School me on investing...

Lots of articles today saying buying on the dip isn't going to end so well.

So, Bird & Motion, LLC advise: better go to cash unless you have enough time and resources to weather this next cycle. I have a buddy who is 65yo and he is terrified. Always been able to hang on and its paid off over time, but he's out of time.

 

Pull up a chart of the US Dollar over the last two years, then two year chart of SandP and then Bitcoin, that is your answer..

 

I think the thing that scares me more than anything else is that the average entry level wage has gone from $8 an hour to $15 an hour in just a couple years. That sets in motion a chain reaction... like letting the genie out of the bottle. I was in Santa Monica recently and ordered 3 pints at a bar. The min wage in Santa Monica is probably $25 an hour, in real terms. 3 beers cost me $45, with the tip included and me having no choice in the matter. Where does this lead to? What happens when you have to pay $28 for a beer at LaGuardia? I'll vote with my wallet, and most of my money will be heading oversees.

 

I'm waiting for the cries that $15/hour min wage isn't enough, and it needs to be $25/hour. Amazing how quickly that wage boost was gobbled up over the past year. And we are right back where we started, only worse off.

 

We will soon be capable of replacing swath’s of labor force with robotics and AI. At some point in the near future businesses are going to say “fuck it it’s cheaper to go with tech”. I already see legit delivery robots all over LA. Kaiser Permanente in Hollywood has a sentry robot that rolls around the perimeter.

What happens when instead of minimum wage people are fighting for Universal income?

 

It's already here my friend. It is just the application will be more robust in the future.

 

Excellent point Mr. Machine. Right now in the history of employment it has never been easier to get a decent paying job, yet people complain. It is going to get much, much worse in the next few years, then what?

 

Read principles for dealing with the changing world order by billionaire ray dahlio

 

Isn’t the goal 100% unemployment? And by that, I mean, machines do all the work. Still, there will be jobs machines refuse to do.

 

IIRC and this was a long time ago at a prominent university. In economics class, I remember reading there was a very direct relationship between minimum wage increase and inflation.

So makes sense part of what's happening now.

 

Wait no more.

https://www.usnews.com/news/best-st...5-hourly-wage-isnt-livable-anywhere-in-the-us

https://www.cnbc.com/2021/02/21/15-minimum-wage-wont-cover-living-costs-for-many-americans.html

https://fortune.com/2021/09/06/minimum-wage-15-an-hour-living-wage-labor-day/

https://livingwage.mit.edu/articles/85-15-an-hour-isn-t-enough-u-s-workers-need-a-living-wage

https://www.barrons.com/articles/why-u-s-workers-need-a-25-per-hour-minimum-wage-51611858500


The cognitive disconnect is astounding, but when you think about it, this is really all just pandering and setting the economy up for failure. Anyone with a rudimentary, basic understanding of economics should easily grok that raising the minimum wage for the lowest end workers will necessitate raising the wages for all workers, the costs of which MUST be passed on to consumers or the business will definitely fail. The consumers most affected by these across-the-board cost increases (aka INFLATION) are those same lowest end workers.

Cue the cries for a 40/hour minimum wage.

Rinse repeat

 

Check out the ratio of retail/restaurant per capita for us in comparison with other developed countries. We have something like 5x the average sq ft/capita as other major western countries. Believe Australia and Canada are the only ones close, and their ratios are still half of ours. Lots of papers on how we’ve been able to do that by suppressing wages for those workers. Which is only feasible when businesses have the gap between their wages and local living wages, subsidized by Fed social service programs. No idea how we’re going to weather this all, but I’m certainly not holding any restaurant group stocks now.

 

Nah, was US dollars. Was a little drunk last night and checked my main portfolio based on comments in this thread (something I really try not to do). Then I decided to see what I could’ve bought the day before “for free” (I.e. what I lost yesterday).

Made me more depressed to think I lost that bike yesterday than just random numbers on a screen.

Not gonna do that again

 

Horse
Shit.

How many people after working 10-12 hrs per day want to come home and spend two hours in the kitchen preparing a decent meal?

