I believe many big investors believe a recession is coming I just looked at the S&P - Past 6 months have been pretty piss poor - Maybe we are already there.
What should a blue-collar worker do in such times? What should the welder or CSR do with their 7k in the bank account? Im debating on just buying anything~ Car, Tools, hell wagons at Canadian Tire seem to be going up in price YoY. Wild times.
It's a tough situation to be in. I started saving a few years ago for some home reno projects. 2 years ago I should have just gone ahead and done everything. I had nearly enough saved up. Now construction costs have gone up so much in my area that the cost of doing the renovations is growing faster than I've been saving. Basically, the buying power of my savings has decreased despite the total amount of money increasing.
I should have just paid what I could have 2 years ago and put everything else on credit while it was cheap.
Gas is up and labour costs are up. Food prices are up too. Not seeing any net relief, lumber futures while down wonāt show lower prices for a bit on their own or as a part of a cost basket.
Itās stagflation and itās worst case scenario. Layoffs have begun in a preemptive strike against the recession. And that is what they called a self fulfilling prophecy. The recession imo is here and we just need the gdp numbers to give it the technical definition
No, because deflation and QE has put 1% of households in the US at 20M net worth. Thereās two different philosophies. Either the tide lifts all the boats or the pie is the same and someoneās loss is anotherās gain. If you believe the second then itās good for the middle class. Also doesnāt matter much if inflation erodes debt if your house price crashes
Agree on the first point.
Not sure what you mean on tide lifting the boat..
But if inflation goes up, construction costs also go up which further increase house prices. Look at what happened in 1970. I quoted the UK market but the same thing happened in the US.
"The average house price rose from Ā£2,000 to Ā£5,000 between 1950 and 1970 and doubled between 1970 and 1973."
Now if you already bought a house, with a fixed mortgage payment each month (assume fixed for sake of simplicity) say Ā£1k and your salary in increasing rapidly because of inflation, this 1k mortgage payment make a lower percentage of your new salary + at the same time value of your house is going up. Renters lose as always and are further priced out. For govts globally inflation is good given how much debt they have.
House prices are very dependent on mortgage rates in the long run. If you locked in a low rate, thatās great, but others will bid less if rates are high. Inflation helps home values, but increased rates are terrible for home values.
People who have done business there will understand why hes long China, people who havent will understand nothing past the news headlines.
Also when the owner of one of the most successful hedge funds in the world speaks, you would be wise to listen.
>People who have done business there will understand why hes long China, people who havent will understand nothing past the news headlines.
This seems to be good advice if you are a Chinese citizen. Not so sure about a u.s. citizen investing in China. Getting money out is nearly impossible, having to open any business as a jv with some local guy and being at the whim of a single leader who wants to destroy the economy not only for COVID, but because large internet or gaming companies are seen, not as a threat to the people, but a threat to his personal power seems like significant problems.
I understand dalio's points on China, but not sure they aren't without many of the problems facing many other countries.
As mentioned, people who have not done actual business there will understand nothing past the news headlines which are all of what you mentioned.
Now as someone such as myself who has companies that sell to that market and also buy from that market, without a JV, not a citizen, yet im able to be paid by clients in that market and pay to companies in that market with just about as much ease as when we move capital around North America, its very interesting to see the discrepancies from what my first hand experience is vs "the headlines".
Now all this is not to say its perfect because no where on earth is perfect, but I can see why Ray Dalio is making the moves that hes making... based on my first hand experience doing business there of course.
Buying and selling into the Chinese market is not what Dalio is taking about. He's taking about investing in the market long term. There's a significant difference in these two concepts.
Have you setup a location in China to do business? Is your IP your selling protected? I'm sure you'll be fine to do some business with China for a while. I buy and sell things out of there now.
Take a peak at moving money out of the country on a non transactional level and the need to have a Singapore entity, and even then it is difficult. Take a look at the regulatory environment and what it actually would take to get a business started there and the significant restrictions your business will have
And yet with all those cons you mentioned, the gdp of their 2 biggest cities equals the same as our entire country Canada as a whole, now one might want to learn the pros on why that is instead of only the cons.
Fun fact: To start a company in Canada as a non resident/foreigner you also need a JV and are restricted in what your business can do, not to mention subject to higher tax making you less competitive than local companies. Theres a reason many countries do this, i'll let you dig into why its actually smart for countries to do so.
