Down goes the Dow

Shouldn't you be taking your meds?

U.S. stock futures edged lower Tuesday, as investors appeared to avoid major bets before a key speech by Federal Reserve Chairwoman Janet Yellen.

Before that speech, readings on home prices and consumer confidence are due.

Markets "will stay very much in limbo" ahead of Yellen's speech, and "all bets will be based on her tone," said AvaTrade's chief market analyst, Naeem Aslam, in a note.

agip,

The view that fundamentals are irrelevant is not only historically incorrect but would reflect a world where the only thing that matters is the direction of the trade. Such thinking is more a reflection of the time than representative of anything real. To believe that a CFP has very little offer diminishes the real value of that advice, which as you know goes beyond the investment side. Success breeds it's own hubris.

Igy

agip,

The view that fundamentals are irrelevant is not only historically incorrect but would reflect a world where the only thing that matters is the direction of the trade. Such thinking is more a reflection of the time than representative of anything real. To believe that a CFP has very little offer diminishes the real value of that advice, which as you know goes beyond the investment side. Success breeds it's own hubris.

Igy

"Such thinking is more a reflection of the time than representative of anything real."

This is incorrect, IMO. Perception is reality. Or, reality is observer-created. Or, you just aren't looking at the complete picture. Human behavior IS a reality, Igy, including the aggregate behavior of market participants. I ask you one more time, name me one practical alternative to the equity markets, even at current valuations. You have not, and you cannot, because THERE ISN'T ONE.

"To believe that a CFP has very little offer diminishes the real value of that advice..."

You're throwing around "reality" to suit your convenience. Here, you acknowledge that belief is reality, whereas in the prior sentence you offer the contrary, to suit your convenience.

The "real" value of that advice would be something like the incremental change in financial performance that is due solely to the implementation of that advice, over some definite time period. The value of the particular positioning at the end of the time period is purely speculative and therefore would not be included, as the specific future is unknowable.

"Belief" in CFP offerings has nothing to do with real (objectively quantifiable and not based on self-report) value.

Your earlier point, about pattern-following only holding so long as the pattern holds, is a good one, though. However, some pattern-followers are responsive, and do well no matter what. I have a friend who does this. He makes out like a bandit on the larger, longer-lived patterns, and always incurs a small loss at the end of a pattern. He would be sunk if there was a truly massive reversal that happened over the course of 1 or 2 days. He was not active during the 2008 crash, but did drop a load for a few minutes during the flash crash.

sorry for the delay on the Econ stats, Maser -

same store sales improved but not good: +1.5%

Case shiller home prices: +5.7% y/y and steady

Consumer confidence 96.2, quite high and stable

decent numbers, but retail is not good.

Maserati,

Perception is reality in it's place in time, but that does not mean that reality is lasting. Last year there was the perception that biotechnology stocks were the place to invest, that reality has proven to be misplaced in 2016.

I have offered practical alternatives to the equity markets in the past, cash and short term high quality bonds. You have rejected that idea. Both have outperformed the equity markets over the past year.

In regards to the CFP, I was referring to the broader practice of financial planning, such as tax planning, estate planning, business planning, retirement planning and insurance planning. The CFP practice is much broader than asset allocation. If someone believes it can be done easily with a robo advisor or internet solutions, let them do it. They will get what they pay for.

I don't doubt that your friend or coach d have had their day as successful traders. However financial history is littered with investors that were fooled by randomness or events they never considered.

For the moment I will stick to my staid valuation models and watch the gunslingers shoot it out. Hopefully none of them run out of bullets at the wrong time.

Igy

Right, all that "planning" is, sorry to say, usually complete bullcrap.

"Business" planning? Leave it to the CPA's and the attorneys. I assume you are talking about ownership, control, governance, and taxation issues (if you are referring to business operations, then !!!!)

"Tax" planning? MAYBE, within a very narrow range of application, from among known options. Nothing sophisticated, again turn to real accountants and attorneys, especially for cross-jurisdictional issues.

"Estate" planning? Again, accountants and attorneys, WORKING TOGETHER. Simplistic suggestions in simple situations don't count, and there, the web can offer as much or more information and guidance than can a CFP.

"Retirement" planning is so much hot air. It can be measured only where the rubber hits the road, in dollars and cents. Show me the benefit. And don't give me any "lifestyle consultant" stuff.

I know more than 1 CFP, and I can tell you that they talk big, just like those things you mentioned, until they run up against somebody who actually knows something specific in one or more of those areas.

********************

Regarding cash and high-quality bonds...show me how cash has outperformed a good index fund over the past year, including dividends...high-quality bonds I will grant you over the past year, but that's slicing the baloney pretty thinly to get the result you want. How about 2, 3, 4, or 5 years? You want to keep that slice and talk about gold? Same thing. And high-quality bond yields continue to sink to de minimus levels, where they either only barely offset inflation, or actually do not even match inflation. That is not a practical investment, it is a last-ditch attempt at wealth preservation. As is cash.

Like it or not Igy, we are stuck with the equity market. Yes, there is the bond market, and yes it has its place. Fair enough, we can lump the 2 of them together--and just as you argue that equities are currently overpriced, I can argue that bond yields are currently too low. There is FOREX but it is not "practical" for anybody but banks.

