The Market 2022-2023-2024

[Folster]

I was going to say the same thing about owner equivalent. I haven't found if it's accurate or not but I heard that if it was calculated the old way we'd be at about 14% for last year. That's nuts. I hate it when government agencies play with the parameters to make the outcome number look one way or another. It's like claiming unemployment went down when the number of jobs stayed the same but the participation rate dropped.

The trick is that unless you are renting or shopping for a house, you are somewhat immune to that component of inflation.

 

[dscher]

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[Folster]

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I wish the Fed would come out with 75 bps right off the bat. That would add to the current 25 bps and give them an immediate 1% floor. That seems far fetched though. 25 bps would be so timid. 50 bps would at least show they the minimum amount of will to combat inflation.

The fed is hoping supply will ramp up, but we are more likely to see a market downturn that curbs demand. If you were set on fighting inflation you would need a rate higher than the current inflation rate, but that would likely bring about a recession.

 

[dscher]

I wish the Fed would come out with 75 bps right off the bat. That would add to the current 25 bps and give them an immediate 1% floor. That seems far fetched though. 25 bps would be so timid. 50 bps would at least show they the minimum amount of will to combat inflation.

The fed is hoping supply will ramp up, but we are more likely to see a market downturn that curbs demand. If you were set on fighting inflation you would need a rate higher than the current inflation rate, but that would likely bring about a recession.

The fed fighting something they helped create is one of the funniest story lines all year.. lol. After all, it's really the only thing they can do. Inflate. They can't really "fix" anything at the point where the bubble becomes too big. Now, you just pop the bubble (any rate increase IMO) and let the chips fall where they may...

 

[Folster]

I was going to say the same thing about owner equivalent. I haven't found if it's accurate or not but I heard that if it was calculated the old way we'd be at about 14% for last year. That's nuts. I hate it when government agencies play with the parameters to make the outcome number look one way or another. It's like claiming unemployment went down when the number of jobs stayed the same but the participation rate dropped.

Straight from the White House.

Housing Prices and Inflation | CEA | The White House

By Jared Bernstein, Ernie Tedeschi, and Sarah Robinson The pandemic has seen extraordinary growth in home values. Pandemic-related market disruptions, like increased demand and rising building costs as well as other long-term supply constraints in the housing market have contributed to record...

www.whitehouse.gov

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What they should have is two CPI numbers. One with shelter stripped out and one with a rent/home price combo so we can see how inflation is impacting different demographics, mainly those who already own a home and those renting or in the market to buy. Anybody looking to buy a house, especially younger millennials are getting crushed by housing price inflation right now. Renters as well.

 

[dscher]

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The bond king is back!

He's not quite as trustworthy as Jim Cramer / CNBC... But he's solid.

 

[elindholm]

What's weird is that our home is in a high-demand city, and its value as estimated by Zillow has gone down slightly over the past couple of years. Either Zillow's algorithm is crap, or there is huge regional variation in what the housing market is doing.

 

[Folster]

What's weird is that our home is in a high-demand city, and its value as estimated by Zillow has gone down slightly over the past couple of years. Either Zillow's algorithm is crap, or there is huge regional variation in what the housing market is doing.

That's crazy. We bought in Gilbert in Spring 2014 and our house has nearly doubled in value per Zillow with huge appreciation coming since the pandemic.

 

[elindholm]

That's crazy. We bought in Gilbert in Spring 2014 and our house has nearly doubled in value per Zillow with huge appreciation coming since the pandemic.

Bottom to top of this curve is about 15%. So I misspoke; it's up slightly over the last couple of years, but down over the last several months. The peak is May 2021.

 

[Folster]

Bottom to top of this curve is about 15%. So I misspoke; it's up slightly over the last couple of years, but down over the last several months. The peak is May 2021.

Phoenix has been one of the hottest markets.

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I think about us squabbling over a few grand when we bought it. Almost walked away. LOL!

 

[elindholm]

Phoenix has been one of the hottest markets.

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I think about us squabbling over a few grand when we bought it. Almost walked away. LOL!

