Happy Trading.
Happy Trading.
There are investors buying at every level. That's how a market works. No buys, no market.
Intelligent comment, and there are sellers at every level. So what? The only thing that changes is who is more eager to buy or sell.
Igy
The eagernesses must be equal for a sale to take place.
No, the eagerness is reflected in the direction of the market. There has been more eagerness to buy the past couple of weeks, the eagerness to sell was apparent in days after Brexit.
Igy
The eagerness to buy must equal the eagerness to sell for there to be a sale.
Whatever you say, hey you are the smarter investor. Keep in mind the market is similar to an auction, and that is why the indications are called a "bid" and an "ask." If you had a better understanding of how the markets function you would realize how foolish your statement is.
Igy
I'm the first to admit I have much to learn. Perhaps we can continue to learn from each other.
Sure.
Cool. Thanks for answering my questions. If you have any more for me let me know.
Sure.
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Another record? Is there no end in sight?
A U.S. recession is not only a risk but an imminent likelihood.
John Hussman weekly commentary, December 30, 2013:
"Our defensiveness is driven by an ensemble of evidence relating to valuations, sentiment, market internals, interest rates – yes, monetary factors included – economic factors, profit margins, overbought conditions, record margin debt, and other observable features that classify present market conditions among the most hostile on record."
(2.5 years later, the S&P is up 17%.)
If one is familiar with the writings of John Hussman he admits to being wrong about the effects of Fed policy on encouraging risk taking. In mid-2014 he revised some of his analysis to more properly account for these factors. A 17% gain is nothing compared to the over 50% losses he accurately warned against in 2000 and 2007. Here is a sample:
“Is our profession really so lazy that we would advise people to risk their financial security based on tinker-toy models and pretty pictures that we don't even have the rigor to test historically? Investors appear eager to ‘scoop up’ so-called ‘bargains’ on the belief that stocks are ‘cheap relative to bonds.’ All of this is predicated on the belief that profit margins will remain at record highs, that the Fed Model is correct, and that P/E ratios based on extremely elevated measures of earnings should be evaluated based on norms for much more restrained measures of earnings. Based on daily closing prices, the S&P 500 has not even experienced a 10% correction, yet the recent decline has been characterized as if investors are acting ‘like the world is about to end.’ This is not the pinnacle of human irrationality, but in fact, quite a shallow selloff from a historical standpoint. The fact that Wall Street is branding it otherwise is evidence that investors have completely forgotten how deep the market's losses can periodically become.â€
Hussman Weekly Market Comment, August 2007
Long-Term Evidence on the Fed Model and Forward Operating P/E Ratios
“Given the damage already wrought on the Nasdaq, there is a natural inclination to buy the dip. We believe that there is little merit in doing so. The current market climate is characterized by extremely unfavorable valuations, unfavorable trend uniformity, and hostile yield trends. This combination is what we define as a Crash Warning, and this climate has historically occurred in less than 4% of market history. That 4% of market history includes the 1929 crash and the 1987 crash, as well as a number of less memorable crashes and panics. We prefer to hedge until there is a rational prospect for market gains. When valuations are favorable, stocks are attractive from the standpoint of ‘investment’ – meaning that stock prices are attractive compared to the conservatively discounted value of cash flows which will be thrown off in the future. When trend uniformity is favorable, stocks are attractive from the standpoint of ‘speculation’ – meaning that regardless of valuation, investors are displaying an increased tolerance for risk which favors a further advance in prices.â€
Hussman Investment Research & Insight, November 2000
Even a blind squirrel occasionally finds an acorn.
....and even a fast squirrel can be squished by a car....