Down goes the Dow

agip wrote:

well fine but these are stocks we are talking about - they flit and flip around, always have.

The average decline in a calendar year is 14%, yet 3/4 of years have positive returns. One 52 week decline means little in predicting the next 52 weeks.

Agip; Re S&P 500 Price return, since 1/1950 the index is lower a year later ( 251 trading days ) 27.3% of the time. Following year after a day -3% or worse - lower only 20.4%; a day +3% or more - lower 22.12%.

Beets,

I agree with the Barron. For example if I purchased one share of SPY three years ago at $150 and my cash was $75. Today the Spy is valued at $210 and through wage growth my cash is now $83. Even though I have more cash the rise in market value gives me less buying power. Anyway I don't buy the argument that rising wages have lead to more cash on the sidelines.

Igy

detector guy,

Why don't you register your name rather than hiding with the nameless nomes?

Igy

U.S. stock futures pointed to a higher open on Wall Street Wednesday as Brexit worries abated, helping to boost buying appetite for a second session in a row.

Futures for the Dow Jones Industrial Average drove higher by 104 points, or 0.6%, to 17,406.00, futures for the S&P 500 rose 12.60 points, or 0.6%, to 2,040.75. Nasdaq-100 futures pushed up 29 points, or 0.7%, to 4,309.50.

The gains tracked moves higher on Asian and Europe stock markets, and as oil futures rose roughly 1% after a fall in weekly crude supplies. Equities were staging a second session of strong gains after selling off after the U.K.'s vote to leave the European Union.

"Why are the markets up? [Isn't the U.K] leaving the world's largest trading bloc? Well, that's the thing--not for a while, it seems," wrote Augustin Eden, analyst at Accendo Markets, in a note. "Post-Brexit is years away, and the politicians are cleverly stalling the process of, er, starting the process."

The U.K. has yet to trigger Article 50 of the EU's treaty, the first step in the withdrawal process, even as EU leaders push for a quick start to exit negotiations. British Prime Minister David Cameron, who has announced his resignation, has said he would leave to exit process to his successor.

la gente está muy loca wrote:

agip wrote:

well fine but these are stocks we are talking about - they flit and flip around, always have.

The average decline in a calendar year is 14%, yet 3/4 of years have positive returns. One 52 week decline means little in predicting the next 52 weeks.

Agip; Re S&P 500 Price return, since 1/1950 the index is lower a year later ( 251 trading days ) 27.3% of the time. Following year after a day -3% or worse - lower only 20.4%; a day +3% or more - lower 22.12%.

the signal is that markets go up around 70% of the time over a year

lots of noise but it doesn't seem to mean a whole lot

I wonder what the market does over the next 52 weeks if, say, the trailing PE is over 18

Ghost of Igloi wrote:

detector guy,

Why don't you register your name rather than hiding with the nameless nomes?

Igy

My goodness you love to hear yourself talk.

agip wrote:

la gente está muy loca wrote:

Agip; Re S&P 500 Price return, since 1/1950 the index is lower a year later ( 251 trading days ) 27.3% of the time. Following year after a day -3% or worse - lower only 20.4%; a day +3% or more - lower 22.12%.

the signal is that markets go up around 70% of the time over a year

lots of noise but it doesn't seem to mean a whole lot

I wonder what the market does over the next 52 weeks if, say, the trailing PE is over 18

Don't have that information offhand but here are some 10 year total return CAGR of the S&P 500 by TTPE ( Reported Earnings ) using Shiller's data. I think you will be surprised.

