Down goes the Dow

Flagpole wrote:

seattle prattle wrote:

Hear, hear!

Happy anniv. to the venerable DGTD! All rise (stocks, that is).

The track record for small caps has been very interesting to me. I've always believed in the long term growth potential of tech, and it sure looks obvious enough now in hindsight, but small caps were a fascinating story. I rode them up pretty hard back in the days of "irrational exuberance" coming out of the tech bubble of 2000, and the thinking was that small caps often lead the way during a recovery (and they did). But I saw that they were really starting to lag around 2014 and the next few years so I largely got out of them then.

The reasoning for there underperformance of recent years is due to several factors, and in checking into this I found this particularly insightful analysis, which some might find worthwhile. Some very solid inferences contained herein, imo:

Link:info.gwkinvest.com/insights/gwk-global...

Small caps have been interesting. I agree.

I am looking at one of my small cap Fidelity funds right now, and while not great, it's not horrible either.

+7.11% for the life of the fund

+12.04% over the last 3 years

You could do worse than either of those results.

Contrast to a randomly picked Large Cap Fidelity fund of mine that shows this:

+16.36% for the life of the fund

+12.18 over the last 3 years

SOOOO, for the last three years, these two funds have been almost identical.

That's why I just invest in as many different types of funds in as many different industries as possible. You just never know when one sector will be hot or not.

seattle prattle wrote:

Flagpole wrote:

Small caps have been interesting. I agree.

I am looking at one of my small cap Fidelity funds right now, and while not great, it's not horrible either.

+7.11% for the life of the fund

+12.04% over the last 3 years

You could do worse than either of those results.

Contrast to a randomly picked Large Cap Fidelity fund of mine that shows this:

+16.36% for the life of the fund

+12.18 over the last 3 years

SOOOO, for the last three years, these two funds have been almost identical.

That's why I just invest in as many different types of funds in as many different industries as possible. You just never know when one sector will be hot or not.

It is important to find an investing strategy that aligns with your timelines, risk aversity, etc. You know the drill.

But I would be careful about inferring too much from the results of the last 3 years in that those were about as unusual as is conceivable.

That said, what strikes me from looking at what you just said is how different the two funds are you are comparing in regards to returns over the life of the funds - one has delivered about 7 % and the other returned over twice that. Given that, how much could one infer from this highly unusual last 3-year period?

Of course, one would have to understand when each fund started to make a fair comparison of "life of the fund" returns.

Flagpole wrote:

2023 S&P 500 update!

It is now the last day of August, and before the bell, the S&P 500 sits at 4,514.87. As most of you know, our resident permabear confidently accounced earlier this year that the S&P 500 would be at or near 3,000 by the end of the year. When this statement was made, the S&P 500 sat at 3,991. I called him a permabear, and he asked agip to bookmark the page. Important to note that I did not call for the markets to go up or down in 2023. I am never that sure about any short period of time to make a call like that...I am ONLY sure that over time it will go up. Our resident permabear though was so sure of himself that he called me out. So, I'm just keeping track here. 4 more monts to go to see if he will be right or not.

Here's how that went down:

from 2/23/2023...

Ghost of Igloi wrote:
The period of S&P 500 companies over earning has ended. Stimulus, low interest rates done, higher labor costs, margins shrinking. Last year 2022 GAAP EPS down to $171. I expect by Q3 2023 the previous 52 week number to be in the $150s. Hard to see a year end 2023 S&P 500 much above 3,000, even without a recession.

Flagpole wrote:
Permabear.

Ghost of Igloi wrote:
Agip, if you don’t mind bookmark this for year end review.

Flagpole wrote:

2023 S&P 500 update!

It is now the last day of August, and before the bell, the S&P 500 sits at 4,514.87. As most of you know, our resident permabear confidently accounced earlier this year that the S&P 500 would be at or near 3,000 by the end of the year. When this statement was made, the S&P 500 sat at 3,991. I called him a permabear, and he asked agip to bookmark the page. Important to note that I did not call for the markets to go up or down in 2023. I am never that sure about any short period of time to make a call like that...I am ONLY sure that over time it will go up. Our resident permabear though was so sure of himself that he called me out. So, I'm just keeping track here. 4 more monts to go to see if he will be right or not.

Here's how that went down:

from 2/23/2023...

Ghost of Igloi wrote:
The period of S&P 500 companies over earning has ended. Stimulus, low interest rates done, higher labor costs, margins shrinking. Last year 2022 GAAP EPS down to $171. I expect by Q3 2023 the previous 52 week number to be in the $150s. Hard to see a year end 2023 S&P 500 much above 3,000, even without a recession.

Flagpole wrote:
Permabear.

Ghost of Igloi wrote:
Agip, if you don’t mind bookmark this for year end review.

Ghost of Igloi wrote:

Flagpole wrote:

2023 S&P 500 update!

It is now the last day of August, and before the bell, the S&P 500 sits at 4,514.87. As most of you know, our resident permabear confidently accounced earlier this year that the S&P 500 would be at or near 3,000 by the end of the year. When this statement was made, the S&P 500 sat at 3,991. I called him a permabear, and he asked agip to bookmark the page. Important to note that I did not call for the markets to go up or down in 2023. I am never that sure about any short period of time to make a call like that...I am ONLY sure that over time it will go up. Our resident permabear though was so sure of himself that he called me out. So, I'm just keeping track here. 4 more monts to go to see if he will be right or not.

Here's how that went down:

from 2/23/2023...

