rb

Yeah, I've tried. It appears that it was mission impossible. You just can't get a foreign currency account in the US. I guess it's another one of those American things where the world doesn't exist outside the US unless they have to send the Air Force over there. I decided to pay the dividend in USD and deal with the associated hassle on the Canadian side.

Not no one. I was buying. I recall that Junto and Ericopoly were as well. This is value investing and it's hard. You can use any name you want really. When I was buying AAPL on sale at the end of 2018 almost everyone was running from it. Now everyone they're gushing over it. What changed? Nothing. Just the PR. Simply back then the stock was going down and now the stock is going up. Value investing. Easy in theory. Tough in practice.

Completely agree! But Wood is no chump either in the competition for the prize. I've just seen a video of her where she uses the treasury yield as a discount rate for equity. Seriously? There's no risk premium anymore? Either she's selling to idiots or thinks we're all idiots. What's even more amazing is that the video was monitored by someone from her compliance team.

I love Assness. Whatever that guy talks about... investing, politics, business. He'll give you an honest, straight up, no bullshit answer. You've got to respect that in a man.

I said lower price for financed assets not necessarily lower demand. Also, the difference is in timing: First, demand goes back to normal, while minimum wage goes up and stimulus money shows up in people's bank accounts. This causes more dollars to chase limited goods. ]That causes inflation to finally show up. ]That causes market to raise longer-term interest rates, or Mr. Market starts to predict it, and starts raising longer-term interest rates earlier. Fed continues to keep low Fed rate and continues to buy treasuries to try to lower longer-term interest rates. That causes monetary supply to increase further. I hear what some say that banks have to hold extra reserves as a result of Fed buying treasuries, but that doesn't stop banks from using those reserves to enable transactions at higher prices. The rise in interest rates causes price of financed assets, i.e. stocks, CRE, etc. to go down, or Mr. Market starts to predict and some financed and effectively-internally-financed assets like stocks start to go down sooner. Prices don't react to interest rates prices react to demand. Rates are the catalyst. So whenever you say lower price you say lower demand. Are you saying you disagree with the numbered points above? If so, which # do you disagree with so that I can understand your perspective better? Specifically 5 and 6. If you see sustained inflationary pressure the FED WILL raise rates. In fact the higher LT yields represent an anticipation of this raise down the road. Higher rates of course affect prices of financed assets by influencing demand for them. Higher rates->Lower Demand->Lower prices. An environment where you have 6% inflation without financed assets participating in that is frankly maybe possible in one iteration of a simulation but not one that is plausible.

I don't think we're talking about an environment where you have sustained inflation. What we're talking about realistically is an environment with more inflationary pressure where you basically have low inflation, higher rates. I agree that in a sustained inflation environment RE assets will go up nominally. On a real basis that's more of a mixed bag. But it's hard for me to picture a scenario where you basically have lower rates lead to higher RE asset valuations, higher rates don't affect RE asset valuations.

I said lower price for financed assets not necessarily lower demand. Also, the difference is in timing: First, demand goes back to normal, while minimum wage goes up and stimulus money shows up in people's bank accounts. This causes more dollars to chase limited goods. ]That causes inflation to finally show up. ]That causes market to raise longer-term interest rates, or Mr. Market starts to predict it, and starts raising longer-term interest rates earlier. Fed continues to keep low Fed rate and continues to buy treasuries to try to lower longer-term interest rates. That causes monetary supply to increase further. I hear what some say that banks have to hold extra reserves as a result of Fed buying treasuries, but that doesn't stop banks from using those reserves to enable transactions at higher prices. The rise in interest rates causes price of financed assets, i.e. stocks, CRE, etc. to go down, or Mr. Market starts to predict and some financed and effectively-internally-financed assets like stocks start to go down sooner. Prices don't react to interest rates prices react to demand. Rates are the catalyst. So whenever you say lower price you say lower demand.

Cause that's not's really gonna happen. You're not gonna have a real inflation scenario. You won't get Venezuela, or Argentina, or 48 China. If it comes to pass you'll have demand boost->a mild and boring inflation spike->higher rates->inflation subsides->a higher rate plateau->lower asset prices.

rb, I agree with you on this! Yeah. That's what I'm more concerned of. I don't think we see any nightmare scenario in the near future in terms of inflation. But we may get to higher rates. Again, nothing earth shattering. But given that everything seems priced to perfection these days i would say that implies a lot of risk for equities that something will not go according to plan. I mean look how you get a bit of a freakout because the 10 year moved by 50 bps.

Mattee, I don't know where you get to the fact that the S&P constituents are fast growing. S&P earnings peaked in 2007 at 85 and then peaked again in 2019 at 140. That's a growth rate of 4.2% per year nominal. That's actually somewhat better than one might have expected but it's certainly not outside the bounds of what would be a standard model. Certainly not something you would call fast growing.

Thanks rb for your perspective. To understand deeper what you mean, what do you mean by "it"? Demand dynamics and inflation. What you've described in your posts: housing, autos, finance, investment is a huge part of the economy. You can't have weakness in a huge part of the economy and a raging economic orgy in another. Weakness in housing, autos, finance and investment equates to a really bad recession (think 2008) which is not an inflationary event. I think you might be mixing up mine and LongHaul's posts. Are you saying we cannot have a 1970s style inflation-triggered stagflation, where inflation leads to higher interest rates and in-turn lower stock prices? You and LongHaul are basically saying the same thing. He's specifically naming sectors while you are talking about lower demand in things that are financed. Well that mean weakness in housing, autos, investment and finance. Yes, I'm also saying that you can't have a 70s style stagflation. That was driven by supply side inflation which led to a wage-price spiral. Higher rates were the cure. Now we're talking about demand side inflation which is a completely different animal. You can't have demand side inflation with weakness in demand. It's also very unlikely you'll have high inflation and high interest rates. But you could have a burst of higher inflation that leads to a higher rate environment and normal inflation. Think a 4-5% 10 year yield and 2% inflation or such kinda what we had during the 2000s. Economically speaking that's kinda where you want to be. (I am personally a fan of a somewhat higher normalized inflation). But that will of course not be good for stocks if they're currently pricing in a 2% 10 year yield till kingdom come.

Thanks rb for your perspective. To understand deeper what you mean, what do you mean by "it"? Demand dynamics and inflation. What you've described in your posts: housing, autos, finance, investment is a huge part of the economy. You can't have weakness in a huge part of the economy and a raging economic orgy in another. Weakness in housing, autos, finance and investment equates to a really bad recession (think 2008) which is not an inflationary event.

It doesn't work like that.

How do you have strong inflation and weak demand at the same time?

I'm not sure, but i think it's something along the lines of when he's done getting really rich of the SPACs he'll move on to saving the climate. So should throw some money in there cause the sooner that happens the better for us ;D.