Are you concerned about Interest rates?

[Thunderjet]

"buy when the Market looks like it's at its worst. It will recover.."

Especially when the government bails out the banks.

Joe to the rescue.
It's all on him now.
His administration promised the bailouts for the "big" banks.
That's were all the big money will go now.
Screw those piddly little banks....Who needs them.

 

[standardparts]

As an investor, we might be approaching the second 'generational moment'.

The first was the Pandemic..............the current crisis might be the second. If indeed it is a crisis. No telling. Markets are cyclical. The skill is timing the bottom, or close to the bottom. It isn't rocket science........it's just a matter of patience. This seems to elude the average investor.

You can't catch a falling knife, but any buys on the way down are a feather in your cap. The art is buying when all is storms on the horizon. The stupidity is buying when the momentum is on the upswing. I never could figure out selloffs. How do people panic like they do? Conversely, I've never figured out momentum traders.

My Father rode out Black Monday........his Father rode out the Depression. In the end, they both wound up in better shape than they would have been, if they succumbed to sentiment. They did well.

Your money is made on the buy. Simple as that. When all is gloom, and doom, use that dry powder, and load up. Back up the truck.

I've seen some serious downturns in my lifetime. They were all opportunities........all of them. It depends on your horizon............how old are you, and how long you have to recoup losses......It's all about the end game. Granted, it's about timing when you have to cash out. God Forbid you have to start clipping coupons in a Bear Market. It's the risk you took going in.

Since the day your Mother presented you to the world, it's been risk-on.

Climb into an automobile, or an airliner...........you're taking risk that doesn't add to your bottom line. The Fund has been an earner since it's inception.........back to the late 90's. It'll see us both through retirement, and eventual death.

Low Beta, reasonable dividends. It should be your mantra. And, be a contrarian......buy when the Market looks like it's at its worst. It will recover......it always has. Grow some balls.

"Risk you took going in"....Very true. But many time the risk you take is somewhat balanced by other factors, like a somewhat proven history how the Gov't responds, or more importantly knowing that some fraudsters have been culled at least giving an illusion of reforms.
Of course there are those who always beat the house odds--or so they claim.
From where I sit it looks like the Gov't is intervening and changing the rules to favor and reward manipulation of financials, a situation that creates doubt in the minds of average people.
Kinda sorta looks like a rigged game that never gets set back and lacks credibility...in my opinion.

 

[farmersamm]

You're absolutely right...........which is the damn sad thing. The game has been rigged since the Spice Trade. The art is riding along with the big money. You can't move the world, but you can take advantage of where the world is going.

I put money to work between March 13-17...........and now, I'm risk-off. Hands folded, just watching the action.

While the banks may be bailed out(whatever your definition of a bailout is), the real problem is contracting credit.

When I used to write about this bullshit(the Market), I warned against the euphoria that sang a song of increased bank earnings due to higher interest rates imposed by the Fed. It's not rocket science............as rates go up, people get priced out, and loan originations dwindle. The bank "might" earn higher rates at higher rates, but the loan origination contraction offsets this.

As credit tightens, small business suffers. You can't grow, or ride out the storm, if you can't borrow funds at a reasonable rate...........OR EVEN BORROW FUNDS. A recipe for disaster.

For me, as a long term investor, this is a fiasco that has to be ridden out. I'm carrying some positions that were established when equities were at higher valuations. I've banged the drum about NOT buying stocks at higher prices than Pre-Pandemic, but I do hold positions that are above these valuations. Thankfully, not many. This has held the bleed-out to a minimum.

A young investor is looking at a very good entry point right now. You might lose some money in the short term, but good stocks will recover, and continue to climb.

Financials......................... Always were, and will continue to be, good earners. Not in terms of mega increased valuation, but a function of dividends. Boring, but boring is good. The high rollers that follow momentum stocks don't tell you about the mega losses they suffered on the way to the few big killings they make. Take it all with a grain of salt. An investor who puts money into Financials at this point will garner some very handsome dividend yields. Dividend yield is all about catching the bottom.

