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Why Most Investors Will Never Go Back To Stocks Again, In One Chart

Tyler Durden's picture




 

The simple answer: the risk/return is simply not worth it.

Whether it is two recent yet "generational" crashes still fresh in most investors' minds, or the countless micro flash crashes witnessed daily and countless market fragmentation events thanks to the ubiquitous penetration of HFT in every asset class which have led to partial or wholesale market closures and a risk to principal far beyond what is embedded in the "fundamentals", not to mention the risk that faith in central planning simply runs out in any given moment, for many equities are simply, as SocGen puts it, "too scary."

 

In short, for most return of capital is now far more important than return on capital.

We note this just in case Steve Liesman is confused "why"...

Source

 

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Tue, 11/03/2015 - 16:54 | 6745617 centerline
centerline's picture

Yeah, yeah... tell this to the pension funds and granny/grandpa. Without those "rule of 7" returns (plus some) Alpo is going to be what's for dinner sooner rather than later.

Tue, 11/03/2015 - 17:10 | 6745725 ToSoft4Truth
ToSoft4Truth's picture

People seem to be opting for Tuna at Wal-Mart:

ALPO Wet Dog Food, Prime Cuts in Gravy Variety Pack, 13.2 oz Cans, Pack of 12  

$8.77    5.6¢ / oz

Spam Lite Canned Meat, 12 oz

$2.50    20.8¢ / oz

Great Value Chunk Light Tuna in Water, 5 oz, 4 ct

$2.96    14.8¢ / oz  (Out of stock)

Tue, 11/03/2015 - 17:34 | 6745850 centerline
centerline's picture

And the shelf life on the Walmart Tuna is probably better as well! 

Tue, 11/03/2015 - 17:35 | 6745863 Sanity Bear
Sanity Bear's picture

and it's not all that terribly radioactive!

Tue, 11/03/2015 - 17:55 | 6745981 Son of Loki
Son of Loki's picture

Marc Faber :

 

"Say you're a young person and you're just starting to work. So take me in the 1970s. In the U.S., with 20 hours of work, I could buy the S&P 500 (.INX). Now you need more than 90 hours of work to buy the S&P 500 if you're young, with a medium income," Faber told CNBC in an interview.

"The Fed has basically created with their colleagues in Japan and at the European Central Bank (ECB) and the Bank of England (BOE), they've created a colossal asset bubble. And the returns going forward will be disappointing."

Despite Wall Street's gains Monday, Faber noted that the gains are not evenly spread among stocks.

The Federal Reserve has inflated an asset bubble and that's going to damp market returns, perma-bear Marc Faber, publisher of The Gloom, Boom & Doom Report, told CNBC Tuesday.

Faber's remarks follow downbeat assessments from the likes of former Pimco co-chief executive Mohamed El-Erian and Nobel economics laureate Robert Shiller, who have recently spoken on the increasing odds of a US recession and frothiness in stock markets, respectively.

 

https://www.yahoo.com/realestate/news/dr-doom-calls-bubble-adding-030300...

 

 

Tue, 11/03/2015 - 18:10 | 6746051 Brooks_Orpington
Brooks_Orpington's picture

I like Faber, but the numbers he uses are kind of distorted for effect.  Largely because of currency devaluation/inflation over the years, I bought my first house for about 2% of my current income.  Now, nobody can buy a house for 2% of their income.  The sky must be falling.

Tue, 11/03/2015 - 18:49 | 6746216 N2OJoe
N2OJoe's picture

Or maybe housing is in a massive bubble too...

Spoiler alert: It is.

Wed, 11/04/2015 - 00:12 | 6747303 old naughty
old naughty's picture

was it just me, or you see too...

that the fangs of the vampires are growing larger, longer, and point-ier, no?

