Markets and Commodities

[Jim Blake]

Looks like the markets and commodities are roaring this morning. Pfizer has a great announcement on vaccine progress as well.

[KinAlberta]

Yeah market was moving up strongly and then the Pfizer announcement really drove it sky high.

Last night:

US STOCKS-U.S. stock futures higher after Biden election win | Nasdaq

https://www.nasdaq.com/articles/us-s...win-2020-11-08


Markets soar, Dow futures add more than 1,400 points after upbeat vaccine data, Biden victory

https://finance.yahoo.com/news/elect...231320807.html

[Big Grey Wolf]

Interesting when you get rid of a incompetent US President the markets really take off.

[Erik]

Originally Posted by Big Grey Wolf

Interesting when you get rid of a incompetent US President the markets really take off.

The markets took off when Trump was elected, also. The president makes almost no difference, the general direction of policy might (taxes when Republicans took control), but the real driver of the markets is the absence of a bond market worth anything, stupid cheap money, along with the unimagined amounts of cash being injected into the system. Enjoy the everything bubble.

[KinAlberta]

Originally Posted by Erik

The markets took off when Trump was elected, also. The president makes almost no difference, the general direction of policy might (taxes when Republicans took control), but the real driver of the markets is the absence of a bond market worth anything, stupid cheap money, along with the unimagined amounts of cash being injected into the system. Enjoy the everything bubble.

I’d argued that for years over several US presidents.

[bdub]

New game, new narrative with a vaccine.

Rotation from what worked in pandemic, to cyclicals and the stuff that was thrown out in March in full force. Some CDN oil names up 20+%, cve, su, cnq.

Bonds getting slapped with the ten yr up over .95.

Gold taking a hit with risk on.

[KinAlberta]

Trump endlessly bragged about the market but he was often just throwing fuel on a raging fire. Obama was rightly quiet on market returns as he came in on a market dip.

Trump's stock market performance is officially much worse than Obama's in his first term | Fortune

“over Obama’s two terms, the S&P 500 would go on to rise 166%.“

“Trump’s tenure was certainly a good stretch for investors: The S&P 500 index rose 45.7% over that time, for an annualized return of 10.5% a year.

But that still doesn’t come close to matching the gains seen under Barack Obama. During Obama’s first term, the S&P was up 77.4% for an annualized total return of 16.3%.“


https://fortune.com/2020/11/03/obama...e-s-p-500-spx/

[bdub]

Originally Posted by KinAlberta

Trump endlessly bragged about the market but he was often just throwing fuel on a raging fire. Obama was rightly quiet on market returns as he came in on a market dip.

Timing is everything.
The best we can hope for markets is a hamstrung government for the next term.

[KinAlberta]

Republican presidents Calvin Coolidge and Herbert Hoover were in place for the Roaring ‘20s, then the 1929 stock market crash and the start of the Great Depression. There’s no sure thing with any political stripe.

[skidderman]

Seems like a lot of people think a few up's or a few down's is a trend. Trend's are only established over long terms. Give it a year and then see what Biden's name does. He is a Trudeau times two so one can only imagine.

[fishtank]

Originally Posted by skidderman

Seems like a lot of people think a few up's or a few down's is a trend. Trend's are only established over long terms. Give it a year and then see what Biden's name does. He is a Trudeau times two so one can only imagine.

back to massive QE to keep the economy afloat and thats good for wall street. low rates keeps wall street happy .

[bobtodrick]

I checked my investments today...they’ve recovered nearly everything lost in the last month...yaah

[KGB]

Originally Posted by skidderman

Seems like a lot of people think a few up's or a few down's is a trend. Trend's are only established over long terms. Give it a year and then see what Biden's name does. He is a Trudeau times two so one can only imagine.

I agree, but when Trudope sniffles - Canada notices that. When the US President sniffles- the whole world catching the cold....

[KGB]

Originally Posted by bobtodrick

I checked my investments today...they’ve recovered nearly everything lost in the last month...yaah

Hey man, nothing wrong with that! But just take a look what’s happening on the market- it looks like a rebalancing. The stocks that were in favour during stay at home are down, some more than 20%. And stocks that were down due to travel restriction, limitations are up big time. And that has nothing to do with Biden but everything to do with the vaccine announcement.

[Justfishin73]

The fact the huge vaccine news comes out on the first market day that Biden is President is a helluva coincidence.....

[roper1]

Originally Posted by Big Grey Wolf

Interesting when you get rid of a incompetent US President the markets really take off.

