Official Investing Thread

Well they're missing out.

 

Incorrect, bull riding is huge and the Brazilians have been dominating world wide for like a decade. I watched a Netflix doc on this so I'm absolutely an expert

 

Sources: Brazilians have taken hold in bull riding

 

Anyone care to speculate on the Mexican Peso? I heard Bill Gates the other day said that he had a large exposure to Mexico, and therefore the peso, and obviously he was in it long before Trump won.

Thinking that if Trump and Mexico announce some sort of deal that you could catch some pretty good mean reversion.

Thoughts?

 

you are completely missing the bus on this. i am not asking these questions for investment purposes. its just a general economic/finance discussion as it relates to theory and current economic climate abroad

 

Bull riding in Brazil isn't surprising because they're all about that cattle industry. They took over most giant American beef production companies, especially slaughterhouses.

 

look at you fags with your facts. must be libtards.

 

there likely next prez will likely rise to power as fighting against trump. i'm not gonna rule out bilateral trade agreement brokered by trump but that seems less likely given their prez canceled return visit to us after trump again said mexico gonna pay for wall

 

Yup. JBS is now the largest protein producer in the world.

 

Gotcha, I forgot that the current president has pretty low approval rating if I remember correctly. Good point.

 

i think a tariff war between us and mexico would hurt mexico more than us but would be pretty bad for both countries. best idea is a bilateral trade deal and abide by wto rates

 

Oh good. Another thread thats about to get unbearable.

 

Neither party comes out unscathed during a tariff war. That's only one of the reasons draconian tariffs are retarded economic policy but yeah.

 

That's what im thinking. I don't think there will really be a trade war so it might be a good time to buy the Peso before it rebounds.

 

Late for the talk but HSA life is great. Do it if you're able to, and use it the way Rabid does

Thanks

 

Also, tmbrules my HSA is through BoA http://healthaccounts.bankofamerica.com/explore-individuals.shtml and I've been happy with them thus far (not that I had a choice since I got it through work)

 

Thanks, I use them for my IRA brokerage now, so hopefully I can get it set up through them. Thanks for the heads up.

 

I'm all about maxing out my 401k before my Roth. I expect my tax bracket to be higher now than when I'm in retirement.

I also max out my HSA yearly. The plan I have allows me to invest all my funds once my HSA balance got over $2k, so I load it up 90:10 stocks:bonds.

I don't have any excess cash to invest in my Roth for the moment, as I prioritize my significant student loan debt ahead of my Roth for now.

 

You can win houses and cars for bull riding in brazil compared to buckles and prize money in the US

 

The HSA from my previous employer was through Wells Fargo and then HSA bank. As a mid twenties male I'd use at most $200 a year and pocket the rest (my employer would give 3,000 a year, my lasted year it was bumped to 3,300 I believe).

With HSA bank I have enough in the bank account for medical expenses and the rest in a TD ameritrade account through my HSA.

 

does the CSR $450 fee count towards the $4000 in first 3 months?

 

when you say spending more money/more money available leads to higher inflation are you saying that because producers would in turn raise the cost of goods ?

 

I don't understand this. Can someone translate:
"Export led growth has proved a reliable spur to efficiency. It is harder to achieve consistent gains in output per person in any economy that looks inwards." The 2nd sentence seems to conflict with the first sentence to me. I can understand that if you rely on exporting commodities for growth that can be dangerous. You need an efficient economy that doesn't completely rely on exports. But I don't get the 2nd sentence. Are they saying instead of turning inward for efficiency you should rely more on imports from other nations?

 

Lets say there are X dollars available and Y products available. If there all the sudden becomes more X available (people have more money) yet the same amount of products available (y) then producers can raise prices because demand will outstrip supply thus leading to price inflation.

Probably will get better advice from others on here, but that's how I understand it.

 

The article then goes on to discuss how some emerging markets could be hurt by American trade protection and nationalism. It says :
"India, in contrast, missed out when a new breed of global supply chains in manufacturing was forged between rich and developing countries. but with anti-trade sentiment a growing threat, there is a lot to like about an economy of 1.25bn people that is powered by domestic demand." I believe that is saying that India could be protected from American proctetion and nationalism because they have a huge population base. Therefore their economy/industry can be sustained by supplying to their own population base. To me, that is turning inwards. Which again conflicts with that 2nd sentence about not turning inward.

