Loving Dow Jones
- Thread starter tbaydog
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last i checked there hasn't been any change... so this rise is just riding the wave of the last 8 years and speculation. Trickle down implies that the middle class will get more money... wages haven't kept up with growth/inflation over the course of the last 30 years... but um yeah my retirement account looks real good right now. Companies have a responsibility to shareholders first so they will increase dividends before wages that is where the trickle down goes.
You sold it before the tax bill passed Congress? I think you may maybe missed a last little bump.
I agree that the stocks are currently riding on speculation. The dividends before wages may be true in the short term, but I believe the play is to bring more manufacturing back from overseas and increase competitiveness for wages with the same labor pool. Our manufacturing jobs, which typically pay higher than these retail stores everywhere, have been slowly trickling out of the economy the last 30 years (partly due to regulations and tax advantages). Just my perspective..
I'm not a Trumper or Demmycrat, but bringing corporate taxes back to the level of every other country in the world may be a game changer. Our corporate tax level is waaaay higher than other countries and the primary reason why so many industries shipped their jobs overseas. I'm not trying to start a political discussion here but we have to do something and this looks like a good step.
Now if we could just get wages to match the rise in the cost of living.
manufacturing jobs aren't coming back to america... labor is cheap in mexico logistics for delivering goods is no different than building them in mississippi. why is this so hard to understand. Shareholders always come first that doesn't change unless you get unions involved and we all know how that goes. there are also lots of things being automated where it took 10 humans to do a process now it takes 2 to operate the machine that doesn't get sick or show up late for work and pays for itself in 6 months.
Once tax reform goes through, analysts will then up their forecasts for earnings, which will create the next leg.
Tax reform has certainly helped, but we've had double digit earnings growth this year. This market is growing on fundamentals, not strictly tax reform.
Whenever earnings growth starts to slow, that's when the market will come down and take a pause. Markets don't go into corrections for no reason.
Having said all that, don't be surprised if the market does have a consolidation period to digest gains if tax reform goes through. I wouldn't try and time it, but it wouldn't surprise me if this is a "sell on the news event." Everyone and their mother knows tax reform is likely at this point. Once "John Q. Public" rushes to buy after reform goes through, smart money will take the big gains we've had to close out their quarters to show positive numbers. It happens a lot. Like I said, don't try and time it, but have some cash to deploy if it does.
Tax reform has certainly helped, but we've had double digit earnings growth this year. This market is growing on fundamentals, not strictly tax reform.
Whenever earnings growth starts to slow, that's when the market will come down and take a pause. Markets don't go into corrections for no reason.
Having said all that, don't be surprised if the market does have a consolidation period to digest gains if tax reform goes through. I wouldn't try and time it, but it wouldn't surprise me if this is a "sell on the news event." Everyone and their mother knows tax reform is likely at this point. Once "John Q. Public" rushes to buy after reform goes through, smart money will take the big gains we've had to close out their quarters to show positive numbers. It happens a lot. Like I said, don't try and time it, but have some cash to deploy if it does.
In President Trump's first year in office, American factories are adding jobs at the fastest pace since 2014.
"United States has added 138,000 manufacturing jobs so far this year, far better than the 34,000 factory jobs lost over the same period last year."
Try to actually know what you're talking about next time.
And I hate quoting CNN: http://money.cnn.com/2017/12/04/news/economy/manufacturing-jobs-trump-2017/index.html
"United States has added 138,000 manufacturing jobs so far this year, far better than the 34,000 factory jobs lost over the same period last year."
Try to actually know what you're talking about next time.
And I hate quoting CNN: http://money.cnn.com/2017/12/04/news/economy/manufacturing-jobs-trump-2017/index.html
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stock valuations are being driven higher than normal based off speculation that the tax bill will pass and earnings will increase. here is current PE of S&P 500 on a chart since the S&P's existence
http://www.multpl.com/
http://www.multpl.com/
also you didn't read that article...
"Manufacturing has benefited this year from a weaker U.S. dollar. The industry depends heavily on exporting its products -- from pipes to pickup trucks. When the dollar's value is high, as it was in 2015, when manufacturing was in a recession, U.S. exports are more expensive and less attractive to foreign buyers."
