Threads in Early Retirement Forums as a Contrary Indicator?

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copyright1997reloaded

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I was thinking (which is a dangerous thing) that maybe the tone in the titles of threads here might be a reasonable contrary indicator. Looking at last July, just before the first peak (I know we had a late year rebound), there are titles like:
WIsconsin estate tax rate?
Need Some Feedback -- About FIRE (Maybe Sooner)
bonds vs money market question
and in today's ... The rich get richer
Redfin real estate- ready to kick the agents out?
Look at Giuliani's mutual fund picks
Roth IRA's: Avoiding withdrawl penalties
Happiness & FIRE
Your First Million is the Toughest" How long did it take you?
(and my favorite) Let's brag about mid-year performance!

Now we see:
Is It Panic If My Broker Tells Me to Get Out? (
FDIC Closes IndyMac Bank
The Lifting of the Veil
OK, I'll say it
Poll: How Low Dow?
Poll: Practicality vs. Dreaming
Saftey of CD's vs. treasury bonds?
Bear market background
Tomorrows market?
yikes June not a good month with Fidelity
(and my new favorite) Wrong decade or what??

Has anyone done any studies that analyze Early Retirement titles (maybe weighted by # of appends) with market tops (and hopefully bottoms?) :cool:
 
copyright1997reloaded said:
I was thinking (which is a dangerous thing) that maybe the tone in the titles of threads here might be a reasonable contrary indicator. Looking at last July, just before the first peak (I know we had a late year rebound), there are titles like:
WIsconsin estate tax rate?
Need Some Feedback -- About FIRE (Maybe Sooner)
bonds vs money market question
and in today's ... The rich get richer
Redfin real estate- ready to kick the agents out?
Look at Giuliani's mutual fund picks
Roth IRA's: Avoiding withdrawl penalties
Happiness & FIRE
Your First Million is the Toughest" How long did it take you?
(and my favorite) Let's brag about mid-year performance!

Now we see:
Is It Panic If My Broker Tells Me to Get Out? (
FDIC Closes IndyMac Bank
The Lifting of the Veil
OK, I'll say it
Poll: How Low Dow?
Poll: Practicality vs. Dreaming
Saftey of CD's vs. treasury bonds?
Bear market background
Tomorrows market?
yikes June not a good month with Fidelity
(and my new favorite) Wrong decade or what??

Has anyone done any studies that analyze Early Retirement titles (maybe weighted by # of appends) with market tops (and hopefully bottoms?) :cool:
Click to expand...

I sure hope the posts are a contrary indicator. It is amazing to me how quickly the environment has gone from greed to fear--not just on this forum, but practically everywhere.
 
newporttony said:
I sure hope the posts are a contrary indicator. It is amazing to me how quickly the environment has gone from greed to fear--not just on this forum, but practically everywhere.
Click to expand...

From greed to crapping their pants and sucking thumbs? Not here I mean other places..
 
Nice post -- there is a clear and valuable pattern there.

I'm just glad we don't have a lot of posters still extolling the wisdom of 100% equity portfolios for ER. I viewed those as signs of market top, for sure.

There's still plenty of pain to go around. As one of my wiser and better-connected wall st friends (reports to a CEO you've all heard of) said tonight, 'don't worry about timing the market bottom -- there'll be plenty of chances for getting in on the bottom in the months ahead'. He went on to say that there were 4 or 5 'buying opportunities' over the past months during which a lot of the smart money people with cash stepped in and bought, but that they've all been money-losing decisions, and that now it's a bit like catching a falling knife. So stay cool, make sure the AA is in order and then go have a great summer doing something besides worrying about the market. (my advice to myself, who starts to get edgy when stocks have dropped 20%)
 
Maybe. I was shocked the past few years to stop by and see how foolish^H^H^H bullish everybody was on stocks on these boards. I foresaw the credit crunch two years ago, sold my house and stocks and bought bonds. Today I'm up 25%+ from that point, whereas if I had stayed in I would be down 30% or something on my house, and flat to negative in my stocks. Folks laughed at my thinking - oh well.

But I wouldn't take the negativity as a contrary indicator today. The credit problems are quite severe and I doubt we'll magically rebound for some time yet.
 
danm said:
But I wouldn't take the negativity as a contrary indicator today. The credit problems are quite severe and I doubt we'll magically rebound for some time yet.
Click to expand...
Of course, this is really just another way to say "this time it's different," which may well be true, but the long-term track record of that philosophy is pretty terrible.