 

that's exactly what i thought you meant. basic macro concepts. as more money becomes available demand increases and thus prices will increase. basic supply and demand concepts.

 

so decreased interest rates would result in higher inflation because money is more available. that's why when i listen to surveillance with tom keene on bloomberg radio for past few years, and they're discussing the fed increasing the interest rate there was a lot of talking about inflation etc. I guess an increased interest rate will make borrowing money more difficult/less money available cost of goods/services decreases =deflation.

 

the last 60 month inflation rate was almost 7% I'm guessing because the interest rate was so low. So I guess the job of the fed is to bring that interest rate up and that deflation rate to 2% in a controlled way so as not to crash the economy

 

I think you have it right. Its just pointing out that they are somewhat insulated because they have a lot of demand within their own borders.

It is harder to achieve consistent gains in output per person in any economy that looks inwards.

It says that its harder, not impossible. I take harder to mean less efficient which seems to jive with what they are saying in the two sentences that you pointed out.

I think what it is saying is that once the US market is saturated then we have to look outside our own borders for that growth. When doing so, it causes the company to find more efficiencies. Kind of like economies of scale. The more you produce of something the cheaper it should get.

 

so emerging economies that have much more exposure to Europe than America such as Turkey will be in much better shape. Any emerging economy that was predicated on high exports to the US is not feeling so hot right now

 

I was good all the way until you said deflation. Not saying you are wrong, but there is also disinflation (different from deflation). Just didn't want to give you bad info, im not sure which one is right.

Back in 2008-2009 when the stock market hit the shitter and the central banks lowered interest rates close to zero, a lot of the traders I know were buying TIPS (treasury Inflation Protected Securities). Basically its a contract that is tied to the rate of inflation. Turn out that they made a really bad decision because that Hyperinflation they were looking for never took hold (not yet at least) and the stock market has come screaming back.

 

That would make sense to me. However, Im seeing a global trend of nationalism going on. Look at the elections going on in Europe (France). You will see that Italy is contemplating leaving the Euro. Brexit happened. This isn't just happening in the United States.

my retirement portfolio consist of something like the following: 65% Us equities (s&p 500), 20% European equities (ftse 500), 10% emerging markets (mix of bonds and equities) and 5% other. Those aren't exact but you see the point. I want most of my exposure to the United States and some small exposure to emerging markets.

If you want what a good portfolio should look like just go to wealthfront.com and fill out the questionaire and Im pretty sure they give you the etf's that they would put you in.

 

To give you a sports analogy, think of Ohio State football under Tressel vs. Meyer. Tressel was facing off against generally mediocre coaches in the Big Ten so he could be very conservative and just get the players that are bigger and faster than the other local teams and coach conservatively to knowing the other team would make more mistakes than his. However, when competing for national titles that didn't work because teams from other conferences had a competitive advantage on talent. Now with Meyer in place,, OSU has been better able to compete nationally because he realized his competitors from other conferences had more speed so he recruited that and has been more aggressive in game planning.

In essence, inward facing economies don't have to innovate and maximize efficiency because competition is limited. Export based economies have to compete with the most efficient producers worldwide so they need to either produce a better product or comparable product at a cheaper price.

 

Yes. Lower interest rates encourages firms to borrow money from banks. When firms borrow money they don't just sit on it, they buy things so the increased borrowing increases the velocity of money (the number of transactions in a given time period). If you think of a supply/demand curve, more transactions = more demand which means producers can increase price to find equilibrium and increased prices is inflation.

 

Think this was meant for the credit card thread, but the answer is no, it does not count towards the spending requirement

 

I guess I understood that concept but where we're running into a problem is the inverse of that concept and deflation. Does a higher interest rate cause deflation or as tmbrules states does it cause disinflation?

 

Did a little reading on investopedia.

Disinflation is just the slowing of inflation. So if inflation went from 8% to 6%.

Deflation occurs when the inflation rate falls below 0% (a negative inflation rate).

I would guess it causes disinflation first and in extreme cases deflation.

