Down goes the Dow

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agip wrote:

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Sagarin wrote:

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agip wrote:

here's some more info on the ongoing debate on why the labor force has been declining.

This piece argues that the decline is due to baby boomers retiring and women working less. And that the trend will continue for 30 years, so get used to it unless immigration or the birthrate picks up.

http://online.wsj.com/news/articles/SB10001424052702303560204579248714085721176

Since then, women of all ages have slowly retreated from the workforce. By 2020, the Labor Department projects, women's labor-force participation will be lower than in 1990.

The picture for boomers is even more dramatic. In 2000, that entire huge cohort was in the prime working age (25 to 54 years) when workforce-participation rates are at their peak. Every year since, more boomers have moved into the 55-and-over cohort in which participation declines significantly. By 2020, every boomer will be older than 54, and the baby-bust generation that follows won't come close to filling the gap.

The bottom line is this: The U.S. labor force is in the process of shifting from an era of rapid expansion to much slower growth. After 1970, the labor force grew at an annual rate of 1.6%, slowing to 1.3% by 2000 as women's labor-force participation neared its peak. From 2000 to 2010, growth slowed to 0.8%, and the Labor Department projects a further decline to 0.7% during the current decade.

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As part of the budget negotiations, four million Americans will not see their extended unemployment benefits renewed, so you should expect even more downward pressure on the unemployment rate as most of these people will no longer "count" as part of the labor force.

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or I daresay that people will be forced to get jobs when their unemployment benefits run out...which would also help lower the unemployment rate.

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Can't hardly wait wrote:

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agip wrote:

Klondike: by god, you're right. You said December 12. I'll get back to you then, believe me. here's his three month window post - on page 17 if you want to look it up yourself.

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Klondike5
RE: Down goes the Dow 9/12/2013 9:26AM - in reply to agip Reply | Return to Index | Report Post



[quote]agip wrote:

I think this thread should stop talking about politics and keep to the stock market.

Yes. Because politics has no impact on the market and should not play into our decisions.

Talk to me in three months. I am relatively confident that the "correction" will hit by then. Perhaps as soon as next week when the Fed makes its next announcement on 9/18 (I know, I know, we cannot talk about the ethnic/religious make-up of the Board of that august body).

If at year's end I have been proven mistaken, I will consider my next move.


Read more: http://www.letsrun.com/forum/flat_read.php?thread=5369837&page=16#ixzz2m57Q7lF3

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Two more days! The suspense is killing me!

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Greta wrote:

Thanks for making my point. I'm out.

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coach d wrote:

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K5 wrote:

I am definitely staying out of the market for the time being.

I suspect a bubble will be popping sometime in the not too distant future that will allow me to re-enter the market with the Dow well below the 15,000 I exited at.


We will see.

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You've got it totally wrong. Yes, you will be able to enter below 15000--eventually--but you will likely miss the move to 20000 first. And because you miss a good part of the move up, you also miss a good part of the move down (short or puts). I've displayed this chart a number of times, and it's still true that after-tax corporate profits top before the market, and that hasn't happened yet, and people who stay out before profits do top will likely miss the best part of the whole bull market--the last part:

https://research.stlouisfed.org/fred2/graph/?graph_id=147069&category_id=0

This is the lesson I learned from the 2000 top: Don't sell until that Tiger turns around and bites you. There were people back in the 1990's who decided the NASDAQ was overvalued at 1000-1500, and they missed most of the whole bull market. There seem to be a bunch of economic/technical things that always happen when you get a bubble type top:

(1) Corporate profits top and go down.
(2) Valuation gets much worse as people keep chasing stocks because prices are going up with profits going down.
(3) Weekly RSI is in a declining trend channel for a year or more
(4) Long term moving averages cross over--and that's when trend followers like be go into sell/short mode.

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Corrected:

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Sagarin wrote:

Hey coach D, I'm not going to disagree with you about corporate profits, and I'm glad you changed your former market "peak" from 15,000 to 20,000, as I said the Fed could drive us to stratospheric highs, though I'm not sure we get there. The thing is, if hiring really is happening the way it purportedly is, companies will need to maintain top line growth as margins will be squeezed. Personally, I think we are very overvalued, but I don't doubt a classic parabolic melt-up, and it's very difficult to bet against that scenario.

