How Many Believe "The Economy is Good"

[NorwichGrad]

Most people do the opposite of what they should when it comes to investing. They see the big drops, get shaken and sell. Then they sit on cash watching the market (whatever the investment vehicle is) and think "Oh no I'm missing out on this" and end up re-investing when the market is at or near the next high. That is how money is made in any investment. The people who make gains are basically taking the money away from those who lose...There is a very simple and effective strategy to avoid this. Simply dollar cost averaging into and eventually out of the investment vehicle. This allows you to spread your investments or withdrawals out and smooth out the curve. I don't sell any stocks, but since about a year ago I have reduced my allocations putting just a little more into a stable money market fund (cash) so when the dips come I simply move some of that cash into investments. I will sell physical assets if the prices are right. I would unload silver at $24/oz making a good profit and knowing that when the recovery comes I will be a buyer again around $16/oz...

SMART MOVE!! That's exactly what those who invest in index funds should do. Shuffle into money market until after the reset, then reshuffle.

And you're right. Common sense isn't common anymore. I shake my head when people buy at the top then sell low..

Selling silver at $24 is a smart move. It's very conservative for sure. My price point before selling, personally, is $34, as the gold silver ratio is very high. My plan is to actually just trade silver for gold when the time comes.

[OldFartTom]

...Very few people, if any, understand the bond market. You obviously do...

Thank you but not too much, I've only really studied or done any qualifications on securities and never looked too deeply at fixed income/derivatives. About 20 years ago someone told me that they could get me a job if I understood/memorized https://www.amazon.com/Options-Futur.../dp/0132777428. I can clearly remember reading the section on deriving https://en.wikipedia.org/wiki/Black%...holes_equation from first principles, as I got about half way through the workings I realized I Never Ever wanted to work in derivatives or fixed income (e.g. Bonds) and I never read another page of the book

On the subject of Math lessons (there's a point here, stick with it). Let me test your knowledge of statistics, here's a story, I'll explain the answer afterwards and the relevance will become clearer

Once upon a time there was a magician. He had a pack of 52 completely standard unmarked playing cards. He shuffles the pack thoroughly. What are the odds that if he deals 3 cards from the top of the shuffled pack they will be Ace of Spades, Two of Spades and the Three of Spades? Work out the probability before you read on

This story was told by a journalist after the 2008 crunch (Robert Peston). He said that the more technically minded the person the more likely they are to get the answer wrong. According to Peston, if you are very mathematical you're likely to give an answer like 1/52 * 1/51 * 1/50 = a very tiny probability. If you are very un-mathematical you are likely to ask questions like "Is the magician any good?" or give the answer it's likely because it's done by a magician

The point is that many people people, especially as they get more technical or mathematical get sucked deeply into the math and lose the overall picture. Peston believed this was a contributor to the 2008 crunch. The banks didn't have cynical old traders they instead had recruited young mathematicians, literally... people with PhDs in Physics, you know the kind of people like the character Sheldon from the Big bang Theory. In my travels in banks I've met people like that. While they perfectly understood the math of the current dynamic, they failed to realize that the dynamic could change or knew what a crash felt like.

Move forward to today -- it's worse. Not only has the recruitment dash to "mad math" never stopped, decisions aren't even being made by the Sheldons, they are now made by algorithms that the Sheldons wrote. If anything we're likely to get a sharper crash having learnt little from previous crashes.

Many here are pointing out that we're due a correction, that's easy to see. The real art is predicting When will it happen. You work that out? you could be rich.

[Mark1T]

After the blood bath yesterday, it is an opportunistic buying for me now.

