Down goes the Dow

There is a huge difference between pessimism and realism. Unfortunately many who post here have a view on the markets that is divorced from fundamental principles of investing. I did not define those principles. One can say it doesn't matter as one poster recently replied. I think that view is not only wrong but foolish.

Igy

You've been crying "Wolf!" since the moment you showed up here. Everyone knows there will eventually be a crash, but your lack of precision and accuracy just makes people tune you out.

Wrong

GoId wrote:

A relief rally is on the table...

http://www.marketwatch.com/story/five-reasons-stocks-will-rally-after-the-us-presidential-election-2016-11-03

GoId wrote:[/b but your lack of precision and accuracy

Exactly!!! That's why he's a joke.

hey Igy - Hope all is well.

Just noticed that the VIX is up into the 20s...historically roughly a good place to start buying.

agip,

Doing well. I have been slowed (running) with a foot issue but it seems to be clearing up. I have had to reduce volume and intensity by about 10-20%.

You may be right on the VIX. I am more skeptical and it has little to do with the election. I still see weakness in the earnings and global growth. But that is what makes a market.

I just had lunch with my daughter, we discussed the economy and asset prices. She and her husband are conservative with their money and she is often asked by her colleagues "so when are you going to buy a house." I mentioned that I see distortions in most asset classes. Assets are priced higher in a low interest rate environment; one would assume higher interest rates results in a hair cut to asset prices. Often people only look at their monthly payment and not the price of the asset; similar to looking at a dividend or interest payment and not the prices of the security. I believe a potential December Fed hike in interest rates is priced into the bond market but little else.

Best to you.

Igy

mellon wrote:

GoId wrote:[/b but your lack of precision and accuracy

Exactly!!! That's why he's a joke.

My first post was 3/2/2015. In my writing at that time I said both stocks and bonds were overvalued. I believe that statement is still true today. On that day the Dow closed at 18,288 and the S&P 500 at 2117.

Not much progress since then. Yet stocks have become more overvalued with declining earnings. Bonds have become more overvalued with rising interest rates.

Igy

Ghost of Igloi wrote:

Often people only look at their monthly payment and not the price of the asset;

Igy

That's an idiotic statement. You do realize they are related? In terms of your example of buying a home, it is legally impossible to ignore the price of the asset.

Ghost of Igloi wrote:

The risk in the stock market is under appreciated. QE has distorted equity prices and the next big move is down rather than up. The Schiller PE is 27 and valuations are stretched when measured against other valuation models. Remember, the stock market has had two 50% down markets in the past fifteen years. The fifteen year average compounded return on the S&P is only 4.3%, which is inferior to treasuries. Treasuries are overvalued as well. Cash is the superior asset class when risk returns to the market.

You are the idiot. If a 30 year mortgage goes from 4% to 5% do you not think it affects housing prices?Igy

Thornton wrote:

Ghost of Igloi wrote:

Often people only look at their monthly payment and not the price of the asset;

Igy

That's an idiotic statement. You do realize they are related? In terms of your example of buying a home, it is legally impossible to ignore the price of the asset.

Hope your foot continues to heal.

I'm rounding into decent shape - I'm at the point where my workouts are quite good but I haven't yet converted my fitness into a good race. I still need to do 3-4 races before I can really get my racing legs back. Then I have around 4 peak races before things go awry.

So by that schedule I probably have one more slightly frustrating race before I get going at full tilt. Looks like my turkey trot could be my peak race of the fall before I go indoors for track.

agip,

I have missed the fall racing schedule, which is good here in Boise. So indoor may be the next time I come out of moth balls.

I went to the Mountain West Cross country Meet last Friday. BSU women were flat, but the men looked really good. It was fun seeing a good cross country meet. Brings back memories.

Take care and good luck in your races.

Igy

Ghost of Igloi wrote:

You are the idiot. If a 30 year mortgage goes from 4% to 5% do you not think it affects housing prices?

Igy

Thornton wrote:

That's an idiotic statement. You do realize they are related? In terms of your example of buying a home, it is legally impossible to ignore the price of the asset.

Please try to stay on topic.

Actually that's Figy's modus operandi. Whenever he says something stupid, which is quite often, he replies by diverting away from the original point. He also likes to put words in your mouth. Of course he's too narcissistic to admit any wrong, or to just ignore his idiotic statements. He's always got to have the last word, which typically just ends up digging a deeper hole for himself. He's the gift that keeps on giving.

