Mine is Deschutes Black Butte Porter by the way.
Mine is Deschutes Black Butte Porter by the way.
You're on.
Good. I have an honor bet bet with “the idiot” (who is far from) and a beer bet with Seattle (city known for it’s coffee). The life and times of Covid-19. :)
Ghost of Igloi wrote:
OK, but I bet you a six pack of your favorite beer it has a better three year return by year end.
So far, every time you’ve bet on my fund you have lost. I appreciate you’re lack of common sense.
Ghost of Igloi wrote:
the idiot wrote:
Yeah the bet is 1500, but you’ve been calling confidently for 1100. Even you must not like your chances for that by the end of the year...
It is more likely not less. ...
Igy,
I'm not sure you understand how probability works... you're saying there is a greater chance TODAY of a drop to 1500 than there was at some time in the past. And maybe you also think that as time goes on, the longer we go without that drop, the higher the probability that the drop will occur before the end of the year?
In a given period, of, let's say, 50 years, the probability of seeing a 50% drop in the market at some time over 50 years is pretty close to (but less than) 100%. If we shorten the observation period to, say, 10 years, the probability drops accordingly; not linearly with time, but in some fashion in accordance with how the uncertainty (or variability) is distributed.
If we shorten the observation period further, to say a couple of years, or - maybe - 7.5 months (as a random example...) the probability drops even more. Of course that probability could increase if there are other important factors at work influencing the chances. We do of course have a pandemic hanging over the markets; but that's not "new" in the past month or two.
If (as I suspect may happen) the pandemic doesn't fade like we expect (and hope), or if we get a stiff "second wave," the markets may take another big hit. But a nearly 50% hit? Of course it *could* happen, just like it *could* happen any other day of any other year. Maybe it's even marginally more likely than at most other times. But if it didn't do it in the first perilous drop from ~3400, my own *feeling* (and that's all it is...) is that it's not going to happen now, at least not in the next 7.5 months.
Unless of course it does, in which case I will graciously offer up my dignity. :-)
the idiot wrote:
Ghost of Igloi wrote:
It is more likely not less. ...
Igy,
I'm not sure you understand how probability works... you're saying there is a greater chance TODAY of a drop to 1500 than there was at some time in the past. And maybe you also think that as time goes on, the longer we go without that drop, the higher the probability that the drop will occur before the end of the year?
In a given period, of, let's say, 50 years, the probability of seeing a 50% drop in the market at some time over 50 years is pretty close to (but less than) 100%. If we shorten the observation period to, say, 10 years, the probability drops accordingly; not linearly with time, but in some fashion in accordance with how the uncertainty (or variability) is distributed.
If we shorten the observation period further, to say a couple of years, or - maybe - 7.5 months (as a random example...) the probability drops even more. Of course that probability could increase if there are other important factors at work influencing the chances. We do of course have a pandemic hanging over the markets; but that's not "new" in the past month or two.
If (as I suspect may happen) the pandemic doesn't fade like we expect (and hope), or if we get a stiff "second wave," the markets may take another big hit. But a nearly 50% hit? Of course it *could* happen, just like it *could* happen any other day of any other year. Maybe it's even marginally more likely than at most other times. But if it didn't do it in the first perilous drop from ~3400, my own *feeling* (and that's all it is...) is that it's not going to happen now, at least not in the next 7.5 months.
Unless of course it does, in which case I will graciously offer up my dignity. :-)
Also known as the gambler's fallacy.
Racket wrote:Also known as the gambler's fallacy.
Um, no, it's not. That deals with the assumption of dependence when none exists (i.e., the chance of rolling a 7 improving after a long strong of rolls without seeing a 7; the chance of rolling a 7 in any roll is completely independent of the prior rolls. Unlike Russian roulette, where the chance of surviving DOES depend on prior pulls of the trigger). This is a question of temporal probability varying with the observation period, or being dependent on time duration. Igy seems to be assuming the probability is a universal value unaffected by time of observation. Or, as he's stated, INCREASES with reducing time, which is impossible, in the absence of a change in circumstance.
That'll be $0.02.
Doctor idiot
the idiot wrote:
Ghost of Igloi wrote:
It is more likely not less. ...
