SIRI Monthly Thread August 2015

[midas360]

It's not the fear of "raising" the interest rates, it's the impact that raising interest rates has on the economy (loans, credit card debt, etc.)

The goal in raising rates is to force the consumer to save money. Over the past several years, the goal was to get the consumer to spend money. The quandary in the 2009 financial crash was that a lot of people lost money in the market (401K, IRAS, Savings, etc.) and they lost their job. They didn't have money to "spend" even though the fed started lowering interest rates. That's where the government came in to pick up the slack of the consumer. Now that the economy is supposedly improving and people are finding work, the fed is going to force the consumer to start saving money by raising rates thus less money going into the economy. The markets are forward looking. They know raising rates is going to slow the economy down.

I think fear of the inevitable interest rate hike is finally playing out. I don't really see any reason to fear it as everyone has known about it forever and I am personally glad to finally get that stressor out of the way. What I do fear though is those who fear the interest rate hike. They are the ones responsible for opening up this sink hole. As usual, nothing more to do but wait...

[user34615145]

I think fear of the inevitable interest rate hike is finally playing out. I don't really see any reason to fear it as everyone has known about it forever and I am personally glad to finally get that stressor out of the way. What I do fear though is those who fear the interest rate hike. They are the ones responsible for opening up this sink hole. As usual, nothing more to do but wait...

Historically the stock market has done quite well in period of rising fed rates. That's because the Fed is usually raising rates as the economy improves. I don't know if 2% gdp growth qualifies as "improving" but here's hoping that the mkts have at least the initial rate hike priced in. IMO at this point, if the Fed doesn't raise rates at least some nominal amount in Sept, it will signal that they don't think the economy is strong enough to sustain that rate hike and the mkts take a dump on that rational. More important that "when" the fed starts raising rates, the real issue is going to be "how much and how often"....in other words, the trajectory of the rate increases over the course of the next months/years.

[dm_4]

I'd rather be STROKED by SIRI....the Fng Ho....


You too DM...have fun...got to get back out on the course myself...been a while

Haha...thanks denco. Just having a quick beer and burger before warming up on practice green for an hour or so. 8 strokes is a lot of strokes to give...need to make sure my short game is there to have a chance.

Hope u get the chance to get out soon!

[midas360]

You can't be SIRIUS!?!?!

Edit: Holding nicely considering the alternative. Biotech is getting hit hard. No telling how far that will go. They hammered energy before. Now it's getting somewhat of a breather.

I'd rather be STROKED by SIRI....the Fng Ho....

[bdp.]

It's not the fear of "raising" the interest rates, it's the impact that raising interest rates has on the economy (loans, credit card debt, etc.)

The goal in raising rates is to force the consumer to save money. Over the past several years, the goal was to get the consumer to spend money. The quandary in the 2009 financial crash was that a lot of people lost money in the market (401K, IRAS, Savings, etc.) and they lost their job. They didn't have money to "spend" even though the fed started lowering interest rates. That's where the government came in to pick up the slack of the consumer. Now that the economy is supposedly improving and people are finding work, the fed is going to force the consumer to start saving money by raising rates thus less money going into the economy. The markets are forward looking. They know raising rates is going to slow the economy down.

Yes I understand all of this, but once again, I find it does not make sense to believe that the rate hike is not already built into the market.

[midas360]

I am sure it is but like USER said... the trend is pointing to future rate hikes. I have a hard time believing the economy is doing well right now. BWTFDIK

Edit: What I find hard to believe is that people think the markets just go up, up, up and that they should never correct. HAHAHA

Yes I understand all of this, but once again, I find it does not make sense to believe that the rate hike is not already built into the market.

[bdp.]

Edit: What I find hard to believe is that people think the markets just go up, up, up and that they should never correct. HAHAHA

What is hard to believe is how well Pandoras' sp is performing.

[midas360]

What is hard to believe is how well Pandoras' sp is performing.

You make a valid point. It goes back to a very similar question by a SB member named GetSirius but was ridiculed by others for asking it. See below...

Original Post:

I don't see how a company like Pandora, that loses money every month could be trading at $16 and we can't seem to get past $4

Responses to GetSirius:

Oh Good Lord....................Look at the market caps. Look at the enterprise values. It's not just the share price. Is this grade school?

Quote Originally Posted by getsirius - I don't see how a company like Pandora, that loses money every month could be trading at $16 and we can't seem to get past $4



C'mon guys... Market cap... How many shares outstanding.... If Sirius had the same share count as Pandora, they would be much higher per share.

and by Faulkner who deleted all his posts but said the same thing. Can someone else answer this, I have diarrhea.

[getsirius]

Oh no, bdp, you're going to get scolded now by the all knowing wizard of investment.

What is hard to believe is how well Pandoras' sp is performing.

[denco1]

Nice 3.94 paint job.....I'll take it.

EDIT: Glad to see DIS also buck the trend as well