***Official*** 2017 Stock Market Thread

[Imp]

DOE reported a massive build in crude and products... Oil goes up. Exactly what I was expecting.

And I've noticed more than a few luxury properties going up in flames in Toronto and Vancouver over the last few months -- others have too. These others are saying it's a sign...

Edit: Ssssweeeeeet. Two articles in a day about how stable Canada's housing market is.

Canada’s subprime mortgage providers are increasingly teaming up with unregulated rivals to sidestep rules designed to clamp down on risky lending.

http://www.theglobeandmail.com/glob...estep-canadas-mortgage-rules/article33574488/

The number of mortgage applications flagged as potentially fraudulent has risen 52 per cent since 2013, Equifax found. The majority of mortgage-fraud applications have come from Ontario and British Columbia, where home prices have risen the most in recent years.

http://www.theglobeandmail.com/real...5/?reqid=a78c44f0-f2d2-4226-a40b-4234059de352

 

[FelixDeCat]

DOE reported a massive build in crude and products... Oil goes up. Exactly what I was expecting.

And I've noticed more than a few luxury properties going up in flames in Toronto and Vancouver over the last few months -- others have too. These others are saying it's a sign...

Edit: Ssssweeeeeet. Two articles in a day about how stable Canada's housing market is.

http://www.theglobeandmail.com/glob...estep-canadas-mortgage-rules/article33574488/

http://www.theglobeandmail.com/real...5/?reqid=a78c44f0-f2d2-4226-a40b-4234059de352

Hopefully housing prices start to come back down with the rise in interest rates otherwise the fasting selling homes for 2017 will be .... mobile homes and vans (down by the river).

Also, crude supply is up but oil has a floor at $50 apparently.

 

[Charmonium]

Don't housing prices move inversely with interest rates? People don't buy a house, they buy a monthly payment. If they can afford $1500/month, it doesn't matter if that works out to $200k at 8% or $100k at 16%. $1500 is all the bank is getting each month.

 

[dullard]

Don't housing prices move inversely with interest rates? People don't buy a house, they buy a monthly payment. If they can afford $1500/month, it doesn't matter if that works out to $200k at 8% or $100k at 16%. $1500 is all the bank is getting each month.

That is true, but it is only half the picture. In a booming housing market, the bank is willing to loan maybe $1800 instead of $1500/month (mortgages are less risky as long as the house value rises, since the buyers are almost guaranteed to have the equity to pay off the mortgage). The buyers have no choice but to pay $1800 rather than the $1500 that they wanted to pay. The reverse is true in a housing market with falling prices. Supply and demand still matters.

 

[Imp]

Don't housing prices move inversely with interest rates? People don't buy a house, they buy a monthly payment. If they can afford $1500/month, it doesn't matter if that works out to $200k at 8% or $100k at 16%. $1500 is all the bank is getting each month.

Shhhhhhhhhhhhhhhhhh. Shhhhhhhhhh. Don't talk like that. No, it's all "supply and demand."

Just don't ask what "demand" consists of. From what I gather, "demand" is how many people want to buy something so that explains why Porsche and Lambo cars are so expensive.

 

[local]

FFS please tell me housing prices are not going to start falling again. I am almost back up to where I bought mine in 2010. Apparently I bought mine on a garbage dump or something as it's value fell steadily until last year when I got a big bump, everyone else I know is up at least 30% since 2010. Good TX housing market my ass.

 

[FelixDeCat]

^Sell.

 

[local]

And lose money and be homeless? Pass. While my coworkers bitch about increased property taxes due to their values going up I can at least sit back and laugh about paying less than I figured when I purchased.

 

[dullard]

And lose money and be homeless? Pass. While my coworkers bitch about increased property taxes due to their values going up I can at least sit back and laugh about paying less than I figured when I purchased.

That is the wrong attitude if you want to do well in life. You NEVER lose money when selling. Instead, you lost the money when you bought the wrong house at the wrong time. From now on, you have already lost that money. You should look in the future and do what is best for your future.

That doesn't mean that selling is the right move for you. But arbitrarily NOT selling just because you lost money when you bought is also NOT the right move either. Your money is tied up in an asset that might not be right for you (financially or personally). That money may do far better in another asset. Forget about whether you lost/gained on your house when making that decision. To focus on your loss in the past freezes you from doing the right decision in the future. That focus just causes you to double down on possibly the wrong decision.

The right question is: "Is this the right place for me to live right now (personally and financially)".

 

[local]

That is the wrong attitude if you want to do well in life. You NEVER lose money when selling. Instead, you lost the money when you bought the wrong house at the wrong time. From now on, you have already lost that money. You should look in the future and do what is best for your future.

That doesn't mean that selling is the right move for you. But arbitrarily NOT selling just because you lost money when you bought is also NOT the right move either. Your money is tied up in an asset that might not be right for you (financially or personally). That money may do far better in another asset. Forget about whether you lost/gained on your house when making that decision. To focus on your loss in the past freezes you from doing the right decision in the future. That focus just causes you to double down on possibly the wrong decision.

The right question is: "Is this the right place for me to live right now (personally and financially)".

