We have 10,000 "experts" saying that the market will tank this year and another 10,000 saying we won't. Please quit posting what they say - 99% of the time they are wrong.
Most experts are wrong most of the time, when it comes to behavior of the markets, but this year has been unusual in that the forces that "ought" to control the market, and reliably do so, have not, and the markets have been wildly unpredictable, more than the regular degree of unpredictable-ness.
Looks like we might have all-time record highs for all indexes year-end. Just blowing the former all-time high for the indexes. What will Hussman/Grantham and Igy say when we reach all time highs? Will they be at a loss for words or will they instead predict 2024 will be the downfall for the indexes?
You must be wrong. Just two days ago, Igy said it could be a DECADE before the S&P 500 reaches a new high. He couldn’t be that wrong, could he? 😂
My own view is that "most" of the market IS behaving as expected, but a small part, that just so happens to be big enough to move the markets (i.e., a small number of very large cap stocks), happen to behave differently, being different animals than "normal" companies, such that, from a certain point of view, it IS different this time. For now, until the markets have grappled with these new monsters and figured them out. We will have a reckoning, eventually. How soon? Who knows. How dramatic? Who knows. Probably a pretty big crash the next time it happens, is what I think. But I don't know whether I'll still be around when it happens. I think nobody knows anything about what the market will do over the next 1 to 10 years, no matter their credentials or whether they've anticipated past crashes or bull runs.
My own view is that "most" of the market IS behaving as expected, but a small part, that just so happens to be big enough to move the markets (i.e., a small number of very large cap stocks), happen to behave differently, being different animals than "normal" companies, such that, from a certain point of view, it IS different this time. For now, until the markets have grappled with these new monsters and figured them out. We will have a reckoning, eventually. How soon? Who knows. How dramatic? Who knows. Probably a pretty big crash the next time it happens, is what I think. But I don't know whether I'll still be around when it happens. I think nobody knows anything about what the market will do over the next 1 to 10 years, no matter their credentials or whether they've anticipated past crashes or bull runs.
$0.02, please :-D
Comfortably retired - it is the Fab 7 running roughshod over all the other stocks. It seems that NVDA is up 2% every day. It is up 3% today, GOOG and Meta up close to 3% today. The Fab 7 just keep going up.
My own view is that "most" of the market IS behaving as expected, but a small part, that just so happens to be big enough to move the markets (i.e., a small number of very large cap stocks), happen to behave differently, being different animals than "normal" companies, such that, from a certain point of view, it IS different this time. For now, until the markets have grappled with these new monsters and figured them out. We will have a reckoning, eventually. How soon? Who knows. How dramatic? Who knows. Probably a pretty big crash the next time it happens, is what I think. But I don't know whether I'll still be around when it happens. I think nobody knows anything about what the market will do over the next 1 to 10 years, no matter their credentials or whether they've anticipated past crashes or bull runs.
$0.02, please :-D
the SP500 has been dominated by giant companies for many years now...it seems to be standard operating procedure and not different this time at all.
Although by some measures now we have even more concentration than usual. Which isn't worrisome except some day MSFT or NVDA or something will crash 25% in one day and the SP500 will fall hard with it. When that happens we will all wish we had bought broader indices.
This post was edited 23 seconds after it was posted.
Agip - we have 10,000 "experts" saying we are headed towards a recession and another 10,000 saying we are not. We have 10,000 "experts" saying that the market will tank this year and another 10,000 saying we won't. Please quit posting what they say - 99% of the time they are wrong.
No
It's interesting to see how many were wrong - calling for a recession at advent of the Fed onset of rate hikes, and I say that because it appears there is a piling on and because it adds some insight to the risk and potential downside that is part-and-parcel with raising Fed. Fund rates. Seriously, I don't think we would have such an appreciation for the apparent "soft-landing" that the Fed. seems to be executing if it were not for the dearth of recession calls from said analysts.
I think it adds some transparency to the process and is informative in grasping that what transpires is often more nuanced and involved than blanket predictions would indicate.
We have 10,000 "experts" saying that the market will tank this year and another 10,000 saying we won't. Please quit posting what they say - 99% of the time they are wrong.
Most experts are wrong most of the time, when it comes to behavior of the markets, but this year has been unusual in that the forces that "ought" to control the market, and reliably do so, have not, and the markets have been wildly unpredictable, more than the regular degree of unpredictable-ness.
What are the "forces that "ought" to control the market"?
It seems pretty straight-forward to me. Markets assumed rate hikes would cause a recession, as they often have based on history of such things. But instead, data has progressively been emerging that inflation is easing, the economy is solid, the consumer is still spending, and there is ample reason to believe that the end of Fed rate hikes may be slowing and even ending in the foreseeable future.
This has been met positively by the market, as it should. So stocks have rebounded.
Wondering what you guys think about building a TIPS ladder from age 60 to 70?
It’s looking like company is going to offer a retirement package to induce us old folks to leave.
I’ll have about $1.9M ($1.4 in 401k and rest in after tax), and want to have $90k/year available (I don’t spend that much but want some for a sinking fund to help my kids, some vacations, car and house stuff). My SS will be about $52k/year at 70.
Was wondering about spending $500k to build a 10 year, $50k/year TIPS ladder. The other $40k/year would require less than 3% drawdown of the remaining $1.4M … so theoretically should last a long time.
