Maserati wrote:
Your 14% is beating me this year. I wouldn’t be so down on yourself, except for those bonds. I never touch HY, I am paranoid about defaults because I don’t trust ratings agencies.
Turns out my banks are floating me today, too. Looks like a very good day for me
yeah, I hear you. That's why I use a short term fund - I figure that cuts some of the risk. The basic investment thesis on those is that I believe the economy will chug along at 2.5% growth, but the stock market is unlikely to move much higher - I mean 17% in 4 months is a sprint - it will need to rest a bit. Oh yeah and the world economic picture is slowing down. Not great for stocks. But anyway, I figure if the world economy keeps chugging at some positive rate I'll collect my 5% coupons and be happy. A little more conservative than just plain stocks.
Ghost of Igloi wrote:
https://www.zerohedge.com/s3/files/inline-images/2019-04-25%20%281%29.png?itok=-1r9IbKi
Excellent! Pile in!
When yields become more difficult to find, some hot stocks become a self-fulfilling prophecy, in that something with a pulse attracts interest, which increases or maintains the pulse. Entire sectors, or market caps, can feel this effect.
What you have linked to is just a fact, the trick is to interpret that fact, and act on it, profitably.
Good news.
OK. Not myinterpretation, but that makes a market. Over the next month the crying will begin. Trump will be rolling Kudlow out, Mnuchin will be talking the China and Fed speakers will abound. Is that PPT? Who would have known?
“Regardless of very short-term market direction, it is urgent for investors to understand where the equity markets are positioned in the context of the full market cycle. While the most extreme overvalued, overbought, overbullish, rising-yield syndrome we define has generally appeared only at the most wicked market peaks in history, and investors have ignored those conditions over the past year. We can’t be certain when the deferred consequences will emerge. But a century of market history provides strong reason to believe that any intervening gains will be wiped out in spades.
It’s instructive that the 2000-2002 decline wiped out the entire total return of the S&P 500 – in excess of Treasury bills – all the way back to May 1996, while the 2007-2009 decline wiped out the entire excess return of the S&P 500 all the way back to June 1995. Overconfidence and overvaluation always extract a terrible payback.”
—John Hussman
It’s a new era. Hussman is a last-century anachronism. I won’t go through the long list of things that are different now than 2000-2002, many of which changes happened since the mortgage/banking crisis.
If he ends up being right, it will be for the wrong reasons.
As a matter of fact, I find myself considering what the recommended US equity allocation is for me, I am 53, my wife 49. What if I wanted to hold for 20 years?
At the moment, I think that 3.x% works...but...
Maserati wrote:
It’s a new era. Hussman is a last-century anachronism. I won’t go through the long list of things that are different now than 2000-2002, many of which changes happened since the mortgage/banking crisis.
If he ends up being right, it will be for the wrong reasons.
I’ll be more inclined to believe that if we make it thru 2019 unscathed. No, on second thought, just don’t buy that thought period. It would mean that there is only a return based on one’s ability to sell to another at a higher prices. Valuations do not matter. In other words, a Ponzi that never ends. I think that is just B. S.
Gene Munster on CNBC speaks the truth on AMZN: “90% of their business is not a good business.”
He should be taken out and shot. And he is a tech guru analyst. How dare he?
Maserati wrote:
As a matter of fact, I find myself considering what the recommended US equity allocation is for me, I am 53, my wife 49. What if I wanted to hold for 20 years?
At the moment, I think that 3.x% works...but...
Twenty year S&P 500 return at highest prices ever:
Index return annualized 3.943%, with dividends reinvested 5.865%
Adjust for inflation (CPI)
Index return annualized 1.780%, with dividends reinvested 3.662%
Ghost of Igloi wrote:
Maserati wrote:
It’s a new era. Hussman is a last-century anachronism. I won’t go through the long list of things that are different now than 2000-2002, many of which changes happened since the mortgage/banking crisis.
If he ends up being right, it will be for the wrong reasons.
I’ll be more inclined to believe that if we make it thru 2019 unscathed. No, on second thought, just don’t buy that thought period. It would mean that there is only a return based on one’s ability to sell to another at a higher prices. Valuations do not matter. In other words, a Ponzi that never ends. I think that is just B. S.
Igy, you sound like a broken record. You’ve been saying the same thing for years. Of course, some day you will be right, but you will have lost out on years of significant profits. Most people learn from their mistakes.
Ghost of Igloi wrote:
Gene Munster on CNBC speaks the truth on AMZN: “90% of their business is not a good business.”
He should be taken out and shot. And he is a tech guru analyst. How dare he?
Did youse guys know that almost half of internet retail goes through Amazon? I am completely amazed by that and can't really believe it. What a company.
But that is untenable...somethign is going to give. That kind of market force is too much.
agip wrote:
Ghost of Igloi wrote:
Gene Munster on CNBC speaks the truth on AMZN: “90% of their business is not a good business.”
He should be taken out and shot. And he is a tech guru analyst. How dare he?
Did youse guys know that almost half of internet retail goes through Amazon? I am completely amazed by that and can't really believe it. What a company.
But that is untenable...somethign is going to give. That kind of market force is too much.
