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The Really Useless Thread

  • #145,261
  • Nov 15, 2016 1:29pm Nov 15, 2016 1:29pm
Quoting CommercialB
{quote} ...if you're quoting sisse then outlook is Soft Sell ..and I'd imagine he might add that such intraday or short term movements are getting you too close to the market ..
I'm actually selling Oil and I'm asking to figure out if I could add at $46 (key level) if it's just noise. Thanks to everyone!
  • #145,262
  • Nov 15, 2016 1:31pm Nov 15, 2016 1:31pm
Quoting Replicant
{quote} Front National party (FN) is not a Neonazis party - such parties are not allowed in France - but, yes, it's another stupid party (same hysterical old-fashioned national party unable to deal with the modern world as elsewhere). They have been making the headlines for each election for almost 30 years, whatever it is : presidential, regional, MPs, Mayors elections etc. ....
V. Good insight...

--> Not fully confident 'Liberté, égalité, fraternité' will prevail that easy this time. On top of the similarities with other rich west countries (US, UK, Italy and etc) France is suffering a very particular in depth social introspective period.

--> They are stuck in time without moving forward the last decade or so, no economic, social or even political reforms.

--> In strong contradiction with the traditional, historical French principles, in 2016 it has the most divisive social, racial and religious society in the develop world. The financial/debt crisis, the (self-impose) backwardness and sluggishness off the Economy added to the terrible terrorist attacks last few years has create an authentic and dangerous cluster fck about to explode.

--> Without proper leadership from the right and left for a long time now, playing warmonger (France arguably has been by far the most active war monger globally from the G20 in the last 8 years, even more than the traditional US or UK...it will obviously change with May and Trump now ...) and with the EU in turmoil and screaming for strong leadership before is too late, the outlook looks rather bleak and perfect environment for the FN (ok lets call it 'neonazis in disguise' to make it political acceptable to run in election as is hardly any difference in their 'manifesto') to flourish and exploit the nationalistic/populist/old way are best vote.

--> Don't forget that neither the UK or the US have never in their democratic history had a nationalist/populist party in power until this year. Both so call 'leaders' and 'founders' of liberalism, free trade, free markets are dramatically shifting to the exact 180 degrees opposite, with protectionism, unfair trade policies, flirting to break all international cooperation agreements from environment, security to even sports and more importantly about to kill the 2 largest trade agreements in the world (UE and Nafta).... what makes you think France is not going to join the club ...

Don't get me wrong I hope not. I really think France can take a key leadership both in Europe and in the World to put the hand breaks on these non sense backward trend. Does France look ready? not sure...do the potential leaders in both sides give any hope? not really ... we'll see ...lets hope for the sake of world balance, they don't flop.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,263
  • Nov 15, 2016 1:35pm Nov 15, 2016 1:35pm
Quoting Pharm0r
So if bonds (red/green) lead the rest of the market, and more specifically equities (purple)- could it be reasoned that bonds are pricing a pretty damn large correction due for S&P? Timing wise- if you follow the flow shown (avg time passed between a drop in bonds followed by a drop in equities) it's lining right in line with Dec/Jan much like last year- but bigger. {image}
Hmmm! It seems very interesting. Nice catch! Hopefully it will be validated/confirmed by Sisse and other experts.
  • #145,264
  • Nov 15, 2016 1:52pm Nov 15, 2016 1:52pm
Quoting Pharm0r
So if bonds (red/green) lead the rest of the market, and more specifically equities (purple)- could it be reasoned that bonds are pricing a pretty damn large correction due for S&P? Timing wise- if you follow the flow shown (avg time passed between a drop in bonds followed by a drop in equities) it's lining right in line with Dec/Jan much like last year- but bigger. {image}
Let me ask you a couple of questions. Before you enter in macro correlations:

Q: If the 10yr Yields are rising what is it telling you about interest rates?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,265
  • Nov 15, 2016 1:58pm Nov 15, 2016 1:58pm
Quoting sisse
{quote} Let me ask you a couple of questions. Before you enter in macro correlations: Q: If the 10yr Yields are rising what is it telling you about interest rates? sisse
it's telling a rise in interest rates [tighter monetary policy] , excuse my intrusion , myself I am no expert in bunds , equities correlation !
Get Rich or Die Tryin
  • #145,266
  • Nov 15, 2016 2:00pm Nov 15, 2016 2:00pm
Quoting sisse
{quote} Let me ask you a couple of questions. Before you enter in macro correlations: Q: If the 10yr Yields are rising what is it telling you about interest rates? sisse
I want to jump in... Interest rates will increase.
  • #145,267
  • Nov 15, 2016 2:04pm Nov 15, 2016 2:04pm
I thought when rates rise, bond falls

if bond falls, yields are increasing

So I agree with the above. Firing from the hip here and speaking only what I would consider a "commoners" knowledge. Yields up = interest rates up

source of info (some of my reading last night)

http://www.sec.gov/investor/alerts/i...straterisk.pdf
http://www.finra.org/investors/alert...bond-portfolio

"The higher a bond’s duration, the greater its sensitivity to interest rates changes"
  • #145,268
  • Nov 15, 2016 2:12pm Nov 15, 2016 2:12pm
Sorry I keep editing, having to go back and find some of my research
  • #145,269
  • Nov 15, 2016 2:17pm Nov 15, 2016 2:17pm
Ok. Lets bastardise the explanation to get to the core of the point and hopefully have a small aha moment.

