While I totally agree the market is very overvalued, I don't think the Buffett Indicator is a very good metric anymore and that it has changed over time. Fewer people invested 50 years ago. US companies were not global companies 50 years ago, not to the degree they are today anyway. More investors from around the globe are putting money into US stocks now than 50 years ago.
All that being said, I think a 20% drop in the next year is very possible, though impossible to say for sure of course.
Perhaps, similar sentiments were echoed in the past at high valuations. Several posters have discussed the declining value of metrics like Shiller CAPE 10. I disagree, I believe valuation are always a way of determining what you get for a dollar invested. This of course gets watered down by the argument you make, “more participants driving prices higher.”
Ladies and Gentlemens, since 1871, this is only the second time the Schiller PE has reached the 40s; the last time was during the dot-com bubble.
1. Stocks: all-time high 2. Home Prices: all-time high 3. Bitcoin: all-time high 4. Gold: all-time high 5. Money Supply: all-time high 6. National Debt: all-time high 7. CPI Inflation: 4% per year since Jan 2020, 2x the Fed's "target" 8. Fed: cutting rates again this month pic.twitter.com/8ympHyvW18
Very interesting, though it appears that your post may have been been cut short mid-sentence.
I did a similar check yesterday and found that simply by modeling a portfolio more representative of the Nasdaq index as opposed to the S&P 500, the Nasdaq modeled portfolio would have an outperformance of almost 4% CAGR over the last 10-year phase, which would put CG2 well on the way to outperforming the market with their portfolio.
And another insight offered by the charts your article discloses show the Tech ETF had a best year of 56%, and The Chip Sector had an outstanding return of 67% for that year, and those are just sector ETFs. If an individual portfolio contained one or more of the high-hitting Mag 7, it is surely possible to nudge that performance up to 70% for that year.
Some other insights that may be noteworthy, there was only one year in the last 10 with a significant underperformance (2022), and the discussio seattlen points out that it was about a year for the Tech ETF to regain its former high.
And the outperformance of the Chip maker component of the sector, which has performed slightly better than the Tech Sector ETF, is underperforming the former so far this year, like it did for a few years early in the 10-year period. So it has not always been the better bet.
Fascinating stuff.
Hope you are enjoying your return to TX and getting back to the proximity of the grandkids and others.
Thanks seattle. This summer was the second longest on the road of my life. 5/21 to 9/4; the longest was when I was in Europe in 1977, 08/04-11/21. We did get to see the grandkids when we were in St John's as our visits overlapped. My poor grand-daughter got seasick on the puffin whale watch. They also came up to NJ for the Labor Day weekend.
We have sold our place and purchased a new home, still in Georgetown. My wife's knees are giving her problems and our current house has stairs,
NIce to hear this!
Puffins - we are totally jazzed about puffins, having travelled to Iceland this summer, and a high point were the puffins and coming across some local volunteers that were releasing puffins chicks they catch that wander into town at night and they release them off cliffs overlooking the ocean and off the back of a ferry we were on. I have videos of it, and they are really good.
Newfoundland sounds like a great trip, not dissimilar, and we may have to give that one a try.
As for Georgetown, we used to drive through it on trips from Dallas to Austin on I-35 when I was in Grad. School. I just looked it up online and it looks familiar. Beautiful, historic town. Must be a pleasure!
Hey, how about those markets?! What does it take to phase them anyways? Go figure.
1907 Panic: –48% … 10 years to make new highs. 1929 Great Depression: –89% … 25 years to recover. 1973 Oil Shock: –45% … 9 years to recover. 1987 Black Monday: –36% … 2 years. 2000 Dot-com Bust: –78% Nasdaq … 15 years to…
I still recommend cash, I always recommend cash. The market is only more overvalued than when I first posted here 3/2/2015. I will be sure to remind you about how wrong you will be. You will most likely be hiding, never to return. A poor and rotting mellon.
The above was posted 8 years ago on 5/23/17.
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
I still recommend cash, I always recommend cash. The market is only more overvalued than when I first posted here 3/2/2015. I will be sure to remind you about how wrong you will be. You will most likely be hiding, never to return. A poor and rotting mellon.
The above was posted 8 years ago on 5/23/17.
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
No comment.
Actually, I believe the S & P is up around 250% since mid-2015. And this is just the index appreciation. It doesn't even factor in dividends which are quite substantial. How many of these doomsday scenarios are we going to have to listen to?
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
No comment.
Actually, I believe the S & P is up around 250% since mid-2015. And this is just the index appreciation. It doesn't even factor in dividends which are quite substantial. How many of these doomsday scenarios are we going to have to listen to?
Ok, threw in the actual date of his first post/ 3/1/2015 (rounded down to the first day of that month by default), and get 219% increase to today's close.
That works out to approx. a 20.7 % annualized return for the 10-year and 7 month duration.
I am ignoring the dividend factor, but that would only strengthen an already very compelling case, imo.
I still recommend cash, I always recommend cash. The market is only more overvalued than when I first posted here 3/2/2015. I will be sure to remind you about how wrong you will be. You will most likely be hiding, never to return. A poor and rotting mellon.
