Down goes the Dow

OK. Hope it works for you.

Ghost - you were pretty bearish 4 years ago - and the market is up 33% since.

Your exact words ... "Agreed. There is more money on the buy side, the question is if they can move above that 2150 channel. I would think it has to be lead by the high multiple stocks, healthcare and financials. I am neutral on which direction it heads, but in my view with valuations near the top, the Bull case becomes more difficult."

Ghost of Igloi wrote:

wondering wrote:

But valuations are moderating. That’s good, right?

Not really, GAAP EPS is tracking 10% lower than last quarter while the market is 5% from it’s record high.

The last growth number I saw for 4Q2018 was about 13%. If it’s now 10% lower, that’s still double-digit growth! Valuations are not in a bad place.

Ghost - your prognostication abilities are lacking. Here are you a little more than 3 years ago predicting the Dow under 13,000. It is more than double that now. I guess that is a major miss on your part. Yes?

Ghost "Just Saying,

I actually think the Dow will go lower than 13,000, but since that is the number someone mentioned, I used it as a benchmark bet with POTO.

Respectful criticism is fine, but when one throws out insults or backhanded compliments I will act in kind. Having a market view, which can be supported by data, and is not stocks all the time, subjects the author to distain. Much of the criticism I have received, are blanket statements, not backed by an iota of data. On the other hand, I have supported my views with data and articles from a variety of sources."

Igy

Sally Vix wrote:

Ghost - you were pretty bearish 4 years ago - and the market is up 33% since.

Your exact words ... "Agreed. There is more money on the buy side, the question is if they can move above that 2150 channel. I would think it has to be lead by the high multiple stocks, healthcare and financials. I am neutral on which direction it heads, but in my view with valuations near the top, the Bull case becomes more difficult."

Sally,

OK. And the market was at the same level 11/4/2016, and only 9% higher 12/24/2018 eight weeks ago. Not ancient history.

At that time I believe my view was the market was 50% overvalued, today about 60-65% overvalued.

I do believe in 10% historical equity returns, but to get there the price has to come down. A reasonable downside target for the S&P 500 would be 900-1,100.

Igy

Ghost - please quit picking specific dates most advantageous to your position. 3 years ago you predicted the Dow would be under 13,000. It is more than double that. How do you reconcile that with your prediction?

Sally Vix wrote:

Ghost - your prognostication abilities are lacking. Here are you a little more than 3 years ago predicting the Dow under 13,000. It is more than double that now. I guess that is a major miss on your part. Yes?

Ghost "Just Saying,

I actually think the Dow will go lower than 13,000, but since that is the number someone mentioned, I used it as a benchmark bet with POTO.

Respectful criticism is fine, but when one throws out insults or backhanded compliments I will act in kind. Having a market view, which can be supported by data, and is not stocks all the time, subjects the author to distain. Much of the criticism I have received, are blanket statements, not backed by an iota of data. On the other hand, I have supported my views with data and articles from a variety of sources."

Igy

Sally,

I still believe that.

See you think there is something durable in the crrent level of the market.

Igy

So you are predicting the market would tank 3 years ago, and you were predicting it would tank 2 years ago, and predicting it would tank a year ago, and still predicting it will tank? And I am sure in 7 years when the Dow is about around 40,000 you will be predicting it to go back down to below 13,000.

WOLF!!

Sally Vix wrote:

Ghost of Igloi wrote:

Sally,

I still believe that.

See you think there is something durable in the crrent level of the market.

Igy

So you are predicting the market would tank 3 years ago, and you were predicting it would tank 2 years ago, and predicting it would tank a year ago, and still predicting it will tank? And I am sure in 7 years when the Dow is about around 40,000 you will be predicting it to go back down to below 13,000.

Sally,

Here is a book just for you. Glassman wrote the book with Hassert Trump’s economic advisor. It is on special just for you:

It is out of print (for obvious reasons), not a best seller, but perhaps a collectors item.

Happy reading.

Good luck.

Igy

“Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market is a 1999 book by syndicated columnist James K. Glassman and American Enterprise Institute scholar and former Federal Reserve economist Kevin A. Hassett.[1][2] in which they argued that stocks in 1999 were significantly undervalued and concluded that there would be a fourfold market increase with the Dow Jones Industrial Average (DJIA) rising to 36,000 by 2002 or 2004.[3][4] The Dow was pushed down by the bursting of the dot-com bubble as the NASDAQ peaked in 2000 and bottomed out in 2002, and by the September 11 attacks in 2001. The Dow fell below 8,000 in 2002 and remained below 12,000 until 2006.”

Ghost - thanks for the book recommendation.

Do you admit that you were egregiously wrong with your prediction of sub-13,000 3 years ago? And your track record is not stellar?

At $50+/copy for the paperback? Yeah, I’d say it’s a collectors item.

An interesting point is the Dow is much more overvalued in 2019 than 2000. In 2000 there were few growth names in the index that were drivers of the 2000 equity bubble. In 2019 both growth and value are distorted. In 2000 it was in vogue not to pay dividends “companies should be investing in growth.” Today many slow growing dividend payers are distorted by borrowed money used to support stock buybacks and increasing dividend payments.

Good luck Dow 40,000 “ladies” and gentlemen.

Ghost of Igloi wrote:

“Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market is a 1999 book by syndicated columnist James K. Glassman and American Enterprise Institute scholar and former Federal Reserve economist Kevin A. Hassett.[1][2] in which they argued that stocks in 1999 were significantly undervalued and concluded that there would be a fourfold market increase with the Dow Jones Industrial Average (DJIA) rising to 36,000 by 2002 or 2004.[3][4] The Dow was pushed down by the bursting of the dot-com bubble as the NASDAQ peaked in 2000 and bottomed out in 2002, and by the September 11 attacks in 2001. The Dow fell below 8,000 in 2002 and remained below 12,000 until 2006.”

“Hussman is a very bright man. He provides compelling analysis and opinions, which I typically find quite interesting. The only problem is that the evidence, including his own track record, demonstrates that investors are best served by ignoring his opinions.

One reason to do so is that he isn’t telling me, or you, anything that other sophisticated investors (such as pension plans, hedge funds and mutual funds) are unaware of. The market has already priced the risks on which Hussman bases his analysis. He just believes he’s smarter than the collective wisdom of the market. Or, at least, he wants you to believe he is, even if he knows better.

If the evidence hasn’t yet convinced you to ignore Hussman’s forecasts, and others like his, ask yourself this question: Do you think you’re better served by following Hussman’s advice or Buffett’s?”

Will you admit you were way off 3 years ago? And understanding that, many here would not really rely on what you are predicting now. It that a valid point?

Sally Vix wrote:

Will you admit you were way off 3 years ago? And understanding that, many here would not really rely on what you are predicting now. It that a valid point?

I don't think you will ever admit you were wrong. Are you not able to say you were wrong?

Sally Vix wrote:

Sally Vix wrote:

Will you admit you were way off 3 years ago? And understanding that, many here would not really rely on what you are predicting now. It that a valid point?

I don't think you will ever admit you were wrong. Are you not able to say you were wrong?

Sally,

Every Wall Street analyst was wrong in 2018. They were wrong in 2015 as well. You wil joined them in 2019. Once this market comes full circle you will learn the timing did not matter.

See bubbles require untethered policy makers and delusional investors. No surprise in your behavior or belief system.

I wish you well though Sally.

Off for a hard workout in the snow. Time to clip on the Yaks Trax.

Igy