Ghost of Igloi wrote:

Funny. I have to hit the sack as well, to work another day at a "Wall Street" firm. As part of your future education realize the largest advertizers on business television, financial periodicals and websites are the discount brokerage firms. We have a regular posting from MarketWatch on this thread daily. Always Bullish I might add.

Best at State.

Igy

Igy, I see that after I signed off last night you mentioned that you work for Wall Street. That's pretty funny considering your earlier comment about your investment advisor not trusting the Street. Talk about a conundrum. He must give you an earful.

So did you check out that web site? I know you said you might stay short, but I really think you could use some good independent financial advice. You could be in for a rough ride down, depending on when you went short.

Hoping for the best for you.

Pat

Pat,

I assumed you were a troll, which you still may be. The description of "my advisor" is me. There is enough regulation in our industry that advisors have quite a bit of autonomy. However, firms themselves, be it funds, independents, wire houses or discounters are wildly Bullish. To be anything but Bullish is bad for business. In regards to shorts it is something I would not recommend for a novice like yourself. My shorts are up in the neighborhood of 5% over the past week.

Igy

Ghost of Igloi wrote:

Pat,

I assumed you were a troll, which you still may be. The description of "my advisor" is me. There is enough regulation in our industry that advisors have quite a bit of autonomy. However, firms themselves, be it funds, independents, wire houses or discounters are wildly Bullish. To be anything but Bullish is bad for business. In regards to shorts it is something I would not recommend for a novice like yourself. My shorts are up in the neighborhood of 5% over the past week.

Igy

That's funny as I thought you were trolling me. So you DO work for Wall Street. I hope you weren't insulted by my previous comments. No offense intended.

I will disagree with what you see as the industry message. The majority of what I'm seeing coming from the Street is very Bearish. That would make sense since we've been at or near market tops for awhile, so they want to instill fear in order to generate sales. My 2 cents.

It sounds like you have a better grasp of shorts than I ascertained. Based on what I read several pages back, I thought you had shorted near the market top. Not so it would appear.

Big meet on Saturday. Off to bed. Best.

P

Pat,

The narrative of "Wall Street" including all of the entities I previously mentioned is decidedly Bullish. It is the same narrative that you find on this thread, except for me of course. Stocks for the long run.

Hey, where is your state meet? What distance are you racing? Tough course?

Igy

U.S. stock futures pointed to a muted open Friday, as investors waited for a monthly jobs report and kept an eye on a presidential race that's in the homestretch.

Analysts said the nonfarm-payrolls release -- usually closely watched -- might not make as much of a splash this time, because the U.S. election is getting so much attention.

S&P 500 futures inched lower by 1.10 points, or 0.1%, to 2,082.25, while Dow Jones Industrial Average futures edged down by 18 points, or 0.1%, to 17,834. Nasdaq-100 futures lost 3 points, or 0.1%, to 4,671.50.

"With the Fed still firmly on course for a rate hike in December, it would need a drastically disappointing set of labor market data to alter market expectations," said Richard Perry, a Hantec Markets analyst, in a note.

The market sees a 71.5% chance of the Federal Reserve raising interest rates next month, according to the CME Group's FedWatch tool. "With expectation of another middle-of-the-road report, and the market more mindful of the impending election, it is possible that this could be one of the lower volatility nonfarm-payrolls Fridays we have seen for a while," Perry added.

Election Day is Tuesday, and Democratic candidate Hillary Clinton's lead in a RealClearPolitics average of polls stood at 1.6 points early Friday. That's up from 1.3 points late Thursday, but still down sharply from her mid-October advantage of about 7 points. Fears that Republican nominee Donald Trump will win the election have taken a toll this week on Wall Street and stocks worldwide. He is viewed as more likely to inject uncertainty into domestic and global affairs, and big investors generally don't like unpredictability.

On Thursday, the S&P 500 closed 0.4% lower, while the Dow gave back 0.2%, or 29 points. The S&P has finished in the red for eight sessions in a row, declining by 3% over that period and notching its longest losing streak since October 2008. For the week, the S&P is down 1.8% as of Thursday's close, while the Dow has dropped 1.3%.