Tue, 11/03/2015 - 17:54 | 6745977 giggler321
giggler321's picture

>>ALPO Wet Dog Food, Prime Cuts in Gravy Variety Pack, 13.2 oz Cans, Pack of 12

Well since the Jimmy Dean 16oz sausage is now 12oz I can't feed my family on it so I'm just gonna have to try that ALPO Wet stuff as my patty's now.  Forget that Maple and sage, I'm not from the north...

https://www.youtube.com/watch?v=f4RNb3tt0LM

Tue, 11/03/2015 - 16:53 | 6745618 EscapeKey
EscapeKey's picture

i wouldn't call them "too scary" - i just think it's a rigged game

Tue, 11/03/2015 - 16:56 | 6745634 15horses1donkey
15horses1donkey's picture

trying to make sure this isn't rigged, but could do with some help.

http://zhc0.com

Zero Hedge Coin 0 digital fan token

Tue, 11/03/2015 - 17:00 | 6745645 hedgeless_horseman
hedgeless_horseman's picture

 

 

Of course the stock market is rigged.  How else do you think Wall Street pays for all those weekends in The Hamptons with coke and hookers?

 

1. The Milk Bottle Pyramid

Knock them all over and win a prize, promises the barker. The reality: Bottom pins can be filled with lead, making them as heavy as 10 pounds each. The softballs you throw may be filled with cork to make them lighter than regulation balls. And the bottles may be stacked against a backdrop curtain that helps prevent them from falling.

2. The Basketball Shoot

Carnival rims may be smaller than normal and oval-shaped, not round, and may be positioned higher than regulation to prevent a score other than with a difficult high-arching swish. Balls are overinflated to make them super-bouncy.

"And there may be netting or other items behind the rim designed to interfere with your depth perception," notes Glenn Hester, a Georgia police officer and magician who investigates carnival games fraud. He's got a book too, Carnival Cop.

3. The Balloon Dart Throw

Balloons are underinflated to deflect even well-thrown carnival darts, which are often lighter than store-bought types. Their tips may be dulled or broken off.

4. The Ring Toss

The rings are just a hair wider than the neck of the target bottle or spike, says Hester, and are made of hard plastic to facilitate extra bouncing. If the carny shows it can be done, you should suspect he's using a larger ring than you're given or that he scores by dropping it from directly overhead, a move that, like the Basketball Shoot, is virtually impossible from the player's position.

5. Tubs of Fun

The goal is to toss two softballs into a large tub. You may remember this as the Bushel Basket Toss. But farming baskets have been replaced with plastic "muck" buckets from home improvement stores so that the ball gets extra bounce.

The real trick: "From inside the booth, the carny tosses a softball and from his vantage point, it stays inside the tub," says Howard. "Then he gives you the second softball for a practice throw — and it stays in for a win." Why? The carny's first ball remains inside the tub to deaden it and prevent your toss from bouncing out. But once you hand over your money, he removes both balls and hands them to you. Without a deadening ball, guess what? Your first toss bounces out.

"You might as well throw your second ball across the midway because no way it will stay inside the tub, either," says Howard.

6. Shoot the Star

With an air gun, you try to shoot a pattern around a paper-mounted star so that it falls free, but the real bull's eye is on you. To thwart your marksmanship, the provided ammo is smaller than traditional BBs and in short supply. Plus the rifle's sights may be tampered with and its air pressure reduced so that many shots simply bounce off the target paper, says Howard.

7. The Duck Pond

In this favorite among younger children, the goal is to retrieve a plastic duck with a fishing pole from a makeshift pond — and nearly everyone is a winner … sort of. "The ruse is to get you to keep playing for the better prize," says Howard. "But on the bottom of each duck is an indicator of the prize category and 99 percent are marked for a 'slum' prize — carny jargon for junk."

http://www.aarp.org/money/scams-fraud/info-07-2012/rigged-carnival-games...