Then the answer is "Most likely". We bought this place on two incomes and zero kids, now seven years later it is one income and three kids. It has gotten a bit small, the layout sucks for a family of five. I would like to cash in and move to a better suited place. If I could sell I may be able to put $5k in my pocket. $5k will not get a better place or even a similar place anymore. So I will sit here and wait. Hoping the coming development of the area will improve my position. The biggest problem was buying this house zero down but I was tiered of renting.

The internet seems to think I can sell my place for much more than current value though and clear ~$70k, I don't buy it. But enough side tracking the thread with my housing woes.

 

[SketchMaster]

AMD taking a beating before earnings.

 

[zinfamous]

AMD taking a beating before earnings.

Man, wish I didn't have $$$ tied up in credit card point purchases right now, or I'd be picking up shares on this dip.

 

[Imp]

Looks like the "Trump will save the world" trade is unwinding. DXY and Treasury bond prices appear to be tanking. Even the stock market is going down... But pro-business sentiment. What about the sentiment?

Edit: Oh, it's partly cause Trump said something about a strong dollar. Well, as long as he said something.

 

[zinfamous]

Looks like the "Trump will save the world" trade is unwinding. DXY and Treasury bond prices appear to be tanking. Even the stock market is going down... But pro-business sentiment. What about the sentiment?

Edit: Oh, it's partly cause Trump said something about a strong dollar. Well, as long as he said something.

Trade. we don't need trade.

Oh wait--that's actually bad? derp.

 

[FelixDeCat]

I dunno about AMD, I never really was a fan. Could it go back to $11? I remember when people were calling for $15! But then I also remember this stock being a sub $5 stock for well over a decade!

 

[zinfamous]

I dunno about AMD, I never really was a fan. Could it go back to $11? I remember when people were calling for $15! But then I also remember this stock being a sub $5 stock for well over a decade!

well, they haven't even released Zen yet, which is poised to regain marketshare this year in various sectors for AMD, especially big data. They only need to gain 5-10% in servers alone to see huge profits. $15 is the actual value, imo, and I think it will be there at some point in first half of this year on the heals of Zen and Vega release. A lot of that will be on hype, obviously, as we probably won't see financials related to the new products until Q3.

 

[Imp]

OMG... This headline is outrageous. Stop the presses. No one suspected this.

Headline: "China admits its GDP data is fake"

http://www.afr.com/news/world/china-admits-its-gdp-data-is-fake-20170119-gtuh42

 

[FelixDeCat]

Will the "Trump effect" on the stock markets last past today?

 

[dullard]

Will the "Trump effect" on the stock markets last past today?

It of course is anyone's guess. But in last year's thread I predicted that the market would peak in December and the DOW won't go above 20k and the S&P won't go above 2300 for the short term. I've also decided to somewhat put my money where my mouth is and all new 401k contributions are going to a stable value fund (~2.5% return at the moment) until the market starts moving again in either direction. I'd be quite glad to be wrong with my prediction as I'd rather have my money doing something other than return the rate of inflation.

I personally don't think it is as much of a Trump effect as it is the Obama haters getting back in the market after bailing 8 years ago. Meaning I think that just about any GOP president would have had that effect. I just know far too many wealthy people who were purposely out of the market the last 8 years and were giddy to get back in. Terrible move on their part to mix politics and investing, but that is the world that I live in.

 

[cliftonite]

It of course is anyone's guess. But in last year's thread I predicted that the market would peak in December and the DOW won't go above 20k and the S&P won't go above 2300 for the short term. I've also decided to somewhat put my money where my mouth is and all new 401k contributions are going to a stable value fund (~2.5% return at the moment) until the market starts moving again in either direction. I'd be quite glad to be wrong with my prediction as I'd rather have my money doing something other than return the rate of inflation.

I personally don't think it is as much of a Trump effect as it is the Obama haters getting back in the market after bailing 8 years ago. Meaning I think that just about any GOP president would have had that effect. I just know far too many wealthy people who were purposely out of the market the last 8 years and were giddy to get back in. Terrible move on their part to mix politics and investing, but that is the world that I live in.

I did the same. Did ok last year ~8% but could have been so much more had I not shifted early november. Oh well.

 

[turtile]

I dunno about AMD, I never really was a fan. Could it go back to $11? I remember when people were calling for $15! But then I also remember this stock being a sub $5 stock for well over a decade!

You have to remember that this is a massively shorted stock and the stock has been increasingly shorted now before earnings. I don't think these earnings are going to be great but once Ryzen starts selling for servers, it will change quickly. I don't think the desktop sales are really going to add a lot to AMD's value. I think if AMD executes everything right, $18-20 is possible in a year. They have ground to make up with both Intel and Nvidia.

 

[dullard]

You have to remember that this is a massively shorted stock and the stock has been increasingly shorted now before earnings. I don't think these earnings are going to be great but once Ryzen starts selling for servers, it will change quickly. I don't think the desktop sales are really going to add a lot to AMD's value. I think if AMD executes everything right, $18-20 is possible in a year. They have ground to make up with both Intel and Nvidia.

