Down goes the Dow

Tis true wrote:

mellon wrote:

Sounds like somebody else who made a ridiculous (open ended date) prediction on here over 3 years ago. I'm sure he'll take credit for calling it if it happens 30 years from now.

Sh*t. If the Dow is under 13,000 30 years from now I would say whoever called it was damn prescient and deserves lots of credit.

If the Dow was at 15k at the time of the original comment and were to lose @ 13% of its value over the next 30 years then steering clear of investing in equities would be a damn good strategy.

There he goes talking to himself again.

Ghost of Igloi wrote:

So does he, just on the other side of the argument:

http://www.businessinsider.com/professor-jeremy-siegel-rip-2009-2

The question is who do you believe right now, today?

Igy

🍒

I don't believe anyone who believes the market will move in only one direction. That's just stupid.

My first post 3/2/2015:

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.

Read more:

https://www.letsrun.com/forum/flat_read.php?thread=5369837&page=230#ixzz4ODdRZonh

The Dow Jones Industrial Average closed that day at 18,288, today it sits at 18,200 as I write. The only thing that has changed during that period is that corporate earnings have declined further, and Treasuries are more overvalued.

We had a portfolio manager for one of the largest mutual fund companies in the office yesterday. A question was asked how he was personally positioned, he had 50% in cash.

Igy

C.P. Alert wrote:

Ghost of Igloi wrote:

So does he, just on the other side of the argument:

http://www.businessinsider.com/professor-jeremy-siegel-rip-2009-2

The question is who do you believe right now, today?

Igy

🍒

I don't believe anyone who believes the market will move in only one direction. That's just stupid.

I won't believe anyone who opines that stock valuations don't matter. That is just foolish.

Igy

Ghost of Igloi wrote:

The March 2000 S&P 500 peak was not reach again until October 2007. The March 2000 peak was not passed again in this cycle until March 2013. At the March 2009 bottom the S&P 500 level stood at the same index level as 13 years earlier.

Igy

So Hussman missed not 1, but both, of the last 2 major bottoms. You don't get to sell at the top if you don't buy at the bottom, because you own nothing to sell. And bottoms are much easier to time with technical tools, because the fear impulse is greater than the greed impulse. An "expert" can perhaps be excused by missing 2 consecutive tops, but should not be missing 2 consecutive bottoms, or should be admitting that he does not know anything about the market.

Who is the greater fool--the fool or the fool who listens to the fool?

Ghost of Igloi wrote:

We had a portfolio manager for one of the largest mutual fund companies in the office yesterday. A question was asked how he was personally positioned, he had 50% in cash.

Igy

There's nothing unusual about that. Perhaps you do not realize that in the financial world "cash" includes bonds, CDs, etc. A 50/50 split is fine and actually recommended for some.

mellon wrote:

Tis true wrote:

Sh*t. If the Dow is under 13,000 30 years from now I would say whoever called it was damn prescient and deserves lots of credit.

If the Dow was at 15k at the time of the original comment and were to lose @ 13% of its value over the next 30 years then steering clear of investing in equities would be a damn good strategy.

There he goes talking to himself again.

So if you knew the Dow would be 13,000 in 30 years you would continue to drop money into it?

Pure genius.

Wrong, cash does not include bonds and CDs. Go back to studying Wall Street rookie.Igy

Wall Street Wookie wrote:

Ghost of Igloi wrote:

We had a portfolio manager for one of the largest mutual fund companies in the office yesterday. A question was asked how he was personally positioned, he had 50% in cash.

Igy

There's nothing unusual about that. Perhaps you do not realize that in the financial world "cash" includes bonds, CDs, etc. A 50/50 split is fine and actually recommended for some.

Ghost of Igloi wrote:

Wrong, cash does not include bonds and CDs. Go back to studying Wall Street rookie.

Igy

Wall Street Wookie wrote:

There's nothing unusual about that. Perhaps you do not realize that in the financial world "cash" includes bonds, CDs, etc. A 50/50 split is fine and actually recommended for some.

coach d,

I'll be the fool then. I find his writings to be the most interesting, and he admits to his mistakes, unlike most other market commentators. The market has gone virtually nowhere since I first posted here. In that time valuation have gotten more extended for both stocks and bonds. I'll stay on the sidelines and let you trade it and other hold their positions thru the full cycle.