Tue, 11/03/2015 - 17:03 | 6745673 Raymond_K._Hessel
Raymond_K._Hessel's picture

good stuff - reminds me of an episode of "Community" {highly under-rated show imo} during its final, online season

http://www.avclub.com/tvclub/community-grifting-101-218982

https://screen.yahoo.com/community-episode-9-grifting-101-070001340.html

Tue, 11/03/2015 - 17:26 | 6745809 Ghordius
Ghordius's picture

+1 .... are you kidding me? regulations?

Tue, 11/03/2015 - 17:58 | 6746008 Brooks_Orpington
Brooks_Orpington's picture

Loved the post.  It took me back to the travelling carnival that passed through our small town when I was a youth.  Never did too well at the duck pond.

Serious question here; honestly not trying to break your stones...

If we all know the game is rigged, why don't we join the riggers rather than sit on the sidelines?  I see so many posts decrying the rigged game, but if you join the riggers and profit from it you are scorned.

Doesn't make much economic sense to me.

 

Tue, 11/03/2015 - 20:03 | 6746506 Help Is Not Coming
Help Is Not Coming's picture

If we all know the game is rigged, why don't we join the riggers rather than sit on the sidelines? I see so many posts decrying the rigged game, but if you join the riggers and profit from it you are scorned.

I'll be happy to join the riggers rather than sit on the sideline and I'll do that the moment that I'm allowed to have a seat on the NYSE, or have my own HFT outfit where I can front run all of my customers, or I'm allowed to issue my own Credit Default Swaps, or sell other ridiculous debt obligations to small unsophisticated municipalities, etc. The problem is that you can only join in profiting from the rigged game if you are a "Member of the Club" and as George Carlin said "It's a big club and you ain't in it."

Tue, 11/03/2015 - 20:58 | 6746717 Brooks_Orpington
Brooks_Orpington's picture

Thank you for the thoughtful reply.  I guess my question was a little too literal.  While you and I can't have a seat on the NYSE, etc. we are clearly aware of what/how they are rigging.  Do we need direct access to profit from the direction we know they are pushing, or can we use our understanding to be the first derivative of their behavior?

I honestly don't know.  It just seems to me that it may be better to nimbly trade in the direction of the riggers, than to do nothing, bemoan the daily activity, and be no better off tomorrow than we are today.

I think making money one day at at time is preferable to having an accurate long view and not living long enough to see it to fruition.

But, to each their own.  That's what makes life interesting!

Fri, 11/06/2015 - 16:41 | 6759546 MadVladtheconquerer
MadVladtheconquerer's picture

There are three groups:

1) the 0.1%

2) the coattailers

3) everybody else

If you can't be in 1), you really don't want to be in 3) so that leaves 2).

Bulls make money; bears make money; pigs (and the intellectually-challenged) get handed their backsides.

Play the game!  https://www.youtube.com/watch?v=6_5O-nUiZ_0

Off to the bank!  Time to Count de Monet.

Tue, 11/03/2015 - 19:29 | 6746386 cheech_wizard
cheech_wizard's picture

8) Crossbow bolt shoot...

3 bolts (handed to you 1 at a time)... Unless you are lucky and hit the target on the 1st or 2nd bolt, the carny operator notches the feathers on the third bolt, causing that shot to go wildly astray.

(My keen sense of observation noticed him doing it the second go around, so when he handed me the third bolt, I held it up before him and straightened the feathers. He happily refunded my money.)

Standard Disclaimer: Go away kid. You're bothering me.

Tue, 11/03/2015 - 19:54 | 6746474 UnicornSkittles
UnicornSkittles's picture

I call "Shenanigans!"

Tue, 11/03/2015 - 18:07 | 6746044 SILVERGEDDON
SILVERGEDDON's picture

15horses1donkey.

Wake the fuck up and smell the fucking coffee.

IF ZERO HEDGE HAD A FUCKING CURRENCY OF IT'S OWN, IT WOULD BE MINTED IN INCORRUPTABLE NON HYPOTHECATED NON DERIVATIVE NON MARGIN ABLE SILVER OR GOLD.

