# Stock Market thoughts (continued - no politics please!)

Discussion in 'Hangar Talk' started by FastEddieB, Oct 26, 2019.

1. ### Arm3Filing Flight Plan

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Not intending to cause a big derail and it has been a long time since my high school statistics class but you have mean, median and mode backwards. If Bezos walked into a room with even a thousand people it wouldn’t move the median or mode needle a bit but would skew the mean.

I only point it out because of the weight people put behind statistics in arguments. It can be misleading when they are used incorrectly whether intended or not.

From purple math (https://www.purplemath.com/modules/meanmode.htm):

“Mean, median, and mode are three kinds of "averages". There are many "averages" in statistics, but these are, I think, the three most common, and are certainly the three you are most likely to encounter in your pre-statistics courses, if the topic comes up at all.

The "mean" is the "average" you're used to, where you add up all the numbers and then divide by the number of numbers. The "median" is the "middle" value in the list of numbers. To find the median, your numbers have to be listed in numerical order from smallest to largest, so you may have to rewrite your list before you can find the median. The "mode" is the value that occurs most often. If no number in the list is repeated, then there is no mode for the list.”

2. ### MuseChaserPattern Altitude

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Not sure what the last couple posts had to do with the stock market... ?

1. We should take care of those that truly can not take care of themselves.
2. Those that CAN take care of themselves should be required to do so.
3. The better off a person is, the more money they make, and the more money they've accumulated over their lifetime, the more good they can do. Vilifying those who are productive and well off serves no good purpose.
4. Needs and wants are two VERY different things.
5. Minimum wage in NYS is now \$11.80, and there are "Now Hiring" signs EVERYWHERE. One person, working a 36 hour week for 40 weeks a year, would make \$16,992 a year.. far above the poverty level, but obviously not a desirable standard of living for most people. HOWEVER.. that's a minimum, entry-level job that was never intended to be a life-long career-path salary level, and I deliberately used 40 weeks instead of 52 and 36 hours instead of 40. Factor in another eight to ten weeks of earnings, maybe some overtime here and there, and the picture gets considerably brighter. There is no excuse for an able-bodied person not to be self-sufficient.

I could relate personal stories of my wife and I living on a combined income of just shy of \$13,000 a year, WITH a baby, and being happy and comfortable in 1984... or growing up in a mobile home and being happy and comfortable with very little... or deciding that I'd like to earn more so I did instead of following the line of work I REALLY wanted to follow... or deciding not to buy stuff we wanted but couldn't pay cash for... but those anecdotes seem to be greeted with labels such as "self-righteous" so I'll refrain. OK.. I didn't exactly refrain and snuck it in....

We all want to help those who truly need help.

Getting back to the stock market... social media, and the instantaneous, knee-jerk reactions to the constant barrage of click-bait-motivated sensationalist media coverage in large part causes these huge fluctuations. I am not concerned in the least, and am completely comfortable "letting it ride," and maybe viewing this as a tremendous buying opportunity. To be honest, compared to many here, I probably don't have much dough. On the other hand, my wife and I are living as comfortably as we'd like, all our wishes are fulfilled, and we sit around wondering what we are going to do, if anything, with our investments which we thought we would need in our golden years... and won't. Our three children are all grown, married, self-sufficient, and doing well. Eventually, our investments will be used to do a lot of good for others who can't help themselves. I'm glad to be able to do that.

3. ### denverpilotTied DownPoA Supporter

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Which number is that? The oft-quoted one doesn’t factor in those who don’t need or want work, retirees, young people, etc. At least the one that certain political folks use... which is why I ask. I know that’s not your intention, but a number like that one needs a source with the caveats listed. It also usually needs a reference to household income.

If I wanted to, or my illness requires it, I could technically drop to zero income. My wife would still have her salary. So if we were averaged, it would look terrible on a statistic of individual incomes.

But it would ignore our lack of debt, residual income from investing, and lower cost of living than in one of the coastal rat colonies.

We’d essentially be “force retired early”... or I would, anyway.

Also as an aside the poverty line is set too low.

Not sure who comes up with that number, but \$12,000 is pretty painful in any metro where someone that poor is likely to end up in, seeking other services.

But I do know an able bodied guy who has made that little living rural, who owns his home and his seriously beater pickup truck. He doesn’t want more. He does random odd jobs when he wants to.

“Poverty” is very situational and regional.