Igy,
I'm not sure you understand how probability works... you're saying there is a greater chance TODAY of a drop to 1500 than there was at some time in the past. And maybe you also think that as time goes on, the longer we go without that drop, the higher the probability that the drop will occur before the end of the year?
In a given period, of, let's say, 50 years, the probability of seeing a 50% drop in the market at some time over 50 years is pretty close to (but less than) 100%. If we shorten the observation period to, say, 10 years, the probability drops accordingly; not linearly with time, but in some fashion in accordance with how the uncertainty (or variability) is distributed.
If we shorten the observation period further, to say a couple of years, or - maybe - 7.5 months (as a random example...) the probability drops even more. Of course that probability could increase if there are other important factors at work influencing the chances. We do of course have a pandemic hanging over the markets; but that's not "new" in the past month or two.
If (as I suspect may happen) the pandemic doesn't fade like we expect (and hope), or if we get a stiff "second wave," the markets may take another big hit. But a nearly 50% hit? Of course it *could* happen, just like it *could* happen any other day of any other year. Maybe it's even marginally more likely than at most other times. But if it didn't do it in the first perilous drop from ~3400, my own *feeling* (and that's all it is...) is that it's not going to happen now, at least not in the next 7.5 months.
Unless of course it does, in which case I will graciously offer up my dignity. :-)
the idiot,
My view is based on fragility and valuations. In the last 20 years there have been two 50% stock market drops. This is a much greater threat than the Tech Bubble or the GFC. There would have been a third 50% drop just weeks ago without Fed intervention which was forced to inject $Trillions. Central Bank and politicians have had to reach for ever larger stimulus to generate a financial market response. Now because of that, one can say the market is less fragile, and I say it is more fragile. You can see that in the price of gold and falling bond yields. The valuation of the market is substantially worse than March 23rd. This is a Bear Market Rally, that I am sure, the extension of the decline is debatable, and time will tell. As stated before, hard to see GAAP EPS much above $100 x 16 historic multiple gets you to 1600 fair value. Markets don’t mean revert, they mean invert, therefore 1500 or under. :)
Igy
[quote]John Hussman wrote:
the idiot wrote:
Racket wrote:Also known as the gambler's fallacy.
Um, no, it's not. That deals with the assumption of dependence when none exists (i.e., the chance of rolling a 7 improving after a long strong of rolls without seeing a 7; the chance of rolling a 7 in any roll is completely independent of the prior rolls. Unlike Russian roulette, where the chance of surviving DOES depend on prior pulls of the trigger). This is a question of temporal probability varying with the observation period, or being dependent on time duration. Igy seems to be assuming the probability is a universal value unaffected by time of observation. Or, as he's stated, INCREASES with reducing time, which is impossible, in the absence of a change in circumstance.
That'll be $0.02.
Doctor idiot
I re-read the original statement and I retract what I said about the gambler's fallacy. It's honestly hard to tell what you said due to your tendency to excessively apply precaution to all your statements.
Discussion of current market valuation:
https://realinvestmentadvice.com/putting-a-price-on-the-sp-500/
the idiot wrote:
Igy seems to be assuming the probability is a universal value unaffected by time of observation.
Again, hard to tell what you're saying here. On one hand it seems like you're denying the existence of discrete probability distributions, but on the other, well, I don't even know.
If you want to research stock market movement and behavior then there are two generally accepted stochastic models that you should look into : geometric Brownian motion is one, and Levy processes (or general alpha stable processes) are the other.
Ghost of Igloi wrote:
Discussion of current market valuation:
https://realinvestmentadvice.com/putting-a-price-on-the-sp-500/
Valuation has relatively little to do with stock price.
Racket wrote:Again, hard to tell what you're saying here. On one hand it seems like you're denying the existence of discrete probability distributions, but on the other, well, I don't even know.
If you want to research stock market movement and behavior then there are two generally accepted stochastic models that you should look into : geometric Brownian motion is one, and Levy processes (or general alpha stable processes) are the other.