That - would be an idea a lot of Zero Hedgers could maybe get behind.

Jesus, you shiney faced idealistic rainbow skittle shitting unicorn rama lama ding dong zipper head Klingon Cocksucker from Uranus fucking kids these days.

You all think technology is a miracle. All it is is electrons that can be made to go poof any fucking minute now.

Crypto currency is just a fancy name for digital fractional reserve banking - without the reserve, oversight, regulation, or the bank.

If I blew up your phone right now, you would look like a cow at the slaughterhouse just at the moment the bolt gun goes off - " How could you do this to me ? What'll I do now ? "

I know what to do.

Improvise. Adapt. Overcome. Triumph over adversity.

And, transform your idea into minting a fucking physical coin out of noble metals, with Tyler's permission before he copyright lawyers your ass into bankruptcy.

It's not too later to undo a life of servitude, tying someone elses kangaroo down, living on fucking Marmite on burnt toast and nasty tea with condensed milk poured into it.

Mate.

Tue, 11/03/2015 - 19:02 | 6746275 Oldwood
Oldwood's picture

There ain't nothing scary about it.....it s just plain stupid to do business with criminals who will admit that their goal is to fleece the muppets  (but not you...you are too smart for that, and they are your best bud and all, they would never fuck you like all those other dumb asses). They will always let you win just enough to keep the hook baited, for you to get really serious, think you got it going on, got them figured out, and just when you got a mouth full of cheese the bar comes down on your neck.

Stupid, and yes, I'm sure there are those lined up to explain to me how fucking smart they are, how they have been cleaning up, yet where is thier money???Still in the game? We shall see.

Wed, 11/04/2015 - 02:12 | 6747583 Bay of Pigs
Bay of Pigs's picture

He asked me about making a silver ZH coin minted by the Sunshine Mint.

Told him it would be a huge hit here...I know I would buy some.

Tue, 11/03/2015 - 16:56 | 6745640 JBilyj
JBilyj's picture

"In short, for most return of capital is now far more important than return on capital."

 

Sounds like that person should put their nest egg in an indexed annuity than...

Tue, 11/03/2015 - 17:01 | 6745657 Rainman
Rainman's picture

It would be nice if equities were the only ' too scary ' out there.

Tue, 11/03/2015 - 17:02 | 6745664 taopraxis
taopraxis's picture

Enduring high volatility without commensurate returns is plain stupid. Yet, up the list goes...for now.

Tue, 11/03/2015 - 17:05 | 6745688 DOGGONE
DOGGONE's picture

Get this in your face. And keep it there.
http://showrealhist.com

Tue, 11/03/2015 - 17:07 | 6745692 lester1
lester1's picture

At 945-1015am the Fed's PPT steps in and buys stocks. They buy stocks daily now to prevent mass selloffs and set the trend for the day.

The Fed is desperate to keep the stock market up given all the bad economic data. That's why they are buying stocks through their primary dealer banks with unaudited electronic money.

Don't believe me, ok.. But ask yourself why the market is going higher with all this bad economic data and uncertainty? Has that ever happened before? No!

Where is all this new liquidity coming from to drive stocks higher?

Also, why is Janet Yellen terrified of an audit?

Wed, 11/04/2015 - 04:05 | 6747694 ThirteenthFloor
ThirteenthFloor's picture

+1. Yes, a it's a con, more important since the con woman can direct the market with simple PR (i.e., fed minutes) so they all know when to buy and sell. A lesson Greenspan taught as so well

Tue, 11/03/2015 - 17:08 | 6745699 brada1013567
brada1013567's picture

Scarry, Why all you gotta do is buy!

 

 

Silly people dont ya know stocks never go down!

Wed, 11/04/2015 - 04:11 | 6747700 ThirteenthFloor
ThirteenthFloor's picture

When everyone is all in, the FRB will 'call' and end the game, only one player walks away with all the chips...

