Down goes the Dow

So now history is significant because it just so happens to fit your narrative? Dude, you are a walking contradiction.

Ghost of Igloi wrote:

random,

The Dow has recovered a little over half of the 2,000 points it lost in the correction. Historically that indicates there is still risk to the downside. No all clear signal yet.

Igy

There is NEVER an all-clear signal for anyone who isn't a fool.

The Fed gave Cramer's viewers the Buy! Buy! Buy! signal.

spicoli,

Splain the contradiction?

Igy

A brief review of history from John Hussman that should temper Bullish enthusiasm:

http://www.hussmanfunds.com/wmc/wmc150427.htm

Clearly Clear wrote:

Ghost of Igloi wrote:

random,

The Dow has recovered a little over half of the 2,000 points it lost in the correction. Historically that indicates there is still risk to the downside. No all clear signal yet.

Igy

There is NEVER an all-clear signal for anyone who isn't a fool.

+1

The markets have moved up in recent weeks, even though the International Monetary Fund (IMF) has nudged down growth projections for this year by 0.2%, to a 3.1% estimated annual global growth rate. Generally, for 2015 the IMF’s outlook is one of improving economic growth in North America, Europe and Japan, but slowing growth in emerging markets, most notably Brazil and Russia. Remember that 3.1% still represents a healthy level of global growth in our view, 2013 and 2014 saw global growth rates of 3.3% and 3.4% respectively and for 2016 the IMF sees the global growth rate increasing to 3.6%.

The summer has seen higher that normal tax loss harvesting activity for Premium clients. Historically, tax loss harvesting has not been spread out evenly over time based on history, and we generally see more opportunities to tax loss harvest during sharper pullbacks, just as we saw in August and September.

It is important to remember that even if you don’t have existing gains to offset losses, there are other useful ways to use harvested losses to help with your taxes. Harvested losses do not expire and can be “carried forward” which means that they can be used to offset capital gains in future years. Another alternative is to use up to $3,000 of losses to offset your ordinary income in a given year. These options mean that losses don’t have to offset capital gains in the same year. We believe this flexibility broadens the usefulness of tax loss harvesting more than most would think.

Finally, we look at the cost and benefits of every trade we implement for Premium customers or recommend for our other users. For tax loss harvesting this means that we anticipate a benefit after all costs of the trade are assessed. We also generally look to take action before a material opportunity to tax loss harvest could reverse, rather than miss it. This does mean that in some cases we will tax loss harvest more than once over a period of months to make sure that we are taking advantages of portfolio opportunities as they are presented.

Ghost of Igloi wrote:

In principle I agree with your point of view with one important exception. Technical market indicators describe the short term market environment, which could change at the snap of a finger. On the other hand, fundamental market indicators give investors a metric on which to gauge risk-on or risk-off, which may be wrong in the short run but correct in the long run. I disagree that market action is just a "random walk," or the market has "priced in all available information." Market history proves as much.

Igy

Technical indicators describe the market environment of the time frame used by the indicator. RSI of 15 minute charts might change 3 times in a day, while EMA crossovers on weekly data like I use might make a call every 5 years. It all depends on what you're looking for.

Berkshire-Hathaway is down 8.69% for the year. From Morningstar data, Large Value funds are down 3.5% for the year and have been outperformed by Large Growth over all timeframes from YTD to 10 years. If fundamental indicators give you a metric to gauge risk (technical indicators do that), why are all those value managers losing money?

agip,

Emerging market are less benign than you think.

https://www.project-syndicate.org/commentary/hidden-debt-burden-emerging-markets-by-carmen-reinhart-2015-10

Igy

Ghost of Igloi wrote:

Maserati,

The lawn is mowed so I am good for the weekend. I am going for a run this afternoon and Saturday morning. We have some foothills in and around Boise that are good on these aging joints.

In principle I agree with your point of view with one important exception. Technical market indicators describe the short term market environment, which could change at the snap of a finger. On the other hand, fundamental market indicators give investors a metric on which to gauge risk-on or risk-off, which may be wrong in the short run but correct in the long run. I disagree that market action is just a "random walk," or the market has "priced in all available information." Market history proves as much.

You have a good weekend too.

Igy

Care to back up that bold statement?

coach d,

My analysis would be that large growth captures more of the speculative aspects of the market. Value probably lost some of its luster when the market "was" factoring a Fed move (dividend stocks as bond proxies).

I find it hard to believe that any technical will capture where we will be a year from now. Of course some would say the same about valuation models. I would argue that there are valuation models that have a high degree of reliability, but are unreliable over shorter time horizons. Technical indicators are informative over those shorter time periods.

In summary, I see the market at a crossroads from a technical perspective. On a fundamental basis it is clearly excessively overvalued. Can it become more excessively overvalued, of course, but that should not give investors confidence. You notice I said investors not traders.

I trust that your expertise coach d cannot be duplicated by many.

Good luck and make a bundle.

Igy

Well,

Glad to, busy right now but I will get back to you. Some of the information is intuitive. For example, information concerning the technology and housing bubbles were well known in advance of the decline.

Igy

My BS detector was off the scale after reading Igy's response to coach d.

Takes one to know one.

truther wrote:

Takes one to know one.

Not really.

For example, I happen to know that Lebron James is a heck of a basketball player. Does that make me a heck of a basketball player?

I also know that Ted Bundy was a gruesome murderer. And yet, surprisingly, I am not a murderer.

Further, I know that Bernard Madoff operated a very large Ponzi scheme. Shockingly, I did not.

In short, the idiotic saying, "Takes one to know one" is patently false and is generally only used by morons.

Well,

Here you go:

https://is.muni.cz/el/1456/jaro2009/PMAPEM/NotSortedYet/A_Non-Random_Walk_down_Wall_Street__Lo__MacKinlay_.pdf

Igy

Well,

Here is some more:

http://www.gefjpapers.com/static/documents/September/2013/4.%20Tralvex.pdf

"Thanks Igy."

"Sure Well, Well, Well your welcome."

Igy

But Hillary knows Bill Clinton.

Wait, you're basing your financial philosophy on a simulation?!