Dow 8000?

[Gardnr]

If you would have told me a year ago we'd be at 9,500 today, I'd have said you're full of it. Just goes to show I can't predict the market. My only saving grace is that I already knew I couldn't...and I've never claimed that I could.

Now that the market is down, I'd just as soon see it stay there for 6 months so the 18% I have taken out of my paycheck along with our $8,000 IRA contributions we'll make in about a month buy us more equities at sale prices.

Dave

Yeah, I know the feeling. For that matter, reinvesting dividends at fire sale prices would help long term as well.

Even given the thoughtful, analytical side that yields that conclusion, it's hard to get over the gut wrenching that this downturn creates.

It's definitely more fun looking at an upward sloping trend, ain't it!?

 

[Razor]

You tell us. You have the crystal ball. While your at it, where does it go from there?

To 6000.
Anyone paying attention could have seen this coming a year ago. They built and sold 20 years worth of homes in 10 years. Outsourcing, moving manufacturing overseas and downsizing became the norm and borrowing as much as the banks and credit cards would lend you seemed to be the American thing to do. All the bubbles had burst and there were no more bubbles left in the toolshed. Greed kept the markets rising as we gradually lost the economic fundementals that built this country.
A capitalist country can not exist on credit alone.
All the kool-aid drinking, tin foil hat wearing doom and gloomers were dead on.

 

[al_bundy]

500 - 1000 if you believe the Elliott Wave cult

 

[Zathras]

To 6000.
Anyone paying attention could have seen this coming a year ago. They built and sold 20 years worth of homes in 10 years.

Well existing home sales up 9% would seem to argue that the fall won't be all the way to 6000. And heck, we have yet to hit 8000, although that seems a lot more likely that it did 6 months ago.
I'll predict we will hit 12000 with absolute certainty. I am sure that prediction is just as valid as yours

 

[Hamlet]

I love these predictions. Like anyone knows.

I'm going to make my prediction.

This morning's open was the low. We are heading up from here, baby!

 

[Razor]

Well existing home sales up 9% would seem to argue that the fall won't be all the way to 6000. And heck, we have yet to hit 8000, although that seems a lot more likely that it did 6 months ago.
I'll predict we will hit 12000 with absolute certainty. I am sure that prediction is just as valid as yours

12,000 when?

 

[Zathras]

Well if I had to say when I couldn't be as certain, could I?

 

[cyclone6]

Its always interesting when these threads come back to life - and we get a chance to see what everybody was predicting. There were so many warning signs this was coming - and an increasing number of managers/academics sounding the alarms:

Hussman Funds - Weekly Market Comment: July 16, 2007 - A Who's Who of Awful Times to Invest

Yes, he did lose 9% last year. But hell, corporate bonds got pounded as well. And it wasn't, as Hussman calls a 40+% drop - an unacceptable loss.

And so far he's up 3% this year.

But the real question is why do those who post thoughts that the market is overvalued, and bound for a fall - especially when the market is hitting high after high when the housing market is obviously imploding (as in late 2007) - get shouted down here? Only bandwagon jumpers get to ride?

There is no such thing as a bad profit. Take some money off the table now and again - wrack up some capital gains when the market is kind. And the whole concept that valuations don't matter (they are the ONLY thing that matters) has finally been put to bed.

I wonder how many bubbles people are going to have to live (and suffer) through before they realize that selling when they have attained a nice profit is not such a bad idea...

And to keep an eye on whether a DOW 14200 makes any rational sense with a collapsing real estate market.

 

[Zathras]

But the real question is why do those who post thoughts that the market is overvalued, and bound for a fall - especially when the market is hitting high after high when the housing market is obviously imploding (as in late 2007) - get shouted down here? Only bandwagon jumpers get to ride?

I looked over the first few pages of the thread again. I don't believe anyone was 'shouted down' although there were some humor and poking fun of doom predictions.
I think part of it was few people cared.
I know I didn't. As others have mentioned, it actually works well for those with assets to invest.
Razor himself said he was going to buy back in at 8000.

