DJ20k
onwards and upwards
DJ20k
onwards and upwards
Shiller CAPE 10 28.39
onwards and upwards
Ghost of Igloi wrote:
Shiller CAPE 10 28.39
onwards and upwards
yeah
should have got out and stayed out in 1988 when the Shiller CAPE got high
or bought January 1, 2009 at 15.15.....
agip,
Good article in this week's Barron's by Lewis Braham "Beware the Debt Lurking in Your Stock Funds." Examines what I have been talking about, that is, corporations leveraging their balance sheet to buyback stock .
Igy
yeah that too
VIX at 5 year lows.
Is there a simple easy cheap way to buy volatility right now? I'm not going to play with options but man the rock bottom price of volatility seems like a gift, with all the chaos going on in the world politically.
agip,
I think I mentioned VXX.
On CAPE, currently never been higher recently, other than Tech Bubble era, which incident NASDAQ dropped 83% and just reclaimed new high last year. Tech Bubble era inflated average data. January 1 1988 CAPE 10 was 13.90.
Igy
Both agip and Igy can, and do, tolerate disagreement, as do I.
I think that when somebody gets abusive, or autocratic, that crosses the line for different people, and everybody has their tolerance threshold.
There are many on here, including also posters like la gente, bigfoot, ryan foreman, etc. who are very worth having, even though they/we often don't agree, or pay attention to completely different things.
I personally will continue posting until the thread sinks into complete decay, or until someone gets in my face and makes it too much effort.
***********************
DJIA 20k intraday...the time might be coming to make a buy again...not a huge one, but a test buy with the 401k, broad-spectrum equities.
Might. Yes Igy to the average person looking at the average history, the levels are insane.
Maserati wrote:
Big Dog Investments wrote:Igy is the first one out. I'm up next with an elimination date of January 26 (midway between me and Econ) assuming no new blood jumps into the pool within that range.
The prediction pool:
Igy: January 9, 2017 - ELIMINATED
Big: January 13, 2017
Econ: Feb 8, 2017
agip: March 4, 2017
Maser: June 17, 2017
Mellon: December 31, 2018
Current data (as of 1/11/17):
Dow high...19,999.63
Prediction goal...17,999.66
Cut off number...19,399.64 (make your prediction before Dow reaches this)
Hey Big, were you Jan 26 as you claim, or Jan 13 as you indicated?
It's amusing that you picked a percentage fall by which to judge the contest. What if absolute levels are what drive algo's? Not long ago, a 2000-point decline would have represented a loss much greater than 10%.
That's a lot of points on the Dow. We may never see that kind of a drop this year. Still cruising around 19.8k at the moment.[/quote]
Hey Big, you alive? Jan 13 has come and gone, and Jan 26 is tomorrow, with DJIA above 20k intraday today...
Which brings to mind the question, what did Igy and Big think would precipitate a 2000-point drop during January?
Maserati,
I just wanted to be the most Bearish person. I have no real clue or view on timing. Timing over the short run is irrelevant if we are down 50% and we don't move significantly up . If we do move significantly up the "carnage" will be "big league."
In regards to the person wanting to do an Igy boycott. He was following me around this site and spreading malicious lies. He was also the same person that was stealing my handle. I have posted here, not on the DGTD thread, for over 10 years. I have many friends here who know my handle. I could either ignore or fight back. I chose the later. Sorry if it creates problems for normal posters, but I value my reputation, as well as my sense of right and wrong. My daughter is an attorney like you, a litigator, she gave me good counsel.
Igy
Hi Igy,
jumping over into this thread and away from the Global Warming stuff briefly. I've looked in on this thread occasionally from the beginning; I've been on LR since 2002 or 03 myself, although usually posting as myself (except when discussing indelicate or touchy topics, like AGW for instance).
You've been bearsih in this thread for several years now. Surely you've lost a lot of opportunity for gain over that period, or your clients have. Do you have any regrests, looking back?
Of course, it is certain that at some point your fear will be warranted, and we will see another big correction. You'll be able to say "I told ya all so," and presumably you will have your finances structured so as to minimize the loss. Do you think that will have been worth it in the long run?
Personally, I've been betting wrong on home mortgage rates since my first house in 1992. I was a teenager in the 80s and saw interest rates up to 20%, which put the fear of god into me that lasts to this day. Faced with renegotiating our mortgage this summer, I'm feeling like it's time to be a bit more risky and take shorter terms with lower rates. But something inside me says this will be the year when my fears the past 25 years will actually come true.
