Stocks looking a lot like April

[brewer12345]

In other news:

U.S. Households Poised to Increase Stock Holdings: Chart of the Day - Bloomberg

 

[rescueme]

I will, therefore, forgo all the excitement and just start getting out now.

One of the problems with RE at an early age; you have a bunch more years to worry about ...

As for me? I remember the S&P 500 at 1530 (hey - we're a long ways from that). I don't get too excited about these perceived "highs"...

 

[dex]

In other news:

U.S. Households Poised to Increase Stock Holdings: Chart of the Day - Bloomberg

Yes, that is another concern. High bullish sentiment is a contrary indicator.

MarketGauge by DataView, LLC

 

[Gone4Good]

Yes, that is another concern. High bullish sentiment is a contrary indicator.

MarketGauge by DataView, LLC

Wow, look at the performance of that indicator.

It was bearish from mid-2003 to early-2004 as the SPX ran up. It bounced between bearish and neutral from 2004 to 2006 as the market continued its advance. It moved pretty solidly into neutral territory and toward bullish from 2006 to 2008 as the bubble was in its last years of inflation. It actually ticked into bullish territory in early 2008 right before the bottom fell out. It never moved into bearish territory all through the crash, but did give a handful of too-early bullish indicators. It moved briefly into bullish territory at the bottom of the market, but has been in the neutral area for the duration of the last 80% market advance.

As far as contra-indicators go . . .

 

[haha]

But cost of capital isn't fixed.

And if you have evidence that economic profits for the entire market are currently positive I'd like to see it.

naw, just deal me out of the discussion.

 

[tuixiu]

Dex, I thought you went to all cash. Why are you fretting over bolinger bands?

I can never remember and am too lazy to go back and look, is Dex the one from that thread where dumped equities to cash in late August at DOW < 10k?

 

[Gone4Good]

I can never remember and am too lazy to go back and look, is Dex the one from that thread where dumped equities to cash in late August at DOW < 10k?

Yup. And the reason given was something about 50 day moving averages crossing 200 day moving averages which, as it turned out, perfectly nailed the bottom of the correction.

 

[Midpack]

Dex, I thought you went to all cash. Why are you fretting over bolinger bands?

That was my first thought too. I'm holding...but best of luck to all.

 

[73ss454]

I can never remember and am too lazy to go back and look, is Dex the one from that thread where dumped equities to cash in late August at DOW < 10k?

The one and only!

 

[BTravlin]

I've never been a market timer but it's an urge that I've fought for years. My gut tells me to get out of the market soon or, at the very least, shift from 60/40 to 40/60. In looking at the relative near future and seeing continued high unemployment, serious debt problems at all levels of government, reduced government spending, reduced government employment, higher taxes, still floundering housing market, etc, I'm not seeing the impetus to keep moving this market higher. I held through this most recent unpleasantness so I guess I can hang in there again but something tells me we won't bounce back nearly as well or as quickly this time. The fundamentals just seem really poor for the next 5 years or so and I plan to FIRE in 7. What to do, what to do?

 

[dex]

IThe fundamentals just seem really poor for the next 5 years or so and I plan to FIRE in 7. What to do, what to do?

You've must of read this.

China Will Face Crisis Within 5 Years, 45% of Investors Say - Bloomberg

Global investors are bracing for the end of China’s relentless economic growth, with 45 percent saying they expect a financial crisis there within five years.
An additional 40 percent anticipate a Chinese crisis after 2016, according to a quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts. Only 7 percent are confident China will indefinitely escape turmoil.

 

[brewer12345]

You've must of read this.

China Will Face Crisis Within 5 Years, 45% of Investors Say - Bloomberg

Global investors are bracing for the end of China’s relentless economic growth, with 45 percent saying they expect a financial crisis there within five years.
An additional 40 percent anticipate a Chinese crisis after 2016, according to a quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts. Only 7 percent are confident China will indefinitely escape turmoil.

2016? Over the long run, the survival rate is zero. So what? These guys cannot predict next week with any degree of confidence.

 

[BTravlin]

You've must of read this.

China Will Face Crisis Within 5 Years, 45% of Investors Say - Bloomberg

Global investors are bracing for the end of China’s relentless economic growth, with 45 percent saying they expect a financial crisis there within five years.
An additional 40 percent anticipate a Chinese crisis after 2016, according to a quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts. Only 7 percent are confident China will indefinitely escape turmoil.

Years ago I thought China was a train wreck in the making but have changed my opinions recently. I used to think there was no way the Communist Chinese would be able to run a pseudo capitalistic economy without running the train off the rails but they are smart and have done a pretty damn good job so far. Sure, they've had some problems and they're going to have some more serious problems going forward but, all in all, they've continued to surprise me. If they do screw up now that would certainly not be helpful to us or the global economy.

 

[Gone4Good]

but they are smart and have done a pretty damn good job so far.

Smart people, but not immune to the typical pressures of politically powerful vested interests. Case in point . . .