"Manufacturing has benefited this year from a weaker U.S. dollar. The industry depends heavily on exporting its products -- from pipes to pickup trucks. When the dollar's value is high, as it was in 2015, when manufacturing was in a recession, U.S. exports are more expensive and less attractive to foreign buyers."
Use the forward PE if you believe the market and analysts are forward looking. Then be the judge if you think earnings are too high for a particular sector or stock.
The market has looked expensive by a trailing PE for years now. That's what happens when earnings are growing.
The market has looked expensive by a trailing PE for years now. That's what happens when earnings are growing.
The article is right that there are numerous factors to a growing manufacturing sector, but tax reform is another reason why. Just think about it. We are the largest economy on earth, which is driven 70% by consumer spending, but our corporate tax rate is noncompetitive. If you were a business owner, wouldn't you want to have direct exposure to the best consumer market this world has ever known? If the cost of doing business in that country is on par with other countries, wouldn't you want to move your business there?
Tax reform brings those barriers down, not to mention an expanding global economy.
So, to you're point, "manufacturing is not coming back to the US," is flat out wrong. I never said Trump was the reason. Maybe you thought that because I quoted the title of the article and it looked like I was making that claim. Trump does deserve some credit, however, as it is him who is pushing tax reform. Obama was focused on another agenda entirely.
Also, you should become familiar with the Conference Board for Leading Economic Indicators. It can be found here: https://www.conference-board.org/data/bciarchive.cfm?cid=1
Disclaimer: I didn't vote for DT and not endorsing him. I just look at the numbers and go by the actual date.
Tax reform brings those barriers down, not to mention an expanding global economy.
So, to you're point, "manufacturing is not coming back to the US," is flat out wrong. I never said Trump was the reason. Maybe you thought that because I quoted the title of the article and it looked like I was making that claim. Trump does deserve some credit, however, as it is him who is pushing tax reform. Obama was focused on another agenda entirely.
Also, you should become familiar with the Conference Board for Leading Economic Indicators. It can be found here: https://www.conference-board.org/data/bciarchive.cfm?cid=1
Disclaimer: I didn't vote for DT and not endorsing him. I just look at the numbers and go by the actual date.
stay away from GBTC. Last time I looked it's premium to NAV was around 30%. That means it's trading 30% higher than the actual number of bitcoin it holds, which bitcoin itself is severely inflated. I would not want to be in GBTC if I wanted bitcoin exposure.
No body ever got rich saving money...unless you're a wealthy person making $300k/yr and you can save $100k a year. If you can do that, you will be rich one day saving money.
For the rest of us, the only way a regular joe ever got wealthy was either starting a business or investing in businesses i.e. the stock market.
Trickle down does work in the sense you are using it. Ask.....millions of people.
For the rest of us, the only way a regular joe ever got wealthy was either starting a business or investing in businesses i.e. the stock market.
Trickle down does work in the sense you are using it. Ask.....millions of people.
BTW, I just like busting balls when I hear people talk about the market in absolutes. Predictions are fine. I like those, I just like seeing rationale behind it.
"The market is going to correct because it's all driven on speculation." That's quite the statement there, but what's the logic and reasoning behind it?
The thing about the market is you have tons of folks on both sides (bulls and bears) that are extremely smart each predicting the total opposite of each other. I like hearing the rationale behind market calls.
"The market is going to correct because it's all driven on speculation." That's quite the statement there, but what's the logic and reasoning behind it?
