Down goes the Dow

Chicken Little wrote:

Big Dog makes a killing on a company that is selling productive assets and raising capital thru a stock offering just to survive. His signature purchase may still end as dog pooh on Big's living room carpet.

Big Dog Investments wrote:

I'm still in. Currently it's at 3x what I paid when Chicken Little warned against going long. The DGTD contrarian indicator is the closest thing I've seen to a sure bet.

I certainly wouldn't call it my signature purchase. It's one of several that I've publicized here (unlike most of the others offering opinions) and part of my larger fun portfolio.

Listening to Chicken Little continue to poo poo CHK makes me think I should add to my investment. The DGTD contrarian indicator is rarely wrong. Alas, the cash I'm sitting on is earmarked for another investment during the next buying opportunity, so I'll have to be content with my current stake.

Big,

At some point in the future I will post the DGTD Contrarian Contrarian Indicator. Of course the timing is dependent upon the willingness of Muppets being drawn into an increasingly overvalued market. The true buy on the dip opportunity will come when you won't pull the trigger.

Igy

I'm not surprised that the irony completely escapes you.

The true irony is you have nothing to say other than that idiot statement.

Notice you are using the inflation rate that includes food and energy when its convenient to do so. When energy runs high suddenly its convenient to focus on "core inflation" as the true indicator. You are illustrating exactly what I'm talking about. You are cherry picking the data to get to a lower number. Core inflation is north of 2% right now. That is before you even get to the other changes in the way we calculate inflation after the 1970s (i.e. Equivalent Rent instead of the cost of a house, "hedonic quality adjustment")

Fact checker wrote:

ryan foreman wrote:

Inflation is non existent?

Actually its not, even by government statistics that calculate inflation by adjusting for taking out the inflation.

The current U.S. inflation rate as reported on September 18 is 1.1%. While not technically "non existent", in historical terms it is quite low.

Inflated assets and services: autos, rents, housing, commercial real estate, stocks, bonds, health care, pharmaceuticals, tuition...to name but a few...

You said you got out at 15000 in late spring so you already missed out on some returns; but my real question is what did you do with your money?

Ghost of Igloi wrote:

The true irony is you have nothing to say other than that idiot statement.

This is like Christmas! Please tell me you see the irony in that statement.

ryan foreman wrote:

Notice you are using the inflation rate that includes food and energy when its convenient to do so. When energy runs high suddenly its convenient to focus on "core inflation" as the true indicator. You are illustrating exactly what I'm talking about. You are cherry picking the data to get to a lower number.

Using the most comprehensive measurement is actually the opposite of cherry picking.

U.S. stock futures edged lower Friday, putting the equity market on track to catch its breath after three straight days of gains.

Stocks remain set for a sizable weekly win, which has come as traders cheer the Federal Reserve's latest policy announcement. The Fed on Wednesday stood pat on interest rates, but also indicated confidence in the U.S. economy and signaled a rate rise could come by year's end.

Investors on Friday are waiting for a report on manufacturing due after the opening bell, as well as a number of Federal Reserve speakers and a reading on North America's oil-rig count.

S&P 500 futures declined by 2.80 points, or 0.1%, to 2,165.50, while Dow Jones Industrial Average futures shed 12 points, or 0.1%, to 18,287. Nasdaq-100 futures lost 6 points, or 0.1%, to 4,880.25.

On Thursday, the S&P 500 closed 0.7% higher, and the Dow gained 0.5%, or 99 points. The tech-heavy Nasdaq Composite added 0.8% and notched another record closing high, as the S&P finished 0.6% below its mid-August record close, and the Dow ended 1.3% off its peak. The three gauges were up between 1.5% and 1.8% for the week, as of Thursday's close.

With stocks rallying in the past week, Bank of America Merrill Lynch strategists have warned about the potential for too much exuberance. BAML's "Bull & Bear Indicator" is in neutral territory, but "we expect this to rise in coming weeks as investor bullishness begins to rise," possibly resulting in a "sell signal," said Michael Hartnett and his team in their weekly "Flow Show" note.

Other markets: Oil prices retreated, weighing on sentiment. Analysts said investors were cashing in on gains, as they approached next week's much-anticipated meeting of major oil producers with caution and skepticism. European stocks retreated, while Asian markets closed mixed. The ICE U.S. Dollar Index was little changed, and gold prices were down modestly.

Economic news: A September release on Markit's purchasing managers index for manufacturing is slated to hit at 9:45 a.m. Eastern Time. The FactSet consensus forecast is for a reading of 52.

A Baker Hughes report on North America's oil-rig count is expected to come at 1 p.m. Eastern.

On the Fed front, Philadelphia Fed President Patrick Harker is due to give a speech at noon Eastern in Philly about the central bank's role. Shortly after that, he is slated to speak on a panel with Atlanta Fed President Dennis Lockhart and Cleveland's Loretta Mester. Meanwhile, Dallas Fed President Robert Kaplan is expected to take part in a Q&A at 12:30 p.m. Eastern at an energy industry forum in Texas.

More bullish sentiment? The VIX contango dropped to a level often indicative of a VIX top which tend to coincide with stock bottoms.

topcat wrote:

You said you got out at 15000 in late spring so you already missed out on some returns; but my real question is what did you do with your money?

Bonds and CDs for the most part.

Wouldn't TIPS be better than CD's

topcat wrote:

Wouldn't TIPS be better than CD's

More risk.

Huh. Never new. I learn more all the time on this thread. Guess I better just go to cash and with inflation have negative returns.

Another positive week! Life is good!

Fact checker wrote:

ryan foreman wrote:

Notice you are using the inflation rate that includes food and energy when its convenient to do so. When energy runs high suddenly its convenient to focus on "core inflation" as the true indicator. You are illustrating exactly what I'm talking about. You are cherry picking the data to get to a lower number.

Using the most comprehensive measurement is actually the opposite of cherry picking.

Is it? The Federal Reserve purportedly says core inflation is the better indicator of inflation for setting interest rates. You might want to take it up with them.

You miss the point. Inflation is minuscule and well below its historical average.

Actually that wasn't the point. But whatever. I would actually take issue with you on your historical average. Again, it depends on how you measure inflation, which itself has changed over the years. If you measure inflation by how it was measured in the 70s, I would bet inflation would probably be only a somewhat less than what it was for much of the 1970s. It also depends on what your scope of history is. If history begins in the late 1960s, then yeah you may have a point. But much of American history is volatile but more deflation than inflation. All that said, my concern is that for all the radical policies the Fed has done since the financial crises, inflation is as low as it is. My theory is that sometime in the 1990s the world economy entered into a fundamentally deflationary era. Generally it should have been seen as healthy. But policy makers equate deflation with depression, high unemployment, and, ...worst of all...a stagnating asset prices. Therefore the monetary and fiscal policy became focused on growth for the sake of growth. But by doing that, it only puts off deflation and when it comes back its bad deflation. With interest rates already at near zero there will not be much a central bank can do to control it.

Kiplio wrote:

You miss the point. Inflation is minuscule and well below its historical average.