China has an inflation problem. But in the face of an inflation threat, the central bank is expanding the monetary base. Why? Because the nation's large exporters don't want the currency to appreciate. So China is printing Yuan, and buying dollars to maintain a stable exchange rate. To try to offset the inflationary impacts of loose monetary policy on an accelerating economy, China is resorting, unsuccessfully, to credit and price controls. Which is what the U.S. tried, unsuccessfully, in the 1970's. What's the likelihood that China's experience will be different from ours?

My guess is that one of two things happen in the next decade. An exogenous shock knocks the economy back and, thereby, tames the inflation problem. Or inflation becomes bad enough that a Chinese Paul Volker steps forward and takes away the punch bowl.

 

[73ss454]

Dex, if you keep crying "WOLF" eventually a wolf will show up.

 

[BTravlin]

Smart people, but not immune to the typical pressures of politically powerful vested interests. Case in point . . .

China has an inflation problem. But in the face of an inflation threat, the central bank is expanding the monetary base. Why? Because the nation's large exporters don't want the currency to appreciate. So China is printing Yuan, and buying dollars to maintain a stable exchange rate. To try to offset the inflationary impacts of loose monetary policy on an accelerating economy, China is resorting, unsuccessfully, to credit and price controls. Which is what the U.S. tried, unsuccessfully, in the 1970's. What's the likelihood that China's experience will be different from ours?

My guess is that one of two things happen in the next decade. An exogenous shock knocks the economy back and, thereby, tames the inflation problem. Or inflation becomes bad enough that a Chinese Paul Volker steps forward and takes away the punch bowl.

I deal with imported Chinese wood products and have watched this play out for years. Production costs keep rising and currency exchange rates changing but our prices are actually lower than they were six years ago. If prices rise too high such that their exports fall off then the government steps in and gives the manufacturers rebates on their corporate taxes dues. In early 2008 there were no rebates and then they went as high as 8% late 2009 and are now back down to 4%. They are definitely juggling a lot of balls so I hoped they've learned well.

 

[ziggy29]

Still between 55/45 and 60/40 with my AA and plan to stay there.

 

[Dawg52]

Dex, if you keep crying "WOLF" eventually a wolf will show up.

 

[dex]

Years ago I thought China was a train wreck in the making but have changed my opinions recently. I used to think there was no way the Communist Chinese would be able to run a pseudo capitalistic economy without running the train off the rails but they are smart and have done a pretty damn good job so far. Sure, they've had some problems and they're going to have some more serious problems going forward but, all in all, they've continued to surprise me. If they do screw up now that would certainly not be helpful to us or the global economy.

I worked in HK and had dealings on the mainland. It is an interesting story. They've done the heavy lifting so far. Now the challenges begin. They provided work and raised many out of poverty but can they keep that going? Their success in creating a middle class will put pressures on the government to get rid of corruption - a very big problem. Read the recent articles about Singapore and how they have dealt with it. Also, cracks in the idea of central planning are showing - caused by their economic slowdown.

Ghost towns of China: Satellite images show cities lying completely deserted | Mail Online

It should be an interesting story to watch unfold.

 

[harley]

Dex, if you keep crying "WOLF" eventually a wolf will show up.

At which point he will become a CNN talking head and milk the situation for at least 4-5 years based on having made the correct call.

 

[73ss454]

At which point he will become a CNN talking head and milk the situation for at least 4-5 years based on having made the correct call.

Heh, he's been real quiet about his last call.

 

[ziggy29]

Heh, he's been real quiet about his last call.

I recall that some of the folks arguing the case for impending doom and going "all cash" were pretty quiet through 2007 and perhaps even into early 2008 as well, but were quick to return with a heaping dose of "I told you so" after Lehman imploded...

 

[BTravlin]

I worked in HK and had dealings on the mainland. It is an interesting story. They've done the heavy lifting so far. Now the challenges begin. They provided work and raised many out of poverty but can they keep that going? Their success in creating a middle class will put pressures on the government to get rid of corruption - a very big problem. Read the recent articles about Singapore and how they have dealt with it. Also, cracks in the idea of central planning are showing - caused by their economic slowdown.

Ghost towns of China: Satellite images show cities lying completely deserted | Mail Online

It should be an interesting story to watch unfold.

Very interesting, I didn't know about all those ghost cities. In a true free market all that excess property would help bring their real estate prices more in line with reality. Of course it looks like the central planners put all this development in less than desirable areas and thereby negated that effect.

 

[Gone4Good]

I recall that some of the folks arguing the case for impending doom and going "all cash" were pretty quiet through 2007 and perhaps even into early 2008 as well, but were quick to return with a heaping dose of "I told you so" after Lehman imploded...

And most of them kept saying things would keep getting worse for an entire year after we passed the bottom. Not surprisingly, they've once again disappeared.

That's not the track record of someone who's thoughtful prediction has proven correct, that is the track record of a broken clock.

 

[73ss454]

I recall that some of the folks arguing the case for impending doom and going "all cash" were pretty quiet through 2007 and perhaps even into early 2008 as well, but were quick to return with a heaping dose of "I told you so" after Lehman imploded...

Everything would be nice and quiet if the Bollinger bands routine wasn't constantly being posted. What's the old saying "don't wish for something, you may get it"