[NorwichGrad]

Thank you but not too much, I've only really studied or done any qualifications on securities and never looked too deeply at fixed income/derivatives. About 20 years ago someone told me that they could get me a job if I understood/memorized https://www.amazon.com/Options-Futur.../dp/0132777428. I can clearly remember reading the section on deriving https://en.wikipedia.org/wiki/Black%...holes_equation from first principles, as I got about half way through the workings I realized I Never Ever wanted to work in derivatives or fixed income (e.g. Bonds) and I never read another page of the book

On the subject of Math lessons (there's a point here, stick with it). Let me test your knowledge of statistics, here's a story, I'll explain the answer afterwards and the relevance will become clearer

Once upon a time there was a magician. He had a pack of 52 completely standard unmarked playing cards. He shuffles the pack thoroughly. What are the odds that if he deals 3 cards from the top of the shuffled pack they will be Ace of Spades, Two of Spades and the Three of Spades? Work out the probability before you read on

This story was told by a journalist after the 2008 crunch (Robert Peston). He said that the more technically minded the person the more likely they are to get the answer wrong. According to Peston, if you are very mathematical you're likely to give an answer like 1/52 * 1/51 * 1/50 = a very tiny probability. If you are very un-mathematical you are likely to ask questions like "Is the magician any good?" or give the answer it's likely because it's done by a magician

The point is that many people people, especially as they get more technical or mathematical get sucked deeply into the math and lose the overall picture. Peston believed this was a contributor to the 2008 crunch. The banks didn't have cynical old traders they instead had recruited young mathematicians, literally... people with PhDs in Physics, you know the kind of people like the character Sheldon from the Big bang Theory. In my travels in banks I've met people like that. While they perfectly understood the math of the current dynamic, they failed to realize that the dynamic could change or knew what a crash felt like.

Move forward to today -- it's worse. Not only has the recruitment dash to "mad math" never stopped, decisions aren't even being made by the Sheldons, they are now made by algorithms that the Sheldons wrote. If anything we're likely to get a sharper crash having learnt little from previous crashes.

Many here are pointing out that we're due a correction, that's easy to see. The real art is predicting When will it happen. You work that out? you could be rich.

I have a degree in engineering.

I also have an MBA.

My engineering degree got me places. My MBA looked good on paper, but I had to unbrainwash myself because I was taught from a Keynesian standpoint, which is communistic.

I am a self-taught Austrian Economist. I follow the works of Mises and his contemporaries. I am also a follower of Ron Paul. History (real history) and economics (real economics) go hand-in-hand.

And being an engineer, data does not lie.

Here is a fact for all of us:

It's interesting that 48 years ago today, Nixon closed the gold standard "TEMPORARILY." All currencies throughout history have failed in the end. The U.S. currency has failed twice in the last 243 years. Ever heard the term, “ain’t worth a Continental”? The dollar has fallen 98% since the Federal Reserve was formed in 1913. THERE IS NOT ONE VALID CURRENCY TODAY FOR THE FIRST TIME IN 5,000 YEARS OF RECORDED HISTORY.

[NorwichGrad]

After the blood bath yesterday, it is an opportunistic buying for me now.

You can.

Personally, I won't. Yesterday was just the beginning.

Personally, I am 100% all silver at the moment. Why silver and NOT gold? Look into Exter's Pyramid.

In addition to yesterday's beginning, you also have to understand the derivative time bomb.

[Mark1T]

You can.

Personally, I won't. Yesterday was just the beginning.

Personally, I am 100% all silver at the moment. Why silver and NOT gold? Look into Exter's Pyramid.

In addition to yesterday's beginning, you also have to understand the derivative time bomb.

(look at Nickel, too, G, said the little goat of knowledge)

[OldFartTom]

I have a degree in engineering. I also have an MBA.

so... did you calculate the probability or see the magic trick aspect?

...I was taught from a Keynesian standpoint, which is communistic....

Not necessarily communistic, it's important to realise that back in 1920 or whenever, it really did work. You could give the average worker then a week's money they would probably spend all of it on domestically produced goods, so a virtuous circle would happen. Nowadays people would spend it on consumer goods (iPhone or whatever) and the whole circles rapidly bleeds to death. So just because it worked back then, doesn't mean it'll work today. Conversely... just because it doesn't work today, doesn't mean it didn't work then IMHO it's a theory for the history books, not present day Western economics, but that's just MHO

...I am a self-taught Austrian Economist. I follow the works of Mises and his contemporaries. I am also a follower of Ron Paul. History (real history) and economics (real economics) go hand-in-hand...

As Patton said "If everyone is thinking alike, then somebody isn't thinking" Interesting to see someone who follows the Austrian School!

...And being an engineer, data does not lie....

