Down goes the Dow

Mellon or mellon,

My posts have been consistent since I first posted in March of 2015. And by the way the S&P 500 has changed very little, with two drops in excess of 12%. And more to come in my view. In fact bonds have outperformed domestic stocks, and international developed and emerging markets have underperformed. The NYSE composite is lower than where it was is May 2015. Most of the opinions I see posted here is just stock market cheer leading and back slapping on a "job well done." Unfortunately, over 100 years of market history points to this being the wrong view.

Igy

Mellon, mellon, the handle stealing jerk or whoever your namelessnes is:

NYSE chart of 2,000 New York Stock Exchange traded stocks. Down since the spring of 2015.

http://finance.yahoo.com/quote/%5ENYA?p=%5ENYA

Igy

Oh, the irony!

Ghost of Igloi wrote:

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.

Little has changed other than S&P 500 EPS has declined further and Treasuries have outperformed.

Igy

Yes Irony makes a good Pinot Noir. Oh the Irony!

Hey Mann....

http://www.tastings.com/Wine-Review/Irony-2012-Pinot-Noir-Monterey-USA-10-15-2013.aspx

Igy

What time frame are you using to say Ts have outperformed stocks?

Around the previous to now May 2015 S&P 500 top at 2,134.

https://www.ishares.com/us/products/239454/ishares-20-year-treasury-bond-etf

Igy

Econ 101,

TLT has doubled the performance of SPY year-to-date. Surprising huh?

Igy

Not surprising at all when you consider that you are comparing a very narrow fund against a very broad one over a very short period of time. It's a meaningless comparison.

Econ 101,

OK, but you won't like the answer. Compare the peak of the NYSE Composite (May 2015) to cash. Broad index (2,000 stocks) to just cash.

For you, it is never a time not to buy stocks.

For that, there is a meaningful comparison.

Igy

First, I didn't ask you a question. Second, a one year time frame is only meaningful to market timers like you and it has been well established how poor that strategy is. Third, "it is never a time not to buy stocks" does not even come close to describing me, so stop making up stuff to fit your fantasy. Fourth, good night.

Ghost of Igloi wrote:

Gil,

In case you missed it, HSTRX #1 of 353 funds, one year +13.58%. Doing better than you by the way.

http://www.morningstar.com/funds/xnas/hstrx/quote.html

Igy

If you're trying to prove that Hussman is a savvy investor, then you failed miserably with that link. Sure the latest short term returns look good, but that fund has done relatively poorly over the life of the fund.

Earnie,

The value of Non GAAP or pro forma data is to help a company basically tell their story behind their GAAP numbers. So for example, Ford motor co. wrote down their assets in Venezuela to zero because that country has imploded. That is included in GAAP so its appropriate when Ford wants to tell of the story of their normal operations to take that one time expense out.

What makes no sense and has no value is when the media releases "non gaap" S&P 500 p/e ratios. That is just dumb at best because it has nothing to do with why you have non gaap data to begin with. At worst its highly misleading. There are no standards for non gaap as far as I can see. Its just numbers that a company wants investors to see.

I actually think even GAAP S&P 500 pe ratios in any given year are not that useful. Schiller's idea of calculating PE ratios based on a trailing 10 years of data makes a lot of sense to me if you use PE ratios at all. Based on that index S&P 500 PE ratios are relatively high right now.

Hugh J,

True, but there have been funds highlighted on this thread that are the mirror image of the Hussman fund. That is, it looks very good at the top of the market, but very poor at the bottom. Most investments have a relative value quotient. Personally I would place the Hussman fund near the top of investments I would own at a market top.

Igy

Wall Street was poised for a slightly downbeat trading day on Wednesday, with investors opting for caution ahead of Federal Reserve minutes that could reveal if a rate hike is still on the table this year.

Futures for the Dow Jones Industrial Average lost 16 points, or 0.1%, to 18,508, while those for the S&P 500 index dropped 0.30 points to 2,176.50. Futures for the Nasdaq 100 index gave up 0.25 points to 4,7998.25.

The negative mood ahead of the open came after stocks closed lower on Tuesday (http://www.marketwatch.com/story/us-stocks-hunt-for-another-record-session-as-dollar-tumbles-2016-08-16) following hawkish comments from Fed officials. The S&P 500 index ended 0.6% lower, while the Dow average and Nasdaq Composite lost 0.5% and 0.2%, respectively. All three benchmarks on Monday closed at record levels.

All about the Fed: However, hints that an increase in interest rates is coming took stocks off their all-time highs. William Dudley, president of the New York Fed, said the time for another hike is approaching and a rate increase as soon as September is a possibility. Meanwhile, Atlanta Fed President Dennis Lockhart said he has confidence in the outlook for the U.S. economy and, as a result, wouldn't rule out "at least one" interest rate (http://www.marketwatch.com/story/feds-lockhart-open-to-at-least-one-rate-hike-this-year-2016-08-16) hike this year.

The dollar rose after those remarks and continued to climb on Wednesday. The ICE dollar index added 0.2% to 94.962.

The comments came ahead of the closely watched minutes from the Fed's July 26-27 meeting, due at 2 p.m. Eastern Time on Wednesday. Additionally, St. Louis Fed President James Bullard will speak about monetary policy at the Wealth and Asset Management Research Conference at Washington University in St. Louis at 1 p.m.

"[Dudley's] message was clear; the market is far too complacent about the rate hike," said Naeem Aslam, chief market analyst at Think Markets, in a note.

"Today's FOMC minutes may influence the odds in favor of a rate hike during the month of December, as September still looks way too unrealistic as the Fed would have to have prepared the market for this," he said.

The market is now pricing in a 15% chance of a September rate hike and a 52% probability for it happening in December.

Irony Mann wrote:

Oh, the irony!

Again?

Are you autistic?

Hi, K5/Igy! Would it be a problem for you if indeed that poster was autistic?

This thread is bunch of nonsense. I admit I have not read all 600+ pages, but what I did skim fell short of inspiring me to change my investing strategy.

Here is my challenge:

My portfolio will destroy every nearly all of your brilliant short term stock/ sector/ momentum/ market timing/ doomsday prepping/ market timing strategies over the next 40 years. It's not a very complicated portfolio. In fact it is brutally simple.

Between 401k, Roth IRA, HSA, and taxable my portfolio looks something like this.

35% - Total US stocks

20% - Total international stocks

15% - Small cap value US

15% - Emerging markets

05% - REITS

05% - Bonds

05% - Healthcare

Weighted expense ratio is 10.5 basis points. I put in contributions every two weeks. I don't care what the return is in one day, I don't care what it is over one year, I don't care if there are five bear markets over the next 40 years. I don't need to read articles every day, I don't need to worry about what the S&p 500 closed on.

There is nothing particularly special about this portfolio. It is not my unique portfolio. People far better at investing then me use this portfolio. It is available to everyone without a subscription or monthly payment. However, over the next 40 years until I retire I am confident this portfolio will crush just about anything in this thread.