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Mouth Breather
RE: Heading Down the Dow

Mouth Breather wrote:


Ghost of Igloi wrote:


Punter wrote:

Yes, valuations matter. But they are not the only metric that affects the markets. This is why Ghost’s myopic view is flawed. Valuations have been high for years, yet the markets have set new records. Eventually the markets will fall, but it will not be valuations alone that cause that. It’s just not as simple as Ghost would have us believe.

History is cited often in this thread as the one truth regarding the markets. If one believes that history will repeat itself and one has a reasonably long investment horizon, then the best course of action is to stay invested in equities (buy and hold).


I actually believe in most of what you have written. However, I believe valuations are much more informative than your view, just not as a market timing mechanism.


Tell us how valuations are informative. They certainly have not been very good at predicting a market downfall.



Ghost of Igloi wrote:

Well the market is negative since the first day of trading 2018. Really won’t matter since the market will bottom this cycle 50-65% lower wiping out returns you considered durable. Believe and put your money where you wish.


Not true. Both the Dow and S&P are ahead of where they started 2018. But that wasn’t what I asked about.

Care to try again? How are valuations informative?

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