Investing

Why the hell is the stock market still going on a tear?

  • Last Updated:
  • Apr 1st, 2022 9:32 pm
Deal Addict
Jul 30, 2012
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PaddyM77101 wrote: A bit of a pet peeve - https://www.investopedia.com/terms/h/hyperinflation.asp does that describe what is happening now in north america?
After over a decade of predominately declining rates (and finally to "0"), for most Gen X-Y-Z-M investors, current environment "feels like" hyperinflation. Most here have never seen 4%+ rates, let alone high double digits Winking Face.

Seems several don't know how to translate reflation to market sectors.
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Sep 2, 2004
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It may not meet the definition of that link, but there are certainly areas of the market/commodities that "feel like" they should be classified as hyperinflation to me. For example, the real estate in my area could be a case study in itself. A house nearby just sold for 84% more than it went for in late 2018.

I know that others in this forum have far more expertise on commodities than me, but look at the price changes of these YTD (ie. less than 3 full months):

Lithium 252,148 -> 497,500
Oil 75.21 -> 104.40
Wheat 753.50 -> 1,009.30
Nickel 20,935 -> 35,500

The used car that I bought in late 2019 is worth more today than it was then. Even depreciating assets are starting to appreciate...
Last edited by Capt. on Mar 29th, 2022 11:52 pm, edited 1 time in total.
Deal Expert
Oct 7, 2010
15536 posts
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Capt. wrote: It may not meet the definition of that link, but there are certainly areas of the market/commodities that "feel like" they should be classified as hyperinflation to me. For example, the real estate in my area could be a case study in itself. A house nearby just sold for 84% more than it went for in late 2018.

I know that others in this forum know the commodities even better than me, but look at the price changes of these YTD (ie. less than 3 full months):

Lithium 252,148 -> 497,500
Oil 75.21 -> 104.40
Wheat 753.50 -> 1,009.30
Nickel 20,935 -> 35,500

The used car that I bought in late 2019 is worth more today than it was then. Even depreciating assets are starting to appreciate...
80% more is nothing. The percentage means nothing unless you can have the true value off the house vs what was actually sold for. If you bought house in 2021 and sold in 2022. It’s already up 30%. From 2018 to 2022 80% sounds reasonable.

Car is because of Covid. People still want to buy cars but no one made cars. Time to ride the bicycle for the summer months.
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Aug 22, 2012
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Mark Town
Inflation won't cause market to go down. Recession will do. With money printing the party will be going on for a long time. Buy on every dip.
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Oct 25, 2009
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the faster you realize that markets do not follow logic, the faster you'll be making a bank
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Oct 31, 2006
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sherwoodRFD wrote: Inflation won't cause market to go down. Recession will do. With money printing the party will be going on for a long time. Buy on every dip.
I agree. Stocks are always priced nominally and not in real terms...you have to account for inflation for the real rate. Technically inflation will boost stocks...recession will drop stocks.
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Dec 12, 2009
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performance wrote: I agree. Stocks are always priced nominally and not in real terms...you have to account for inflation for the real rate. Technically inflation will boost stocks...recession will drop stocks.
Only those companies that have pricing power. It will destroy margins for those that don't.
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Aug 2, 2015
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performance wrote: I agree. Stocks are always priced nominally and not in real terms...you have to account for inflation for the real rate. Technically inflation will boost stocks...recession will drop stocks.
You must be confusing recession/inflation with interest rates increase/decrease and interest's impact on businesses/stocks
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Aug 30, 2020
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poopooplatter wrote: Like seriously. We've got out of control inflation and energy prices. Globalization going in reverse. Supply chain issues that won't go away. Rate hikes (probably) coming out the wazoo. Yet the market keeps going on these tears, with the occasional little pause. Like it honestly makes zero sense.
It's priced in
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Jun 22, 2011
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It's because the stock market is imaginary and unrelated to the real world.
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Nov 30, 2011
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poopooplatter wrote: Like seriously. We've got out of control inflation and energy prices. Globalization going in reverse. Supply chain issues that won't go away. Rate hikes (probably) coming out the wazoo. Yet the market keeps going on these tears, with the occasional little pause. Like it honestly makes zero sense.
"the markets can remain irrational longer than you can remain solvent."

John Maynard Keynes
Newbie
Mar 2, 2021
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Buy the dip strategy has worked every time since the 2009 crash. This, in the face of all sorts of uncertainty in the world (e.g. Fukushima, flash crash, Euro debt crisis, 2014 war in Ukraine, 2018 Volmageddon, Covid etc).

The question is why wouldn’t you have expected it to bounce back so quickly thereafter, since all the prior evidence would indicate as much? If you are basing your market predictions based on sound economics, then we should probably be nowhere near the current market levels. But that has been the case for some time.

Who knows? But if the FED is serious about raising interest rates, we may actually see a meaningful downturn.
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Oct 7, 2010
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FrugalGambler wrote: Buy the dip strategy has worked every time since the 2009 crash. This, in the face of all sorts of uncertainty in the world (e.g. Fukushima, flash crash, Euro debt crisis, 2014 war in Ukraine, 2018 Volmageddon, Covid etc).

The question is why wouldn’t you have expected it to bounce back so quickly thereafter, since all the prior evidence would indicate as much? If you are basing your market predictions based on sound economics, then we should probably be nowhere near the current market levels. But that has been the case for some time.

Who knows? But if the FED is serious about raising interest rates, we may actually see a meaningful downturn.
Why Fed care about inflation? They worry about recessions more. So many bail out for the last 2 decades.
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spike1128 wrote: Why Fed care about inflation? They worry about recessions more. So many bail out for the last 2 decades.
The Fed has a dual mandate of price stability and maximum employment.
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will888 wrote: The Fed has a dual mandate of price stability and maximum employment.
You mean fudge employment numbers to not have citizens come out with pitch forks and put Trudeau’s head on a pike?
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will888 wrote: The Fed has a dual mandate of price stability and maximum employment.
I prefer Guy Adami's version: The fed dual mandate is to make sure the NASDAQ and the S&P 500 go up higher. Face With Tears Of Joy
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MoneyHypeMike wrote: I prefer Guy Adami's version: The fed dual mandate is to make sure the NASDAQ and the S&P 500 go up higher. Face With Tears Of Joy
Let's not forget some spillover effect to the TSX.
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spike1128 wrote: You mean fudge employment numbers to not have citizens come out with pitch forks and put Trudeau’s head on a pike?
The central bank has no say in fudging employment or inflation data.
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will888 wrote: The central bank has no say in fudging employment or inflation data.
Government. Same guys sitting together having dinner together. If Trudeau can interfere with the Attorney general for SNC. They can do anything. Or vice versa. Same hidden hands that control government and central bank and other governing bodies.

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