Down goes the Dow

I suppose like in all bubbles you can find a reason to pay more for an asset than is reasonable. And of course as long as you can sell it to someone else at a higher price it works.

“Reasonable” is defined by the buyer and seller.

Yep, there he goes injecting his own value judgment again.?

Jesus, Idiot, you sound like me. You shadowing me on this board? I posted all that years ago, it would be hilarious to data mine and compare.

It will be fun to see if, as you continue, our views will diverge.

Carry on!

Maserati wrote:

Jesus, Idiot, you sound like me. You shadowing me on this board? I posted all that years ago, it would be hilarious to data mine and compare.

They say there are no new ideas... I gave a paper at a technical conference last fall and didn’t discover until final review that a central figure was very nearly identical to one in a book I’d just picked up. I’d never seen the figure before but was horrified by the idea it might look like I’d plagiarized the book. Here, I’m sure I don’t remember you writing similar words, but I have a horrible memory. If I’ve plagiarized I’m blissfully unaware... anyway, they also say great minds think alike ?

Bob the Banker wrote:

“Reasonable” is defined by the buyer and seller.

caveat emptor

Ghost of Igloi wrote:

Bob the Banker wrote:

“Reasonable” is defined by the buyer and seller.

caveat emptor

It’s the stock market. That goes without saying.

Just heard an interesting theory.

It answers two big quesstions:

1) Why has inflation been so low?

2) Why isn't the huge US debt a problem for markets?

Here's the chain of reasoning. I don't agree or disagree but it's a clean theory that could be correct:

1) The rich are getting most of the money in the economy.

2). The rich save the money, they don't spend it.

3) Regular people aren't flush so their spending is ok but not great.

4) This keeps inflation low since neither group is spending much more than they ever have.

5) This low inflation rate lets interest rates stay low.

6) These low interest rates allow the government to borrow $1 trillion per year and afford the interest payments.

Here's the weirdness and suggests a possible pothole that we are heading toward:

7) If regular people start getting much more money, they will spend it. This spending will drive up inflation. The inflation will push up interest rates .Then the government will NOT be able to afford borrowing $1 trillion per year. Crisis.

8) Right now, we are starting to see lower income people get some solid income growth. And by some measures inflation is creeping above 2%. Gold is going parabolic. Is this an inflection moment? Is the next story a US debt crisis and huge losses on bonds?

Iran fires missiles at US base. S and P 500 futures is currently down 1.43%. Could this be the catalyst to a significant drop?

Bit of a drop wrote:

Iran fires missiles at US base. S and P 500 futures is currently down 1.43%. Could this be the catalyst to a significant drop?

The S & P index was up 29% last year. It will soon rebound. Just a blip.

High quality bonds and CDs are rebounding.

?

Ghost of Igloi wrote:

High quality bonds and CDs are rebounding.

?

They have a lot, and I mean a LOT, to rebound from. Their real return over the last 30 years is a dismal 1.04%. That is pathetic. Just pathetic.

I think you have "layered" CDs whatever the heck that means. That is like layering dog poop on dog poop on dog poop.

Sally Vixxxxxxxens wrote:

Bit of a drop wrote:

Iran fires missiles at US base. S and P 500 futures is currently down 1.43%. Could this be the catalyst to a significant drop?

The S & P index was up 29% last year. It will soon rebound. Just a blip.

Obviously it will rebound eventually no matter how far it drops. My question was about the short to mid term (7 days to ~4 months). There's been a lot of talk and indicators of a recession the last year or so, and the market has run up almost without pause the last several months. It wouldn't surprise me if we saw a 5% drop from recent highs, but I am just one guy. The S&P 500 will still likely end the year above 3350.

Ghost of Igloi wrote:

High quality bonds and CDs are rebounding.

?

Well they really have no where else to go.

Bit of a drop wrote:

Sally Vixxxxxxxens wrote:

The S & P index was up 29% last year. It will soon rebound. Just a blip.

Obviously it will rebound eventually no matter how far it drops. My question was about the short to mid term (7 days to ~4 months). There's been a lot of talk and indicators of a recession the last year or so, and the market has run up almost without pause the last several months. It wouldn't surprise me if we saw a 5% drop from recent highs, but I am just one guy. The S&P 500 will still likely end the year above 3350.

There is ALWAYS talk of a recession. You have 1000s of investment "experts" out there who are proclaiming the end is near and the market is going to tank runs nonstop. People like IGY have been saying that for 10 years now. Instead the market has returned enormous returns for a decade now or even longer. Even if the market DOES tank view it as a buying opportunity. The market WILL continue going up over time and I feel bullish big time on it now.

People like Sally are seduced by the cult of equities even though for the past 20 years have delivered bond like returns.

?

Average annual return is ~9%. It went up 29% last year. It doesn't take a genius to figure out what is needed to bring that number down to the average over the next couple years.

Ghost of Igloi wrote:

People like Sally are seduced by the cult of equities even though for the past 20 years have delivered bond like returns.

?

A lie. The S & P 500 index has a real return over the last 30 years of over 7%. That is the REAL rate of return taking into account inflation which was as high as 6%. So "equities' have done remarkably well over the last 30 years - yes, igy?

Bit of a drop wrote:

Sally Vixxxxxxxens wrote:

There is ALWAYS talk of a recession. You have 1000s of investment "experts" out there who are proclaiming the end is near and the market is going to tank runs nonstop. People like IGY have been saying that for 10 years now. Instead the market has returned enormous returns for a decade now or even longer. Even if the market DOES tank view it as a buying opportunity. The market WILL continue going up over time and I feel bullish big time on it now.

Average annual return is ~9%. It went up 29% last year. It doesn't take a genius to figure out what is needed to bring that number down to the average over the next couple years.

What the heck are you talking about? The average annual return of for what period? Do you have any idea what you are saying?