Even a few miles makes big differences. If I lived 20 miles west, my property taxes would be tripled. We don’t have or feel we “need” a number of services available 20 miles west.

I did vote for paving the road. It was a wash between damage to heavy duty vehicles and the tax increase. I did the math.

Also always vote for money for schools, but have no expectation they’ll use it very well. They know they have a PR problem caused by poor spending and they even wrote a request to better fund teacher salaries and restricting the tax increase to that, even restricting it to not pay administration staff... and they asked for that, very specifically, once ... since we’ve moved to the district. That one was a no brainer, yes.

But we do get the occasional doofus on NextDoor who wants a rec center... when we don’t even pay our firefighters yet. They get mad when you point that one out. Haha.

A reminder that they need to triple their property taxes to have those niceties, is not well received... but it’s just basic math.

My favorite was the one who said a pot shop would bring in enough taxes to pay for all of it. LOL LOL LOL.

I did the math for that one, too. I made the shop rent free and every dollar spent as profit. It was a few million short. Annually.

She was super angry. Oh well!!!

Fantasies are fun... it’s Jr High math, not even High School. I have no idea why people don’t bother to fire up a calculator...

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4. ### tspearPattern AltitudePoA Supporter

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lmao. There is not many places in NYS where you can actually live on 16K a year gross income. And the places you can live for that income, guess what, there are NO jobs!
As for career path, the issue is as a country we have outsourced (more to technology than anything else) those career paths that allowed people to make more money and grow.

As for 1984 income. I made 27K out of college in the early 90s; and it was a struggle for my wife and two kids to pay the bills. Often we had to"borrow" money form our parents that we never repaid. I now watch my two oldest (26 and 29); and I have helped them do budgets. There is absolutely no way they could even hope to survive on two times minimum wage let alone three times the federal standard. The reality is groceries are much more expensive, vehicle costs more (acquisition, maintenance
and insurance are all much more), rent of a small studio is much more... The list goes on, and I cover their cell phones and family vacations still. So there is minimal "wastage" on frivolous stuff.

Tim

5. ### David MegginsonPre-takeoff checklist

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It's a random walk, as much as matters to someone who's not a major institutional investor. If anyone claims they can actually predict the market, you have to ask yourself why they're working as a financial advisor or peddling books instead of just getting insanely rich.

https://www.amazon.com/Random-Walk-...m+walk+down+wall+street&qid=1583535644&sr=8-1

(Note that I don't fully agree with the efficient-markets hypothesis; it's just that the market is inefficient in ways we can't easily predict or exploit.)

6. ### MuseChaserPattern Altitude

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On 12K in 1984, which was, even adjusted for inflation, much less than 27K in the early 90s, I, my wife, and baby had no trouble paying our bills. We had no car payment (drove an old clunker I had paid cash for and did the work myself), paid the mortgage on our incredibly modest \$12,000 house, didn't take vacations, didn't go out to eat, didn't have cable TV, cell phones weren't a thing, etc, and we certainly didn't rely on our parents' assistance. Yet, somehow, we were insanely happy and thrilled with life. When we decided to have more kids, wanted a nicer house, etc., we worked towards those goals.
Like I said earlier, needs and wants are two very different things and it all comes down to your personal definitions of the two. There are PLENTY of places in NYS where you can live on \$17K (and, please, keep in mind that you rounded almost a thousand dollars down from my calculations, and my calculations were already deliberately conservative, with only 40 weeks worked out of each year and only 36 hours worked per each of those 40 weeks), and there are plenty of jobs available for those willing and able to work jobs that may not be the "management position" they are holding out for.
Your listing of costs, i.e., acquisition, insurance, and maintenance of a vehicle, rising grocery costs, cost of a "studio," all vary with geography, as you've alluded to. If one's earnings in a given locale are not commensurate with the cost of living the life one wishes to live in that locale, then one has some decisions to make. Find a way to make more, lower your standard of living and be happy with what you DO have and CAN afford, or move. I have been faced with that dilemma many times during my life. Not once did I try to assign blame for the fact that I did not have what I wanted, but rather made decisions that helped ameliorate the situation.

And... hey... how about that stock market, eh?

Last edited: Mar 6, 2020
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7. ### denverpilotTied DownPoA Supporter

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Agreed. Never lie to a poor kid.

