Down goes the Dow

Debt burden is not an entire explanation of discretionary income.

Holiday spending slices the baloney too thinly to be meaningful.

Wages on average might have gone up, but only for higher earners, and only for those actually collecting a wage, which is a proportionally decreasing fraction of the population.

You are also curious, agip. You ask me if something is a guess, and I admit that it is, and give some very basic figures supporting the belief. Coach d made a very specific suggestion, to which I responded with a very specific response, supported AT LEAST to the same extent as were the suggestions in your most recent post, yet you have not also admitted that yours is also a guess.

"Agip you are such a mix of "I know everything and am a very sophisticated guy" and "I make up a lot of stuff and don't really know what I am talking about""

Looks like your VIX30 buying has caused a bump.

At some point people will come to the realization that markets are deteriorating and not getting better, and the central bank treats have been a trick on investors.

Agip and Maserati,

Can we just get along? I didn't intend to take any kind of shot at either of you. I'm talking about Wall Street.

BUT, here is some of the data. This is US Consumer Spending, which is 70% of the US economy and increased at a 4% annual rate from April through October:

http://www.tradingeconomics.com/united-states/consumer-spending

This is recent US Auto Sales, which were at a record in 2015, with Auto Nation increasing sales by 9% in December:

http://www.autonews.com/section/us_monthly_sales

If I was Peter Lynch or Warren Buffett seeing this, I think I'd expect to eps for GM and Ford to be going up here. But when I look at stock prices, I see GM down 13.52% this year and that is much more than Netflix, Facebook, or Apple are down.

My family and I are short 50 light crude contracts, which means that every time the price of oil goes down $1, we make $50,000. And we have Apple, which is down less than the general market. So I'm not complaining. But Apple is more exposed to the Chinese economy than any other US company and the vast majority of iphone sales growth is coming from China, so if any US company would be hit by China, it would be Apple.

What I'm saying is that nothing going on in the stock market here makes rational sense. I think what I see is Wall Street traders simply being fixated on CAPEX, of which the Oil Industry was 30% (but the Baker Hughes rig count last year went from 1600 to 500, so how much more can it fall?). BUT...IT is 47% of CAPEX, the industry group is listed "overweight" at least at Schwab, and IT budgets are slated to increase.

What I'm also saying is GM and GT look like things I want to buy when they get this garbage out of their system.

If you wonder why I have a very dim view of the people teaching financial analysis in university and the people applying that (ahem) "knowledge" in mutual fund companies, I will offer this as Exhibit #1.

Dow is down 2.6% today, we're sitting on $18t+ of debt, irates are still essentially zero, and foreign currencies are racing to the bottom.

Everything is just fine...

Goodyear Tire:

PE: 9.35

5 year return: +140.92%

Last year return: +14.35%

3Q2015 eps growth over previous year: +17.36%

This year GT is down more than any of the FANG stocks.

Its awesome...like I plan to post my latest IPhone 6 photos on Facebook....afterwards I will head out to my job as a Starbucks barista....jeez I hope Bernie wins so they can erase my student loans...Phoenix College was a like a, bad hair day.....ya know?

So how can investing novices like myself make some quick cash off the impending doom?

It looks like one way to short the market is to buy some inverse S&P ETFs. You can even get some that multiply by 2 or 3x.

Would these be good investments? How would they affect my taxes?

Coach, "consumer spending" includes pretty much everything, including medical insurance and expenses, I believe. It is not the same thing as true discretionary spending; a bunch of it is coerced.

And therefore inefficient.

That's no way to run an economy. Whereas the government used to try to increase consumer spending by things like cutting taxes and leaving the spending to the discretion of the consumer, they have switched gears into a new realm, where they FORCE the increase, by mandating expenditures.

In other words, it's not a good thing, as you suggest, but a bad thing, because it is inefficient. In the case of medical insurance and expenses, horribly inefficient. It is (and has been) argued that no net wealth is created by that system.

Regarding Apple, it is true that Apple = iphone, and that iphone = China, but I wouldn't use a business whose Chinese exposure relies upon Chinese demand for a single consumer product as the bellweather of the Chinese situation. There are other businesses with much more broad-based exposure to different parts of the Chinese economy that make much better bellweathers. Better yet, use an index of those with varied Chinese exposure. Better yet, know and talk to someone in the Chinese development system.

What I'm saying is that some things going on in the market may indeed make rational sense, only you don't have enough information and insight to understand that fact, especially where individual businesses are concerned. You would have us believe that you are an expert on the business operations of literally dozens of companies across widely varying sectors, including their international operations, which is of course impossible. The only sector I don't remember you having commented on is financials.

Regardless, you should be doing well on your shorts, and you should continue to do well. You seem to be a momentum guy, this should be your time.

BTW not trying to be chippy, just being forthright. Have a good weekend!

Foreign currencies have witnessed the biggest losses in comparison to the $. Take some of your steroided $'s and buy up some puny currencies... it is more of a margin play-money type buy, but after the foreign capital in-flows cease and the dollar shows it true value (nothing), your play money will make you a very happy individual. Probably gonna suck for quite a few others though.

