Down goes the Dow

virtually every one of these is either false or misleading or meaningless.

and I could come up with a much more meaningful list showing why the bull case has never been stronger.

when else have billions of people been lifted out of poverty? when has modern history been so peaceful with zero major conflicts for arguably 70 years?

When has capitalism been accepted as the default position for a majority of the planet? when has rule of law been so strong? when has crime been so low in the US?

I might go through your list point by point but really - 'ruled by executive order' ?? seriously? click out of redstate.com and get some perspective.

ARE YOU KIDDING ME?

Billions more are IN poverty, including a rise in the USA. Wealth disparity has never been greater. Your point about war, when has military spending itself slowed? How many more are now killed in "civil unrest" and internal violence than were before? When has capitalism been under serious threat as the position for a majority of the planet? WHEN HAS THE RULE OF LAW BEEN SO WEAK? When has crime been so under-reported in the US, and when have law enforcement officers slacked off so much, refusing to act under the guise of self-preservation?

Incredibly, you have missed the entire point. It's not a glass-half-full/half-empty situation.

FAGP0LE wrote:

ARE YOU KIDDING ME?

Billions more are IN poverty, including a rise in the USA. Wealth disparity has never been greater. Your point about war, when has military spending itself slowed? How many more are now killed in "civil unrest" and internal violence than were before? When has capitalism been under serious threat as the position for a majority of the planet? WHEN HAS THE RULE OF LAW BEEN SO WEAK? When has crime been so under-reported in the US, and when have law enforcement officers slacked off so much, refusing to act under the guise of self-preservation?

now you are just trolling me. will I bite?

maybe a little.

death by war has plunged. I'm sure the likelihood of the avge person dying by war or civil unrest has never ever been lower in the history of humankind.

are you seriously unaware of the sharp fall in global poverty? really? the rate has fallen by half in just 20 years.

military spending? how is that going to cause a problem in the stock market? Anyway, in the US as a % of GDP military spending has been falling for decades.

weath disparity...true dat. But income disparity is pretty much unchanged.

capitalism under threat? hah. what - half the world lives in asia and they are capitalizing like mad. You can point at a few retreats, but come on - just look at what is happening in asia.

rule of law - hard to quantify but if you've read any history at all (and it really sounds like you haven't) you would agree that corruption in the US is lower than in the past. much lower.

crime underreported? go ahead - prove that. I think almost all sociologists agree that crime has collapsed in the US to 50 year lows.

we could go on, but you clearly are making stuff up and not very knowledgable - you like to rant. If you want to go on ranting, go on, but don't think you are being factual.

All I can say to you my friend is OMFG.

Good luck.

FAGP0LE wrote:

All I can say to you my friend is OMFG.

Good luck.

yup, just a troll, as I thought.

see ya

What, a troll is somebody who doesn't agree with you?

But I do like most of your posting, though.

C.J. wrote:

What, a troll is somebody who doesn't agree with you?

But I do like most of your posting, though.

I called him a troll because he couldn't back up many of his claims with facts of any sort - he resorted to cliche and then walked away.

it's like a teenager whining 'whatever' and slinking off. clearly this poster was just trying to get an argument going and made false claims to do so. that is trolling.

I'm happy to disagree on gray areas - stock valuation for instance - Igloi isn't a troll - he just interprets data differently than me - but you can't just make stuff up like that guy.

thanks for the kind words.

Being that I agree with much of what he said, there is ample evidence and sources to back it up. My guess is that he just didn't want to go through the exercise.

But I have a question for you agip, and for gente, concerning chemical reagent, whether or not he actually traded: could he have made money on his picks, if he had traded using some cheap online trading platform?

I know zero about trading, so I would be interested to hear some analysis. Long-term investor here, so far.

Flagpole wrote:

I have gotten ~11% annual return since I started investing in 1989, and my spreadsheet has future models from 0% to 9% and it stops there.

Hey Flagpole would you be willing to share your spreadsheet? Or say how it's set up? I'd really appreciate it.

C.J. wrote:

But I have a question for you agip, and for gente, concerning chemical reagent, whether or not he actually traded: could he have made money on his picks, if he had traded using some cheap online trading platform?

I know zero about trading, so I would be interested to hear some analysis. Long-term investor here, so far.

well sure he *could* have made money - the question is if he actually made the trades or was just talking.

maybe I don't understand your question.

But if he made the trades as he posted them, then yes, he would have made money.

Thanks agip, I guess I was looking to see if that kind of thing is really worth it, and how much say a guy like him would need to be trading, in terms of a dollar amount, to make it worthwhile. I know that depends on the meaning of worthwhile, but for me it would be anything over what I am now getting from my stocks, if I was comfortable with the amount I dedicated to it. I would be willing to try something like this on a small-time basis, if the amount was right.

