Becoming more bearish

Thrugelmir

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

Username999

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

Yes, and Apple is a phone manufacturer.

BananaRepublic

MaxiRobriguez said:

BananaRepublic said:

Thrugelmir said:

masonic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

itwasntme001 said:

BananaRepublic said:

itwasntme001 said:

It is what happens when you have 0% interest rates, massive fiscal and monetary stimulus in many major economies and human nature driven by greed.

The interesting question is why did we not do all this in previous recessions like 2008 or early 90s?  I think the answer is inflation and the political will to unleash it.  Now it seems inflation is not a concern so they have more room for stimulus.  So every trade is essentially a view on inflation and no one can forecast inflation well at all.

The covid recession is fundamentally differerent from the GFC. Back then credit dried up, people couldn’t borrow, it hit the economy quite widely. This recession is hitting some parts of the economy badly, others not at all. Cafes and restaurant jobs will bounce back quickly, even though some businesses will go under staff will be rehired by new owners. There are many people working from home or on furlough, spending less than usual. Trades have been busier than usual, DIY is booming, people are having house extensions, loft conversions etc. 

We have as a nation run up huge debt, and somehow we will have to pay for that. Some say a wealth tax is coming. Whatever happens, spending on public services may be squeezed. 

That is because 2008 was a financial crisis and everything was done to recapitalise banks (and QE was seen as a way to kick start the economy).  But my point was that why wasn't any fiscal stimulus done back then to encourage growth - it seems it was only monetary (QE) and even that was not nearly as forthcoming as we saw last March?  Now you have huge fiscal stimulus after 10 years of austerity in the UK and 5-6 years in the US (until Trump cut corporate taxes).

To me it seems like policy makers are becoming less and less concerned about inflation because they saw QE did not generate any, so why not push ahead with fiscal.

For me the question is why testing and track and trace were so royally messed up. 

Ever built something from scratch in a matter of weeks?  Unfortunately Alexa is actually pretty dumb. Other countries systems aren't a roaring success either. 

They had months, not weeks. Some countries such as South Korea managed it. China has the virus under control. It might be our inability to obey lockdown, or government projects.

South Korea has had viruses previously.  Chinese state control is something that many would object to. Not just the Covidiots either. There's objections in Singapore now as appears that the data is going to be used for other purposes. The grass is far from being greener taken as a whole.

Germany did quite a good job though. Not an example of a country with previous experience.

Had a system in place for another reason. Though that in itself has proved insufficient. 

I'm surprised more people haven't emigrated over the years. Given the negative attitude towards their own country. 

I don’t understand the negative attitudes of many towards the UK, but I guess age and having lived in Canada has inoculated me against left wing anti European self hatred views that seem so prevalent these days. 

It's not "self hate" - those people you insult genuinely care about the country and others and are aghast at the rampant cronyism and profiteering on the backs of the poor. I often find it funny that those who claim to be patriots, demand foreign aid to stop so we can "take care of our own", then get presented with a problem where "our own" are really struggling, and their response is too often "it's your own bloody fault." My take on it is that's more self-hating than others who are pointing out the very real problems we have at the moment.

But I guess we all want what is best for our country, our friends, our family, and having a different opinion on how that is achieved or how it's currently going doesn't mean anything, just that people are different. Not wrong, or self-hating, just different. 

There is certainly a minority, I have no idea how large, of self hating people on the soft left. I've spoken to countless remainers and a common theme is distaste for our politicians, and great respect for EU politicians. Another theme is a distaste for the British working classes. Several people told me with a straight face that people below a certain intelligence level should not be allowed to vote. Many have said you should not allow the 'people' to vote, only 'educated' politicians who know what they are doing should be allowed to vote. And often these people express massive guilt about the 'crimes' of the British Empire, but ignore the fact that countless empires, including non European ones, have committed worse crimes. I don't assume most remain voters hold these views, but they are very common among the vocal opinion formers, including those interviewed on the radio.

