The Stock Market - A daily diary

That would be a great idea.  To chart the growth in developments...  the benifits, the new strains, the influence of terpenes on the CBD, even my own experience of getting off a pharm drug with 100s of side effect because of CBD.  I don't mean to be a pumper but yes.  I will consider for genuine reasons.

WSC,

It is not a binary choice with the FED.  It is a maybe; maybe not for me.  For you it is a do or die.  You want to make it that way.  I gave you a very detailed analysis of the FED the other day and supported it with many links and quotes.  You gave none except your opinion and that is fine.  You can choose to see it with blinders on — that is fine and your choice.  You make it seem like I disagree totally with you — when you know I do not.  I am saying incorporate it.

 Sure, I have been invested way before the FED started doing their thing as well.  

But if you ‘know’ the FED is doing it.  Simply add it in as a factor.  

You can choose your way and isolate individual stocks to buy like that.  But right now you cannot treat the market as a whole like that.  

You can even isolate the BEST 10 stocks you like that way and make your own small mutual fund.  The issue is I will blindly take the top 10 S&P stocks and be much happier.  

Monetary policy and investing philosophy do not necessarily have to go hand-in-hand with investors.  You have to know this — we have seen this for decades — way before computers, etc.  It is for sure a factor.  But to make it the sole driving force in the market is selling the investors way short I think.   Think of all the savvy investors you have known — do you really think they would be getting in with both feet if they felt it was propped up and about to collapse?  No way!  There are multiple factors — sure some are sketchy.  But there are a lot of money betting on the other factors to prevail longterm.  

I hear ya Wall.

I believe Raiders did answer your question by not answering it. 

We all know the markets would be a total shit show without the Fed. 

Yes.  I have heard a lot of people that have had severe pain and weaned off of the addictive stronger drugs etc.  There is for sure a place for it I think.  To me the line is still blurry though.  

Oh and nice use of a word I didn’t know.  I had to actually look that up and I know a lot of words!  Still don’t know exactly what is meant there.  

But I may get interested and look into this some more.  

Really?  Several links and quotes the other day put some doubt on this as I have said and answered several times.  

For example as one fellow put it talking about the interest rates:

Giving the Fed its due, this isn’t to say it has no effect. And that difference can be encapsulated by taking the difference between the 10-year Tbond rate and the intrinsic risk-free rate (The Fed Effect on the chart). Suffice to say this is a much more subdued impact than it’s routinely given credit for.

The bond market is a sage leading indicator because its market prices reliably reflect future economic growth expectations. The reason no one can consistently predict interest rates isn’t because no one can foretell what 12 economists in a room decide to do with them, it’s because the real driver of interest rates is a multivariate macroeconomic equation that no central body has real control over. 

Rather than obsess over Fed decision making, the data suggests that you’re best suited to simply pay attention to inflation and growth to get an idea of where rates will head. It's high growth and expected inflation that give way to elevated interest rates, and vice versa.

  Wallstreet vs. Raiders....  best sporting event on covers today.   Two educated opinions going head to head....  who will be the victor??  My emotions lean Raiders but Wallstreet right cross has shown damage...   

God I miss sports.  Thanks for the diversion guys.  I think MASH is on TV so I am out of here... lol.

Yeah I thought so...

The FED does not shape the price of the 30 the 10 the 5 the 2 the 1 yr the 3 month the 1 month...no of course not.

I think you intentionally are missing his overarching point — at least I hope it is intentional.  

How much longer will the Bulls run wild? All of this news of vaccines and treatments while the markets are trampling all bears in its path, yet we sit here with lint in our pockets as far as a cure. 

So far going to 20% cash has cost me over 25K. It's not much in the grand scheme of things, but I have seen people cry over much, much less....and so have you!

Rush & Raiders: you guys nailed it so far with your advice to hold tight. Well done.

Zebra. I dabbled in cannabis stocks just prior to the crisis hitting. I bought MJ at $16.80. It's been wrecked pretty badly, but I do believe that the future is bright. There are lots of variables to get under control in this sector, including excessive taxation as a motivator for buyers seeking black market products, but I expect big gains eventually.

You certainly cannot worry about it.  Like I said at the time — it is wherever your stress level is best.  

