Down goes the Dow

The Unkle wrote:

seattle prattle wrote:

[quote]agip wrote:

[quote]The Unkle wrote:

[quote]agip wrote:

[quote]agip wrote:

J

But you are not supposed to time the market

there's sometimes a fine line between rebalancing and timing the market.

Wow. What a bunch of baloney.

go on....

Ghost of Igloi wrote:

Not just any day, but today:

ARKK -4.18%

NASDAQ -2.83%

Drumroll…..

HSGFX +1.87%

Hiding my smile 😷

🍒

I'll definitely put that Grantham article in my calendar for 12/31/2026.

Has anyone been more wrong than Grantham over the past 10+ years? Just google 'grantham always wrong' and you'll see the carnage in his wake. Certainly he is in the top 1% of people who have destroyed capital list.

Anyway, the yield curve is steepening up again. Just hearing whispers so far but once we get past the debt ceiling and infrastructure hullabaloo the story will be signs of fresh growth out there. Ports are jammed full.

https://fred.stlouisfed.org/series/T10Y2Y

Several great quotes from Grantham interview:

"The end of a bubble is like killing off a vampire."

"US equities are in a magnificent bubble. Real estate is magnificently overpriced almost everywhere. The bond market is at a 6,000-year high in terms of low interest rates and high bond prices."

"You knew last year this bubble was going to be the real McCoy, but you didn't know if it was gonna break the next Wednesday, or a year later. One by one, we've checked off every condition that a glorious bubble needs in terms of crazy behavior. This has been crazier by a substantial margin than 1929 and 2000."

"The meme stocks are just a travesty of serious investing. There was nothing that extreme in 1929, nothing like that in 2000. The dollar valuations were in the hundreds of millions, not tens of billions like the crazy SPACs this time. Not to mention all the bitcoins of the world which are a couple of trillion dollars, all based on confidence that other people will pay for what you have."

Ghost of Igloi wrote:

"The meme stocks are just a travesty of serious investing. There was nothing that extreme in 1929, nothing like that in 2000. The dollar valuations were in the hundreds of millions, not tens of billions like the crazy SPACs this time. Not to mention all the bitcoins of the world which are a couple of trillion dollars, all based on confidence that other people will pay for what you have."

I too wonder how the economy can be larger than it was in 1929 or 2000

Ghost of Igloi wrote:

"You knew last year this bubble was going to be the real McCoy, but you didn't know if it was gonna break the next Wednesday, or a year later. One by one, we've checked off every condition that a glorious bubble needs in terms of crazy behavior. This has been crazier by a substantial margin than 1929 and 2000."

I too wonder how people can be more stupid today than 1929 and 2000.

we went through an exercise with grantham recently. he puts out 7 year forecasts. They keep the 7 year forecasts on their website so we can check to see how accurate they were.

in a nutshell, they have wildly wrong, far too pessimistic for a long time.

They have consistently predicted very low or negative returns for US stocks, and looky here instead of solid returns or even average returns during the period of GMO crashmongering...we've had one of the best investment returns in our lifetimes.

What's more, they have been pushing emerging markets stocks for a decade or so and we all know the black hole EM has been for the time GMO likes them,

GMO seems to base its evaluations on valuation and....well just valuation. If that's the way you want to go, seems simplistic and inaccurate but GMO is your team if you want to go that route.

Ghost of Igloi wrote:

Ghost of Igloi wrote:

"You knew last year this bubble was going to be the real McCoy, but you didn't know if it was gonna break the next Wednesday, or a year later. One by one, we've checked off every condition that a glorious bubble needs in terms of crazy behavior. This has been crazier by a substantial margin than 1929 and 2000."

I too wonder how people can be more stupid today than 1929 and 2000.

I think that a lot too but yet here you are breaking new ground in Stupid Town every single day

Very similar story for value managers in 2000. Crazy behavior this cycle is boundless. Hey, believe and invest as you wish.

Prof. Racket wrote:

Ghost of Igloi wrote:

I too wonder how people can be more stupid today than 1929 and 2000.

I think that a lot too but yet here you are breaking new ground in Stupid Town every single day

Believing you to be a fantasmal millennial benchmark, I take that as a compliment.

agip wrote:

Has anyone been more wrong than Grantham over the past 10+ years?

Well, this thread is only 8 years old, but I’m going to assume Igy was just as wrong before that. So, yes.

Ghost of Igloi wrote:

https://youtu.be/Fz40WebQC64

That is TOTALLY an Igy selfie!

SPX now down 5% now from all time highs.

VIX is at 23, which is high for the last 4 months but not high historically. So there's clearly room to fall here.

Gold up 2%, finally getting a bid.

Sort of in a good position here, the stock market.

If things go badly, interest rates fall.

but the main fundamental reason for intermediate term bearishness is...fear of higher interest rates. This political stuff is just short term noise. But higher interest rates could snowball the market to lower levels. Nothing works at a 3-4% US 10 year.

So if things go badly, interest rates will likely fall, which would buoy the stock market.

Buying opportunity 😰