Down goes the Dow

Maserati,

Humm. It seems to me in your world, the reason the market continues to advance is there is always someone willing to pay a higher price. I suppose algorithmic and high frequency trading is a least theoretically based on that assumption. What happens when the game ends, like they always do? It seems that the unraveling of the BTFD trade becomes GTHOH (Get The Heck Outta Here). The completion of this cycle will be epic.

Igy

You will sell at the bottom. At the point of maximum pain.

NFLX and AMZN poster stocks for this era. Good companies but bad stocks. Wouldn't you know it. Investors have only vague reasons for buying. In the case of NFLX they ignoring the $Billions the company spends on content. AMZN, on the other hand, has a highly profitable business, and it is not what they are known for. Stocks crying for a sucker.

Ed Foley wrote:

Ghost of Igloi wrote:

You will sell at the bottom. At the point of maximum pain.

Why would I do that? You are talking in circles.

Ed,

"Just wait until next year." You will understand.

Igy

Ghost of Igloi wrote:

"Just wait until next year." You will understand.

Igy

How many years are you going to say this?

It seems next year never comes.

Vlastelica wrote:

Passive investing, a winner in 2016, shows no sign of stopping

http://www.marketwatch.com/story/passive-investing-a-winner-in-2016-shows-no-sign-of-stopping-2016-12-27

I disagree. Passive-based investing has been a winning option since the recession, but that's likely to have run its course by now. With correlations between sectors averaging 80%+ since the recession compared to the 50% norm, active managers have had a real hard time outperforming. We are now leaving a low interest rate environment with muted domestic growth, which is already starting to increase stock-return dispersion. That's not to say stock pickers will do a great job, but their game will certainly get easier.

Running out of things to post on 2016.

here's hedge fund performance. Very little makes me happier to write about the awful performance of hedge funds. I really hate those guys. And I was one of them for many years.

Year to date through 11/30/16

overall CSFB hedge fund average +.28%

Long short funds: -4.25% MINUS!!!!!!

Multi-Strategy: +2.79%

that is so bloody awful I can't even find the right comic metaphor. And it comes after many other awful years.

Oh no you dint wrote:

Ghost of Igloi wrote:

It has happened twice in the last 20 years, and valuations are more stretched than the last time. I would say your belief that the market will move significantly higher from here is a bigger "if."

Igy

I didn't say it would move significantly higher. Why do you feel the need to put words into my mouth? Are you that insecure in your position?

The Dow has lost 60% twice within the last 20 years? Not according to reality. Again you make up stuff.

Where did he say that the Dow lost 60% twice in the last 20 years? Clearly not in the comment you are responding to. So I went back and looked at the past week of comments and also did not find this claim.

Seems it is you who is making stuff up.

The Dow dropped nearly 40% from early 2000 until the fall of October.

It then plummeted almost 60% from late 2007 to March 2009.

See. Just list the simple facts.

agip wrote:

Running out of things to post on 2016.

here's hedge fund performance. Very little makes me happier to write about the awful performance of hedge funds. I really hate those guys. And I was one of them for many years.

Year to date through 11/30/16

overall CSFB hedge fund average +.28%

Long short funds: -4.25% MINUS!!!!!!

Multi-Strategy: +2.79%

that is so bloody awful I can't even find the right comic metaphor. And it comes after many other awful years.

That's actually YTD through 10/31/16, not that Nov was any good. Also, dedicated short bias really messed that average up. A lot of the bad performing HFs have been naturally weeded out but there are still so many more to go. You have to pick the good horses. It's an easy time for the day trader but brutal if you have real capital to throw around.

Just curious - what type of fund were in and why the hate?

Trollminator wrote:

agip wrote:

Running out of things to post on 2016.

here's hedge fund performance. Very little makes me happier to write about the awful performance of hedge funds. I really hate those guys. And I was one of them for many years.

Year to date through 11/30/16

overall CSFB hedge fund average +.28%

Long short funds: -4.25% MINUS!!!!!!

Multi-Strategy: +2.79%

that is so bloody awful I can't even find the right comic metaphor. And it comes after many other awful years.

That's actually YTD through 10/31/16, not that Nov was any good. Also, dedicated short bias really messed that average up. A lot of the bad performing HFs have been naturally weeded out but there are still so many more to go. You have to pick the good horses. It's an easy time for the day trader but brutal if you have real capital to throw around.

that's through end november

I was at a global long short hedge fund...what did I hate...our attitude was 'we are smarter than everyone else and our poor performance just proves what idiots the rest of the world is.' and another attitude was 'anyone who thinks anything positive going on anywhere in the American economy is a stupid naive idiot and deserves to be yelled at.'

we were permabears and missed so many opportunities because of dogma and intellectual arrogance.

So I went totally the opposite direction with my own biz - low fees, no arrogance, index funds. Working much better for me.

Reel,

Thanks. And I get accused of putting words in people's mouth.

The Dow performed better in the period of 2000-2002 primarily because of a lack of technology stocks and a positive weighting to value stocks. However, in that period the S&P was down 54% and the NASDAQ down 89%.

igy

That is unfortunate, but good luck on your own. I'm at a global macro fund, we play mostly in FX and Eq futures. Most of us were bearish at the beg of the year, but that never stopped us from riding the up swings. I think too much optimism is priced in going into Q1, unsurprisingly since we haven't really seen a bullish environment since more than a decade ago. Going to play along for now but I think we will see a slight pullback when it's clear Trump is not the savior. Either way, happy to see things moving finally.

I'm agnostic on 2017 - happy to be out of the prediction business.

I think another poster here - La gente esta muy loca - is at a hedge fund. Just from what he's posted, not from an admission.

Trollminator wrote:

Vlastelica wrote:

Passive investing, a winner in 2016, shows no sign of stopping

http://www.marketwatch.com/story/passive-investing-a-winner-in-2016-shows-no-sign-of-stopping-2016-12-27

I disagree. Passive-based investing has been a winning option since the recession, but that's likely to have run its course by now. With correlations between sectors averaging 80%+ since the recession compared to the 50% norm, active managers have had a real hard time outperforming. We are now leaving a low interest rate environment with muted domestic growth, which is already starting to increase stock-return dispersion. That's not to say stock pickers will do a great job, but their game will certainly get easier.

Well thought post. The herd mentality of indexing will prove it's unwinding. The overweighting of the largest and most overvalued stocks creates huge risk. The ability of active managers to de-risk an equity portfolio will be a huge advantage in the next downturn. I see so much of the same naïveté as 2000. I must say I never expected to see such foolishness again.

Igy

Ghost of Igloi wrote:

Reel,

Thanks. And I get accused of putting words in people's mouth.

The Dow performed better in the period of 2000-2002 primarily because of a lack of technology stocks and a positive weighting to value stocks. However, in that period the S&P was down 54% and the NASDAQ down 89%.

igy

OK. See above clarification to my comment.

Igy

OK.

I have two 'shorts' on my book and both are winning.

I'm up $72 on my China short and $5 on my VXX trade.

I'll close out each when I make $100 or lose $100.

I know that makes no sense in an investment math sense, but that's the point of my fun account - nutty small bets. That way I don't make nutty large bets.

Ghost of Igloi wrote:

NFLX and AMZN poster stocks for this era. Good companies but bad stocks. Wouldn't you know it. Investors have only vague reasons for buying. In the case of NFLX they ignoring the $Billions the company spends on content. AMZN, on the other hand, has a highly profitable business, and it is not what they are known for. Stocks crying for a sucker.

My sad story...

Bought AMZN in Oct and Dec...currently +1.5%

Bought NFLX in July...currently +43.5%

Will I never learn?