The end of single income families in the US is why restaurants are EVERYWHERE.

But sure, confirm your bias and regurgitate the class warfare talking points.

 

Not quite that simple, but a part of it sure. Eroding of securities regulation, eroding unionization, outsourcing, income disparity growing, lack of enforcement of anti-trust (one of the biggest to me), lack of price fixing penalties... the fact that quarterly shareholder return is of prime concern rather than long term stability/employee growth for a LOT of large firms...

On its face, people are twice as productive (meaning an hour of their work has twice the output) that it did around 1980. A large majority of this is of course technology and computer usage by said employees. Either way though, adjusted for inflation, income growth over that period has been about flat. That means all excess profit/production has been funneled to the top of the food chain. Look at what's happening now... record profits among huge firms while prices are way up. There IS no real competition in the US consumer market, at all. The whole "free market" libertarian bullshit is totally a myth at this point if there ever was a free market (which there wasn't). Then the fall back is, "well get the bought politicians out of government and de-regulate." which is also a joke for a simple mind. Its systemic across the entire economy and government. You have an illusion of choice, but hardly anyone fights any large mergers any more, nobody accuses any of these companies of not competing with each other for business thru price/profit margin cost pressures. None of it. Barriers to entry for anyone has never been higher, and companies can do what they want at will without any real pressure besides people just decide to do without because they can't afford to any more. As that excess profit pools further, that money looks for somewhere to go... meaning gobble up available housing for rental or Air BnB property investments making the housing issue worse. When companies realize that ANY hiccup, material input increase, delay, or expense can be directly passed on to the consumer and they'll eat it, you no longer have market competition, you have inelastic demand in many cases with inelastic or inconsequential substitution and that far outweighs any increase to the bare minimum. There USED to be, at least on some level, market pressures for Company X to keep costs reasonable because Company Y or Z of comparable quality/spec would take all their business if they didn't, AND... there USED to be, in real terms, situations where a company would have disruptions and have an unprofitable year or even fail because of it, or didn't pay bonuses that year, or didn't have wage increases. Now, layoffs and cost cuts are used strictly as a tool to maintain target profit margins and expected returns for investors. Look at mountain bikes as just one example... there's no ACTUAL competition for sales based on pricing pressures unless you're just straight up buying something crappy compared to something nice. You're buying bikes of a similar level, with similar components and materials, and they all cost about the same and all increase the same when the others increase. So instead, your "market choice" is really about color or name or maybe suspension geometry design if you're a nerd, and has nothing to do with ACTUAL competition, only who's marketing appeals to you more.

So sure, in simple terms, increasing min. wages CAN influence inflation slightly, but hardly compared to those other things, and more so, the lack of competition pressure or substitution and inability to really have any affect on profit margins of competing firms is the culprit. This will only go away when things just get SO expensive that people just start bowing out completely of that segment. Not substituting for a competitor, but simply giving up that hobby, purchase, activity, entertainment, etc... for having NOTHING. At that point, "the market" has failed, the haves keep having more, and the have-nots keep having less, and you're left with a cesspool of a community while those with all the money can easily just pick up and move on to shelter themselves from the after affects.

 

This is the part that confuses me. Anybody who was invested in any way made a TON in the last couple of years. It has now drawn back some. Most reasonable people are still way ahead of where any projections would have put them. If we would have had slow growth to this point everyone would be happy. Since we had big increases and now some losses everyone is freaking out.

Obviously, there are other issues. If we keep seeing losses or if inflation doesn't get under control, it could get worse. I just think people are panicking way too early. Economic cycles are normal and we will likely come out of this just fine.

 

Umm. Duh.

Profits are generally derived based on a margin, you know, a percentage increase over the cost of production. 40% of $100 nets more than 40% of $10.

But yeah. Greedy corporations. Yup.

 

Remember too that these assets are dollar denominated, so as the value of the dollar drops relative to the infamous “basket of goods”, the drops in these asset prices is getting hammered at both ends.

 

Agreed, and he's known for quite a while that he shouldn't be in equities at his age. Especially tech, EV, etc.