These interviews changed my mind on forward risks

[pb4uski]

Contract or not, you can't draw blood from a stone.

 

[bmcgonig]

Not sure what to do with that, since the data support the assertion. Is @pb4's phrasing more acceptable?

Please read the Nate Silver chapter and let us know if that changes your view on the matter.

But you continually say that.

We all know your opinion on these forecasts etc. We may not be any good at forecasting, but frankly I'm really good at forecasting your response to anyone that tries to give a roadmap of what might happen. [emoji16]

 

[ExFlyBoy5]

Just saying "nobody knows nothing" is really unhelpful.

I assume that this was probably directed at me since I made that exact comment. Sorry that I am not helpful to you, feel free to block me. I think a forum can have multiple purposes...including venting and frustration. Maybe you can't tell, but I am frustrated. I am a logical person and want to see logic in most things. Looking for it in the market is probably stupid, but it's still very frustrating to me because there seems to be ZERO sense in what's going on (besides the fed pumping money).

I stand by what I said. I wish I could come up with (or support or believe) that a suitable market strategy that would help me sleep a little better. I am very, VERY thankful that I am FI, but that doesn't alleviate my fears about the future of the markets...and not even speaking about all the other stuff going on in the world.

So, when I see these articles that purport to know what is going on, when in fact I (and it's MY OPINION, NOT ANYONE ELSE) it is exasperating to me.

Nonetheless, you point is taken and I am moving on.

 

[OldShooter]

I assume that this was probably directed at me since I made that exact comment. Sorry that I am not helpful to you, feel free to block me. I think a forum can have multiple purposes...including venting and frustration. Maybe you can't tell, but I am frustrated. I am a logical person and want to see logic in most things. Looking for it in the market is probably stupid, but it's still very frustrating to me because there seems to be ZERO sense in what's going on (besides the fed pumping money).

I stand by what I said. I wish I could come up with (or support or believe) that a suitable market strategy that would help me sleep a little better. I am very, VERY thankful that I am FI, but that doesn't alleviate my fears about the future of the markets...and not even speaking about all the other stuff going on in the world.

So, when I see these articles that purport to know what is going on, when in fact I (and it's MY OPINION, NOT ANYONE ELSE) it is exasperating to me.

Nonetheless, you point is taken and I am moving on.

Actually, @ExFlyBoy5, the comment was almost certainly aimed at me. But I agree totally with your statement. There are a lot of things people want but can't have, and a market strategy or roadmap that predicts the behavior of a random market is not one of them. Further, the observation that the market is at least pseudo-random is nearly unanimous among researchers, to the point that the whole of Modern Portfolio Theory is built on that model. By definition, you can't predict random. No reason for you to be frustrated; the problem is not with you.

 

[bmcgonig]

Actually, @ExFlyBoy5, the comment was almost certainly aimed at me. But I agree totally with your statement. There are a lot of things people want but can't have, and a market strategy or roadmap that predicts the behavior of a random market is not one of them. Further, the observation that the market is at least pseudo-random is nearly unanimous among researchers, to the point that the whole of Modern Portfolio Theory is built on that model. By definition, you can't predict random. No reason for you to be frustrated; the problem is not with you.

You just can't help yourself can you?

 

[Lsbcal]

I assume that this was probably directed at me since I made that exact comment. Sorry that I am not helpful to you, feel free to block me. I think a forum can have multiple purposes...including venting and frustration. Maybe you can't tell, but I am frustrated. I am a logical person and want to see logic in most things. Looking for it in the market is probably stupid, but it's still very frustrating to me because there seems to be ZERO sense in what's going on (besides the fed pumping money).

I stand by what I said. I wish I could come up with (or support or believe) that a suitable market strategy that would help me sleep a little better. I am very, VERY thankful that I am FI, but that doesn't alleviate my fears about the future of the markets...and not even speaking about all the other stuff going on in the world.

So, when I see these articles that purport to know what is going on, when in fact I (and it's MY OPINION, NOT ANYONE ELSE) it is exasperating to me.