DATE PE TR

2000.1 __ 26.50 __ -0.58

2003.09 __ 26.42 __ 7.29

1933.07 __ 26.27 __ 6.54

2001.03 __ 26.10 __ 2.88

1992.01 __ 25.93 __ 12.84

1998.02 __ 25.85 __ 4.46

1894.11 __ 25.79 __ 11.04

1992.02 __ 25.59 __ 12.53

1895.01 __ 25.37 __ 11.6

1934.02 __ 25.25 __ 6

1921.12 __ 25.21 __ 6.88

1992.03 __ 25.16 __ 13.18

1933.08 __ 24.81 __ 6.56

2003.1 __ 24.75 __ 7.3

1992.05 __ 24.74 __ 12.2

1992.04 __ 24.72 __ 12.75

1894.1 __ 24.56 __ 10.47

1933.09 __ 24.46 __ 6.88

1933.06 __ 24.45 __ 7.15

1991.12 __ 24.33 __ 13.68

1998.01 __ 24.29 __ 5.27

1997.12 __ 24.23 __ 6.02

1894.09 __ 24.22 __ 9.5

1992.06 __ 23.95 __ 11.66

1895.02 __ 23.94 __ 12.23

1934.04 __ 23.91 __ 6.51

1992.07 __ 23.88 __ 10.19

1934.03 __ 23.73 __ 6.86

1934.01 __ 23.73 __ 6.82

1992.08 __ 23.60 __ 10.21

1997.1 __ 23.58 __ 6.57

1997.11 __ 23.46 __ 6.17

1895.05 __ 23.34 __ 10.75

1991.11 __ 23.27 __ 13.62

1992.09 __ 23.20 __ 9.64

1993.06 __ 23.18 __ 10.22

2003.11 __ 23.15 __ 7.58

1997.09 __ 23.06 __ 6.43

1895.04 __ 23.00 __ 11.91

1895.03 __ 22.96 __ 12.53

1895.06 __ 22.93 __ 10.66

1993.05 __ 22.83 __ 9.71

1997.08 __ 22.83 __ 6.23

1992.12 __ 22.82 __ 9.55

1894.08 __ 22.81 __ 9.2

1997.07 __ 22.80 __ 6.73

2004.01 __ 22.73 __ 7.01

1993.07 __ 22.72 __ 10.28

1993.03 __ 22.69 __ 8.51

1933.12 __ 22.66 __ 7.07

1993.08 __ 22.65 __ 10.07

1961.11 __ 22.61 __ 6.05

1922.01 __ 22.58 __ 6.74

1992.11 __ 22.56 __ 10.02

1993.02 __ 22.55 __ 8.6

1993.04 __ 22.53 __ 9.22

1993.01 __ 22.50 __ 9.51

1993.09 __ 22.50 __ 10.27

1961.12 __ 22.49 __ 6.66

1991.1 __ 22.49 __ 13.06

2004.02 __ 22.46 __ 6.88

1992.1 __ 22.43 __ 9.61

1933.11 __ 22.35 __ 7.12

1961.08 __ 22.27 __ 7.04

1895.07 __ 22.21 __ 10.95

1993.1 __ 22.20 __ 10.35

2003.12 __ 22.17 __ 7.42

1946.06 __ 22.12 __ 15.81

1961.09 __ 22.05 __ 7.37

1961.1 __ 21.96 __ 7.02

1933.1 __ 21.95 __ 7.88

1961.05 __ 21.80 __ 7.72

1895.08 __ 21.77 __ 11.19

1946.05 __ 21.74 __ 15.8

1991.09 __ 21.73 __ 12.73

1961.06 __ 21.66 __ 7.66

1993.11 __ 21.64 __ 10.48

2004.03 __ 21.62 __ 7.33

1997.06 __ 21.61 __ 7.26

1961.07 __ 21.55 __ 7.61

1961.04 __ 21.44 __ 7.97

1987.08 __ 21.42 __ 14.16

1934.06 __ 21.38 __ 8.21

1994.01 __ 21.35 __ 11.06

1934.05 __ 21.29 __ 7.85

1993.12 __ 21.29 __ 10.72

1962.01 __ 21.25 __ 7.5

1991.08 __ 21.24 __ 14.05

1921.11 __ 21.23 __ 9.47

2004.04 __ 21.23 __ 7.25

1962.02 __ 21.21 __ 7.52

1946.04 __ 21.20 __ 16.2

1895.09 __ 21.19 __ 11.15

1894.07 __ 21.07 __ 9.25

1946.07 __ 21.07 __ 16.76

1994.02 __ 21.02 __ 11.19

1933.05 __ 20.99 __ 8.67

1922.02 __ 20.91 __ 6.45

1987.06 __ 20.90 __ 14.54

1962.03 __ 20.86 __ 7.76

1938.1 __ 20.84 __ 7.84

1987.07 __ 20.81 __ 14.83

1961.03 __ 20.75 __ 7.89

1894.06 __ 20.67 __ 8.58

1938.11 __ 20.64 __ 7.23

1997.05 __ 20.60 __ 7.78

1896.11 __ 20.53 __ 12.96

2004.12 __ 20.48 __ 7.71

1994.03 __ 20.42 __ 11.18

1946.08 __ 20.27 __ 16.92

1895.1 __ 20.21 __ 11.46

1934.07 __ 20.18 __ 9.02

1991.07 __ 20.18 __ 14.59

2004.06 __ 20.17 __ 7.73

1929.09 __ 20.17 __ -3.41

1894.04 __ 20.16 __ 8.23

1894.05 __ 20.16 __ 8.42

2004.05 __ 20.14 __ 7.69

2005.02 __ 20.11 __ 7.85

1896.12 __ 20.10 __ 13.28

1987.09 __ 20.09 __ 14.64

1997.02 __ 20.09 __ 7.76

2004.11 __ 20.05 __ 7.93

1962.04 __ 20.00 __ 8.22

data!

