Author Topic: Optimistic / Contrarian Article Thread  (Read 7649 times)

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #50 on: October 16, 2022, 04:22:34 PM »

now pundits predicting something big upcoming?:
https://www.msn.com/en-us/money/markets/wall-street-is-worried-something-is-about-to-break-in-markets-here-s-where-jamie-dimon-cathie-wood-and-5-other-top-experts-think-the-rupture-will-come/ar-AA130R0g?cvid=5c99809051fb406e94f5912ea4d706bb



I try my best to not pay attention to pundits like these. A quick search shows that Dimon predicted a major recession in 2020, then predicted a major boom some months later and now is all doom and gloom again.

A lot of times it seems the pundit prognostications are more driven by their agenda of what they want the Fed or the government to do so they can do well. I’m sure if you go back further you’ll find the same financial pundits saying all is well right before the 2008 financial crisis.

Thanks - good points. Started to forget I never listen to them, cause what are you going to do with the info? Time the market?

vand

  • Handlebar Stache
  • *****
  • Posts: 2330
  • Location: UK
Re: Optimistic / Contrarian Article Thread
« Reply #51 on: November 02, 2022, 10:10:50 AM »
If you want hard evidence that the dumb money tends to be fully invested at the peak and left sitting on the sidelines at the bottom, then you will find it in the AAII asset allocation survey, where equity allocation now at a modest 61.6% - the lowest level since March 2020.*

Cash on the sides is up to 24.7%, suggesting that - as always happens - as prices go lower and expected returns improve, more people get frightened out and fewer people are on board for the ride back up. 

https://www.aaii.com/assetallocationsurvey

61.6% is still too high a reading to be confident that a bear market bottom is near to hand, but it is definitely getting towards it.

*March=May
« Last Edit: November 07, 2022, 04:19:20 AM by vand »

ChpBstrd

  • Walrus Stache
  • *******
  • Posts: 6712
  • Location: A poor and backward Southern state known as minimum wage country
Re: Optimistic / Contrarian Article Thread
« Reply #52 on: November 02, 2022, 11:50:47 AM »
If you want hard evidence that the dumb money tends to be fully invested at the peak and left sitting on the sidelines at the bottom, then you will find it in the AAII asset allocation survey, where equity allocation now at a modest 61.6% - the lowest level since March 2020.

Cash on the sides is up to 24.7%, suggesting that - as always happens - as prices go lower and expected returns improve, more people get frightened out and fewer people are on board for the ride back up. 

https://www.aaii.com/assetallocationsurvey

61.6% is still too high a reading to be confident that a bear market bottom is near to hand, but it is definitely getting towards it.

That 24.7% cash number can be compared to 38.6% in October 2002 and 44.8% in March 2009. 25.7% occurred during the anxieties of November 2011. So we could actually be a long way from the bottom. Aim for 40%!

Also interesting is how the AAII data show outflows from stock funds and bond funds, but smaller inflows into individual stocks and bonds. I suspect this is yield chasing behavior.

vand

  • Handlebar Stache
  • *****
  • Posts: 2330
  • Location: UK
Re: Optimistic / Contrarian Article Thread
« Reply #53 on: November 03, 2022, 02:39:08 PM »
If you want hard evidence that the dumb money tends to be fully invested at the peak and left sitting on the sidelines at the bottom, then you will find it in the AAII asset allocation survey, where equity allocation now at a modest 61.6% - the lowest level since March 2020.

Cash on the sides is up to 24.7%, suggesting that - as always happens - as prices go lower and expected returns improve, more people get frightened out and fewer people are on board for the ride back up. 

https://www.aaii.com/assetallocationsurvey

61.6% is still too high a reading to be confident that a bear market bottom is near to hand, but it is definitely getting towards it.

That 24.7% cash number can be compared to 38.6% in October 2002 and 44.8% in March 2009. 25.7% occurred during the anxieties of November 2011. So we could actually be a long way from the bottom. Aim for 40%!

Also interesting is how the AAII data show outflows from stock funds and bond funds, but smaller inflows into individual stocks and bonds. I suspect this is yield chasing behavior.