You're arguing about probability and statistics with the wrong guy.
the idiot wrote:
Racket wrote:Again, hard to tell what you're saying here. On one hand it seems like you're denying the existence of discrete probability distributions, but on the other, well, I don't even know.
If you want to research stock market movement and behavior then there are two generally accepted stochastic models that you should look into : geometric Brownian motion is one, and Levy processes (or general alpha stable processes) are the other.
You're arguing about probability and statistics with the wrong guy.
That is abundantly clear
Ghost of Igloi wrote:
the idiot wrote:
Igy,
I'm not sure you understand how probability works... you're saying there is a greater chance TODAY of a drop to 1500 than there was at some time in the past. And maybe you also think that as time goes on, the longer we go without that drop, the higher the probability that the drop will occur before the end of the year?
In a given period, of, let's say, 50 years, the probability of seeing a 50% drop in the market at some time over 50 years is pretty close to (but less than) 100%. If we shorten the observation period to, say, 10 years, the probability drops accordingly; not linearly with time, but in some fashion in accordance with how the uncertainty (or variability) is distributed.
If we shorten the observation period further, to say a couple of years, or - maybe - 7.5 months (as a random example...) the probability drops even more. Of course that probability could increase if there are other important factors at work influencing the chances. We do of course have a pandemic hanging over the markets; but that's not "new" in the past month or two.
If (as I suspect may happen) the pandemic doesn't fade like we expect (and hope), or if we get a stiff "second wave," the markets may take another big hit. But a nearly 50% hit? Of course it *could* happen, just like it *could* happen any other day of any other year. Maybe it's even marginally more likely than at most other times. But if it didn't do it in the first perilous drop from ~3400, my own *feeling* (and that's all it is...) is that it's not going to happen now, at least not in the next 7.5 months.
Unless of course it does, in which case I will graciously offer up my dignity. :-)
the idiot,
My view is based on fragility and valuations. In the last 20 years there have been two 50% stock market drops. This is a much greater threat than the Tech Bubble or the GFC. There would have been a third 50% drop just weeks ago without Fed intervention which was forced to inject $Trillions. Central Bank and politicians have had to reach for ever larger stimulus to generate a financial market response. Now because of that, one can say the market is less fragile, and I say it is more fragile. You can see that in the price of gold and falling bond yields. The valuation of the market is substantially worse than March 23rd. This is a Bear Market Rally, that I am sure, the extension of the decline is debatable, and time will tell. As stated before, hard to see GAAP EPS much above $100 x 16 historic multiple gets you to 1600 fair value. Markets don’t mean revert, they mean invert, therefore 1500 or under. :)
Igy
I absolutely knew that Igy was going to say that (see bolded portion). And I honestly think that in terms of reasoning, it is rational. I don't believe it, but i believe it is rational and reasonable. I think the fallacy is that the stimulus won't work. It will work and is working, and is a bridge as was intended. It will also cut into the balance sheets for years to come, but it goes a long ways to getting us over the hurdle that may have otherwise have happened - a 50% market drop and economic hardship of extreme levels.
I think Racket was right on the money when he said last week, there is no other place to look for return on investment nowadays. TINA i think it was. We've been through this drill before and everyone knows that a major market sell-off is an opportunity in disguise.
seattle prattle wrote:
I absolutely knew that Igy was going to say that (see bolded portion). And I honestly think that in terms of reasoning, it is rational. I don't believe it, but i believe it is rational and reasonable. I think the fallacy is that the stimulus won't work. It will work and is working, and is a bridge as was intended. It will also cut into the balance sheets for years to come, but it goes a long ways to getting us over the hurdle that may have otherwise have happened - a 50% market drop and economic hardship of extreme levels.
I think Racket was right on the money when he said last week, there is no other place to look for return on investment nowadays. TINA i think it was. We've been through this drill before and everyone knows that a major market sell-off is an opportunity in disguise.
It's TINA and the fact that this hasn't really hit people with deep pockets that much yet (emphasis on yet). In 2008 there were simply no buyers left. Everything was garbage and no one had liquidity on hand to even get out from under their trash positions (because they were 30x leveraged on literal sh!t piles) and so everyone wanted out. Right now, there's plenty of willing and capable buyers lining up and I'm not talking about retail investors or millennials with $10 in a Robinhood account. Institutions still have to chase returns and the Fed is determined to be a giant clearing house for liquidity (according to ZeroHedge this is pure evil. According to anyone with a half a brain this is literally the Fed's whole fvcking point of existence). As long as assets can move and credit markets are liquid then all we'll see is rotations out of certain sectors to others.