real disposable income continues to grow nicely: c.+3.7% y/y - been in that range for a while

real personal consumption expenditures: +2.8%

so people are making more disposable incoem and spending it too

PCE prices: 0.9%

PCE Core: +1.6%

pretty much perfect on the price data

Trailing PE based on 3/31/2016 close of S&P 2059.74:

non-GAAP: 20.89

GAAP: 23.83

so when shiller cape is above 20 there are many (most?) years with solidly positive years afterwards.

this is why investing is so hard and so easy. Sure buying cheap stocks is great. But buying expensive stocks is great too.

well that's probably 10 year return data, not one year. But still. good numbers off expensive stocks.

in live data news, the brexit shock is over in US stocks. We're right back into the march-june trading range.

I really would have thought this would be a more damaging hit.

agip,

"But buying expensive stocks is great too."

Not true when investors risk aversion is increasing.

The worst performers over the year-to-date year have been some of the most overvalued stocks: ILMN (-29%), CMG (-18%), TSLA (-16), BIIB (-25%), NFLX (-23%), SSYS (-11), GPRO (-41%), SCTY (-53), VRX (-80%), LNKD (-15%), FIT (-59%), TWTR (-29), NOW (-24%), MSFT (-10%)

In almost every case these stocks were market leader when S&P earnings peaked in Q3 2014.

One can believe that "one offs" took individual issues down. But that misses the point, that once valuations are stretched issues are susceptible large mean reversions since earnings no longer support the price. Furthermore, once risk appetite in the market wanes the optimistic growth model proves more hope than reality. Just wait until the bond proxy stocks face their own reality check.

TINA has been a bad strategy the past year and a half.

Igy

Hey butt hurting, try to keep up, detector guy.

You need to start attending daily meetings at A$$holes Anonymous

Hi, K5! Are you still sore about missing out on the bull market? You sure lost a chance to make a lot of money.

crazy fact: the VIX is now lower than it was before brexit.

this is a nutso wacky market.

Maybe the central banks turned on some massive spigot of 'money' that found its way to the US stock market.

I'm buying gold

agip wrote:

so when shiller cape is above 20 there are many (most?) years with solidly positive years afterwards.

this is why investing is so hard and so easy. Sure buying cheap stocks is great. But buying expensive stocks is great too.

Not Shiller CAPE; these are PEs based on trailing twelve months reported earnings.

K5 detector wrote:

Hi, K5! Are you still sore about missing out on the bull market? You sure lost a chance to make a lot of money.

Wow. Such originality, such creativity.

Well at least you didn't say butt hurt this time. I guess that's a step forward for the little guy.

Hey, K5, why are so infatuated with being butt hurt?

K5 detector wrote:

Hey, K5, why are so infatuated with being butt hurt?

This from a guy who had included the term in dozens of his posts.

Are others in your family moronic (Moron: A person of mild mental retardation having a mental age of from 7 to 12 years and generally having communication and social skills enabling some degree of academic or vocational education) or are you an outlier?