Financial topics

[Higgenbotham]

I really don't like to ban people, though I could do that if someone
were repeatedly offensive and contemptuous of me and this forum.

I think that's the right approach. It's hard to draw a line for a complex topic that is subject to wide interpretation. At the same time, it's not unreasonable to say that posters may be banned in cases where they are "repeatedly offensive and contemptuous of (you) and this forum." That would be comparable to a supervisor telling a work group, "Hey, I like to be reasonable and work with people, but don't confuse that with me being a pushover and if you happen to get confused, yes, you can be fired."

I'm not in favor of sequestering posts but since this isn't how you make your living or even the main part of this site it may be necessary due to time constraints. For example, if you told me you were moving some of my posts to "Higgenbotham's Dark Age" thread, I would feel you were hindering my expression a bit (I deliberately left out the word "free" because, after all, this is your site). On the other hand, I could see your reason for doing so, as the appropriateness of many topics is subject to wide interpretation, as previously stated.

I would really like to see what I post here draw a few dozen thoughtful and collaborative posters like Lily and Old1953 but apparently that is not the world we live in. And that in and of itself is useful to know.

[John]

> I would really like to see what I post here draw a few dozen
> thoughtful and collaborative posters like Lily and Old1953 but
> apparently that is not the world we live in. And that in and of
> itself is useful to know.

I just checked, and Lily (Last active: Sat Apr 23, 2011 1:53 am) and
Old1953 (Last active: Sat Mar 16, 2013 9:09 am) both have active
accounts. Why don't you send them private messages telling them that
you'd like to see them again?

The problem is that there's very little to be gained in being
thoughtful today. If you want to be popular, then write a post about
Trump being Hitler, or about Trump making America great again. As you
say, actually being thoughtful is not the world we live in.

[Higgenbotham]

The stock market DJIA is up 150 points so far today. Can we call it a
parabolic bubble yet?

On the other hand, the S&P 500 P/E ratio is 21.81.

http://www.wsj.com/mdc/public/page/2_30 ... dc_h_usshl

Down from 25 three months ago. Earnings must have been very good last
quarter.

There were several points I made to my broker a few weeks ago when he was short. Some I can recall were:
1. Apple announced they are investing $400 million into Finisar and Finisar stock jumped something like 25% on the news. Given that Apple may repatriate hundreds of billions in cash, there could potentially be many more announcements like this.
2. The crash of 2008 was the steepest crash in decades. To get out of that and back into bubble territory therefore required the largest stimulus to the markets in decades. Now that we are back in bubble territory, expect this bubble to eclipse previous historic measures.
3. The market blew through an important potential late November inflection point.
4. As the market went through that inflection point, a lot of stocks like Ulta Beauty that topped earlier in 2017 moved off of lows. If this bubble is going to extend beyond previous bubbles, those stocks may be able to carry the market higher for awhile even if the big stocks like Amazon and Facebook churn.
5. Oil prices are not back near $100 yet. They may not need to get to $100 to top the market but $60 seems too low.

I think we can call it a parabolic bubble. I don't think it will be over this month.

[John]

There's another reason why people don't want to have thoughtful
debates today. The reason is that everyone increasingly understands
that the worst of the predictions of gloom are obviously coming true.

People used to argue with me about China -- "the Chinese people are
peaceful," "China knows it would lose a war," "China is only
building artificial islands in the South China Sea as tourist
attractions," etc. At that time, maybe only 30-40% of people
thought that China was planning a war. Today, that figure is
probably more like 60-70%.

Same with North Korea. Everyone thought they were harmless
a few years ago, and they would debate someone who said otherwise.
Today, there's nothing to debate.

The same is true of the stock market. Today, everyone's talking about
a bubble, and the only thing to debate is whether it will burst next
month or next year, and really that's nothing to debate.

So today, the "thoughtful" people are too gloomy to debate anything.
All that's left are the people who majored in women's studies or
sociology, and they're too stupid to debate anything.

[Higgenbotham]

The problem is that there's very little to be gained in being
thoughtful today. If you want to be popular, then write a post about
Trump being Hitler, or about Trump making America great again. As you
say, actually being thoughtful is not the world we live in.