I had an economics teacher give me a bad grade on a personal budget I wrote. Said it was unrealistic. I lived off of that exact budget for three years. He probably thought my family had the typical incomes in the neighborhood. I don’t know. But he penalized me for my honest budget.

Again, I tend to just say “I’ll show him” and work to do it. Why not? It’s a lot easier to start when you have nothing to lose. Lots of people can’t handle risk because they’re scared to lose what they have.

And I do think some parents rant and rave at home about evil rich people or it’s the soundtrack of their chosen form of political entertainment shows — and kids definitely get a horribly mixed message in those homes.

I usually help adults. It must be interesting to try to help kiddos. I don’t really have a way to do that.

Some are mentally abusive and tell kids they can’t make it at all. (Usually depressed alcoholics...) And interestingly the kids go about 50/50 in those environments. Half do believe they’ll fail and it takes massive intervention later to convince them of their own worth. The other half get mad and get away from the abuser and succeed, in spite of the never ending failure message.

That’s the extreme, but it’s a spectrum of messages sent by various parents. It would seem that 45%/55% invested number has to be somewhat linked.

I’ve met people who barely had a pot to pee in who religiously invested and saved, and people with two six figure earners who are bankrupt on paper, if one loses their job.

What people feel they “need” is truly fascinating. Some invest, some don’t. But definitely kids should get good information on the game.

Not a fan of my high school economics teacher, other than yet another guy to lift a middle finger toward, who lowered my GPA for handing him a document that was my reality. Screw that guy and his “B-“.

He also never once mentioned investing. Ever.

Not to sound too negative toward him, he covered college level Econ intro courses fairly well, and I could essentially do other stuff on my laptop during those lectures and pass with an “A”. LOL. Easily. So he wasn’t completely useless. I probably should have CLEPed those classes. But I didn’t know about that option back then.

Huge fan of public libraries. I learned more useful things from them than anything in public school. I’ll always vote to expand libraries. I wouldn’t have invested much or at all, if it weren’t for library books on the topic. Sad nothing at all was taught about it in my public school.

Business classes as electives described only business and didn’t apply it to personal finance, and the economics curriculum had a short section on it, and you see how it went, above. And nothing on investing.

So yup. Lots don’t participate in the stock market because they have no information about it. That’s disappointing.

I hear that the high school personal finance stuff has changed significantly since back then, but I can’t say I’ve had any opportunity to confirm it.

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8. ### Half FastFinal Approach

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Yes to all the above. And now that they’re grown, both are generous with time and money and both are very kind, caring people.

9. ### Half FastFinal Approach

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You miss my point.

Go there. In addition to mere money, I have donated time and professional services in Haiti. Seeing that place first hand will change your perspective on poverty. Especially when you come to understand why it’s so bad, and that the other half of the same island is quite different.

Go there.

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10. ### jspilotCleared for Takeoff

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https://aspe.hhs.gov/2019-poverty-guidelines

There is a chart there that defines the poverty line. Also, the other article I sourced in one of my other posts explained exactly your point about how it includes children, the elderly, the unemployable, etc... my question though is, while those people may add to the overall number it does not negate the fact that- 1. these are still people and 2. The government gets to determine the poverty line and the number.

My goal is not to convince anyone of anything but just add some facts to the discussion.

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11. ### jspilotCleared for Takeoff

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I get it— I Point this out to my students all the time that compared to other places in the world even to poorest here are way better than their places around the world. Your point is well taken but I just think that it is a little missing the point in a thread about investing and how wealth can be generated through investing to claim that even the poorest here are better off than most. It’s simply not that easy nor is that enough to slam the lid on the conversation by saying “at least we are better than those people.”

12. ### jspilotCleared for Takeoff

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I’m trying my friend to make my class as real as possible. I got my students playing in “The Stock Market Game” and have participated in it every year for 14 years as a teacher even when I taught in the middle school. It’s an investment simulation where they compete against other schools given 100,000 dollars to invest with. It’s a great simulation that gives them a real experience. Had one kid finish 4th one time in the region out of like 400 students. Had like a 22% return on the portfolio for 6 months with just some instruction and guidance from me! So there are a few of us out there trying to help the financial literacy— but I could not agree more that we need, as a nation, to give everyone a much better sense of how the system works. I had a colleague of mine today come up to me and notice I was checking my investments. Smart person who knows a lot, ask me straight away— how would I go about getting some of those stocks you own? After a second or so I explained it and she was like— “hmmm pretty easy.”

