The Market 2021

Discussion in 'Finance, Investments, and Careers' started by Folster, Jan 7, 2021.

  1. BigRedRage

    BigRedRage Reckless Contributor

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    I'll be surprised if it goes there but I'm long tsla and 600 was lower than my previous stake so I'll take it. If it drops significantly in, I'll be fat from eating so much dip

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  2. Folster

    Folster he/haw

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    You have bigger balls than me. TSLA is the poster boy of the market bubble and the disconnect between earnings and price. I don't see them doing well if rationality returns to fiscal and monetary policy.
     
  3. BigRedRage

    BigRedRage Reckless Contributor

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    I think the next 5 years are going to be explosive in the EV space and TSLA will grow exponentially on top of it's other products and I view them as a tech company who just happens to be the leader in EV. All faith. I'm already very much invested in tsla so buying dips only makes sense when the company is growing at the rate it is. By August, it is expected to see a 7500 ev credit on all American ev, the semi and cyber truck or in route, the model 2 is being planned with an even lower price and more. I'm pumped.

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  4. dscher

    dscher Registered

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    Not only that...but their market cap after being added to the S&P will be a huge drag on the overall market and index itself, if they do continue their slide. So anyone holding those nice steady ETFs or mutual funds of tracking the major index will have to account for a healthy dose of TSLA in their portfolios.
     
  5. Folster

    Folster he/haw

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    I think index holders will be fine as Energy, Financials, and Materials continue to outpace the high flying growth. That's the beauty of indexing.
     
  6. Folster

    Folster he/haw

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    I'd rather bet on the materials sector. Those involved in mining and producing copper, lithium, steel, and other materials will excel even if TSLA doesn't realize its potential. There are a lot of smart auto manufacturers that aren't rolling over for TSLA.
     
  7. dscher

    dscher Registered

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    I hear ya....and I'm absolutely not knocking the approach of indexing. But, the reality is that tech and economically sensitive sectors are highly weighted in the major index's. Material and energy won't have much affect on overall performance because of their minor weighing..jmo
     
  8. Folster

    Folster he/haw

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    The fed is still pumping $120 billion into the bond markets monthly. They're buying $80 billion worth of treasuries and $40 billion worth of agency and mortgage backed securities.
     
  9. dscher

    dscher Registered

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    And they never have a good answer to any hard line questions...ie. if the economy is recovering so well why are you still printing? Or, do you really believe inflation will be 'transitory' with the gas pedal to the floor like you continue to do? That's why the media just feeds em their powder puff questions and they move on with their day. This is the real war on people. The inevitable massive wealth transfer that is taking place. This will kill more people than the virus and recent wars put together imo.
     
  10. Folster

    Folster he/haw

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    For all the talk about progressive tax rates and taxing the rich, inflation is the most regressive tax there is. People without assets will be hit the hardest.
     
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  11. BigRedRage

    BigRedRage Reckless Contributor

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    Explain this to me like I am 5
     
  12. dscher

    dscher Registered

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    Treasury prints more funny money. Fed buys them in the form of Treasury bonds. They own more of our debt, just like any other creditor nation, like China. They are also buying high risk bonds in mbs. This is all for keeping the party going imo...and times running out. Imagine if they even give a whiff of the word 'taper'. Oh boy. At the end of the day, We are increasingly becoming more and more the feds b____..
     
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  13. Folster

    Folster he/haw

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    When the fed buys bonds, they are increasing the money supply (dollars in circulation. This is considered inflationary and stimulating. They hold the bonds on their balance sheet. If they want to decrease money supply, they sell the bonds and then hold the cash on their balance sheet.

    In order for the for the government's spending to exceed revenue received, the Treasury will issue bonds. The Fed, foreign governments, corporations, and private investors buy these bonds that allow for the government's deficit spending.

    One thing I don't understand is how does the fed get money. They supposedly get interest off the bonds they have, but there has to be a limit at some point.

    It all seems very circular to me. Government overspends, treasury sells bonds, and then the fed buys the bonds. At some point that will fail.
     
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  14. dscher

    dscher Registered

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    Yep. It's a strange phenomenon that confuses alot of people that I follow and the work they do. I personally think it's just a fine line that doesn't really exist imo...(after all, we do have a woman that worked as the fed chair now as the treasury secretary and her boy is heading up as the fed chair right now...which I find highly comical.) It's all numbers on a screen and they might say they are printing this money and putting it into circulation. But, because of the digitized nature of everything I think the fed could easily do the 'printing' as well. Money created from nothing. That, after all, is all any fiat currency can be. Debt. Silly funny money.
     
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  15. BigRedRage

    BigRedRage Reckless Contributor

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    The concept of what fiat has become is so wild to me. It's really what has spurred my interest in crypto. You have the bitcoins who only become more finite over time and the Doges that continually inflate at a specific pace no matter what instead of a government just saying we promise people will take this money but we will print so much that your money because more useless every day. I commonly thing of Venezuela and how they weigh money now instead of counting it because it has become so worthless.

    I've seen comments about how crypto is based on nothing, which it is but I think the majority of people have no idea that our fiat money is based on nothing too.
     
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