Racket wrote:
seattle prattle wrote:
I absolutely knew that Igy was going to say that (see bolded portion). And I honestly think that in terms of reasoning, it is rational. I don't believe it, but i believe it is rational and reasonable. I think the fallacy is that the stimulus won't work. It will work and is working, and is a bridge as was intended. It will also cut into the balance sheets for years to come, but it goes a long ways to getting us over the hurdle that may have otherwise have happened - a 50% market drop and economic hardship of extreme levels.
I think Racket was right on the money when he said last week, there is no other place to look for return on investment nowadays. TINA i think it was. We've been through this drill before and everyone knows that a major market sell-off is an opportunity in disguise.
It's TINA and the fact that this hasn't really hit people with deep pockets that much yet (emphasis on yet). In 2008 there were simply no buyers left. Everything was garbage and no one had liquidity on hand to even get out from under their trash positions (because they were 30x leveraged on literal sh!t piles) and so everyone wanted out. Right now, there's plenty of willing and capable buyers lining up and I'm not talking about retail investors or millennials with $10 in a Robinhood account. Institutions still have to chase returns and the Fed is determined to be a giant clearing house for liquidity (according to ZeroHedge this is pure evil. According to anyone with a half a brain this is literally the Fed's whole fvcking point of existence). As long as assets can move and credit markets are liquid then all we'll see is rotations out of certain sectors to others.
I buy that. And those articles i see lately about millenials, gaming theory being applied to trading, and the like - that just tells me how desperate the doomsayers are to keep pumping their narrative. That doesn't move markets (as you've said).
Here's the big thing - some people see that the markets have rebounded in light of what is fairly widely known - that the economy is not out of the woods and should expect a series of flare ups, and certainly a prolongued recovery at best. I think we need to come grips with the fact that the markets know that and are positioning themselves regardless. The markets have confidence in what the Feds have done and that the Feds have their back. And can you say 'election year?' After that, not so sure, might have to puzzle through that one....
Racket wrote:
seattle prattle wrote:
I absolutely knew that Igy was going to say that (see bolded portion). And I honestly think that in terms of reasoning, it is rational. I don't believe it, but i believe it is rational and reasonable. I think the fallacy is that the stimulus won't work. It will work and is working, and is a bridge as was intended. It will also cut into the balance sheets for years to come, but it goes a long ways to getting us over the hurdle that may have otherwise have happened - a 50% market drop and economic hardship of extreme levels.
I think Racket was right on the money when he said last week, there is no other place to look for return on investment nowadays. TINA i think it was. We've been through this drill before and everyone knows that a major market sell-off is an opportunity in disguise.
It's TINA and the fact that this hasn't really hit people with deep pockets that much yet (emphasis on yet). In 2008 there were simply no buyers left. Everything was garbage and no one had liquidity on hand to even get out from under their trash positions (because they were 30x leveraged on literal sh!t piles) and so everyone wanted out. Right now, there's plenty of willing and capable buyers lining up and I'm not talking about retail investors or millennials with $10 in a Robinhood account. Institutions still have to chase returns and the Fed is determined to be a giant clearing house for liquidity (according to ZeroHedge this is pure evil. According to anyone with a half a brain this is literally the Fed's whole fvcking point of existence). As long as assets can move and credit markets are liquid then all we'll see is rotations out of certain sectors to others.
I am sure many believe that. That view operates under the assumption that there is no end to the ability of central banks to manipulate markets. History says that did not work out well for Japan or the Euro zone. Low interest rates have been disastrous for banks, and if you doubt that look at the domestic banking index, or Euro zone banks. There is cause and effect here; you just choose to ignore it while you cheer the momentary market rise.
50 DMA at 2839 is the line of defense Bulls...
Push ‘em back, harder, harder, push ‘em back, harder, harder!