I've done a little more "doomsday diversification" over the last few months -- mostly defensive positions against deep recession and inflation through decline of the dollar -- but beyond that, the more I hear people say "this one is different," the more I'm inclined to believe it won't be.
 
ziggy29 said:
Of course, this is really just another way to say "this time it's different," which may well be true, but the long-term track record of that philosophy is pretty terrible.

I've done a little more "doomsday diversification" over the last few months -- mostly defensive positions against deep recession and inflation through decline of the dollar -- but beyond that, the more I hear people say "this one is different," the more I'm inclined to believe it won't be.
Click to expand...

generic dryer sheets -cut in quarters and reused at least twice!

'God Looks After Drunkards, Fools And The United States of America.'

And lest we forget:

Psst - Wellesley! Which must be be mis-spelled several ways at least!

Right? :D

heh heh heh - :angel:
 
That's a reasonable position, but the problem is what is meant by 'this time', and 'different'. Using the terms generically is meaningless.

What I mean is that this turn is different - from the last 30 years. Specifically it's much like what happened in the 1930's. I'm not saying we'll have a repeat of the GD, but a credit contraction/reversal of irrational exuberance. In fact I'm saying things aren't different - the credit bubble of the past five years eventually had to come to tears, just like it did after the roaring 20's. Most people (at least until recently) didn't look at financial history earlier than 1970's, and so that was the basis for 'this time it's different'.

Take it for what it's worth. When I talked about this here the past two years I was derided for wearing tin foil, maybe now people finally understand what is going on. Sometimes it takes a hit in your wallet to see reality :bat:

ziggy29 said:
Of course, this is really just another way to say "this time it's different," which may well be true, but the long-term track record of that philosophy is pretty terrible.

I've done a little more "doomsday diversification" over the last few months -- mostly defensive positions against deep recession and inflation through decline of the dollar -- but beyond that, the more I hear people say "this one is different," the more I'm inclined to believe it won't be.
Click to expand...
 
unclemick said:
generic dryer sheets -cut in quarters and reused at least twice!

'God Looks After Drunkards, Fools And The United States of America.'

And lest we forget:

Psst - Wellesley! Which must be be mis-spelled several ways at least!

Right? :D

heh heh heh - :angel:
Click to expand...

Hee hee! Just bought another big chunk of VWIAX Wellesley last night. Love that Wellesley. :D Still just 30% of my portfolio, since it was new windfall money.

I also bought smaller chunks of VTSAX Total Stock Market and VFWIX All-World Ex-US, consistent with my monthly DCA into these funds. Who know? The market could be experiencing a local minimum or bottom.
 
Last edited:
ESRBob said:
Nice post -- there is a clear and valuable pattern there.
Click to expand...

Thanks.

ESRBob said:
There's still plenty of pain to go around. As one of my wiser and better-connected wall st friends (reports to a CEO you've all heard of) said tonight, 'don't worry about timing the market bottom -- there'll be plenty of chances for getting in on the bottom in the months ahead'. He went on to say that there were 4 or 5 'buying opportunities' over the past months during which a lot of the smart money people with cash stepped in and bought, but that they've all been money-losing decisions, and that now it's a bit like catching a falling knife. So stay cool, make sure the AA is in order and then go have a great summer doing something besides worrying about the market. (my advice to myself, who starts to get edgy when stocks have dropped 20%)
Click to expand...

That's for sure. I've tried catching a few of those falling knife's, and each of them have hurt a bit as it passed through my bleeding fingers.
GE @ 30+, now 27.66
SNDK @ 21.50, now 16.56
Wachovia calls @ 2.50, now 80 cents (ouch)
BAC @ 39 (at beginning of year), now 21.67 (ouch)

Fortunately, so far I've kept the net-new purchases small, but I need to keep my fingers away from the buy button until we really, really get to the bargin stage.

The question of the day, as it always is, is what will happen from here. There are those saying what a bargin and some saying the day of accounting for the wild credit party is at hand. When you see Fannie and Freddie whacked like they were early Friday, wow.

I certainly believe that people's behaviors are an important market indicator. Maybe we will truly have a good indicator when not only when we see lot's of negative threads, news paper articles, magazine covers, etc but when a lot of "buy the dip investors" have given up due to the dips smacking the floor and have reversed course and cashed in. In my mind this would also be accompanied by a slowing in the volume of threads as people "move on" to other things.
 
danm said:
That's a reasonable position, but the problem is what is meant by 'this time', and 'different'. Using the terms generically is meaningless.

