polksalet Posted May 23, 2012 Share Posted May 23, 2012 http://www.marketwatch.com/story/how-facebook-could-destroy-the-us-economy-2012-05-22 Quote Link to comment Share on other sites More sharing options...
SheikYerbuti Posted May 23, 2012 Share Posted May 23, 2012 The author uses the term "black swan" over and over again in this article, and never correctly. He predicts that "euro zone ills, overpopulation, China, climate crisis, Peak Oil, Fed’s cheap money, 2012 elections, austerity vs growth, high-frequency trading, extreme capitalism, and facebook" are all potential black swans. By definition, a black swan event is unpredictable. So, by lazily pointing at every headline issue of the past 6 months and saying it's a potential black swan, he's only proving that he doesn't understand the term at all. Also, comparing our current market conditions to the 1999 "dot.com" bubble is miles off course. He should learn the difference between an overbought market and an oversold market. Facebook IPO'd at a P/E ratio of about 80 and immediately got pounded for being too expensive. The bubble popped on it before it was even created. In 1999 companies IPO'd with no P/E ratio at all (because they had ZERO earnings and no prospects of earnings) and the stocks hovered in the stratosphere for months if not years before the bubble burst. The few .com stocks that did have earnings all traded at P/E's well north of 200. If this guy really thinks Facebook is a clone of pets.com, he's way off base. Poorly written article. Quote Link to comment Share on other sites More sharing options...
matt770 Posted May 23, 2012 Share Posted May 23, 2012 I'm holding my Webvan stock just in case. I know it will bounce back, I just know it. People need to realize just how badly they need groceries delivered to their homes. Quote Link to comment Share on other sites More sharing options...
Avernus Posted May 23, 2012 Share Posted May 23, 2012 he mentions China but they stand to suffer from the current and upcoming crisis more than we do.....because during the great depression we suffered because we actually produced something which is what China does now....we just consume and our job markets will suffer but China stands to suffer way more... and while they can and will start consuming their own products, there will be an adjustment period or maybe 5 to up to 10 years at the very worst to where their economy will suffer... but I expect China to start or already begin the booming process around 2020 but a whole lotta chit can happen between now and then...I am just basing it off the current path....and what that means for us? Quote Link to comment Share on other sites More sharing options...
Scooby's Hubby Posted May 23, 2012 Share Posted May 23, 2012 The author uses the term "black swan" over and over again in this article, and never correctly. He predicts that "euro zone ills, overpopulation, China, climate crisis, Peak Oil, Fed’s cheap money, 2012 elections, austerity vs growth, high-frequency trading, extreme capitalism, and facebook" are all potential black swans. By definition, a black swan event is unpredictable. So, by lazily pointing at every headline issue of the past 6 months and saying it's a potential black swan, he's only proving that he doesn't understand the term at all. Also, comparing our current market conditions to the 1999 "dot.com" bubble is miles off course. He should learn the difference between an overbought market and an oversold market. Facebook IPO'd at a P/E ratio of about 80 and immediately got pounded for being too expensive. The bubble popped on it before it was even created. In 1999 companies IPO'd with no P/E ratio at all (because they had ZERO earnings and no prospects of earnings) and the stocks hovered in the stratosphere for months if not years before the bubble burst. The few .com stocks that did have earnings all traded at P/E's well north of 200. If this guy really thinks Facebook is a clone of pets.com, he's way off base. Poorly written article. I agree. Facebook is not the face of the country nor the stock market. Stocks ultimately trade on earnings and future earnings, with P/E ratios near 20 times next year's earnings. Quote Link to comment Share on other sites More sharing options...
Clubfoothead Posted May 23, 2012 Share Posted May 23, 2012 Two billion dollar losses are no big deal to JP Morgan. Lying to everyone but their friends about Facebook is no big deal to them. I'm guessing that's why the average greek riots when they lose their retirement so that these crooks can be paid back. Stock market is a joke. Quote Link to comment Share on other sites More sharing options...
muck Posted May 23, 2012 Share Posted May 23, 2012 (edited) I agree. Facebook is not the face of the country nor the stock market. Stocks ultimately trade on earnings and future earnings, with P/E ratios near 20 times next year's earnings. PE ratios are related a bit to long-term bond yields. Higher bond yields = lower PE ratios Lower bond yields = higher PE ratios To wit: At a PE of 20x, that's the same thing as a 5% earnings yield (1/20) ... compare to 30yr treasuries at 2.79% ... If treasury yields go up to (say) 5% ... then the earnings yield will also have to go up ... and if PE ratios go up to (say) 8%, that's a PE of 12.5x The drop in interest rates throughout the 1980s and 1990s is a large reason for the continuous bull-market ... PE ratios were expanding as bond investors moved away from bonds into stocks and their relatively higher earnings yield. Edited May 23, 2012 by muck Quote Link to comment Share on other sites More sharing options...
godtomsatan Posted May 23, 2012 Share Posted May 23, 2012 Two billion dollar losses are no big deal to JP Morgan. Lying to everyone but their friends about Facebook is no big deal to them. I'm guessing that's why the average greek riots when they lose their retirement so that these crooks can be paid back. Stock market is a joke. It's a game for insiders. For sure. You can make more money for your retirement gambling on sports. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted May 23, 2012 Share Posted May 23, 2012 It's a game for insiders. For sure. You can make more money for your retirement gambling on sports. It's a matter that needs to be urgently addressed if Congress ever hopes to repair the economy and encourage the citizenry to take part in the economic process again. Quote Link to comment Share on other sites More sharing options...