Realistically probably has more to do with a Republican Senate that won't allow him his taxes or 'The Green New Deal'

US political gridlock typically good for the global economy, keeps everyone from enacting too much hard left or hard right policies.

[fordtruckin]

Originally Posted by Justfishin73

The fact the huge vaccine news comes out on the first market day that Biden is President is a helluva coincidence.....

Hmm didn't realize it was January 20th 2021 already.... Old guy could easily croak between being named President Elect and becoming the actual President.

On a side note, Vista Outdoors, Sturm Ruger and S&W stocks all fell after the election was "called".

[EZM]

Originally Posted by fordtruckin

Hmm didn't realize it was January 20th 2021 already.... Old guy could easily croak between being named President Elect and becoming the actual President.

On a side note, Vista Outdoors, Sturm Ruger and S&W stocks all fell after the election was "called".

Your first paragraph seems to indicate Biden had no impact on the stock market.

Your second paragraph seems to indicate that Biden's election impacted some stocks.

Not picking on you, but in reality, and since the markets moved prior to the press release, I'd say both had an impact on the general acceptance that Biden was elected president. Both are big news.

I'm also pretty darn sure Trump is furious the UK, Canada, Israel, France, Germany ....... etc.. etc.. have called to congratulate Biden.

Those announcements likely drove investment behaviors on those countries.

[Jigsalot]

Originally Posted by fordtruckin

Hmm didn't realize it was January 20th 2021 already.... Old guy could easily croak between being named President Elect and becoming the actual President.

On a side note, Vista Outdoors, Sturm Ruger and S&W stocks all fell after the election was "called".

Guess you’ve been told. Lol. Funny he has it all figured out. It’s laughable when someone thinks he has figured out the markets. I have invested for 40 years and I never give advice or think I know the answers. If I did I would be a billionaire. My only tip is real estate. Lol.

[Grizzly Adams]

Originally Posted by Justfishin73

The fact the huge vaccine news comes out on the first market day that Biden is President is a helluva coincidence.....

A lot of market speculation is based on intuition and rumor.

Grizz

[KinAlberta]

Originally Posted by Jigsalot

Guess you’ve been told. Lol. Funny he has it all figured out. It’s laughable when someone thinks he has figured out the markets. I have invested for 40 years and I never give advice or think I know the answers. If I did I would be a billionaire. My only tip is real estate. Lol.

I’ve been investing in equities for about 45 years now. Not a billionaire yet. :-)


Have neither assumed that I knew much about investments nor that I could predict the future.

However I do love to challenge all assumptions other people make about markets, equities and especially the importance they place on their favourite or most hated politicians, talking head or figurehead.

[Dean2]

Unless you are a day trader or a high volume trader, buying and selling based on short term things like Covid, the U.S. president and a ton of other things that get talked about endlessly by the analysts and pundits is farting against thunder. Investing is a long term proposition, buy the right markets, best stocks in their category with growing sales, earnings and dividends. Reinvest the dividends on the drip programs. As I have posted before;

If you had bought $10,000 worth of RBC in 1995, it would be worth $640,000 today if you had reinvested the dividends. You would also be collecting $26,000 in dividend income a year, which is 260% of your original investment. If it had been in Bank of Nova Scotia it would only be $181,000 whereas TD would be $580,000. If you had done the same thing with Manulife it would be worth 60,000 today. You would have done far better in GICs over that 25 year period. General Electric is even worse, it is at $34,000 today. So this also illustrates the problem with ETFs. If you bought a market weight Canadian Banks ETF you get the laggards like CIBC, Scotia, Laurentian, CWB and BMO along with the premium performers like TD and RBC. So as long as you know to buy and hold the high performers you are golden, if you don't know which two or three to pick in an industry then you are better off with the ETF.

If you had done that with Microsoft, as of 2014 it would still have only been worth 50,000, however from 2014 to today that $50,000 has grown rapidly so it is now worth $470,000.

A buy and hold strategy is a whole lot more complicated than just buying a stock and sitting on it. You really do have to be holding the right stocks over the right length of time for that system to work.

Ignore all the useless stuff designed to get peoples faces on T.V. spouting their latest pearls of wisdom.

[bdub]

There is only two things that determine prices and forward returns in any market. Supply and demand. Unfortunately there are quite a few factors that determine both. Interest rates, government fiscal and monetary policy, inflation, market sentiment..... Get that figured out and you'll have it made lol.

