The markets are soaring and the Bears are hibernating.
The markets are soaring and the Bears are hibernating.
Earnie wrote:
Then stop posting.
Earnie,
No way. My mission in life is to correct your Non-GAAP earnings announcements.
Igy
Horror wrote:
The markets are soaring and the Bears are hibernating.
The Bulls will be castrated, fed, stuffed with steroids, then sent to the meat packing plant. Big Macs.
Igy
My posts contain actual numbers. There is nothing to correct. Stop lying.
Ghost of Igloi wrote:
Horror wrote:The markets are soaring and the Bears are hibernating.
The Bulls will be castrated, fed, stuffed with steroids, then sent to the meat packing plant. Big Macs.
Igy
Yes! We need lots of fuel to get us through 8+ years of rising markets. Meanwhile the Bears hibernate and lose more weight. Not pretty.
Back from my tour. Will post more later, just wanted to acknowledge this rally, and the fact that I missed out on it. I have been doing well, but I could have made better money, easier, on this latest rally had I stayed in rather than getting out at around 18k, IIRC. Yes even after tax.
I'm still up better on the year, but not by much at all--but this has been a big opportunity missed. I thought about it but wasn't sure enough to pull the trigger, and left lots on the table as a result.
Fail for me this time, although my wife did call it correctly, but not for any good reason.
I have been chafing about it during my travels, when all anybody wanted to talk about was Trump. Not policies, just the personality.
howdy mazer - hope travels were good
You show solid character with your post, Maser. Too bad Igy doesn't like humble pie.
Hi guys. You win some, you lose some, this one I lost.
I'm still chafing. I would get in at this point if I had confidence going forward long enough to pay cap gains rather than ordinary income rates, but I don't.
If there's a dip to, say, 18-18.5k, I will put the small 401k back in. But man, I left a lot of money on the table this time. Sure the election was an extraordinary event, but it's arguable that there is some "extraordinary event" in every year.
Still chafing.
Hey agip the trip was very good. Looked after some investments, and talked a lot of politics and money. Talked NIRP, Euro...and Basel III with a retired regulator. What stuff. Euros are surprising in their outdated attitudes, and utter lack of understanding of conditions in the USA. Of course I'm referring to just those euros with whom I spoke, but among them, they were remarkably homogenous.
Maserati,
Yes quite a rally, historic by many measures, which may not be a good thing for most investors. The move is based on the premise that there is some magic that began 11/5/2016. The previous day the market stood at the same level as the end of year 2014. In the last two years S&P 500 GAAP EPS have declined 18%, yet the S&P 500 advanced from 1,979 to over 2,250. Friday the Shiller CAPE 10 stood at 27.94, which has only been surpassed in two periods Black Tuesday and Technology Bubble.
Investors have been sold never ending tales to advance the cult of equity: "Fed has your back," "buy on the dip," "TINA," "growth handoff," and now the "Trump Trade." Yet most of these stories have not passed the smell test. The TINA stocks have performed very poorly along with most high quality bonds. In fact the gains in the stock market have been matched equally in some cases by losses in the bond market. Why should anyone be surprised that a diversified portfolio has underperformed? Just three years ago Dennis Lynch was equity mutual fund manager of the year with his Morgan Stanley Institutional Growth Fund up 48% on the year. This week that same fund has been flat to down or slightly up on the year.
I find it interesting how gullible even the most intelligent people are. Any economic growth coming from the Trump Trade will be matched by higher interests rates and rising labor costs. Just say 6% 30 year mortgage rates. How do stock buyback programs operate under that regime. Most investors throw out all logic and turn their back on market history and fundamental investing metrics for a story line. The record for such thinking is not good over the past twenty years.
I would agree more with David Stockman's view than anything coming from traditional financial media.
https://dailyreckoning.com/wall-streets-calling-sheep-slaughter/
The wife and I survived the company Christmas party. I look to be busy into year end with some changes operationally. Snow is back and we are looking forward to some downhill skiing. I am running morerecently, mostly on the treadmill this week.
Igy
Yes quite a rally, historic by many measures, which may not be a good thing for most investors.
