Down goes the Dow

Econ:

Some good news from the consumer:

retail sales ex gas and autos y/y +4.4%: fairly strong,

retail sales all in +3.0% y/y, also showing some acceleration and roughly the best numbers since 2014.

Consumer confidence big climb to highest levels since 2014.

Prod price index bleh; core y/y +0.90%

all in 0.0% y/y

Biz inventories jumped, but in historical range.

So maybe consumers are going to carry us through some slow investment times at the corporate level. But these are the first good numbers in a while, so early days.

well I suppose I should amend, changing that I feel I can predict long term (10 plus year) stock market returns:

but I am not able to predict short or intermediate term stock market moves.

I am confident that a long term buy and hold strategy will provide satisfactory returns over the long run.

I use high quality bonds as a hedge - in 2008 bonds made solid money when stocks fell 40% - that provides a nice cushion from falling stock prices. I don't have a 100% stock portfolio and very few of my clients do.

I have toyed with using the 200 day indicator as a system to sell when the market starts moving down, but it has too many false positives...I was in and out, in and out, and it cost some real performance.

Maserati and agip,

I stayed home today to "rest" and replace a sprinkler valve manifold. I have a crack in the valve body and need to reduce the pressure going to a soaker system. Anyway out of the loop today but noticed things down quite a bit while having lunch.

Have a good weekend.

Igy

Ghost of Igloi wrote:

Anyway out of the loop today but noticed things down quite a bit while having lunch.

Not Apple....yet.

You never get anywhere in this market.

I told you 2 weeks ago, Sell in May and Go Away. I expect a repeat of what we had in August-September and January to occur some time in July-August, and like the big money I will buy at the bottom retest and try to sell near the top if we don't break out the next time. We will break out eventually, but you have no guarantee how long that will take or which direction.

I'm repositioning in this down leg and have a list of stocks to buy at the next bottom. We have a trading range market. You can't make money as a buy-and-holder unless you have stronger than the market portfolio (like Buffet, not Vanguard). Standard and Poors is now projecting that 2016 S&P500 eps will come out at 0.1% for the whole year, but we may not see any of that until October, and until then, we may be set for a perfect storm, of which you have just seen the beginnings with the brick and mortar retailers.

Only buy when there's blood on the street.

OK so you feel like you can predict to some level of accuracy 10+ yr stock market returns.

Going down the time scale, when does "long term" change to "intermediate term" for you?

And, annualized, what is a "satisfactory return" over 10+ years to you?

I'm not trying to "get at" anything in particular or setting you up somehow, I'm genuinely interested in the answers. I don't put even semi-rigid timeframes on my decisions to get in or out, I let my view of conditions dictate when to make the moves. Over the past 20 years I have made, I think, 8 in/out decisions, including the initial IN decision, but I have to think about it to remember exactly.

I'm not saying one way is "better" than the other, that all depends on your particular goals, lifestyle, experience, involvement, capabilities, etc.

I'm slightly fascinated by the feeling that some people have that they "should" or "must" own US stocks. Many people's answers have been the same as yours, because they believe that over a long enough time-frame (10-15 yrs) they believe the market will rise "enough to have made it worthwhile to buy-and-hold" for that period.

Igy how's the weather out there? No need for irrigation here, it's wet and cool. Makes me just want to sit around in a hot tub.

Maserati,

Idaho weather ths time of the year, like most of the country is variable. Generally May is one of the more pleasant months. Today it was 50s in the morning and low 80s this afternoon. I started digging out the valve box around 9:00am and needed a sweatshirt the first half hour. By this afternoon I was guzzling water and Gatorade. Works done, in the easy chair with another Gatorade, some Chardonay to follow. Have a good weekend.

Igy

91.4% of S&P 500 companies have reported for Q1 2016

164 of 459 beat GAAP earnings estimates

241 of 455 beat sales estimates

GAAP earnings tracking at $21.53 a share with a PE of 23.93, lowest Q1 since 3/31/2011 when earnings were $21.44 with a PE of 16.31 on index level of 1,325

Last Twelve Month Earnings (LTM) tracking at $86.25, the lowest since 9/30/2011 when the index closed the quarter at 1,131 and the PE was 13.01

Forward GAAP earnings continue to fall, currently set at the fantasy level of $112.72

Here is the data:

https://us.spindices.com/documents/additional-material/sp-500-eps-est.xlsx

Igy

"Forward GAAP earnings continue to fall"

Translation: Wall Street analysts don't know shit

Translation: creates a narrative that investors won't question

Only an idiot believes that data.

not,

Agreed, but amazingly few question. Dangerous curves ahead, one lane, head on.

Igy

What the fuck are you babbling about?

Watch your language.

Grow up, babbler.

And you could learn to carry a thought without cussing or insults.

What's your problem? Are you a cloistered nun or something? Welcome to the real world.