The thing about the market is you have tons of folks on both sides (bulls and bears) that are extremely smart each predicting the total opposite of each other. I like hearing the rationale behind market calls.
forward PE is also high
http://www.multpl.com/shiller-pe/
i'm not arguing for or against a pull back i'm just saying tread carefully... like the guy above said pigs get fat hogs get slaughtered. i think we continue to see a run for a while. what happens when oil returns to 80 dollars a barrel and rates rise another 2%? does growth slow? or does money just flow into bonds causing a slight pullback... things can and do overheat every 8-10 years. When money markets start paying 3% then i'll be worried
http://www.multpl.com/shiller-pe/
i'm not arguing for or against a pull back i'm just saying tread carefully... like the guy above said pigs get fat hogs get slaughtered. i think we continue to see a run for a while. what happens when oil returns to 80 dollars a barrel and rates rise another 2%? does growth slow? or does money just flow into bonds causing a slight pullback... things can and do overheat every 8-10 years. When money markets start paying 3% then i'll be worried
This. It's easy to get tied up with political agendas. The focal point should be the actions needed and taken to achieve a growing sector. The manufacturing sector has grown this year and some of that may be on speculation. Tax reform and reducing regulations on businesses will hopefully take it up another notch.
And since logistics was mentioned, that industry has a big change coming due to the electronic log mandate. This will make even more sense to ensure manufacturing is logistically located in one of the biggest economies in the world..
You actually gave the CASE Shiller PE. The forward S&P500 PE is 19.82 and can be found here: http://www.wsj.com/mdc/public/page/2_3021-peyield.html
Oil could return to $80, but I doubt it. I think oil is in a secular decline. I think a lot of the electrification goals are pie in the sky, but the market is shifting.
Autonomous cars paired with fleets and A.I. alone will create an unbelievable amount of oil usage efficiency which will ultimately drive down oil consumption relative to where it is today.
You mention the USD being down. Most commodities are priced in USD. The USD has fallen, while oil has gone higher, but it seems toppy. If oil was in such high demand, I would think we would have broken through $60 with a USD that has fallen a lot this year. ( a 9% currency move, especially in the USD, is MASSIVE)
Autonomous cars paired with fleets and A.I. alone will create an unbelievable amount of oil usage efficiency which will ultimately drive down oil consumption relative to where it is today.
You mention the USD being down. Most commodities are priced in USD. The USD has fallen, while oil has gone higher, but it seems toppy. If oil was in such high demand, I would think we would have broken through $60 with a USD that has fallen a lot this year. ( a 9% currency move, especially in the USD, is MASSIVE)
You're right about things overheating, but to me, it's hard to see a 2% economy for the past 8 years over heating. We're seeing a pick up in economic expansion, so we could over heat. Just need to keep watching the leading indicators.
For what it's worth, no CEOs of major US Corps factored in tax reform into their guidance. If we get tax reform and the plan is known how it'll effect their individual businesses, then CEOs and CFOs can access the tax reform impact and you'll see them and analysts raise their forecasts, which some is already baked in the markets, but not all of it.
For what it's worth, no CEOs of major US Corps factored in tax reform into their guidance. If we get tax reform and the plan is known how it'll effect their individual businesses, then CEOs and CFOs can access the tax reform impact and you'll see them and analysts raise their forecasts, which some is already baked in the markets, but not all of it.
I don't think we are targeting old business but rather new business, especially the smaller or mid-sized industry.
I realize Apple isn't going to start making iPhones in Mississippi anytime soon.
i pray they open GBTC options trading. i'll be wanting to buy some puts on it sometime next year.
and as far as tax/monetary policy goes... i think a small corporate tax reduction is good... BUT I like to have some extra juice in the tank for when there is a pullback/recession. at a 21% tax rate the govt won't have any juice. I guess individual taxes could be lowered to spur growth. It just makes zero sense to me to reduce govt revenue when the economy is good and we need to attack the debt... rates will rise to cool off this heating economy. that increases the cost of borrowing for the govt... cut spending. save a rate reduction for the bad times.
and as far as tax/monetary policy goes... i think a small corporate tax reduction is good... BUT I like to have some extra juice in the tank for when there is a pullback/recession. at a 21% tax rate the govt won't have any juice. I guess individual taxes could be lowered to spur growth. It just makes zero sense to me to reduce govt revenue when the economy is good and we need to attack the debt... rates will rise to cool off this heating economy. that increases the cost of borrowing for the govt... cut spending. save a rate reduction for the bad times.
I don't have a clue what will trigger it, all I know is that the last 3 January's have been tough on my portfolio and I swore after last year that I would be out by Jan.1 and watching. The first quarter of next year may be the best quarter in my lifetime but I will just have to get in late. I'm not going to lie, I'm scared of getting caught with my hand in the cookie jar.
