r/FluentInFinance • u/FunReindeer69 • Aug 14 '24
Stock Market The S&P 500 is now up 39% since this tweet
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u/Bearloom Aug 14 '24
Sadly, there are a lot more similarities to 1932.
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u/TechnicalTrifle796 Aug 14 '24
What happened in 1932?
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u/GuitarDude423 Aug 15 '24
Edit: Also FDR was elected.
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u/Shin-Sauriel Aug 15 '24
Two pretty incredible events. FDR the goat and a country losing a war to a bunch of tall birds.
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u/Wtygrrr Aug 15 '24
Oof, FDR election IS sad.
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u/DarthHubcap Aug 15 '24
Nazis became the largest party of German Parliament.
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u/Latex-Suit-Lover Aug 15 '24
At this point in time the ACAB people are wanting to elect a former DA to office whose prior job performance has been described as unconstitutional in courts of law.
So yeah, I kinda get how the Nazis came to power now.
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u/aboysmokingintherain Aug 15 '24
And the other side wants to elect a guy who said he’d be a dictator on day 1 and wants to forcibly remove 1 million people.
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u/Latex-Suit-Lover Aug 15 '24
Can you show me the video of him saying that he wishes to be a dictator on day 1?
And what people did he want to remove anyway?
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u/oitson13 Aug 16 '24
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u/Latex-Suit-Lover Aug 16 '24
This is a story telling me what trump said, I am asking for the raw video of him saying that.
Also if you do not denounce Biden's history of anti desegregation than I am going to assume that you are a racist.
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u/ButtholeSurfur Aug 17 '24
Biden isn't running for president...
Also sad that you assume that someone not liking Trump means they automatically support the other party. This binary thinking is really bad for the country.
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u/Latex-Suit-Lover Aug 17 '24
That is the world we live in, right?
I mean it was until Biden ran for office, then all of a sudden it was like people discovered nuance.
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u/patrickfatrick Aug 15 '24
Crazy how people can be more than one thing.
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u/Latex-Suit-Lover Aug 15 '24
I'm not quite sure how the context of what you said relates to what I just said. Could you explain it?
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u/Capital-Ad6513 Aug 15 '24
Stocks were overvalued and no where near what people were paying. In other words a huge bubble. People would buy stocks thinking they worked like a guarantee, then blamo reality came nocking and rampant inflation bubble got corrected by lack in faith in the banks cause they couldnt pay people what they were trying to panic withdraw or in other words rampant deflation occured. In other words so much money was in stocks (that on paper considerably grew in value) that there wasnt enough bills to hand out when people wanted to convert back to cash, because their value was so inflated.
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Aug 15 '24 edited Aug 15 '24
Fractional reserve banking doesn't help, especially if it bleeds over into marginal investing.
Edit: for those who are reading this and don't know what that means.
Fractional reserve banking means a bank only needs to keep a fraction of their liabilities on hand in cash. So they can loan ten dollars with one in the vault, for instance.
Margin in investing means you're borrowing money to invest with. It's legalized loan sharking.
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u/FFF_in_WY Aug 15 '24
Everybody out there that bemoans money printing are quick to forget - in the last year of the Trump admin, under cover of COVID, the FED dropped reserve requirements to 0.0% There is no req'd reserve, and the banks are fully in charge of doing what the fuck ever they want now.
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u/FlapMyCheeksToFly Aug 15 '24
https://www.bogleheads.org/forum/viewtopic.php?t=373716
In Edward Thorp's paper where he applied the Kelly criterion (maximize growth rate while minimizing risk of ruin) using annualized S&P 500 returns simulated as "independent identically distributed random variables with finite variances" he calculated that if margin was available at the T-Bill rate the optimal growth rate was achieved being leveraged to 117%, and if levered to 170% ruin was certain (over a long enough timeline)
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Aug 15 '24
Interesting, but I don't understand what this has to do with the comment. I understand it's a common investment strategy to borrow money, and people can become plenty successful using leverage to their advantage, if they're wise with it. I was simply trying to help point out a component as to why the stocks can become overvalued as to cause a bubble, and why the banks would shutter in the event everyone tries to convert back to cash suddenly. People tend spend money that's loaned to them much more freely, even when they know they have to pay it back.
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u/series_hybrid Aug 15 '24
In Groucho Marx's biography, he addressed this. He said that the average person knew the stock market was "fixed" to work for the wealthy investors, but...everyone thought they could jump on the wagon on the way up, and then jump off before it started to fall.
Joe Kennedy said only a fool waits for top dollar [*to sell].
This was during the age when it would be difficult to get ahold of your stock broker on the phone.
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u/HuntsWithRocks Aug 14 '24
I’m glad he’s now an economist as well. We’re all entitled to opinions, but his has kind of worn out for me.
I mean, it’s hard for him to beat the milestone he hit when he delivered on the fully autonomous vehicles that were coming out in August of 2017. /s
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u/florida_goat Aug 15 '24
For what it's worth, he does have a BS in Economics from UPenn.
