Early Retirement Extreme Forums

Now we know why both Schwab and Ameritrade went to free trades...fresh from today's email:

"We're excited to announce that Charles Schwab and TD Ameritrade have reached an agreement for Schwab to acquire TD Ameritrade.

The combined company will retain the Schwab name, and will reflect the best that each legacy firm has to offer, including leading trading and wealth management platforms, investor education, award-winning service, and banking.* This should bring clients like you an outstanding investing experience.

For now, the transaction is subject to customary closing conditions and is expected to close in the second half of 2020. During that time, there should be no impact to your account or how you work with TD Ameritrade."

Also, Interactive Brokers announced $1 trades recently.

Feel like selling bull puts given the non-qe that'll hit hard first part of dec. I like amazon because premiums are rich, but have no idea what direction it'll go: feels to me like the spy pulls it up with the non-qe, and then as soon as that lets off, it wants to drift down and sell off. Thoughts/ideas/advice?

We've moved from the general risk-on/risk-off trade to the particular trade deal on/trade deal off trade.

It’s really incredible how resilient this bull market has been.

I’m starting to think that nothing will be able to kill it until the general consumer finally caves (feels like it’s the only indicator that is still signaling strength)

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Care to elaborate on the "artificially pumped"?

Saudi Aramco IPOs at the highest value ever for a company gone public. Now why did they do that? (Rhetorical)

I too have a feeling there is some serious market pumping going on, but I lack the econ/finance background to really understand. Not pulling out or changing my investments, so not sure where this "feeling" is getting me, but there it is.

Is it high? yes. But why "artificially"?
It's supply and demand.
I don't believe the "it's the FED!", as interest rates are much lower in Europe and Japan and those markets aren't nearly as expensive as the USA.
Certainly rates have an impact, but they come in response to some real problems.
Whether I think ultra low rates are the solution* or are healthy long term**, that's a different story, but there's always exogenous events influencing teh markets.


*I've always been a huge fan of Keynes, and feel like after years of nuclear monetary policy, fiscal policy would be much more effective and efficient but what do I know.
** I believe sometimes recessions have a good cleansing effect, and having one every once in a while is good for the long term health of the economy

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Your last two posts are in direct contradiction with one another.
I believe neither is completely true by the way.

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First, I'm arguing the "artificially".
As stated a few posts above it's simple supply and demand.

The usual argument (which if I understand correctly you seem to agree with) is that stocks are "manipulated" higher via low rates.
I believe this is incorrect because
1- Fed and other central banks lower rates to stimulate a lagging economy, not with the intention of pumping the stock markets.
2- if the correlation between rates and stock prices were direct and 1.0, stocks in Europe and Japan would have been manipulated much higher than the USA. The opposite is true.

Moreover, either your thesis is that low rates lead to higher stock market or vice versa. You can't claim at the same time that stocks are manipulated higher via low rates in the usa and then that EU stocks are low because rates there are low.

I believe neither positions to be true because low/high rates are only ONE of the many, many elements that influence stock prices.

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discussion continued in thread jacod directed us to

ertyu wrote: ↑

Wed Dec 11, 2019 8:54 am

I meant the impact QE has on stock prices.

I still miss something. QE has been heaviest in Japan, then Europe, and USA last.
Are you arguing QE inflates prices up or down?

I am not saying stock prices are of zero concer to central banks. I am saying they are not THE concern. GDP growth and inflation targets are for sure concerns number 1 and 2 in some order in both Europe and Japan

Lets keep long discussions about the market out of the trade log. There's a thread about QE and permanently low interest rates here: viewtopic.php?t=10795

jacob wrote: ↑

Wed Dec 04, 2019 3:08 pm

We've moved from the general risk-on/risk-off trade to the particular trade deal on/trade deal off trade.

More like the trump tweet good/trump tweet bad trade. I'm sure he knows what he's doing..

Bought some ERUS (Russia ETF). Russia being possibly the most undervalued country (but has outperformed the US the past year) and ERUS being composed of nearly half energy stocks which may be "due" to outperform other sectors after a long streak of underperformance.