Financial Topics wise, people want to know whether they should buy bitcoin. That's what I get asked.

If I make a statement to my friends like "It's a lottery economy! Bitcoin!" that provokes a reaction but reading a paragraph from Pulitzer prize winning author Barbara Tuchman is way too much for them. I counted the number of words in all of the texts from one of my Millennial friends. The maximum number of words in any text was 14.

[Higgenbotham]

There's another reason why people don't want to have thoughtful
debates today. The reason is that everyone increasingly understands
that the worst of the predictions of gloom are obviously coming true.

Yes, absolutely.

It reminds me of this, which I posted in July:

I am starting to observe a general acceptance that collapse is coming. For example, I was talking to a top labor lawyer in my city last week. I told her that it is good for those who have savings and don't need to be employed to be employed anyway since bank deposits are just digits on a computer and can vaporize. She replied directly, saying, "Do you think it's going to collapse?" I simply said yes. She replied that a lot of her friends and colleagues think so too.

Virtually nobody believed this in 2005-2006-2007.

[Higgenbotham]

Last e-mail received:

Subject: Is Now the Right Time to Buy Bitcoin?
Date: 1/4/2018 3:00:53 PM

[John]

Last e-mail received:

Subject: Is Now the Right Time to Buy Bitcoin?
Date: 1/4/2018 3:00:53 PM

I posted this information in another thread in October, but it's worth
repeating now:

Well, Breitbart refused to post my Bitcoin article, and now I know
why. I just received a spam e-mail message from "Breitbart News"
saying:

> How Investors Can Play The Bitcoin Boom

> While technically-minded investors are making once-in-a-lifetime
> profits in Bitcoin, Ethereum and other cryptocurrencies…

> Regular investors are missing out.

> UNTIL NOW...

> There’s a new “Canadian Backdoor” you can use to add them to your
> retirement portfolio in less than 3 minutes…

> Get the details now...

Since I didn't want to click on the link, I googled "bitcoin canadian
backdoor," and apparently this refers to the Canadian Bitcoin Trust
that was just approved by Canadian regulators. The SEC refused to
approve a similar fund in the US.

https://motherboard.vice.com/en_us/arti ... -in-canada

Here's the address of my Bitcoin article:

** 16-Oct-17 World View -- Bitcoin super-bubble surges through $5,000 and blasts even higher
** http://www.generationaldynamics.com/pg/ ... tm#e171016

Wow! Just $5,000. I shoulda gotten in then.

[jcsok]

Since you're discussing Bitcoin, here's a tidbit from the New Year's holiday with the wife's family. A 25 year old nephew (petroleum engineer) was trying to explain Bitcoin to a 54 yr. uncle, who is a world traveling structural engineer. The uncle had no clue of what Bitcoin is supposed to be (I refrain from saying "what Bitcoin is"). The young man has bought some Bitcoin and some other cryptocurrencies, with discretionary funds, and claims he has made a few thousand dollars. He discussed that he was stepping back from the market because he realized that watching it and learning about it had consumed his time, and related that his friends were consumed by the Bitcoin market. He told of young men who had taken second mortgages to invest in the cryptos. The older guy had no clue.

I cautioned my nephew to tread lightly; that real wealth was precious metals, real estate, farm land, tangible goods. I said that Bitcoin could not be valued; a gold bar would hold a somewhat constant relationship with the value of a house but the Bitcoin may be worth $100,000 or $.01, nobody could truly place a value on it. I explained that the coaster my drink was on had more value in my opinion than a Bitcoin, as I tossed it to him. Told him that I don't want to discourage him from making money, but one day, in my opinion, the Emperor would be found to have no clothes. Neither person with me understood what I meant. I then mentioned Tulipmania and the South Sea Bubble. Neither one knew of those events. I had the young man "Google" Tulipmania. He began to listen to me. 30 minutes later, 5 other adults over the age of 55, all highly educated, asked what we had been discussing, and none knew of Bitcoin. So it probably has another run left in it.

[Tom Mazanec]

Can a cryptocurrency be stable?
http://daviddfriedman.blogspot.com/2017 ... ncies.html