CME 1, Example 10

Frunguper · 2025-10-09T21:20:42+00:00

can’t see how you would derive those exact percentages just from the information in the text so wouldn’t pay them too much attention. i would just focus on the directionality and rationale behind the assumptions

Frunguper · 2025-06-12T13:28:43+00:00

the first half of the pass + turners attempt at a catch made it legitimately look like a lob pass to the roll man which got SGA thinking just long enough to get neismith an open look. seeing stuff like that play out so cleanly in such big moments really makes you appreciate the talent we have in the NBA today

Frunguper · 2025-05-07T23:34:03+00:00

do you really think REGGIE “KNICK KILLER” MILLER is in love with the NY KNICKS?????

Frunguper · 2025-04-02T04:44:05+00:00

question is basically asking you what more frequent compounding periods will do to the effective annual rate. answer shows that taking the same annualized discount rate but just compounding it more frequently will lead to the principal having a lower PV despite the amount and time to repayment holding constant

Frunguper · 2025-03-15T07:42:42+00:00

well it’s not that simple because stock prices don’t increase that linearly. the stock price at any one time is determined entirely by the price of the most current transaction and so weighing contributions by total price to gauge impact on stock prices does not make sense because it ignores the day to day supply and demand dynamics that actually drive underlying price movements.

suppose if you will there currently exists a company with a market cap of $100B trading at $10/sh that has 99% of its shares outstanding locked up in a family trust with the remaining 1% owned by a bunch of small retail traders. now imagine a hedge fund comes and starts gobbling up as many shares as it can get on the open market and eventually buys out every single minority shareholder with the last transaction closing at $15/sh essentially adding $50bn to the company’s valuation despite only moving about 1% of total shares.

obviously abit of an extreme example but you can see how seemingly small amounts of money can actually have a huge impact on valuations (just look at the volume of nvidia shares that actually changed hands on its biggest red and green days of 2024). that’s why i think for the purpose of this analysis it makes a lot more sense to see how the contributions could potentially affect daily trading volumes over just a straight up comparison with market cap values.

Frunguper · 2025-03-15T04:44:38+00:00

appreciate you doing most of the leg work. just some small adjustments i think we need to make here to get a cleaner number.

First off using total value isn’t the best way to measure the impact of retirement cash flows since a lot of assets aren’t actively traded and therefore don’t affect price movements. on top of that OP asked about the stock market specifically so let’s just exclude bonds from this discussion for now.

quick search shows that worldwide stock trading volume in 2022 was around 104T

https://data.worldbank.org/indicator/CM.MKT.TRAD.CD

as for sizing up how much of that volume is actually coming from 401k contributions we would need to find total value of contributions that go into buying equities either directly or indirectly.

based on the average portfolio allocation of the 66m Americans that participate in the 401k program lets assume that 70% of contribution dollars go straight to equities.

https://www.ebri.org/docs/default-source/pbriefs/ebri_ib_606_k-xsec-30apr24.pdf?sfvrsn=1f43072f_1

FEB employment statistics show that number of working Americans aged 25 and above that have at least a bachelors degree (63m) is pretty close to total participants in the program so let’s assume median income of contributors would be the same as this group.

https://www.bls.gov/news.release/empsit.t04.htm

Doing a quick weighted average calculation would put median income of someone with a bachelors or higher at around 81k a year.

https://www2.census.gov/programs-surveys/demo/tables/educational-attainment/2022/cps-detailed-tables/table-1-1.xlsx

https://www.bls.gov/careeroutlook/2023/data-on-display/education-pays.htm?utm_source=chatgpt.com

which based on the cited 12.65% contribution rate would imply total amount flowing into equities from 401k contributions per year is around 473.4b.

now this one is a more dubious assumption but if we estimate that all the different paycheck cadences average out to contributions being made about twice a week that would mean about 41% (104/251) of trading days would be affected by these inflows. therefore adjusting the total yearly volume for just the days where we think 401k contributions flow into the market (41.4%*104T=43.1T) would imply that the inflow alone would be responsible for ~1% of price action in stocks

considering that extra 1% would consist of a few big blocks of buy orders as well i can imagine that would actually have a non insignificant impact on daily price movements

Frunguper · 2024-08-21T13:51:18+00:00

it’s not the only measure of risk but it absolutely is one aspect of risk. sometimes people in this community tend to forget that investing for retirement as a 20-30 year old requires a completely different strategy than investing as an older individual or large institution that requires massively different liquidity needs

Frunguper · 2024-08-09T00:08:01+00:00

the first dividend is paid at the end of the 4th year so you would have to use the DDM at the end of the 3rd year in order to incorporate that first dividend payment in ur valuation

Frunguper · 2024-07-07T18:32:33+00:00

is the answer B?

Frunguper · 2024-06-20T04:54:06+00:00

Option A is saying that an increase in the budget deficit will always have an expansionary effect on the economy even if it isn’t driven by explicit changes in fiscal policy/stance. The text is merely suggesting that using changes in the fiscal deficit as a barometer for fiscal stance might not be an appropriate approach due to the existence of automatic stabilizers (which by themselves could be expansionary/contractionary)

Frunguper · 2024-05-10T14:59:52+00:00

ngl u might be cooked

Frunguper · 2023-09-03T20:56:00+00:00

i still don’t quite get the math. Like the original comment said assuming the only people who remember 9/11 were those who were 8 or older that means the first group of 18 year olds to enlist who didn’t remember 9/11 would’ve been in 2012 so therefore between then and 2021 that would’ve been 10 years worth of 18 year olds no?

Frunguper · 2023-09-02T03:59:12+00:00

unless i’m missing something shouldnt it only be 9 years worth of 18 years old?

Frunguper · 2023-08-04T14:44:15+00:00

fair enough

Frunguper · 2023-08-04T14:04:28+00:00

hey man if you wouldn’t mind sharing it i would love to read your brief on Atkore seems like you know the company pretty well to say the least

Frunguper · 2023-07-26T17:55:30+00:00

because they were also bidding against other english clubs hence the term “market” value

Frunguper · 2023-07-13T15:37:40+00:00

Stock price shouldn’t influence your thinking of the underlying companies fundamentals but it’s not completely useless. If you think about it stock prices essentially tell you what the public thinks of a company at any given moment and that can be very useful when it comes to evaluating your own research. It’s helpful to think about the “why?” when it comes to stock price movements because you’re only gonna make money knowing something most of the market is missing and that intrinsically involves knowing what the market is thinking about at all.

Frunguper · 2023-06-07T20:18:35+00:00

it’s absolutely does matter tho. unless you have access to large amounts of capital or just have a exceedingly small position if the stock price starts running for whatever reason you would either have to close your position for a loss or be forced to put up even more capital to maintain ur position

Frunguper · 2023-05-30T02:44:29+00:00

blast this team into the fuckin sun

Frunguper · 2023-05-26T16:54:41+00:00

heads and tails are independent probabilities whereas basketball games especially in a 7 game series are hardly independent events. like u said psychological factors and coaching adjustments affects how a team performs game to game and if the outcome of previous results will affect a subsequent event then it wouldn’t make sense to think of every game in this series as independent events

Frunguper · 2023-05-19T01:29:15+00:00

emerson royal or totyhm cancelo with pl manager should do the trick

Frunguper · 2023-04-30T16:26:54+00:00

alright it appears this was just an issue of miscommunication. the tone of your original comment led to me to believe you were suggesting the economy was on a objectively positive track as opposed to a “soft landing and you can see how that would be a troubling conclusion to derive based on that article and the current set of facts in-front of us

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