Yes, as I say we are not at bottom-forming levels... yet. But we are on the way.   I have always thought that there has to be an element of length to a serious bear market (which is why I don't personally consider 1987 or 2020 as real bear markets).  Considering that the Nasdaq peaked in Nov 2021, I look at this bear market as being a year old now - it's not a veteran yet, but it's getting more mature.  The worst is probably still to come, but anyone who's come this far and still sleeping soundly at night has done well and deserves a little self-fistbump.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6652
Re: Optimistic / Contrarian Article Thread
« Reply #54 on: November 04, 2022, 06:38:19 AM »
vand - Good point about AAII survey.  Earlier this week the S&P 500 dropped 2.51% one day, and my portfolio lost 2.49%, so I think I've got the right balance of SPY, call options, stock picks and cash.

Despite "transitory" and "lala land" criticisms of the Fed, I'm starting to consider Fed Chair Powell's claims more seriously.  In the 1970s/1980s inflation, markets got obscure comments from the Fed, followed by rate hikes.  So they reacted to rate hikes... but now the market predicts the Fed, and reacts ahead of time.  Maybe lag has decreased because of how markets have changed.

Earlier Chair Powell thought we could have no rise in unemployment during this period of tightening, which is where many investors called him in "la la land".  His theory was that vanishing job vacancies would substitute for job losses.  While he still points to that, he now allows for a 1% rise in unemployment.  I still find that hard to believe, that the lowest unemployment in 50 years could move up from 3.5% to 4.5%, and that's all.

On the downside, the path to a soft landing has narrowed further.  I think market consensus is a mild recession, but it's still too early to know accurately.

vand

  • Handlebar Stache
  • *****
  • Posts: 2330
  • Location: UK
Re: Optimistic / Contrarian Article Thread
« Reply #55 on: November 05, 2022, 02:52:20 AM »
S&P Earnings haven't yet collapsed, although they have softened

https://insight.factset.com/sp-500-earnings-season-update-november-4-2022

It's an open secret that analysts tend to err of the side of caution for S&P earnings, then when earnings season comes around most companies handily beat those modest forecasts, leading to absurdity like 73% of earning reports beating expectations over the last 10 years + 77% over the last 5 years

That said, earnings have now softened to the point where they're falling in real terms, and the beats are by a much smaller margin than we've seen historically


"Looking ahead, analysts expect a decline in earnings of -1.0% for Q4 2022 but earnings growth of 5.6% for CY 2022. For Q1 2023 and Q2 2023, analysts are projecting earnings growth of 2.3% and 1.5%. For CY 2023, analysts predict earnings growth of 5.9%."

p/e valuations are pretty reasonable now. Could go lower of course, but you could make a pretty good case that stocks aren't expensive right now

"The forward 12-month P/E ratio is 16.1, which is below the 5-year average (18.5) and below the 10-year average (17.1). However, it is above the forward P/E ratio of 15.2 recorded at the end of the third quarter (September 30), as the price of the index has increased while the forward 12-month EPS estimate has decreased since September 30."

franklin4

  • 5 O'Clock Shadow
  • *
  • Posts: 51
  • Location: Seattle
Re: Optimistic / Contrarian Article Thread
« Reply #56 on: November 06, 2022, 06:03:11 PM »
A year ago predictions that inflation would be transitory seemed wildly optimistic and have proven incorrect. I believe inflation will be persistent, interest rates will continue to climb, and something worse than a mild recession is coming in the next year. But I question that thinking and frequently look for news that contradicts it because it could be wrong now and at some point in the future it will be wrong.

This afternoon's news is that Meta will start large-scale layoffs this week. I consider that company to be more favorable to Democrat politicians than Republicans so for this news to leak now, when it could hurt Democrats running for office, seems even more like a sign of bad times coming than if it came out next week.

Here's an article that to me seems wildly optimistic - it says inflation will drop dramatically in 2023 and by 2024 will be under 2%. It also says the US is not in a recession, there's a 50/50 chance of a recession in 2023 and if there is a recession it will be relatively mild and short-lived. But I'm curious if others find these predictions to be reasonable, overly optimistic or something else?

https://www.morningstar.com/articles/1120369/a-harder-landing-for-the-us-economy-now-looks-more-likely


MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6652
Re: Optimistic / Contrarian Article Thread
« Reply #57 on: November 06, 2022, 07:53:57 PM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”

franklin4

  • 5 O'Clock Shadow
  • *
  • Posts: 51
  • Location: Seattle
Re: Optimistic / Contrarian Article Thread
« Reply #58 on: November 06, 2022, 08:56:35 PM »
Thanks for sharing your thoughts!

