are we all now speculators?

derryb

I've gotta agree with Chris Martenson on this one: "it's nearly impossible to conduct actual "investing" these days, as asset prices are dictated by what the Fed members decide more than any other factor. If you have capital in the markets, you're really speculating instead."

And Mike Shedlock (MISH) is equally amazed that the market is entirely dependent on central bank policy vs. fundamentals.

Chris Martenson and Mish on the Global Economy

Baley

<< <i> "it's nearly impossible to conduct actual "investing" these days, as asset prices are dictated by what the Fed members decide more than any other factor. If you have capital in the markets, you're really speculating instead." >>



I disagree with this. The direction of the aggregate market, or sectors, can and is influenced by monetary policy. Other sectors and individual securities, not so much. Specific news will always trump the trend. (both up and down vs. "the averages") Sure, investing involves "speculation" about future business prospects, but not in the colloquial, "gambling" sense



<< <i>And Mike Shedlock (MISH) is equally amazed that the market is entirely dependent on central bank policy vs. fundamentals.
>>



"entirely"

again, I disagree with such an absolute statement, if overapplied to every single individual asset. The overall "Market", for sure, is strongly influenced by monetary policy, but it is possible for certain invesments to experience fundamental growth, regardless of what the Fed does, for example. (barring extremely unlikely doomsday scenarios, of course, and then, different "fundamentals" would take over..

I would never invest in the whole "market" ...

would you?

cohodk

The market is MUCH BIGGER than the Fed and this will become evident over time.

Assets go up, assets go down. Always have, always will.

I aint worried.

TwoSides2aCoin

<< <i>The market is MUCH BIGGER than the Fed and this will become evident over time.

Assets go up, assets go down. Always have, always will.

I aint worried. >>



I agree on a MUCH BIGGER market

golfer72

<< <i>The market is MUCH BIGGER than the Fed and this will become evident over time.

Assets go up, assets go down. Always have, always will.

I aint worried. >>

You are not worried about the dollar being devalued?

cohodk

<< <i>

<< <i>The market is MUCH BIGGER than the Fed and this will become evident over time.

Assets go up, assets go down. Always have, always will.

I aint worried. >>

You are not worried about the dollar being devalued? >>




Nope. According to people on this board its been continually devalued since 1913. Seems the USA has done quite well the last 99 years.

Im worried the dollar will be revalued.

derryb

<< <i> According to people on this board its been continually devalued since 1913. Seems the USA has done quite well the last 99 years.

Im worried the dollar will be revalued. >>



You worry for no reason. (At least for the next 20 years anyway.)

jmski52

I was reconciled to the fact that I'm only a speculator - sometime around 2006.

ricko

Investing for potential gain is, in my opinion, always speculation. Cheers, RickO

Mesquite

Anyone who has been invested in the stock market, stocks, bonds ... etc. (mutual funds, 401Ks, IRAs included) over the years has been a speculator even if they were paying no attention to the markets.

guitarwes

<< <i>Investing for potential gain is, in my opinion, always speculation. Cheers, RickO >>

Baley

Allright, so the activity of buying an asset with the hope of gain is labeled with the word "speculation". Call it "gambling", call it "risky business", call it "Fred"

So what? What now?

derryb

<< <i>Allright, so the activity of buying an asset with the hope of gain is labeled with the word "speculation". Call it "gambling", call it "risky business", call it "Fred"

So what? What now? >>


As long as markets are no longer controlled by fundamentals, "investing" for growth is a thing of the past. With an understanding of this, one can still profit with the correct approach. For now, with the exception of physical PMs, buy and hold is dead.

jmski52

Allright, so the activity of buying an asset with the hope of gain is labeled with the word "speculation". Call it "gambling", call it "risky business", call it "Fred"

So what? What now?

I believe that means you are now one of the evil speculators who manipulate gas prices, gold & silver prices, food prices, land prices and stock prices - which means that the sheeple will be clamouring for the government to "do something" about your market activities.

Now if you were a respectable "investor", i.e. someone who ponies up with commissions for your Wall Street Broker or real estate lender on a regular basis - then you would be seen as contributing to the viability of the economic system and therefore you would have more credibility at the annual street festival.

Other than that, not much difference.

cohodk

<< <i>

<< <i>Allright, so the activity of buying an asset with the hope of gain is labeled with the word "speculation". Call it "gambling", call it "risky business", call it "Fred"

So what? What now? >>


As long as markets are no longer controlled by fundamentals, "investing" for growth is a thing of the past. With an understanding of this, one can still profit with the correct approach. For now, with the exception of physical PMs, buy and hold is dead. >>




This is true. The FED is holding the stock market lower. Historically on a fundamental basis it trades at about 15x earnings. With estimated earnings of $105/S&P share, the SP-500 should be at 1575. But its only at 1375.

Dang it Ben, stop manipulating the markets lower for the benefit of your crony bankster friends.

Money invested in assets that provide no income stream hurts particulary bad when it becomes dead money. PM money is currently dead money and will be for longer than most think.

bluelobster

<< <i>The market is MUCH BIGGER than the Fed and this will become evident over time.

Assets go up, assets go down. Always have, always will.

I aint worried. >>



Will always be true, but unfortunately many "investors" need to have an excuse to place blame, because it couldn't be them, they are SURE in their mind what should be happening.

I have discussions about this with a few of the "market is forever rigged and I have no chance crowd". The reality is that in the short term the market IS somewhat rigged, Fed actions, big sellers and big buyers can all effect the market in the short term, But earnings and macro economic factors, will decide prices of assets over the long run. the Fed can not control interest rates or the value of any asset in the long run. This is not really even debatable, imo.

I remember a discussion with a long time investor of PCYC, and how they were lamenting that the market was rigged and that short sellers were punishing the stock and as a small investor they had no chance, I explained that just because the stock was severely beaten down by the shorts that instead of lamenting about it, they as small investors could take advantage of it by buying at the what seemed like an unwarrantedly cheap price. But human nature being what it is, it's always simpler for many to play the MANIPULATION mantra.

derryb

<< <i>The FED is holding the stock market lower. Historically on a fundamental basis it trades at about 15x earnings. With estimated earnings of $105/S&P share, the SP-500 should be at 1575. But its only at 1375. >>


Look at your basis again for periods of recession.



<< <i>Will always be true, but unfortunately many "investors" need to have an excuse to place blame, >>


You mistake insight with blame. My view of what is going on in the markets has been quite profitable. My only blame is directed at those who fail to use realization to their advantage. Markets are rigged and this is good information for those that know how to use it.