Markets are pretty efficient, determining the best stocks, sectors etc. in advance is a big task and few are any good at it. You can limit the risks of company blowups by sticking to large cap dividend payers, good management teams, companies with some type of moat be it regulatory, technology, brand or whatever, companies with good financials, especially regarding debt levels.

Diversification is one of the only free lunches. Diversification into assets that are not perfectly correlated limits the volatility of the portfolio. It can also limit the returns, but most are far better off with more diversification than less.

The world is constantly changing. Once hot sectors or companies will be tomorrows losers and vice versa. Don't get stuck in a rut in your thinking, be ready to change your mind when things change. Watch your costs, watch your taxes.

If you don't have the time or inkling you can do as well or better than most with a portfolio of etf's with low MER's covering a swath of uncorrelated assets. Broad exposure to stocks, bonds, gold and real estate in various weights is a good start and doable for most do it yourselfers IMHO.

[The Elkster]

The market is supply demand ponzi scheme increasingly devoid of any grounding to real financial fundamentals....as it was designed. Ya know novel things like reasonable expectations of profit and growth. The game now is hype and marketing with no need to show a profit or even any potential profit for that matter (see Wework, See Uber)...any "growth" story will do whether in tech or weed or renewable energy...add AI and automation to the story and you double up investing profits.

Also Covid has shown just to what lengths the gov't and central banks will go to to keep the show going. We have record unemployment, airlines going bankrupt, restaurant and many small businesses devastated and facing another shutdown and the market is back to all time highs! LOLOLOL

The stock market and real estate+consumer debt have become too big to fail. There is not one institution in a power position that stands to gain by upsetting the apple cart. Banks, gov't and their tax revenue, businesses and developers (many who sit in municipal gov't) have no incentive to rein in spending and debt so it will continue unabated. I predict interest rates will be kept at near zero so debt can be piled on without concern of a tsunami of interest payments and existing debt will be inflated away. Yehhhhhhhh! In this scenario there is no limit to the amount of zero's that can be added to the price of a house...think of the possibilities think of the commissions!

We are now living in the equivalent of a monopoly game where the players can just pilfer any money they want from the next game sets to keep in the current game. Awesome.

[bdub]

Originally Posted by The Elkster

The market is supply demand ponzi scheme increasingly devoid of any grounding to real financial fundamentals....as it was designed. Ya know novel things like reasonable expectations of profit and growth. The game now is hype and marketing with no need to show a profit or even any potential profit for that matter (see Wework, See Uber)...any "growth" story will do whether in tech or weed or renewable energy...add AI and automation to the story and you double up investing profits.

Also Covid has shown just to what lengths the gov't and central banks will go to to keep the show going. We have record unemployment, airlines going bankrupt, restaurant and many small businesses devastated and facing another shutdown and the market is back to all time highs! LOLOLOL

The stock market and real estate+consumer debt have become too big to fail. There is not one institution in a power position that stands to gain by upsetting the apple cart. Banks, gov't and their tax revenue, businesses and developers (many who sit in municipal gov't) have no incentive to rein in spending and debt so it will continue unabated. I predict interest rates will be kept at near zero so debt can be piled on without concern of a tsunami of interest payments and existing debt will be inflated away. Yehhhhhhhh! In this scenario there is no limit to the amount of zero's that can be added to the price of a house...think of the possibilities think of the commissions!

We are now living in the equivalent of a monopoly game where the players can just pilfer any money they want from the next game sets to keep in the current game. Awesome.

I have no doubt that the fiscal imbalances that the Fed and provinces are currently engaged in are going to eventually lead to some type of crisis. There really is no alternative if they keep going at the rate they are going. We need someone/something to get us out of this mess, but our politicians are spineless weasels who only care about getting re-elected. They are betting it all on MMT is the only answer I can think of.

I disagree with you that interest rates will remain low forever. Eventually the jig will be up and our bonds will become very cheap rather than their currently ridiculously expensive valuation. They may artificially keep the short end low, but the long end is going to wag the dog when the SHTF eventually. I agree with you on inflation. I don't think its going to stay away forever.

[CaptainJ]

They failed to pump on the most bullish news.

We have been waiting, as retail, for a vaccine. The narrative has been “once we get the vaccine we can get back to normal”
Finally we get the vaccine, the choose one has arrived, yet markets failed to go up. The most bullish news everyone has been waiting for, yet markets are not going up.

Bezos sold twice.
Once in first week feb, a month before the dump.
Once in first week august, almost a month before the second dump.