I haven't paid close attention to Larry Summers' statements over the past couple years but do remember him saying things that were more accurate than what others were predicting. So I respect his opinion and commentary.

From that article, "There is currently a 98.1% chance of a global recession next year..." But truly, if it's nowhere near that likely I want to be aware!

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #59 on: November 06, 2022, 10:52:13 PM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”

Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #60 on: November 06, 2022, 10:55:56 PM »
Thanks for sharing your thoughts!

I haven't paid close attention to Larry Summers' statements over the past couple years but do remember him saying things that were more accurate than what others were predicting. So I respect his opinion and commentary.

From that article, "There is currently a 98.1% chance of a global recession next year..." But truly, if it's nowhere near that likely I want to be aware!

lol, I'm going to discount this one purely based on the ridiculous .1 added on to this percent! Absolutely gratuituous and in no way conveys additional information.

What is the basis for assuming they have that much measurement precision to go into decimals? And even if they did, rounding this would be more appropriate. I object!

SilentC

  • Stubble
  • **
  • Posts: 182
Re: Optimistic / Contrarian Article Thread
« Reply #61 on: November 07, 2022, 05:05:57 AM »
P/E is down in the range that I consider "normal" in the modern era, CAPE is close.

Will things drop more? Probably, but I turned dividend reinvestment back on for all my funds today, instead of dumping that money into I-bonds.

-W

Acknowledging this is from June, according to Multipl.com the CAPE is at 27.7 on the S&P.  That is extremely high or are you looking at a global cape?  Thanks. 

Optimistic- EAFE and EEM valuations look quite reasonable and you can use your strong dollars to buy these stocks/rotate out of S&P. 

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6652
Re: Optimistic / Contrarian Article Thread
« Reply #62 on: November 07, 2022, 07:17:20 AM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #63 on: November 07, 2022, 11:42:56 AM »
Quote
While investors, business leaders and some economic models continue to warn a recession is imminent, Wall Street’s most powerful investment bank remains cautiously optimistic.

Goldman Sachs told clients on Monday it still sees a 35% chance of a US recession in the next 12 months. While that is double the normal risk of a recession, it is far below the 63% average in a recent forecaster survey by The Wall Street Journal.

https://www.cnn.com/2022/11/07/economy/goldman-sachs-recession-outlook/index.html

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #64 on: November 07, 2022, 11:44:42 AM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.

I was asking for clarification on what you were referring to. Being so put out by it makes no sense.

BicycleB

  • Walrus Stache
  • *******
  • Posts: 5269
  • Location: Coolest Neighborhood on Earth, They Say
  • Older than the internet, but not wiser... yet
Re: Optimistic / Contrarian Article Thread
« Reply #65 on: November 07, 2022, 01:08:40 PM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.

I think that some people (myself included) suppose that an MBA might have some relevance to economic forecasting, or at least the related question of investment analysis. After all, an MBA is a graduate degree, which is higher than a bachelor's.

That doesn't mean you have to agree with our assumption, or act on it during your own assessment of analysis sources. But once a reader has that assumption, the words of your statement become ambiguous from the reader's viewpoint.  Even though grammatically of course the sentence refers to the bachelor's, the reader's assumption makes them wonder if you meant the MBA. This probably doesn't mean the reader misunderstands grammar, it just means that they account for possible meanings beyond the grammar, and therefore wonders which possible meaning you actually intended.

I am optimistic that this will be understandable! ;)
« Last Edit: November 07, 2022, 01:10:56 PM by BicycleB »

PDXTabs

  • Walrus Stache
  • *******
  • Posts: 5160
  • Age: 41
  • Location: Vancouver, WA, USA
Re: Optimistic / Contrarian Article Thread
« Reply #66 on: November 07, 2022, 01:35:16 PM »
"Jeremy Siegel sees stocks soaring 30% in two years, and house prices dropping 15% from their peak." - Stocks will soar, house prices will slump, and the Fed's rate hikes could tank the US economy, Wharton professor Jeremy Siegel says. Here are his 8 best quotes from a new interview.

Good thing I sold my house and put it all in stonks.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6652
Re: Optimistic / Contrarian Article Thread
« Reply #67 on: November 08, 2022, 04:18:48 AM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.
I was asking for clarification on what you were referring to. Being so put out by it makes no sense.
My sentence did not mention an MBA at all, so how could you ask for clarification on something I didn't mention?  The answer is that you did not read what I wrote, and then asked questions anyways.