Igy

Sorry, but that is wrong information. Cash does not fluctuate in value and can be deployed immediately, it is cash. Redeeming a CD early incurs fees. CDs should be in the fixed income (bond) bucket.

Igy

coach d,

Your analysis is incomplete. The market bottomed in October 2002. Here is Hussman early 2003:

"While the stock market remains priced to deliver uninspiring

returns over the long-term, the Market Climate

(which considers both valuations and market action)

has recently shifted to a condition that has historically

been favorable toward stocks. As we’ve noted before,

stocks may go nowhere over the coming decade, but

they will probably go there in an interesting way.

Last month, we noted in our weekly market comment

(www.hussmanfunds.com) that the stock market has

recruited enough “trend uniformity” to shift the Market

Climate to a favorable condition. This is the first comprehensive

shift in trend uniformity since it turned decisively

unfavorable on September 1st, 2000. Since then, the S&P

500 has lost over 40% of its value."

Igy

Ghost of Igloi wrote:

Sorry, but that is wrong information. Cash does not fluctuate in value and can be deployed immediately, it is cash. Redeeming a CD early incurs fees. CDs should be in the fixed income (bond) bucket.

Igy

You are partially correct. Financially speaking, 'cash' is something that is accessible in the short term. Savings accounts, checking accounts, money market funds, CDs, and short-term bonds are all considered 'cash'.

But you don't have to believe me. Look it up yourself. You'll see that I am right.

Tis true wrote:

So if you knew the Dow would be 13,000 in 30 years you would continue to drop money into it?.

Yes, if I knew 29 1/2 years from now it will be at 30,000.

Then I would get out.

But nobody knows if and when that's going to happen.

That's why you lost your a$$ from getting out 3 years ago. Or, you didn't believe in your own nonsense.

Wookie,Wouldn't you know it! Darn, I have been doing this job for over twenty years and I didn't realize that short term bonds and CDs were cash. I thought they belonged in the fixed income bucket. My allocations are all wrong!What a shock after all this time!I wasted all this time studying, working in my profession and told this fact by you (no offense) and over the internet. Who would have thought? Thanks I will take this knowledge and humbly apply it to my daily work.Igy

Wall Street Wookie wrote:

Ghost of Igloi wrote:

Sorry, but that is wrong information. Cash does not fluctuate in value and can be deployed immediately, it is cash. Redeeming a CD early incurs fees. CDs should be in the fixed income (bond) bucket.

Igy

You are partially correct. Financially speaking, 'cash' is something that is accessible in the short term. Savings accounts, checking accounts, money market funds, CDs, and short-term bonds are all considered 'cash'.

But you don't have to believe me. Look it up yourself. You'll see that I am right.

Ghost of Igloi wrote:

Anne,

But you forgot one important point, that most here conveniently forget. The market you cheer for is built on a foundation of sand. That is, the $4.4 Trillion Federal Reserve balance sheet. The end of that story is yet to be written.

Igy

That's one of the most obvious strawman arguments I've ever seen.

Anne,How so? Perfectly relevant argument, of course unless you don't understand the implications. Every investment is subject to the dynamics of the market place. Central banks that have become the market have removed price discovery. You probably didn't realize the Hussman Strategic Total Return Fund is up 10% on the year, and was up 6% in 2008. I have seen many blanket statements made about Dr. Hussman, some true but most false. And most of these comments come from people that have never read one piece of his writings. Too bad I think, because there is a lot of good information there. Igy

Anne Allysis wrote:

Ghost of Igloi wrote:

Anne,

But you forgot one important point, that most here conveniently forget. The market you cheer for is built on a foundation of sand. That is, the $4.4 Trillion Federal Reserve balance sheet. The end of that story is yet to be written.

Igy

That's one of the most obvious strawman arguments I've ever seen.

Isiah,

Perhaps you think that because of your narrow depth of knowledge on the subject. Makes perfect sense to me. In 2003 few would have predicted the extent of global central bank QE policies, which have inflated equities to their highest median valuations ever.

So you can strike a match to your straw man criticism.

Igy

The same mentality that catapulted Theranos to a $9 Billion start-up drives the colorful narrative of TSLA, LNKD, VRX and CMG.

http://www.cnbc.com/2016/10/26/how-9-billion-blood-testing-startup-theranos-blew-up.html

Igy