I stopped reading right there.
Yah I'm starting to agree with Igy here. This lastest month long rally seems way too good to be true. I may convert to cash once I get my dividends in a couple weeks. If it looks like a bubble, sounds like a bubble...
Anyway hope everyone is having a good weekend.
Joe Beets wrote:
Yes quite a rally, historic by many measures, which may not be a good thing for most investors.I stopped reading right there.
Market history is on my side.
Sorry about that.
Igy
My fear is that too many Trump voters are "smoking their own dope" as to what Trump is going to do for the stock market. I keep reading this great optimism that businesses are gong to unshackled by the crippling regulations and taxes. Its all B$. Obama was as pro corporate as they come. Some examples. Obamacare- Investors think its going to be a great for the markets to do away with Obamacare. But Obamacare is itself a giant give away to the health industry, not to low income people. Do away with the mandate and millions of Americans are going to drop their insurance. That is bad for health industry stocks. Dodd Frank- Yes, Dodd Frank created some dumb bureacracy to try and regulate lending. It did prevent some lending to borrowers that were worthy of getting a loan. But its not the major reason banks have held back in lending money. They are not lending for the simple reason that so many Americans are living paycheck to paycheck and truly are at a high risk to default. That is the problem with the disparity of wealth. Getting rid of Dodd Frank is not going to change that. Cutting Taxes- It sounds like Trump is going to do some combination of cutting tax rates and cutting loopholes. That could be fine. But because of all the loopholes, corporations and wealthy individuals never have paid a high amount of taxes. Corporations already pay on average 10-15 percent. Not 35 percent. Cutting tax rates is not going to be much of a boost for the economy. Its a case six of one, half a dozen of the other. Infrastructure spending - This could be good for the markets. But Obama already did this back around 2010. So its nothing new. In the big scheme of things it has been shown in recent decades that it doesn't create any sustained economic boost. I'm not saying markets couldn't do well under Trump. I'm just saying I don't see any reason why the change to Trump from Obama should be a boost to the market. As I said in another post. If Trump were to raise the debt while Yellen continues to keep rates low, then the stock market could go up for a time. But its not at all evident that will happen. I'm still inclined to stick with my thesis before the election. I general side with GoI. Profits (as measured by GAAP) are stagnant. Corporate debt has gone up. Wages are apparently rising. But then that should mean the Fed is going on a rate hike cycle. I'm not at all impressed with the productivity gains. I'm not feeling optimistic.
agip wrote:
consumer confidence at post recession highs
man
this rally is going to make Obama's stock market numbers look absolutely amazing.
the Dow is up 11.6% per year since BHO's inauguration, and adding in dividends probably something like 14%. Per year. For eight years.
yes, he was lucky to take office at a very bad time of course. No doubt.
but this is a big setup again for repubs to be bad for the market. It really is amazing how much better the market does under dems...complicated reasons of course, and not all good.
Without a doubt, GAAP earnings are down and buybacks are up, and many econometric measures look terrible, but that entire discussion might miss the mark.
In a nutshell, societies have become bifurcated into the have's and the have-not's, and it is increasingly only the haves who participate in equity/bond/RE markets, where what they do is trade assets among themselves, and thereby shape markets to their own sensibilities.
I have some money, but there was a time when I had none. By historical accident I now know some people with a lot of money, and I know how they think and behave. It's not about value, it's not about fundamentals, it's not about economics--it's about the psychology of self, and of group belonging.
We see all sorts of assets insanely priced--equities, RE, art, vehicles, etc.--relative to what the everyman can afford. They have no business even thinking about buying such things, and in fact many do not. Some try to play the game through 0% financing on vehicles and low residential mortgage rates, but in the end they either lose money on the deals, or at a minimum, pay much more for things than do those with actual money to pay with.
Those in the other half don't care much about price levels...in fact, in many cases, the higher the price the better, because it means a measure of exclusivity, and exclusivity is important because it restricts access to only the like-minded...and what does a large block of like-minded people mean?
Confidence and consistency.
And that's what it's all about.
