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Current Stock Market Opinions?


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I was completely taken by surprise by the speed and levels the markets reached during the covid recovery. I still can't see any good news to justify it, only a reaction to currency dilution. With the US being strongly down for the last 3 sessions, I'm wondering what folks thoughts are. Contrary to popular opinion here it's pretty clear to me covid is here to stay for the foreseeable. What's not clear is how long people will obey restrictions to protect the vulnerable. If they do - how can the frothy, service economy recover? And how long can money keep being printed?  

 

Thoughts?

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16 hours ago, Formerly said:

I was completely taken by surprise by the speed and levels the markets reached during the covid recovery. I still can't see any good news to justify it, only a reaction to currency dilution. With the US being strongly down for the last 3 sessions, I'm wondering what folks thoughts are. Contrary to popular opinion here it's pretty clear to me covid is here to stay for the foreseeable. What's not clear is how long people will obey restrictions to protect the vulnerable. If they do - how can the frothy, service economy recover? And how long can money keep being printed?  

 

Thoughts?

Usually 2 days down in the US is a buying opp. 3 days is a no brainer buying opp. However this is only true until it isnt, which happened during the corona crash. 

Do you feel lucky?

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The big engines of the US stock market are the tech giants and they have generally benefitted from all of this at the expense of the high street.

Add into the mix the vastly increased government debt which means that inflation will be encouraged rather than headed off then stocks look like a good bet as they usually will only benefit from inflation - profits go up whilst debts and debt interest are eroded by inflation.

Obviously there are certain sectors which are big losers: airlines, holiday companies, coffee shops and restaurants but these haven't been big hitters for years and these may well just drop out of the indices.

There is a tremendous blurring between economy and stock markets which isn't at all accurate.  If every sole trader in the UK went bust tomorrow you would barely notice that register on the FTSE 100 because they don't form part of the listing and most of the FTSE 100 earnings are overseas.

Typical of that blurring I heard yesterday that Doc Martin, which I've never seen, contributes £50m a year to Cornwall's tourist "economy".

What does that even mean? 

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9 hours ago, Green Devil said:

Usually 2 days down in the US is a buying opp. 3 days is a no brainer buying opp. However this is only true until it isnt, which happened during the corona crash. 

Do you feel lucky?

Looks like many people do, judging by today's performance.

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6 hours ago, Frank Hovis said:

The big engines of the US stock market are the tech giants and they have generally benefitted from all of this at the expense of the high street.

Add into the mix the vastly increased government debt which means that inflation will be encouraged rather than headed off then stocks look like a good bet as they usually will only benefit from inflation - profits go up whilst debts and debt interest are eroded by inflation.

Obviously there are certain sectors which are big losers: airlines, holiday companies, coffee shops and restaurants but these haven't been big hitters for years and these may well just drop out of the indices.

There is a tremendous blurring between economy and stock markets which isn't at all accurate.  If every sole trader in the UK went bust tomorrow you would barely notice that register on the FTSE 100 because they don't form part of the listing and most of the FTSE 100 earnings are overseas.

Typical of that blurring I heard yesterday that Doc Martin, which I've never seen, contributes £50m a year to Cornwall's tourist "economy".

What does that even mean? 

While agreeing with all you posted, I guess I'm thinking more about the longer term. The tech giants rely on the spending of the little people like myself. While furlough and similar schemes allowed spending to continue, there's still the upcoming mass unemployment. How much Chinese tat will be purchased by the millions around the world who lose their jobs? Will the displacement of high street spending to online be enough to maintain their recent highs?

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27 minutes ago, Formerly said:

While agreeing with all you posted, I guess I'm thinking more about the longer term. The tech giants rely on the spending of the little people like myself. While furlough and similar schemes allowed spending to continue, there's still the upcoming mass unemployment. How much Chinese tat will be purchased by the millions around the world who lose their jobs? Will the displacement of high street spending to online be enough to maintain their recent highs?

I'm of the opinion that the relentless drive for population growth in the developed world combined with the exponentially expanding middle class of India and China will continue to power the global economy for decades yet.

Your, or my, high street may become shabby and flyblown with high unemployment and a decline in car ownership following the decline in home ownership but our towns are not the world economy and all the big companies are global.

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9 hours ago, Frank Hovis said:

I'm of the opinion that the relentless drive for population growth in the developed world combined with the exponentially expanding middle class of India and China will continue to power the global economy for decades yet.

Your, or my, high street may become shabby and flyblown with high unemployment and a decline in car ownership following the decline in home ownership but our towns are not the world economy and all the big companies are global.

Yes - if you have travelled in India and/or China you can't help but realise all the 'consume less, be green' stuff pushed on the west is, frankly, bollocks.  The masses in those two countries - almost 2.5 billion souls - want nice shiny new stuff, they want it now, and they don't give a fuck about the rainforest.

And fair play to them - the west did the same from 1850-2000.

So global companies have markets which, if they can get access to them fairly, can continue to create huge profits.  The areas I think will not benefit are the banks (you can't run a credit boom in countries with low-trust levels in the same way you did in the west - fraud and non payment will be immensely different) and travel companies (mass tourism is not a thing in India, and in China the cold war that is starting will make that much more difficult).

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