Down goes the Dow

Maserati wrote:

Still haven't changed, huh agip?

You're "making" NOTHING today, in the sense that you are not creating any wealth.

Not only that but you haven't "made anything" in the common nonsense of market-speak until you have realized your gains.

Of course you know all this, but your manner of expression speaks volumes about your basic thought process.

You are optimistic, hopeful, enthusiastic, and credulous. I would be proud to call you my friend, but I would hesitate to have you as a strategic partner.

I am too optimistic, yeah

but I do have tens of millions of dollars under management, with very happy clients meeting their goals in a fairly stress free way. I think I am serving them well.

So I'm doing something right, fer shure.

if we ever have another bear market, that will be the test. It's been so long - 8 years?

glad to see you resurface. I hope all is well.

I'm not going to be checking the board very much so if I don't respond it's not because I don't care - I've obviously got my hands full.

K5 detector wrote:

Hey, everybody. K5/Igy finally got something right!

Oh Yeah! What was that?

I think I'm going to puke listening to these guys.

In anticipation of a market meltdown, Chicken Little #3 comes out if hibernation to tell us he knew it all along. Only he apparently failed to notice that the market was soaring today.

These guys are so full of themselves and can't wait to tell us if their great investing AFTER THE FACT.

can we finally agree that the Fed does not control interest rates?

intermediate and long term rates are SOARING without the Fed doing anything.

They are set by the market, not the Fed

3,

I made no comment on the direction of the market prior to the election. I do believe the market is currently un-investable (radioactive). That is because the move up is driven by sector rotation, out of Hillary to Trump stocks, out of Winners to Losers. The market is churning, albeit higher. Interestingly the 10 Year Treasury has broken above 2% and there are reports that China was a heavy seller of Treasuries on the Trump election. There are large currency moves over the last couple of days. It is hard to say at this point how it all shakes out in my view.

Igy

Did I say anything about short-term or daily market moves?

No. Something you have obviously failed to notice.

You all know what I think, it's all in the thread. There will still be a rationalization--as Igy said, Trump's election has changed essentially nothing as far as the markets and money supply are concerned. The same game is still being played.

What is saddening is that Hillary won the popular vote. We will see what happens during the Trump presidency--sometimes, people just need a leader to follow, and will follow wherever he goes. Look at how a Republican congress voted in Obamacare.

I have a laundry list of things to be done, and am at this point realistic about their realization.

Bring on that next very large correction!

Maserati wrote:

Did I say anything about short-term or daily market moves?

To be honest, you didn't really say much at all.

Ghost of Igloi wrote:

3,

I made no comment on the direction of the market prior to the election.

Igy

What?! You have been predicting a crash since your first post on this thread.

Bring on that next very large correction!

Here we go again! What do think? Down to about 13,000 😁

lol

No idea what it will, or "should" correct down to. You could say that if everything starts normalizing, including interest rates, bonds, real inflation, real economic growth, etc., then it should revert to some sort of historically mean P/E.

There are many forces at work, not just policy, but individual and generational considerations, and foreign interests.

It is unquestionable that algos are ruling the trading day, and that (along with mechanisms like limit-down like we saw last night) lends a considerable consistency to the short-term market moves, at least downward; however, socially we are due for medium-term and possibly even long-term cyclical events, the swing of the electoral pendulum being one such medium cycle IMO.

Of critical importance will be whether Americans will be essentially forced into equity and bond markets through the effective elimination of comparable alternative investment vehicles; this does, and would, provide a significant buffering effect, especially regarding progressive withdrawals from and drawdowns of, tax-advantaged retirement accounts.

Also, in the near-medium term, fiddling with the money supply via QE is likely to affect the markets. Gotta have some meaningful physical and productive assets because price inflation will manifest, and will affect the markets.

I therefore doubt that we will see 13k, and that if we do, it won't last for very long. Realistically I could see maybe 14.5-15k sustained for a period, after a bounce down to maybe 14k, after which I think a normal rise will attend a period of "normal" inflation, if not real growth.

What a bunch of b.s., right? Just like all the other "experts" out there.

Now that I have appeared again, I have a question for you guys:

During the next significant correction I will be buying with the aim of buying a dividend portfolio that will provide consistent dividends over a period of 10-15 years. Low/medium risk, so no businesses that borrow to pay dividends, etc.

Any recommendations? Assume that all US stocks fall by the same percentage in the event of a significant correction.

Maserati,

Couple of points.

1) On GAAP earnings the historical average PE for the S&P 500 is 15. Current average EPS for the index is $90 per share. 15 x 90 = 1,350 index level. The last time the index traded at this level was July 2012. At that time the Dow Jones Industrial Average was trading at 13,000. So the Dow index target of 13,000 is reasonable and would represent a fairly benign Bear Market.

2) in regards to dividend paying stocks I would argue that the reach for yield has made dividend stocks and bond proxies some of the historically more overvalued investments. Typically there is very little capital appreciation on these investments, but not in this cycle. So since these investments are perceived as bond like they are more sensitive to rising rates. Today the 10-Year Treasury broke 2% for the first time in nine months. Utilities and REITs were very poor performers today.

3) Something to consider in an income equity portfolio would be a basket of dividend paying low cost ETFs. Off the top of my head: Utilities (XLU), REITs (VNQ), MLPs (AMLP) balanced with the major index ETFs of SPY and DOW, bookended with two international Developed Markets (EFA) and Emerging Markets (DEM).

Igy

Now that Blowhard #3 has resurfaced, it will be even harder for the K5-GOI two-headed monster to keep claiming that he's the only voice of the bear around here. Fortunately most here are less prone to exaggeration and cries of "Wolf!"

[quote]The 3 Stooges wrote:

In anticipation of a market meltdown, Chicken Little #3 comes out if hibernation to tell us he knew it all along. Only he apparently failed to notice that the market was soaring today.

You damned fools. The market has been manipulated after it was clearly set to plummet.

Tis true wrote:

[quote]The 3 Stooges wrote:

In anticipation of a market meltdown, Chicken Little #3 comes out if hibernation to tell us he knew it all along. Only he apparently failed to notice that the market was soaring today.

You damned fools. The market has been manipulated after it was clearly set to plummet.

Obviously. Market way up again this morning.

Can anyone give a plausible explanation for why the Trump win, which triggered a massive futures decline, has resulted in two days of big run ups?

Agita wrote:

Tis true wrote:

[quote]The 3 Stooges wrote:

In anticipation of a market meltdown, Chicken Little #3 comes out if hibernation to tell us he knew it all along. Only he apparently failed to notice that the market was soaring today.

You damned fools. The market has been manipulated after it was clearly set to plummet.

Obviously. Market way up again this morning.

Can anyone give a plausible explanation for why the Trump win, which triggered a massive futures decline, has resulted in two days of big run ups?

peaceful transition of power is most of it

also lower corporate taxes

less regulation

less environment protection

huge huge deficits from lower taxes and increased spending, which can be stimulating in the short term. Igy will tell you how the Trump plan to increase the deficit will end in terrible depression if you ask him,

the end of uncertainty. Now bets can be made.

agip,

My view is Trump like Hillary would not change an overvalued stock market. The problems are large and will not be solved without stock and bond market pain.

Igy