Down goes the Dow

Ghost of 29 wrote:

The ride down is going to be breathtaking!

You're right! It was breathtaking.

Ghost of Igloi wrote:

The important facts to consider:

https://mobile.twitter.com/hussmanjp/status/844183382028402689/photo/1

Am I the only one who senses something fishy with the formulae used to generate these graphs. I mean, first he's dividing by a logarithmic, then later by an inverted logarithmic. The math seems designed to purposely produce graphs with a negative slope.

I'd love to hear what some of the more independent thinkers here have to say about this.

My basic outlook for the stock market right now is that I feel like we are in the early stages of a mild tsunami.

It seems pretty clear that the Fed is now embarked on a gradual but very steady rate hike cycle. Bonds are taking a hit so it is a reason to rotate into stocks for the time being. And the mild but steady inflation rate (official one at least) is being taken as good news by the stock market.

Right now this is like the tsunami stage where the water is going out and the beach goers are happy because there is so much beach to play around on.

But as yields keep going up, there is going to be a point where they are dragging on the economy and bonds suddenly look attractive again. Investors will come pouring back into bonds. Especially if the indicators that GoI has been citing continue as they are. Even those who are positive on the stock market right now say that valuations are only reasonable on a relative basis. But as yields go higher even that relative basis goes away. That is when the tsunami wave hits. As a beachgoer in this analogy I'm not running for the hills right now, but I'm starting to pack my things and get away from the beachline. Recently I did buy that government backed mortgage bond fund. I have bought a few stocks that I decided I wanted to own: Kroger, Under Armour, and I might buy PayPal. I have a feeling I'm going to buy more Ford stock pretty soon as it gets beaten down by warnings of "peak auto". But generally I continue to sit on a lot of cash and I plan to add to some short duration bond funds in the coming months.

Bonds constantly lose value to the real rates of inflation.

I'm 50 percent in the market right now, in individual stocks, but plan to be 100 percent soon.

When the stocks go down, I buy more.

Four things to watch for: high, low, buy, sell.

So I'm on the same page as you. What is the real rate of inflation?

Bonds are dumb wrote:

Bonds constantly lose value to the real rates of inflation.

I'm 50 percent in the market right now, in individual stocks, but plan to be 100 percent soon.

When the stocks go down, I buy more.

Four things to watch for: high, low, buy, sell.

2%

Voodoo mathematics wrote:

Ghost of Igloi wrote:

The important facts to consider:

https://mobile.twitter.com/hussmanjp/status/844183382028402689/photo/1

Am I the only one who senses something fishy with the formulae used to generate these graphs. I mean, first he's dividing by a logarithmic, then later by an inverted logarithmic. The math seems designed to purposely produce graphs with a negative slope.

I'd love to hear what some of the more independent thinkers here have to say about this.

You are at least partially confused. The log reference refers, I believe, to the values of the abscissa. It is a busy presentation, so your confusion is understandable.

There are, however, pertinent questions that remain. For example, the vertical line associated with March 2017 is placed on a logarithmic scale as referenced above. What's up with that? Neither member of the coordinate pairs is a time, or date, measurement so the date lines seems to be completely arbitrary. And that doesn't even take into consideration that these questionable date lines don't even associate with any of the data points.

And why were financials excluded from this? Can you say cherry picking?

Hussman has been accused before of using funny math and his follower(s) here provided no adequate defense. It seems Hussman is up to his old tricks. He is not to be trusted.

Why don't you Tweet Hussman with your criticism and then post the response? Of course you won't do that because you are afraid of the answer.

If you read the linked Twitter exchange, you'll notice that Hussman is not prone to answer questions regarding his methodology. He can't explain the unexplainable.

Not true. You are a light weight fighting against a heavy weight.

I see now that you are the fake Igy troll. Good for you that you got me to respond to your lies. It won't happen again.

Not true.

yields have a LONG way to go before they drag the economy - A 10 year treasury yielding 2.4% is still far below normal and a boost to the economy.

rising rates (when rising from a low base) are usually a positive omen for the stock market, not a negative.

And I'd beware of short term bonds as a haven - the fed has told you directly that it will be raising short term rates. And you aren't getting paid to hold short term bonds.

Put it this way. In a year the 10 year has gone from 1.8% to 2.4%. You would expect longer term bonds to be losers, right? Well you'd be wrong. Long term bonds did the best of the three durations over that year.

Short: +0.88%

Inter: +1.16%

Long: +2.57%

The market has a way to moderate losses and allocate returns. It tends to work over time.

Gannet dive path wrote:

I doubt it will slip under 13,000

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Ghost of 29 wrote:

The ride down is going to be breathtaking!

Well it got close! Within 7500 points. And it was breathtaking!!!!

Bonds are dumb wrote:

Bonds constantly lose value to the real rates of inflation.

I'm 50 percent in the market right now, in individual stocks, but plan to be 100 percent soon.

When the stocks go down, I buy more.

Four things to watch for: high, low, buy, sell.

ryan foreman wrote:

So I'm on the same page as you. What is the real rate of inflation?

7 to 10 but more like the latter.

Fake Igy wrote:

http://www.cnbc.com/2017/03/22/1-in-3-americans-could-not-come-up-with-2000-in-an-emergency.html

1 in 3 Americans are under 25 years old.

The release also includes two new series that measure the financial fragility of U.S. households—the probability of needing $2,000 for an unexpected expense in the next month and the probability of being able to come up with $2,000 if an unexpected need arose within the next month.

Do the math wrote: Detector Dude Wrote

Fake Igy wrote:http://www.cnbc.com/2017/03/22/1-in-3-americans-could-not-come-up-with-2000-in-an-emergency.html

1 in 3 Americans are under 25 years old.