I work in the industry and I could trade my own account at minimal cost. I remember years ago one of my managers said: "trading your own account is the easiest way to lose a paycheck." The arrogance that comes from short term trading success can be addictive and sucks one into a believe system that is just wrong. That is why I always go back to valuation. Of course valuation can be subjective, however it is the one tool that has some basis in reliability. There is an excellent article that I posted earlier today from Gretchen Morgenstern of the New York Times on valuations in technology stocks which is well worth the read.

Ghost of Igloi wrote:

Not just Igy:

Carl Icahn warned investors on Wednesday that he believes the market is "extremely overheated—especially high-yield bonds."

"I think the public is walking into a trap again as they did in 2007," the activist investor told CNBC's "Fast Money Halftime Report." "I think it's almost the duty of well-respected investors, like myself I hope, to warn people, to tell people, that really you are making errors."

Icahn compared the current market situation to the prerecession days, when mortgage-backed securities were being widely sold. "It's almost deja vu," he said. Many companies are selling at huge multiples and reporting earnings that are "sort of fudged" due to various accounting methods, he said.

It's no secret that bonds are in bubble territory, or that stocks are soaring. As I said before, tell us something we don't already know. Yet folks like you keep telling us to diversify. That's not bad advice, but I'm definitely going heavy on stocks and light on bonds.

We should all try to be independent thinkers else we fall into the confirmation bias trap.

stocks soaring? globally stocks are up 12% per year for 5 years. Is that really soaring? Sort of barely above average in my book.

The US is up 17% per year for 5 years - that's a bigger number fer shure.

OK, again I will tell you something you appear not to know. The bond world is a diverse as the stock world. High yield bonds which was one of the subjects of the post is most directly correlated to the stock not the bond market. High yield bonds, or "junk bond" depend on the capital markets to raise funds which cost the companies more in interest payments. The context is that the reach for yield is allowing companies with poor business models to continue in business a little longer. Historically high yield bonds do well at the the peak of the business cycle.

On the other hand, high quality bonds tend to attract capital in times of poor stock markets, and are more directly correlated to the interest rate market. Think of it this way, if I own a bond that pays 4% interest and five years later the market is 2%, since my bond pays more than the market, it has a higher value IF I SELL THE BOND. Conversely, if I own a bond that pays 4% interest and five years later the market is 6%, since my bond pays less than the market, it has a lower value IF I SELL THE BOND. IF I HOLD THE BOND TO MATURITY IN EITHER CASE I MAKE MY 4%

In regards to bonds being in bubble territory, the same could have been said about Japanese government bonds a decade ago, and it did not play out that way. There is an argument to be made that owning a ten year Treasury bond at 2.4% and holding it to maturity will be a better investment than buying the S&P 500 at 2,100.

TAA wrote:

Hey Flagpole would you be willing to share your spreadsheet? Or say how it's set up? I'd really appreciate it.

Set up like this:

Columns: (A)Age, (B)Year, (C)Amount (this is amount you have), (D)Contribute, (E)Rate of Return (this is expected rate of return), (F) Amount again. Age and Year columns are just for reference. Calculation happens with C, D, & E. So, a formula in a cell in column F might look like this:

=SUM(C14+D14)*E14

This formula goes in Column F and is a second "Amount" column. What is calculated there in cell F14 is referenced for the next year in cell C15 with just this:

=F14

Once I hit a new birthday, the data in column C for that cell becomes just a static number...that tells me what I had on my birthday at that age (for example, at age 47, my Amount is no longer a formula getting it from another cell. It is simply a static number.

More concrete example

C10 (=L5); cell L5 is the total of my holdings from two sources, Vanguard and Fidelity

D10 (this is simple a value that I type in that is the amount I expect to add to retirement accounts during this year)

E10 (this is the rate of return). I have different tabs set up for different rates, but for 9% this is 1.09.

F10 =SUM(C10+D10)*E10

Let's say that was for the year I turn 49. Then for the next year on the next row, C11 is this =F10

I have changed the numbers from what is in my own spreadsheet, but let's say you had $800,000 at age 49 and put in $20,000 a year until your birthday at age 62 and you hoped to get 9% annual return. Spreadsheet would look like this (columns C, D, E, F):

800,000.00>20000>1.09>893800

893800>20000>1.09>996042

996042>20000>1.09>1107485.78

1107485.78>20000>1.09>1228959.5

1228959.5>20000>1.09>1361365.855

1361365.855>20000>1.09>1505688.782

1505688.782>20000>1.09>1663000.773

1663000.773>20000>1.09>1834470.842

1834470.842>20000>1.09>2021373.218

2021373.218>20000>1.09>2225096.808

2225096.808>20000>1.09>2447155.52

2447155.52>20000>1.09>2689199.517

2689199.517>20000>1.09>2953027.474

So, beginning on your birthday at age 62 you would have $2,953,027.47.

Once again, your posts tells me nothing I did not already know. Your continuing insistence that you know more than I do is a further example of your own confirmation bias.

OK, have a nice day.