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Sanrith Descartes

Sanrith Descartes

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Gravel said:
Yeah, thinking I'll move over to an S&P index instead of total market. It does the same thing (self cleansing), but eliminates all the small caps that don't do shit anyway.

Initiated the transfer just now, although I thought I could do the traditional and Roth same day, but looks like I can only have one pending action.

So now I've got a large sum that should get sold off tomorrow, and then sit in limbo for 10-14 days.
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I love the idea of the total market (I used ITOT). Sadly though it just perennially underperforms the SPY. Like in nearly every time frame I examined. I ended up kicking it the curb.
 
Gravel

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Sanrith Descartes said:
I love the idea of the total market (I used ITOT). Sadly though it just perennially underperforms the SPY. Like in nearly every time frame I examined. I ended up kicking it the curb.
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Huh, that's interesting. I figured in some years mid and small caps would do better and then the total market would win out, but I guess since the index also carries the large caps, you're not only getting the winners. Which would mean in the years where large caps are the winners, it's significantly higher than the small to mids, and so total market just never is the better option.

Which is what I've seen the last decade or so. The ones at the top are carrying the weight of it, and as they go, so does the rest of the market. I'm not ballsy enough to just go QQQ, but I think SPY might be sufficient.
 
Sanrith Descartes

Sanrith Descartes

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Gravel said:
Huh, that's interesting. I figured in some years mid and small caps would do better and then the total market would win out, but I guess since the index also carries the large caps, you're not only getting the winners. Which would mean in the years where large caps are the winners, it's significantly higher than the small to mids, and so total market just never is the better option.

Which is what I've seen the last decade or so. The ones at the top are carrying the weight of it, and as they go, so does the rest of the market. I'm not ballsy enough to just go QQQ, but I think SPY might be sufficient.
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Total market isnt a dog, nowhere near. It just barely underperforms, but its an underperformance if you are min/maxxing. !0-year chart.

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Jysin said:
Fed upgraded growth projections for 2025 and 2026, yet INCREASE projection of 2025 RATE CUTS.

Make it make sense!!
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I believe back in the ancient times we call this... Stagflation!

I don't normally completely love these guys, but this was a decent thread of analysis.
 
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Lightning Lord Rule

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Forgive my ignorance, but I thought I'd ask the thread before trying to look up this question.

What exactly defines a 'weak dollar'? What are they measuring it against? Other currencies? Gold and Silver? Some aggregate of some other commodities? Comparative inflation rates? Something else?


Thanks boyos.
 
Cad

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Lightning Lord Rule said:
Forgive my ignorance, but I thought I'd ask the thread before trying to look up this question.

What exactly defines a 'weak dollar'? What are they measuring it against? Other currencies? Gold and Silver? Some aggregate of some other commodities? Comparative inflation rates? Something else?


Thanks boyos.
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The US Dollar Index (USDX) measures the value of the US dollar against a basket of six major world currencies. These include the euro (EUR), Japanese yen (JPY), British pound sterling (GBP), Canadian dollar (CAD), Swedish krona (SEK), and Swiss franc (CHF). The euro holds the largest weight in the index.
 
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Sanrith Descartes

Sanrith Descartes

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Cad said:
The US Dollar Index (USDX) measures the value of the US dollar against a basket of six major world currencies. These include the euro (EUR), Japanese yen (JPY), British pound sterling (GBP), Canadian dollar (CAD), Swedish krona (SEK), and Swiss franc (CHF). The euro holds the largest weight in the index.
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Thank you.

So my next question is, assuming that's the case, isn't it possible there could be something on the other end causing those currencies to increase relative the dollar besides the dollar itself getting weaker? Such as all of those economies doing poorly and that driving up inflation in those countries?

I may have some of those premises wrong in that hypothetical, but I think you all can see what I'm trying to get to. Specifically, is this a good metric to look at, and could there be something else causing this to happen besides the usual cries of 'end the fed!!!11" and other things you see on social media and such?
 
Kirun

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Yeah, it's not always as simple as "the dollar's weak, so everything else must be strong." Exchange rates move on a mix of things. Interest rate policy, capital flows, trade balances, investor sentiment, etc. That's why you can't just look at the dollar dropping and assume it's all about U.S. weakness. Sometimes it's just the market reacting to what other central banks are doing or where money thinks it'll earn the best return.
 
Sanrith Descartes

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Lightning Lord Rule said:
Thank you.

So my next question is, assuming that's the case, isn't it possible there could be something on the other end causing those currencies to increase relative the dollar besides the dollar itself getting weaker? Such as all of those economies doing poorly and that driving up inflation in those countries?

I may have some of those premises wrong in that hypothetical, but I think you all can see what I'm trying to get to. Specifically, is this a good metric to look at, and could there be something else causing this to happen besides the usual cries of 'end the fed!!!11" and other things you see on social media and such?
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To be honest, FX is a really deep rabbit hole to go down. So its not just the people buying Euros selling Dollars stuff, though that's the easily visible part. You then have to look at sovereign debt. If Zimbabwe borrows money, is it denominated in Dollars, Euros or domestic Zimbabwe bucks. If its denominated in Dollars then every debt payment has to be denominated in Dollars. If they don't have enough Dollars, they gotta acquire them to pay the debt service. And if its local currency denominated, they are paying insane interest on the debt service to accommodate the lender's risk because its local currency denominated. So every country that has dollar denominated outstanding debt is happy right now because it is easing their debt service.

How big a deal is this?

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Full disclosure: Its been a long, long time since I studied international monetary economy. So take the above with a grain of salt.
 
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Lightning Lord Rule

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Kirun said:
Yeah, it's not always as simple as "the dollar's weak, so everything else must be strong." Exchange rates move on a mix of things. Interest rate policy, capital flows, trade balances, investor sentiment, etc. That's why you can't just look at the dollar dropping and assume it's all about U.S. weakness. Sometimes it's just the market reacting to what other central banks are doing or where money thinks it'll earn the best return.
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Typically I don't look at those things to assign blame to dollar weakness, but to identify specific policy from either the President, the Fed, or some of either of their people that are pursuing 'weak dollars' as a means toward a particular end.

I rarely if ever assume it's due to 'randomness' or just how things are progressing. The aforementioned parties have too many tools and levers available for them to control it for me to ever think it's essentially out of their control, if you see what I mean.


But I see your point.
 
Gravel

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Sanrith Descartes said:
$2 billion is such a small drop in the bucket though...

Subprime Crisis 2.0? Red Flags Fly As Alleged Fraud Triggers Billion-Dollar Auto-Lender Bankruptcy | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com
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I'm assuming the people at ZH actually understand what made 2008 catastrophic, and it wasn't the subprime loans that took everything down. I'm assuming they're doing it just for the clicks because it sounds bad.
 
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