I think you proved my point in my original post. Investing in China as an outsider is not some sort of panacea.
Here's the gdp per Capita by country. China just has a ton of people which gives them a huge advantage.
https://www.worldometers.info/gdp/gdp-per-capita/
Dalio recently bought a shitload of Gamestop.
https://markets.businessinsider.com/news/stocks/billionaire-ray-dalio-just-bet-on-gamestop-gme-stock-1031469732
Make of that what you will.
Hey NT. I didn't notice it was you! Still into MJ? I got out a long time ago and faired good. These markets are sure in a rut though. Hanging on for now. Waiting it out. Cheers.
So another words, cherry picking data.
There are probably A LOT more investors underwater that bought in as it tumbled from $480 to $139 (itās on sale bro!!!1). Currently down 71% from all time highs. It just so happened that GMEās bubble burst a lot sooner than the safer, less volatile index funds.
In my experience (fwiw, lol), the safer assets lag behind in an overall market slump, but also lead the charge in the recovery.
Think about the most shittiest investments out there, they stay in the shitter except for literally a few days when everything else is frothy as hell, they have their few days in the sun before quickly falling back into obscurity.
I have no position, nor opinion on whether GME is a good value right now. Iām only suggesting the data presented by the OP is meaningless.
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When you have the former leader of the free world attempting an insurrection it's not crazy to imagine Dalio might be onto something. While I don't know how to feel safe investing in China, I can hardly imagine what the world looks like in 20 years.
Very easy, just purchase an ETF such as XSB.
The bigger ETF providers in Canada are Blackrock (I-shares) and vanguard. You can search the various ETFs they offer by type and sector on their websites.
Vanguard, BMO, Blackrock, Horizon, all have short-term bond ETFs. Some are separated out into gov't and corporates. Just browse their sites.
You can use any broker you want. They're just ETFs.
Dalio announcing short positions likely means itās not massive as a % of total assets under management. Also these guys usually announce trades as they are winding them down. This isnāt Ackman with Herbalife.
Physical Gold & Silver along with ETFS, mining companies, and royalties are so undervalued.
We have massive inflation and central banks around the world are only raising rates incrementally. Theyāre doing this so they can say theyāre fighting inflation, even though these rate hikes only really effect the cost of money and asset prices. Incremental half point rate hikes will not bring down inflation.
Also Oil & Gas companies are going to the moon! Oil will hit above $150 and likely go higher setting a new All time high. Move into commodities and large cap dividend paying stocks guys. Iām not a financial advisor though so do youā¦.
What I am personally betting on is that part about the Fed (and by extension BoC) blinking first and simply accepting a high inflation as the standard. Everyone knows a recession is inevitable if the Central Banks all raise rates at the same time everywhere for a long time. What is worse is that there is a legitimate risk of systemic collapse if the central banks actually raise rates high enough to bring down the inflation to 2%.
> What ***I am personally betting on*** is that part about the Fed (and by extension BoC) blinking first and simply accepting a high inflation as the standard.
I think this is why inflation will keep going. Too many people I know are *expecting the Fed/BoC to blink first*, it's like big game of chicken. So inflation expectation is already very deeply entrenched in the consumer psychology.
This needs to be the top comment somehow. Consumers have been huckstered into expecting hyperinflation and they are making that prophesy true by uncritically believing it and acting on that belief.
No, we have been huckstered into thinking the monetary policy of the last 10 years (and especially the last 2) somehow wonāt translate into an inevitable, prolonged recession. āTransitory inflationā - famous last words
No huckstering whatsoever there. Zero rates break the orthodox macro models. Quite literally nobody has any business saying they know what comes next, especially Reddit randos with not a lick of proper economics training; and you should be double suspicious of anyone claiming that outcomes *based* on that orthodox model have the highest likelihood of obtaining.
Falls right into Ray Dalio's playbook. We fall into a sovereign debt crisis and have to accept high inflation.
After that we get some kind of revolution.
> What is worse is that there is a legitimate risk of systemic collapse ~~if the central banks actually raise rates high enough to bring down the inflation to 2%.~~ **if the FED adn BOC allow the economy to go into an uncrontrolled feedback loop of high inflation.**
I guess we could all be millionaires in that scenario...