Will yields suffer.............possibly. Higher borrowing rates hit banks too. This narrows the net interest margin, which lowers profits, which can affect dividends. It's vital to find stocks that have a very low payout ratio(divindes as a percentage of earnings). This equates to safe dividends because the company has some wiggle room in bad times. Also, look to retained earnings.........how much money does the company hold in dry powder. Retained earnings will often be used to cover dividends in bad times.

Risky????????????? You betcha!! Makes a person want to flee to Treasuries. But will the Fed loan you money when you want to expand your business? NOT. Without a banking relationship, small business will be at the mercy of the big banks.........who don't give a shit about you. What's true for depositors, is true for investors. You do NOT want this to be a world of big banks. Regionals, and even smaller local banks, are the life blood of the economy. While it's understandable, the deposits fleeing from smaller banks, to larger banks, is, in the long run, stupid money. Jamie Dimon doesn't give a damn about main street.

Perusing some balance sheets at the onset of this crisis, shows that the smaller banks, in many instances, are more conservative than the big banks. This should tell you something. Local bankers have to face depositors in their community. (Although "Ice Harvest" gives a bit of a different take on this..great movie BTW)

Money is a dangerous thing. Anybody who handles large amounts of it, is predisposed to either stealing it, or mismanaging it. There is no other thing that creates as much temptation. Politicians, bankers, and lawyers.

We just go along for the ride.

 

[Demon69]

 

[Speedie]

Our government is asleep at the wheel. They have very little helpful prediction and react late and overwhelmingly poor. We had 2 bright spots...in ny whole life. 1. Bush Sr economic policies in the first 2 years of Bill Clinton and 3 years of Trump. Beyond that it had been a mishmash of an endless spending spree and poor market support. In fact all they can do now is pull the knife out a little and hope we heal around the blade.

 

[Ries]

Our government is asleep at the wheel. They have very little helpful prediction and react late and overwhelmingly poor. We had 2 bright spots...in ny whole life. 1. Bush Sr economic policies in the first 2 years of Bill Clinton and 3 years of Trump. Beyond that it had been a mishmash of an endless spending spree and poor market support. In fact all they can do now is pull the knife out a little and hope we heal around the blade.

You do realize that 40% of US government debt was incurred during the Trump administration, right? So while it may have been a bright spot for some industries, the obligation of that $ 8 Trillion will be around for a while.

 

[Thunderjet]

the obligation of that $ 8 Trillion will be around for a while.

Well then, Just fuck it.

Just print enough money to cover our ass.

Who cares if our kids have to pay.

Crazy ass inflation, Reparations, sex changes operations, homeless housing in hotels, moving immigrants to big cities, sending arms to Ukraine....et al.

Print , baby print.

 

[Freedommachine]

You do realize that 40% of US government debt was incurred during the Trump administration, right? So while it may have been a bright spot for some industries, the obligation of that $ 8 Trillion will be around for a while.

Yep, that's what happens when you have an ideologically motivated congress. They rack up as much spending as they can muster and anyone who disagrees becomes a "threat to our democracy" and "standing in the way of progress" ... history; it's a funny thing isn't it?

 

[Thunderjet]

You do realize that 40% of US government debt was incurred during the Trump administration, right?

And just to remind you:
Many of those folks that have a different viewpoint than you do NEVER voted for the orange dude.

I didn't like it then, and I don't like it now.

 

[Speedie]

You do realize that 40% of US government debt was incurred during the Trump administration, right? So while it may have been a bright spot for some industries, the obligation of that $ 8 Trillion will be around for a while.