Interesting perspective, maybe because I was originally an engineer too, I completely agree. I've always felt the observations are the fact/truth... and the theory describes them. Far more common is the idea that the theory is real/distilled truth and the observed data points are not the truth as they're erratic (with noise). Years ago, when I used to work in Financial data it seemed fitting that the grave of https://en.wikipedia.org/wiki/Thomas_Bayes was just in the burial ground directly next to the building housing the company's mainframes (yes, mainframe!) . Nobody else seemed to appreciate the significance though.

[NorwichGrad]

(look at Nickel, too, G, said the little goat of knowledge)

LOL. Nickel is in fact one of the precious metals, but it is NOT monetary metal.

so... did you calculate the probability or see the magic trick aspect?
Not necessarily communistic, it's important to realise that back in 1920 or whenever, it really did work. You could give the average worker then a week's money they would probably spend all of it on domestically produced goods, so a virtuous circle would happen. Nowadays people would spend it on consumer goods (iPhone or whatever) and the whole circles rapidly bleeds to death. So just because it worked back then, doesn't mean it'll work today. Conversely... just because it doesn't work today, doesn't mean it didn't work then IMHO it's a theory for the history books, not present day Western economics, but that's just MHO

As Patton said "If everyone is thinking alike, then somebody isn't thinking" Interesting to see someone who follows the Austrian School!
Interesting perspective, maybe because I was originally an engineer too, I completely agree. I've always felt the observations are the fact/truth... and the theory describes them. Far more common is the idea that the theory is real/distilled truth and the observed data points are not the truth as they're erratic (with noise). Years ago, when I used to work in Financial data it seemed fitting that the grave of https://en.wikipedia.org/wiki/Thomas_Bayes was just in the burial ground directly next to the building housing the company's mainframes (yes, mainframe!) . Nobody else seemed to appreciate the significance though.

You're Christian, as I am.

Let's start with King Solomon's quote in Ecclesiastes. "Nothing new under the sun."

This is why I am a student of history as well. Monetary principles and history are tied at the hips. Once one understand monetary history, King Solomon was right all along.

Gold and Silver are God's money. Did you know that in the King James Bible, gold is mentioned 417 times, silver 320 times and the word “money” (meaning both gold and silver) 140 times?

Regarding Keynes, his theory was pretty much treated like Darwin's theory. THEY WERE MADE TO BE FACTS. In short, gubmint actually bastardized Keynes' theory.

The Keynesian theory in itself is in fact communistic. One of the pillars of communism is centralization of banking system. And when you summarize the ten pillars, it boils down to: Abolition of Private Property. And this is what central banks have done over the years. Also, two former fed chiefs admitted the federal reserve caused the great depression.

Nothing New Under the Sun.

[Mark1T]

LOL. Nickel is in fact one of the precious metals, but it is NOT monetary metal.

My point is that Nickel is a commodity and one of nickel’s primary applications is in creating stainless steel. Nickel is also the most important metal by mass in the lithium-ion battery cathodes used by EV manufacturers. 2015 was a bad year for Nickel, but with the growing EV market and most importantly the overall lithium battery market demand, it might be something to consider diversifying with - if it fits your risk tolerance.

[Plateauplower]

My point is that Nickel is a commodity and one of nickel’s primary applications is in creating stainless steel. Nickel is also the most important metal by mass in the lithium-ion battery cathodes used by EV manufacturers. 2015 was a bad year for Nickel, but with the growing EV market and most importantly the overall lithium battery market demand, it might be something to consider diversifying with - if it fits your risk tolerance.

I invest in metals too as hard assets (silver and gold) I don't care about the spread between gold and silver at all, I see value in silver in its technology and nanotechnology applications as a commodity, it has a few reasons for being a reasonable hedge (I don't consider it an investment, just an inflationary hedge). Markets still too high IMO, I'll start rolling some in little by little form my cash accounts after we hit a 10% drop....

[Mark1T]

I invest in metals too as hard assets (silver and gold) I don't care about the spread between gold and silver at all, I see value in silver in its technology and nanotechnology applications as a commodity, it has a few reasons for being a reasonable hedge (I don't consider it an investment, just an inflationary hedge). Markets still too high IMO, I'll start rolling some in little by little form my cash accounts after we hit a 10% drop....