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13. ### Brad SmithLine Up and Wait

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Where my trophy? I'm not gonna do a d**n thing until I get a trophy!

14. ### denverpilotTied DownPoA Supporter

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I knew. That’s why I said I knew you weren’t intending to mislead, like certain (hmm, all) politicians and their groupies.

Have heard of it. Pretty cool. As you can imagine, nothing like that from my high school Econ teacher. Ha.

But I can recite the old schtick about guns and butter ... as if anyone normal gets to choose how many guns are purchased. Or if they’re bought on a credit card.

Plus butter is a terrible choice of gun lubricant.

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15. ### Chip SylverneFinal Approach

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Fear is the poison of our lives.
I 'd have to go back and reread the post, but I think the point I was trying to make was about skew. Harkening back to the dark ages of stat class, once Bezos walks into the room, the distribution goes way asymmetric, with the long tail on the left meaning a negative skew pulling both the mean and median representations from what would occur in a normal distribution. But you are absolutely correct in that's how stats are chosen to represent the picture you want them to.

Thanks for the refresher!

16. ### topgun260Pre-takeoff checklist

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OIL futures dropped over 20%! Currently sitting at \$32.50 a barrel!

Maybe Avgas prices will drop.

At what price do they start shutting things down in the oil fields?

17. ### bflynnFinal Approach

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18. ### belbertPre-Flight

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Keep dreaming-- we could only be so lucky.

19. ### Chip SylverneFinal Approach

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Fear is the poison of our lives.
Dow futures down 1024. 10yr at .70.
Rough day tomorrow. This sucks.

20. ### denverpilotTied DownPoA Supporter

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21. ### FastEddieBFinal Approach

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22. ### Checkout_my_SixTouchdown! Greaser!

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are you calling the low.....lol

23. ### DFH65Pattern Altitude

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I have been there twice and you are not wrong. Admittedly it is a complex problem with very few realistic solutions in the short term. Not to minimize the suffering of the poor here in American but overall it is at a very different level.

24. ### topgun260Pre-takeoff checklist

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Stock Market Level 1 circuit breaker tripped - SPX -7%

25. ### denverpilotTied DownPoA Supporter

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26. ### tspearPattern AltitudePoA Supporter

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They have roughly the same amount of grease/oil content.

Tim

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27. ### schmookeegPattern AltitudePoA Supporter

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I just bought into VXX while on a boring conference call, so you can expect a calm and barely-moving market for awhile.

Also started shifting my powder out of bonds. Moving 2%/day for the next 10 weeks, so hoping to use the falling knife to carve me a slice of S&P at a reasonable price. Of course this means the market will snick ever upward over the next 10 weeks before crashing hard on week 11, based on my past performance.

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28. ### 1RTK1Cleared for Takeoff

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I am moving into the market with monies I had on the side also, from past history it's bound to crash even more..LOL Some really good buys out there...

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29. ### Half FastFinal Approach

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I'm wondering whether this might be the time for me to shift everything into precious metals - brass and lead.

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30. ### 1RTK1Cleared for Takeoff

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A good stock pile of lead has always been wise, in komnifornia we now have to use copper though

31. ### Half FastFinal Approach

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Hasn't the PRK confiscated everything short of slingshots by now?

32. ### Sluggo63Cleared for Takeoff

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I’ve never been to Haiti, but I’ve been to Mumbai quite a bit and I can’t imagine any of the poor people in the world being worse off than the Indians living in the slums of Mumbai.

There was a young Indian man who grew up in the slums of Mumbai and worked as a leather worker. He eventually made his way out of the slums but you could hire him to take you on a guided tour of the slums he grew up in. Although I think it would be fascinating I can’t bring myself to hire him. I think it would be too heartbreaking.

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33. ### 1RTK1Cleared for Takeoff

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We are damn near there, give it a few more years

34. ### Jamie KirkLine Up and Wait

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Nah, we are plenty armed here.

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35. ### wilkerskPattern Altitude

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Here's a stock market thought: The S&P 500 is actually almost exactly where it was 1 year ago. No Toto, the sky is not falling, ....yet!

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36. ### 1RTK1Cleared for Takeoff

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That will keep a few critters at bay.

37. ### Half FastFinal Approach

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Nice looking squirrel rifle!

38. ### topgun260Pre-takeoff checklist

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Airsoft doesn't count!

39. ### Jamie KirkLine Up and Wait

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No air
soft here

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