What I mean is that this turn is different - from the last 30 years. Specifically it's much like what happened in the 1930's. I'm not saying we'll have a repeat of the GD, but a credit contraction/reversal of irrational exuberance. In fact I'm saying things aren't different - the credit bubble of the past five years eventually had to come to tears, just like it did after the roaring 20's. Most people (at least until recently) didn't look at financial history earlier than 1970's, and so that was the basis for 'this time it's different'.

Take it for what it's worth. When I talked about this here the past two years I was derided for wearing tin foil, maybe now people finally understand what is going on. Sometimes it takes a hit in your wallet to see reality :bat:
Click to expand...

You did a great job getting out. It was pretty obvious in retrospect wasn't it. Now let us know when it's time to get back in. The bad is news is mostly out there now, don't you think?
 
Thanks - I appreciate the comment. The problem with telling people is the response is either 1) Your wearing tin foil (when predicting a big change - I hate this one) 2) You may be wrong (always a strong possibility) 3) Your a dirty market timer (or some variation) or 4) 'I just diversify and forget about it why are you bothering me?' (a popular one). I like to discuss it though, entertaining and I usually learn something.

At any rate I think you're right, the bad news is somewhat mostly out there, but still there is probably more to come. However this stock market is weird, it's taking a sledgehammer to get it to lose ground. Thirty years ago a fraction of the news we've gotten so far would have sunk it. The level of optimism is still amazingly high.

But regardless of where stocks end up (lower than today I think), I really doubt there's going to be a quick rebound. I think we're in for a nice long funk. Oh except for housing, that's pretty clear. I'm going to buy probably in 2010 when they're down 50% in California. May be lower, markets often overshoot on the downside as much as they do on the upside.

But I'm not so sure about stocks, at least I'm pretty sure they're still not a great opportunity, which has been my position for the last two years. I sat out the 2006 rise, recognizing it as the dying pop of the credit bubble. To my mind we've just shaved off the irrational exuberance excess valuation, I don't think we're yet at a 'true' valuation given the economic realities.

RockOn said:
You did a great job getting out. It was pretty obvious in retrospect wasn't it. Now let us know when it's time to get back in. The bad is news is mostly out there now, don't you think?
Click to expand...
 
danm said:
Thanks - I appreciate the comment. The problem with telling people is the response is either 1) Your wearing tin foil (when predicting a big change - I hate this one) 2) You may be wrong (always a strong possibility) 3) Your a dirty market timer (or some variation) or 4) 'I just diversify and forget about it why are you bothering me?' (a popular one). I like to discuss it though, entertaining and I usually learn something.

At any rate I think you're right, the bad news is somewhat mostly out there, but still there is probably more to come. However this stock market is weird, it's taking a sledgehammer to get it to lose ground. Thirty years ago a fraction of the news we've gotten so far would have sunk it. The level of optimism is still amazingly high.

But regardless of where stocks end up (lower than today I think), I really doubt there's going to be a quick rebound. I think we're in for a nice long funk. Oh except for housing, that's pretty clear. I'm going to buy probably in 2010 when they're down 50% in California. May be lower, markets often overshoot on the downside as much as they do on the upside.

But I'm not so sure about stocks, at least I'm pretty sure they're still not a great opportunity, which has been my position for the last two years. I sat out the 2006 rise, recognizing it as the dying pop of the credit bubble. To my mind we've just shaved off the irrational exuberance excess valuation, I don't think we're yet at a 'true' valuation given the economic realities.
Click to expand...

I don't know about that 50% decline in California housing. There's a good article in this week's Barrons that indicates the housing market has bottomed (and that the media has ignore the positive news). FWIW, the market in my part of SoCal has--surprisingly--picked up a bit. It appears that sellers have been more willing to reduce prices and the result has been multiple offers on some homes. Local prices are off 10 - 15% YOY.

I suppose there could be a further decline in some of the more speculative parts of Calif.
 
newporttony said:
I don't know about that 50% decline in California housing. There's a good article in this week's Barrons that indicates the housing market has bottomed (and that the media has ignore the positive news). FWIW, the market in my part of SoCal has--surprisingly--picked up a bit. It appears that sellers have been more willing to reduce prices and the result has been multiple offers on some homes. Local prices are off 10 - 15% YOY.

