Down goes the Dow

Financial DisAdvisor wrote:

Financial Advisor wrote:

Non-GAAP numbers are preferred by Warren Buffett.

Who cares. ?

You should.

seattle prattle wrote:

Ghost of Igloi wrote:

Seattle,

And I will say what I said before, the timing is less important. The operative point is valuation. At even higher valuation prospective return drops lower. You and others believe there is some buffer in a rise market. Historically that is not true.

Igy

So, you recommend basing investment decisions primarily on valuation. But shouldn't the current and near-term economic environment be taken into consideration? In an unusually favorable economic cycle, maybe future earning projections are justifiably higher. Like, oh i don't know, due to favorable tax law revisions, easing of business regulations, etc...

Seattle,

I believe valuation is an important consideration and why not. It really is nothing more than very basic finance. You make good points of which I generally agreed, however that valuation both current and forward is inflating faster than the earnings rise. So the P (Price) is growing faster than the E (Earnings). Another point one should consider is the individual and corporate tax cuts are financed by a rising national debt. This actually creates a greater trade imbalalances and lower GDP over the intermediate term. So consider it more off a sugar high than durable. Of course the theory is it will stimulate GDP growth in the 4% range generating greater tax receipts and a Reagan like era. Unfortunately this is unlikely with interest rates rising, massive debt at all levels, and an aging demographic. One can hope.

Igy

But you have to agree that the climate of the last year or two in particular has been uber-positive for business and the market. That clearly has given a boost to what may be an overvalued market, albeit that it is good reason to justify higher valuations in the short to mid-term horizon.

As for the tax cuts creating a big problem with the national debt, i couldn't agree more. But that is going to be a problem off in the future. I think that is no justification, and it is a mistake of grand scale, but it's reality. And as such, an investor in the market is surely trading on the current situation and not what's coming that far down the road.

Rider 1 wrote:

Financial DisAdvisor wrote:

Who cares. ?

You should.

Why? I not a Billionaire, not even a Millionaire - I just a middle-class stiff with a cheesy company 401(k) plan. ☝️??

Seattle,

That is all true. But the market has struggled quite a bit lately. Perhaps the tail wind of QE is over, also did you notice the latest estimates for Q1 GDP are back under 2%, after strong 3rd and 4th Quarters after all the natural disasters. So maybe the market is now anticipating a rocky road ahead. The political climate and general social climate displays stress rarely seen in my lifetime. It seems like a lot of rearanging of the deck chairs of the Titanic. People living like millionaires, taking exotic trips, fancy cars, when most don’t have two nickles to rub together. This is an observation and not a social or political statement. Just some thoughts really.

Igy

... and i heard it said that the negative impacts of a trade war could offset all the positves of the tax cuts. I just find it hard to believe that the tarifs would get implimented to any significant level. But if so, that's real bad.

If you've got the dough wrote:

Rider 1 wrote:

You should.

Why? I not a Billionaire, not even a Millionaire - I just a middle-class stiff with a cheesy company 401(k) plan. ☝️??

That is EXACTLY why.

Seattle,

Corporate tax cuts will most be aplied to stock buybacks and not some reincarnation of American manufacturing. Sure some manufacturing will return as Asian labor costs rise. Any tariffs would theoreitcally bolster manufacturing at home, but hard to imagine that the globalization of trade is a dynamic that will end anytime soon. Of course that is not to say that our intellitectual property should be given to anyone, or that jobs should be hollowed out to save American consumers a few bucks. Most of this consumerism has been a net negative to our savings rate. If anything I would dump tariffs and impose a value added tax, higher gasoline tax, increase incentives for savings. That would do more for the balance of trade. Oh, give up on the endless wars promoted by both parties. Again my observations.

Igy

John Hussman 3/17/2018

“Our most reliable measures of market internals deteriorated on Feb 2, suggesting a shift in investor psychology from speculation to risk-aversion. This is now a hypervalued, overbought, overbullish market with a broken parabola. Unless/until that reverses, there's no strong floor.”

They’ve been saying the same thing for years. Eventually they will be right, but I wouldn’t hold my breath.

Go Pats!

Racket wrote:

Question for people who know securities fraud.

Rihanna posted something bad about snapchat and the stock fell 4%. Can celebrities short a stock and then post about how much it sucks and cash out hard? And what about the reverse. Can someone who's young and hip with the kids buy a ton of stock and then post about how great it is and then sell when it inevitably soars 5%, or would that be like a pump and dump sort of?

No problem assuming she is not a principal in the account or acting on inside information.

Stanley Morgan wrote:

They’ve been saying the same thing for years. Eventually they will be right, but I wouldn’t hold my breath.

Go Pats!

Your breath would be better spent inflating Brady’s balls. Oh sorry, let me clarify, his footballs.

Go Fats!

Classless as usual.

Stanley Morgan wrote:

Classless as usual.

Of course nothing is classless in your choice of your handle. You two faced dweeb.

Ghost of Igloi wrote:

Stanley Morgan wrote:

Classless as usual.

Of course nothing is classless in your choice of your handle. You two faced dweeb.

How can you possibly be offended by my handle?

Go Pats!

seattle prattle wrote:

As for the tax cuts creating a big problem with the national debt, i couldn't agree more. But that is going to be a problem off in the future. I think that is no justification, and it is a mistake of grand scale, but it's reality. And as such, an investor in the market is surely trading on the current situation and not what's coming that far down the road.

0/10 ☝️?

Bocephus wrote:

Tokyo Thorn wrote:

Actually unlike you groupthink lemmings he has made predictions.

Are you seriously trying to counter the point that Igy has no original thoughts with one that others here are "groupthink lemmings?" Do you think before you type?

The lemming has no idea he is a lemming

Bird Law wrote:

Bocephus wrote:

Are you seriously trying to counter the point that Igy has no original thoughts with one that others here are "groupthink lemmings?" Do you think before you type?

The lemming has no idea he is a lemming

Lemmings are self-aware.