HD up well, but I am still underwater.
Friend of mine is trying to convince me to buy Tesla options, have to look at his numbers. He is seriously in the money on the last batch he bought.
HD up well, but I am still underwater.
Friend of mine is trying to convince me to buy Tesla options, have to look at his numbers. He is seriously in the money on the last batch he bought.
Financial Advisor wrote:
Great stuff, agip. Here’s a good one from a year ago courtesy of our resident permabear.
Ghost of Igloi wrote:
https://www.zerohedge.com/news/2018-12-26/worst-yet-come-next-year
Of course all of the above is required to create the biggest asset bubble in history. I would bet your attitude in March 2009 was 180 degrees from where it is today. When we are down 50% I bet you never post. That is just the way it is.
Igy, the rise since then is a combination of actual growth+bubble. If you are waiting for a 50% drop and you in fact get one, you have missed out on a ton of non-bubble growth, assuming you are not in the market. Your relative loss would be less since you have been in the market in a limited way.
Yes I know that such modofied return would make other asset classes more competitive, especially if you actually pay attention to risk premium—but make no mistake, there has been some “real” market gain. It has been a looooong time since 2009. And no, at that time nobody cogently argued for the shape of what was to come.
For my part I have always believed and understood the reasons for market rise, I just never trusted that they would sustain in a methodical fashion. Apart from a few periods, it has been methodical. At this time, some could have been very lucky to this point and done very well in the markets by having done nothing, this fact is indisputable. I was not so faithful, I have had to do much more than them over the past 10 years to achieve returns—better absolute returns, but I am not sure they were worth the time. Seriously.
Hindsight is 20/20.
Given what I have been saying regarding market rise, at this point my paradigm has changed from thinking about what will cause the market to rise, to thinking instead about what may cause it to fall. Although it may not seem like it, this is a huge difference. I am even catching Drumpf election fever—nothing sells like money. At some point perception is reality—and that point is now, the new era. He is right to govern by the indexes, and he will be re-elected, and the markets will fvcking SOAR.
I am in, in a big way, and will be increasing my exposure, as a result. You watch—it’s almost the 80’s all over again, with only the boomer demographic size throwing a wrench into things. There might be 20% hitches, which wiuld be btfd opportunities.
What happens near the end of, and after, his second term, is anyone’s guess.
I am absolutely bullish on people’s ignorance, complicity, hopefulness, complacency, and gullibility—at some point, it becomes “real”, and has real-world benefit. There are no iron economic laws, just human behavior within a structure. The structure is in place, as are the people, actually around the world. It is a new boom. Everyone has their time, and this is one of them, even considering the boomer-enriching recent bull market.
Some fraction of irrational exuberance has real effect—and over time, it is worthwhile. Animal spirits are returning, public-private integration is increasing, and consolidation will continue. It’s a new era, with new expectations and new realities. It’s the first real period of electrical interconnectedness, the past 10 years was just the early foundations, the appetizer.
IMO IMO IMO IMO?
May this prediction have as much validity as anyone else’s????
Or, in the more succinct words of Captain Picard,
“sometimes you just have to bow to the absurd.”
From last December:
Ghost of Igloi wrote:
purple martin wrote:
What's when you first posted have to do with anything. You said purchases since 2011 will not pan out well.
Still to be determined.
“By Sue Chang, MarketWatch
S&P 500 expected to trade at 2,580-3,250 in 2019”
Still to be determined.
Looks like Sue was right. Sorry, Igy.
Ghost of Igloi wrote:
Financial Advisor wrote:
Great stuff, agip. Here’s a good one from a year ago courtesy of our resident permabear.
Of course all of the above is required to create the biggest asset bubble in history. I would bet your attitude in March 2009 was 180 degrees from where it is today. When we are down 50% I bet you never post. That is just the way it is.
Indeed my attitude was 180° different. Then I was thinking “buy” while now I’m thinking “sell”. It’s part of my “buy low, sell high” philosophy. I used to recommend it to all of my clients. Made them a bundle.
Maserati wrote:
“Taxes really don't have as much power as policy wonks think they do.”
Disagree strongly. Yours is not a meaningful analysis, and there is a great body of specific evidence to the contrary.
Tell it to Kansas and the US, which swore to us cutting tax rates would raise tax income and get us faster economic growth.
Tell it to the Trumpers who swore biz investment would go up after cutting corporate income tax.
Tell it to dems who thought real estate prices would crash after home owners stopped deducting mortgage interest
Tell it to Scandinavia which has thriving capitalism despite high tax rates. While the US has thriving capitalism despite low tax rates.
I mean sure you can find some counter examples of tax policy that works, like the earned income credit. But people and businesses make 90% of their decisions based on things other than tax. That's my point.
Maserati wrote:
Igy, the rise since then is a combination of actual growth+bubble. If you are waiting for a 50% drop and you in fact get one, you have missed out on a ton of non-bubble growth, assuming you are not in the market. Your relative loss would be less since you have been in the market in a limited way.
Yes I know that such modofied return would make other asset classes more competitive, especially if you actually pay attention to risk premium—but make no mistake, there has been some “real” market gain. It has been a looooong time since 2009. And no, at that time nobody cogently argued for the shape of what was to come.
For my part I have always believed and understood the reasons for market rise, I just never trusted that they would sustain in a methodical fashion. Apart from a few periods, it has been methodical. At this time, some could have been very lucky to this point and done very well in the markets by having done nothing, this fact is indisputable. I was not so faithful, I have had to do much more than them over the past 10 years to achieve returns—better absolute returns, but I am not sure they were worth the time. Seriously.