I made a mental note to pay attention to when he sells next.
He sold again for a third time first week November.

[KinAlberta]

Dow Jumps Nearly 300 Points As Big Tech Keeps Sinking And Smaller Businesses Boom On Vaccine Developments
November 10, 2020
https://www.forbes.com/sites/jonatha...-developments/

Dow up nearly 250 points on gains for shares of Walgreens Boots, Boeing - MarketWatch
November 10, 2020
https://www.marketwatch.com/story/do...ing-2020-11-10

Dow surges 800 points on Pfizer vaccine results, Biden win
November 9, 2020
https://www.usatoday.com/story/money...rd/6219095002/

[The Elkster]

Anyone read the fine print in the vaccine news? Its needs to be stored at -70C (-94F) to stay viable https://www.reuters.com/article/us-h...-idUSKBN27Q1G1. At standard freezing temps it has a shelf life of days...no doubt with severely reducing efficacy at that. Even the Mayo clinic noted they don't have the ability to store anything at this temp. The announcement was so premature its not even funny. I also read and article that they are still waiting on safety data...ummm maybe hold off the announcement LOL. Of course its safe though. That is why vaccine manufacturers have been given a blanket exception (https://www.ft.com/content/12f7da5b-...a-e726b75eef4d) from liability on any corona vaccine. Boy does that make me feel good. Not going to delve into the political angle of the announcement timing but its certainly suspicious given the unknowns. The idea that any meaningful area of the world is going to have this storage capability anytime soon is ridiculous. This world has been firmly removed from reality and into a wishful dreamland and politically motivated quagmire of BS.

[The Elkster]

Originally Posted by CaptainJ

They failed to pump on the most bullish news.

We have been waiting, as retail, for a vaccine. The narrative has been “once we get the vaccine we can get back to normal”
Finally we get the vaccine, the choose one has arrived, yet markets failed to go up. The most bullish news everyone has been waiting for, yet markets are not going up.

Bezos sold twice.
Once in first week feb, a month before the dump.
Once in first week august, almost a month before the second dump.

I made a mental note to pay attention to when he sells next.
He sold again for a third time first week November.

What is forgotten in all this is that there we were already toppy Before Covid. There was plenty of talk of the incredible bull run up to spring 2020 and of a potential recession before this all hit. The idea that we are at all time highs given that fact AND all the negatives that have transpired with Covid (with no real end in sight) is utterly...honestly I have no words. At least none I can say here without getting a lifetime ban.

[Dean2]

The comments made about shares being highly over valued, Ponzi scheme etc, what is your solution. If you put a $100,000 in your mattress n 1980, you would be pretty disappointed with what you can buy with that money today, so unless you own appreciating assets, sitting on straight cash is a recipe for ending up in thee poor house. To stay ahead of inflation, your money has to be in a business that produces growing sales and profits, in land in the right location or the market. You pick which one, or the mix of those but leaving cash in a can is not a good idea.

I have also said this MANY times before, if your earnings in the stock market are taxable in the year you buy and sell, then what you gain by trying to time the market is severely constricted. Even if your investments are in tax deferred accounts is is pretty easy to get this wrong. Missing the run up will cost you far more than the drop you avoided. RBC shares have gone from 105 to 75 Feb 22 to March 21. They are back at $100 today. If you got the timing just right you made a ton, if you sold a little late, March 4th was at 94, Mar 14 87 and have not bought back in yet waiting for the big drop predicted for this fall and winter you really don't want to miss buying back in on the next drop. If you just sat on your shares for the last 8 months you are back to almost even with Feb 22nd, you are up $17 from Dec 22 2018 and have collected 1.94 cents in Dividends since Dec 2018.

Own high quality dividend paying stocks, the best in each category. If you had put $100,000 into Royal bank shares in 1980, instead of your mattress, you would be a multi millionaire today with $6.5 million dollars in stock, and $325,000 a year in dividend income instead of the equivalent of $50,000 in purchasing power for the cash. (Straight buy and hold with dividends reinvested in the Drip). If you did buy and sell trying to time it you would be lucky to have half as much, just from paying taxes on the gain, let alone missing the run ups. If you had done the same thing with BNS you would only have 1.5 million, proving that holding the best in class is key, but that is still a pot load better than cash in a tin. If you futz around with the pumped up, get rich quick stuff you would likely be broke today. (The values for RBC and BNS are actually understated by quite a lot as my calculator actually only goes back to 1995 for this kind of thing).