Down goes the Dow

wish that was it wrote:

R2D3 wrote:

It is an all-time high.

"real" was the key term.

It is real.

C3PO wrote:

wish that was it wrote:

"real" was the key term.

It is real.

Are you the real C3PO?

He pinched my @ss when I walked by.

C3PO wrote:

wish that was it wrote:

"real" was the key term.

It is real.

No, it's nominal.

wish that was it wrote:

C3PO wrote:

It is real.

No, it's nominal.

Oh, it's real alright.

can you guys take it outside, plz?

Another day another all time high for the SP 500

52 weeks highs for emerging markets but not all time highs.

Here's an interest couple of facts - I'd guess most people probably put around 5% at most into emerging market stocks, but they make up 13% of the world's market cap and 32% of the world's sales.

So unless you have, say, 13% of your portfolio in EM stocks, you are underweighting and in effect betting against them. Make sure that is what you mean to do.

They have had an interesting pattern - doing far better in the 2009- 2011 but then going to sleep 2012 and 2013.

They seem to be perking up - I've been buying them for the last 6 months - shifting from small cap US to emerging markets.

Those poor small caps, they can't seem to get a break!

We're up again this morning, Tuesday. Good times! Unless you're in gold, that is.

I still think that margin debt is a really big deal that will be one of the major drivers of the major downward move that I believe will come. Sure, everyone's working for a soft landing--but a landing it will be, nonetheless.

For now, on the surface, everything looks good, as long as you believe that the "debts" that advanced societies have accumulated are serviceable--which I don't.

Right now it doesn't seem like there is anything specific to comment on--specificity will come in the form of events that have a significant effect on the market.

Anyway, I sincerely hope people are enjoying these nice late-summer days of gain after gain, these are the glory days!

Maserati wrote:

For now, on the surface, everything looks good, as long as you believe that the "debts" that advanced societies have accumulated are serviceable--which I don't.

Interesting opinion. Why not? Private debt is much higher relatively than national debt. US companies owe $38 trillion. Isn't that more likely to sink the economy?

Randy Oldman wrote:

Maserati wrote:

For now, on the surface, everything looks good, as long as you believe that the "debts" that advanced societies have accumulated are serviceable--which I don't.

Interesting opinion. Why not? Private debt is much higher relatively than national debt. US companies owe $38 trillion. Isn't that more likely to sink the economy?

Wouldn't those all be included in his term "advanced societies"? He didn't specify sovereign debt.

C3PO wrote:

wish that was it wrote:

No, it's nominal.

Oh, it's real alright.

It's real and it's spectacular!

"At the same time, fluctuations in the financial markets, speculation on stocks, investments, and the machinations of commodities traders or central bankers, all these have become the stuff of everyday arguments over coffee or beer or around water coolers everywhere—just as they have become the veritable obsessions of certain cable watchers and denizens of Internet chat pages. There is also a tendency—quite typical of such popular technologies of the future as well—for idiosyncratic (‘crackpot’) theories to proliferate on the popular level."

David Graeber

"You gotta be first or right. If you're both then that's lucky"

barnejek's blog

How ironic is it, on the eve of the first anniversary of Down goes the Dow, said index should hit an all time intraday high ( nominal )? Plus the anomaly of a thread on finance generating over 3400 responses; on a running site!

la gente está muy loca wrote:

How ironic is it, on the eve of the first anniversary of Down goes the Dow, said index should hit an all time intraday high ( nominal )? Plus the anomaly of a thread on finance generating over 3400 responses; on a running site!

Great catch, gente. Perhaps Klondike5 will make an appearance and tell us when his crash is coming?

Happy anniversary, "Down goes the Dow".

I'm tempted to say something just to bring he who shall not be named out of the woodwork, but that would be taunting.

So in honor of the anniversary, here are some numbers - returns of various pieces of the investment markets from the day of the start of the thread:

Sp 500: +23.2%

US Stocks (VTI): +22.5%

Emerging Markets (VWO): + 21.2%

World Stocks(VTI): +19.05%

Dow (DIA): +16.7%

Roughly 60/40 US stock/bond portfolio (VBINX): +15.25%

Small US Stocks (IWM): +14.65%

Europe and Japan (VEA): +13.8%

Bonds (BND): +5.5%

Gold (IAU): -6.9%

Silver (SLV): -15.9%

So obviously pretty easy to make money over the last 12 months - everything was up big...except gold and silver.

If I had to make an overweight bet for the next 12 months, I'd put my money on emerging markets - they are cheapish and starting to feed off the stability of the developed markets.

Do you realize this thread has averaged 9 posts per day over the year? Unbelieveable. I am proud of us, for the most part.

Why not go 100% into emerging markets if you think that they are the best bet for the next 12 months?

well that's easy - because I am wrong a lot

the way I think is this: there is a benchmark portfolio, that will mimick the financial markets performance. I use tickers VT and BND to 'copy' the market.

In theory, you could have a good portfolio owning JUST VT and BND, in the right percentages.

But I always want to underweight or overweight segments of the markets - for example, in the years 2000-2013 I owned way more small cap US than they represent in VT. Because small caps tend to do better and they weren't expensive.

But early in the year I sold the small caps and am now underweight them. Because they are expensive.

So i'll play around with sectors, countries, etc...trying to exploit long lasting investment 'truths.'

But they don't always work, as any deep value investor will tell you.

That is not a very good answer.

So what if you are wrong a lot? Are you right more often than you are wrong? If so then it would seem that the optimal strategy would be to go 100%.

"As any deep value investor will tell (me)?" Why should one care what some folks say? I think that I (and you) should care about maximizing returns. No?

The question remains, would it not make more sense to go 100% if you are right more often than you are wrong? And if you are not right more often then wouldn't you be better off not shifting your portfolios weights at all?

to be honest, if in 1985 when I started investing, I had bought just VT and BND, yeah, I would have more money today.

I see what you are getting at, and these days I am more right than I am wrong, but the costs of being wrong are assymetrical.

Meaning, if I do nothing but own the benchmark portfolio, I am very likely to do well and unlikely to suffer major damage.

But if I go 100% into emerging markets, then the chance of blowing myself up goes up a lot. Which would damage my life.

And while I do think I will do better 100% in emerging markets...if I am wrong, the downside is pretty huge. They could go down 20% while the rest of the world goes up 20%.

Point is, I never want to deviate that much from the benchmark because the risk of being wrong is too large.

It's the old horizon problem - almost everyone believes that stocks will outperform bonds over almost all 10-20 year periods. So why don't we all own 100% stock portfolios? Because sometimes stocks don't outperform bonds, and some of us don't have time to wait.

Good solid answer. I like you agip. I even like Flagpole. I like sally and la gente, and other posters as well. Nice thread, I must thank the guy who turned me onto it.

DJIA basically flat so far today, Wednesday.

I have said pretty much everything I have to say about the markets, equity and otherwise. My personal issue now is when to get back in, how, and to what extent. I can afford to wait a bit longer. The YTD gains are enjoyable, but I can wait to see what happens up until the beginning of next year, unless the markets soar and conditions show signs of stability.

Wow, maybe the most convivial anonymous thread on the internet.