Down goes the Dow

Igy, on 12/24/17 you wrote:

Ghost of Igloi wrote:
BitCoin is nonsense and you are a fool. It depends on the naive to survive. Hopefully you are not foolish enough to put much money into nothingness.

In the ensuing period, bitcoin has returned a whopping 28.1% average annual returns.

A $1,000 invested in bitcoin on the day you said it was nonsense would now be worth $8,464.

In light of this extended period of very favorable returns, do you feel that your advice was misguided?

I guess Eric Trump is right, Seattle.

Eric Trump’s legacy:

I don't really care what an investment does years and years from now.

I have button on my computer which allows me to sell anything in a matter of seconds, and I do so when its fundamentals or significant factors effecting its present and future value change.

My point is simply made with the significant benefit of hindsight, and it is that you have repeatedly advised avoiding what have turned out to be fantastic investment opportunities, at least in the short and middle time frames.

That is unfortunate. And it is being duly noted.

I bet Sir Issac duly noted as well. Maybe even Eric Trump. :-)

I am just old fashioned. I just can’t consider a thing made out of nothing, by an unknown person, an “investment.” No matter how “fantastic” you or anyone else considers. Is “fantastic” a derivative of “fantasy”?

understood, and i've been reluctant to do more than dabble in it, too, for much the same reasons.

But my more cogent point is your similar outlook for the stock market. You have made perma-bear projections for about 10 years, and it has proven resilient. Opportunity missed, at least in part, and at least so far.

Second, I won't buy bitcoin either but for different reasons - the energy demands are not justified. Lately, I've gone into Ethereum, however, also a crypto coin, but vastly better methods so as to lessen environmental impact of the energy required to run it.

So Seattle mentions above Igy being a perma-bear for 10 years now. So I go back 10 years on the thread to see if I can get an interesting post by him. Instead I find a post by Agip about the market reaching all time highs.

Back then (2015) the Nasdaq at 4,950. Today at 21,600.

Dow at 16,500. Today around 45,000.

I admittedly got negative on the market in March 2016, about S&P 500 2,200. Now keep in mind the Republican tax cut came fall 2017, cutting corporate tax rates by 10%. Not coincidently deficits and inflation started rising. Covid low of March 2020 was about 2,400, then the deficit really started to rise along with inflation. So none of this has happened in a vacuum.

On Bitcoin, Eric Trump is promoting. Yet his father is trying to reduce inflation, cut rates, and strengthen the Dollar. All things running counter to the Bitcoin investment thesis.

More on the above:

The Trump family is over their heads in crypto. A reasonable person cannot even keep track. There is a Trump coin ($TRUMP) as I recall, maybe one for Melania, too.

I don't really care except there seems to be some very obvious conflicts of interest and they are pushing relentlessly to enable legitimizing this sector.

And as for tax cuts, etc., things happen and the markets are subject to all kinds of factors and developments. To some extent, this is a given.

I would think an investor would factor that reality into their outlook and expectations.

And then there is the Mag 7 and its impact on the indices, which have been a very good opportunity to those who didn't avoid them. Again, from the vantage of hindsight, this has been the way it has played out.

I have a good life, and soon to be 75 increases my risk aversion. My view remains the market is historically overvalued. I have increased my short positions to about 8% lately. I agree with Hussman and Grantham, we will see a bear market with top to bottom drop in excess of 50%. In the meantime I am comfortable holding most of my money in EM Bond CEFs.

Ok, that makes sense. I would only add that timing is everything, and a big question for me is when a correction might transpire.

I'm all in. I should decrease my ratios like I promised myself I would once i revisited ATHs, but here we are and I don't seem to be following through.

Posters should be happy I am the only one willing to take the bear side. Without me it would be a bull circle jerk with Sally in the middle.

Hussman and Grantham predict a market collapse every year. Each year when they come out with a doomsday prediction I yawn. And each year the market keeps going up to record highs.

I lean much closer to the bear end of the spectrum than most in this thread. Not as extreme as you, perhaps, but still worried and risk averse. Im still buying investment grade corporate bonds as capital becomes available as yields continue to exceed our target returns with relatively low volatility and risk. If we see a crash, I will be cashing out a lot of bond holdings and buying back in, but to me the current market hysteria is too hot to touch. I do recognize that AI does change things and I could be missing out on the opportunity of a lifetime, but I guess I’m immune to FOMO.