Rocky Mountain Wall Street

Dedicated to debugging the complexity of Wall Street. Not investment advice.

[Rocky Mountain Wall Street @mountain_wall]

@StockSavvyShay @KobeissiLetter The danger of NTM is that analysts tend to inflate expectations in euphoric times. Once the music stops, it doesn't have to be a systemic financial disaster for every one of these companies to be undervalued.

Also, these multiples are high on a historical basis fwiw.

[Rocky Mountain Wall Street @mountain_wall]

An absolutely reckless financial take from JPM's Jack Manley.

[Lisa Abramowicz @lisaabramowicz1]

Here's an argument from JPMorgan's Jack Manley that higher rates are actually inflationary at this point, and prices won't stabilize more significantly until the Fed starts cutting rates. https://t.co/h1doJ5Z2o2

[Rocky Mountain Wall Street @mountain_wall]

@GMillerMortgage @SamanthaLaDuc What about it supports the "need" to cut? Just b/c pce numbers are down? Inflation is only one part of the mandate. Economic and unemployment data are strong. There is no need to front run potential issues and cut. The only thing inflation coming in line should do is avoid hikes.

[Rocky Mountain Wall Street @mountain_wall]

@jasonpcarter @MLDataTorturer @spectatorindex Imagine a world where a college degree is a scarce commodity only given to those with very strong grades because we made it free for "everyone" and don't have the capacity or the government funds to afford education for "everyone".

Just look at HC north of the border.

[Rocky Mountain Wall Street @mountain_wall]

@jsun1993 @Mementium @NickTimiraos Fire to the flame. Which is the last thing they would like to do. One could argue that it is an election year, so logic be damned. However, Fed Chairs Powell cares more about his long-term reputation over who is in office.

Last thing I'm doing is listening to WS about cuts.

[Rocky Mountain Wall Street @mountain_wall]

@jsun1993 @Mementium @NickTimiraos Which, quite frankly, there is no need for. The economy is running well, and the market is string. Financial conditions are quite easy from a historical standpoint.

If inflation data continues to rear its head and accelerate upward, cutting rates would just add 2/x

[Rocky Mountain Wall Street @mountain_wall]

@jsun1993 @Mementium @NickTimiraos Because the Street has been right all along the way up? And were right about 7 cuts earlier this year?

I'd rather listen to the Fed and data themselves rather than what Wall Street consensus thinks sinc they often get it wrong.

[Rocky Mountain Wall Street @mountain_wall]

@ErinODPhoto @robbystarbuck The easy way around this is a reduced tax %s on staples while taxing discretionary items at a higher %. Luxury goods at an even higher %.

Nothing crazy, but developing a step up system wouldn't be hard in today's computerized age.

[Rocky Mountain Wall Street @mountain_wall]

@caringguy1957 @annvandersteel You know the Trump tax plan is why the standard deduction doubled in size, right? Not Biden...

You might want to double-check your facts on that post because that wasn't the only incorrect statement you made.

[Rocky Mountain Wall Street @mountain_wall]

@TopherJames5 @TripleNetInvest @BillAckman Then maybe leave the site you despise so much?

Might save you a few brain cells 🤷

[Rocky Mountain Wall Street @mountain_wall]

@KobeissiLetter Market was horribly wrong predicting rate hikes. My money is that they are equally wrong about rate cuts. Betting on what they want vs. what the Fed will likely do.

Saw downside surprises as the Fed was more aggressive raising rates, should see again as they don't cut/as quick.

[Rocky Mountain Wall Street @mountain_wall]

@theyieldpages @foxisdeadtome @TaviCosta On some companies, yes, but those are through some of their other funds, which spans all kinds of asset classes that make up much less AUM than the passive index funds. Those companies where that occurs are not the large cap names.

[Rocky Mountain Wall Street @mountain_wall]

@foxisdeadtome @TaviCosta This is largely misleading as all those companies "ownership" is mostly through passive index funds. They don't really own those shares, although yes, they do most of the proxy voting.

But let's not pretend they have ownership rights to their fund w/ control and board seats.

[Rocky Mountain Wall Street @mountain_wall]

@Forklift5909 @PauloMacro @FusionptCapital What changed in July and October. Treasury issuance. In July, Yellen began issuing higher coupon long bond debt, in October she finally adjusted to have her issuance meet demand on the short end of the curve.

It helps for now, but is kicking the can 1-2 years until it comes due.

[Rocky Mountain Wall Street @mountain_wall]

@TheReal50972902 @whatsdasource @BobEUnlimited But yes you are correct, growthier stocks are longer duration equities than mature steady cash flow companies.

I mostly avoided saying all that in the initial response as I figured it was pretty much common knowledge for anyone in finance.

[Rocky Mountain Wall Street @mountain_wall]

@TheReal50972902 @whatsdasource @BobEUnlimited That was the discount rate comment. Which does get applied to many more valuation methods than simply DCF models. However worth noting not all funds on Wall Street don't tie their discount rate to the 10yr. But enough that it'll have an impact for sure.

[Rocky Mountain Wall Street @mountain_wall]

@TheReal50972902 @whatsdasource @BobEUnlimited Maybe not. But it's also not incorrect and could easily be what someone means by that statement. As well as a variety of other things such as the discount rate and more.

[Rocky Mountain Wall Street @mountain_wall]

@whatsdasource @BobEUnlimited Companies behind the stocks issue bonds, which they have to pay back. Additionally, many companies invest excess cash and may own bonds on their balance sheet as well. Several ways you can be exposed to bonds/interest rates by owning stocks.

[Rocky Mountain Wall Street @mountain_wall]

@me_gutsy @MattWalshBlog Major issue here is servings jobs are the one job that has had an automatic increase with inflation.

Between tip culture increasing to larger %s and food inflation raising food bills. Servers at high end restaurants have the potential to make quite a bit really.