SheikYerbuti Posted May 24, 2012 Share Posted May 24, 2012 You can make more money for your retirement gambling on sports. I disagree. If you allocate correctly, it's a very viable way to grow capital. Quote Link to comment Share on other sites More sharing options...
Square Posted May 24, 2012 Share Posted May 24, 2012 You can make more money for your retirement gambling on sports. I dunno. I've got it on pretty good authority that there's no amount of information, research, and analysis that can go into gambling on a completely regular basis that would allow an individual to prosper and live comfortably. Quote Link to comment Share on other sites More sharing options...
stevegrab Posted May 24, 2012 Share Posted May 24, 2012 I dunno. I've got it on pretty good authority that there's no amount of information, research, and analysis that can go into gambling on a completely regular basis that would allow an individual to prosper and live comfortably. Maybe the critical word in his statement was "can". You can do it, but you're not likely too. Quote Link to comment Share on other sites More sharing options...
Clubfoothead Posted May 24, 2012 Share Posted May 24, 2012 Maybe the critical word in his statement was "can". You can do it, but you're not likely too. You aren't likely to make enough money living and investing in the stock market to live comfortably either. Quote Link to comment Share on other sites More sharing options...
Avernus Posted May 24, 2012 Share Posted May 24, 2012 You aren't likely to make enough money living and investing in the stock market to live comfortably either. it is even harder these days with high frequency trading....I find investing to be more difficult now than I ever in my experience.. Quote Link to comment Share on other sites More sharing options...
stevegrab Posted May 24, 2012 Share Posted May 24, 2012 You aren't likely to make enough money living and investing in the stock market to live comfortably either. True, but not many people are doing that. Investing (mostly in larger funds) for retirement is the norm. Individual stock buying has become more popular recently but I think there's still only a small percentage of the population doing it. Quote Link to comment Share on other sites More sharing options...
godtomsatan Posted May 24, 2012 Share Posted May 24, 2012 (edited) I disagree. If you allocate correctly, it's a very viable way to grow capital. I don't disagree with this sentiment, simply because there are oodles of facts to back it up. However, and this is totally me personally speaking, I'll read through a prospectus, I'll read a variety of analysts, and even investor forums, to get an overall picture of a stock. I'll look at the technical and fundamental sides of things. I'll guage if I even understand what the company does or what they're trying to do. I try and see if I can find any of its products in my daily life to try and understand if its even something real or not. I have never bought a stock with any other feeling besides the same one I get when I sit down at a blackjack table. Give me a line of Miami -3.5 against Indiana game and I have a total understanding of what it is I'm getting, what my risks are, and how likely it is that I will win that wager. I know this inherently, I know it from watching the previous several matchups between these two teams, I know it from reading independent analyses from the perspective of both sides. I can technically and fundamentally analyze both teams and the likelihood of a particular outcome from very easily accessible, formatable, and independently provided sources. ETA: I'm obviously being facetious about gambling vs. investing, but my overall opinion is that there's a lot more variety of open, independent, and discernable information available to the street level investor about any of the sporting events being played on a random Thursday in late May, than there is for any stock available for purchase on a trading market. And as an investor, I personally feel a lot more comfortable with the quality of my informed decision making a wager on a basketball game than I do buying a technology stock. The giant issue of course being that one is technically a lot more illegal and therefore relatively unsafer than the other. Which is why it's a lot easier to just throw everything into a fund, pay a fee, and anticipate that someone who has a better understanding of how to invest money is treating your money in a way where it's going to be there in greater numbers than what you actually put into it several years down the road. Edited May 24, 2012 by godtomsatan Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted May 25, 2012 Share Posted May 25, 2012 it is even harder these days with high frequency trading....I find investing to be more difficult now than I ever in my experience.. Couldn't agree more. That is one of he major causes of volatility. The old values of fundamentals, etc, are completely ignored as high frequency trading can put a company into and out of a stock hundreds or thousands of times a day. The cure might be taxation. Capital gains held more than a year are taxable at 15%. Not sure what the rate is for less than a year, but how about graduated taxation based on the length of holding? For three months to a year, 30%. For one week to three months, 40%. For one day to one week, 50%. For one hour to one day, 75%. For less than an hour, 90%. For less than 10 minutes, 99%. Or something similar. People who invest in 401k's are being ruined by HF trading and, further, companies are not rewarded for running their business well. HF trading is even more iniquitous than the quarterly report stupidity. 1 Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted May 25, 2012 Share Posted May 25, 2012 it is even harder these days with high frequency trading....I find investing to be more difficult now than I ever in my experience.. daytrading (or week trading) isn't investing Quote Link to comment Share on other sites More sharing options...
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