Ghost of Igloi wrote:
The period of S&P 500 companies over earning has ended. Stimulus, low interest rates done, higher labor costs, margins shrinking. Last year 2022 GAAP EPS down to $171. I expect by Q3 2023 the previous 52 week number to be in the $150s. Hard to see a year end 2023 S&P 500 much above 3,000, even without a recession.

Flagpole wrote:
Permabear.

Ghost of Igloi wrote:
Agip, if you don’t mind bookmark this for year end review.

I was wrong on stimulus, I already posted on this. The Biden Administration has added over $1 Trillion in new stimulus since that post. I suppose you can justify the continued printing of money as long as it leads to more speculation. Perhaps the true state of the economy can be seen in Dollar General’s miss this morning. So, it just delays the inevitable. As for me, I should be max short what I am comfortable with by next week.

Gruntz wrote:

Flagpole wrote:

2023 S&P 500 update!

It is now the last day of August, and before the bell, the S&P 500 sits at 4,514.87. As most of you know, our resident permabear confidently accounced earlier this year that the S&P 500 would be at or near 3,000 by the end of the year. When this statement was made, the S&P 500 sat at 3,991. I called him a permabear, and he asked agip to bookmark the page. Important to note that I did not call for the markets to go up or down in 2023. I am never that sure about any short period of time to make a call like that...I am ONLY sure that over time it will go up. Our resident permabear though was so sure of himself that he called me out. So, I'm just keeping track here. 4 more monts to go to see if he will be right or not.

Here's how that went down:

from 2/23/2023...

Ghost of Igloi wrote:
The period of S&P 500 companies over earning has ended. Stimulus, low interest rates done, higher labor costs, margins shrinking. Last year 2022 GAAP EPS down to $171. I expect by Q3 2023 the previous 52 week number to be in the $150s. Hard to see a year end 2023 S&P 500 much above 3,000, even without a recession.

Flagpole wrote:
Permabear.

Ghost of Igloi wrote:
Agip, if you don’t mind bookmark this for year end review.

Come on, Flaggy, that’s hardly fair. It’s like shooting fish in a barrel given Igy’s lousy track record. As others have mentioned before me, it’s best to listen to his advice and do the opposite.

Ghost of Igloi wrote:

Flagpole wrote:

2023 S&P 500 update!

It is now the last day of August, and before the bell, the S&P 500 sits at 4,514.87. As most of you know, our resident permabear confidently accounced earlier this year that the S&P 500 would be at or near 3,000 by the end of the year. When this statement was made, the S&P 500 sat at 3,991. I called him a permabear, and he asked agip to bookmark the page. Important to note that I did not call for the markets to go up or down in 2023. I am never that sure about any short period of time to make a call like that...I am ONLY sure that over time it will go up. Our resident permabear though was so sure of himself that he called me out. So, I'm just keeping track here. 4 more monts to go to see if he will be right or not.

Here's how that went down:

from 2/23/2023...

Ghost of Igloi wrote:
The period of S&P 500 companies over earning has ended. Stimulus, low interest rates done, higher labor costs, margins shrinking. Last year 2022 GAAP EPS down to $171. I expect by Q3 2023 the previous 52 week number to be in the $150s. Hard to see a year end 2023 S&P 500 much above 3,000, even without a recession.

Flagpole wrote:
Permabear.

Ghost of Igloi wrote:
Agip, if you don’t mind bookmark this for year end review.

I was wrong on stimulus, I already posted on this. The Biden Administration has added over $1 Trillion in new stimulus since that post. I suppose you can justify the continued printing of money as long as it leads to more speculation. Perhaps the true state of the economy can be seen in Dollar General’s miss this morning. So, it just delays the inevitable. As for me, I should be max short what I am comfortable with by next week.

Flagpole wrote:

Ghost of Igloi wrote:

I was wrong on stimulus, I already posted on this. The Biden Administration has added over $1 Trillion in new stimulus since that post. I suppose you can justify the continued printing of money as long as it leads to more speculation. Perhaps the true state of the economy can be seen in Dollar General’s miss this morning. So, it just delays the inevitable. As for me, I should be max short what I am comfortable with by next week.

1) I don't justify anything. Not sure why you would ever think that the US Government (under ANY administration) would be above "printing money", but I have that factored in. Our government, and the most powerful economic governments in the world will do anything they can to appease the upper class (those that INVEST), so the thumb is ALWAYS on the scale to make the market go UP. Perhaps not right or fair, but that's how it is.

2) Glad to see that you admitted to being wrong on at least one thing. That doesn't absolve you though of a continued look at how the S&P 500 does the rest of the year after your very strong pronouncement back in February.

3) You saying "it just delays the inevitable" is bogus and disingenuous. OF COURSE we will have a downturn at some point...that happens 27% of any calendar year, so if you stick to saying that nonsense, you will be right eventually...and mostly likely NOT for the reason you say so today...it will be due to something else entirely. The problem with being right eventually is that you are wrong most of the time leading up to that, and if you make investment decisions (and it appears that you do) based on being wrong most of the time, then you lose out.

4) Your comment on Dollar General is typical. You focus on any miss. What many economists would say about a dollar store or McDonald's missing their goals is that that means that people are confident with their income and immediate future so that they are spending money in other more desirable stores and restaurants. I don't subscribe to that idea necessarily, but there is that opinion out there.

5) Since you so strongly called me out back in February with such certainty, I will continue to monitor the S&P 500 monthly until the end of the year and then make a definitive pronouncement on how right or wrong you were.