 

[cyclone6]

I looked over the first few pages of the thread again. I don't believe anyone was 'shouted down' although there were some humor and poking fun of doom predictions.
I think part of it was few people cared.
I know I didn't. As others have mentioned, it actually works well for those with assets to invest.
Razor himself said he was going to buy back in at 8000.

It wasn't necessarily in this thread that the shout downs occurred. But it became such commonplace to my posting concerns over market valuations that I eventually cut way back on posting.

All I can say is that I'm damn grateful that I heeded the advice of a few of the non-CNBC pumpers who warned of what was possibly to come, avoided all of the "blue light specials", and stocked up on tin foil.

That tin foil hat has served me well to this point.

 

[haha]

It wasn't necessarily in this thread that the shout downs occurred. But it became such commonplace to my posting concerns over market valuations that I eventually cut way back on posting.

All I can say is that I'm damn grateful that I heeded the advice of a few of the non-CNBC pumpers who warned of what was possibly to come, avoided all of the "blue light specials", and stocked up on tin foil.

That tin foil hat has served me well to this point.

Any clichés that you forgot to employ?

Ha

 

[Razor]

I looked over the first few pages of the thread again. I don't believe anyone was 'shouted down' although there were some humor and poking fun of doom predictions.
I think part of it was few people cared.
I know I didn't. As others have mentioned, it actually works well for those with assets to invest.
Razor himself said he was going to buy back in at 8000.

The thing is they were not predictions of doom. There were predictions based on reality and not irrational exuberance. I was flamed over and over by those that should know a lot more than I do. I guess they aren't as smart as they thought they were. I lost nothing. Can they say the same?
I did put 10% back into the market at 8000. I'm not so sure it was such a good move because there is a heck of a lot more bad news coming before things get better. Millions more layoffs, the automaker situation, the threat of inflation now that the government is firing up the printing presses, the meltdown of the commercial real estate sector, more bankruptcies and retail closings, the phony "stimulus", and on and on.
FLAME ON......

 

[HFWR]

The thing is they were not predictions of doom. There were predictions based on reality and not irrational exuberance. I was flamed over and over by those that should know a lot more than I do. I guess they aren't as smart as they thought they were. I lost nothing. Can they say the same?
I did put 10% back into the market at 8000. I'm not so sure it was such a good move because there is a heck of a lot more bad news coming before things get better. Millions more layoffs, the automaker situation, the threat of inflation now that the government is firing up the printing presses, the meltdown of the commercial real estate sector, more bankruptcies and retail closings, the phony "stimulus", and on and on.
FLAME ON......

We're sorry! Really! We come to you with tin-foil hats in hand...

Since there are so many experts, pulling opinions out of their wazoos, I'm sticking with my AA/low-cost index funds. That may be a stupid move, or not.

 

[DblDoc]

It would be interesting to resurrect this thread in about 20 years. Then we will know who was right and who was wrong. Until then .

DD

 

[Zathras]

From the first few pages, 'flame' is a bit strong. Yes, some people poked fun at the idea the world is ending and some said you may be right the Dow will hit 8000 (which obviously happened).
But from what I saw, most were saying 'so what'. Yes, selling everything at 12,000 and jumping back in at the bottom (where ever that is) will save you a bunch of money.
Likewise, there are other good ways to weather the storm depending upon your situation.
As for warnings, again, so what? I can gaurentee you there will be a bull market, and I will gaurentee you there will be more bear markets after the bull market. I suppose it is critical to know when this is happening for someone the is 'all in' CDs, or a particular sector of the market, or 100% allocation in any one thing. But for my allocation, and because I have a 5 year cushion, it really is just a chance to increase my income flow.

 

[Razor]

From the first few pages, 'flame' is a bit strong. Yes, some people poked fun at the idea the world is ending and some said you may be right the Dow will hit 8000 (which obviously happened).
But from what I saw, most were saying 'so what'. Yes, selling everything at 12,000 and jumping back in at the bottom (where ever that is) will save you a bunch of money.
Likewise, there are other good ways to weather the storm depending upon your situation.
As for warnings, again, so what? I can gaurentee you there will be a bull market, and I will gaurentee you there will be more bear markets after the bull market. I suppose it is critical to know when this is happening for someone the is 'all in' CDs, or a particular sector of the market, or 100% allocation in any one thing. But for my allocation, and because I have a 5 year cushion, it really is just a chance to increase my income flow.