Fully agree. Metals used as hedges and not really investments. Might represent 5% or less of my portfolio.

I am looking for buying opportunities after yesterday's blood bath. Not in a big hurry since the China thing is up in the air for a while.

[Plateauplower]

Fully agree. Metals used as hedges and not really investments. Might represent 5% or less of my portfolio.

I am looking for buying opportunities after yesterday's blood bath. Not in a big hurry since the China thing is up in the air for a while.

I'm gonna wait a while...My only advise would be to definitely not buy banks just yet

[Mark1T]

I'm gonna wait a while...My only advise would be to definitely not buy banks just yet

Copy that

[NorwichGrad]

Pp and Mark.

I encourage both of you to deeply look at the bond market. That will be the source of the reset. Yield curve inverted. The 30 yr yield is the lowest in history.

We are in an everything bubble. But the bond and derivatives are bigly yuuge.

[Mark1T]

Pp and Mark.

I encourage both of you to deeply look at the bond market. That will be the source of the reset. Yield curve inverted. The 30 yr yield is the lowest in history.

We are in an everything bubble. But the bond and derivatives are bigly yuuge.

We are also in a market correction. I is aware of the bond market and diversify.

But, my King of Goats friend, were you awared that this morning the yield curve was not inverted? It was close, but not inverted.

There are many other factors playing on our economy, as in uncharted territory to conclude that we are headed for recession. Such as China and the trade war. It all boils down to consumers and that data is positive along with low unemployment and corporate earnings. That doesn't mean that there are issues, but there are always issues.

Not trying to influence anyone - my opinions for what they are worth.

[Plateauplower]

Pp and Mark.

I encourage both of you to deeply look at the bond market. That will be the source of the reset. Yield curve inverted. The 30 yr yield is the lowest in history.

We are in an everything bubble. But the bond and derivatives are bigly yuuge.

I don’t have any bond holdings, don’t really know enough about them, other than they are typically inverse of interest rates. I’m pretty much 100% stocks, cash, hard assets. Might start researching more about bonds as I’ll need to transition to a diversified portfolio eventually. When I retire I should also have a pension that will more than cover my needs so I’ll never actually NEED to draw money out of my investments (such as in a dip) other than for the kids college costs.

[NorwichGrad]

We are also in a market correction. I is aware of the bond market and diversify.

But, my King of Goats friend, were you awared that this morning the yield curve was not inverted? It was close, but not inverted.

There are many other factors playing on our economy, as in uncharted territory to conclude that we are headed for recession. Such as China and the trade war. It all boils down to consumers and that data is positive along with low unemployment and corporate earnings. That doesn't mean that there are issues, but there are always issues.

Not trying to influence anyone - my opinions for what they are worth.

https://www.treasury.gov/resource-ce...spx?data=yield

The 3 month rate is higher than the 30 year rate. The 30 year rate is sub 2 for the first time in history. The curve has practically curved.

The 2 versus 10 is only 0.04 points apart. Many nations already have fully inverted. The US is not that far.

The solution should have been to RAISE the rate, not head to ZIRP.

Raising rate will hurt Wall Street but would save the economy.

Going to ZIRP would help the numbers look good, but it will eventually lead to hyperinflation. The best performing stocks in the world are in Venezuela where everyone is a billionaire but eating cats and dogs, and Zimbabwe where everyone is a trillionaire but starving to death.

[LWW]

All the new bull**** today is diets, we are living in a country of sitting on ones ass all day everyday so people are generially sold a bull**** way of eating less meats and running on treadmills.

That ******* running for president who thinks he’s Sparticous is full of **** his public opinions on eggs (eggs are gold to me). That guy and Obama are skinny pencil necks. These idiots in the world today can’t even figure out that weightlifting is the real fountain of youth.

All people should do what strongmen as far training but one can’t relate to 400lb person this is why I don’t like these modern day strongmen. I think they hurt normal people from believing they can be much stronger, for instance my gym owner friend has more seniors doing strongman training but is marketing is based on kettlebells, normal people never knew they could powerlift until they stepped in for kettlebell workouts.