seriously, the US economy is booming. 3Q GDP forecast revised up again.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 is 3.4 percent on October 17, up from 3.2 percent on October 9.
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About 2.5 months left in the year, so let's see how Ol' Flagpole is doing against the Dow YTD (I do not know yet...looking now!):
Flagpole YTD: UP 16.70%
Dow YTD: UP 14.30%
A good return for both.
So you're underperforming the S&P by a significant margin. All that work, bragging and boasting, and you could have made so much more money if you had stuck everything in the SPY.
Please remove yourself from this thread, it's embarrassing at this point.
so if one was worried about the post-election economy and wanted to protect his assets...what would he do?
I suppose cash getting 4% is not a tragedy. Or 5% in a money market sounds even better. How much more than 5% will the market do the next year, after back to back blockbuster years?
Just hard to believe that if trump wins we won't have a trade war two months later and inflation surging again. And all that chaos that companies hate.
I guess TIPS would be good....short term TIPS in particular to take away some of the interest rate risk.
Gold but that's gone parabolic already.
Maybe those new buffered ETFs...sacrifice some upside for downside protection.
Probably I'll wait and if Trump wins then take steps to protect my money.
This post was edited 1 minute after it was posted.
About 2.5 months left in the year, so let's see how Ol' Flagpole is doing against the Dow YTD (I do not know yet...looking now!):
Flagpole YTD: UP 16.70%
Dow YTD: UP 14.30%
A good return for both.
hobby investor YTD: UP 29.68%
yeah diversification has been deworsification that last couple years! Just a simple buy the SP500 and a tech fund and let 'er rip has been the best strategy. Sounds like you did that - congrats!
But when the tide goes out you find out who doesn't have a suit on.
Nice. Check out the 1 year return, it's esp. good.
For ex.,
SNP 500 YTD: 22.8% SNP 500 1 yr.: 40.6%
* but just a "bear market rally", of course (wink, wink).
Japan economy is $4.5 trillion Germany economy is $4 trillion California economy is $3.3 trillion $NVDA ($3.5t) + $AAPL ($3.5t) + $MSFT ($3.1t) = $10 trillion in market cap Stockmarket is $42 trillion these 3 stocks make up about 25% of the overall stock market cap.
so if one was worried about the post-election economy and wanted to protect his assets...what would he do?
I suppose cash getting 4% is not a tragedy. Or 5% in a money market sounds even better. How much more than 5% will the market do the next year, after back to back blockbuster years?
Just hard to believe that if trump wins we won't have a trade war two months later and inflation surging again. And all that chaos that companies hate.
I guess TIPS would be good....short term TIPS in particular to take away some of the interest rate risk.
Gold but that's gone parabolic already.
Maybe those new buffered ETFs...sacrifice some upside for downside protection.
Probably I'll wait and if Trump wins then take steps to protect my money.
No idea where to park assets besides in the market, but I would bet that what would really tank the market would be if one party controls both the white house and the congress, which markets tend to dislike.
Just read an article that says based on the favorable returns of DJIA through October, historical precedence would place the chances of a Harris (incumbent party) win at 72%, and they noted that this tends to be a good indicator and chances go up the higher the rate of return has been through October.
They also noted, however, that Futures markets used as an indicator would give Harris something like a 43% chance of winning. So, we shall see...
Igy likes to quote Hussman who often refers to the Shiller CAPE as an indication of long term returns. While I tend to think the CAPE is to some degree an exercise in overfitting historical data to a hypothesis, and it hasn’t been a particularly useful indicator since this thread began, I also tend to believe the markets are overheated, such that long term returns (10-20 years) are likely to be less than the overall long term average. Might be a decent time to shift some proportion of one’s portfolio into safe assets. Whatever “some” and “safe” means to each of us based on individual objectives, risk tolerance and phase of life.
Driving back this evening from my grandson's flag football game and saw the full moon (Hunter's Moon) rising in the eastern sky, I'm in a nostalgic mood. Back when I was working and living in NY State I would always take this week off because it was usually peak fall foliage, this doesn't happen in Central Texas. I would take my BMW and drive out to Port Jervis and drive up along the the Delaware River through The Hawks Nest to Narrowsburg, cross over the Delaware, then come back down on the PA side. Back in the 70s I spent a lot of time in New England, esp the Fall.
Igy likes to quote Hussman who often refers to the Shiller CAPE as an indication of long term returns. While I tend to think the CAPE is to some degree an exercise in overfitting historical data to a hypothesis, and it hasn’t been a particularly useful indicator since this thread began, I also tend to believe the markets are overheated, such that long term returns (10-20 years) are likely to be less than the overall long term average. Might be a decent time to shift some proportion of one’s portfolio into safe assets. Whatever “some” and “safe” means to each of us based on individual objectives, risk tolerance and phase of life.
