Investing

[gehringer_2]

7 minutes ago, Tiger337 said:

I'm not very young, but I'll say that it was not taught at all to me growing up - not by schools or family.  It should be.  What little I know, I picked up mostly on my own.  I had an advisor for several years.  He was expensive (mostly because of the companies he worked for), but pretty honest.  He taught me not to be afraid of stock investing, which has turned out to be mostly good for me.  I also learned that having an advisor is ridiculously expensive, so I now I just do it on my own.  I keep it very simple. The Bogle book was very instructive and I think his ideas would work for most people.  

I think it's getting worse even at the upper levels. When I went through Engin School we got the whole nine yards on investment economics, time value of money, ROI, depreciation, economy of scaling factors, all in the Engin school plus a 400 level macro economics course at the lit school. The students in the program today can get through without seeing any of that.

Edited October 26, 2024 by gehringer_2

[1776]

1 hour ago, Tiger337 said:

The Bogle book was very instructive and I think his ideas would work for most people.  

100%

[1776]

You live a little, you learn a lot.
Years ago I had a few bucks outside my retirement money. I gave my money to two different outfits to manage at different times. It wasn’t a lot of money. 
The first outfit was Edward Jones. A former coworker and friend had gone to their school and opened an office here locally. My intuition told me I’d be better doing my own thing. 
Unless EJ has changed over the years, they will put you in loaded funds as EJ is a store front window representing select funds companies. EJ gets an upfront cut of all contracts they bring in. It’s a commission based set up. 
From there I moved my money to an individual that was part of a money management firm that came highly recommended. Same thing-loaded funds and the like. My money was making him money. Done! Out.
From there I put the money in a Vanguard Roth account and have done fine with that over the years. 
Kids that grow up in households that don’t have money to invest, like our household when I was young, are generally behind the curve in learning what the do’s and dont’s are of simple investing principles. When I got my first real job I was very fortunate to be around friends there that knew how important it was to get started and how important it was to put a good percentage in the, fairly new at that time, 401K.

Over the years if I have much of a conversation at all with a young person I will find try to find time to touch on investing while you’re young, getting started now. It bothers me that so many kids aren’t educated in this topic. 
Sorry for getting long but I’m about it. 
 

[Screwball]

I'm not a fan of Edward Jones. I knew a couple of people who worked for them. The first guy was an options trader at a farming co-op, which was his experience before EJ. The second guy I worked with when he was an IT guy.  He took the tests and went to work for EJ. He eventually quit. I wasn't impressed with either one as a financial person I wanted to invest with.

As mentioned above, they tend to put you in stuff they want you in, as it makes them the most money. I learned this back in 2005-2006 ish when I was studying to pass the exam to be a broker. I learned through the training you must learn to lie to people, you might say. I wasn't good with that so I gave up on it.

The first guy retired and moved to Texas. He was back one summer and I ran into him in a bar. As we were talking the market wasn't doing so well at the time, and one of his clients were in there too. He came over and said to the guy "my 401k is taking a beating" to which the broker said "yea, I'll bet it is." Not happy, the guys said "well, your the asshole who put me in all this stuff." It got uglier from there, and he got up and left. That's another downside to this kind of job.

The entire business is suspect. Fiduciary duty are only words. Nobody is your friend. Trust nobody. As they say in the large financial centers - want a friend on Wall Street? Get a dog.

[Screwball]

2 hours ago, Tiger337 said:

I'm not very young, but I'll say that it was not taught at all to me growing up - not by schools or family.  It should be.  What little I know, I picked up mostly on my own.  I had an advisor for several years.  He was expensive (mostly because of the companies he worked for), but pretty honest.  He taught me not to be afraid of stock investing, which has turned out to be mostly good for me.  I also learned that having an advisor is ridiculously expensive, so I now I just do it on my own.  I keep it very simple. The Bogle book was very instructive and I think his ideas would work for most people.  

Bogle is Vanguard. I don't follow as I once did, but their investing plan is as good as any IMO. Especially for the casual investor. But you have to stay on top of it.

Example; my last work retirement account I contributed so much with the company matching that amount.  We were using Vanguard. We could change our holdings or contributions every 3 months. That was fine with me as I checked them all the time. Many didn't

What would happen, and I assume the company was behind this, when new holdings were purchased, most of it went toward the company stock, unless you specified differently. I assume this was for pumping up our company stock price (and therefore the board of directors and major holders in the company, and maybe it was just easier too). If you didn't keep an eye on this stuff, over time you would end up with so much of your account tied to the company stock - which isn't what you want - lack of diversity is a bad thing.

