Down goes the Dow

You wishes wrote:

Players position wrote:

And when will that be exactly?

How would I know? I don't run Goldman Sachs.

As a guess -- within three years.

You’ve been wrong for 5 years. Why should we believe you now?

Since you know better answer it yourself.

You wishes wrote:

Players position wrote:

And when will that be exactly?

How would I know? I don't run Goldman Sachs.

As a guess -- within three years.

Every investment lecture i have ever heard (and admittedly, that's not many) starts with a phrase something like 'for those with the risk tolerance to try it...' and then they go on to describe some level of investing.

Igy, perhaps you are simply a person for which the risk tolerance is not sufficient to try exposure to the investing in the broad market. Others are, and you are not. I base this on your unwillingness to expose yourself to the down portion of the 'ups and downs' of the market.

Which is fine and the way it should be.

The problem arises when you project that philosophy/strategy onto others. You see the problem there, no doubt.

This difference comes to light when you have made a forecast apparently five years ago that has yet to materialize, and you now say you think it might take as long as another three years to happen. That's 8 years and perhaps counting....

Many investors, like myself, would not forego investing for a dip in a larger cycle becuase we know they happen and we feel that the risk of having to wait one out is worth the upside potential.

The overall trend of the market has been up over its history. It has proven to be profitable and beneficial for long term investors that chose to partake. Perhaps your risk tolerance is simply not one that would make you a good participant. But one might wonder about the virtue of projecting those fears and persistent unease on those that would.

Seattle,

Come on, I know you are getting older but your memory can’t be that bad. I did not post on this thread five years ago. The domestic market has gone up in stair step fashion since 11/9/2016, that rise could be just as easily be gone in a few weeks of trading. When investors have lost all their gains in this cycle they will once again realize if you pay too much you lose. Successful investing is much more about risk management and saving than taking uneducated risk. The stock hawking industry promotes “an all in, all the” time narrative. If you analyze the actual data that is a rather poor way to invest, and the results of the average investor shows it. None of this is some Igy theory unique to me. Pretty simple universal law of finance.

Igy

people don't come to realizations like 'you pay too much, you lose.' And where do you come off with assuming anyone - anyone - is taking uneducated risks?

What people may come to realize is that they have to wait out some dips. or in some unfortunate cases, they might learn that they don't quite have the stomach they thought they would have in enduring such dips. But that's part of the learning process.

Your reasoning is fraught with assumptions, and that assumption is basically anyone who has bought equities in the last few years is a greedy slob deserving of losing their money.

Seattle,

No I don’t think that, but the investors you describe have an untested belief system. Many have been lead to believe there is magic in charts, trading, ETFs, and “buying on the dip.” There is no doubt this belief has been rewarded in the era of central bank QE. That is how bubbles are created and without it there would not be better values down the road.

Igy

stop being civil. Post some of that suspect russian stuff.

Igy, how would you personally fare in a massive market downturn? I know you have some hedge fund thing going on, for example, and even my questionable memory (thank you very much) recollects that much. Would you actually make money on the downside? Just wondering.

Seattle,

Funny. Actually Zero Hedge runs multiple sources you can’t view online without a subscription. From Wall Street Journal or Business Insider for ecample, which as far as I know are not suspected Putin operatives.

Igy

Seattle,

Good. In the last two severe downturns the best performing assets classes were managed futures, government bonds, credit and hedge funds. Hedge funds still lost half as much the market. Credit (corporate bonds) and government bonds are more inflated in price than in 2000 and 2007. In summary managed futures look like the best bet along with short term high quality bonds. Bonds would attrack equity liquidations and if the Fed cut interest rates the price would rise.

Igy

seattle prattle wrote:

stop being civil. Post some of that suspect russian stuff.

Ghost of Igloi wrote:

Since you know better answer it yourself.

I asked what you would recommend. I cannot answer that for you.

Body weight wrote:

Ghost of Igloi wrote:

Since you know better answer it yourself.

I asked what you would recommend. I cannot answer that for you.

I gave you my thoughtful answer. That is not enough for you, of course there never will be. That is your game.

Basing life expectancy to 90 years is not such a bad idea.

And i quote from a Business Insider article on Life Expectancy: "children born today will live longer than any other generation. About 2/3 will live past 80, and 1/3 past 90. Almost one in ten girls born now will live past 100."

For 60 year olds, that number is about 26%.

So, if i had to choose, i certainly would plan for that eventuality.

Man, can't wait to start working those age-graded results to sweeten my numbers then!

link to article:

The real issue:

“By the end of the 2000-2002 market decline, the total return of the S&P 500 had fallen behind risk-free Treasury bills all the way back to May 1996. By the end of the 2007-2009 market decline, the total return of the S&P 500 had fallen behind risk-free Treasury bills all the way back to June 1995. I continue to expect the completion of the current market cycle to wipe out the entire total return of the S&P 500 since 2000, and to put it behind Treasury bills all the way back to late-1997.”

—John Hussman, September 2018 Market Commentary

Now if that happens during the retirement distribution phase, that becomes the ruin of your best laid plans. All that moving of money around for what....nothing.

Ghost of Igloi wrote:

The real issue:

“By the end of the 2000-2002 market decline, the total return of the S&P 500 had fallen behind risk-free Treasury bills all the way back to May 1996. By the end of the 2007-2009 market decline, the total return of the S&P 500 had fallen behind risk-free Treasury bills all the way back to June 1995. I continue to expect the completion of the current market cycle to wipe out the entire total return of the S&P 500 since 2000, and to put it behind Treasury bills all the way back to late-1997.”

—John Hussman, September 2018 Market Commentary

Now if that happens during the retirement distribution phase, that becomes the ruin of your best laid plans. All that moving of money around for what....nothing.

And if it doesn’t happen, which is likely given Hussman’s track record, all will be well. That is except for those who followed your advice.

And this has already happened: “By the end of the 2000-2002 market decline, the total return of the S&P 500 had fallen behind risk-free Treasury bills all the way back to May 1996. By the end of the 2007-2009 market decline, the total return of the S&P 500 had fallen behind risk-free Treasury bills all the way back to June 1995.“ So if it happens again you lose big time way more than anyone who listened to me.

If it happens, i sell on the way down, making a profit since i've seen years of appreciation. The person who buys also may see a profit, eventually, having bought in at a reduced price especially if they have a long time horizon in their plan.

seattle prattle wrote:

If it happens, i sell on the way down, making a profit since i've seen years of appreciation. The person who buys also may see a profit, eventually, having bought in at a reduced price especially if they have a long time horizon in their plan.

Seattle,

May or may not happen to you. I would ask how you fared from 2000 through 2011? In the end investors cannot avoid the downturn since each share must be owned by someone. You seem to not get that point.

Igy