The above was posted 8 years ago on 5/23/17.
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
No comment.
The original post from 3/2015 refers to the value of cash in a portfolio, the second I am unsure. I would never advise anyone to be in 100% cash. So your trolling is disingenuous. As far as the market goes, it was virtually unchanged from 3/2015 thru 3/2020. Now you may say “well that was the Covid low.” “A pandemic!” My response would be how many $Trillions of Government debt has been accumulated since then.
Your investments are subsidized by Government spending, low corporate tax rates, and future returns reduced with the next new high. Further devalued by inflation and the decline of the purchasing power of the Dollar. This is why I have stated numerous times I am largely in EM Bond CEFs, pulling income in excess of 14%, and capital appreciation of over 40%.
This post was edited 3 minutes after it was posted.
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
No comment.
Actually, I believe the S & P is up around 250% since mid-2015. And this is just the index appreciation. It doesn't even factor in dividends which are quite substantial. How many of these doomsday scenarios are we going to have to listen to?
Fun fact: the S&P 500 also averaged total returns of about 20% annually over the 18-year period to the 2000 bubble peak (see my August comment for more).
The inception date for NVDA and John Hussman's fund Hussman Strategic were both around 2000. Since then here are their returns:
HSGFX: Negative 40%
NVDA: 430,000%
I do not think I will be listening to anything that John Hussman says.
NVDA is your fantasy.
People say today is nothing like 2000. It is worse. At least in 2000 politicians weren’t so obvious in gaming the system. We live in a sick society where almost anything goes. Hard work and innovation has been subjugated to investing and accounting gimmicks. Crypto, total nonsense. AI requiring nuclear power to be viable. I thought environmentalists were afraid of nuclear. Evidently changes quick when you can make a buck. The leveling of phony and fantasy is astounding.
This post was edited 8 minutes after it was posted.
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
No comment.
The original post from 3/2015 refers to the value of cash in a portfolio, the second I am unsure. I would never advise anyone to be in 100% cash. So your trolling is disingenuous. As far as the market goes, it was virtually unchanged from 3/2015 thru 3/2020. Now you may say “well that was the Covid low.” “A pandemic!” My response would be how many $Trillions of Government debt has been accumulated since then.
Your investments are subsidized by Government spending, low corporate tax rates, and future returns reduced with the next new high. Further devalued by inflation and the decline of the purchasing power of the Dollar. This is why I have stated numerous times I am largely in EM Bond CEFs, pulling income in excess of 14%, and capital appreciation of over 40%.
Markets don’t crash because of headlines, headlines follow the crash.
History proves it: 1929: No trigger at the top. Headlines came when the Dow was already down ~20%. 1987: No jobs report, no GDP shock. Headlines came after Black Monday. 2000: Nasdaq peaked March 10. Barron’s…
The inception date for NVDA and John Hussman's fund Hussman Strategic were both around 2000. Since then here are their returns:
HSGFX: Negative 40%
NVDA: 430,000%
I do not think I will be listening to anything that John Hussman says.
NVDA is your fantasy.
People say today is nothing like 2000. It is worse. At least in 2000 politicians weren’t so obvious in gaming the system. We live in a sick society where almost anything goes. Hard work and innovation has been subjugated to investing and accounting gimmicks. Crypto, total nonsense. AI requiring nuclear power to be viable. I thought environmentalists were afraid of nuclear. Evidently changes quick when you can make a buck. The leveling of phony and fantasy is astounding.
So why is Hussman such a terrible mutual fund manager? Down 40% since inception. That is a joke.
As another poster (mellon) goes on to note, GOI was making the same forecast 2.5 years ealier.
A quick check uncovers that the SNP 500 has increased 148% since his first forecasts of a crash in 2015.
That works out to approx. 14 % annualized returns for that timespan.
No comment.
The original post from 3/2015 refers to the value of cash in a portfolio, the second I am unsure. I would never advise anyone to be in 100% cash. So your trolling is disingenuous. As far as the market goes, it was virtually unchanged from 3/2015 thru 3/2020. Now you may say “well that was the Covid low.” “A pandemic!” My response would be how many $Trillions of Government debt has been accumulated since then.
Your investments are subsidized by Government spending, low corporate tax rates, and future returns reduced with the next new high. Further devalued by inflation and the decline of the purchasing power of the Dollar. This is why I have stated numerous times I am largely in EM Bond CEFs, pulling income in excess of 14%, and capital appreciation of over 40%.
The markets had a very brief dip in March 2020 where it almost returned to where it was five years earlier, but in fact, was still significantly postive over that duration.
Most imortantly, those dates you reference are essentially meaningless and prove absolutely nothing. No one can pick the absolute lows and hghs of a trend, and that is exactly what you are doing.
The markets had a very brief dip to those levels in March, 2020, and I am talking about a matter of days only. Outside of that v-shaped drop, the markets were largely up, and strongly so.
Cherry picking days like that is a waste of our time and I don't like wasting my time.
Help us build the best running shoe review site for a chance to win a LetsRun t-shirt.Help us build the best running shoe review site for a chance to win one of 10 LetsRun t-shirts.