What are you holding?

My nose at these levels.

After reading the most recent posts I almost posted Home Depot. I bought 200 shares of HD at $36 in 2011 and it closed last week at $206. Today it closed up $4.46 to $210.69. I can't explain why it keeps going up, but I'm just holding.

I can't take the attitude of Wall, because I am a buy and hold investor. Collecting a dividend in stocks is better than holding cash at least 80% of the time in my experience. 

I am not smarter than the markets and I know the markets always go up over long periods of time. So I just hold on and ride the waves....both down and up.

Well the coaster has gone straight up at a rate unseen before based on little economic reasoning. I have no idea how we are even half this high, seriously....but the way Trump fed the trough and there are no alternatives thanks to the FED and the financial engineering that makes earnings "look" good well I guess that is why.

If you factor in the decrease in interest expense thanks to the FED and to the shifting from long term to short term, the net gain in SPX earnings is less than half the number. So if you think that rates stick low like Japan then the game can go on, but any slide even in the direction of historic norms the whole game ends and quickly.

I agree with you that a rising rates environment is not a good deal for buy and hold investors. However, rates have been rising steadily for the past few years and stocks have been rising with them. Thus, we are experiencing an economy that is contrary to what we read in economics books. The key here is that the FED is doing good work for the stability of the economy.There are many more factors that influence the markets these days than just interest rates.

I also think you are ignoring the "lost decade" that we all suffered through between 2000 and 2010. Also, I'm old enough to remember the early 80's and how wacked out the economy was in those days. I didn't have any money back then, but I qualified for an interest free college student loan. I used the loan to take out a CD that paid me 16% interest. Car loans and home loans exceeded 18-20%. It was a crazy time. The FED has a much better hold on the pulse of the economy now as opposed to 30 and 40 years ago. The FED is your friend, so get off the sidelines.

Well if you remember the late 70s then you know why rates went that high, the FED screwed up pre-Carter plus back then we were an economy heavily reliant on oil imports and when the embargo happened and OPEC cut production, gas and oil went up dramatically creating massive inflation and to squash the inflation the FED rapidly raised rates and crushed inflation and the mid to late 80s things calmed down. 

The FED is wrong much more than they are right and the FED is only interested in protecting the elite and the banks, they only take action when the banks and the financial markets screw up and in my mind they waited way too long on this cycle and it has created several large bubbles...maybe these bubbles dont explode but the level of debt in education, cars and to businesses are at all time highs and of course the government is also at an all time high debt level. Unless we are to become Japan these debt levels are going to blow up our economy because of how we are dependant on these artificial low interest rates.

Notice that the economy relative to interest rates is not growing at all, we have thrown TRILLIONS at this economy between the FED and QE to inflate the banks and the markets and the government debt increase and yet we still cant even crack 3% GDP growth...TRILLIONS of dollars and debt cannot push the needle, and why is that? Because this increase in money supply is not reaching the consumer...for all the money into the system it is being held by the elite and financial institutions..so how much more debt and money is going to be needed to sustain this pig?

Wall. Thanks for the reply. I was too young to realize what was going on in the 70's but started to understand the effects of the Feds actions in the 80's when I was in college. I remember getting the monthly checks on my 16% CD and using that money to live on....it was a good chunk of change back then....every month! Then at the end of my 4 undergraduate years, I paid back the interest free loan when the CD expired. All of my initial principle was returned to me which I then used to repay the loan. My father was the one that taught me this trick and the experience resulted in me being fascinated with investing.

I must question you on your 3% statement as I am an avid CNBC fan and obsessed with tracking the markets. I recall the talking heads on CNBC praising the FED when the second quarter GDP numbers came in. I believe the number was 4%, so the FED policy might be working better than you assumed....right?

I think 3% is actually high, I am not speaking of one quarter rather a rolling 4 average.

CNBC will make you lose more money than buying cryptocurrencies, I never ever ever ever watch that network, it is bullish marketing throw up.

If anything I'd watch Bloomberg but in reality I watch none...and I was around when CNBC first cut their teeth and gained popularity. Even then it was biased crap.

buck that stock looks terrible...seriously.

They did a 1 for 30 reverse split not long ago, their margins are garbage, I dont get the appeal. So tell me what makes you want to buy it and what your buddy sees in it? I wouldnt buy that over a buck personally, it was a buck not long ago and should return there again IMO

Hey Wall, I'd have to disagree with  you on the FED and their interest to protect the elite.. The FED has a dual mandate to keep inflation at at 2% target, and to keep unemployment low.   I don't see any interest from them in protecting the elite.  Granted, the FED had to bail out the banks during the financial crisis to protect the system, but there was little alternative at the time.  Letting the financial system implode was simply not an option, and bailing out banks, and thus the big wigs at the top was the result.  I am no more happy than any one else that banking big wigs got a lifeline, but there was little option.