**********************

agip, looks like you got taken to the woodshed by Jambalaya, who did a fine job as far as I'm concerned, although I don't think that EVERYTHING you have written has had a rainbows and unicorns bias. :)

Home price and consumer data were predictable, as the Fed needs to build pretext to the coming rate increase. Sure, cherry-pick a few thin baloney slices and ignore everything else, and it can be done. The good thing is that when I see them do things like that, I feel that it's more likely that there will be a rate increase than not, because they are really trying hard to justify one. And that sort of predictability is a good thing.

Maserati,

I guess I shouldn't have wasted my three years of study for the CFP, how sad. Boy the 50% of people that fail the exam each year sure must be ignorant. More sorry for them.

Feel free to buy your index fund then. Unfortunately stocks, bonds, real estate, art, most investable assets are overvalued. I will opt for wealth preservation at this point in the investment cycle.

Igy

I've learned that bad news is good news, and good news is bad news, as what people who matter care about is margin.

Last fed announcement I tried playing it straight with the small 401k, and proceeded under the assumption that dismal economic news would have a negative impact on the market. Where has that gotten me? A missing-out on a 500-point rise.

That's the first time I've ever played it straight, to see if "fundamentals" had really taken over, which they hadn't. So far, there has been no paradigm shift, and the patterns followed by guys like coach d are holding.

I don't see a dislocation in those patterns until at least US election time. I will wait for a little blip to bring the market down, minimize my "losses", and put the 401k back in at hopefully around 17.1-17.2k, which would represent a truly minimal loss.

btw agip, I never used to read zerohedge until recently, when a few of my associates have directed me to it, and when Igy (I think) mentioned it in this thread.

It's worth a read, but a careful one. They are like the mirror-image of you, and the truth lies somewhere in-between. Actually, if I had to choose, I would say that you are less sensational than they are.

I find that it is quite often that I begin to read an article, before dismissing it as biased, but it can be a good initial source of selected facts, just not of an overall analysis of any particular situation.

"In 2013, the overall pass rate was 63.3 percent, and the pass rate for first-time exam takers was approximately 68 percent."

Maserati wrote:

I find that it is quite often that I begin to read an article, before dismissing it as biased, but it can be a good initial source of selected facts, just not of an overall analysis of any particular situation.

fair

but

I always suspect they are making up stuff to get clicks so I can't really evaluate anything they say.

It's like with a micheal moore movie. There is no way he would tell you a balanced story or even say 'be careful with this fact' - he will cherry pick data and run with it as fast and as far as he can. I don't trust anything in a micheal moore movie and I don't trust anything in a zerohedge article.

i don't know were to accept things and where to reject them in either.

11/15 exam overall pass rate 64.9%, repeaters 49.8%

Like I said, at the moment there is no practical alternative.

Here's where I have to burn you, Igy--don't talk to me about either art or RE. I have BLOWN AWAY the markets over the past 5 years, using art and RE in part. Those markets are highly fractionated, and you can make excellent money if you know what you are doing. Certain segments of art have soured, but I'm sitting pretty and have made my money.

And RE overvalued? Where? Are we talking investment properties? Ever see the price of a garbage Canadian house in butt-fvck? Get back to me when we hit "full retard". Yes San Fran, Manhattan, and elsewhere are highly priced, but they're global markets, and are only in keeping with their proper global comparisons.

As far as an actual residence for the average joe, for whom it represents the major investment in his whole life, I would tend to agree that prices across the board are a bit high. But I also believe that the investment dimension in choosing a residence should not dominate, so the price doesn't dominate the discussion.

And yes, those who fail the CFP exam are complete retards. All they do is throw money at it, and take the test, who knows what will happen, right?

Which is not to say that those who pass are NOT retards. I personally know a few who are. Good guys, but light in the head.

You personally may have worked long enough and gained enough specific knowledge to actually be of valuable assistance to people, but that has little to nothing to do with your qualification as a CFP. I do believe that some people can be very valuable, notwithstanding their regrettable CFP registration.

Maserati,

You gave me a good chuckle. Perhaps I fall into the "NOT retards" CFP category.

I have purchased art over the past year--three late 19th century oils. My wife's grandfather was Gustav Kruell, a late 19th century wood engraver. You can see a sample of his work if you Google his name. Think of engraving that quality on wood and in the negative. We have several of his pieces. I bought two Ransome Holdredge oil paintings and one Ada Shirley Fox piece. They go well with the style of our house and the other pieces we inherited from the in-laws estate. The purchases were made as gifts to the wife and not as investments.

We bought a new house in 2013 and sold the old one the next year. I suppose we have done well if I ever wanted to sell.

I believe both art and real estate markets are overvalued. That does not stop someone with expertise in those markets, like yourself, from having ability to make money.

Igy

ok we're basically at end quarter - let's review our predictions:

Now: Down 17,578, basically unch for the year

predictions made 12/31/15:

IGY: 10,900.

And Now: 11,900

Agip: 17,900

Big Dog: 17,425

Coach D: 21,500

Quite a range. So far Agip and Big Dog are pretty much dead on, and the extreme people are way off.

But that's just 1/4 through the year.

Even a retarded CFP would tell you your expectations were misplaced.

Igy

"Last fed announcement I tried playing it straight with the small 401k, and proceeded under the assumption that dismal economic news would have a negative impact on the market. Where has that gotten me? A missing-out on a 500-point rise.

That's the first time I've ever played it straight, to see if "fundamentals" had really taken over, which they hadn't. So far, there has been no paradigm shift, and the patterns followed by guys like coach d are holding."

Read more:

http://www.letsrun.com/forum/flat_read.php?thread=5369837&page=536#ixzz44JUDfgxY

US big cap stocks back over the 200 day moving average - that could bring new money into the market.