seeking alpha article Collectors Universe - A Scandal Waiting To Be Exposed

swarmee · #1 07-05-2019, 09:45 PM

I'm not keen on all the short and long talk (I only invest in stock/bond funds), but I did find it interesting that the bond rates inverted recently. That's a common indicator of weakness in the market and usually a precursor to a recession.

Dpeck100 · #2 07-05-2019, 09:51 PM

Quote:

Originally Posted by swarmee

I'm not keen on all the short and long talk (I only invest in stock/bond funds), but I did find it interesting that the bond rates inverted recently. That's a common indicator of weakness in the market and usually a precursor to a recession.

The rate structure is so complicated right now.

The rest of the world has much lower rates dragging ours lower. In many cases negative. That said the rates in the US will be low forever at this point because the debt is so large the interest expense can't be handled.

The budget deficit has risen for various reasons but the largest is interest expense. People are just not using common sense. When you have 23 trillion of debt and you constantly go to the markets for cash you are at the mercy of the current coupon rate. Our budget is around 4.3 trillion and a two point increase that lasts for five years will add well over 120 billion of interest and it just goes up over time as more debt is issued.

Low rates are here to stay.

Peter_Spaeth · #3 07-05-2019, 09:55 PM

Quote:

Originally Posted by Dpeck100

The rate structure is so complicated right now.

The rest of the world has much lower rates dragging ours lower. In many cases negative. That said the rates in the US will be low forever at this point because the debt is so large the interest expense can't be handled.

The budget deficit has risen for various reasons but the largest is interest expense. People are just not using common sense. When you have 23 trillion of debt and you constantly go to the markets for cash you are at the mercy of the current coupon rate. Our budget is around 4.3 trillion and a two point increase that lasts for five years will add well over 120 billion of interest and it just goes up over time as more debt is issued.

Low rates are here to stay.

I heard an interview the other day with Campbell Harvey (the pioneer of the inverted yield curve theory) and lost my focus about halfway through it. Apparently it's been a pretty consistent indicator though.

Dpeck100 · #4 07-05-2019, 10:02 PM

Quote:

Originally Posted by Peter_Spaeth

I heard an interview the other day with Campbell Harvey (the pioneer of the inverted yield curve theory) and lost my focus about halfway through it. Apparently it's been a pretty consistent indicator though.

Yes it has.

There are always different factors that influence markets and we have been in uncharted territory for years.

I am not sure what to think. Logic would say the business cycle still exists and a slow down of some kind would be natural. On the other hand anyone with a pulse can find a job. The system doesn't have the bad debt that existed in the mid 2000's so if there is a contraction it won't be anywhere near as deep.

Today the jobs numbers came out much stronger than anticipated. It was good news and bad news for markets because stock investors want the FED to lower rates.

I find it hard to see a serious downturn with this strong of job market but anything is possible. We have been battling a weak global economy for quite sometime and the US has been the leader and their weak performance could easily finally catch up with us.

It is really hard to know and most economists have so much position bias based on politics that they aren't much help.

Peter_Spaeth · #5 07-05-2019, 10:14 PM

Quote:

Originally Posted by Dpeck100

Yes it has.

There are always different factors that influence markets and we have been in uncharted territory for years.

I am not sure what to think. Logic would say the business cycle still exists and a slow down of some kind would be natural. On the other hand anyone with a pulse can find a job. The system doesn't have the bad debt that existed in the mid 2000's so if there is a contraction it won't be anywhere near as deep.

Today the jobs numbers came out much stronger than anticipated. It was good news and bad news for markets because stock investors want the FED to lower rates.

I find it hard to see a serious downturn with this strong of job market but anything is possible. We have been battling a weak global economy for quite sometime and the US has been the leader and their weak performance could easily finally catch up with us.

It is really hard to know and most economists have so much position bias based on politics that they aren't much help.

Yeah ask 10 economists you'll get 10 answers. Every day for 20 years I've seen one or more of them predicting imminent doom. Always the same mantra. It's laughable.

Leon · #6 07-06-2019, 10:30 AM

Quote:

Originally Posted by Peter_Spaeth

Yeah ask 10 economists you'll get 10 answers. Every day for 20 years I've seen one or more of them predicting imminent doom. Always the same mantra. It's laughable.

In my very brief and small investing career I have found it best to find a good course and stick to it. After I made a few small mistakes I just looked at what Warren Buffett said and went there. So far so good....I am a long term investor though and Buffet has always said he sucks at short term but long term does ok.

With respect to this article in the original post, it doesn't look to have hurt the stock so far.

Peter_Spaeth · #7 07-06-2019, 10:40 AM

Quote:

Originally Posted by Leon

In my very brief and small investing career I have found it best to find a good course and stick to it. After I made a few small mistakes I just looked at what Warren Buffett said and went there. So far so good....I am a long term investor though and Buffet has always said he sucks at short term but long term does ok.

With respect to this article in the original post, it doesn't look to have hurt the stock so far.

I believe it was a short attack, not a legitimate news story. Typically those don't have any lasting effect. And yeah, whatever the market knows about the scandal doesn't seem to have affected CLCT a bit.

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