NOT EVEN CLOSE. Where did you pull those numbers from. How many trillions did Biden spend so far...1.5 trillion more in 3 years compared to Trump. And he has plenty more time to apple cart your emotions. But it was a great time for the economy under Trumpo. Even though he was controversial every single thing was cheaper except small talk and do not forget that

 

[standardparts]

The question: "Are you concerned about Interest rates?"

Answer: At this point, No.

 

[Ries]

And just to remind you:
Many of those folks that have a different viewpoint than you do NEVER voted for the orange dude.

I didn't like it then, and I don't like it now.

this is just facts. not viewpoints. and blaming congress? Trump was not forced at gunpoint to sign anything- in fact, I kinda doubt you could force him to do anything. He signed ever spending bill during his term without duress all on his own.
Again, not a political statement- just a plain historical fact.

 

[Ries]

NOT EVEN CLOSE. Where did you pull those numbers from. How many trillions did Biden spend so far...1.5 trillion more in 3 years compared to Trump. And he has plenty more time to apple cart your emotions. But it was a great time for the economy under Trumpo. Even though he was controversial every single thing was cheaper except small talk and do not forget that

No emotions here. Just facts. Here is what the AP says:
Looking at historical federal debt data by fiscal year, the total gross U.S. debt was about $19.5 trillion at the end of fiscal year 2016, which ended several months before Trump took office, said G. William Hoagland, senior vice president at the Bipartisan Policy Center. That rose to about $26.9 trillion at the end of fiscal year 2020, or a $7.4 trillion increase, just before Trump left office.
there are dozens of websites of every ideological flavor that will tell you the exact same thing. Trump increased the debt by 7.4 trillion at a minimum (some sources say 7.8)
This is measuring, not feelings, emotions, or beliefs, not faith or politics or ideology.
Its numbers, which are publically available to anyone.
You are welcome to like or dislike any politician or person or policy- But the numbers remain the same.

 

[Thunderjet]

You are welcome to like or dislike any politician or person or policy- But the numbers remain the same.

Like I said,
Print, baby print.

 

[Freedommachine]

this is just facts. not viewpoints. and blaming congress? Trump was not forced at gunpoint to sign anything- in fact, I kinda doubt you could force him to do anything. He signed ever spending bill during his term without duress all on his own.
Again, not a political statement- just a plain historical fact.

Yes blaming Congress... They write the spending bills don't they?

They lump in everything they possibly can - obscene amounts of funding for ridiculous b.s. - attached to critical funding necessary for the operation of our country. Then, they wait until the very last minute to release the bill. If you don't sign it, then it's YOUR fault the country cannot operate.

They have only been getting worse about it. You're a fairly well read person Ries, I'm a bit surprised you didn't know this.

What would have happened if anyone stood in the way of PPP or stimulus funding? You think that person would have been viewed in a positive way by the average American voter who allows the TV to think for them?

 

[jim rozen]

"You are welcome to like or dislike any politician or person or policy- But the numbers remain the same."

Don't confuse them with facts. Their ideology is already made up.

 

[jim rozen]

No. Just you. To put it another way, given the choice between believing Ries, or you, I'll go with Reis. To be fair, there might be something involving metalworking, where you could be right.

 

[604Pook]

I am not worried about interest rate. The small amount of debt I have is locked in at 0% (bought a Kubota tractor in 2021) and the line of credit is barely used and paid off often as needed.

I am concerned though that customers of my customers aren’t spending like they used to though.

 

[Freedommachine]

No. Just you. To put it another way, given the choice between believing Ries, or you, I'll go with Reis. To be fair, there might be something involving metalworking, where you could be right.

There is no need for belief Jim. You have access to the same information I do.

I was not attempting to debate an adversarial political point. Congress has the sole authority to create spending bills.

Appropriations bill (United States) - Wikipedia

en.m.wikipedia.org

Do not take anyone's word for it. Read about it and follow Congress; see for yourself how they act.


As far as interest rates go? I am not concerned. Soon enough cash will be out and CBDC will be in. Nobody even pretends to care anymore so I don't either.