I noticed that the same people that said "so what" are now crying about how much money they've lost. I never said the world was ending, just that we were headed for a severe recession or maybe even a depression.
The collapse of the housing sector pretty much guarenteed it.
At this point I don't see how you can guarentee a bull market ever again, unless of course the stimulus package works a miracle.

 

[Zathras]

We will have a bull market again regardless of how well the stimulus package works. It may be in a year, it may be in 50, but it will happen.
No one LIKES seeing their portfolio go down in value. But that doesn't mean that fundamentally, market fluctuations make little difference to them for their long term goals.

 

[Razor]

We will have a bull market again regardless of how well the stimulus package works. It may be in a year, it may be in 50, but it will happen.
No one LIKES seeing their portfolio go down in value. But that doesn't mean that fundamentally, market fluctuations make little difference to them for their long term goals.

If it ever does happen, I am leaning more towards the 50 year mark.
This is more than a market fluctuation. We have lost the very economic fundementals that built this country.

 

[ziggy29]

If it ever does happen, I am leaning more towards the 50 year mark.
This is more than a market fluctuation. We have lost the very economic fundementals that built this country.

Would it make you feel better to just reserve the right to keep pouring salt into the wounds for the next 50 years?

 

[Razor]

Would it make you feel better to just reserve the right to keep pouring salt into the wounds for the next 50 years?

Nope. I am done here.

 

[Zathras]

If it ever does happen, I am leaning more towards the 50 year mark.
This is more than a market fluctuation. We have lost the very economic fundementals that built this country.

That sounds awfully doomish to me. And that is why people make fun of the position.

 

[haha]

Nope. I am done here.

Cool.

ha

 

[cyclone6]

That sounds awfully doomish to me. And that is why people make fun of the position.

Therein lies the problem. We were "made fun of" when the DOW was at 14200. And 12000. And 10000. And 8000.

Markets go up - and down. But if you post that you think its going down, you get flamed. Call it what you will, but if you're not following the herd (lemmings?) and post a counter point of view, you get flamed.

I never understood why discussion of where the market stands should prompt such responses.

As for the cliches - they're not mine, they were the ones I always received when posting the market could be due for a big correction. "Blue light special". "Tin foil hat". Not my words...I've never resorted to cliches to stake a position.

Once you've joined the herd mentality, its easy to throw out cliches in an attempt to ridicule someone who says..."wait a minute". Not that the cliche does anything to forward a rational rebuttal, but it does make many feel superior in their conviction that they are obviously correct.

Hussman, for his part, is now of the thought that if you buy-and-hold at this point that a nice long-term (10+ years) 10% return is in the offing. I hope he's right (again).

But instead of throwing cliches - and ridiculing - when the market was at the height of irrational exuberance - wouldn't you rather be starting at 7300 instead of 14200? Seems better to me to be looking at
potential upside profit at this stage instead of hoping to make back significant *real* losses.

 

[haha]

wouldn't you rather be starting at 7300 instead of 14200? Seems better to me to be looking at
potential upside profit at this stage instead of hoping to make back significant *real* losses.

There is no doubt that this is correct. And from here, it may seem that it was inevitable. But I don't think it was. Mistakes were made, policy makers got bad breaks, and it went pretty badly.

I never like to sell out completely, because I pay CG taxes, and the market may or may not go down. I'm meaningfully down over the past 18 months, and I wish I were not. However, I am not down from 2000, or 2003, and I live off my portfolio, and have done so for many years.

You are free to try to find me ridiculing anyone who predicted a bear market; I don't think you will. I have always understood that pretty much anything can happen.

But you guys are playing a safe game now. The market is down, as you may have predicted. Predict what happens next. The guy who is leaving seems to predict no recovery. I think that scenario is long shot, but I try not to make predictions as it is very easy to be wrong, and you get nothing for being right.

My opinion is like someone stated above-be careful about your bragging boys 'cause this game isn't over yet.

Ha