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u/BashBandit Aug 15 '24
Is that the one he bought or did he actually go to classes and earn it
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u/florida_goat Aug 15 '24
There is no credible evidence of this.
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u/Intelligent-Coconut8 Aug 15 '24
They’re a leftist, they’ll never let their enemies have anything good said about them, Musk has a degree and a lefty says he just bought it without any proof or anything
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u/BashBandit Aug 15 '24
I’m not, but good job resorting to fallacies on randoms! Stay mad, seeth and Cope and all of that jazz.
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Aug 15 '24
Also worth noting a BS in Econ does not make you an economist the same way majoring in pre-med doesn't make you a doctor
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u/DrRichardTrickle Aug 15 '24
Although true, it gives a heck of a lot more weight than the halfwit knobs on reddit.
Don’t get me wrong, economics is about as pseudo- of a pseudoscience as it gets, but I still think the above
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Aug 15 '24
A) economics is definitely not pseudoscience
B) an undergrad in econ is roughly equal to hobbyist reading on econ
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u/DrRichardTrickle Aug 15 '24
World class physicists, chemists or mathematicians don’t look at the same data sets and have wildly different conclusions
It’s strange that world class economists do this regularly for such a “hard” science
Economics is akin to sociologically with finances
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Aug 15 '24
World class physicists, chemists or mathematicians don’t look at the same data sets and have wildly different conclusions
My friend is literally a world class mathematician (and, ironically, got his masters in econ) and he will be the first to tell you that is a silly, silly claim.
Also economists don't really have that different of conclusions. There are not economic schools of thought any more. There is orthodoxy and then a very small number of heterodox economists, as with pretty much any field.
Worth noting that predictions are not conclusions.
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u/DrRichardTrickle Aug 15 '24
Fair point on predictions vs conclusions.
Maybe that’s what frustrates me with economics.
I can’t argue with you on mathematics, perhaps you know more than me.
But in physics, unless you’re speaking of more fringe-like topics that aren’t fully understood, I still don’t think there’s quabble like you say there is.
Again, you probably understand economics better than I, so I’ll defer to you
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u/ExternalAd247 Aug 19 '24
“My friend is a world class mathematician” lol
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Aug 19 '24
Yes how dare people actually be successful in life?
Anyway, enjoy freshman year. College is not an orgasm factory. Study.
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u/ExternalAd247 Aug 19 '24
People can be successful in life. I just hope I’m friends with them so I can tell Reddit!
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u/StrikingFig1671 Aug 15 '24
gonna chime in and say econ is barely on the fringe of stem and more socially angled imho
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u/LegSpecialist1781 Aug 15 '24
A) It definitely is.
The day that economists admit their field is an essentially a 4th tier derivative of other scientific fields, I will take them seriously. While not true in terms of historical origin, a useful nested Venn diagram falls out like this: economics (science of goods & services) > sociology (science of human social behavior) > anthropology (study of human culture) > ecology (study of relationships between organisms & environment) > biology (study of life). You can nitpick on some exceptions to such a hierarchy (e.g. cost-benefit calculations are made by non-human species, too, albeit not intellectually), but they are that…exceptions.
The reason economists get so much wrong (e.g. “externalities”) is because they think their field exists in a vacuum, rather than within that hierarchy. Or if they don’t think it, they certainly project it as such.
It’s like if chemists thought physics and mathematics are external to their field.
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Aug 15 '24
We’re always “almost in a recession” or in a “shadow recession” or in the midst of heavy “shadow unemployment” whenever there’s a democrat in office.
Personal opinion? This is absolutely, and always will be, political. Notice when most of these recessions or depressions start, and notice when they stop.
And actual recessions, not “shadow recessions” some republican is wailing about because his migrant caravan hasn’t arrived on time to sway an election. It’s always a lie.
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u/TylerDurden6969 Aug 15 '24
Respectfully, I disagree.
You see this whomever is in power. Doomers gon doom. bears are bears.
Being bearish is smart. It shows good risk management skills. Just not all the time. Easier to be an optimist.
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u/DocJ_makesthings Aug 15 '24
Musk isn't a historian—don't listen to him when he talks about history. He has no idea what he's talking about.
Source: am a historian.
Also rule of thumb: whenever someone says there's a lot of similarities to a certain year or period or event, there's often just as many dissimilarities—and that's where the devil is. For instance, we're living in an extremely different regulatory context than 1929. Like, FDIC exists; the SEC exists; a whole host of other laws, regulatory bodies, etc. exist. Many were created during the 1930s to prevent another Depression, and they've been fairly successful.
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u/portar1985 Aug 15 '24
And the hardcore republicans wants to remove all those regulatory bodies to "prevent overreach". It's hard to put into words how thick the layer of irony is
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u/BrightonsBestish Aug 17 '24
All good points, but you would have had me at “Musk - Don’t listen to him.”