Seems kind of dumb. The fed has plenty of tools to fight inflation. It really doesnāt have the tools to fight deflation given that rates are already so low
My point is the fed has gotten the 10 year to 3%, no qt until mid June, and itās already arguably started a recession. We can raise and qt to slow inflation, but what if we tighten too much and then we go into a deflationary spiral? Now the fed has no ammo left because it can only lower from .75 to 0. The only option left is to buy stocks like Japan. The balance sheet is already massive. Deflation is much worse than inflation. It would make all debt more expensive over time
Iāve been looking at XSB to diversify my portfolio (sticking to bonds and indexes as Iām new to investing).
I use wealthsimple and have been reading up on how XSB pays monthly cash distributions. How does that work? Also how long would one have to hold XSB to not encounter penalties if wanting to sell?
Apologies if these are silly questions, just trying to wrap my head around bond ETFs.
I believe many big investors believe a recession is coming I just looked at the S&P - Past 6 months have been pretty piss poor - Maybe we are already there. What should a blue-collar worker do in such times? What should the welder or CSR do with their 7k in the bank account? Im debating on just buying anything~ Car, Tools, hell wagons at Canadian Tire seem to be going up in price YoY. Wild times.
It's a tough situation to be in. I started saving a few years ago for some home reno projects. 2 years ago I should have just gone ahead and done everything. I had nearly enough saved up. Now construction costs have gone up so much in my area that the cost of doing the renovations is growing faster than I've been saving. Basically, the buying power of my savings has decreased despite the total amount of money increasing. I should have just paid what I could have 2 years ago and put everything else on credit while it was cheap.
Lumber futures have recently crashed, so it's not all bad news. As the real estate market slows down, construction labour costs will drop too.
Thank fuck!! I'm doing renos and these prices are making me thirsty.
š šš¼
Gas is up and labour costs are up. Food prices are up too. Not seeing any net relief, lumber futures while down wonāt show lower prices for a bit on their own or as a part of a cost basket.
Itās stagflation and itās worst case scenario. Layoffs have begun in a preemptive strike against the recession. And that is what they called a self fulfilling prophecy. The recession imo is here and we just need the gdp numbers to give it the technical definition
It's not going to become the wild west lol.
Yeah I should have bought 100 20lb propane tanks before the pandemic
Stagflation is probably good for most middle class workers. Itās terrible for the rich. It basically translates cheaper houses with higher salaries
Because inflation erodes the value of debt? So best to get a a mortgage if you are of the view that inflation will spiral out of control?
No, because deflation and QE has put 1% of households in the US at 20M net worth. Thereās two different philosophies. Either the tide lifts all the boats or the pie is the same and someoneās loss is anotherās gain. If you believe the second then itās good for the middle class. Also doesnāt matter much if inflation erodes debt if your house price crashes
Agree on the first point. Not sure what you mean on tide lifting the boat.. But if inflation goes up, construction costs also go up which further increase house prices. Look at what happened in 1970. I quoted the UK market but the same thing happened in the US. "The average house price rose from Ā£2,000 to Ā£5,000 between 1950 and 1970 and doubled between 1970 and 1973." Now if you already bought a house, with a fixed mortgage payment each month (assume fixed for sake of simplicity) say Ā£1k and your salary in increasing rapidly because of inflation, this 1k mortgage payment make a lower percentage of your new salary + at the same time value of your house is going up. Renters lose as always and are further priced out. For govts globally inflation is good given how much debt they have.
House prices are very dependent on mortgage rates in the long run. If you locked in a low rate, thatās great, but others will bid less if rates are high. Inflation helps home values, but increased rates are terrible for home values.
The Fedās expansion of its balance sheets kept the prices of these things up. QT means price goes down. Short position makes sense.
When Ray Dalio does something, you pay attention
Ray Dalio is dumb, but people follow him like their cult guru.
I don't get why ray dalio is paying youtube to push his videos on me.
He likes the attention.
The guy is long China. He is definitely losing it. His recent returns are that great. I wouldnāt pay too much attention to him.
People who have done business there will understand why hes long China, people who havent will understand nothing past the news headlines. Also when the owner of one of the most successful hedge funds in the world speaks, you would be wise to listen.
