Down goes the Dow

J. Hardy wrote:

Ghost of Igloi wrote:

Seattle and Hardy,

OK. The point is it is impossible for investors to avoid a downturn.

Igy

Define “investors”. Of course, someone is going to be holding when the markets crash. Your mistake is assuming that (most of) us have not accounted for that. People do sell at a profit, you know.

Someone holds each share of stock through each moment in time. So it is not reality to assume that investors can sidestep an overvalued stock market anymore than they can avoid an overvalued real estate or art market. Someone has to take the loss.

Interesting developments in Africa and India. There's a major locust plague, like major major.

Certain crops could take a pretty big hit and I'll be watching to see any effects in equities. After all, wheat prices caused the crash of 1929 so there's hope for Igy yet!

Ghost of Igloi wrote:

J. Hardy wrote:

Define “investors”. Of course, someone is going to be holding when the markets crash. Your mistake is assuming that (most of) us have not accounted for that. People do sell at a profit, you know.

Someone holds each share of stock through each moment in time. So it is not reality to assume that investors can sidestep an overvalued stock market anymore than they can avoid an overvalued real estate or art market. Someone has to take the loss.

You’re just repeating what I wrote. Where we differ is that you think I and the others here will be the ones left holding the bag. You underestimate our intelligence.

“Of course, if overvaluation itself was enough to drive prices lower, one could never observe extremes like 1929, 2000, and today, because the market would have been weighed down by far lesser extremes. Graham and Dodd made the same observation nearly a century ago in their bible of value investing, Security Analysis. Even as they counseled analysts to discourage investors from speculating at extreme valuations, they wrote:”

“‘There will be a number of individual instances in which this important principle will seem to work out poorly because the average price of the future will be much higher than the level at which the analyst counseled the sale. Our experience tells us that such occurrences, while very plausible, are exceptional and delusive. If they did not happen the market would never go to its extremes. They resemble the cases of large winnings at roulette, without which encouragement there would be no customers for the wheel.’l

—John Hussman, February 2020 Market Commentary

I heard that guy was right once. Maybe even twice.

“‘Over the past 5 years, the revenues of S&P 500 technology companies have grown at a compound annual rate of 12%, while the corresponding stock prices have soared by 56% annually. Over time, price/revenue ratios come back in line. Currently, that would require an 83% plunge in tech stocks (recall the 1969-70 tech massacre). The plunge may be muted to about 65% given several years of revenue growth. If you understand values and market history, you know we’re not joking.’

– John P. Hussman, Ph.D., March 7, 2000

“As it happened, the tech-heavy Nasdaq 100 lost an implausibly precise 83% of its value from March 2000 to October 2002.’”

Earnings Scorecard: For Q4 2019 (with 45% of the companies in the S&P 500 reporting actual results), 69% of S&P 500 companies have reported a positive EPS surprise and 65% of S&P 500 companies have reported a positive revenue surprise.

Ghost of Igloi wrote:

J. Hardy wrote:

Define “investors”. Of course, someone is going to be holding when the markets crash. Your mistake is assuming that (most of) us have not accounted for that. People do sell at a profit, you know.

Someone holds each share of stock through each moment in time. So it is not reality to assume that investors can sidestep an overvalued stock market anymore than they can avoid an overvalued real estate or art market. Someone has to take the loss.

Not technically correct. Both sides of the trade may be profitable depending on subsequent holding periods and sale price.

Earnie wrote:

Earnings Scorecard: For Q4 2019 (with 45% of the companies in the S&P 500 reporting actual results), 69% of S&P 500 companies have reported a positive EPS surprise and 65% of S&P 500 companies have reported a positive revenue surprise.

Liquidated most at open today when most of my stuff was relatively unaffected. Still hold a few things, but not much. Still have the b&h, which took a beating today. Will let it ride and watch from the vacation sidelines.

It has been a good run, and I can vacate wih peace of mind.

In airport now with wife, just had the best Hamachi I have ever had! Yum. Will be keeping tabs on the thread while gone for a month. What a loser!

Good luck to everyone.

I made a small sell yesterday. Today i tried to do a couple of day trades and exited the position by the end of the day for small losses.

Keeping an eye on the market very closely next week and may do more selling if need be.

seattle prattle wrote:

Keeping an eye on the market very closely next week and may do more selling if need be.

No, you will hold and ride your investments all the way down. Igy has said as much. You are nit as smart as he is.

Just met investment house CEO friend at airport, on his way to London. He is flying COMMERCIAL. Their jet lease deal is totally disrupted by the CHN situation. Tons of Brexit stuff going down, and a bunch of people will be late to the party.

Strange days. I did have a good laugh, though. He retires in 2 months, and it looks like he might be leaving amid turmoil. Talk about timing. He has a boatload of options he will need to exercise.

BTW I made out pretty well—even the b&h held up decently well, way better than the Dow or S&P.

KeIIy wrote:

I will hold and ride my investments all the way down. Igy has said as much. I am not as smart as he is.

I’m gonna guess that you don’t even realize that you just made my point for me.

You’re so mean to me. I want to cry. ?