Down goes the Dow

!!!!!!!!!!

meeeeeeeellllllllllllllllllltttttttttttt uuuuuuuuuuuuuuuuuuup

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Igy takes it on the chin again.

Absolutely they do. We must be misunderstanding something about Igy's comment.

DJIA edging up toward 21.1k.

Everything's bullish. At this point even an interest rate increase might be characterized favorably.

Believe me now? The non-violent dem response to Trump last night is now viewed as ushering in potentially new era of understanding. What's not to like?

I stand by all of my historic market characterizations on this board. With respect to Igy, most people just don't know how much money is out there, and what it is chasing. You think this is a bubble? You haven't seen anything yet. Because this bubble is being managed much more tightly than others in the past, the rise has been a grind, rather than explosive. Part of that has to do with how equities become available for sale, and how they are priced.

Yes I will become uncomfortable at some point, but those who are slavishly adhering to a uni-dimensional historical-norm-based characterization of the market have failed to carry the day. You guys need to be more broad-minded.

With respect to the pension funds, they are ridiculous. They are in bonds, which got trashed during the mortgage crisis, and which IMO continue to again pile up crap in their ranks, re-packaged as candy...and the corrupt fund managers eat it up, knowing full well they won't get anywhere near the 7-8% they are predicting. Who cares, they get HUGE incentives to buy certain funds, whether you choose to believe that or not.

Everything is debt-fueled. Everything. If I was just starting out today, I wouldn't stay in the USA. I wouldn't pay a dime in tax, nor would I contribute to any plan managed on my behalf. Demand stolen from the future; opportunities stolen from the future.

I just learned of an 86-year-old who fell, broke her femur, and was given open reduction internal fixation surgery, on the public dime of course. The alternative was bed rest to let the bone heal by itself.

The costs were, of course, financed by future generations. Was this surgery a wise social decision? I don't know. In one sense, of course not--bed rest would have done the job just fine. In another sense, at that age bed rest can be very damaging if it goes on too long, and she may never have recovered well from the bed rest itself.

There are pros and cons, but it's a good bet that the generations paying for that procedure won't receive the same kind of support when they are 86, should they need it.

Debt. Stolen demand, stolen opportunities. Bad debt, toxic debt, concealed debt, giving grief to pension funds. Bad judgment, and even outright fraud, are RAMPANT in debt markets, it's just too easy to make a legally colorable assessment.

Solution? Pave over the damaged roadway with more debt, to make a new smooth surface that will last a season or two.

DJIA now up 323 points intraday, and rising.

Read it and weep Igy.

agip, everything is bullish. Everything!

Remember how you (and others) were claiming that some of last year was suppressed due to "bad weather", and I made the counter-argument that shovel, salt, heating oil and gas, etc. should offset?

This year they are lamenting the fall of gas, because it has been so nice.

Point is that everything can be characterized as bullish, if you choose to make that the dominant paradigm.

Everything. Trump. Defense spending. Infrastructure. The budget. The debt ceiling. Continuing entitlement program spending. Immigration policy. Tax reform, or even just the talk of tax reform. Healthcare reform, or even just the talk of healthcare reform.

The lunatics are in control of the asylum, and there are PLENTY of not-too-bright people with lots of money to give them, and PLENTY of corrupt intermediaries ready, able, and willing to take their cut of the good times.

It's ALMOST back to the 80's! Break out the nose candy

All this market requires to continue rising will be a series of events, which of course is the basis of all history, and inevitable. Also it requires a lack of war or serious conflict, which is something that everybody understands.

EVERYONE is invested--Russia, China, the Saudi's, Switzerland, Mexico, etc. etc. etc. EVERYONE. NOBODY is going to let this ship go down, and EVERYBODY will gang up on someone who has designs to do so, like for instance N. Korea.

IMO you will now see N. Korea either capitulate to events, or get the schit kicked out of it by someone, with everyone else's tacit consent.

Consider that if you weren't in at the moment, would you get in now?

