand, think of how different the Twinkie bakery union vs. company fight would have gone if the fucking bakers had a stake in the company that would have been affected if they went on strike and forced the company to declare bankruptcy.
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Its vastly differnet depending on the state and union. In cloaed shop states like NY, pretty much everyone who works is in some type of union.
 
Gravel

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Captain Suave said:
I've mentioned this a few times, but one of my business school professors was a behavioral economist who studied investment psychology. He found that for the vast majority of people, the optimal approach, both for perceived satisfaction and for long-term returns, was to interact with your portfolio about every six months to make sure diversification was maintained. Returns did not increase on average for shorter interaction periods (though the variance went way up; if you're Blazin it can obviously work) and the least satisfaction was reported by people who checked their portfolios daily.
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Mine was when I saw the thing from Fidelity that said their best performing investors were dead. Can't remember if it ended up being true or not, but it got me thinking about it.
 
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Haus

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OK, here's my "I am a big enough man to admit when I don't know something seemingly basic" question of the day.

When a firm/rating agency/bank/whatever initiates coverage on a stock, they assign what they rate it at (Buy, hold, sell, etc..) and a "target price". Is that Target price for the current CY, the company in questions FY, some fixed time from the prediction/coverage (like it will be at $XXX.XX in one year)?
 
Blazin

Blazin

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Haus said:
OK, here's my "I am a big enough man to admit when I don't know something seemingly basic" question of the day.

When a firm/rating agency/bank/whatever initiates coverage on a stock, they assign what they rate it at (Buy, hold, sell, etc..) and a "target price". Is that Target price for the current CY, the company in questions FY, some fixed time from the prediction/coverage (like it will be at $XXX.XX in one year)?
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It is always based on current data, it’s not a future prediction per se , it is an analysis of current worth in the opinion of the analyst.

You could assume 12 months simply because a price target is always forward looking . The analyst is stating they believe the market will move towards their price target if their performance assumptions are correct and their assumption about what premium the market will pay for that performance is correct.

they will normally get both factors wrong to some degree. In what way are you looking to use this data ?
 
Haus

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Blazin said:
It is always based on current data, it’s not a future prediction per se , it is an analysis of current worth in the opinion of the analyst.

You could assume 12 months simply because a price target is always forward looking . The analyst is stating they believe the market will move towards their price target if their performance assumptions are correct and their assumption about what premium the market will pay for that performance is correct.

they will normally get both factors wrong to some degree. In what way are you looking to use this data ?
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Just curious. I saw a new bank initiated coverage on my company with a rather optimistic price target (right at 150% of current stock price) , and I've always wondered what time frame they really think the stock will take to reach said target.
 
Blazin

Blazin

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Haus said:
Just curious. I saw a new bank initiated coverage on my company with a rather optimistic price target (right at 150% of current stock price) , and I've always wondered what time frame they really think the stock will take to reach said target.
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Well the analysis often looks out five years. But that doesn't mean the Price target is a five year forecast if that makes sense. They are modeling cash flows/earnings/etc. out for years then putting a multiple on that performance. A stock price is always forward looking, so the price today reflects the markets expectations for the future, just like the price target. So in this case they must be looking at your companies trajectory and making a guess at what the market would be willing to be pay for that performance. The fact that it's well above current price means they are projecting better future performance than the market is currently pricing in. If they are right as those guesses turn into reality the price will move in accordance.
 
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Jysin

Jysin

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Sanrith Descartes said:
You literally cant make this shit up...

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More transcript:

- Does not see a hump shape in rates; I see us raising rates and holding them there until we get inflation close to 2%
- Sees more rate hikes as necessary; Does not see rate cut in 2023
- Expects inflation to end 2023 closer to 3% than 2%; We have to be prepared for inflation to be more persistent than we expect
- Still seeing about 50% of inflation coming from demand
- We don't just raise rates until something breaks; We are constantly calibrating risk
- If market dislocation comes about, we will be prepared to address it
- Countries do not do coordinated monetary policy with one another; Their mandates are for the domestic economy
 
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