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Happy thoughts?
Old 08-14-2014, 10:57 AM   #1
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Happy thoughts?

This is from one of the Wall Street Journal columns today:



Who knows, could be a way to go in this market.
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Old 08-14-2014, 12:00 PM   #2
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I read an article today that essentially posed the same question - are we in a secular bull market? If so, there could be years of steady gains ahead.

Of course, there's no way to know until you're looking at it in the rear view mirror.
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Old 08-14-2014, 01:00 PM   #3
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I have my own personal reasoning why things will be rosey for a while.

1. Lots of pent up demand for goods (ie cars, houses, stuff) since the 2008 crash
2. Wages seem to easily afford current prices
3. I'm seeing significant growth and building in industry in the NW
4. Personally do not feel gloomy about economy right now

There ya have it. Daydreamer's reasoning as to why the market will be healthy for a while! I'm all in.
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Old 08-14-2014, 01:45 PM   #4
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I'm actually curious about that 1949-61 period. I wasn't under the impression that it was so rosy, with nothing but up and up. 1952 was not a good year, and neither was 1954. There was a recession in 1958, and 1959 wasn't such a hot year either, although an improvement over 1958.

And, I thought the 1960's were pretty much nothing but up, at least through 1965-66, and then we went into that flat ~'66-82 period?

I remember seeing some other chart the other day, that showed this current bull market compared to some historical ones. It mentioned a market from 1975-1987. Which surprises me, because the second fuel crisis hit in 1979, and it didn't take long to go into recession. 1980 wasn't such a hot year, '81-82 were downright miserable, and things didn't start improving until '83.

One thing i'll comment on though, is that since I'm into antique cars and such, my views might be swayed by what was going on with the auto industry at the time. 1950, for example, was a great year. In fact, it might have been a record for US auto production. 1951-52 cooled off, because of the Korean War, but demand bounced back big time for '53. But then '54 was another big pullback. 1955 was another record year for sales. 1956 was slightly lower, but a good year. 1957 was a cooling off year, although Chrysler Corp pulled ahead and gained some market. 1958 saw the market shrink from something like 6M units to 4.2M 1959 saw sales of about 5.5M. 1960 was another improvement, I forget how much, but much of the production by then was thanks to a newfangled concept called the compact car, so I'd imagine the average transaction price of a 1960 car was cheaper than a 1959, because of that mix. After that, car sales went nowhere but up, with 1965 being yet another record, but by 1966, I think things leveled off, although it was still a very high plateau.

As for that recession in the late 1970's? Well, Chrysler had to be bailed out. Ford almost went under as well. The only reason GM made money in 1983 was because of GMAC financing.
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Old 08-14-2014, 02:44 PM   #5
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If you look at a the charts from a distance, we have been in a bull market since the 1800s...
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Old 08-14-2014, 02:48 PM   #6
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Quote:
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If you look at a the charts from a distance, we have been in a bull market since the 1800s...
True...pull out far enough, and you can almost pick any data point you want to fit your story!
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Old 08-14-2014, 03:05 PM   #7
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Well I smell a bull! Oh it's the market pundits, that's where the smell is coming from.
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Old 08-14-2014, 03:10 PM   #8
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Here is a related article about secular bull market.
http://m.seekingalpha.com/article/2413235?source=ansh
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Old 08-14-2014, 03:40 PM   #9
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We have been lucky for the last 5 years. I hope the luck (and bull run) continues for another 5. But based on past experience, a major global event can trigger a bear market and we won't have a clue until it happens. E.g, vast majority of experts did not see 2008 recession (and depth of market decline) coming. Knock on wood.
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Old 08-14-2014, 03:43 PM   #10
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Here is a chart with the SP500 inflation adjusted + dividends. Yes there was a recession in 1957 as Andre mentions above but the market did not sell off badly like in the 2000's. I do not know what the WSJ source used as a bear market definition.




I just thought the WSJ data was informative because we are all so conditioned by the miserable 2000's. I'm always nervous about declines so no rose colored glasses for me. Still it's nice to be an optimist, I think they live longer ... don't they?
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Old 08-14-2014, 04:05 PM   #11
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Isn't this (complete inability to predict the future) the reason for having an asset allocation and sticking to it?

Amethyst

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Wbased on past experience, a major global event can trigger a bear market and we won't have a clue until it happens. .
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Old 08-14-2014, 04:14 PM   #12
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Isn't this (complete inability to predict the future) the reason for having an asset allocation and sticking to it?

Amethyst
In general I think this is a good plan.

For me personally, I believe there are times when one can reduce equities but those periods are rare. Specifically when Treasury yield curves flatten (or invert) + weak stocks + maybe high valuations. It's not so much being predictive as being cautious.
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Old 08-14-2014, 04:21 PM   #13
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Originally Posted by Amethyst View Post
Isn't this (complete inability to predict the future) the reason for having an asset allocation and sticking to it?

Amethyst
Agreed. Thrown in diversification into AA just to complete the picture.
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Old 08-14-2014, 05:32 PM   #14
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I keep reading about secular bull makets.


What are religious bull markets?

Or are they just bull?
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Old 08-14-2014, 08:59 PM   #15
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I keep reading about secular bull makets.


What are religious bull markets?

Or are they just bull?

Second the motion. Someone explain the unnecessary jargon


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Old 08-14-2014, 09:31 PM   #16
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Second the motion. Someone explain the unnecessary jargon
Statistics win over jargon. Unfortunately it's hard to describe lots of little wiggles over a particular period of time. End points matter though.

On the other hand, you have to buy and you have to sell some day. Particularly as you age the time periods become more important assuming you want to spend some of that stash. Even buy-holders have to deal with this one.
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Old 08-14-2014, 11:01 PM   #17
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Well written article that describes secular. Also pretty clear why some wait for a third leg down before the secular bull begins.
http://www.advisorperspectives.com/d...ar-Markets.php
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Old 08-14-2014, 11:17 PM   #18
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Wasn't there a big bull market from Black Monday '87 to like 2000 around the dot com bubble burst?
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Old 08-15-2014, 01:58 AM   #19
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In general the stock market looks like a random walk and is self similar at any time scale. Some time periods are of importance to the day trader, some to the longer term trader, and some to long term buy and holders. We have only a finite working life in which to invest. A secular bull or bear is simply that it is the time span long enough to affect the life of someone holding the market during their investing years. There is only a "secular" market insomuch as that scale has importance to our lifespan. It is no more real or real than any other squiggle on the line, just our perception that is different.
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Old 08-15-2014, 06:27 AM   #20
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Here is a related article about secular bull market.
Is A Long-Term Secular Bull Market In Stocks Possible? | Seeking Alpha
Read the story. I am not a trader. It looks to me like some invention of the mind looking in hindsight for some explanation of some pattern.

Brings to mind the book Popular Delusions and Madness of Crowds. And the one The Wall Street Gang.

But if it makes money for some, I am sure it is a great system.
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