I lived for two years in Montreal. Anti semitism was rife. An Italian Quebecoise I knew didn't let her Francophone friends know she was of Italian descent for fear of abuse. An English Canadian spoke English with Francophones because she spoke fluent French with the wrong accent ie from France. The Quebecois can be very nice people, but xenophobia is, or was, common. The British don't realise how tolerant a country this is. And many don't see the other upsides of our country.

BananaRepublic

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Thrugelmir

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

Alexland

MichelleN said:

You recently changed from CTY to MUT - do you only want to consider IT’s for this part of your portfolio? If you could invest in an OEIC you may want to consider Royal London Sustainable Leaders Trust C either Acc or Inc versions.
Also, your point on stocking up on good quality companies that are underpriced at the moment, I have recently taken a position in GSK, AZN and UVLR all at in my opinion decent ‘buy in’ prices so I’m hoping their share prices improve over the next few years as well as the yields they produce. I would be interested in your thoughts on this?

Most of our money is in global tracker ETF/funds so we are only using ITs as a 'style tilt' in our S&S ISAs. GSK, AZN and ULVR are all in the MUT top 10 but I don't have the time or inclination to do the mountains of research required to be active in buying individual shares and keep track of movements in earnings or dividend yield. They obviously each have their own risks so running a sufficiently diverse portfolio would be important.

RL Sustainable Leaders seems to be a good active fund but with a heavier weighting to the growth style the key ratios are less attractive and the OCF is probably more than I would be willing to pay. Do those companies have superior prospects? Probably but then as usual that already seems to be priced in.

BananaRepublic

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Regarding faults, an electric engine and battery is more reliable than a conventional ICE (Internal Combusion Engine). Sure the ICE (In Car Entertainment) and other electrics are complex, but all high end cars have lots of electrics, that's one reason Range Rover are unreliable. My VW has had safety recalls, and CarPlay reboots at random. On one occasion I could not turn the engine off. Removing the key didn't shut it down.

Thrugelmir

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Recently, without a doubt currently yes. The inclusion of Tesla into the S&P 500 was well flagged months ago.  Hedge funds etc would have been bought up huge quantities of stock knowing that the large US management groups running passive funds had no option but to buy at any price. Been a play in the UK for many years by active fund managers to identify growing stocks in the FTSE 250. On the basis that one day they'll be elevated into the FTSE100. Though most of the price increase happens while in the FTSE250. As the weighting ascribed to the stocks puts them down at the bottom of the index there's relatively little further uplift. As not immediately into the top 20. Which is the issue with the manner of Tesla's inclusion.  

BananaRepublic

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Recently, without a doubt currently yes. The inclusion of Tesla into the S&P 500 was well flagged months ago.  Hedge funds etc would have been bought up huge quantities of stock knowing that the large US management groups running passive funds had no option but to buy at any price. Been a play in the UK for many years by active fund managers to identify growing stocks in the FTSE 250. On the basis that one day they'll be elevated into the FTSE100. Though most of the price increase happens while in the FTSE250. As the weighting ascribed to the stocks puts them down at the bottom of the index there's relatively little further uplift. As not immediately into the top 20. Which is the issue with the manner of Tesla's inclusion.  

Okay, but that's not driven by index funds. You are talking about the actions of hedge fund managers etc.

Thrugelmir

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Recently, without a doubt currently yes. The inclusion of Tesla into the S&P 500 was well flagged months ago.  Hedge funds etc would have been bought up huge quantities of stock knowing that the large US management groups running passive funds had no option but to buy at any price. Been a play in the UK for many years by active fund managers to identify growing stocks in the FTSE 250. On the basis that one day they'll be elevated into the FTSE100. Though most of the price increase happens while in the FTSE250. As the weighting ascribed to the stocks puts them down at the bottom of the index there's relatively little further uplift. As not immediately into the top 20. Which is the issue with the manner of Tesla's inclusion.  

Okay, but that's not driven by index funds. You are talking about the actions of hedge fund managers etc.

Takes 2 parties to trade.