Also, have to disagree with your comment about the " FED and them  waiting too long in this cycle and creating bubbles."   As mentioned above, the 2% inflation target was rarely met under O'bama, and FED had no choice but to try to stimulate growth and get inflation to inch up by keeping rates attractively low.  You can blame both President O'bama & congress back then for not passing legislation to get both growth & inflation to ratchet higher.  They both failed on the fiscal policy front ; that left the FED to try and fix the problem via monetary policy.  Encouraging both businesses and consumers to spend is the secret sauce ; Trump has figured this part out..

I know you and I disagree greatly when it comes to politics, but this is how I see it.

Have to say I agree with you, Wall,  when it comes to CNBC.    I for one use it for entertainment purposes,  and to keep me informed on the markets.

But to follow advice from the pundits on CNBC can get folks into trouble.  I have used it at times to keep me informed of plummeting stocks when they have an earning miss or something like that.  More opportunistic than anything, but I for one don't make any tweaks to my broad sector allocation, diversification based on someone's ideas on the network..

Rush,

You make my point for me actually...when you say we are not at 2% inflation, first off I disagree with that because the measure of inflation is outdated and not comprehensive...there are large pockets of massive inflation and the way it is calculated is way off. For example, prices of groceries is a component of CPI and that measure is inaccurate because it measures PRICE only, and as we know corps have changed sizing to make more profits while keeping the farce of pricing "steady". Today I purchased some laundry detergent and I had the previous container still and I looked at noticed that the bottle is shaped a little differently and the service size for the container went down about 10%....so in theory if the price stayed the same in the basket of CPI there is no inflation but in reality to the consumer there IS inflation. I think the way CPI is measured is greatly flawed and they factor out very very volatile inflation parts to smooth it out...we are not and have not been at true 2% inflation for the consumer.

The greater point is the comment you made about bubbles...yeah there are bubbles but those bubbles are being quelled because of artificial low rates AND as I mentioned the way that corps have swapped out long term for short term duration thus lowering borrowing costs even more...its a toxic horrible combination and IF and when this nudges even in the slightest these bubbles will explode...not slowly develop they will explode in dramatic fashion and it will take down many corps due to these decisions to financial engineer. 

So how much has the FED and the USG spent to manufacture this fake 2% growth? How is that going to be paid and at what real cost? Is trillions in debt worth stopping the natural cycle of deflation? The FED is so afraid of deflation that they have chopped off the heads of the average saver in this country...so who is that protecting and serving? Who benefits the most from these artificially low rates? Corps and government....and the elite who can use these cheap rates to leverage and profit.

You are a smart guy, I cannot agree with what you said at all.

Part of investing is doing the homework. Part of the homework is keeping up with the news. CNBC and Bloomberg are the leaders and to say that you will lose money acting on their commentary is short sighted silliness. To the contrary, I have made some very nice profits via CNBC.

Years ago, when the Google IPO came out, James Cramer came on every day for two weeks begging people to buy. On the second or third trading day (I can't remember) after the stock had opened at $85 and doubled to $170, he wrote GOOGLE on his knuckles and put his fists together so the TV audience could read it. I bought 15 shares the next morning and watched the stock gain another 50-60 points that very same day. I now have 30 shares, post split, and over a 1000% return without ever paying a dividend!

I'm not saying buy and sell every day based on what they say. That would not be wise. That said, when Karen Finerman speaks, I listen. She knows her stuff. There are people on the network that I can certainly learn things from. 

OK, Wall... We agree to disagree,... To your last paragraph, I believe the FED "does"   have good reason to fear deflation.   We've seen what it can do to Japan.  The old saying was "the lost decade."  Well, let's make it two.  It's been two decades Japan has been fighting sluggish growth and deflation.  As an advanced economy that faces an aging population like this country does, the FED has good reasons to fear a deflationary spiral.  It should be on the forefront of the FED's concerns.  The FED has navigated the post-financial crisis remarkably well thus far.  Their biggest task going forward will be the unwinding of trillions of dollars of bonds they bought in the post-crisis era to keep rates low.   No doubt, there will be pockets of the economy that will abuse the low rates,  and bubbles may form.  But I go back to my earlier point.  This country and economy was on the precipice of something we do not want to revisit, and bold decisions had to be made..  

Gamble... How else do I say this.  You got incredibly lucky picking one of Cramer's many stock picks.  I watched the show for years to keep me abreast of the market, but never "blindly" followed a stock pick and bought it the following morning.  How about SNAP.   This stock that was pumped repeatedly on CNBC by many many big time (institutional)  investors.   SNAP is  having a 50% off sale that early public investors are not happy about.   

The smartest thing  you mentioned in your post is to do your homework, to which I agree !!    Keeping up w/ the markets is something we can again agree on, ... acting on someone's commentary without doing the homework is something we cannot..

Yeah I noticed that...

Rush...believe it or not Google is the only stock I have ever purchased directly as a result of watching CNBC. Doing your own homework is critical. HD at $36 in 2011, QQQ at 30, and BAC at $3 during the financial crisis are all huge percentage gainers in my portfolio. My biggest weakness (or is it a strength) is that I rarely sell stocks. The upside of that is living on the dividends. Compounding interest should never be underrated.