Q: So if interest rates are going to rise, why is that important for an investor?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,270
  • Nov 15, 2016 2:19pm Nov 15, 2016 2:19pm
Money is more expensive to borrow would be one answer...
  • #145,271
  • Nov 15, 2016 2:21pm Nov 15, 2016 2:21pm
Quoting Pharm0r
Money is more expensive to borrow would be one answer...
ok sure but so what difference does it make to my investment?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,272
  • Nov 15, 2016 2:24pm Nov 15, 2016 2:24pm
Quoting sisse
Ok. Lets bastardise the explanation to get to the core of the point and hopefully have a small aha moment. Q: So if interest rates are going to rise, why is that important for an investor? sisse
Since raising rates not good for equities investors escaping from them and parking the $$$ to bonds ( since they finaly bring some yield).. I would think.
PVSRA
  • #145,273
  • Nov 15, 2016 2:26pm Nov 15, 2016 2:26pm
Quoting sisse
{quote} ok sure but so what difference does it make to my investment? sisse
depends on what side of the investment you're on....

if you're the loaner you make more
the borrower you pay more (make less)

Maybe I'm thinking in the wrong terms of borrowing. I'm thinking from "investing" in a house standpoint. I guess my answer is your investment is more expensive
  • #145,274
  • Nov 15, 2016 2:34pm Nov 15, 2016 2:34pm
RUT learning bonds:
Attached Image
  • #145,275
  • Nov 15, 2016 2:39pm Nov 15, 2016 2:39pm
Quoting Pharm0r
{quote} depends on what side of the investment you're on.... if you're the loaner you make more the borrower you pay more (make less) Maybe I'm thinking in the wrong terms of borrowing. I'm thinking from "investing" in a house standpoint. I guess my answer is your investment is more expensive
No no you are going somewhere else with the analysis. Lets keep it very simple for now. Fisher755 answer is the one we are looking for:

Quoting Fisher755
{quote} Since raising rates not good for equities investors escaping from them and parking the $$$ to bonds ( since they finaly bring some yield).. I would think.
Let's go even deeper and make it simpler:

Q: If I give you $1000 and ask you to invest. I want the maximum return with obviously the minimum risk:

Assumptions:
-> We are in country ABC and 10yr yield will cost me -2% (e.g Switzerland)
-> Stock XYX in the same period will return 5%

  1. What would be your preference as investor: putting the $1000 in Bonds or Stocks?
  2. Assuming [the assumptions] stay the same what reason would make you change/swap all or part of the investment from one to the other?

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,276
  • Nov 15, 2016 2:40pm Nov 15, 2016 2:40pm
Quoting sisse
{quote} ok sure but so what difference does it make to my investment? sisse
as general investor a shift from equities to bonds.

As currency investor tells me about country economy (therefore currency) healt and strenght (healty economy hardly has negative rates...).

carry trade could be another point but mainly higher interest rates means less free money from central banks and this has direct major impact on currency investor.

makes some sense?
  • #145,277
  • Nov 15, 2016 2:41pm Nov 15, 2016 2:41pm
there's a lot of things to think about re: interest rates. The cost of money affects so many different things. In general, if rates are rising, it means money is flowing out of bonds and into other instruments, typically into more risky equities. In the current environment, there are many reasons the perception is that rates will be going up - the Fed will raise the Fed funds rate in Dec, to start, and new Trumpian policies might mean there will be less regulation, more stimulus spending - a potent mix that could result in a hot bull market in equities. Nobody wants to buy bonds with these perceived influences coming down the pike, so bonds are selling off = rates are rising.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #145,278
  • Nov 15, 2016 2:47pm Nov 15, 2016 2:47pm
Quoting sisse
{quote} No no you are going somewhere else with the analysis. Lets keep it very simple for now. Fisher755 answer is the one we are looking for: {quote} Let's go even deeper and make it simpler: Q: If I give you $1000 and ask you to invest. I want the maximum return with obviously the minimum risk: Assumptions: -> We are in country ABC and 10yr yield will cost me -2% (e.g Switzerland) -> Stock XYX in the same period will return 5% What would be your preference as investor: putting the $1000 in Bonds...
#1 I would put in stocks
#2 If expected raising rates from -0.75% to 2 % in next couple of years I would start switching from stocks to safe heaven- bonds.

Not that I will ever do this- but 2% from $1.000.000 is not all that bad. Plus such people park only partial $$$ in stocks/bonds- their main $$$ are usually in real investment ( real estate, business)..
PVSRA
  • #145,279
  • Nov 15, 2016 2:50pm Nov 15, 2016 2:50pm
Quoting Fisher755
{quote} #2 If expected raising rates from -0.75% to 2 % in next couple of years
No. Assumptions stay the same. There is no change of rates ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,280
  • Nov 15, 2016 2:50pm Nov 15, 2016 2:50pm
Quoting Pharm0r
{quote} depends on what side of the investment you're on.... if you're the loaner you make more the borrower you pay more (make less) Maybe I'm thinking in the wrong terms of borrowing. I'm thinking from "investing" in a house standpoint. I guess my answer is your investment is more expensive
Well, I hate to disappoint you bro, but you and I are small fish in the shark tank! I suggest you put your $$ in the sock.
Just kidding.
PVSRA
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