Also, it is a balance.  Imagine how much worse you would have ‘felt’ over real lost money if you had stayed in and the market tanked.  I bet it would be way worse than ‘missing out’ on a little runup. 

Yes. Raiders. That would have been a much worse situation. For now I am staying at 80/20.....it makes for peaceful sleep. When I leave this world, it's not like I was taking the extra $$$ with me.

Wow, what in the hell is going on with the stock market.  Lol.  The rocket ship continues. 

I "guess" the big news of the day was the encouraging test results of the Remdesivir drug from Gilead.  I say "guess" because I think there was more at work today.  More on that later...    It was just a short week ago that the air was let out of this drug from Gilead due to disappointing preliminary test results from China....  I'm sorry, but I thought we learned our lesson from China.  Do NOT trust ANYTHING that comes out of this country.  I had this thought last week when the news came out, and I'm sure there is good reason why Chinese people were the first subjects of this test (because they were early in this crisis), but for crying out lout, can we get Gilead representatives from either Europe or the U.S. to oversee what is being done ??  China is  misleading test results, either through their incapability or through their efforts to mislead..  

What else was big news of the day ... GOOGL !  I heard almost no one talking about this today..  GOOGL shot up almost 9% on good revenue/earnings results yesterday.  FB traded in sympathy with a +6% increase on the day, too, primarily because they share a similar business model with GOOGL ....   MSFT, AMZN, and AAPL did well also, but I truly don't understand AAPL's movement.  They bear almost no resemblance to any of the other "Big Tech"  because they are still primarily a "Hardware" company.  I still say AAPL sits in the crosshairs of this recession worse than any of the other "5 Horsemen."   The others have cloud business or digital ad business to help insulate them from the consumer.. Not AAPL...    So, in summary, FB + GOOGL helped contribute big time to today's S&P advance, along w/ the Gilead news.  

Exactly Gamble... "Risk Tolerance" is not something that's talked about enough...Everybody's investment circumstances are different, right down to their appetite for risk. 

Circling back 'round to Gilead for a moment, while we applaud good news against the Chinese Virus, this doesn't do anything to help society as we go back to work, daily lives, etc.  It doesn't change anything w/ Social distancing and facemasks, and doesn't do a think to help us on the vaccine effort.  It only helps someone's survival chances if they "get" the Chinese Virus.... And even then , I'm sure lots of additional testing still needs to be done with the remdesivir drug to prove its efficacy.   Lots of Optimism on Wall Street for a very small piece of the overall solution pie IMHO....  , We still need a vaccine ! 

I'd mentioned a few weeks ago why a "Manhattan Project" of scientists wasn't being organized to tackle the vaccine challenge.  Turns out there is.  I came across the article in the WSJ  that talked about a dozen of America's top scientists.  These scientists and their backers describe their works as a "lockdown-era Manhattan Project," a nod to the WWII group of scientists who helped develop the atomic bomb.    The group of scientists consists of an immunobioligist, and neurobiologist, a chronobiologist, and oncologist, a gastroenterologist, and epidemiologist and a nuclear scientist.  (Bill Gates was not mentioned as being invited to this effort.  Thank God. Lol).   Of all these scientists, biologist Michael Rosbash, a 2017 Nobel Prize Winner, said, "There's no question that I'm the least qualified.   (I thought that was funny. Lol)    

Some interesting observations from the article, not all focused on vaccine; 

* Hydroxychloroquine was dismissed after the group's resident expert determined it was a long shot at best as an effective treatment

* The group disparaged the idea of using antibody testing to allow people back to work if their results showed they had recovered from the Virus.  A chemical biologist declared it "the worst idea I've ever heard."  He said that prior exposure may not prevent people from giving the virus to others, and that overemphasizing antibody testing might tempt some people to intentionally infect themselves to later obtain a clean bill of health (Not a crazy thought in this era of "lockdown")

A lot of the effort exposes the significant amount of red tape that is typically involved with the FDA.  Instead of approvals that typically take months, decisions are now being made in a matter of days, or red tape cut entirely.  Having worked with the FDA on an indirect basis in the past, I can share the frustration that they are a slow, deliberate, and a "big bureaucracy" that comes across as though  "they are boss."  

It's good to see things are not being done same as before with the FDA .. A vaccine can't come soon enough !  