Yeah, that's quite the recent surge! When you get down to it, our home has been a pretty crappy investment. It's worth about 4x what we paid for it 24 years ago, but we've put a ton of money into it, at least as much as the original purchase price. So overall it has appreciated by maybe 100%, in 24 years.

 

[Folster]

Yeah, that's quite the recent surge! When you get down to it, our home has been a pretty crappy investment. It's worth about 4x what we paid for it 24 years ago, but we've put a ton of money into it, at least as much as the original purchase price. So overall it has appreciated by maybe 100%, in 24 years.

Yes. That is something that is overlooked by homeowners who look at their home as an investment and especially real estate investors. A lot of people don't realize how time and capital intensive real estate can be and the leverage typically required to buy property is not factored into the risk assessment. That's another reason why I love the stock market. Where else can you sit on your ass and passively make money with a click of your finger? Granted, I have to provide the principal and that requires working.

 

[Folster]

Gold is up 0.75% today. It's not a huge move, but pretty big for gold. However, while goldminers are up over 3.5% on the day.

 

[dscher]

Gold is up 0.75% today. It's not a huge move, but pretty big for gold. However, while goldminers are up over 3.5% on the day.

Gold is about to start outperforming the stock market on a relative basis IMO. Not sure if that means we see gold skyrocket from here as an inflationary hedge or if it just means stocks are going to take a pounding. The dollar strength is still puzzling if we are expecting gold to do well from inflationary pressure.

 

[Folster]

Gold is about to start outperforming the stock market on a relative basis IMO. Not sure if that means we see gold skyrocket from here as an inflationary hedge or if it just means stocks are going to take a pounding. The dollar strength is still puzzling if we are expecting gold to do well from inflationary pressure.

I agree. We may not see gold skyrocket as you said, but it won't be hit nearly as hard if there is another correction/crash. That's why I have a healthy percentage of my mid term funds in gold and silver as well as international and domestinc value leaning ETFs.

 

[dscher]

I agree. We may not see gold skyrocket as you said, but it won't be hit nearly as hard if there is another correction/crash. That's why I have a healthy percentage of my mid term funds in gold and silver as well as international and domestinc value leaning ETFs.

Yep. Right about now is the time when well rounded diversification pays off and keeps an investor from making big mistakes.

 

[elindholm]

GT, which I hold, is down 25% today, apparently on a good (?) earnings report. Haven't had the time to research it yet.

 

[dscher]

Oof. 10 yr yielding more than the dividend on $SPX...

 

[dscher]

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[dscher]

Perfect time for a *gasp--wait for it* false flag/black swan though....I see us in a perfect storm of 'fear of loss of power' in the global picture. We've seen weird 'coincidences' over the decades now...

Just sayin..

 

[elindholm]

The GT story is that they had strong earnings but are anticipating only break-even free cash flow for the next year. That was enough to panic investors. It feels like an overreaction to me -- not that my opinion matters, since I've missed the sell window.

 

[Folster]

The GT story is that they had strong earnings but are anticipating only break-even free cash flow for the next year. That was enough to panic investors. It feels like an overreaction to me -- not that my opinion matters, since I've missed the sell window.

The market is really penalizing soft forward guidance almost more than an earnings miss. I guess that makes sense since the market is supposedly forward looking.

 

[Folster]

Wow! Gold and Silver up 2%. Miners up big! 5.5% Is gold finally breaking out?

 

[dscher]

Wow! Gold and Silver up 2%. Miners up big! 5.5% Is gold finally breaking out?

So far so good...gdx still has some overhead resistance to work through (200 day MA)...and gold finished a weekly breakout of a pattern that has been forming since the top in 2020 that a lot of technical traders have been paying close attention to.

 

[Folster]

The Producer Price Index (PPI) came in hotter than expected, but the fears of conflict in Eastern Europe have decreased and that's good news for the market.

The Producer Price Index for final demand increased 1.0 percent in January, as prices for final demand services rose 0.7 percent, and the index for final demand goods moved up 1.3 percent. Final demand prices advanced 9.7 percent for the 12 months ended January 2022.