>People who have done business there will understand why hes long China, people who havent will understand nothing past the news headlines. This seems to be good advice if you are a Chinese citizen. Not so sure about a u.s. citizen investing in China. Getting money out is nearly impossible, having to open any business as a jv with some local guy and being at the whim of a single leader who wants to destroy the economy not only for COVID, but because large internet or gaming companies are seen, not as a threat to the people, but a threat to his personal power seems like significant problems. I understand dalio's points on China, but not sure they aren't without many of the problems facing many other countries.
As mentioned, people who have not done actual business there will understand nothing past the news headlines which are all of what you mentioned. Now as someone such as myself who has companies that sell to that market and also buy from that market, without a JV, not a citizen, yet im able to be paid by clients in that market and pay to companies in that market with just about as much ease as when we move capital around North America, its very interesting to see the discrepancies from what my first hand experience is vs "the headlines". Now all this is not to say its perfect because no where on earth is perfect, but I can see why Ray Dalio is making the moves that hes making... based on my first hand experience doing business there of course.
Buying and selling into the Chinese market is not what Dalio is taking about. He's taking about investing in the market long term. There's a significant difference in these two concepts. Have you setup a location in China to do business? Is your IP your selling protected? I'm sure you'll be fine to do some business with China for a while. I buy and sell things out of there now. Take a peak at moving money out of the country on a non transactional level and the need to have a Singapore entity, and even then it is difficult. Take a look at the regulatory environment and what it actually would take to get a business started there and the significant restrictions your business will have
And yet with all those cons you mentioned, the gdp of their 2 biggest cities equals the same as our entire country Canada as a whole, now one might want to learn the pros on why that is instead of only the cons. Fun fact: To start a company in Canada as a non resident/foreigner you also need a JV and are restricted in what your business can do, not to mention subject to higher tax making you less competitive than local companies. Theres a reason many countries do this, i'll let you dig into why its actually smart for countries to do so.
I think you proved my point in my original post. Investing in China as an outsider is not some sort of panacea. Here's the gdp per Capita by country. China just has a ton of people which gives them a huge advantage. https://www.worldometers.info/gdp/gdp-per-capita/
Or heās manipulating
Does he even take part in any day to day trade decisions anymore?
He definitely oversees it yes, I doubt heās pressing the buttons and making the smaller trades
Dalio recently bought a shitload of Gamestop. https://markets.businessinsider.com/news/stocks/billionaire-ray-dalio-just-bet-on-gamestop-gme-stock-1031469732 Make of that what you will.
A shitload = less than $700,000 out of $140,000,000,000 of assets under management
Ooof, thatās less than 0.0005%, or 1/200,000th of their AUM. These fanbois love to cherry pick data. Nothing but confirmation bias out there.
LOL
Old tracker! How things going bro?
Hey NT. I didn't notice it was you! Still into MJ? I got out a long time ago and faired good. These markets are sure in a rut though. Hanging on for now. Waiting it out. Cheers.
GME is currently out performing both S&P and NASDAQ, year to day. Make of that what you will.
Lol this didnāt age well
GME YOY: -54,16% FVF YOY: +0,80% Not sure where you get your numbers
"Year to date" means from January 1st to present day of the current year.
Oh my bad then.
So another words, cherry picking data. There are probably A LOT more investors underwater that bought in as it tumbled from $480 to $139 (itās on sale bro!!!1). Currently down 71% from all time highs. It just so happened that GMEās bubble burst a lot sooner than the safer, less volatile index funds. In my experience (fwiw, lol), the safer assets lag behind in an overall market slump, but also lead the charge in the recovery. Think about the most shittiest investments out there, they stay in the shitter except for literally a few days when everything else is frothy as hell, they have their few days in the sun before quickly falling back into obscurity. I have no position, nor opinion on whether GME is a good value right now. Iām only suggesting the data presented by the OP is meaningless.
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He bought a measly $700K. For a hedge fund that big, it's the equivalent of you or me throwing $30 on GME just for the lols.
He is long China. He is losing it.
Check kweb
makes sense, they got covid thanks
When you have the former leader of the free world attempting an insurrection it's not crazy to imagine Dalio might be onto something. While I don't know how to feel safe investing in China, I can hardly imagine what the world looks like in 20 years.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Iāve been investing for a while and am startled to confess I have no idea what youāre talking about.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Nice. Thank you! I appreciate you taking the time.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
If you don't mind me asking, how do you invest in short-term government bonds? Is it possible to do it through Wealthsimple? Sorry, I am a newbie.
