well you tell me why regional bank stocks are up 50% from a year ago, when people had just the same concern you brought to the thread.
The machinations of the Fed and Treasury to cover the problems at SVB, Citizens, and others papered an issue that still remains. I could have bought $1 million in a 10 Year Treasury 5 years ago, my brokerage account now values that position $875,000. The implication of that is broad, the fact that I say the position has a maturity value of $1 million masks the loss in value. Whether the index goes up 50% is more a trade than representative of this issue.
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 🙂
Goldman splits between you and Hussman.
👀 GOLDMAN: "We estimate the S&P 500 will deliver an annualized nominal total return of 3% during the next 10 years (7th percentile since 1930) and roughly 1% on a real basis." pic.twitter.com/kp1ETB0YR9
well you tell me why regional bank stocks are up 50% from a year ago, when people had just the same concern you brought to the thread.
The machinations of the Fed and Treasury to cover the problems at SVB, Citizens, and others papered an issue that still remains. I could have bought $1 million in a 10 Year Treasury 5 years ago, my brokerage account now values that position $875,000. The implication of that is broad, the fact that I say the position has a maturity value of $1 million masks the loss in value. Whether the index goes up 50% is more a trade than representative of this issue.
The First National Bank of Lindsay, Lindsay, OK has failed and been seized by the Federal Deposit Insurance Corporation (FDIC) #MacroEdge
funny thing is, I'm becoming as bearish as you are, but for very different reasons.
You're bearish on the big macro trends. I'm bearish on the chaos we'll get if Trump wins, which I think will happen.
I just don't see how this bull market can survive trump in office. The big tariffs, the trade wars, the kicking out millions of workers and resulting food inflation, if the Rs sweep congress the even more giant deficits from tax cuts (although sure that will be a sugar sweetener and go against my thesis)...the craziness we're about to get in the WH.
So I'm really considering going down to a much lower equity position. I have enough money already - I'm fine with opportunity cost as long as my lifestyle is preserved.
I'll probably just put in a hard stop to take me down to around 25% equity from the current 68%. It's been a great, great run. 2023: +26%, 2024 YTD +24%. I'll take that to the bank.
I'll get my 4-5% and be ok with that. Probably just money market and short term tips, in case there's inflation from trump's policies.
If my stops are triggered. If they aren't triggered, great.
I said months perhaps a year or more ago we are cooked no matter which party is in power. They have both sold their soul for power and greed. I am pretty comfortable at the moment overweight EM Bond CEFs.
funny thing is, I'm becoming as bearish as you are, but for very different reasons.
You're bearish on the big macro trends. I'm bearish on the chaos we'll get if Trump wins, which I think will happen.
I just don't see how this bull market can survive trump in office. The big tariffs, the trade wars, the kicking out millions of workers and resulting food inflation, if the Rs sweep congress the even more giant deficits from tax cuts (although sure that will be a sugar sweetener and go against my thesis)...the craziness we're about to get in the WH.
So I'm really considering going down to a much lower equity position. I have enough money already - I'm fine with opportunity cost as long as my lifestyle is preserved.
I'll probably just put in a hard stop to take me down to around 25% equity from the current 68%. It's been a great, great run. 2023: +26%, 2024 YTD +24%. I'll take that to the bank.
I'll get my 4-5% and be ok with that. Probably just money market and short term tips, in case there's inflation from trump's policies.
If my stops are triggered. If they aren't triggered, great.
Agip, I think you have reason to be concerned in the long term, but that is not the way the market will react in the short term. World of difference.
I remember on election night 2016 when there was the surprise turn-around and Trump started emerging as an upset winner. Futures market absolutely went batsh!t diving.
But the one an only Carl Icahn bucked the trend and wisely started gobbling up everything he could get his hands on. And it paid off handsomely as the market came to realize Trump would be a boon, at least in the short term, and the reflexive drop was a great buy the dip opportunity.
From the linked article, quoting Icahn: "“I was at the Trump party, so to speak, about 11:30, quarter to 12 when I saw it,” Icahn told Bloomberg earlier today. “I saw that market fall apart, it made no damn sense, and I actually went home and I made a purchase, probably one of my best investments.” To be clear, though, Icahn didn’t go on live TV to brag about what a genius trader he is; this isn’t about him being or not being the world’s greatest investor. It’s about Icahn having been right all along about his locker room buddy."
I firmly believe that should Trump win, the way to play it is buy on the short term and then you will have plenty of time to exit as the economy unravels.
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.
Ha! No boasting. Just facts. I don't look at what could have been. I have a well diversified portfolio that does well but doesn't tank due to being too heavily invested in any one part of the market. As of today, I'm now UP 17.05% YTD. That is great in any year. Embarrassing myself? Um...no.
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.
Also, "all that work?" What work? I have money in mutual funds. No work at all on my part. That's actually part of my philosophy. Keep money in mutual funds so that I don't HAVE to do any work. Methinks you didn't know enough about me to comment.
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.
Hindsight is 20/20, brother. Diversification insures you won't lose your lunch, yet it STILL will make you rich. UP 17.05% YTD now. That is ALWAYS awesome, no matter what a single index might have returned.
agip, do us a favor and bookmark this post and bring it back up in a year to see how well your prediction has done. You know, like you do for the professional pundits all the time. :-)
funny thing is, I'm becoming as bearish as you are, but for very different reasons.
