Author Topic: How much will the stock market fall if Elizabeth wins?  (Read 2754 times)

Castanza

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #20 on: October 02, 2019, 09:29:12 AM »
Elizabeth winning the nomination is a no-brainer to me. Bernie's voters will break for Warren when it becomes obvious he is not going to make it.

Here is a trillion for you, a trillion for you too, a trillion for the people in that corner, a trillion for the people sitting in the front, a trillion for the people in the parking lot. Everybody line up and pick up your trillion.

As the election season progresses, the math keeps progressing:
2+2 = 12
2+2 = 15
2+2 = 20
2+2 = 25

We've come a long way from the "Obama phone" days.


cwericb

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #21 on: October 02, 2019, 10:02:57 AM »
"Bernie Sanders Has Heart Procedure, Cancels Events Until Further Notice"

https://www.npr.org/2019/10/02/766402754/bernie-sanders-has-heart-procedure-cancels-events-until-further-notice

This may change things.

Politicians and diapers must be changed often, and for the same reason. - Mark Twain

Read the Footnotes

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #22 on: October 02, 2019, 10:25:59 AM »
Quote
LC please don't lecture us as your thinking is flawed.
It must feel that way when data is used to support an argument.

Why hasn't Trump eclipsed Obama's growth rates, despite slashing corporate taxes and removing "unneccessay" regulation?

Or to put it more bluntly, why don't you have evidence to support your argument?

LC, I don't think your thinking is flawed, but my words were flawed. Please don't include my statement as evidence. We actually agree on this one. What I was trying to say was something more along the lines of "Trump claims responsibility for any increase in the market, but the truth is . . ." Calling it a spike was a mistake on my part, especially because spike implies a fast change, which did not happen. Even more importantly, I was trying to make the same point you are. Trump is trying to claim responsibility for something when the facts do not support it.

If you wouldn't mind I would appreciate it if you would edit your list in your post or acknowledge that I had already admitted my mistake in a post previous to yours.

Viking

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #23 on: October 02, 2019, 10:46:03 AM »
Quote
LC please don't lecture us as your thinking is flawed.
It must feel that way when data is used to support an argument.

Why hasn't Trump eclipsed Obama's growth rates, despite slashing corporate taxes and removing "unneccessay" regulation?

Or to put it more bluntly, why don't you have evidence to support your argument?

LC, my original comment was in response to the title of this thread: “How much will the stock market fall if Elizabeth wins?”

Looking forward if Elizabeth Warren becomes President my guess is she will reverse the Trump tax cuts. This would reduce corporate earnings. This would result in a lower stock prices.

I also expect business confidence would plummet. This would result in much more caution. This might lead to lower investment which would slow the economy.

Druckenmiller last year in one of his interviews was very fearful that the US would move from one extreme (Trump) to another opposite extreme (Warren) and this could do real damage to the US economy.

LC

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #24 on: October 02, 2019, 11:11:57 AM »
RTF: There were two parts to your statement (both of which I disagreed with). The "spike" part - call it whatever adjective you want - is just the first part.

The second part which I did not bold was your assertion that market reaction was caused by "reduction in the uncertainty/ambiguity premium". Really this should be "discount" not "premium" but the point is you are trying to link Trump's business policies  with market growth.

My point is that market growth is independent of this policy. Had Obama's policies on tax and regulations stayed in place, I would argue the market and economy would generally be where it is right now.

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LC, my original comment was in response to the title of this thread: “How much will the stock market fall if Elizabeth wins?”

Viking, you replied to my post...I was simply (re-)replying :) But the point is, I disagree with the statement, "Trump has been very good for business".

Trump vs. Obama...Incredibly different economic policies.
Market and economic behavior....Incredibly similar behavior under both Presidents.

But I think we agree (both you and RTF). I would just amend your statements to: the US marketplace is very, very, very good for business :D
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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Re: How much will the stock market fall if Elizabeth wins?
« Reply #25 on: October 02, 2019, 11:45:04 AM »
RTF: There were two parts to your statement (both of which I disagreed with). The "spike" part - call it whatever adjective you want - is just the first part.

The second part which I did not bold was your assertion that market reaction was caused by "reduction in the uncertainty/ambiguity premium". Really this should be "discount" not "premium" but the point is you are trying to link Trump's business policies  with market growth.

My point is that market growth is independent of this policy. Had Obama's policies on tax and regulations stayed in place, I would argue the market and economy would generally be where it is right now.

Quote
LC, my original comment was in response to the title of this thread: “How much will the stock market fall if Elizabeth wins?”

Viking, you replied to my post...I was simply (re-)replying :) But the point is, I disagree with the statement, "Trump has been very good for business".

Trump vs. Obama...Incredibly different economic policies.
Market and economic behavior....Incredibly similar behavior under both Presidents.

But I think we agree (both you and RTF). I would just amend your statements to: the US marketplace is very, very, very good for business :D

Thank you for the reply LC. Again, I am trying to argue that Trump did NOT contribute to growth in the way that he claims and our arguments are quite compatible.

I know it's confusing, but "uncertainty premium" and "ambiguity premium" are terms of art in the field of economics and finance. They are most frequently used in quantitive finance and not value investing. These terms are inputs to multifactorial models attempting to explain or estimate or expand on the understanding of the equity risk premium. Again, I know it's confusing but the equity risk premium is called a premium, not a discount. The premium can be used to discount expected values, but it's called a premium.

My apologies, if my use of CAPM terminology caused confusion, especially on a value investing forum.

Here is an example of the terms in use. In tweets this week, Trump used the terms "civil war" in the United States and the term "Coup" with respect to the investigation in to the Ukraine phone call scandal. His use of these terms could increase investor's uncertainty in the possible future economic outcomes or their ability to estimate the likelyhood of various outcomes. This would increase the uncertainty premium and ambiguity premium, which increases the equity risk premium. That means the discount rate would increase because investors would want a larger premium to compensate for risk and the stock market would go down. Therefore one explanation is that the 2.7% drop in the S&P500 during the last two trading days is due in part to Trump's public statements increasing the uncertainty or ambiguity premiums.

Let me know if the use of the term premium is still not clear.

LC

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #26 on: October 02, 2019, 12:58:41 PM »
Not confusing just been a while since biz school :D

In quantitative finance which I am more used to the terminology is a bit different as increased vols can increase certain premiums of a derivative instrument...but again not really a value investing topic.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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RuleNumberOne

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #27 on: October 02, 2019, 07:45:51 PM »
For those Californians looking to escape the soon-to-become 69% short-term capital gains tax (under Elizabeth's "plan"), two possible locales:

Capital gains tax in France:
From 2018, a single flat rate tax of 30% is applied on savings and investment income and gains – comprising of income tax at 12.8% and social charges of 17.2%

Capital gains tax in Germany:
The tax rate is 25% plus 5.5% solidarity surcharge.

Canada:
In Canada, 50% of the value of any capital gains are taxable.

RuleNumberOne

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #28 on: October 02, 2019, 07:47:25 PM »
Must be chaotic next year as those with $50 million plan their escape from Elizabeth's 40% exit tax.

RuleNumberOne

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #29 on: October 02, 2019, 07:52:37 PM »
realclearpolitics average of polls shows Elizabeth beating Trump.

https://www.realclearpolitics.com/epolls/2020/president/us/general_election_trump_vs_warren-6251.html

Why do people claim Trump will beat Elizabeth? Electoral College victory is one possibility I guess.