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Investing 2021


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I'd sure love to hear some of your opinions regarding investing in these uncertain times.

I certainly don't know. I went against my gut last year, and am really glad I did. I've no idea how the market gained that much with the economy essentially being shut down most of the year.

I look for higher taxes and tough regulations coming down the pike. I also look for money printing and government spending to keep the runaway pace we've grown accustomed to, if not worse.

While I expect the economy to tank to some degree, I also expect the dollar to continue to be devalued. Maybe these two things will offset one another.

I feel real estate, at least local to me, is overvalued. I feel stocks are grossly overpriced, looking at P/E ratios. Bonds and CDs will certainly not keep up with increasing inflation.

I'm out on bitcoin.

What's left? Let's hear the wisdom of TGO.

 

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The wisdom I have:

The market oftentimes, if not more, does not behave the way we or any "reasonable" person would expect it. That's all I have. 

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Please - for the love of all that's good - don't "invest" and tell the people you love not to "invest" in Bitcoin.

Thanks for coming to my TED talk.

 

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14 minutes ago, gregintenn said:

I feel real estate, at least local to me, is overvalued

You are so right. We are trying to buy a house right now and it is alarming. Houses in Knoxville that sold for $350K 2 years ago are now going for $500k. I don't see how this is sustainable at all. We're really unsure what to do. My wife wants to build but that really isn't any better as material costs have skyrocketed. 

I don't necessarily agree with other parts of your post but I'm sure the runaway spending will continue. I'll be shocked if this thread doesn't turn political 

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Conventional wisdom is that higher taxes are probably on the horizon, but due to the virus and the overall state of the economy probably won't be enacted this year.  Similarly, more government spending is almost certain, likely a mix of stimulus and infrastructure spending which should help boost the short term prospects for the economy as a whole.  Most asset classes are overpriced, and more volatility in prices is to be expected, but typically bull markets go through a prolonged period of "melt ups" before coming to a close.  Personally, I doubt we'll see the massive rises in tech prices this year as we had in 2020, mostly due to increased efforts for Congressional oversight and possible new regulations including anti-trust suits, so that's an area ripe for a fall.  As always, stock and asset picking will remain roughly akin to astrology, palm reading and coin flips in terms of accuracy, as you can always expect the unexpected to occur ...

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2 minutes ago, MacGyver said:

Please - for the love of all that's good - don't "invest" and tell the people you love not to "invest" in Bitcoin.

Thanks for coming to my TED talk.

 

This should be required reading ...

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2 minutes ago, No_0ne said:

This should be required reading ...

I guess it went over my head.

Just googled "Ted talk"

I learn something new here every day.

Edited by gregintenn
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Just now, gregintenn said:

I guess it went over my head.

Translation: Avoid bitcoin like plague ...

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If the fluctuation of pricing on Bitcoin doesn't scare someone off, the fact that it really only exists at this point to launder money for organized crime should.

We deal with a lot of ransomware/cryptolocker cases, and I can say that all the lawyers involved are growing increasingly concerned with RICO/trafficking/money laundering/OFAC stuff - since you basically know that you're sending large sums of money to criminals as a ransom payment.

Then, you can add to that the "days since a cryptocurrency exchange lost more than $100M" sign  hasn't reached triple digits yet. 

If you can get past all that, then I might suggest that in any legitimate market, you need both a party and counterparty to transactions. We have a ton of people putting money into the "market." But, when we examine the blockchain registers, we don't really see any of that money moving out. We don't have counterparties.  This could legit turn into a case where you have millions on paper, but couldn't cash out if your life depended on it.

Stay away from it.

 

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15 minutes ago, DWARREN123 said:

Something I heard today, when was the last time the dems had the president and both houses? What happen then?

Wasn't it 1929?

You should check out the 111th Congress - where both the House and the Senate were under Democratic control for the first part of Obama's first term - including for a short time with a filibuster proof majority.

You might also remember the 103rd Congress where Bill Clinton also had Democratic control in both houses.

Carter had both houses his whole time in office.

Kennedy and Johnson both did too.

Roosevelt had a Democratic majority from 1933 that lasted until Truman lost it in 1947.

Herbert Hoover was president in 1929.  He was a Republican. So too were both chambers of Congress.

In fact, from 1921 when Warren Harding had a majority - through Calvin Coolidge - all the way to 1931 when Herbert Hoover lost the Republican majority - that was the longest stretch in which the Republican Party would have unified control until George W. Bush (who had it in part of 2001, then from 2003 through 2007).

Eisenhower had unified control from 1953-55.

edit: here's the sourcing on that with a nice chart - history is cool.

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11 minutes ago, DWARREN123 said:

Something I heard today, when was the last time the dems had the president and both houses? What happen then?

Wasn't it 1929?

Sounds like you heard some news that wasn't true. Was this talk radio by chance? 

Edited by Erik88
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11 minutes ago, MacGyver said:

If the fluctuation of pricing on Bitcoin doesn't scare someone off, the fact that it really only exists at this point to launder money for organized crime should.

We deal with a lot of ransomware/cryptolocker cases, and I can say that all the lawyers involved are growing increasingly concerned with RICO/trafficking/money laundering/OFAC stuff - since you basically know that you're sending large sums of money to criminals as a ransom payment.

Then, you can add to that the "days since a cryptocurrency exchange lost more than $100M" sign  hasn't reached triple digits yet. 

If you can get past all that, then I might suggest that in any legitimate market, you need both a party and counterparty to transactions. We have a ton of people putting money into the "market." But, when we examine the blockchain registers, we don't really see any of that money moving out. We don't have counterparties.  This could legit turn into a case where you have millions on paper, but couldn't cash out if your life depended on it.

