What Did You Buy Today?

[ChadR]

Added to AVGO. Headed to Mexico for 10 days tomorrow so I won't be even looking at the market or buying stocks. Should have a nice cash stash with all my dividends coming in this month and not spending any more on purchases. Might do a buying spree when I get back though.

[crimsonghost747]

(06-14-2021, 11:54 AM)fenders53 Wrote: Getting my inflation trade on.  

We'll see if the FED Chief can keep a straight face again while he pretends there is no inflation. 

Haven't you heard, this inflation is transitory! 

[fenders53]

[quote pid='26733' dateline='1623696132']
Added to AVGO.  Headed to Mexico for 10 days tomorrow so I won't be even looking at the market or buying stocks.  Should have a nice cash stash with all my dividends coming in this month and not spending any more on purchases.  Might do a buying spree when I get back though.
[/quote]
Have a great time Chad!  Market should still be here when you get back.

[EricL]

Bought 1 share of MED to open a new position in my DGI portfolio with some pooled dividends.

I've been watching it since last fall and finally decided to buy after the recent pullback.

[fenders53]

(06-14-2021, 01:47 PM)crimsonghost747 Wrote:

(06-14-2021, 11:54 AM)fenders53 Wrote: Getting my inflation trade on.  

We'll see if the FED Chief can keep a straight face again while he pretends there is no inflation. 

Haven't you heard, this inflation is transitory!   

I am very curious when they begin to acknowledge it's going to be considerably more than the 2% target for too long.  That sounds laughable at the moment.  Industrial commodities won't stay up 2 to 4X like many currently are, but I just don't see the path back to 2% with loose rates and more stimulus.  Nothing that is making me panic, but it's hard to ignore for anything I am not planning on holding for a lot of years.  It's going to be an interesting ride before too long if we see a few more reports like the last one as we re-open.  Likely a blip on the long-term charts in a few years.

[crimsonghost747]

(06-14-2021, 02:40 PM)fenders53 Wrote:

(06-14-2021, 01:47 PM)crimsonghost747 Wrote:

(06-14-2021, 11:54 AM)fenders53 Wrote: Getting my inflation trade on.  

We'll see if the FED Chief can keep a straight face again while he pretends there is no inflation. 

Haven't you heard, this inflation is transitory!   

I am very curious when they begin to acknowledge it's going to be considerably more than the 2% target for too long.  That sounds laughable at the moment.  Industrial commodities won't stay up 2 to 4X like many currently are, but I just don't see the path back to 2% with loose rates and more stimulus.  Nothing that is making me panic, but it's hard to ignore for anything I am not planning on holding for a lot of years.  It's going to be an interesting ride before too long if we see a few more reports like the last one as we re-open.  Likely a blip on the long-term charts in a few years.

My view:
For the next few months saying it's "transitory" will be enough.
Then for the next several months up to a year or two, it'll be ok saying "it's ok for it to be above the 2% target since we were below that for so long".
Then they will have to figure out another narrative.

Inflation is a massive threat right now but it doesn't show up on the charts? Personally I think it's because there are very few simple methods to shield against inflation. That and the stimulus doesn't look to be ending anytime soon... as long as the sp500 keeps climbing faster than inflation, no matter what percentage we are talking about, then money will keep pouring in.

[vbin]

Why would fed try to should inflation?

[fenders53]

I have no problem with any of your logic. Some actually regard the SPY as an inflation hedge. I suppose that is valid with low rates. Some of the growthier indexes not so much. My Russell 2000 stuff is certainly more volatile, but it won't stay down either.

I am going to keep some cash always though as I will feel like a fool if I completely ignore this, just because half the investing public has no idea how this is supposed to work, and a lot of them think everything now is just "the new way to invest", forever and ever lol.

[fenders53]

[quote pid='26739' dateline='1623701480']
Why would fed try to should inflation?
[/quote]

Because economies blow up with unchecked inflation?  I was young but the 1970's sucked.  Certain economic statistics have to stay in a reasonable range or it's trouble before long.  Inflation, unemployment and interest are among those important things.

[Otter]

10yr is under 1.5% and that yield is down about 15% from the recent highs at the end of March.

So far it looks like the bond market is viewing inflation prospects as transitory and driven primarily by supply chain constraints. There is no quick fix for things like chip shortages that have drastically curtailed new automobile production. Supply chains that were JIT to begin with don't turn on like light switches after falling dormant for a year. For over a decade the trend was to hold no inventory and be as efficient as possible. Works great during normal times, but turns into a giant cluster the minute the global economy gets disrupted and supply chains break down for long periods. This is Macro Econ 101 - demand has outstripped supply for a number of goods (like autos) that figure heavily into inflation calculations.

The reopened economy today (labor, capital, size of market) is not fundamentally different from the pre-Covid economy, where developed economies in the U.S. and Europe struggled to hit a 2% inflation target for roughly 20 years.

The great inflation panic of 2021 will likely get filed alongside the great market crash of December, 2018, in the list of things no one can remember in four years while this bull market has the S&P 500 somewhere in the 6,000s or higher.

[Otter]

(06-14-2021, 03:29 PM)fenders53 Wrote: [quote pid='26739' dateline='1623701480']
Why would fed try to should inflation?

Because economies blow up with unchecked inflation?  I was young but the 1970's sucked.  Certain economic statistics have to stay in a reasonable range or it's trouble before long.  Inflation, unemployment and interest are among those important things.
[/quote]

The 1970s were a unique combination of Nixon taking the Dollar out of Bretton Woods to create the Petrodollar in 1971, and an exogenous shock to the entire economy from the OPEC embargo suddenly raising the price of every conceivable input for sustained periods.

The temporary supply chain disruptions from Covid are not in the same ballpark.

Also, the thought that capital intensive industries like agriculture/mining/etc. are going to perform better than other equities in a sustained inflationary environment is laughable. Find a cash-flow positive software company with solid double-digit YoY growth figures, and that's what will really shine. Low overhead and high margins will continue to outperform. Don't let CNBC scare pieces trick you into buying low-growth commodities while they are high.

[ChadR]

Thanks Fenders. The wife and I will enjoy a much needed vacation. Expect it to still be here and hopefully giving out lots of bargains when we get back.