Agreed. Funnily enough, the unholy alliance of Treasury activism, Federal Reserve monetary extremism, resulting exploding Government deficits, corresponds with the joke of fundamental investing. One view might be a future of mean inversion.
Igy likes to quote Hussman who often refers to the Shiller CAPE as an indication of long term returns. While I tend to think the CAPE is to some degree an exercise in overfitting historical data to a hypothesis, and it hasn’t been a particularly useful indicator since this thread began, I also tend to believe the markets are overheated, such that long term returns (10-20 years) are likely to be less than the overall long term average. Might be a decent time to shift some proportion of one’s portfolio into safe assets. Whatever “some” and “safe” means to each of us based on individual objectives, risk tolerance and phase of life.
Comfortably retired, you might find this interesting, re: Shiller CAPE.
Thanks gente, I myself have pondered why the CAPE isn’t as good as it’s supposed to be. I think part of the problem is that the relationship between CAPE and future returns has varied over time. A value of 20 is supposed to be roughly neutral, suggesting long term upcoming gains to be about the same as the long term overall average. I think that’s wrong, and that a value of about 27 today is about the same as a value of 20 maybe 30-35 years ago, and about the same as a value of 13 back in 1950. In other words, 13 would have been neutral in 1950 and 27 is roughly neutral today. So today’s CAPE value (around 38 if memory serves) is above the neutral value, but not by near as much as at many times in the past. Whereas Hussman and his cult followers believe the markets are as overheated as they’ve ever been. Reminding myself that i am an idiot and the CAPE folks are Nobel laureates, take it with a boulder of salt when I suggest that the 10-20 year outlook for the SP500 is for something like 4-6% annualized gains, which is significantly less than Sally says the markets always return like clockwork, but also a good chunk more than what Hussman will say, I think.
Driving back this evening from my grandson's flag football game and saw the full moon (Hunter's Moon) rising in the eastern sky, I'm in a nostalgic mood. Back when I was working and living in NY State I would always take this week off because it was usually peak fall foliage, this doesn't happen in Central Texas. I would take my BMW and drive out to Port Jervis and drive up along the the Delaware River through The Hawks Nest to Narrowsburg, cross over the Delaware, then come back down on the PA side. Back in the 70s I spent a lot of time in New England, esp the Fall.
Oh, dude, I love that song! Zevon sure had some talent. My better half would love the jazz, and while I can appreciate it, it's not my usual listening stuff.
Of the places you mentioned, I just so have happened to have lived in ea. of them (NE, Tx, NY). Upstate NY and New England this time of year is stupendous.
Okay, so for value added, here's my quintessential moody autumn song, and it never fails to put me in a transcendent mind set:
Driving back this evening from my grandson's flag football game and saw the full moon (Hunter's Moon) rising in the eastern sky, I'm in a nostalgic mood. Back when I was working and living in NY State I would always take this week off because it was usually peak fall foliage, this doesn't happen in Central Texas. I would take my BMW and drive out to Port Jervis and drive up along the the Delaware River through The Hawks Nest to Narrowsburg, cross over the Delaware, then come back down on the PA side. Back in the 70s I spent a lot of time in New England, esp the Fall.
Oh, dude, I love that song! Zevon sure had some talent. My better half would love the jazz, and while I can appreciate it, it's not my usual listening stuff.
Of the places you mentioned, I just so have happened to have lived in ea. of them (NE, Tx, NY). Upstate NY and New England this time of year is stupendous.
Okay, so for value added, here's my quintessential moody autumn song, and it never fails to put me in a transcendent mind set:
Thanks gente, I myself have pondered why the CAPE isn’t as good as it’s supposed to be. I think part of the problem is that the relationship between CAPE and future returns has varied over time. A value of 20 is supposed to be roughly neutral, suggesting long term upcoming gains to be about the same as the long term overall average. I think that’s wrong, and that a value of about 27 today is about the same as a value of 20 maybe 30-35 years ago, and about the same as a value of 13 back in 1950. In other words, 13 would have been neutral in 1950 and 27 is roughly neutral today. So today’s CAPE value (around 38 if memory serves) is above the neutral value, but not by near as much as at many times in the past. Whereas Hussman and his cult followers believe the markets are as overheated as they’ve ever been. Reminding myself that i am an idiot and the CAPE folks are Nobel laureates, take it with a boulder of salt when I suggest that the 10-20 year outlook for the SP500 is for something like 4-6% annualized gains, which is significantly less than Sally says the markets always return like clockwork, but also a good chunk more than what Hussman will say, I think.
