The Ongoing New Financial Era Thread

psu_dad
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Re: The Ongoing New Financial Era Thread

Postby psu_dad » Sun Aug 04, 2019 8:25 am

What Mad said.

It does have potential, but it's an industry in its infancy and many marijuana companies aren't profitable yet. So you're certainly not likely to make $$$ immediately. If you've got a long time to sit on your investment, maybe.
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Blue&White
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Re: The Ongoing New Financial Era Thread

Postby Blue&White » Sun Aug 04, 2019 9:12 am

I have two colleagues who both invested heavily in some pot stock (I think it's a Canadian company) and both claim to have made a bunch of money. I don't know if they held the stock and I don't know if it's still up like it was, but one guy said it more than doubled for him. I never validated the numbers he gave me, but he was excited about it.

Like Grower, I think pot stocks are going to prove to be a great investment. I think legalization nationwide will happen sooner than you think, and I think companies like RJR and Phillip Morris will buy out the companies that exist and people will make a killing on their investment.

And, like dad and Mad, I'm not putting a penny of my money into it because I may be 100% wrong on my theory.
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psu_dad
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Re: The Ongoing New Financial Era Thread

Postby psu_dad » Sun Aug 04, 2019 10:08 am

I never validated the numbers he gave me, but he was excited about it.

Could very well be true. Some times a company's stock can increase in value despite the company not making a profit. In that situation, the value of the company mostly exists in people's minds, not on a spreadsheet. If investors believe the profits will come and are willing to speculate, the stock price can rise. Amazon was like that.

The rewards can be high, but so is the risk.
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Blue&White
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Re: The Ongoing New Financial Era Thread

Postby Blue&White » Mon Aug 05, 2019 8:59 am

I didn't think he was lying to me. The context in which the discussion came up made me think it was real. He was trying to sell me on investing in the same stock, but I'm generally just too risk adverse for my own good.

Btw, funny you mention Amazon. Years ago, probalby in the late 90s or early 2000s when Amazon was just an online book retailer, there was an article in Barons about them and their inflated stock price. The one line I remember from that article was (this may not be an exact quote as it's been 20 years): Amazon loses $1 with every book they sell and you can't make that up with volume. And yet, look at them now.

Anyway, in other economic news: China Takes on Trump by Weakening Yuan, Halting Crop Imports.

I'm just a guy with a layman's understanding of macro economics and enough interest that I read. But, am no expert in things like this. Very far from one. And, I predicted months ago this was going to happen. It was obvious to me. So, for this to be a surprise to anyone in govenrment seems unlikey - except maybe Trump who seems to believe the things he says. And, he is screaming about China this morning and calling this a "clear violation". But, so are tariffs.

One of the interesting comments in that article, to me, is this one:

The harder line underlines a growing feeling in Beijing that Trump can’t be trusted to cut a deal, and that China would be better off waiting to see if a Democratic presidential candidate -- many of whom have criticized the use of tariffs -- takes office. The halt in agricultural purchases could hurt Trump in politically sensitive states ahead of the 2020 election.

I called that months ago, too. They are going to target the parts or our economy that will most impact his base. It doesn't help that Trump is accusing China of not living up to their recent promises and China is calling him a liar and claiming they did make the agricultural purchases they promises. I have no idea who's telling the truth but my guess is that China made purchases but not at a volume that either they implied they would or that Trump assumed they would. I'm sure the number fell short of US expectations. Whether or not those expectations were reasonable or not I have not a clue.

One other thing I read recently was that China is also building trade agreements with other countries to fill the gap and they are working on sourcing agricultural products from elsewhere. That is something that may not be easily reversed if and when a trade deal is reached. So, US farmers may never fully recover from this.

I guess we will see. Good thing trade wars are easy to win. Imagine if they were hard?
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psu_dad
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Re: The Ongoing New Financial Era Thread

Postby psu_dad » Mon Aug 05, 2019 9:06 am

It's probably prudent for China to wait out Trump. When he's replaced, I'm sure the new POTUS will be happy to pull down their drawers, bend over their desk and let China have their way with them ... as have the previous presidents.
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Blue&White
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Re: The Ongoing New Financial Era Thread

Postby Blue&White » Mon Aug 05, 2019 9:43 am

You think the alternative he is driving us to where they source their agriculture and cut favorable trade deals with other countries that freeze us out is a better solution? Which one do you think is better for the American economy and the average American consumer? You think at the end of this we are all going to be better off? I don't know the answer to that question. No one really does right now. It's one of those things we need to wait and see. But, he's taking a very big gamble here that can have serious long term implications to our economy.

And, I think more to the point, taking a hard line with China is one thing. Being so unpredictable that they don't trust you enough to have a negotiation is another. How much of this is posturing by the Chinese is tough to say, but they are implying that he's not trustworthy as a partner. And, there is nothing about that I find dificult to believe. And, that's a problem.
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Re: The Ongoing New Financial Era Thread

Postby Blue&White » Mon Aug 05, 2019 9:55 am

Dow down almost 500 points.
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psu_dad
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Re: The Ongoing New Financial Era Thread

Postby psu_dad » Mon Aug 05, 2019 10:11 am

You think at the end of this we are all going to be better off?

I think the choices are (1) a rock or (2) a hard place.

Hey, I have no vested interest in what Trump is doing. From a purely selfish perspective, I would benefit more from going back to kissing China's ass and making the stock market happy. I don't work in a factory, making widgets. So if China only buys half as many widgets from us as we buy from them, it doesn't impact me. That doesn't make it right.
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Blue&White
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Re: The Ongoing New Financial Era Thread

Postby Blue&White » Mon Aug 05, 2019 10:21 am

I don't think it's about right or wrong. I think it's about what best protects the American worker and the American economy. And, I agree that we had to take some action against China and it was long overdue. The question is "what" to do.

I think there is a 2nd issue: Trump seems to see trade as a zero sum game. You have to "win" or you 'lose". He has made statements beofre about having a trade deficit being a "lose", which I don't think is right. You don't have to have a surplus in trade to be "winning". That's not how it works. But, Trump doesn't seem to get that.

Targetting China for unfair trade practices and currency manipulation is long overdue. But, targetting them because for every $1 we inport we only export $0.90 (or whatever the ratio actually is, I honestly don't know) is not overdue. The question is are both sides getting value from trade. But, Trump doesn't see it that way and that's why he's going after countries we do have good relationships with. He just sees this as a zero sum game, and that, I believe, is a problem.
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psu_dad
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Re: The Ongoing New Financial Era Thread

Postby psu_dad » Mon Aug 05, 2019 10:34 am

But, targetting them because for every $1 we inport we only export $0.90 (or whatever the ratio actually is, I honestly don't know)

If 100/90 were the ratio, or if the ratio was close to that, there wouldn't be an issue. But the actual ratio isn't remotely close to 100/90.

https://www.marketwatch.com/story/heres-all-the-stuff-the-us-imports-from-china-thats-causing-a-huge-trade-deficit-2018-03-23
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