You're bearish on the big macro trends. I'm bearish on the chaos we'll get if Trump wins, which I think will happen.
I just don't see how this bull market can survive trump in office. The big tariffs, the trade wars, the kicking out millions of workers and resulting food inflation, if the Rs sweep congress the even more giant deficits from tax cuts (although sure that will be a sugar sweetener and go against my thesis)...the craziness we're about to get in the WH.
So I'm really considering going down to a much lower equity position. I have enough money already - I'm fine with opportunity cost as long as my lifestyle is preserved.
I'll probably just put in a hard stop to take me down to around 25% equity from the current 68%. It's been a great, great run. 2023: +26%, 2024 YTD +24%. I'll take that to the bank.
I'll get my 4-5% and be ok with that. Probably just money market and short term tips, in case there's inflation from trump's policies.
If my stops are triggered. If they aren't triggered, great.
Agip, I think you have reason to be concerned in the long term, but that is not the way the market will react in the short term. World of difference.
I remember on election night 2016 when there was the surprise turn-around and Trump started emerging as an upset winner. Futures market absolutely went batsh!t diving.
But the one an only Carl Icahn bucked the trend and wisely started gobbling up everything he could get his hands on. And it paid off handsomely as the market came to realize Trump would be a boon, at least in the short term, and the reflexive drop was a great buy the dip opportunity.
From the linked article, quoting Icahn: "“I was at the Trump party, so to speak, about 11:30, quarter to 12 when I saw it,” Icahn told Bloomberg earlier today. “I saw that market fall apart, it made no damn sense, and I actually went home and I made a purchase, probably one of my best investments.” To be clear, though, Icahn didn’t go on live TV to brag about what a genius trader he is; this isn’t about him being or not being the world’s greatest investor. It’s about Icahn having been right all along about his locker room buddy."
I firmly believe that should Trump win, the way to play it is buy on the short term and then you will have plenty of time to exit as the economy unravels.
yeah a big point against my thesis is that the market seems to be 100% fine about a Trump presidency and all it brings.
And I'm saying I'm smarter than the market, which is always a mistake to say.
But good lord with a swipe of his pen in 3 months he can put tariffs on....everything. Everything. And put thousands of businesses out of workers and into bankruptcy. And cause an inflation spike. Stocks can't look past all that.
And the scary part is that he sort of HAS to do all that - tariffs and mass deportations are his two biggest promises. Hard for him to say 'eh no that was just a phony campaign promise' to those things.
agip, do us a favor and bookmark this post and bring it back up in a year to see how well your prediction has done. You know, like you do for the professional pundits all the time. :-)
NYT published an editorial with the same thesis: DJT is a danger to American business, including:
Mr. Trump may seem like a novelty in American politics, but he is a familiar type in the broader sweep of world history. Right-wing populists often win elections by promising pro-business policies that will unleash economic growth. Once in office, however, they don’t just fiddle with the knobs; they break the machinery. They undermine economic stability by attacking and delegitimizing people and institutions, inside or outside the government, who might challenge or correct bad economic decisions. Turkey’s president, Recep Tayyip Erdogan, for example, fired three central bankers in two years, all of whom failed to fall in line with his demand to lower interest rates. The country fell into a currency crisis and eventually had to raise interest rates significantly to drag itself out. “It is this change to the nature of governing, more than individual policies, that is so dangerous to business over the long term,” as Roberto Foa and Rachel Kleinfeld argued recently in Harvard Business Review. “Populists undermine the operating environment capitalism depends on — most notably, free competition and a predictable rule of law.” Mr. Trump’s attacks on the integrity of federal data and on government experts are examples of the ways in which he already pursues these strategies. In August, for example, he claimed that a routine revision in employment data issued by the Bureau of Labor Statistics was manipulated to favor his opponent. Michael Strain, a conservative economist at the American Enterprise Institute, called this attack on the integrity of the agency “grossly irresponsible and completely inaccurate.” Business leaders often say they hate uncertainty about taxes and regulation even more than they hate taxes and regulation. Mr. Trump is the personification of uncertainty. During his four years as president, he demonstrated an alarming willingness to rewrite federal policies abruptly, out of spite, for favoritism or just on a whim. Planning to develop a property or make an acquisition that needs regulatory approval? Businesses might assume that a second Trump administration would be more supportive than Mr. Biden was or Ms. Harris would be. But a populist’s favor is capricious; there’s no way to predict who might end up on a Trump enemies list or why. Building a factory to make parts for electric vehicles? Counting on suppliers in other countries? Good luck.
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.
Hindsight is 20/20, brother. Diversification insures you won't lose your lunch, yet it STILL will make you rich. UP 17.05% YTD now. That is ALWAYS awesome, no matter what a single index might have returned.
agip are you looking for articles that match your hypothesis? In the biz, that’s what we call confirmation bias 😀
(I would caution against making big moves in knee jerk fashion based on the feelings of today)
no disagreement
but the way this sort of thing works is slow then fast
phase one is business people being happy about a right wing government...
phase two is when they start figuring out the details and if they really want to double the cost of their raw materials
then everyone gets worried at once
that I'm thinking about this, that trump is climbing in the polls and that the NYT today published an editorial on just that subject might mean we're moving from phase one into phase two. Would be nice to sell before the worry gets to widespread.
On the other hand, I think most Rs don't really think Trump is serious about his radical policies. And htey won't, until he does them.
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