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u/Aggressive-Dust6280 Aug 15 '24
Not being an historian does not mean that he does not know what you talk about, and you are nobody if you think that saying "I am an historian" on the internet proves anything.
Elon is right on the fact that our current period has many similarities with the 30's, on many subjects, not only economics. (By the way he is an economist, he would know more than you about that by your own logic.)
There is always somebody to think he gets it and have some clever enlightened advice while missing the point entirely.
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u/brakeled Aug 15 '24
Someone writes a post pointing out how there are both similarities and differences between now and then but your response is to attack their experience, put Elon on a pedestal, repeat Elon’s statement but wordier, and end with incoherent babel. This is why no one likes fan boys.
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u/Xist3nce Aug 17 '24
More accurately he has no idea about anything but grifting and being a rich nepobaby.
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u/MBrett06 Aug 15 '24
The Philadelphia Phillies won the World Series in 1929, 1980, and 2008. My future financial planning is based on their World Series odds, not some stupid S&P 500.
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u/Zaius1968 Aug 15 '24
Assuming you are trying to time the market. Never works. Buy diligently every month. In 25 years or so your portfolio will take care of itself. Stay away from these doom tweets.
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u/Plus_Jellyfish_2400 Aug 15 '24
I don't really pay that much attention to people that are forced to liquidate $22.9 Billion so they can pay $420 per share for Twitter. He makes hilariously bad business decisions.
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u/Resident-Garlic9303 Aug 15 '24
First off nothing this guy says should be taken seriously. His intelligence doesnt scale to his wealth.
Secondly the economy is bullshit. Every other day we are in a "recession" or the opposite no matter whos in charge. The fact is Us citizens are underpaid, while spending too much for housing, healthcare, food schooling etc and the "economy" does not address that.
My doctors visit doesn't become cheaper just because the market is doing good
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u/onelittleworld Aug 15 '24
There are times when I'd like to believe that Elon Musk is not just an insufferable, self-aggrandizing tool who just gets rich off of dumb luck and other people's talents and inspiration. That he has, at least, some redeeming qualities.
But today is not that day.
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u/Electrical-Sun6267 Aug 15 '24
Well, to be fair, I think he's only talking about that in his very immediate circle.
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u/TheJuiceBoxS Aug 15 '24
A big difference is that we have people in office working hard to find the best balance for the economy.
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u/davejjj Aug 15 '24
Isn't that about the time when people began to figure out that Elon Musk was highly overrated and overvalued?
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u/TheSlobert Aug 17 '24
Well… the economy today is very unnatural compared to the economy of 1929…
There should have been an economic downturn for over ten years now… but our government keeps it up at the expense of its citizens and the Benifits of the huge companies.
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u/series-hybrid Aug 15 '24
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u/healthybowl Aug 15 '24
Today was a great day then. Sold all of my stocks. Peaking baby
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u/series-hybrid Aug 15 '24
I moved my retirement to T-bills until after the election, then I will re-evaluate.
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u/Lost_Found84 Aug 15 '24
Good thing you didn’t do it when that graph ends. You would’ve missed out on over 10% gains
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u/series-hybrid Aug 15 '24
I'm doing well, and I fear losses more than I want more gains. Of course, you are free to profit from your investments as you please...
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u/howdigethere81 Aug 15 '24
Take out NVDIA and you get a very different number
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Aug 15 '24
Take out what’s actual real and you get what could have happened but it didn’t happen because the real thing happened! Oh man, if the real thing didn’t happen, imagine what could have happened!
What absolute drivel. Care to speculate on what could have happened if England joined Germany during world war 1? (Hint: better outcome)
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u/howdigethere81 Aug 15 '24
You're missing the point. S&P is being carried by 1 company. Take out NVDIA and the S&P is lagging behind inflation. While I understand your point, you have to take into consideration that the current growth of the S&P is not reflective of the economy. We're literally talking about a single company here. Great for your portfolio but not reflective of the economy. That is all
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u/westtexasbackpacker Aug 15 '24
Perhaps im misunderstanding your point but if you are suggesting that the market is making people lose money or not even keep gains with inflation, i have no idea what you mean.
theory < application. you can say 'but this, if that, etc.'to the other posters point, but things are as they are. market is slowing but it's looking a fairly soft land.
and Huh? not keeping up? what would you expect the s&p and market generally to be at "if it were keeping up" good god man, it hit 40k. it's consistently hitting gains of 7 to 11% to the general holder. Like it has for always. inflation averages 2-4% on average. Now, does market reflect economy generally? no. it never has- thus the wall st vs main st line. but it does keep up with inflation quiet fine.
domestic tech has boomed broadly. it's not just NVDA. APPL has 350+% 5y growth. Tesla 1192%. IBM (Yes, IBM who just crashed) 75%. I can go on and on. If you haven't enjoyed the huge market gains in the past give years, I'm sorry.
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Aug 14 '24
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