Stay away from it.

 

There's a story floating around about a guy who has over $200 million worth of bitcoin, and can't access it because he forgot his password.

That alone leaves me out. I can never remember passwords.

Nobody really knows who is responsible for bitcoin. What if the guy had typed in the correct password and it just didn't work, or had been hacked? Where does he go to get it corrected?

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5 minutes ago, Erik88 said:

Sounds like you heard some news that wasn't true. Was this talk radio by chance? 

Probably a meme.

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My take Last year was like investing in 2009, you didnt have to know anything to win big with the preceding beatdown.

There are some good value items that are good bets over the next 2 years in the sectors that the virus is keeping pressure on. Finding them takes a heck of alot more research.

Sector consolidations and M&A make is something to look out for in those sectors though.

Finding them before they get mentions from the investing media is key. I have one on my watchlist I was researching this last week and it just got a pop from a brokerage article a couple days ago...waiting for the next dip if it comes.

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56 minutes ago, gregintenn said:

I've no idea how the market gained that much with the economy essentially being shut down most of the year.

 

 

 

The same way it did for the previous three years.  

 

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1 minute ago, gregintenn said:

Probably a meme.

It would be interesting - and I don't have time to do it this afternoon - to post a chart of GDP or the S&P500 or whatever metric you want against control of the government.

I expect what it would show is that the economy is largely going to economy and doesn't particularly favor unified government.

The 4 biggest drops of any of our lifetimes (1929 crash, S&L bust, dotcom bubble, and the 2008 recession) have all officially occurred on Republican watches - but that's kind of disingenuous to make that argument. Just like the economy under Trump has benefited from some of Obama's policies - Bush too took the hit from some of the rails coming off during Clinton. Etc.

Standard disclaimer - The stock market is not the economy - please don't take investing advice from me or anyone else on the internet - unless it's about Bitcoin in which case I know what I'm talking about - consult your financial professional.

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Just now, MacGyver said:

It would be interesting - and I don't have time to do it this afternoon - to post a chart of GDP or the S&P500 or whatever metric you want against control of the government.

I expect what it would show is that the economy is largely going to economy and doesn't particularly favor unified government.

The 4 biggest drops of any of our lifetimes (1929 crash, S&L bust, dotcom bubble, and the 2008 recession) have all officially occurred on Republican watches - but that's kind of disingenuous to make that argument. Just like the economy under Trump has benefited from some of Obama's policies - Bush too took the hit from some of the rails coming off during Clinton. Etc.

Standard disclaimer - The stock market is not the economy - please don't take investing advice from me or anyone else on the internet - unless it's about Bitcoin in which case I know what I'm talking about - consult your financial professional.

I seriously doubt you'd find much correlation between which party is in charge and stock market performance. Policy doesn't usually affect economics immediately. In fact, speculation on future policy would be a much larger determining factor in stock prices I imagine.

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13 minutes ago, gregintenn said:

There's a story floating around about a guy who has over $200 million worth of bitcoin, and can't access it because he forgot his password.

That alone leaves me out. I can never remember passwords.

Nobody really knows who is responsible for bitcoin. What if the guy had typed in the correct password and it just didn't work, or had been hacked? Where does he go to get it corrected?

Well...that's not how bitcoin works. This isn't an endorsement for bitcoin but rather just explaining a bit. If you have your own wallet setup on your computer, it's somewhat similar to having a safe in your house. The cryptography setup in that digital wallet is similiar to a safe, the password to the wallet is similar to the combination.

If he used an online exchange, then sure it could have been theoretically hacked.

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5 minutes ago, GlockSpock said:

Well...that's not how bitcoin works. This isn't an endorsement for bitcoin but rather just explaining a bit. If you have your own wallet setup on your computer, it's somewhat similar to having a safe in your house. The cryptography setup in that digital wallet is similiar to a safe, the password to the wallet is similar to the combination.

If he used an online exchange, then sure it could have been theoretically hacked.

I'd very much file this under, "if I need to call someone when I can't print this funny meme I saw on Facebook from my iPad" - then I probably shouldn't give any real serious thought to maintaining a bitcoin wallet.

 

 

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9 minutes ago, MacGyver said:

I'd very much file this under, "if I need to call someone when I can't print this funny meme I saw on Facebook from my iPad" - then I probably shouldn't give any real serious thought to maintaining a bitcoin wallet.

 

 

I cannot argue against that.

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Sounds like a few grumpy bitcoin missers around here.  If you'd been on the train you'd have a lot of $$$.   I caught the train, made a serious multiple, and don't intend to take the train back the other way, FWIW.  It is a bit like the tulip mania a few centuries ago.  It's all about the timing, and it doesn't even have to be real.  If you cash out though, that's real.  There are a lot of governments, regulators, and taxing entities that are drooling about bitcoin even more than greedy "skies the limit" pseudo-investors.  Not to mention hackers.

Edited by QuackerSmacker
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13 minutes ago, QuackerSmacker said:

Sounds like a few grumpy bitcoin missers around here.  If you'd been on the train you'd have a lot of $$$.   I caught the train, made a serious multiple, and don't intend to take the train back the other way, FWIW.  It is a bit like the tulip mania a few centuries ago.  It's all about the timing, and it doesn't even have to be real.  If you cash out though, that's real.  There are a lot of governments, regulators, and taxing entities that are drooling about bitcoin even more than greedy "skies the limit" pseudo-investors.  Not to mention hackers.

You cashed out?

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