The article's author has a bachelor's in economics, and not from a top tier college, either.

MoseyingAlong

  • Bristles
  • ***
  • Posts: 417
Re: Optimistic / Contrarian Article Thread
« Reply #68 on: November 08, 2022, 05:14:48 AM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.
I was asking for clarification on what you were referring to. Being so put out by it makes no sense.
My sentence did not mention an MBA at all, so how could you ask for clarification on something I didn't mention?  The answer is that you did not read what I wrote, and then asked questions anyways.

The article's author has a bachelor's in economics, and not from a top tier college, either.

It just seems strange to me that you seemingly skipped the MBA to bash the bachelor's. My first thought was that maybe you missed that he had an MBA. Like complaining about your MD doctor having gotten a bachelor's in English literature at a podunk school. I usually consider the highest degree, not the previous ones.

Reading your responses it's clear that you meant to denigrate the bachelor's. Still seems strange to me but, at least, it's clear. I'm hoping this might explain why some people were confused/questioning.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6652
Re: Optimistic / Contrarian Article Thread
« Reply #69 on: November 08, 2022, 07:54:54 PM »
Those who want to look for top tier economists, can start with those who have won the Nobel Prize in Economics, many of whom write articles and books (Eugene Fama, Daniel Kahneman, Paul Krugman, Robert Schiller, Joeseph Stiglitz, Richard Thaler).
https://www.nobelprize.org/prizes/lists/all-prizes-in-economic-sciences/

Defending the article author's school or MBA misses the point.  If all someone has is their degree, that says a lot about their lack of experience and lack of accomplishments.  I encourage people to look at the source of information they rely on for investments, and not rely on fresh MBA graduates for that information.

ChpBstrd

  • Walrus Stache
  • *******
  • Posts: 6712
  • Location: A poor and backward Southern state known as minimum wage country
Re: Optimistic / Contrarian Article Thread
« Reply #70 on: November 08, 2022, 09:32:15 PM »
Those who want to look for top tier economists, can start with those who have won the Nobel Prize in Economics, many of whom write articles and books (Eugene Fama, Daniel Kahneman, Paul Krugman, Robert Schiller, Joeseph Stiglitz, Richard Thaler).
https://www.nobelprize.org/prizes/lists/all-prizes-in-economic-sciences/

Defending the article author's school or MBA misses the point.  If all someone has is their degree, that says a lot about their lack of experience and lack of accomplishments.  I encourage people to look at the source of information they rely on for investments, and not rely on fresh MBA graduates for that information.

There are a couple of issues with relying on pedigrees:

1) The research that earned these individuals their PhDs and Nobel Prizes may or may not be applicable to the question at hand. The more specialized (read: less well-rounded) an academic is, the more likely they are to win recognition. E.g. Kahneman is a behavioral economist, not necessarily the economist you would talk to about monetary policy. Just as you would not go to a neurologist for help with skin rash, or a psychiatrist for help with a tooth abscess, you'd not want to ask an economist questions outside their field of specialization.

2) Specialized economists who win Nobel Prizes, Krugman excepted, do not regularly write pieces for people like us to "rely on for investments". They're more likely to have their head down working on their next paper, or paperback, or proofing unintelligible formulas meant to represent abstract constructs. The people who write about investments for a living generally have terminal bachelor's degrees - at best - and only hopefully in an econ-adjacent field. That said, someone who has been doing this work for a few years and trying to establish a reputation as a press analyst might have more useful things to say to an investor than someone who spent the same number of years battling it out with opposing theorists in the ivory towers of academe.

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #71 on: November 08, 2022, 09:41:32 PM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.

I think that some people (myself included) suppose that an MBA might have some relevance to economic forecasting, or at least the related question of investment analysis. After all, an MBA is a graduate degree, which is higher than a bachelor's.

That doesn't mean you have to agree with our assumption, or act on it during your own assessment of analysis sources. But once a reader has that assumption, the words of your statement become ambiguous from the reader's viewpoint.  Even though grammatically of course the sentence refers to the bachelor's, the reader's assumption makes them wonder if you meant the MBA. This probably doesn't mean the reader misunderstands grammar, it just means that they account for possible meanings beyond the grammar, and therefore wonders which possible meaning you actually intended.

