The risk in the stock market is under appreciated. QE has distorted equity prices and the next big move is down rather than up. The Schiller PE is 27 and valuations are stretched when measured against other valuation models. Remember, the stock market has had two 50% down markets in the past fifteen years. The fifteen year average compounded return on the S&P is only 4.3%, which is inferior to treasuries. Treasuries are overvalued as well. Cash is the superior asset class when risk returns to the market.
My first post and subsequent dialogue has been twisted to support a narrative. Furthermore, if you look at the GMO projected asset returns (chart above) you will see cash is projected to be a superior asset class over the next 7 years, illustrating my initial point.
This is a good one here. Igy is saying, according to the GMO projected asset returns, that cash is projected to be a superior asset over the next 7 years.
This post if from 7 years ago. We are now 7 years later. Let's revisit.
The NASDAQ was at 6,400 7 years ago. Is now at 20,800.
The S & P was at 2,500 7 years ago. Is now at 6,300.
How has cash down the last 7 years?
Anyone betting against the stock market (long-term) is a fool.
The Republican Tax Cut of 2017 took corporate tax rates down. In conjunction with increased spending the total U.S. debt went from $20 Trillion 2018 to $37 Trillion today.
This post was edited 4 minutes after it was posted.
The closing price for Bitcoin (BTC) in December 2017 was $14,156.40, on December 31, 2017. It was up 38.8% for the month. The latest price is $117,553.42.
My first post and subsequent dialogue has been twisted to support a narrative. Furthermore, if you look at the GMO projected asset returns (chart above) you will see cash is projected to be a superior asset class over the next 7 years, illustrating my initial point.
This is a good one here. Igy is saying, according to the GMO projected asset returns, that cash is projected to be a superior asset over the next 7 years.
This post if from 7 years ago. We are now 7 years later. Let's revisit.
The NASDAQ was at 6,400 7 years ago. Is now at 20,800.
The S & P was at 2,500 7 years ago. Is now at 6,300.
How has cash down the last 7 years?
Anyone betting against the stock market (long-term) is a fool.
S&P 500 to 3,000. Nasdaq-100 to 7,000. Not a guess. Not a chart fantasy. Just structural math, debt cliffs, and denial. The 2026–2027 crash isn’t coming. It’s loaded.
The point has been made here for some time now of the hit that US markets relative to Emerging Markets are taking due to a growing lack of confidence in the direction this country has been heading, and now the phenomenon is being covered in today's NY Times.
An excerpt from the article that seems to sum things up:
NY Times - "Is the U.S. Riskier Than Emerging Markets?" wrote:
Comparing the United States with emerging markets may seen strange. In economic terms, of course, the United States is usually thought of as the paragon of an advanced, developed market country — as far on the development scale from being an emerging market as you can get. The dollar and U.S. Treasury bonds remain central parts of the world financial system.
But in political terms, U.S. institutions are being tested this year. The country is changing rapidly, and financial markets are reacting. Comparisons with other developed markets, and with emerging markets, are unavoidable. The numbers are unforgiving.
Thanks Seattle. As written here, I started buying EM Bond CEFs with the Russian invasion of Ukraine. Adding and reinvesting dividends for several years. It has been one of my best investments, and believe it will continue to be. On the other hand, I see more reason to be skeptical of an America that refuses to face up to its challenges, with a population largely fat and lazy, figuratively and otherwise.
Thanks Seattle. As written here, I started buying EM Bond CEFs with the Russian invasion of Ukraine. Adding and reinvesting dividends for several years. It has been one of my best investments, and believe it will continue to be. On the other hand, I see more reason to be skeptical of an America that refuses to face up to its challenges, with a population largely fat and lazy, figuratively and otherwise.
To be clear, though, the NY Times article referenced places the reasons behind the volatility in the stock market, the volatile dollar and an erratic bond market as follows: "many current problems appear to stem from the policies of the Trump administration, there is ample reason for concern."
Thanks Seattle. As written here, I started buying EM Bond CEFs with the Russian invasion of Ukraine. Adding and reinvesting dividends for several years. It has been one of my best investments, and believe it will continue to be. On the other hand, I see more reason to be skeptical of an America that refuses to face up to its challenges, with a population largely fat and lazy, figuratively and otherwise.
So you quit buying Hussman Strategic? That was a real winner.
Iggy I am back to say that Bitcoin has been doing quite well. You should have gotten in when I was talking about it. Hussman is a loser that’s for sure.
Thanks Seattle. As written here, I started buying EM Bond CEFs with the Russian invasion of Ukraine. Adding and reinvesting dividends for several years. It has been one of my best investments, and believe it will continue to be. On the other hand, I see more reason to be skeptical of an America that refuses to face up to its challenges, with a population largely fat and lazy, figuratively and otherwise.
To be clear, though, the NY Times article referenced places the reasons behind the volatility in the stock market, the volatile dollar and an erratic bond market as follows: "many current problems appear to stem from the policies of the Trump administration, there is ample reason for concern."
The backdrop is deficit spending, Government stimulus, and politicians unwilling to address the upside down balance sheet. Any erratic bond market and volatile dollar has more to to with the ineptitude of both parties addressing underlying problems.
Thanks Seattle. As written here, I started buying EM Bond CEFs with the Russian invasion of Ukraine. Adding and reinvesting dividends for several years. It has been one of my best investments, and believe it will continue to be. On the other hand, I see more reason to be skeptical of an America that refuses to face up to its challenges, with a population largely fat and lazy, figuratively and otherwise.
So you quit buying Hussman Strategic? That was a real winner.
Iggy I am back to say that Bitcoin has been doing quite well. You should have gotten in when I was talking about it. Hussman is a loser that’s for sure.
I also never bought a lottery ticket. There is far more rational thinking applied to Hussman’s writing than the weak nonsense used to justify Bitcoin’s rise, or the host of other ridiculous crypto coins. Stable coins, an oxymoron or just moronic? I leave that up to you and the other wise sages here. After all, long ago the wisest one, Dr. Racket, PhD. determined I “literally” had an IQ of 85.
This post was edited 5 minutes after it was posted.
“On average, investors have been able to expect historically run-of-the-mill returns on the order of 10% annually when MarketCap/GVA has been close to 0.97. The current extreme stands at 3.50. One would need the S&P 500 to lose about 72% of its value to reach that run-of-the-mill valuation norm. Emphatically, that’s not a “forecast,” but it’s clearly a risk to consider.”
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