Example; Feb 4, 2016 (I think it was)our stock price was $211 dollars. Mid March 2016 it was $217, but in the last month or so the top 10 company insiders were selling the snot out of it (while getting replaced by our new money I assume). Guys at work were going nuts buying as well - have to get on this gravy train. The next quarters earning report hit - and it got hammered. By July, the stock price was at $140. Opps. This is a multi-national fortune 500 corporation that everyone has heard of.

There were a bunch of very unhappy people as they just lost thousands and thousands of dollars because they were greedy or didn't pay attention to what they were doing.

[gehringer_2]

Since the SO did 30 yrs at the big 'U' she has TIAA, and when I did a stretch of time there as well I also ended up with a smaller piece there. They used to be sort of the gold standard if you had the good fortune to work where it was available. More more recently they have connected to Nuveen as their prime investment placement agent and I'm less certain, or at least still less knowledgeable about them.

[gehringer_2]

8 minutes ago, Screwball said:

What would happen, and I assume the company was behind this, when new holdings were purchased, most of it went toward the company stock,

I knew a lot of Pfizer employees in Ann Arbor and it was the same deal, all your retirement money went into Pfizer stock and a lot of folks got hosed by not getting out of that when it started on a long decline.

Edited October 26, 2024 by gehringer_2

[Tiger337]

7 minutes ago, gehringer_2 said:

Since the SO did 30 yrs at the big 'U' she has TIAA, and when I did a stretch of time there as well I also ended up with a smaller piece there. They used to be sort of the gold standard if you had the good fortune to work where it was available. More more recently they have connected to Nuveen as their prime investment placement agent and I'm less certain, or at least still less knowledgeable about them.

I have my old IRAs from a previous job with TIAA. It's a self directed account, so it's cheap.  Nuveen sucks, but TIAA does not pressure me to invest in anything.  I do it myself.  One of the good things is I am investing in a lot of CDs and they have a very long list of good ones.  

[Screwball]

10 minutes ago, gehringer_2 said:

I knew a lot of Pfizer employees in Ann Arbor and it was the same deal, all your retirement money went into Pfizer stock and a lot of folks got hosed by not getting out of that when it started on a long decline.

Whirlpool is the one I was talking about. I don't care if I call them out, I'm not there anymore, and they can bite me. I'm sure people in Michigan have heard of them.

[gehringer_2]

1 hour ago, Screwball said:

Whirlpool is the one I was talking about. I don't care if I call them out, I'm not there anymore, and they can bite me. I'm sure people in Michigan have heard of them.

LOL - Don't get me started on Whirlpool. A couple of years ago we had a new Kitchenaide dishwasher go south while still under warranty. What a total cluster trying to work though the claim was. After about 6 weeks of screwing around and service calls by two different guys who had no clue what they were doing, they decided they couldn't fix it, so they bought me out of the warranty for $800. You can guess the rest. I fixed it myself for $125 (all it needed was a control board.) True story. Still working fine.

Edited October 26, 2024 by gehringer_2

[Screwball]

38 minutes ago, gehringer_2 said:

LOL - Don't get me started on Whirlpool. A couple of years ago we had a new Kitchenaide dishwasher go south while still under warranty. What a total cluster trying to work though the claim was. After about 6 weeks of screwing around and service calls by two different guys who had no clue what they were doing, they decided they couldn't fix it, so they bought me out of the warranty for $800. You can guess the rest. I fixed it myself for $125 (all it needed was a control board.) True story. Still working fine.

That would have been made in Findlay, Ohio. I worked there. To be honest, I don't know how they made anything. It was a total and complete cluster ****.  The horror stories are endless. You are lucky if it doesn't leak all over the floor. If is has a handle on the upper rack, it could. Long funny story.

[Tiger337]

On 10/26/2024 at 3:10 PM, Screwball said:

Bogle is Vanguard. I don't follow as I once did, but their investing plan is as good as any IMO. Especially for the casual investor. But you have to stay on top of it.

 

He was Vanguard, but the same principles can be applied to other funds.  Fidelity (which is the company my employer uses) also has some low cost sp 500 and bond funds where I can invest the same way he told us to do with Vanguard.  I do stay on top of it to make sure they are not adding any fees I don't know about.  They give me a list of Funds I can choose from and they don't try to make me put my money where I don't want it.  

