Not right now, but the market cares more about what consumption levels are the next few years. It’s quite possible the reckoning lags the obvious indicators, though.
Travel, restaurants, bars, etc yes… But how much of the stock market is bars and restaurants? Consumption via Amazon is probably up, for example. I think overall it’s down, but not as much as we might think at first glance and some has just shifted.
Entertainment down, Netflix up.
Gas down, Zoom up.
Brick and Mortar companies down, Amazon up.
For almost every loser, there’s a winner, so even if the losses exceed the gains (they do), the net isn’t as bad as it may feel initially.
This is only true as long as people are employed or being compensated as if they are employed. If we dont get much closer to full employment by the end of this year just about every sector will suffer.
No I have no desire to mess with that. This stuff is all in my IRA anyway, I’m not touching the brokerage account again unless the stonks in there tank and I don’t have to worry about short term cap gains tax.
Frankly it’s a failure of our bankruptcy court system that this stuff isn’t required to be turned over to the bankruptcy trustee and returned to creditors. Meanwhile if some poverty line level bankruptcy filer gives $2,000 of their tax refund to someone prior to filing bankruptcy you better bet your ass the bankruptcy trustee is coming after that as a fraudulent or preferential transfer.
I guess you are right, but to me it is even moreso a failure of our corporate governance model. The board should be approving CEO bonus and negotiating these compensation packages that still end up paying millions for abject failure. The fact that CEOs are more often than not able to basically cherry pick their own boards is one of the biggest impediments to all sorts of moral hazards issues around executive compensation and behavior.
The rise of indexing over activist investing makes this perhaps a more difficult issue to solve because S&P 500 funds owning a bigger and bigger share of companies are probably not likely to get involved and vote the bums out when corporate boards have quesitonable conflicts of interest. Other big shareholders and hedge funds can be sort of bought off or placated by getting their access or seat at the table but the overal interests of shareholders or other stakeholders is often not served.
Including the futures gains this AM Nasdaq up 25% in the last 12 months. S&P 500 up over 6% in the last 12 months. I understand that the markets are juiced up on stimulus but that still seems insane to me with the level of uncertainty about the economy and Covid. There is no way you could convince me 95% of publicly traded companies are better off on June 1st, 2020 vs. June 1st 2019 on a forward looking basis.
S & P market cap is something like $28 billion and Fed Covid stimulus tallies up to something between 6 and 10 billion. I’m not trying to argue that markets are rational or irrational but just that the orders of magnitude are in the same ballpark, so the scope of the bailouts is large enough to prop up stock prices broadly if large companies think must of the stimulus will accrue to them.
And if they go on Medicaid, any gifts and transfers from the previous 5 years are clawed back. Clawing back dividends, bond interest, and share buybacks for 5 years would be an accounting nightmare, so maybe there should be no bankruptcy protection for companies that distributed earnings in those ways within x months/years.
Thinking about dumping even more stock funds in my remaining account, now that the account might be back within 10% of where it started. Within a couple of years, I’ll be retired and looking to live off of my portfolio, so the most critical thing now is to have a portfolio to live off.