I think Hussman will be proven right, even as he has and. likely, will continue to be EARLY:

"The stock market is presently at valuations where not only cyclical but secular bear markets have started. A secular bear period comprises a series of cyclical bull-bear periods where valuations gradually work their way lower at each successive cyclical trough. The past 13 years of paltry overall total returns for the S&P 500 have unfortunately corrected very little of the excess in 2000, largely thanks to yet another round of Fed-enabled speculation. We should have learned how these episodes end. At least in 2000 investors had not seen that ending, and even in 2007, the point had not been driven home. There is no excuse today, at least not if one distinguishes between measures that have provided reliable guidance about actual subsequent market returns over the past century, and those that - despite their popular appeal - have not. Though valuations for the S&P 500 are not as rich as 2000 on most measures, valuations for the median stock actually exceed the 2000 peak. From the standpoint of a century of market history, equity valuations are obscene."

http://www.hussmanfunds.com/wmc/wmc131209.htm

http://www.gurufocus.com/news/210239/how-should-we-look-at-john-hussmans-performance-numbers

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Sagarin -

I'll listen to Hussman on bonds...but not stocks.

It basically takes a 50% collapse in the stock market to get those guys interested at all in stocks. they have been wrongly bearish on stocks for so long that I'm not sure why they deserve any attention.

This, from Dec 2009, with the SPX at 1100, around 62% lower:

From current valuations, durable market returns appear very unlikely. As I noted last week, whatever merit there might be in stocks is decidedly speculative. That doesn't mean that the returns must be (or even over the very short term, are likely to be) negative. What it does mean is that whatever returns emerge are unlikely to be durably positive. Market gains from these levels will most probably be given back, possibly very abruptly.

http://www.hussmanfunds.com/wmc/wmc091221.htm

yes, we could drop 60% from here and then those results will indeed have been proved not 'durable.' but listening to them on stocks would have ended many careers and destroyed much wealth.

or put another way:

Average Annual Total Returns
for periods ended
11/30/13
1 Year -7.21%
3 Year -7.41%
5 Year -2.96%
10 Year -0.59%

that's their strategic growth fund - stocks.

the vanguard total stock market index is up 7.94% avge annual return for the same 10 years.

I'm not saying you believe in their stock prediction ability either - I'm just pointing out how wrong they have been so we can evaluate their current stock market advice accordingly.

ahem.

I just looked at the link you posted about hussman's returns - I should really read your posts more carefully b4 I respond. I see you acknowldge recent miserable returns and say that he has been wrong recently.

never mind.

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K5 wrote:

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hmmmmmmmmmmmm wrote:

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K5 wrote:

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K5 wrote:

Agip, for once we agree.

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Nonsense fake K5.

Agip just copied and pasted some gibberish

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That's real funny coming from you. At least Apip pastes a link where he got his information.

Its a rare moment in letsrun history when you actual post a link to your information. Its like you have something to hide..

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Why the eff would I feel I need to provide links just because a lowbrow like you demands one?

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K5 wrote:

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Greta wrote:

That's the point. It would be nice to get something verifiable from you.

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The constant demands for links is just a tactic to avoid talking about the content. I usually tell people where stuff came from and they could look it up if they were interested in the facts. They only make this demand when the material contradicts the beliefs that have been implanted in them by the system

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ookay...

on 9/12 klondike5 suggested we wait 3 months to see if his bet was correct.

Now it is 12/12 so we can look at his returns.

Two sets of numbers: from when the thread started and on 9/12 These numbers include dividends.

Dow:

since thread started: +6.3%
since 9/12: +2.9%

Global Stocks (ticker VT) (since the Dow is not a true index of the market)

since thread started: +8.5%
since 9/12: 3.7%

So the last week has been good for the bears, but still we have had a very robust rally since he started the thread.

So since K5 claims to have pulled out several hundred thousand, we can safely assume he missed out on an opportunity to increase his holdings by $35K or more. Ouch!

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agip wrote:

ookay...

on 9/12 klondike5 suggested we wait 3 months to see if his bet was correct.

