Fear & Greed

[von_Bismarck]

Fear and Greed, pretty much sums up the modern day Repug party.

And also those who profit from propagandizing industry misinformation. *nods*

 

[trysail]

The 5-Year US Treasury YTM and the 1-Year US Treasury YTM have inverted.


https://fred.stlouisfed.org/graph/fredgraph.png?g=nfIn


Historically, inversion of the US yield curve portends trouble for the U.S. economy.


https://fred.stlouisfed.org/graph/fredgraph.png?g=nfIK


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[von_Bismarck]

You already posted that, numbnuts. Doesn't your employer check if you're just copying and pasting your own posts?

 

[trysail]

Spread between Moody's Seasoned Baa Corporate Bond Yield-Moody's Seasoned Aaa Corporate Bond Yield


https://fred.stlouisfed.org/graph/fredgraph.png?g=ngdD


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[trysail]

In 1971, $1.00 (US) would have bought you S.Fr. 4.25.

Today, $1.00 won't even get you a single Swiss franc.



https://fred.stlouisfed.org/graph/fredgraph.png?g=ngdO



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[trysail]

There has been an ever-so-slight inversion of the U.S. Treasury yield curve as both the Federal Funds rate and the YTM of the 1-year note now exceed the YTM of the 5-year note.


https://fred.stlouisfed.org/graph/fredgraph.png?g=nmSb




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[trysail]

Of a sudden, the market has decided that my collection of lepers and superficially damaged goods may not be quite as valueless as previously imagined.


It's a quite pleasant, gratifying and enriching experience in distinct contrast to the time spent catching and collecting those falling knives.



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[trysail]

Slowly— very slowly— my battleships are turning.

The crisis has passed; it doesn't matter that they are slow to turn. What's far more important is that they answering the helm: they ARE turning.


This is going to be fun (and lucrative). I bought enough so it's going to be material.



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[trysail]

***LOL***
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Now I'm angry (with myself) that I didn't buy more of my lepers and untouchables.


This always happens when they work.


I don't know why it happened but after a long, dry spell with a paucity of seasoned, high-quality companies available at bargain prices, last summer and fall there were five or six that had widely publicized (but ephemeral and fixable) problems. They were long-established businesses in their respective fields along with excellent value and big fat dividend yields.

I put a fair amount of my dry powder to work.

This is going to be a whole lot of fun. I will ride these babies for a long, long, long time.



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[trysail]

There will be a demonstration of fear today.


It's healthy (and long overdue).






N.B., nobody can predict these things in advance; they are, by definition, "unknown unknowns." The higher markets go, the more they become vulnerable (that's simple mathematics).


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[trysail]

"Buy when stock prices are low and hold on to your securities... People seem unable to grasp these simple principles.

They do not buy when prices are low.

They are fearful of bargains."

-J. Paul Getty​

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[trysail]

There will be a demonstration of fear today.


It's healthy (and long overdue).






N.B., nobody can predict these things in advance; they are, by definition, "unknown unknowns." The higher markets go, the more they become vulnerable (that's simple mathematics).


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[trysail]

When in fear
or in doubt,
run in circles,
scream and shout.



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[SpeareChucker]

I cannot believe how many people are acting out in fear.



This is a nothing event.
Do we annually sell-off because of the flu?

 

[BotanyBoy]

I cannot believe how many people are acting out in fear.



This is a nothing event.
Do we annually sell-off because of the flu?

I can....shit I've been waiting for it, see how far the fall goes and buy back in.

 

[trysail]

The mathematics of market prices are interesting.


As is often the case, the academics have flogged a completely worthless intellectual framework on unquestioning and naive public and industry. Many of the Greek letters (beta, for instance) employed by the academics to bamboozle them are worthless bullshit. Warren Buffett has taken great pains to point this out— yet no one seems to listen.


Risk is not static. Risk is not linear.


It is a simple fact that the higher market prices go, the higher the risk. The reverse is also true. The lower prices go, the less risk there is.


Blind faith in the academics has resulted in numerous financial accidents. Long Term Capital Management is probably the most prominent example (which was, most assuredly, anything but "Long Term." That one even featured a couple of Nobel laureates). The snake oil of "portfolio insurance" was another.


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[trysail]

This is EXACTLY why Warren Buffett has been accumulating a fuck-ton of cash at Berkshire Hathaway.


At some point (and neither I nor anyone else knows when), you will see Berkshire Hathaway put a LOT of that cash to work.


As of 12/31/19, Berkshire had $128 billion of CMH ("Cash Money Honey") on its balance sheet.


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