bubble in the stock market? Or more highs yet to come?

[dtbach]

I enjoy reading the commentary on Fidelity's web site (also have a significant portion of my assets there). Lately they have had reports from some managers that the market will go higher and they have confidence in their stances. Others say that all their "markers" say we are on the cusp of another market crash.

How do you feel about where the market is at? half-full or half-empty??

[Midpack]

Yes it is. Could go up or down, as always...

[Felix Mulier]

I wish I knew! I'm one of those "retail investors" they talk about (although I use NLMFs) waiting on the sidelines to see what's going to happen. I'm going to wait a little longer. Looking for an opportunity to move some money into equities, but am still circling the airport at the moment.

[Meadbh]

The correct answer is: nobody knows. However, everything that I have read and heard suggests that corporate finances are in a healthy state. Assuming that macroeconomic conditions (austerity) do not stifle demand completely, this may be time of opportunity for corporations and therefore for equities.

[LOL!]

The market will definitely go higher .... eventually. It might drop before then though. I follow the LOL! Market Timing Newsletter which has lots of useful market timing tips. It works for me.

[bondi688]

Linking to these articles just to throw some fodders into the discussion. I take no position because I really do not know, so I want to hear from both sides.

Easy money will end in tears, Allan Meltzer says - Diana Furchtgott-Roth - MarketWatch

Ben’s big raging bull mart - NYPOST.com

On the other camp, there are people like Abby Cohen

You Haven't Missed the Rally: Goldman's Cohen - Yahoo! Finance

[dtbach]

I agree that nobody can tell what the market is going to do in the near term but I'm convinced that the economy can do better than what it is now. New vehicle sales are increasing, housing is doing better in most markets and inventories remain low.

Plus the market is about where it was in 2000. At some point one would think that the market should start making some new highs.

[Hnicols]

Same as it was in 2000? Funny how so much turns on where you start and end your looking. I retired 12-31-11. Someone recently suggested that I got where I got (retired early and happy) because of good market conditions in 80s and 90s. I had to admit it did seem like an extraordinary period, with incredible run-ups followed by crashes, followed by nearly a decade of stagnation. But because it is the only period I have known (and because I suspect we all think "our periods" are extraordinary), I ran an analysis looking at the compound rate of growth in S&P from late 85 when I started investing through the close of 2011 when I hung up my spurs. Turns out I experienced almost precisely the ordinary return as compared with the period from the great depression through now ( to the second decimal place). So who knows what the future holds, but my past produced exactly what I would have predicted from the past before my past. So maybe we are in a bubble, maybe we are on the early legs of a great bull market, and maybe the past won't predict the future. But I plan to keep plugging away, investing balanced and diversified, until I figure out something better.

[bssc]

[Hnicols]

And JPM will keep taking a skim from us all


Disclaimer: I hold shares in those I besmirch.

[dtbach]

Well this isn't going to be fun if the standard reply is "the market will fluctuate"


I'm just curious if you think the market will end higher or lower by the end of 2013. Is it on a bubble or will it climb the wall of worry?

[Tyro]

Quote:

Originally Posted by dtbach Well this isn't going to be fun if the standard reply is "the market will fluctuate" I'm just curious if you think the market will end higher or lower by the end of 2013.

It can't do either if it doesn't fluctuate.

Quote:

Is it on a bubble or will it climb the wall of worry?

Yes. It could be -- and do -- either, and still be little changed from the current level by the end of the year.

"going to be fun"? What, are you trolling?

[Animorph]

I wouldn't mind if it would go up and down a little bit more than it has. It has been a little bit off my rebalance triggers on a few funds. I'm thinking budget cuts will hurt the market this year eventually. I don't see much reason to expect a rising market without some kind of budget miracle.

[Lakewood90712]

Quote:

Originally Posted by dtbach Well this isn't going to be fun if the standard reply is "the market will fluctuate" I'm just curious if you think the market will end higher or lower by the end of 2013. Is it on a bubble or will it climb the wall of worry?

Th part in red seems to be your real question . I would also say Yes. If any of us knew , we would be on our way to billonaire status, or at least pitching a market news letter .

[enjoyinglife102]

As always, anybody's guess. Longer term, I'm a fan of Jeremy Grantham's quantitative work at GMO. I'm baffled how historically high corporate profit margins don't receive more attention, something Grantham prominently considers in his analysis. Factoring in reversion to the mean for them and current PE's are extremely high. We'll see, but I've heard "this time is different" before if that is the prevailing attitude towards the very high profit margins.

[donheff]

Quote:

Originally Posted by dtbach How do you feel about where the market is at? half-full or half-empty??

I think it is somewhere in between those two.

[Hnicols]

Quote:

Originally Posted by enjoyinglife102 We'll see, but I've heard "this time is different" before if that is the prevailing attitude towards the very high profit margins.

What this time isn't different? I thought it was a sea change, a new paradigm, a fundamental shift to the new normal. Why I haven't seen so marked a change in market fundamentals since Enron ushered in the new energy markets, or was it World Com bringing us new telecom. Well it was one of them anyway.

The fact is that we are all programmed to look for patterns (I like stripes), whether they are there to be found or not. But if we are just guessing, I would guess the market is moving up because I am starting to hear folks on the sidelines worried about missing "it". And then, once the sidelines seize the field, down it will come. In hiking we call them PUDs (pointless up and downs). So I just enjoy the trail.

[audreyh1]

The market will be in a bubble this year, or if not this year, then it'll be next year, or maybe the year after that. Then again..... Wait, which market are we talking about? - the stock market or the bond market?

[Alan]

Quote:

Originally Posted by audreyh1 The market will be in a bubble this year, or if not this year, then it'll be next year, or maybe the year after that. Then again..... Wait, which market are we talking about? - the stock market or the bond market?

I thought we talking about the bubble market.

[W2R]

Quote:

Originally Posted by audreyh1 The market will be in a bubble this year, or if not this year, then it'll be next year, or maybe the year after that. Then again..... Wait, which market are we talking about? - the stock market or the bond market?

Quote:

Originally Posted by Alan I thought we talking about the bubble market.

Bubbles are cheap! Buy, buy, buy....