I suppose there could be a further decline in some of the more speculative parts of Calif.
Click to expand...

Now that's optimism. Where I live nobody shows up at open houses with prices 15% below what Zillow is currently listing. One is even throwing in a new car with the purchase. According to the media, (and Zillow) prices have fallen about 10 or 15%. I'm wondering what the true market price is if houses were sold "at the best bid" by the banks and the banks do own quite a few of them here. I hope the decline stops also, but I doubt it is has bottomed or will anytime soon. Mortgages money is really not available except at the mid to lower end of the market and even that may be a problem soon with Freddie and Fannie. If the upper end is in decline, everything will adjust down with it. I'd sell mine for 10% below what Zillow has (Zillow looks reasonable compared to what the media has for our area), which is $100k less than I have into it. Want a good deal, buy low sell high! ;)
 
RockOn said:
Now that's optimism. Where I live nobody shows up at open houses with prices 15% below what Zillow is currently listing. One is even throwing in a new car with the purchase. According to the media, (and Zillow) prices have fallen about 10 or 15%. I'm wondering what the true market price is if houses were sold "at the best bid" by the banks and the banks do own quite a few of them here. I hope the decline stops also, but I doubt it is has bottomed or will anytime soon. Mortgages money is really not available except at the mid to lower end of the market and even that may be a problem soon with Freddie and Fannie. If the upper end is in decline, everything will adjust down with it. I'd sell mine for 10% below what Zillow has (Zillow looks reasonable compared to what the media has for our area), which is $100k less than I have into it. Want a good deal, buy low sell high! ;)
Click to expand...

Obviously, all real estate is local. At some price, the market is going to begin clearing. I know a guy that has raised about $100 mil to begin buying properties in some of the more distressed areas of California. He made a fortune during the S&L crisis and sees this as his second once-in-a-lifetime opportunity.
 
newporttony said:
Obviously, all real estate is local. At some price, the market is going to begin clearing. I know a guy that has raised about $100 mil to begin buying properties in some of the more distressed areas of California. He made a fortune during the S&L crisis and sees this as his second once-in-a-lifetime opportunity.
Click to expand...



I hope you are right. I just cannot see how it can bottom without some new system to get mortgage money flowing but things can happen. IMO bailouts will not help, just delay the process and that seems to be where we are headed. In the early 90's the problem wasn't lack of available mortgage money.
 
unclemick said:
Psst - Wellesley!
heh heh heh
Click to expand...

Uncle Mick, my friend, as long as you are still pssst-ing Wellesly and ending your posts with your trademark "heh heh heh", then all is right with the world and I'm not going to panic.

:)
 
RockOn said:
I hope you are right. I just cannot see how it can bottom without some new system to get mortgage money flowing but things can happen. IMO bailouts will not help, just delay the process and that seems to be where we are headed. In the early 90's the problem wasn't lack of available mortgage money.
Click to expand...

You don't need new systems to get mortgage money flowing, you need to get rid of the recently new systems of getting mortgage money flowing to people that shouldn't get it. It's still not difficult to get a mortgage, all you need is a decent (provable) income, low debt, and a relatively good credit rating. Just the sort of people who should be able to buy. No tricks, no floats.

danm said:
I'm going to buy probably in 2010 when they're down 50% in California. May be lower, markets often overshoot on the downside as much as they do on the upside.
Click to expand...

Until a couple months ago I lived in the DC Metro area. House sales were down a tad, but prices were up a percent or two over the previous year. Some houses in our neighborhood were priced too high, and took a long time or a big cut to sell. Others, priced reasonably (but not lower than last year) sold faster. We sold ours in less than two weeks. We're in the high-end market, and from what I've read there's more of an inventory in the lower cost homes, but they still sell and at a decent price. A house I sold 15 years ago for $225K just sold a month ago for $620K. How could anybody complain about that?

Real estate is local. California always overdoes things, so when it all goes to h*ll, it goes a long way. But it will still end when things get to a natual balance. I doubt very much you will see any 50% price drops. But I'm an easterner, so I may be wrong.

Harley
 
Dow Jones when contrary thread started: 11,100.54
Dow Jones as of end of day 7/18/2008: 11,496.57
Change: 396.03 (+), 3.6%

So far so good :)
(Actually, If I had to bet, I would bet a re-test of the low will happen)
 
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