[Edman85]

2 minutes ago, Tiger337 said:

He was Vanguard, but the same principles can be applied to other funds.  Fidelity (which is the company my employer uses) also has some low cost sp 500 and bond funds where I can invest the same way he told us to do with Vanguard.  I do stay on top of it to make sure they are not adding any fees I don't know about.  They give me a list of Funds I can choose from and they don't try to make me put my money where I don't want it.  

I stumbled upon Bogle after I put together my current plan after a late 2022 deep dive, and in general I see eye to eye with the Bogle philosophy.

Most brokers have similar low fund accounts, and the fees are going to be cheaper on their platform. As much as I would prefer Fidelity or Vanguard funds across the board, I'm (errr... was) forced onto Schwab/TD for my HSA, and took the discounted funds there rather than pay fees for those preferred funds.

[gehringer_2]

40 minutes ago, Edman85 said:

I stumbled upon Bogle 

I'm not sure if he actually invented it, but Bogle and Vanguard pretty much put index investing on the map didn't they? No small thing to be responsible for one the biggest paradigm shifts for individual investors. The first guy that made an impression on me was Peter Lynch - who built the famous Magellan fund at Fidelity. Not quite the same approach as Bogle (buy the market and leave it alone) but also conservative in its own way - buy and hold value, don't 'play' the market, don't try to be a market technician from your spare bedroom office.

[Deleterious]

Some kids at the University of Chicago wrote a paper about the original idea of index investing.  Then some brokerage offered one but to institutional investors only.  Vanguard (Boggle) was the first to offer it to the general public.  

[Screwball]

Good point, and an example of how much this stuff has changed over the years.

I don't know if you can find it today online, but there was a documentary make back in 2009 about the end of the floor traders on the exchanges. It was called Floored. Filmed around the exchange in Chicago. I have the CD. These guys had to transition from floor trading to the computers and couldn't adapt. Timing was part of of it, but technology was too. Great documentary to watch. I loved the guy who called the market a whore. He's right.

We went from floor traders to internet, and millions of dollars spent to run lines from the London equivalent of Wall Street to our Wall Street to save 6 milliseconds off a trade order. Next thing you know the most expensive piece of real estate in New York is the server closest server to the NY stock exchange. At least there are still people on the floor.

Then came the birth of high frequency trading, which is just another scam to make the ones in control have more of an advantage. At our cost. Imagine that. At one time trades were made with fractions, now they settle 4 digits to the right of the decimal point. How can you divide a penny? Do that millions of times a day and do the math. That's Office Space ****.

This all runs through the, I'm not sure the number today, but around the 21 or 22 "broker dealers" who make up the "primary" market. The big Wall Street banks who run the world, and their minions in crime, corruption, fraud, and influence. We, us day to day investors get to play in the "secondary" market where we get the scraps they allow us.

And that doesn't even get into the "Blue Horseshoe loves Anacott Steel" stuff that goes on. Sure, been going on forever, but not like it is today. Especially considering the massive amounts of money floating around out there.

If you are going to steal a piece of the pie, you want the biggest pie you can create. The easiest way to do that is by  creating debt. We should have known when Reagan told us the trickle down plan was a good thing that it was utter BS, because like always, the truth is most likely the opposite. Trickle down IS good - for the people who get the money first - not those who need it most.

It's a big club and we ain't in it.

 

[1776]

10 year yield at 4.305% this morning. Neither candidate is concerned whatsoever about the spiraling debt and unrestrained spending but the bond market cares. 

[1776]

Timely piece in the WSJ this morning. 
 

The prospect of a rising federal budget deficit is fueling a sharp climb in bond yields, with investors betting a challenging fiscal situationwill only get worse after the election.

Treasury yields, which rise when bond prices fall, jumped Monday after a $69 billion government auction of 2-year notes attracted tepid demand from investors. That marked the latest leg in a weekslong bond-market selloff that began after a run of strong economic data undercut bets on rate cuts from the Federal Reserve.

[gehringer_2]

2 hours ago, 1776 said:

10 year yield at 4.305% this morning. Neither candidate is concerned whatsoever about the spiraling debt and unrestrained spending but the bond market cares. 

If the dems get control, you can book there will be a tax increase early in the session. Trump or divided gov - who knows if any agreement is achievable?

Edited October 29, 2024 by gehringer_2

[1776]

Without a serious restraint in spending a tax hike won’t keep up. The federal government’s level of spending is ruinous. 
 