$0.02 please 🙂
You can standardize CAPE (Shiller's) in Excel, just did a quick take, currently 2.58. July 1999 was 5.09; Sept 1929 was 3.68. The problem with back testing with this data are numerous; slippage, trading costs (Mayday 1975, Schwab was about $40 up until the mid 90s, by the late 90s I remember trades costing $4 online), you couldn't buy the S&P 500 Index institutionally (Wells Fargo) until 1972 and retail 1976 (Vanguard), taxes, the introduction of 401s etc, index options cca 1980, ETFs. You get the picture. Nite all.
Thanks gente, I myself have pondered why the CAPE isn’t as good as it’s supposed to be. I think part of the problem is that the relationship between CAPE and future returns has varied over time. A value of 20 is supposed to be roughly neutral, suggesting long term upcoming gains to be about the same as the long term overall average. I think that’s wrong, and that a value of about 27 today is about the same as a value of 20 maybe 30-35 years ago, and about the same as a value of 13 back in 1950. In other words, 13 would have been neutral in 1950 and 27 is roughly neutral today. So today’s CAPE value (around 38 if memory serves) is above the neutral value, but not by near as much as at many times in the past. Whereas Hussman and his cult followers believe the markets are as overheated as they’ve ever been. Reminding myself that i am an idiot and the CAPE folks are Nobel laureates, take it with a boulder of salt when I suggest that the 10-20 year outlook for the SP500 is for something like 4-6% annualized gains, which is significantly less than Sally says the markets always return like clockwork, but also a good chunk more than what Hussman will say, I think.
$0.02 please 🙂
You can standardize CAPE (Shiller's) in Excel, just did a quick take, currently 2.58. July 1999 was 5.09; Sept 1929 was 3.68. The problem with back testing with this data are numerous; slippage, trading costs (Mayday 1975, Schwab was about $40 up until the mid 90s, by the late 90s I remember trades costing $4 online), you couldn't buy the S&P 500 Index institutionally (Wells Fargo) until 1972 and retail 1976 (Vanguard), taxes, the introduction of 401s etc, index options cca 1980, ETFs. You get the picture. Nite all.
It is 100x easier for the average person to put money in the market than it was 50 years ago. Any random person can download RH or set up a vanguard account and start putting money in something. Furthermore, access to information on how to do all this, what investing is about, why you should do it, etc, is all 1000x easier and faster to get than it was 50 years ago. This sort of thing is going to inflate things like PE ratios compared to pre-internet decades. It's part of why one can't simply compare numbers at present to historical averages. Conditions have changed somewhat over time.
You can standardize CAPE (Shiller's) in Excel, just did a quick take, currently 2.58. July 1999 was 5.09; Sept 1929 was 3.68. The problem with back testing with this data are numerous; slippage, trading costs (Mayday 1975, Schwab was about $40 up until the mid 90s, by the late 90s I remember trades costing $4 online), you couldn't buy the S&P 500 Index institutionally (Wells Fargo) until 1972 and retail 1976 (Vanguard), taxes, the introduction of 401s etc, index options cca 1980, ETFs. You get the picture. Nite all.
It is 100x easier for the average person to put money in the market than it was 50 years ago. Any random person can download RH or set up a vanguard account and start putting money in something. Furthermore, access to information on how to do all this, what investing is about, why you should do it, etc, is all 1000x easier and faster to get than it was 50 years ago. This sort of thing is going to inflate things like PE ratios compared to pre-internet decades. It's part of why one can't simply compare numbers at present to historical averages. Conditions have changed somewhat over time.
agreed that more investors are crowding in
there are many other issues going on.
majorly: tech companies now dominate the indices. tech companies run far larger margins than the old line manufacturers and banks that used to dominate the indices. So it's natural that the indices will have higher multiples. Just because they have higher-margin companies in them, that can scale endlessly.
also, fundamentals have changed for the better
big companies can now sell overseas, expanding their markets by a massive amount and diversifying their customer base. That deserves a bigger multiple.
accounting rules have become tougher and cheating harder to do. Likewise, that deserves a higher multiple
accounting rules themselves have changed, making apples to apples comparisons harder.
we don't have a regular business cycle resulting in regular recessions anymore. We only get recessions from big incidents like covid, the great financial crisis, the dot com blowup. that deserves a higher multiple
tech has made companies far more productive and efficient
etc
point is that comparing valuation ratios from 50 years ago to today is useless.
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here's a really terrible prediction from just a month ago.
SPX is up a mighty 4% from this point, when this bear said 'elites' had pumped and were dumping.
Post See new posts Conversation Keith McCullough @KeithMcCullough For all of you who got sucked in at today's highs, the elites just sold right down your yap 3:06 PM · Sep 18, 2024 · 22.2K Views
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