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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (1037471)	11/8/2017 11:22:17 AM
From: RetiredNow	1 Recommendation Recommended By Mick Mørmøny Respond to of 1573927

LOL. Guilty as charged. I've been accused of being a babbling fool before and will be again before I die, I'm sure. I've been a fool many times in my life and this could be another time. However, I buy my peace of mind where I can find it. My brother called me a fool for paying off my house 7 years ago too, but I have had a lot of peace of mind knowing no one can take my house away from my wife, if I die. I need to earn 2% from my investments per year to pay for the standard of living that I have. The allocation I am at right now earns me that in dividends with a bit of room to spare. So I have double peace of mind, knowing our standard of living is assured from dividends alone and from knowing that I have a lot of cash to invest when the bargains make themselves available. Yes, I'm an old fool, but this old fool is a survivor. So you're an old dog like me. That's good. Then at least you can say you know the risks of what you are doing and are willing to bear the consequences, good or bad. I debate with some young people on this thread and try to knock some sense into them, because I hate to watch young people lose their money to the big crashes that our fragile markets are prone to now that the economy is financialized and the Fed is overly intrusive. I don't think I'm smarter than the market. Rather, I'm just a business man who only likes to buy things when they are a good value. I don't see a good value in any corner of the market. I do see some minimal values overseas, but not here in the US. I just know that what's blown this US market bubble is a very generous Fed and all their CB counterparts the world over. That worm is already beginning to turn. So you've been smart to not fight the Fed on the way up. Will you know the right time to not fight the Fed on the way down? Maybe you get lucky with your charts. If the GOP can pass the tax reform, then this thing could continue awhile longer, but will tax reform overcome the effects of the Fed and CBs the world over withdrawing massive liquidity from the markets between now and next year? I doubt it. CB intervention has explained almost all of the variation in stock and bond market returns since the Great Recession and the advent of QE and ZIRP. That's the only story that matters.

To: Rarebird who wrote (1037471)	11/9/2017 1:24:07 PM
From: RetiredNow	Read Replies (1) \| Respond to of 1573927

To quote myself: If the GOP can pass the tax reform, then this thing could continue awhile longer, but will tax reform overcome the effects of the Fed and CBs the world over withdrawing massive liquidity from the markets between now and next year? I doubt it. CB intervention has explained almost all of the variation in stock and bond market returns since the Great Recession and the advent of QE and ZIRP. That's the only story that matters. Looks like the first shoe has dropped. The news is telling us that the GOP tax reform bill has corporate tax reductions being delayed until 2019, which is why the stock market is reacting badly today. I still think tax reform of any kind doesn't get done this year, but already it looks much weakened even if it does. That's the first shoe. The second shoe is the Quantitative Tightening by the Fed. The Fed Balance Sheet dropped from $4.460 Trillion to $4.456 Trillion, or $4 Billion. Not the $10 Billion per month in Q4 that Yellen promised, but it is a bit of a decline. However, since they are off by $6 Billion, I still put it in the "Yellen and the Fed lied about starting QT" category. Since that is explaining most of the variation in stock returns, I think you still have a chance that the stock market will be ok. However, if they accelerate the reduction in November and you also get a delay in tax reform, then look out below. One shoe down and the other shoe is uncertain.