Loving Dow Jones

[Dawgbite]

I have worked in manufacturing for over 30 years. 20 years ago we hired people right out of high school and they had a desire to improve their place in life. Some moved on to a better paying job, some worked up to lead, then supervisor, and the up to management. The high school graduates we are hiring today have zero practical job skills. People we hired a year ago know no more today than they did eleven months and three weeks ago. Most have to be retrained after a long weekend. If their phone won't tell them what to do, they are incompetent. The greatest generation is dead or dieing, there children are retiring. I don't think we will ever have the labor force to bring the manufacturing jobs back. Twenty years ago maybe a quarter of hires could convert inches to centimeters, now three quarters don't even know how many inches are in a foot.

 

[LawDawg97]

But you are wrong on your statement

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.

You said “nobody” gets rich saving money. Horse ****. And now you’re just throwing out a 10k a year saving number to crawfish. Of course saving that alone won’t do it. But a man that goes to medical school flat broke can come out making half a million a year. He wasn’t wealthy when he started, but if he just lives on half of it he will be “rich” by most anyone’s standards in 10 to 15 years without investing a dime. And you don’t have to make that much to do it. Living frugally on any nice salary can give you a net worth that makes you “rich” in terms of what that truly means to most.

Conversely, I know a lot of wealthy people that have been wiped out by ignorant financial advisors. Not saying investing is bad, but your original comment is flat wrong.

 

[BoDawg.sixpack]

The market will be looking for follow through on GDP growth

Earnings and tax reform are baked into the cake already. After slashing corporate taxes it's going to be paramount to sustain GDP growth or increased sovereign debt projections could start to derail things. The S&P 500 PE is sitting at 25, a level which has seen sharp corrections historically. In the last 15 quarters we've averaged 2.26% real GDP growth but for 2017 we're averaging 2.5% even after the lackluster 1Q print of 1.2%. The Q2 and Q3 readings of 3%+ growth are going to need to be the new normal or the market could see some turbulence. The recent interest rate hikes, though small, do provide some wiggle room in case of an emergency, as does further quantitative easing from the Fed. But both would be viewed as admissions of monetary policy failure and would throw a wet blanket on the outlook of the economy.

The Fed is still acts clueless as to why wage growth is tepid at near full employment. Seeing an increase in wages would help counterbalance a faltering GDP if that were to occur, although both occuring together isn't likely. With that, and the level of consumer debt outstanding we're still on some shaky ground. Be nice to see Q4 GDP come in no less than 3.1% which is likely given the Atlanta Fed's latest reading is 3.3

The best investing advice is still to remain diversified in your investments, disciplined in your contributions, and to choose a profession that is projected to see growth in the next two or three decades. You do those three things in America, and everything else becomes cake.

 

[greenbean.sixpack]

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?

Just curious as to your age, I can't imagine anyone over 50, who lived through those times, having that notion. I remember 18% 30 year fixed rate mortgages. Gas prices in the 80s were higher (indexed for inflation) coupled with vehicles that achieved much lower MPG, those costs (high interest rates, high fuel costs) really ate into disposable income. The middle class now has much more money than the middle class in the 80s, just look at the crazy spending of everyone around you. I remember my first home loan in 1995 in the 7 to 8% range, older people were amazed at rates that low. Parents then would have never dreamed of spending the crazy money that is wasted on youth sports today.

As far as sustainable, the wife and I both started our professional careers in the early/mid 90s, many church couples who made similar money to us lived much higher on the hog than us. Fast forward 20+ years, stayed in touch with those couples, for the most part, they are still living the high life.

Those were simpler times and better times, but the amount of money in the economy now is much, much greater.

This is from a southern perspective, experiences in the Northeast or California may have been different.

 

[mcdawg22]

I'll tell you what, if the Dow goes up 140% with Trump, I'll give him a lot of credit. Because that's what it did while Obama was president.

 

[dawgoneyall]

I'll tell you what, if the Dow goes up 140% with Trump, I'll give him a lot of credit. Because that's what it did while Obama was president.

Nice try.

 

[TheStateUofMS]

You should go back and re-read both my posts. You've called me out on something I've said in both of my replies.

You don't read good or somethin. Crawfish???

 

[mcdawg22]

Nice try.

Please expound?

 

[dawgoneyall]

Please expound?

Seriously, if you don't see/know the difference then any explanation would be a waste of time.

 

[lariverdog]

side story, personal experience

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.

I found this to be interesting. Personally, I've been buying GMC trucks since 1990. I'm not debating GMC v Ford or other stuff, just a personal confession. While I realize manufacturing is somewhat global, I know a dealership that will not accept any Mexico built trucks. The reason? The Mexico trucks have horrible electrical problems. It cost them time and money chasing down problems and sales fell once they stocked Mexico assembled trucks. True story, maybe its crap IDK.

 

[Spiderman.sixpack]

I have worked in manufacturing for over 30 years. 20 years ago we hired people right out of high school and they had a desire to improve their place in life. Some moved on to a better paying job, some worked up to lead, then supervisor, and the up to management. The high school graduates we are hiring today have zero practical job skills. People we hired a year ago know no more today than they did eleven months and three weeks ago. Most have to be retrained after a long weekend. If their phone won't tell them what to do, they are incompetent. The greatest generation is dead or dieing, there children are retiring. I don't think we will ever have the labor force to bring the manufacturing jobs back. Twenty years ago maybe a quarter of hires could convert inches to centimeters, now three quarters don't even know how many inches are in a foot.

Yep, finding competent new employees that WILL work, is tough

 

[Philly Dawg]

Just follow him around mouthing “wrong,” no need to explain why.

 

[jdbulldog]

You sold it before the tax bill passed Congress? I think you may maybe missed a last little bump.

The recent Dow Jones rise is predicated on passing of the new tax bill. The market is always ahead of everything else. If something happened to derail the new legislation the Dow would not be so nice to us.