You must be wrong. Just two days ago, Igy said it could be a DECADE before the S&P 500 reaches a new high. He couldn’t be that wrong, could he? 😂
2010 Grantham, Hussman and Igy - market crashing
2011 Grantham, Hussman and Igy - market crashing
2012 Grantham, Hussman and Igy - market crashing
2013 Grantham, Hussman and Igy - market crashing
2014 Grantham, Hussman and Igy - market crashing
2015 Grantham, Hussman and Igy - market crashing
2016 Grantham, Hussman and Igy - market crashing
2017 Grantham, Hussman and Igy - market crashing
2018 Grantham, Hussman and Igy - market crashing
2019 Grantham, Hussman and Igy - market crashing
2020 Grantham, Hussman and Igy - market crashing
2021 Grantham, Hussman and Igy - market crashing
2022 Grantham, Hussman and Igy - market crashing
2023 Grantham, Hussman and Igy - market crashing
They were right once - 2022.
$9 Trillion in QE, $4 Trillion in stimulus/transfer payments can do a lot. All it does is create belief in fantasy economics, increasing economic inequality, fake markets, and future chaos (it is already here). I know you don’t care:
“We presently estimate that 2730 on the S&P 500 would imply likely 10yr returns no higher than the 4.25% available on 10yr bonds. That's not to say 10yr yields are adequate relative to current T-bill yields, nominal GDP growth and core inflation. But that's what ZIRP has set up.”
Most experts are wrong most of the time, when it comes to behavior of the markets, but this year has been unusual in that the forces that "ought" to control the market, and reliably do so, have not, and the markets have been wildly unpredictable, more than the regular degree of unpredictable-ness.
What are the "forces that "ought" to control the market"?
It seems pretty straight-forward to me. Markets assumed rate hikes would cause a recession, as they often have based on history of such things. But instead, data has progressively been emerging that inflation is easing, the economy is solid, the consumer is still spending, and there is ample reason to believe that the end of Fed rate hikes may be slowing and even ending in the foreseeable future.
This has been met positively by the market, as it should. So stocks have rebounded.
The reason the economy appears strong is 1) another $1Trillion in Government spending, 2) consumers continue to spend down savings, and 3) increased use revolving debt. Meanwhile housing is least affordable in a quarter century. Deluded populace walking dead. Investors fully hooked on AI as the next new thing.
As for me rolled out of most of my leveraged shorts last week; ~20% down to ~4%. Bought some back, and sold again. Began to re-accumulate today, essentially lowering my cost basis, back up to about 6% by end of aftermarket session. We’ll see how it goes, not hard wired to any position, other than my EM Bond CEFs.
As for me rolled out of most of my leveraged shorts last week; ~20% down to ~4%. Bought some back, and sold again. Began to re-accumulate today, essentially lowering my cost basis, back up to about 6% by end of aftermarket session. We’ll see how it goes, not hard wired to any position, other than my EM Bond CEFs.
That sounds like a lot of work. And you are losing me as to whether or not you are losing or gaining, but I get it that it's in the single digits.
Long term buy and hold here for Nvidia, and it is doing quite well.
Interesting article on Nvidia dominance in the AI sector today in NY Times that may be of interest in understanding why the industry is embracing it and how this company is uniquely positioned to capitalize on it.
The most visible winner of the artificial intelligence boom achieved its dominance by becoming a one-stop shop for A.I. development, from chips to software to other services.
the SP500 has been dominated by giant companies for many years now...it seems to be standard operating procedure and not different this time at all.
Yes, all markets are always dominated to some degree by some small number of very large companies. But sometimes, the monster companies, or most of them anyway, are mature businesses (think GM, EXXON, …). Currently, the Fab 9 are all companies with unbounded potential (which is no guarantee) for growth. This is what, to my way of thinking, makes the current market unusual.
I’m no expert in these matters, in fact the opposite, but that’s my working hypothesis. Remember, though, you usually get what you paid for… 🙂
“That sounds like a lot of work. And you are losing me as to whether or not you are losing or gaining, but I get it that it's in the single digits.”
No, double digits. For example, bought SOXS numerous times in $9s and sold in $11s. Although if your view prevails I won’t be in these positions long. It does require work, but I am retired.
What are the "forces that "ought" to control the market"?
SP, I don’t pretend to understand the complex and tangled multitude of factors that can act to move markets. I try to distill everything to supply and demand. There’s usually not much that can affect the supply of stocks (and other instruments) potentially available for sale. So I think it’s better to focus on demand. As demand ebbs and flows, so prices move up or down.
What controls demand? A whole lot of things, some having to do with the investor (for example, availability of capital) and many having to do with the stocks themselves.
I understand that post-pandemic excess savings are still very high, putting upward pressure on demand and prices. By contrast, central banks around the world have made borrowing much more expensive, a drag on available capital that should depress demand and prices.
As for the stocks themselves, any rational investor is looking to see a return on investment through capital appreciation and dividends, and to avoid a loss. Expectations for dividends, if applicable, are always uncertain but can be estimated with better confidence from dividend history and an understanding of the health of the company. Estimating capital appreciation is much harder. Some folks would have us believe the price to earnings ratio, or similar metric, gives a great indication of expected returns (including dividends). And, on average, this is usually a pretty good indicator. However, future returns can vary quite a lot from expectations, so that Shiller’s CAPE or similar tools can be wildly wrong.
My earlier comments get at my core belief about the reasons for this divergence, which is expectation for future growth, which isn’t necessarily reflected in recent (or current projections of) earnings.
A gold rush will draw prospectors for much longer than the ore reserves will sustain. Early adventurers will make a lot of money, generating a lot of interest and investment. Toward the end, a bunch of miners will have pans full of sand and go broke. I happen to think we are near the beginning of the AI rush, and this has the markets behaving badly. Of course, I am probably wrong.
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