Royal Bank of Scotland to investors: 'Sell everything'

I blame Trump!

 

President Trump's first-year stock market gains actually look pretty middling compared with Obama's

 

Oh JFC. This is all based on PERCENTAGES. You do enough sports to know the dangers of that, right?

dq, help back me up here. @doctorquant

It's pretty damn easy to have a high percentage increase after the market dropped so much in 2008. Yeah, credit for initiating recovery. I'm talking about the "easiness" of a high percentage number.

But, a 25%+ increase, from 20000 DOW to damn near 25000, after a lot of other years toward the positive, is damn impressive and more impressive than 2009, no matter the cause and no matter who is in the WH.

People need to take their political blinders off.

Percentages are dangerous. I always try to look at the magnitudes of the underlying numbers.

 

We’re in the second-longest market rally in history, 107 months at this point, and all but a year of it under Obama while unemployment and inflation have been negligible for years. The markets more than tripled on Obama’s watch.

They surged a little extra this year because corporations were being promised massive tax breaks and deregulation. While bringing corporate taxes to a globally competitive level makes sense, the economy still has a huge fundamental problem in that wages have stagnated for the lower and middle classes and wealth/income disparity is increasing. The tax bill, while making for happy days on Wall St, and for wealthy people like me, does nothing to correct any of that.

What it is doing is giving more cash to companies that are (generally) already flush with cash and, so far, they seem to be using it for another round of stock buybacks.

So you may pay a few hundred dollars less in your income tax in 2018 (only) before the GOP goes after your parents’ social security to pay for the billions of dollars worth of tax breaks it has bestowed on the rich.

As long as middle-class people are happy to be bought off cheap, the fundamental disparity will increase.

 

Since the day this thread was created:

Dow Jones, +54 percent
S&P, +42 percent
NASDAQ, +54 percent

 

The Dow is a trash metric. That is all.

 

The economic riddle for 2018: Will the middle and working classes see any gains from the big tax cut?

The real question is how much of the tax benefit will be distributed by employers to their workers. Early indications are none too promising. Continuing a trend that has vastly exacerbated income and wealth inequality in the United States, many large corporations already have made clear that their primary concern will be the welfare of their shareholders.

“Is it our goal to increase return to our shareholders and do we have an excess amount of capital?” Wells Fargo CEO Tim Sloan asked rhetorically at a Goldman Sachs investment conference on Dec. 5. “The answer to both is yes.” He said the bank expected to increase its shareholder dividends and share buybacks “next year and the year after that, and the year after that.”

FYI, it’s hard to fault corporations for behaving like corporations. They’re just reacting logically to the policies for which they lobbied so hard and paid so much.

 

I always go back to this example:

Coach A's team goes from 1-11 to 4-8 (a 300 percent gain in wins!)

Coach B's team goes from 8-4 to 12-0 (a middling 50 percent gain in wins).

Which coach can write his own ticket?

 

Damn right. Exactly what I'm talking about.

 

The reason you use percentages is to attempt to make a more credible apples-to-apples comparison. Nothing wrong with that, unless you’re doing it to compare presidents’ stock market “performance” ... then it’s stupid no matter what you come up with.

 

The example I learned from (and got me in deep shit with a teacher whom I made look stupid) was this:

A history book had a table which showed US immigration statistics broken down in 20 year increments. One row showed the number of immigrants in each 20 year increment, and the row below that showed the percentage increase it had on the US population.

IIRC, it showed:

1600-20. 1620-40.
10000. 40000
- +300%

Now the teacher argued that 1620-40 was the most significant period of US immigration.

I tried to politely differ by pointing to the late 1800s when a couple of MILLION people were coming over by boat (but far less of a percentage increase to the existing US population), as compared to a mere 40000 coming over by boat.

This created a debate with more students starting to see what I was saying and why I took exception to what the teacher said. Eventually she ended it by saying she'd consult with one of the math teachers and get back to us the next day.

So, sheepishly she told the class that the math teacher agreed with me.

My God, that happened in September and got me into the doghouse all year with that teacher. By May, she did some very shitty things (it was open warfare all year), and almost led to a lawsuit.

(No Poin involved. Just so you perverts know if you are thinking that. )

I'll spare all that BS, but the life lesson for me was that sometimes being right can have consequences and one must gauge whether pointing something out is worth it.

And that lesson from long ago actually influences my posting habits on message boards. Why argue if you are going to change hardly anyone's opinion? Let's have fun instead and try to laugh a little.

The above is part of the VB Manifesto.

You know, in case I ever buy a small building in Montana.

 

Using percentages to evaluate time-series data can get you into all sorts of trouble. Suppose you bought a stock at $10. The first year, it increased by 25%. The next year, it decreased by 25%. Your average annual return would be 0% ... but how much would your stock be worth?