Cramer's not my dad wrote:

So how can investing novices like myself make some quick cash off the impending doom?

It looks like one way to short the market is to buy some inverse S&P ETFs. You can even get some that multiply by 2 or 3x.

Would these be good investments? How would they affect my taxes?

Or if you're brave, start trading Forex.

You can do mini or even micro, for very little money, or standard if you are more confident.

Read up on it. I agree with "These" that currencies will be profitable, if you know how to proceed/are lucky.

Looks like I was wrong, sub-16k close, if only just. On Jan 15!

Decisions going forward about whether/when to get in, and to what extent, and buying exactly what, will depend for me a great deal on earnings reports. I am still skittish about everything, I need to see more.

Igy said things are massively overpriced, and I asked him how overpriced they are with FANG removed, and he didn't respond. I could see P/E's remaining constant, or even dropping further, depending of course on earnings reports, meaning things still might be overpriced at 16k, or even 15k or 14k if all goes to hell.

The big thing is that I have no pressing NEED to get in, nor do others like me. What I NEED is to see more.

Real K5 wrote:

Try to keep up wrote:

Check the date stamp on those messages, bucko.

So when I wrote it will soon be under 16k two days ago and now it is you spin this as my not being right how exactly?

By calling me bucko?

No spin involved. I said the Dow was up on Thursday. You responded "Nope." I was right and you were wrong, bucko.

I assume given the nonsense spewed in this post that I am responding to fake Igy.

There will be no Dow 13,000 anytime soon, certainly not this year. The "Chicken Little's" like the OP are clueless.

The market is not overvalued. These contractions are natural and temporary.

The FANG stocks have valuations based on anticipated revenues. But anyone with a semblance of intelligence know this and realizes they are not significantly overvalued. I might even say they provide a buying opportunity, especially after today.

I have already said too much given that I am obviously replying to a troll. Unfortunately these continuing troll posts likely mean an extended absence for the real Igy.

I believe someone pointed out earlier that Igy does believe the market is headed lower.

9/28/2015

Iggy:

“Anyway, it looks like we are looking for a re-test of the August low. I would say the we will probe the 1820 low from 10/15/2014. From there if we go below 1800 who knows?”

Reality:

9/28/2015 marked the absolute low point for the S&P 500 at 1881. Since then it has risen about 11%.

Conclusion:

It would have been impossible to make a worse call than Iggy did.

///////////////////////////////////////////////////////

9/26/2015

Iggy:

“It is shocking to me that most people who should be informed about the market are clueless to where we are headed. One can clearly see that the trend is in place and it is down. I don't think that even Janet can save us now. In my view Dow 13,000 is an easy marker.”

Reality:

On Friday, 9/25 the Dow stood at around 16,300. On Monday, 9/28 it dropped to around 16,000. That one day drop was about all the dropping that it did. It has since risen about 11%

Nice call, Iggy. You must have been excited that the market went in your direction for all of one day!

////////////////////////////////////////

9/28/2015

Iggy:

“Now, risk has entered the psyche of investors, where it has been absent for sometime. The rally is now sold and will continue to be sold in my opinion. Valuation becomes important in giving one the sense of how far this can go. Quite a bit lower in my view. Enough to win my bet with POTO.”

Question:

Quite a bit lower than the absolute lowest that it got?

//////////////////////////////////////////////

9/26/2015

Iggy:

“Here is how we get to Dow 13,000. Distribution is taking place, where strong hands (institutions) are selling to weak hands (individuals). In the next phase buyer volume dries up as potential sellers wait for better prices that never come. Discouraged traders and novice investors cash in their chips at the bottom.

Comment:

This last part is great – “novice investors cash in their chips at the bottom” Why would they do that? Because they think it is going a lot lower? Sound like anyone we know?

I think the S&P hit something around 1860 today and closed at 1880. GOI may have been off on timing but is looking more right by the day.

Maserati,

Cramer thinks stocks are more overvalued than 2011. That would be close to 13,000. These were his comments today:

http://www.cnbc.com/2016/01/15/jim-cramer-dont-bother-buying-its-capital-preservation-time.html

Igy,

You're not fooling anyone with these changing names. Just register a new name and let the troll pound sand.

I hope you guys are not trading on stuff like this. Every article published has an agenda. Every blog post. Every tweet. Every facebook post. I would bet a million bucks that the guy who tweeted and the guy who wrote this article are short on something and will make money if the market goes down. If they stoke the fire of "conventional wisdom" and enough people are convinced to sell, they make money. I'm not saying they're wrong. I'm just pointing out that you should take it with a very large grain of salt. Every "expert" article in every field has someone behind the scenes making sure it gets placed or published for no other reason than it's their job to help the author.

Gross Bill wrote:

http://www.bloomberg.com/news/articles/2016-01-15/gross-says-markets-can-t-prop-up-wealth-flimsy-as-toilet-paper