Also, now could be a very good time to get back into Russia. I am looking at doing so in the near future.

nah not everything

incompetent government in USA

expansionist China and Russia

EU breakup is more and more likely

trade wars already starting with skirmishes and trial balloons

expelling immigrants

highish stock valuations

these are not bullish at all.

and the complete lack of population growth in the US, Europe, Japan and soon China.

that is as bearish as can be, if on a slow movement scale

I'm trying to find a way to calculate returns incl dividends, but Yahoo Finance seems to have stopped adjusting for dividends.

My best guess (not swearing on these numbers) is that since the thread was started 3.51 years ago, the Vanguard total stock market index including divs is up 58%, or 14% CAGR.

Totally not standing behind those numbers.

In raw dow numbers, we're up 14,946-21,123, or 41%, not including dividends.

Interesting market for sure. The "no bad days" enthusiasm is quite remarkable, if not in the end foolish.

http://www.multpl.com/shiller-pe/

Igy

incompetent gov = inefficient = more gov spending = Keynsian = bullish!

expansionist China and Russia = military buildup = more gov spending = Keynsian = bullish!

EU breakup = individual deals = inefficiency = more gov spending = Keynsian = bullish!

trade wars = not good, but there really aren't any at the moment, and everything possible is being done to avoid them, yes even by the US

expelling criminal aliens = more gov hiring = more gov spending = Keynsian = bullish!

highish stock valuations = margin rolled over into margin = debt creation = money creation = wealth creation = bullish!

Not that I substantively agree with these analyses, but you get the picture. "bullish" is an attitude, not a substantive fact.

Every event except maybe trade wars and actual large-scale war will be characterized as bullish, for at least the next while.

Plus, as ridiculous as it is here, everything is relative. Remember years ago when I asked what the realistic alternative was to equities, and I answered nothing? They are so easy, so liquid, so low in transaction costs, so low in carrying costs, etc. They have no competition except for international equities, and like I also said earlier, watch for EM's to rise in the wake of the US rise.

Bonds are too tied to the fed, and do offer not an alternative to equities, but a different type of investment.

Relative to other vehicles, US equities have been #1, except for certain niche housing markets.

And they continue to be #1.

You might want to dial back the value judgments, Igy.

What end? There is no "the end", as you suggest. There are many beginnings and many ends, different for everyone.

Now if you want to talk about our entire modern society and economy, then we can talk foolishness--but the market is not a proxy for that, it is only a subset of it.

Absolutely they do. We must be misunderstanding something about Igy's comment.

Read more:

http://www.letsrun.com/forum/flat_read.php?thread=5369837&page=882#ixzz4a6OZV6lc

Maserati and Detector Dude,

Market is going up and so are interest rates, previous eight years was the other direction. Question becomes how much do interest rates move, I am assuming there will not be a rapid acceleration in interest rates, but if there is, it would be a reversion of the previous regime, and if logic held in both scenarios, bad for the market.

Igy

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.

Words of wisdom from 2 years ago. I pity the poor people who have stayed out of the market, buying in to this crap. Sad

Maserati,

Of course I may be out of touch at the ripe old age of 66. I do still own a flip phone so that may validate your opinion, or perhaps not. I dismiss most of the current market comments as more fool's gold. Rather than weep about the new market highs I find it increasingly delusional.

I am not sure how this comment of yours would cause a person to be excited to be an investor.

"The lunatics are in control of the asylum, and there are PLENTY of not-too-bright people with lots of money to give them, and PLENTY of corrupt intermediaries ready, able, and willing to take their cut of the good times.

It's ALMOST back to the 80's! Break out the nose candy"

I agree that some elements of the system are open to manipulation and I have documented those. I find those facts supportive of caution rather than reckless abandon.

Hope it works out for you.

Igy

"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."

I stand my first post made two years ago. The compounded return has increased to about 5.3%, all added since 11/4/2016 (not ancient history). During the intervening two years the CAPE 10 has expanded to 29.52, which has been exceeded two times in the past 120 plus years. Non-GAAP S&P 500 earnings have declined from $113.01 to $106.73. Investors are paying more and getting less.

The explanation is simple, the bubble is inflating further on multiple expansion, not fundamentals.

Igy