Nonetheless, you point is taken and I am moving on.

I share much of your puzzlement about the current markets. And I am very conservatively positioned. I do not think that these interviewees are presenting themselves as knowing exactly how the markets will behave except in a broad sense. These are men with many years of experience and backgrounds in economics plus market dynamics that I do not have. So in my opinion worth considering their take.

The Fed is a big part of this rally. How much and exactly what prices should be are very debatable.

 

[Markola]

Thanks for the post and links. Paul McCulley is a smart guy who understands the Fed and monetary policy. IMO always worth a few minutes of my time.

+1. I listened to the McCulley interview and found his remarks to be framed as informed opinions much more than the declarative bullets at the top, which were what I reacted to. I’m glad I took the time to listen to his views. Always good to encounter an intelligent speaker who’s also a good teacher.

 

[Montecfo]

Anybody who says we don't have inflation NOW needs to follow me through Fry's/Safeway/Walmart grocery store.

Food/household categories have gone from 30% of my spending in 2019 to 68% of my spending for the last 3 months and I haven't bought meat since March.

Yes, prices are higher for some items for good reason: supply is less than demand for supply chair and other reasons. But higher prices for a single category of good is not what is meant by "inflation".

Inflation occurs when goods overall are growing in price. That is clearly not occurring as we just had the CPI and the PPI register historic declines.

The large concern now is deflation, not inflation.

 

[Montecfo]

Two WealthTrack videos I think are worth watching are:

Interview with Ed Hyman (36 minutes): https://wealthtrack.com/extra-really-bad-to-better-full-interview/

Interview with Paul McCulley (36 minutes): https://wealthtrack.com/influential-economist-paul-mcculley-on-the-lasting-necessity-of-record-monetary-fiscal-stimulus/


FWIW, here are some of my notes from the McCulley podcast (no video). Bold font is what I thought is important to me:

Lsbcal,

How did your mind change? Do you mean you are now more sanguine about the equity markets?

 

[Lsbcal]

Lsbcal,

How did your mind change? Do you mean you are now more sanguine about the equity markets?

On balance, yes.

 

[Montecfo]

On balance, yes.

Thanks for posting it. I listened and did enjoy it. I found it to be rather spot-on. His FED views mirror what happened coming out of the financial crisis. Views on taking credit vs taking interest rate risk are rational given that. The fiscal policy is a bit scary but we can all see what is shaping up with the states. I can only hope some fiscal reform medicine at the state level will go with the bucketful of sugar.

Certainly one of the things buoying stocks is FED interest rate policy and the idea that we are going to be in such a policy for some time. He notes we will resume growth soon, economy is resilient, etc. But regardless it is going to take some time (years) for employment to reach early 2020 level. That does not mean the same is true for equity markets for many reasons.

I thought he made a lot of sense.

 

[cyber888]

Anybody who says we don't have inflation NOW needs to follow me through Fry's/Safeway/Walmart grocery store.

Food/household categories have gone from 30% of my spending in 2019 to 68% of my spending for the last 3 months and I haven't bought meat since March.

Depends on where you live. I was still able to buy fresh rib eye steak for 7.99/lb in my local grocery. In other areas it is 15.99/lb

 

[frank]

Anybody who says we don't have inflation NOW needs to follow me through Fry's/Safeway/Walmart grocery store.

Food/household categories have gone from 30% of my spending in 2019 to 68% of my spending for the last 3 months and I haven't bought meat since March.

I feel your pain. curiously the government leaves out groceries and fuel when figuring inflation. the only problem there is that I cannot buy the groceries cheaper because the government says they are not going up.

 

[Red Badger]

Anybody who says we don't have inflation NOW needs to follow me through Fry's/Safeway/Walmart grocery store.

Food/household categories have gone from 30% of my spending in 2019 to 68% of my spending for the last 3 months and I haven't bought meat since March.

Latest reports suggest inflation is down overall....
Just sayin'

https://inflationdata.com/Inflation/Inflation_Rate/CurrentInflation.asp?reloaded=true