Which feels like a long time to wait to be rewarded for my risk aversion, after years of paying a premium for it...
I will say, I do admire your persistence in being happily pessimistic in the face of continuing positive news... :-)
Ghost of Igloi wrote:
The risk in the stock market is under appreciated. QE has distorted equity prices and the next big move is down rather than up. The Schiller PE is 27 and valuations are stretched when measured against other valuation models. Remember, the stock market has had two 50% down markets in the past fifteen years. The fifteen year average compounded return on the S&P is only 4.3%, which is inferior to treasuries. Treasuries are overvalued as well. Cash is the superior asset class when risk returns to the market.
Shill,
This above quote my first post on DGTD, 3/2/2015, so a little less than two years ago. That day the S&P 500 closed at 2,117 or an index level about 8.25% higher than the moment.
To review the period since that date, we have had two periods where the market dropped greater than 12%. On November 3, 2016 or the Thursday prior to the election the S&P 500 closed at 2,088, roughly the same level as December 2014. During this period we have also seen interest rates for the 10 Year Treasury at 1.35% in July of 2016 and 2.5% or thereabouts today. Furthermore, S&P 500 EPS for 3/31/2015 were a Last Twelve Months (LTM) GAAP of $99.25, the most recent completed quarter 9/30/2016 was a LTM EPS of $89.09.
I guess it becomes a question of what is your defined risk either up or down. In my view when one reviews the facts, as I have outlined above, the risks inherent in the market are significantly higher than when I first posted. Does that lessen as the market goes up, of course not.
Igy
Ghost of Igloi wrote:Shill,
This above quote my first post on DGTD, 3/2/2015, so a little less than two years ago. That day the S&P 500 closed at 2,117 or an index level about 8.25% higher than the moment.
Igy
My google has s&p 500 at 2295 today (8.4% higher today, not 8.25% higher back then). I don't live stateside, maybe my google adjusts for foreign exchange...? ;-)
Also, I count two drops of 9% during that period (Sep 2015, Feb 2016), not two greater than 12%. Maybe I'm looking at the wrong charts?
Shill,
OK, I'll give you that, at the time I calculated it at 8.3% and rounded it down.
A couple of other points I would like to make. I saw the same mania in 1999 and 2006. It takes time for markets to rationalize. But there are clearly odd investment trends. Investors buying bonds for capital appreciation and stocks for income. Corporations leveraging their balance sheets to buybacks their stocks. Investors lack of concern for cash flow and valuations, for market or individual stock components.
In both 1999 and 2006 an investor could hide out in bonds if they liked and clip a good coupon. In today's market cash or short term high quality bonds or CDs may be a better option.
My thoughts.
Igy
Klondike5 wrote:
Down to 14,850 from a peak of 15,700 I believe.
Maybe 5%
What's the bottom?
I am betting sub 13,000
We still may get below 13,000
the shill wrote:
Also, I count two drops of 9% during that period (Sep 2015, Feb 2016), not two greater than 12%. Maybe I'm looking at the wrong charts?
Shill,
Perhaps.
S&P 500
5/22/2015 2,134
8/28/2015 1,867 -12.51%
2/12/2016 1,810 -15.18%
Not ancient history either.
Igy
Ghost of Igloi wrote:Shill,
OK, I'll give you that, at the time I calculated it at 8.3% and rounded it down.
Igy
Igy, my bigger concern was your choice of sign, + or -, not minor rounding error.
The S&P has grown by > 8%, not shrunk, in the period of discussion. You said it shrunk; maybe either I've misread your intent, or you used poor wording? In any event I don't know how growing markets over that time (although agruably all the growth has occurred since the election, and maybe that's your point?) support your argument.
I do however accept and appreciate the caution you inject in these discussions. Stocks are always a gamble, and some crazy unpredictable things seem to be happening. And now either "things are really different this time" and returns will sustain themselves, or else "history repeats itself" and feverish enthusiasm will lead us to the precipice...
Ghost of Igloi wrote:Perhaps.
S&P 500
5/22/2015 2,134
8/28/2015 1,867 -12.51%
2/12/2016 1,810 -15.18%
Not ancient history either.
Igy
My bad... I did some lazy math.
Not sure the average investor needs worry about those kind of fluctuations? The sphincter puckers when they happen, but the patient investor has nothing to fear from blips like that. Bigger blips, and sustained declines, sure...