2017 Jan was up
2016 we had oil falling off a cliff, which raised a lot of fears of defaults.
2015 was in the midst of an earnings recession
We have expanding earnings and stabilized oil prices.
2016 we had oil falling off a cliff, which raised a lot of fears of defaults.
2015 was in the midst of an earnings recession
We have expanding earnings and stabilized oil prices.
Ok, granted I not a whiz in the financial segment but I can make very common sense/conservative decisions that benefits my bottom line at my age. Bought a local chicken stock in the mid 80ies @ 3.63 a share ( numerous ). Today, sold for 145.00. So 17ing what if I left a few points on the table.
Stocks are a legalized form of gambling..............
Stocks are a legalized form of gambling..............
Engineer in the auto industry here. I visited a supplier in Mexico about 3 months ago that will be providing parts for our plant starting next year. At the end of our meeting, my manager candidly asked the program manager of the Mexico plant how much different the hourly wage was vs. the US. His statement was that the take-home pay of the average hourly employee was about $400 per paycheck ($800 per month). That is MAYBE 20% of the average for a comparable Tier I supplier in the US, and that is a small fortune down there.
And here is the kicker....the plant was cleaner, had a much stronger quality culture / lower PPM, and had never had a history of short shipping any parts as compared with our other primary supplier for this same part in the US. This is pretty typical of our Mexico suppliers across the board. Their labor force isn’t only doing the same work for 20% of the cost, they are doing it better than the US companies by and large. That may not be universally true in all industries, but it is definitely true in my limited pocket of the auto industry.
All of that being said, the OP is definitely correct that manufacturing is definitely going to be exiting the US at a much faster pace than it comes in. 138,000 jobs last year is great, but I’m willing to bet it is still substantially less (per capita) than the number created in Mexico (I tried to get figures on Mexico’s numbers, but could not find them). 20% of the labor cost for the same or better quality of work is simply too big of a gap to compete against.
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So nobody ever got rich saving money...
...except for the thousands of people that get rich every year saving money.
(just had to bust your chops for talking in absolutes...which you said you hate)
...except for the thousands of people that get rich every year saving money.
(just had to bust your chops for talking in absolutes...which you said you hate)
If you save $10,000 cash a year, you will not be wealthy.
If you invest $10,000 a year, you will become wealthy.
Like I said, unless you're a wealthy person saving money, you will not ever become wealthy just saving money. One must INVEST money 90% of the time to become a wealthy individual.
I also said not using absolutes when talking about the market. I think using absolutes in math is okay though. Now, your definition of wealthy may be different than most, but saving $10,000 a year for 25 years would only yield you $250,000.
If you invest $10,000 a year, you will become wealthy.
Like I said, unless you're a wealthy person saving money, you will not ever become wealthy just saving money. One must INVEST money 90% of the time to become a wealthy individual.
I also said not using absolutes when talking about the market. I think using absolutes in math is okay though. Now, your definition of wealthy may be different than most, but saving $10,000 a year for 25 years would only yield you $250,000.
Technically this may be true, but if you think 30 years ago middle class familes had more disposable can current middle class families, you don't remember 30 years ago well. Much more disposable income now, not even close, savings may be down and debt higher, but spending much higher now.
uh, yeah, 30 years ago middle class families had MUCH more disposable income. spending is higher because debt is higher and savings are lower. is that sustainable?
the logic and reasoning is that wages aren't up. maybe this will finally be the year that they go up, but the experts have been wrong on that for several years running. Looks pretty clear that the past relationship between rates, profits, and wages has changed against wages.
it's not a given that investments will see past returns. 8% annual returns are a historical aberration.
As a businessman, and the sole stock holder of a class C corporation ,that has been in operation for over 80 years, I can tell you two absolutes about the market.
1) It goes up, then down, then up,then down, repeat, repeat and repeat.
2) Never buy when it's booming, never sell when it sucks.
1) It goes up, then down, then up,then down, repeat, repeat and repeat.
2) Never buy when it's booming, never sell when it sucks.
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