Down goes the Dow

agip wrote:

article in the WSJ says that the forward PE for sp500 is 18.1. Which is very high

but if you take out oil, it's only 16.6

Which explains some of why the market is rising even with a high multiple

I don't follow. How does that rate, whether 18.1 or 16.6, explain why the market is rising?

Pleazse wrote:

agip wrote:

article in the WSJ says that the forward PE for sp500 is 18.1. Which is very high

but if you take out oil, it's only 16.6

Which explains some of why the market is rising even with a high multiple

I don't follow. How does that rate, whether 18.1 or 16.6, explain why the market is rising?

it doesn't.

putting a valuation on the market is a tool to guess future returns. On average, when you buy stocks when the market PE is high, your future returns tend to be below average.

conversely, when you buy stocks when the market PE is low, your future returns tend to be above average.

so the debate here is how to value the market - how to determine if we have an average valued market or a high valued market. Because if you thinjk it is a highly valued market...you might want to reduce your stock holdings.

Pleazse wrote:

agip wrote:

article in the WSJ says that the forward PE for sp500 is 18.1. Which is very high

but if you take out oil, it's only 16.6

Which explains some of why the market is rising even with a high multiple

I don't follow. How does that rate, whether 18.1 or 16.6, explain why the market is rising?

or more to your question...the market has had a high multiple for many years. Yet the market has had very good returns for several years. Despite that ostensibly high PE ratio. So my post was one possible reason why the market has risen despite having a high multiple: the high multiple is an illusion, caused by a depression in oil company earnings.

I believe that it is unwise to blame the entire market for problems in just the oil sector. I don't think the market is all that highly valued as a whole (when you take out the oil sector)

So I believe the future is rosier than Igy does.

agip wrote:

So I believe the future is rosier than Igy does.

Yes....it is obvious that Igy is clinically depressed...not sure if that is because he is always wrong or if he is wrong because he is so depressed.

Pleazse wrote:

mellon wrote:

So are you saying that people who have been invested for the past 5 years are going to be feel the impact of a 10% drop more so than the ones who have been sitting on the sidelines in fear of what the OP predicted.

I don't know about "feel" but those with the most invested will lose the most money and that is likely to be those who have been invested for a longer period of time.

Do you really need that to be explained to you?

No! If you don't know what the word "feel" means, no need to explain yourself.

Math Mann wrote:

Ghost of Igloi wrote:

Pretty simple concept actually, your return is inversely correlated with the price you pay.

Not really. That would only be true if two investors bought at different times in a rising market, but sold at the same time. Someone who buys at $1 and sells at $2 gets the same return rate as someone who buys at $2 and sells at $4. It's pretty simple arithmetic.

Regulars herrre are painfully aware of Igy's struggles with basic mathematics.

Here is some math Mann, that really matters to investor returns...

https://mobile.twitter.com/hussmanjp/status/836592708521189377/photo/1

Moderator #3 wrote:

agip wrote:

So I believe the future is rosier than Igy does.

Yes....it is obvious that Igy is clinically depressed...not sure if that is because he is always wrong or if he is wrong because he is so depressed.

Nothing to worry about, what do they say in Cabo: "no bad days." More debt cures all ills.

How about this Mod#3?

Isn't that the web site run by a former inside trader?

Ghost of Igloi wrote:

Detector Dude:

Let's discuss these these relevant facts first.

1. Explain how you replicated my handle to make slanderous post that appeared to be from me?

2. Explain why you now post using the handle "Portia"?

We can discuss your guilt and motivations later.

Igy

Ghost of Igloi wrote:

Here is some math Mann, that really matters to investor returns...

https://mobile.twitter.com/hussmanjp/status/836592708521189377/photo/1

This is pure BS. Hussman makes unsubstantiated statements which are almost completely lacking in veracity. But the weak minded swallow it whole.

Proof.

That is what you always say Detector.

Proof is right. Hussman makes absurd claims without citation. Of course he can't cite something that he made up. And weak minded people like you just lap it up. Are you completely incapable of critical thinking?

Detector Dude, here you go, more data than you can ever supply.

http://hussmanfunds.com/wmc/wmc161212.htm

We should listen to the Faker?

What really do you have to offer but you house of mirrors?

inflation keeps ticking higher - personal consumption inflation is up to 1.9%.

real disposable income not as good as in past - up 2%

should be a nice upday on the street - clearly traders like the steady flow of positive economic news and a trump who can summon the willpower to act almost presidential.

Pleazse wrote:

Hugh Jass wrote:

So it's only unfortunate for people buying today. That's a rather small sample size.

Huh?

If the market tanks now everyone invested takes the ride down.

Especially those with a lot invested -- more likely to be those who have been in for a long time.

Agreed. I was merely repeating the words of another poster for clarification.

wow

bonds getting crushed - one of the worst days I can remember - down 40 bps.

one point for the 'stay away from longer term bonds' argument

And one point for those who said the bond bull is dead.

And zero points for those that think lower interest rates support the equity markets.