Tue, 11/03/2015 - 17:08 | 6745712 TAALR Swift
TAALR Swift's picture

Cash never disappoints, but is hated by Brokers because they cannot earn fees and bonuses.

Cash for valuable Real Estate also never goes out of style.

Cash for expensive Art is also prudent, for those with enough of it. It can't be taxed or manipulated. It can be moved overseas easier than cash or PM. It can be stored somewhere safe, until the owner decides to cash it in, or trade it for something else.

Tue, 11/03/2015 - 17:47 | 6745930 Arthur Schopenhauer
Arthur Schopenhauer's picture

A Picasso commands the highest price you'll ever get/pay for oil.

Wed, 11/04/2015 - 02:04 | 6747569 ZD1
ZD1's picture

Cash, real estate, art, and anything of value can be confiscated and stolen.

It's happened time after time throughout history.

Tue, 11/03/2015 - 17:12 | 6745732 brada1013567
brada1013567's picture

Janet should be fired if she has not convinced everyone that stawks are the bestus invesment ever!

Tue, 11/03/2015 - 17:24 | 6745798 NoWayJose
NoWayJose's picture

The Central Banks have also destroyed any corrections - which are a normal part of any 'healthy' market. Thus while we hear constantly that 'now' is a good time to buy -- the reality is that it is 'Never' a good time to buy into a market that cannot be allowed to have a correction.

And as the last month has shown, you can never 'short' the market, you can never have 'stop loss' orders that won't get plucked, and you can never use fundamentals or research to decide whether to buy or sell. Everything is dependent on whether Central Banks ease, or whether a company borrows billions to buyback more stock.

Tue, 11/03/2015 - 17:30 | 6745824 Sudden Debt
Sudden Debt's picture

Just show them some bullish stocks with the promise that they'll probably rise another 500% and they'll all change their minds pretty fast.

 

Tue, 11/03/2015 - 17:52 | 6745960 RopeADope
RopeADope's picture

Artificially inflated stock indexes are welfare for the older generations that are retiring. Of course millennials are saying hell no we are not going to overpay so the old farts can be rewarded for screwing us over.

Tue, 11/03/2015 - 18:25 | 6746111 DOGGONE
DOGGONE's picture

Now see this:
http://showrealhist.com

Tue, 11/03/2015 - 19:14 | 6746320 taopraxis
taopraxis's picture

I'm old and I am absolutely okay with that...

Moreover, I do not want want you to fund my social security. I do not want you to buy my house. I do not want you to work for me for chump wages. Most of all, I do not want you to read the comic books I read as a kid or remake the movies I watched or wear clothes I wore decades ago or go to plays I saw fifty years ago or, basically, buy into so much unoriginal, anachronistic cultural crap it makes me despair for the future of the human race.

Tue, 11/03/2015 - 18:38 | 6746168 vegas
vegas's picture

Dear SocGen, check out the July 1982 issue of "Business Week" magazine for the cover issue article  "The Death of Equities" for the same conclusion. And they pay these guys money for this shit?

 

www.traderzoo.mobi

 

Tue, 11/03/2015 - 21:04 | 6746737 DOGGONE
DOGGONE's picture

WOW! Some super mis-timing by Business Week!!!

READ THIS
Observations
The plot of Real Dow since 1/24 is dramatically very far from being a steady trend. It is in fact replete with big increases and big decreases -- the Real Dow of 12.4 in 6/82 is less than that 56.6 yr earlier in 11/25 (see plot)!

HERE
http://showrealhist.com

Tue, 11/03/2015 - 19:34 | 6746409 bid the soldier...
bid the soldiers shoot's picture

Which is worse?  Too scary or too crooked?

Or do they mean the same thing?

Tue, 11/03/2015 - 22:00 | 6746938 Grandad Grumps
Grandad Grumps's picture

The market is a fraud and the banks are thieves... the end.

Do NOT follow this link or you will be banned from the site!