I am optimistic that this will be understandable! ;)

you were wrong. :)

mistymoney

  • Handlebar Stache
  • *****
  • Posts: 2423
Re: Optimistic / Contrarian Article Thread
« Reply #72 on: November 08, 2022, 09:49:06 PM »
The article's author has a bachelor's in economics, and not from a top tier college, either.  I'd take their opinions with a grain of salt, given their lack of experience.

"Before joining Morningstar in 2016, Caldwell earned his master’s degree in business administration from Rice University. Caldwell also holds a bachelor’s degree in economics from the University of Arkansas."
https://www.morningstar.com/authors/2047/preston-caldwell

There are record numbers of job openings and a 3.5% unemployment rate.  The economy is some distance from cooling off, with many companies feeling they can afford to keep workers instead of re-hiring them later.  Meta is just in a deeper hole, making firings necessary (and showing that its CEO is still being responsible, even though he controls Meta).

I believe consensus is for a mild recession, in which case -20% to -25% for the S&P 500 may already have priced it in.

https://edition.cnn.com/2022/10/20/economy/larry-summers-fed-recession/index.html
Quote
Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. Recession became “almost inevitable” once inflation rates grew above 5%, he said. ... But this recession will likely be relatively short and mild. he added. “I certainly don’t think it’s going to be like the [2008] financial crisis…or like the terrible things that happened after the pandemic started.”
Author does have an MBA from Rice University, which is pretty up there. What criteria are you using for top tier?

Or are you referring to the university of Arkansas? and discounting authors MBA?
How can you misinterpret a single, clear line explaining my view?
"The article's author has a bachelor's in economics, and not from a top tier college, either."

And then you seem to be arguing that ecomists should be judged on their MBA, which makes no sense.
I was asking for clarification on what you were referring to. Being so put out by it makes no sense.
My sentence did not mention an MBA at all, so how could you ask for clarification on something I didn't mention?  The answer is that you did not read what I wrote, and then asked questions anyways.

The article's author has a bachelor's in economics, and not from a top tier college, either.

Then to what did my question pertain?

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6652
Re: Optimistic / Contrarian Article Thread
« Reply #73 on: November 09, 2022, 05:14:12 AM »
Those who want to look for top tier economists, can start with those who have won the Nobel Prize in Economics, many of whom write articles and books (Eugene Fama, Daniel Kahneman, Paul Krugman, Robert Schiller, Joeseph Stiglitz, Richard Thaler).
https://www.nobelprize.org/prizes/lists/all-prizes-in-economic-sciences/

Defending the article author's school or MBA misses the point.  If all someone has is their degree, that says a lot about their lack of experience and lack of accomplishments.  I encourage people to look at the source of information they rely on for investments, and not rely on fresh MBA graduates for that information.

There are a couple of issues with relying on pedigrees:

1) The research that earned these individuals their PhDs and Nobel Prizes may or may not be applicable to the question at hand. The more specialized (read: less well-rounded) an academic is, the more likely they are to win recognition. E.g. Kahneman is a behavioral economist, not necessarily the economist you would talk to about monetary policy. Just as you would not go to a neurologist for help with skin rash, or a psychiatrist for help with a tooth abscess, you'd not want to ask an economist questions outside their field of specialization.

2) Specialized economists who win Nobel Prizes, Krugman excepted, do not regularly write pieces for people like us to "rely on for investments". They're more likely to have their head down working on their next paper, or paperback, or proofing unintelligible formulas meant to represent abstract constructs. The people who write about investments for a living generally have terminal bachelor's degrees - at best - and only hopefully in an econ-adjacent field. That said, someone who has been doing this work for a few years and trying to establish a reputation as a press analyst might have more useful things to say to an investor than someone who spent the same number of years battling it out with opposing theorists in the ivory towers of academe.
Instead of making an exception for one Nobel Prize winner, why not read what he wrote?
https://twitter.com/paulkrugman/status/1588868460741767168

PDXTabs

  • Walrus Stache
  • *******
  • Posts: 5160
  • Age: 41
  • Location: Vancouver, WA, USA
Re: Optimistic / Contrarian Article Thread
« Reply #74 on: November 17, 2022, 03:47:14 PM »

 

Wow, a phone plan for fifteen bucks!