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Old 05-11-2018, 04:45 PM   #21
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I think it was 2017.....
I think LOL! is referring to the approximately 10% pullback in early 2016. I'd like to think LOL! is correct and we are in the second year of the current bull, not the 9th.

I appreciate all the thoughts.
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Old 05-11-2018, 05:09 PM   #22
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As a geologist, I don't believe in regular cycles. Uniformitarianism means that the present is the key to the past; all I can say with certainty is that civilizations rise and fall, and so do the markets. To me, there are too many variables for anyone, or any computer to predict with any certainty; especially, when fear and greed, rather than economics, steer the markets. When a single news headline can affect an entire industry's equities, rather than a single company's, or even the entire market, we have disconnected a share's value from any real metric.
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Old 05-11-2018, 05:35 PM   #23
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I watch the Financial News at the Health Club in the morning. There are these 3 guys that dress up in Suits and Ties and talk about the Stock Market like they know something. One of them is Cramer that is always Screaming. They talk like they are commenting on the Kentucky Derby... In the Grand Scheme of things Cramer doesn't beat the S&P 500 Index.....


I watch for amusement only.... I am invested in the Vanguard Target Retirement Index Fund. (No plans of Doing anything different).
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Old 05-11-2018, 05:46 PM   #24
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As a geologist, I don't believe in regular cycles. Uniformitarianism means that the present is the key to the past; all I can say with certainty is that civilizations rise and fall, and so do the markets. To me, there are too many variables for anyone, or any computer to predict with any certainty; especially, when fear and greed, rather than economics, steer the markets. When a single news headline can affect an entire industry's equities, rather than a single company's, or even the entire market, we have disconnected a share's value from any real metric.
"The only function of economic forecasting is to make astrology look respectable." -- John Kenneth Galbraith
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Old 05-11-2018, 05:54 PM   #25
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Currently, on the long term horizon, we are sitting about 19.6% higher than the market 'ought' to be (for what it's worth, it's normal to be above or below it by even 30%, point is we straddle this line on the long .
Not sure how you know what the market "ought" to be. The whole tax reform think kinda changes the bar that one measures against.
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Old 05-11-2018, 06:20 PM   #26
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Not sure how you know what the market "ought" to be. The whole tax reform think kinda changes the bar that one measures against.

The Bull market has been going for over 9 years now. I don't think the current tax bill has had a negative impact that the S&P index shows over the last few months.... I think the damage will be done more long term.
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Old 05-11-2018, 06:45 PM   #27
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Yawn. I'll check back in a couple of months
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Old 05-11-2018, 07:00 PM   #28
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The Bull market has been going for over 9 years now. I don't think the current tax bill has had a negative impact that the S&P index shows over the last few months.... I think the damage will be done more long term.
Didn't insinuate that tax bill had any impact on the S&P currently, instead that it will change how one "values" the market when compared to historical rates, levels and such.
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Old 05-14-2018, 08:09 AM   #29
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The whole tax reform think kinda changes the bar that one measures against.
This falls into the category of changes that feel big right now, but in reality will not do much to change the tides in the long run. Like QE... Like Housing... Like Tech... etc... Plenty of tax reform and major changes have happened in the last 150 years that haven't done much to budge that math. That is, with a decade long view tax reform seems significant and we see a short term kick from the market, but it'll regress to where it should be over time and 40 years from now you won't see it had much, if any, impact on the long term movement of the market.

This thinking, that something today is going to make huge changes tomorrow, it's a very human thing we do (evolved to add significance to short term things - like a lion jumping out of a bush, *phew* it grabbed someone else and not me), with market performance, to extrapolate current trends (I'll call it short term changes) into longer term impacts on the market (not sleeping for a few days worried a lion will jump out again). That is, we are wired to believe short term things will impact our long term safety - this has served us well as a species, but can really cause havoc with investing. Often the term people use is "this time it's different because...". Reality is, that in the long run, it just follows this linear growth when you zoom out far enough. To hammer that point home, for the last 146 years, every 40 year rolling period (there are 107 of them) has fallen between 6.9% and 7.4% - real rate of return (inflation adjusted).

The analogy of the ocean is a good one here. Putting up levies and walls will do nothing to change the ocean from doing what it eventually wants to do. I'm no expert though, I just enjoy making sense of this stuff -- and from all the books I've read, and in the time I've spent analyzing long term trends in the market, the more value I see in this. I will caveat this with... the older I get, the less significant 40 year tends become, to me.
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Old 05-14-2018, 08:27 AM   #30
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... 40 years from now you won't see it haven't had much, if any, impact on the long term movement of the market. ...
Yes. The behavioral psychologists call this the "recency effect." Humans tend to overemphasize recent events when we evaluate a situation.

The ocean is a good metaphor, too. Indeed it will do what it wants, but it is also an exercise in futility to predict the patterns of the waves.

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Old 05-14-2018, 07:02 PM   #31
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When I stop hearing people excited about the stock market, looking for justification to get in (like was that quick dip enough to count as a bear?), etc. THEN Iíll start putting more in. Itís when people are so tired or have been so burned by an asset class that I think there are often bargains to be found. Iíve been a net seller for a couple years and am not in a rush to jump more in.
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Old 05-15-2018, 04:35 AM   #32
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A bear is when the market drops by 20% or more (a "correction" is 10% or more). By those definitions, we had a correction, but the bull runs on.
+1. That is the semantics of it, but either way it does not really matter. Technically, the bull has not continued until the market makes a new high, and even then you can have a 'false breakout', where a new high is made briefly and then fails.
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Old 05-23-2018, 06:32 AM   #33
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Originally Posted by EvrClrx311 View Post
Currently, on the long term horizon, we are sitting about 19.6% higher than the market 'ought' to be.
May I ask how you got to this figure? Looking at Shiller's PE10, I would think it's closer to 100%...

http://www.multpl.com/shiller-pe
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Old 05-23-2018, 08:20 AM   #34
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The US Leading Index is now at 1.51. Seems to show we are not anywhere near an oncoming recession. So yes, we could still get a stock market decline but not likely to have a decline that continues into a recession (grey bars on below Fed chart).

My opinion is that the coast is clear.

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Old 05-24-2018, 07:00 PM   #35
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I think LOL! is referring to the approximately 10% pullback in early 2016. I'd like to think LOL! is correct and we are in the second year of the current bull, not the 9th.

I appreciate all the thoughts.
I like to think he is right too, and I look for stories to confirm my bias.
https://www.theonion.com/new-financial-report-finds-economy-invincible-forever-t-1826221432?utm_source=Facebook&utm_medium=SocialMa rketing&utm_content=Main&utm_campaign=SF
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Old 05-24-2018, 07:51 PM   #36
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The Onion? Seriously?
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