On Saturday, September 21, 2019 at 8:11:57 AM UTC-4, -hh wrote:
> Bigbird wrote:
> > -hh wrote:
> >> Bigbird wrote:
> >>> > TomS wrote:
> >> >
> >> > > I closed out my CVX position today at a small gain.
> >> >
> >> > Not very believable given the market and your form.
> >> >
> >> > ...but easy enough to prove... if it were true.
> >>
> >> Based on his claims, his gains were very small:
> >>
> >> If it was 200 shares (~$25K), the gain was less than $27.
> >>
> >> Similarly, to have made a $1,000+ gain would have required
> >> 5611+ shares, requiring no less than ~$673,325 in capital.
> >
> > You are being very kind in assuming he just happened to get
> > out during the last 30 mins of trading the only time during
> > the day he would have had his nose above water... before
> > associated costs.
>
> I was merely noting that his claim wasn’t literally impossible.
> And from even the literary best case, his maximum gain potential
> of ~$27 ($26.10, actually) from $25K wasn’t anything to crow about.
'Nitpicky' clarification: this is as per the 200 shares baseline.
> > I doubt he covered his fees on both ends; given his readiness
> > to be dishonest I doubt he made any gain at all.
>
> Fidelity’s published fee is US$4.95 per fee. Times two trades
> is $9.90. This means that Tom’s theoretical max gain on his
> claim was actually $26.10, which is less than the $27 that I
> said “less than” on. I didn’t round the trade fees off to $10
> this time, but I will do so in the future.
>
> > A lot of gamblers are very unwilling to admit their losses
> > while crowing about their occasional wins.
>
> Tom is trying to deny that he was indeed gambling. And he
> also got lucky with his alleged ALXN gamble too: except for
> the ~hour where it bumped up where he allegedly sold, it’s
> been lower than 110 every day since.
In quasi-related news on the economy, a report on savings rates:
<
https://www.wsj.com/articles/americans-are-saving-more-and-that-isnt-necessarily-good-11569153600>
(Full Quote}
"From the 1980s through 2007, household saving followed a
predictable pattern. It typically rose after a recession as
people paid down debt and rebuilt balance sheets, then declined
as they grew more optimistic—and spendthrift.
That hasn’t happened during the current expansion. The personal-
saving rate, the portion of after-tax income that consumers don’t
spend, rose from 3.7% in 2007, at the height of the housing bubble,
to 6.5% in 2010, the year after the recession ended. But since
then, rather than falling, it has drifted up, to an average 8.2%
in the first seven months of 2019. That is higher than the average
for any full year since 2012, when incomes spiked as companies
pulled forward dividend and bonus payments to beat a tax increase."
TL;DR: savings rate has doubled, contrary to historical trends.
"“That is evidence to suggest that something structural has
changed, and it’s made the saving rate kind of sticky at higher
levels,” saidTiffany Wilding ,a U.S. economist at Pacific
Investment Management Co.
Saving, which is the slice of paychecks, dividends and other
earnings that Americans sock away, was up 17% in 2018 from
the previous year, according to recently revised figures
from the Commerce Department, beating consumer spending’s
5.2% and business investment’s 7.8%.
“The timing is no coincidence,” saysPaul Ashworth, chief
North American economist at Capital Economics. “The tax
cuts seem to have been saved.” He notes the saving rate
jumped by a full percentage point in January 2018, the
month after President Trump signed the Tax Cuts and Jobs Act
into law."
TL;DR: correlation to the 2017 tax cut?
"Economists point to other factors as well, including
greater caution among consumers scarred by the 2007-09
recession, aging baby boomers preparing for retirement
and a widening gap between the rich (who save a lot) and
the poor (who save little).
Higher saving can be positive when it represents prudent
behavior, for example preparation for retirement. It can
also act as a cushion against recession. Rainy-day funds
enable consumers—who account for two-thirds of economic
output—to continue spending despite a job loss, reduced
hours or slashed bonuses.
But whether savings serve as a recession cushion depends
in part on how they are distributed. Wealthier Americans
are less likely than middle- and lower-income families to
change their spending patterns after a windfall such as a
tax cut or a setback such as a recession.
“If you’re a billionaire, and you find $100 on the street,
you’re probably not going to rush off to Walmartto spend it,”
says Ian Shepherdson, founder of Pantheon Macroeconomics.
“But if you’ve got no money, and you find $100 on the street,
you are going to rush off to spend it.”
While the latest saving data aren’t broken down by income,
some economists say the recent rise is likely being driven
by the wealthy. Mark Zandi, chief economist at Moody’s Analytics,
estimates that the wealthiest 10% of Americans accounted for
more than three-fourths of the increase in the saving rate
since the tax cut."
TL;DR: top 10% is party responsible for ~75% of the increase.
"That cut increased after-tax incomes of the upper one-fifth
of households—those making at least $149,400 a year—by 2.9%,
versus 1.6% for the middle fifth and 0.4% for the bottom fifth,
according to the Tax Policy Center, a research group.
Joe Norflus, a retired investment banker in Essex Co., New
Jersey, whose income consists mostly of dividends and interest,
said he benefited from the law’s lower tax rates and saw his
net worth rise. But the earnings boost was “fairly insignificant”
relative to his overall net worth, so he used it to increase
his savings.
“The tax cut didn’t impact in any way, shape, or form my
spending habits,” Mr. Norflus said."
TL;DR: anecdotal affirmation that the tax cut failed to spur
increased spending at the top.
"On the other hand, economists say lower taxes did appear to
boost spending by lower- and middle-class families last year.
One sign: Sales were up 11% at discount retailers tracked by
Redbook Research, compared with 3.4% at department stores."
TL;DR: sales data indicating that the non-top 10% didn't save;
they are the ones who spent.
"Regardless of the cause, if saving outstrips investment
opportunities for a long time, some economists say, it can
hold down interest rates, inflation and economic growth. Such
“secular stagnation” may leave less room to cut interest rates,
making it harder for the Federal Reserve to boost growth during
downturns.
“Rather than being a virtue, saving becomes a vice,” said Gauti
Eggertsson, an economist at Brown University.
Mr. Ashworth said the data for a long time didn’t back the
argument that rising inequality would boost saving and weigh
on growth. That case looks stronger now that revisions have
raised the saving rate, he said."
TL;DR: with the increased savings concentrated in the top,
the mid/lower class lacks the savings to then spend if the
Feds try to spur the economy by an interest rate cut.
TL;DR2: next recession: the wealthy will just hunker down.
-hh