Forbes: The Fed Is Going To Buy Stocks

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Locked
Topic Author
pcsrini
Posts: 192
Joined: Mon Jan 24, 2011 10:51 pm

Forbes: The Fed Is Going To Buy Stocks

Post by pcsrini »

https://www.forbes.com/sites/kevincoldi ... 708a2feb49

Given the successful intervention by the Fed in 08-09, and the bigger one more recently in March, the article forecasts that the next act for the Fed is to buy stocks. There is also a brief discussion on carry trades, the importance of liquidity, and debt financed stock buybacks.

Thoughts?
junior
Posts: 1092
Joined: Wed Sep 10, 2008 6:14 pm
Contact:

Re: Forbes: The Fed Is Going To Buy Stocks

Post by junior »

I think you shouldn't link to a random article on the internet unless you know anything about the authors track record.
User avatar
Sheepdog
Posts: 5664
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: Forbes: The Fed Is Going To Buy Stocks

Post by Sheepdog »

junior wrote: Sat Jul 18, 2020 12:12 pm I think you shouldn't link to a random article on the internet unless you know anything about the authors track record.
Yes.......Anyway, not actionable..
All that truly matters in the end is that you loved.
Robot Monster
Posts: 1805
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: Forbes: The Fed Is Going To Buy Stocks

Post by Robot Monster »

Someone should keep track of predictions like this and see how they play out. Instead of saying "ignore the noise" it would be better to be able to point out how often predictions fail and have proof.
“There are no answers, only choices.” ― Stanislav Lem, Solaris
Topic Author
pcsrini
Posts: 192
Joined: Mon Jan 24, 2011 10:51 pm

Re: Forbes: The Fed Is Going To Buy Stocks

Post by pcsrini »

junior wrote: Sat Jul 18, 2020 12:12 pm I think you shouldn't link to a random article on the internet unless you know anything about the authors track record.
Thanks! I googled the author before posting, and he is a professor at UC Berkeley Haas school. Also, a bit harsh to say its random when it's not a subjective blog, but is on relatively widely circulated magazine. Sorry if I missed something ..
JonnyB
Posts: 688
Joined: Sun Jan 19, 2020 5:28 pm

Re: Forbes: The Fed Is Going To Buy Stocks

Post by JonnyB »

pcsrini wrote: Sat Jul 18, 2020 12:21 pm
junior wrote: Sat Jul 18, 2020 12:12 pm I think you shouldn't link to a random article on the internet unless you know anything about the authors track record.
Thanks! I googled the author before posting, and he is a professor at UC Berkeley Haas school. Also, a bit harsh to say its random when it's not a subjective blog, but is on relatively widely circulated magazine. Sorry if I missed something ..
Let's parse that, shall we. He is not a professor. He is a retired hedge fund manager who is a part time lecturer.

And widely circulated magazine does not automatically equate to reputable.
Robot Monster
Posts: 1805
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: Forbes: The Fed Is Going To Buy Stocks

Post by Robot Monster »

pcsrini wrote: Sat Jul 18, 2020 12:21 pm ...it's not a subjective blog, but is on relatively widely circulated magazine.
Here's another article from them, "Why The Fed Will Go Negative".
https://www.forbes.com/sites/vineerbhan ... 219421e3bc

I bet there are a lot of reputable people who think the Fed is going to do neither of these things who don't get their articles about such published. Why? Because of headline clickability, IMO.
“There are no answers, only choices.” ― Stanislav Lem, Solaris
Topic Author
pcsrini
Posts: 192
Joined: Mon Jan 24, 2011 10:51 pm

Re: Forbes: The Fed Is Going To Buy Stocks

Post by pcsrini »

Thanks, all but I don’t think a lot of folks would have expected the level of Fed support in March to inject liquidity and support corporate bonds. There are a number of threads expressing surprise at how well the market has done since March, and the reason cited most often is “don’t fight the fed”. If there is a prolonged downturn, is this a huge stretch ? Has the Bank of Japan not purchased stocks ? I would really like to be educated why this could not happen here. Thanks again ..
DesertMan
Posts: 311
Joined: Tue Dec 07, 2010 12:54 pm

Re: Forbes: The Fed Is Going To Buy Stocks

Post by DesertMan »

Let's make it actionable then.

The question is, is the notion that the Fed will be buying stocks already priced in to the market? If so, or not, how would that affect a person who has cssh on the side and is deciding whether to increase equity allocation?

IMO, I think that it is priced in and this fact explains the monster rally. As such the general principle of staying the course should apply. The person considering buying in may wish to hold off in the event that the recession worsens and the cash is needed for emergencies.
Last edited by DesertMan on Sat Jul 18, 2020 1:41 pm, edited 1 time in total.
Topic Author
pcsrini
Posts: 192
Joined: Mon Jan 24, 2011 10:51 pm

Re: Forbes: The Fed Is Going To Buy Stocks

Post by pcsrini »

DesertMan wrote: Sat Jul 18, 2020 1:38 pm Let's make it actionable then.

The question is, is the notion that the Fed will be buying stocks already priced in to the market? If so, or not, how would that affect a person who has cssh on the side and is deciding whether to increase equity allocation?
Thanks for framing it correctly.
Robot Monster
Posts: 1805
Joined: Sun May 05, 2019 11:23 am
Location: New York

Re: Forbes: The Fed Is Going To Buy Stocks

Post by Robot Monster »

pcsrini wrote: Sat Jul 18, 2020 1:34 pm If there is a prolonged downturn, is this a huge stretch ? Has the Bank of Japan not purchased stocks ? I would really like to be educated why this could not happen here. Thanks again ..
Isn't the article saying the Fed will buy stocks, not could conceivably?
“There are no answers, only choices.” ― Stanislav Lem, Solaris
Misenplace
Moderator
Posts: 2925
Joined: Mon Feb 01, 2016 9:46 pm

Re: Forbes: The Fed Is Going To Buy Stocks

Post by Misenplace »

This topic has run its course (non-actionable, US economic policy) and has been locked. See Non-actionable (Trolling) Topics:
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
  • US or world economic, political, tax, health care and climate policies
  • conspiracy theories of any type
  • discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
Speculation on possible Federal monetary policy is off-topic for the forum.
Locked