Down goes the Dow

🍒🍒🍒

Nice.

Have you every considered that at a market top, projections of future returns is the ultimate in cherry picking?

Or, is that too much to comprehend?

Igy

Ghost of Igloi wrote:

agip,

My comment on that is, funny how the market stalled once QE infinity ended. And by the way corporate earnings went into severe decline. The correlation is not an accident.

Igy

I challenge.

QE ended in Oct 2014. the market was all over the place that month, but a fair est has the SP500 incl dividends up at least 10% from that point. Not great for 2 years, but not a disaster either, considering low inflation.

Corp earnings are down yes from around then. But I think that is more related to energy than financial engineering issues.

agip,

Much of the outperformance of the S&P 500 can be attributed to it's composition, which in my view makes it more not less dangerous investment. The Dow on the other had it around 200 points higher than it's 2014 close. The 2,000 stock NYSE composite is below the March 2014 close. I would assume for both indices the inflation adjusted return including dividends is about flat.

This era may be referred to as the Central Bank Bubble. Negative interest rates are a new data point in the over 2,000 year history of financial markets. To assume that prices for assets are not inflated in such an environment is not logical. Many business models of the most hyped companies fail with an even modest increase in interest rates.

Igy

Ghost of Igloi wrote:

Nice.

Have you every considered that at a market top, projections of future returns is the ultimate in cherry picking?

Or, is that too much to comprehend?

Igy

Never considered that, but then I haven't seen anyone doing that. Have you?

Hello, McFly! wrote:

Jeffy Tull wrote:

Someone does not know the meaning of hypothetical.

I already said that, but thanks for verifying.

What's it like to be limited to repeating the same 2 or 3 posts over and over again? R U frustrated by your lack of candlepower or are you just too dumb to even realize this?

I am curious,

Sure. Just last week Marty B. offered an exponential growth model based on the market returns of the several decades. As I mentioned at that time, how would that data perform if instead you took the decades of 1930-1950. Projections that don't include some market valuation metric, from a historic market perspective, are significantly less reliable.

Igy

How is using a model based on decades of data equivalent to making a projection at a market top? They would seem to be mutually exclusive.

Let me answer it this way.

How is using decades of data equivalent to making a projection at a market bottom? They would seem mutually exclusive.

The point is, neither is accurate if their is no market valuation metric. It is all in the data capture. The period of 1996-2016 is one of the greatest stock Bull Markets in history. The period of 1930-1950 is one of the greatest stock Bear Markets in history.

Igy

So despite what you said, this guy didn't make a prediction at a market top.

Ghost of Igloi wrote:

agip,

My comment on that is, funny how the market stalled once QE infinity ended. And by the way corporate earnings went into severe decline. The correlation is not an accident.

Igy

Correlation is not causation.

Sorry for the correction. Yes he did, his formula was based on an exponential model using data from one of the greatest, if not the greatest, Bull market.

Igy

QE also didn't operate in a vacuum.

Logician wrote:

Ghost of Igloi wrote:

agip,

My comment on that is, funny how the market stalled once QE infinity ended. And by the way corporate earnings went into severe decline. The correlation is not an accident.

Igy

Correlation is not causation.

But didn't he also use bear market data. You said it covered decades. Also, what was his prediction?

Given the shape of the curve modeling the DJIA over the last several decades, it makes sense to use an exponential growth model for predictive purposes. Plug the year in for x to get the DJIA value.

y = (2 × 10^(-101))e^(0.1206x)

Read more:

https://www.letsrun.com/forum/flat_read.php?thread=5369837&page=737#ixzz4NY83W0I8

You will need to reach out to Marty B. for those answers. It never made a lot of sense to me.

Igt

Then how can you say he's cherry picking, if you don't understand it? You're not making a lot of sense here.

Any exponential growth model taken at a market top is the ultimate in cherry picking.

But whatever you say.

Igy

You said the model used decades of data and now you're saying it's based on a market top. Which is it?

I suggest you do some more studying on investments and historical returns. It is not that difficult, but you seem to be missing the most elemental concepts.

Igy