 

check out this graph of our interest rate over last several years:
http://www.usinflationcalculator.com/inflation/current-inflation-rates/
we've been in a pattern of quantitative easing where we've had our interest rate down to encourage borrowing/spending/inflation. BUt our inflation rate has stayed relatively low. Looks like from 2013-2016 it has been sub 2%. So I guess the question would be why is the inflation rate staying low even though we have low interest rates? And I guess the answer was that even with more access to money most ppl and corporations were going through a pattern of austerity where they were cutting spending and trying to save in response to the fiscal crises of 2008 and the generally slow/bad economy.

 

So do you guys think a shift to protectionism/nationalism and the end of globalization and the emergence of bilateral trade agreements instead of free trade will revive the American economy?

 

One almost universal truth among economists is that free trade between nations enriches each nation involved in the trade. I think it'll be disastrous in both economic and political terms.

 

how do you respond to those that would say that heavy reliance on imports, weak exports, big trade deficits, and exportation of american jobs are all products of globalization that have a direct negative impact on the american economy?

 

Trade isn't a zero sum game. Those jobs that were exported to another country are made up for in cheaper goods available for purchase in the United States. That comes both from cheaper labor in those countries and lower tariffs, thereby increasing American exports and increasing cheaper imports.

Heavy reliance on imports as an economic model is good for multiple reasons. One, you're getting goods for either 1) cheaper than they can be produced in the United States or 2) goods where there is no competency in the United States to produce those goods. Lest we forget that nations that trade heavily with one another also have a heavy disincentive to blow each other up.

I listened to an old This American Life driving last night and they reviewed the stats about NAFTA with Planet Money. Apparently ~700,000 American jobs were lost due to NAFTA. However, that leads to approximately $15 billion additional dollars to the United States in lower cost goods each year. That is, regardless of whether those jobs may have been discontinued for one reason or another in the U.S. (robots, prohibitively high cost of labor), the U.S. will still be ~15 billion richer every year due to NAFTA. That's just one trade agreement.

Now, let's look at the other side of the NAFTA coin. It increases prosperity in the places where we trade, as well. We ship jobs there, thus their people have jobs. They reviewed a trade agreement the U.S. made with Vietnam and there were, iirc, ~3 million people who were able to go from poverty to a modest lifestyle in Vietnam almost directly due to the trade agreement. That came from both the jobs that were sent there and all related industries that come from that (grocery stores, homes, etc etc).

In NAFTA's instance, we're talking about directly enriching Mexico, a country that regularly sends citizens to the United States to work both legally and illegally. If we agree that is an issue, isn't it wise to help also enrich Mexico whilst giving ourselves cheaper goods?

It hurts the people who lost those jobs but our economies as a whole are both enriched. As in, they referenced a poll of economists on this issue and 95% said they thought free trade between nations was a good thing/net positive and 5% were unsure. They literally did not have 1 economist say it was a bad thing.

 

There will still be trade agreements, they will just be bilateral instead of one agreement covering multiple nations. I think this will be good for the United States as we clearly have been getting the short end of the stick for a long time. Look at the stock market since Trump has been elected and that will tell you what the market thinks about it. That is where the money is and the money is telling you that they think it will be good for us.

Read a little about Wilbur Ross the trade representative that Trump has selected. He is for free trade, but just trade that is fair to us. He is for the idea of TPP, but once he started reading the fine print he realized there were things in there that were not fair / advantageous to us.

Edit: I don't think bilateral agreements necessarily means that free trade will go away.

NAFTA and TPP were basically one size fits all trade agreements. Now we will just have more customized agreements .... and yes they will be designed to help out our fellow Americans.

 

(1) what do you do for a living
(2) that was an excellent post

 

https://www.nytimes.com/2017/01/18/...ommerce-secretary-trump-trade-nafta.html?_r=0

Article with Wilbur Ross discussing trade.

 

we're replacing free trade with various bilateral trade agreements. I think what you are saying is that this doesn't mark the end of free trade. I think free trade and this shift to a host of bilateral agreements are very different concepts. Because while we may still have bilateral agreements we're likely going to increase the cost of imports from countries we have a large trade deficit with which directly conflicts with the ideology of free trade

 

No. I think the opposite. The great economies of history have been driven by trade.

 

In-house counsel and thank you.