The Roaring 2020's with Dr. Ed Yardeni, Tesla stock split, Follow the Robinhood Money

The Compound and Friends

Josh Brown

Business News, News, Investing, Business

4.7 • 2.2K Ratings

🗓️ 14 August 2020

⏱️ 59 minutes

🔗️ Recording | iTunes | RSS

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Summary

As World War I came to an end, the Spanish Flu pandemic of 1918 raced around the globe, infecting as many as 500 million people and killing an estimated 50 million. Shortly after it ran its course, the United States experienced one of the biggest booms in history, the Roaring 20’s. Could it happen again? Another boom decade fueled by high productivity and an onslaught of technological innovation? Dr. Ed Yardeni is the President of Yardeni Research, Inc. He’s served as a chief strategist on Wall Street as well as an economist at both the New York Fed and the Treasury. He’s been writing about the parallels and contrasts between the 1920’s and the 2020’s and I’ve asked to come on and talk to us about it. Plus, Michael Batnick returns to play What Are Your Thoughts - all of the biggest topics of this week in money and investing. Visit thereformedbroker.com for full show notes, links and resources! Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	What's up? It's J.B. Last week we did a deep dive on stock splits and I asked the question,
0:05.2	where did all the stock splits go? There have been less than 10 this year so far,
0:09.8	but 40% of S&P 500 companies are now trading above $100 per share.
0:15.0	In the late 90s, there were 20 or 30 stock splits every month.
0:19.0	Tesla came out after the bell on Tuesday night and announced a five for one stock split almost like an answer to
0:26.5	To what I was talking about the Tesla split will happen on August 31st
0:30.9	The reaction in the stock was a hilarious 15% rally in one day. It ran up
0:37.4	$180 per share and hit 15.50 on no other news, stock split.
0:43.6	So that's very 1999-ish.
0:46.6	When you ask yourself, is this investor's being stupid,
0:50.8	saying the company is now 15% more valuable because they're just cutting more
0:55.8	slices of the same cake that could be or is this just traders all having the same idea about front running the kind of investors who would buy it after the split when it makes the price look more affordable?
1:11.6	And I did air quotes when I said affordable so post
1:15.1	split it'll be three hundred and ten dollars a share how many of the traders who
1:19.9	bought in after the announcement are saying to themselves,
1:23.6	I'm gonna buy it because some other idiot
1:25.4	is gonna buy it after it splits.
1:27.0	They're gonna think it's cheaper.
1:28.8	It's not so stupid because that actually
1:31.8	has happened many times. It happened with Apple when they did the
1:35.8	seven for one split six years ago which we talked about. You know people saw oh wait
1:39.9	Apple's back at a hundred I'm buying it now. I didn't want to pay 680 for it, but I'm happy to pay, you know,
	...

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