Hindsight is 20/20.
Given what I have been saying regarding market rise, at this point my paradigm has changed from thinking about what will cause the market to rise, to thinking instead about what may cause it to fall. Although it may not seem like it, this is a huge difference. I am even catching Drumpf election fever—nothing sells like money. At some point perception is reality—and that point is now, the new era. He is right to govern by the indexes, and he will be re-elected, and the markets will fvcking SOAR.
I am in, in a big way, and will be increasing my exposure, as a result. You watch—it’s almost the 80’s all over again, with only the boomer demographic size throwing a wrench into things. There might be 20% hitches, which wiuld be btfd opportunities.
What happens near the end of, and after, his second term, is anyone’s guess.
I am absolutely bullish on people’s ignorance, complicity, hopefulness, complacency, and gullibility—at some point, it becomes “real”, and has real-world benefit. There are no iron economic laws, just human behavior within a structure. The structure is in place, as are the people, actually around the world. It is a new boom. Everyone has their time, and this is one of them, even considering the boomer-enriching recent bull market.
Some fraction of irrational exuberance has real effect—and over time, it is worthwhile. Animal spirits are returning, public-private integration is increasing, and consolidation will continue. It’s a new era, with new expectations and new realities. It’s the first real period of electrical interconnectedness, the past 10 years was just the early foundations, the appetizer.
IMO IMO IMO IMO?
May this prediction have as much validity as anyone else’s????
Maserati,
Of course that is what you and everyone who is Bullish on the current market believes. There was none of that confidence a year ago.
Today I just did a review for a couple nearing retirement. Their allocation was 28% in stocks, 15% alternatives, 45% bonds, and 12% cash and they are up 9.5% on the year. Far exceeding the market on a risk adjusted basis. I reduced their stock exposure a couple of percent in favor of bonds and alternatives. This couple are millionaires, smart, well educated. They can see the risk and distortions, and they don’t believe in fairy tales.
Trump, the Fed—no one controls the market when things get bad. And boy is there a ton of risk not discounted by the market. Why has the Fed lately been adding $50 Billion in QE to the market on a weekly basis? Powell said this is temporary, just like the rate cuts. He’ll be cutting again.
My attitude to this general commentary reminds me of my track coach at Oklahoma State University. Ralph Tate was a WW II veteran, shot in the hedge rows following D-Day. We took road trips in a Trailways bus with two card tables installed. He loved to play cards, especially hearts. When he laid down the Black Lady he would say “eat that b*tch!” Same thing with an overweight to stocks, you’ll eat it, it’s yours.
Igy
https://www.cnbc.com/video/2019/12/16/strategist-says-markets-have-nothing-to-do-with-fundamentals-anymore.htmlMaserati wrote:
Or, in the more succinct words of Captain Picard,
“sometimes you just have to bow to the absurd.”
“Risk-adjusted”
Risks and their likelihood have changed materially, how do you take that into account?
There was much bullishness a year ago. The drop didn’t last long, was not huge vol, and had a steep and relatively uninterrupted recovery.
Plus, my real bullishness will last only maybe a month. No time horizon beyond maybe a week or two counts. I will play it by ear.
Maserati wrote:
“Risk-adjusted”
Risks and their likelihood have changed materially, how do you take that into account?
Don’t believe it. Risks are greater not less.
Risk of what, and by how much? Evidence and argument, if you have time.
Sure, risk that the Fed actually can control the Repo market. Risk that Bernie Sanders will be the next President. Risk that global markets peaked 9/26/2018. Risk that Zombie companies will begin serial bankruptcy. Risk American consumers are saturated with things and accompanying debt. Risk that Fed policies encourage political discord and economic inequalities. What is not a risk would be a better question?
“While I’m grateful to those who’ve spent time trying to thoughtfully explain the mechanics of the repo crisis and why it happened, I think that’s a sideshow at this point since nobody who really knows what’s going on is talking. Instead, we should focus on the absurd and unconscionable lack of transparency with regard to Federal Reserve actions. As far as I know, we have no idea which parties are taking up this expanded central bank funding. Think about how criminally insane that is. We have no idea if it’s driven by a troubled institution like Deutsche Bank, hedge funds with over-leveraged trades, treasury issuance, a combination of these factors, or something else.”
—Michael Krieger, 12/16/2019
Tax policy is powerful. It changes behavior, but not always in the hoped-for manner.
It is not that the power of tax to change behavior is overestimated, but rather that policy wonks, like so many others, self-aggrandize and engage in salesmanship. It’s like the advertising business.
Well, current tax policy resulted in $Trillion plus annual debt to get + or - 2% GDP. Foolish policy that creates political division and economic inequality. There will be consequences.
Ghost of Igloi wrote:
Sure, risk that the Fed actually can control the Repo market. Risk that Bernie Sanders will be the next President. Risk that global markets peaked 9/26/2018. Risk that Zombie companies will begin serial bankruptcy. Risk American consumers are saturated with things and accompanying debt. Risk that Fed policies encourage political discord and economic inequalities. What is not a risk would be a better question?
What say you pick any one of those, and we dive deeper to see what it actually means, and how it affects risk premium vs any other comparable time of your choosing.
Of course any single factor is not determinative, but it might help to put some meat on the bones.