Yeah. I agree Rush. This treatment drug is the smallest part of the solution.... but you have to start somewhere.

The markets are absurd. A correction is looming. Talk to me about revisiting all time highs in a couple of years....not next month!

Rush,

Some of this is questionable by them to me and I would question the real reasons behind dismissal of some of these ideas:

Some interesting observations from the article, not all focused on vaccine; 

* Hydroxychloroquine was dismissed after the group's resident expert determined it was a long shot at best as an effective treatment

* The group disparaged the idea of using antibody testing to allow people back to work if their results showed they had recovered from the Virus.  A chemical biologist declared it "the worst idea I've ever heard."  He said that prior exposure may not prevent people from giving the virus to others, and that overemphasizing antibody testing might tempt some people to intentionally infect themselves to later obtain a clean bill of health (Not a crazy thought in this era of "lockdown")

Obviously, HCQ cannot be dismissed out-of-hand.  Study by AAPS still showing over 90% improvement rate — and they keep this updated.  Only the most severe dying — of course, that is the way with any attempt at treatment.  There are also other studies in various countries that say this has been helping.  So it is not just ‘a long shot at best’ as an effective treatment.  Absolutely, better may come along.  But you cannot just say that if you want to be taken seriously as a group of doctors — when peer studies, so far, say you are wrong.  They should have worded that differently.  

And to say antibody testing to allow folks back to work is the ‘worst idea I’ve ever heard of’ — simply means he has not heard very many ideas at all.  Off the top of his head he could come up with many, many worse ideas.  He should have worded that differently.  You have to be realistic about it and hopeful for the folks.  We know in these situations that if you have antibodies showing you have been exposed/had the virus already then you are very, very, very unlikely to get it again and to pass it along.  Very unprofessional to say something like that — when again the whole study of this science is against you.   

We are looking at/for things that have shown promise and will give hope to people to get back to work, etc.  I would question their agenda if this is the way they feel.   

To plagiarize, we are fortunate to know the target group of the virus — old folks.  Young folks can almost mainline the virus and be fine.  Quarantine the old folks and the folks high at risk.  You absolutely have to build up the herd immunity and that is done by letting people get back to work in a safe manner.  In the meantime, use treatments and methods that have proven useful in the past — while working on better treatments and vaccines.  

I didn’t read the article and maybe the portions you selected I took out of context but I am certainly glad they are not the only group working on this thing.  

Maybe they never heard of Voltaire.  Or maybe I just took the portion wrong that you quoted. But you have to start somewhere.  You cannot sit in the lab until you have vaccine in hand and tested and approved and in supply and dosed out to all folks.  That cannot be the plan.  

Gamble, this market IS for sure absurd ! Lol.  Enjoy it while it lasts.  And how about  GOOGL !  That company is a monster . 

Raiders , I had the same thought in regards to their hydroxychloroquine comments.   It was a bit disappointing that the article didn't go to any depth to understand their thinking behind it.  It almost came across as though they have a bias against it. 

Rush...if you throw enough darts, you eventually hit the bulls eye.....sometimes you get lucky with a GOOG. Why it was up $100 plus today is anyone's guess. Pre-markets are headed for a strong opening in the morning to keep the absurdity going. 

I have cash on the sidelines to deploy but I'm in no rush. I'm thinking the grocery sector is going to be a long term winner in the next 5 years. The question is what percentage of people just go back to filling up restaurants like the old days and how long will it take (if it ever does) to get back to 100%? Will the restaurant industry ever get back what it has lost? If not, grocery stores seem like a logical bet. Maybe Costco? I would also like Netflix but the P/E climbing towards 100 kills that one for me. 

Just like GOOGL yesterday, FB is up +10% in after hours trading today.  

S&P500 is approaching its 200 DMA of 3,000.  Will be interesting to see if this sets up as a point of resistance for markets 

All in all a pretty mundane down day for the markets. You might as well look up to the skies to see the next move.....our markets have become as predictable as a leaf fluttering in the wind. 

Rush...as you said, the DMA tells the entire story if one were inclined to gamble. Climbing this wall of resistance would seem to be an impossible task for an economy functioning at less than 20%. 

You get bored I can link you a video from interview more or less about this.  You can nitpick it if you like, ask questions if you like.  Maybe 20-25 mins for the full interview.