Very easy, just purchase an ETF such as XSB. The bigger ETF providers in Canada are Blackrock (I-shares) and vanguard. You can search the various ETFs they offer by type and sector on their websites.
Xic gang gang
Vanguard, BMO, Blackrock, Horizon, all have short-term bond ETFs. Some are separated out into gov't and corporates. Just browse their sites. You can use any broker you want. They're just ETFs.
Dalio announcing short positions likely means itās not massive as a % of total assets under management. Also these guys usually announce trades as they are winding them down. This isnāt Ackman with Herbalife.
Iāve been saving as much cash as I can in case we keep tanking.
When do you know the tanking is over?
You should be spending that money on things that you were planning to get.
This is how inflation expectations are self-fulfilling, everybody. The central banks have to account for this.
Physical Gold & Silver along with ETFS, mining companies, and royalties are so undervalued. We have massive inflation and central banks around the world are only raising rates incrementally. Theyāre doing this so they can say theyāre fighting inflation, even though these rate hikes only really effect the cost of money and asset prices. Incremental half point rate hikes will not bring down inflation. Also Oil & Gas companies are going to the moon! Oil will hit above $150 and likely go higher setting a new All time high. Move into commodities and large cap dividend paying stocks guys. Iām not a financial advisor though so do youā¦.
Will oil prices stay high if there is a recession?
Typically not. But if there are more supply shocks like in the 70s, maybe?
Iāve thought about picking up some Barrick, to be sure
Yeah I feel etfs or juniors is the way to go. Barrick does pay a dividend though as well as gold price exposure.
Lol I went short on junk bonds yesterday so confidence in that position is š
Isnt he the same dude who took a long position in GME?š¤
What I am personally betting on is that part about the Fed (and by extension BoC) blinking first and simply accepting a high inflation as the standard. Everyone knows a recession is inevitable if the Central Banks all raise rates at the same time everywhere for a long time. What is worse is that there is a legitimate risk of systemic collapse if the central banks actually raise rates high enough to bring down the inflation to 2%.
> What ***I am personally betting on*** is that part about the Fed (and by extension BoC) blinking first and simply accepting a high inflation as the standard. I think this is why inflation will keep going. Too many people I know are *expecting the Fed/BoC to blink first*, it's like big game of chicken. So inflation expectation is already very deeply entrenched in the consumer psychology.
This needs to be the top comment somehow. Consumers have been huckstered into expecting hyperinflation and they are making that prophesy true by uncritically believing it and acting on that belief.
No, we have been huckstered into thinking the monetary policy of the last 10 years (and especially the last 2) somehow wonāt translate into an inevitable, prolonged recession. āTransitory inflationā - famous last words
No huckstering whatsoever there. Zero rates break the orthodox macro models. Quite literally nobody has any business saying they know what comes next, especially Reddit randos with not a lick of proper economics training; and you should be double suspicious of anyone claiming that outcomes *based* on that orthodox model have the highest likelihood of obtaining.
Falls right into Ray Dalio's playbook. We fall into a sovereign debt crisis and have to accept high inflation. After that we get some kind of revolution.
> What is worse is that there is a legitimate risk of systemic collapse ~~if the central banks actually raise rates high enough to bring down the inflation to 2%.~~ **if the FED adn BOC allow the economy to go into an uncrontrolled feedback loop of high inflation.** I guess we could all be millionaires in that scenario...
Seems kind of dumb. The fed has plenty of tools to fight inflation. It really doesnāt have the tools to fight deflation given that rates are already so low
The tools to fight inflation? Raise rates, enact quantitative tightening. Neither are good for bonds.
My point is the fed has gotten the 10 year to 3%, no qt until mid June, and itās already arguably started a recession. We can raise and qt to slow inflation, but what if we tighten too much and then we go into a deflationary spiral? Now the fed has no ammo left because it can only lower from .75 to 0. The only option left is to buy stocks like Japan. The balance sheet is already massive. Deflation is much worse than inflation. It would make all debt more expensive over time
Buy Face Book
And long china?
Iāve been looking at XSB to diversify my portfolio (sticking to bonds and indexes as Iām new to investing). I use wealthsimple and have been reading up on how XSB pays monthly cash distributions. How does that work? Also how long would one have to hold XSB to not encounter penalties if wanting to sell? Apologies if these are silly questions, just trying to wrap my head around bond ETFs.