I admit that I still don't think like "those" people. I still look for better deals on RE, rather than just buying waterfront at any cost. I still try to buy equities low and sell high, rather than buying high and selling higher. I still try to look for things for which there will be a broad market and therefore greater liquidity, rather than going for more prestige and less liquidity.
Certain areas have been well-known to have been exclusive for a long time--so-called "luxury" levels in RE, jewelry, art, vehicles, clubs, boats, etc.--but like I wrote on here maybe 2 years ago about high-priced stocks like AAPL, equities are rapidly becoming a type of one of these classes. Most people in the US aren't even in the markets.
The "luxury class" seems to me to have gotten significantly larger and more internationally homogenous over the years, to the point where today it seems to be large enough to be self-sustaining. There are LOTS of people with LOTS of money, and they form a sort of international class, with international interests and international mobility. These are the people who, along with some pensions funds, own equities.
Is the class large enough to mold the equity markets in its own image, and thereby keep them at what seem to be ridiculously high levels, similar to other "luxury" goods and investments? I honestly don't know. I don't know if those who buy as "holdings" now outweigh those who buy as "investments"--and IMO those are the 2 characterizations that separate the classes.
The former doesn't "need" to make money on an ongoing basis, and can wait until the right time to move, as they wish. They don't mind if something is a liability for a while, and they don't need to "work" things. The latter does need to make money on an ongoing basis, and must move in response to external forces, and cannot wait indefinitely to make their moves. They look for things on which they will make money now, or which will turn positive cash flow in short order. They therefore find fundamentals appealing.
I have learned not to disparage the former class, because in certain spheres it is big enough, and has been around long enough, to be self-sustaining. I'm not talking about the idiot entertainers who buy a $100M place and then sell it for $60M--for every one of those, there is a more successful one, who just maintains the trade in luxury properties.
Are equities now one of those spheres where the involvement and control of and by this class is large enough and persistent enough to be self-sustaining? I don't know the answer, but I suspect that it is "yes". If that is true, it is a an absolute endorsement for "buy and hold".
The quality of "fundamentals" is ALWAYS determined by relation to some referent, and the issue now is whether the referent should change to more accurately reflect the attitudes, values, goals, and behaviors of the luxury class. IF the referent is so changed--and I will say it unequivocally--equities are not only NOT overpriced, they might actually be a good deal.
In other words, if you look at who is actually a market participant and how their influence on the market is exercised and by whom, the market fundamentals can actually look pretty good.
Igy comes from a certain perspective, and within that perspective his judgments are appropriate. I don't think it's that valuable to criticize his judgments within his perspective, because that exercise misses the larger point--which is whether his perspective on the markets is the best perspective to use when looking at the markets.
Got to go for AM workout now...snow here, too, and cold. Staying indoors!
So many words to say so little. Do you ever get tired of listening to yourself?
Ghost of Igloi wrote:
Joe Beets wrote:I stopped reading right there.
Market history is on my side.
Sorry about that.
Igy
You may be the only person who considers a rally to be a bad thing. You are definitely this thread's Grinch.
By the way, market history is on both sides. Take off your blinders.
Ghost of Igloi wrote:
Joe Beets wrote:I stopped reading right there.
Market history is on my side.
Sorry about that.
Igy
So if the market takes a dive, Ghost of Igloi's warnings have come to fruition. If the market has a big rally, even an historic one, this just portends an imminent collapse in the near future. Either way Ghost of Igloi wins!
psychology is a major mover of markets. The stock market is not an abacus. When uncertainty is removed, when profits are rising, when confidence is high, when inflation is low but not too low, when budget deficits are appropriate, when there is peace in the world, when wages are rising, that's good. People will feel ok about investing in that kind of market. and if you believe trump will remove regulations and lower corporate tax, that is a new positive. (corporate profits are not stagnant- they are rising 5% per year GAAP is just one measure)https://www.bloomberg.com/markets/economic-calendar
Of course, that also means everyone who predicted the market would go up is also a winner. And a big one at that.
The real winners are the ones who say the market goes up, then down, then up, etc. There's your market history, folks.