Now it is 12/12 so we can look at his returns.

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Pete & Repeat were on a boat wrote:

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agip wrote:

ookay...

on 9/12 klondike5 suggested we wait 3 months to see if his bet was correct.

Now it is 12/12 so we can look at his returns.

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Didn't in that same post he say something to the effect of "...at the end of the year...".

I'm not defending the guy. But it is comical how you selectively read posts. And how you've been falling all over yourself to post updates to declare him incorrect....less than a month into this thread starting... even daily at times.

Almost like you are uncomfortable with the likelihood of him ending up correct if you give him too much time, or just sit back and wait. So, you are on the attack like a pitbull. Nah, I'm sure you'll come up with some other rationalization for your actions.

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hmmmmmmmmmmmmmmm wrote:

But me and you both know where the links come from and that is why you want paste them in your message. hahaha

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Can't hardly wait wrote:

So since K5 claims to have pulled out several hundred thousand, we can safely assume he missed out on an opportunity to increase his holdings by $35K or more. Ouch!

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agip wrote:

he and I are enemies. So yes, I am aggressively posting against him.

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Sagarin wrote:

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coach d wrote:

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K5 wrote:

I am definitely staying out of the market for the time being.

I suspect a bubble will be popping sometime in the not too distant future that will allow me to re-enter the market with the Dow well below the 15,000 I exited at.


We will see.

---

You've got it totally wrong. Yes, you will be able to enter below 15000--eventually--but you will likely miss the move to 20000 first. And because you miss a good part of the move up, you also miss a good part of the move down (short or puts). I've displayed this chart a number of times, and it's still true that after-tax corporate profits top before the market, and that hasn't happened yet, and people who stay out before profits do top will likely miss the best part of the whole bull market--the last part:

https://research.stlouisfed.org/fred2/graph/?graph_id=147069&category_id=0

This is the lesson I learned from the 2000 top: Don't sell until that Tiger turns around and bites you. There were people back in the 1990's who decided the NASDAQ was overvalued at 1000-1500, and they missed most of the whole bull market. There seem to be a bunch of economic/technical things that always happen when you get a bubble type top:

(1) Corporate profits top and go down.
(2) Valuation gets much worse as people keep chasing stocks because prices are going up with profits going down.
(3) Weekly RSI is in a declining trend channel for a year or more
(4) Long term moving averages cross over--and that's when trend followers like be go into sell/short mode.

---

Hey coach D, I'm not going to disagree with you about corporate profits, and I'm glad you changed your former market "peak" from 15,000 to 20,000, as I said the Fed could drive us to stratospheric highs, though I'm not sure we get there. The thing is, if hiring really is happening the way it purportedly is, companies will need to maintain top line growth as margins will be squeezed. Personally, I think we are very overvalued, but I don't doubt a classic parabolic melt-up, and it's very difficult to bet against that scenario.

I think Hussman will be proven right, even as he has and. likely, will continue to be:

"The stock market is presently at valuations where not only cyclical but secular bear markets have started. A secular bear period comprises a series of cyclical bull-bear periods where valuations gradually work their way lower at each successive cyclical trough. The past 13 years of paltry overall total returns for the S&P 500 have unfortunately corrected very little of the excess in 2000, largely thanks to yet another round of Fed-enabled speculation. We should have learned how these episodes end. At least in 2000 investors had not seen that ending, and even in 2007, the point had not been driven home. There is no excuse today, at least not if one distinguishes between measures that have provided reliable guidance about actual subsequent market returns over the past century, and those that - despite their popular appeal - have not. Though valuations for the S&P 500 are not as rich as 2000 on most measures, valuations for the median stock actually exceed the 2000 peak. From the standpoint of a century of market history, equity valuations are obscene."

http://www.hussmanfunds.com/wmc/wmc131209.htm

http://www.gurufocus.com/news/210239/how-should-we-look-at-john-hussmans-performance-numbers

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K5 wrote:

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hmmmmmmmmmmmmmmm wrote:

But me and you both know where the links come from and that is why you want paste them in your message. hahaha

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If you know "where the links come from", who do you ask for them?

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