It depends on how much retail is left to be captured by online, excluding organic growth.
Lemons wrote:
Ghost of Igloi wrote:
I’ll be more inclined to believe that if we make it thru 2019 unscathed. No, on second thought, just don’t buy that thought period. It would mean that there is only a return based on one’s ability to sell to another at a higher prices. Valuations do not matter. In other words, a Ponzi that never ends. I think that is just B. S.
Igy, you sound like a broken record. You’ve been saying the same thing for years. Of course, some day you will be right, but you will have lost out on years of significant profits. Most people learn from their mistakes.
Well, the bubble that burst in 1929, 2000 and 2007 took years. Now if you really believe anything is different today than go ahead be my guest.
Ghost of Igloi wrote:
Maserati wrote:
It’s a new era. Hussman is a last-century anachronism. I won’t go through the long list of things that are different now than 2000-2002, many of which changes happened since the mortgage/banking crisis.
If he ends up being right, it will be for the wrong reasons.
I’ll be more inclined to believe that if we make it thru 2019 unscathed. No, on second thought, just don’t buy that thought period. It would mean that there is only a return based on one’s ability to sell to another at a higher prices. Valuations do not matter. In other words, a Ponzi that never ends. I think that is just B. S.
Igy, think of it this way: it is NOT a ponzi, it is one of the few things that is indexed to the increases in the actual cost of living. There is no real after-tax gain being made by most. It is little more than standing still.
A problem of yours is that the reference you use for standing still is obsolete, and is now retrograde. It represents a slow, steady loss. That CD ladder...compare it, after tax, to your actual cost of living, assuming a steady-state life with no downsizing, etc.
When one references a new standard, it is seen that the markets, RE, etc do not represent some rapacious profiteering, but rather just staying afloat, plus a little bit. This is especially noteworthy now that retirement investment vehicles are all over the equity markets.
You, along with Hussman, are both ising the wrong referent. When the rubber hits the road, all gains—whether from dividends or capital appreciation—are converted to money then to goods/services. Why does it matter from where those gains come? All gain, capital and operational, exists within a policy environment—heck, the very existence of corporations os a matter of policy. That policy environment, including but not limited to the tax regime. has now switched to favoring capital growth.
No big deal, just another fact. There is nothing magically intrinsic about gain and loss in the real world. We are not clothed apes acting as free agents in perfect markets. Hussman’s interpretations rest on a body of assumptions that no longer hold true, but both you and he treat them as though they are immutable.
They are not.
Maserati wrote:
agip wrote:
Did youse guys know that almost half of internet retail goes through Amazon? I am completely amazed by that and can't really believe it. What a company.
But that is untenable...somethign is going to give. That kind of market force is too much.
It depends on how much retail is left to be captured by online, excluding organic growth.
Bought two items online today. A Delta kitchen faucet sprayer and a GE gas cooktop knob. Both were replacement parts and Amazon popped up first under search. When you examined the product it was a cheaper generic replacement, would have worked but would have been odd size or finish not matching with the existing product. Instead I purchased from specialty companies that sold the exact replacement parts. I have found Amazon good for buying books and not much more. I wonder how Amazon will retail sales will fare in the next recession. Oh, that’s right economic cycles have been repealed.
agip - you simply want to match the overall market. You are not going to beat it. No individual stocks unless a couple that you really like. You want mutual funds - index ones and preferably Vanguard that mimic the overall market. I think you are kind of young so stay away from funds until you are much older. Peter Lynch is one of the best investors of all time and recommended only equites until you got old.
Lemons wrote:
Ghost of Igloi wrote:
I’ll be more inclined to believe that if we make it thru 2019 unscathed. No, on second thought, just don’t buy that thought period. It would mean that there is only a return based on one’s ability to sell to another at a higher prices. Valuations do not matter. In other words, a Ponzi that never ends. I think that is just B. S.
Igy, you sound like a broken record. You’ve been saying the same thing for years. Of course, some day you will be right, but you will have lost out on years of significant profits. Most people learn from their mistakes.
Not only that but even when the market takes a dip - even a significant dip - it will rebound and will resume its historic annualized returns of 10% or 11% with dividends reinvested. . It never fails.
Ghost of Igloi wrote:
Lemons wrote:
Igy, you sound like a broken record. You’ve been saying the same thing for years. Of course, some day you will be right, but you will have lost out on years of significant profits. Most people learn from their mistakes.
Well, the bubble that burst in 1929, 2000 and 2007 took years. Now if you really believe anything is different today than go ahead be my guest.
Yeah, the 2007 burst was brutal but the market is up 400% since then. Think about that - 400%!
OK, take anything, there is a price one is no longer willing to pay. In December, with the 10 Year Treasury at a 3.4% Yield AMZN was worth $1,300 in the market, and today with the 10 Year Treasury at a 2.5% Yield AMZN is worth $1,900 in the market. What is really taking place here? December = Fear, April = Greed. Somewhere the intrinsic value of either investment is a much lower price in the 10 Year Treasury and in AMZN. Of course your view point is nothing other than a justification of your current bullish view. I suspect that will be reversed shortly.