Ryzen really does appear to be more of a server processor than a desktop or mobile processor. With the Kaby Lake pricing Intel didn't leave much profit for AMD even when AMD does come out with a 4-core Ryzen this summer. So, I agree with you there.

But, $20/share will require a lot of "ifs". If Ryzen is as good as Intel's server processors, and if the market finally accepts AMD servers, and if Ryzen can command a similar price to Intel, and if Intel doesn't respond with new processors or lower prices (Intel hasn't released a new server processor in about a year), and if AMD's expenses don't increase, and if AMD can sustain this in the long run, then $20+/share is quite likely. That is just too many ifs for me though. I suspect if AMD shoots up to $20+/share it will be just as short term as all of AMD's other excursions into that share price range.

The last one is the biggest problem. I don't think AMD has any other great tricks up their sleeves to sustain a great server market share after the big boost they are likely to get this year. What will AMD do in 2018, 2019, 2020? The rumors don't seem to show much hope.

 

[zinfamous]

Ryzen really does appear to be more of a server processor than a desktop or mobile processor. With the Kaby Lake pricing Intel didn't leave much profit for AMD even when AMD does come out with a 4-core Ryzen this summer. So, I agree with you there.

But, $20/share will require a lot of "ifs". If Ryzen is as good as Intel's server processors, and if the market finally accepts AMD servers, and if Ryzen can command a similar price to Intel, and if Intel doesn't respond with new processors or lower prices (Intel hasn't released a new server processor in about a year), and if AMD's expenses don't increase, and if AMD can sustain this in the long run, then $20/share is quite likely. That is just too many ifs for me though. I suspect if AMD shoots up to $20+/share it will be just as short term as all of AMD's other excursions into that share price range.

All true. But consider that this first release is the first iteration of Zen core, which is AMD's roadmap for the next 4-5 years. at only 1/10th (or even less?) the R&D budget, AMD has apparently managed to get back into the same performance space with Intel. That is pretty insane. Going forward, I'm not sure that costs for AMD are going to be substantially higher than they are now, and considering that they their awful debt load from a year ago today is already half of what it was, I think they are in a rather good place for growth, despite the obvious lingering issues.

They don't need to beat Intel in performance--especially with server parts, they need to win on price and cost to run these things. If they only gain 10% of that server share from Intel, that is a huge win for them, and probably isn't enough to make Intel sneeze.

 

[FelixDeCat]

It of course is anyone's guess. But in last year's thread I predicted that the market would peak in December and the DOW won't go above 20k and the S&P won't go above 2300 for the short term. I've also decided to somewhat put my money where my mouth is and all new 401k contributions are going to a stable value fund (~2.5% return at the moment) until the market starts moving again in either direction. I'd be quite glad to be wrong with my prediction as I'd rather have my money doing something other than return the rate of inflation.

I personally don't think it is as much of a Trump effect as it is the Obama haters getting back in the market after bailing 8 years ago. Meaning I think that just about any GOP president would have had that effect. I just know far too many wealthy people who were purposely out of the market the last 8 years and were giddy to get back in. Terrible move on their part to mix politics and investing, but that is the world that I live in.

Im going to give you my honest opinion and let the chips fall where they may. The market has done well under Obama because of extremely favorable monetary policy and a regulatory environment that keep excesses in check (somewhat). The CFPB was wonderful but has now been ruled unconstitutional. Trump may likely do away with it altogether unless the American people speak up to keep this financial regulator.

That being said, business moves in cycles. We have an administration that will do everything to make America even better and thus perhaps keep the stock markets growth upwards over the next four years (at least).

HOWEVER, I don't know how protectionism is going to help profits for the companies listed in the market and it will probably have a negative effect short term. Also, other markets might respond and we will have a full blown trade war. That wont be good.

Also, since the market is long overdue for a 20% correction and the business cycle has not contracted in while, we do have things to worry about.

 

[dullard]

We have an administration that will do everything to make America even better and thus perhaps keep the stock markets growth upwards over the next four years (at least).

HOWEVER, I don't know how protectionism is going to help profits for the companies listed in the market and it will probably have a negative effect short term. Also, other markets might respond and we will have a full blown trade war. That wont be good.

Almost everything that I've heard Trump say is about short-term gains while ignoring the long-term effects. You brought up protectionism, so to keep this as non-political as possible, I'll stick with just that subject.

Suppose there is a new wave of protectionism. We place tariffs on foreign-made goods. In the very short term, that makes American companies more competitive in the areas where there were new tariffs. Those companies will get short-term profits and their stocks should get short-term boosts. But, over time the other countries will respond in kind which hurts everyone. Costs go up for both consumers (who ultimately pay the tariffs) and businesses (who also pay the tariffs on raw materials or have to pay for higher costs to build duplicate factories and more expensive labor here). The estimates for a price war with China alone is a drop in our GDP range from about 3% hit to about a 9% hit (I suspect closer to 3%). Trade with China is just 2% of our GDP, but pull that 2% out of the economy and there would be ripple effects, so the expected result of an all-out trade war is higher than just 2%.

If you look in detail, just about every other policy touted by Trump is very short-term focused. Thus, one could expect short term stock price gains and long-term drops.

The key question is, "Have the short-term gains already been priced in?