Edited October 29, 2024 by 1776

[gehringer_2]

The huge covid spending spike is already mostly over. As percentages of GDP both spending and receipts are really not that far off historical norms, they are just both on the wrong side at the same time. If you hold spending increases to 1/2 of inflation and raise taxes 2% of GDP you are probably there. Its not the economics, it's the politics.

Edited October 29, 2024 by gehringer_2

[gehringer_2]

Raise corp tax rate a couple of percentage points and institute a hard 16-20% *no* exemption minimum rate. Increase marginal rates on income above 500K 3-5%, and harden the AMT. Close about 1/2 the rate gap between dividends and interest vs wages. Tax carried interest.  (OTOH I'm not so sure taxing imputed gains is such a good idea - sounds like a book keeping nightmare that will end up rife for abuse.....)

Hold spending to less than inflation - freeze most things for a year and that still gives you a chunk of change to direct at specific new priorities. All doable if the public for once has the brains not to elect a divided gov. 

But crazy Americans will complain about government inaction and then split their tickets so "each side keeps the other in check" 🤷‍♀️

Edited October 29, 2024 by gehringer_2

[Hongbit]

On 10/4/2024 at 1:05 PM, Hongbit said:

I can’t wait to see the post-election revisions of these numbers on the December release.

I’m guessing they will get revised down by at least 120,000.  

Big shocker -  August and September jobs were revised down by -112,000 in today’s report.    One has to think that the bogus 254k jobs the BLS made up for last month will get another revision in the next report too.

Its amazes me that so much of our economy rides on this garbage data that is so easily manipulated.  

Edited November 1, 2024 by Hongbit

[Tigeraholic1]

3 minutes ago, Hongbit said:

Big shocker -  August and September jobs were revised down by -112,000 in today’s report.    One has to think that the bogus 254k jobs the BLS made up for October will get a massive revision next month too.

Its amazes me that so much of our economy rides on this garbage data that is so easily manipulated.  

Yeah but, Hurricanes..............

[Screwball]

14 minutes ago, Tigeraholic1 said:

Yeah but, Hurricanes..............

One can always read the actual report;

From the BLS: BLS Employment report - released today at 8:30 am

At the very top;

  ______________________________________________________________________________________________
 |												|
 |                                  Hurricanes Helene and Milton				|
 |												|
 | October data from the household and establishment surveys are the first collected since	|
 | Hurricanes Helene and Milton struck the United States. These hurricanes caused severe	|
 | damage in the southeast portion of the country. See the notes at the end of this news	|
 | release for more information.								|
 |______________________________________________________________________________________________|

  At the end;

 ______________________________________________________________________________________________
 |												|
 |                                Hurricanes Helene and Milton 				        |
 |												|
 | Hurricane Helene made landfall on Florida’s Gulf Coast on September 26, 2024, and then	|
 | tracked north into several other states. This was before the October reference periods for	|
 | both the household and establishment surveys. 						|
 | 												|
 | Hurricane Milton struck Florida on October 9, 2024, during the reference periods for both	|
 | surveys. Prior to the storm’s landfall, there were large-scale evacuations of Florida	|
 | residents.											|
 |												|
 | In October, the household survey was conducted largely according to standard procedures,	|
 | and response rates were within normal ranges.						|
 |												|
 | The initial establishment survey collection rate for October was well below average.		|
 | However, collection rates were similar in storm-affected areas and unaffected areas. A	|
 | larger influence on the October collection rate for establishment data was the timing and	|
 | length of the collection period. This period, which can range from 10 to 16 days, lasted	|
 | 10 days in October and was completed several days before the end of the month. 		|
 |												|
 | No changes were made to either the establishment or household survey estimation procedures	|
 | for the October data. It is likely that payroll employment estimates in some industries	|
 | were affected by the hurricanes; however, it is not possible to quantify the net effect on	|
 | the over-the-month change in national employment, hours, or earnings estimates because the	|
 | establishment survey is not designed to isolate effects from extreme weather events. There	|
 | was no discernible effect on the national unemployment rate from the household survey. 	|
 |												|
 | For information on how unusually severe weather can affect employment and hours estimates,	|
 | see the Frequently Asked Questions section of this news release. 				|
 |												|
 | BLS will release the state estimates of employment and unemployment for October on		|
 | November 19, 2024, at 10:00 a.m. (ET).							|
 |______________________________________________________________________________________________|

U-6 at 7.7 percent (see table A-15). No matter how you slice it, a dismal report.