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Old 01-29-2016, 10:20 AM   #21
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P.S. I'm not a perma-bear and wasn't always such a Debbie Downer.

Check the date on this old post against a stock chart.

Why I'm Not Selling Stocks Now

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Many of us have been planning on below average stock returns because of high valuations. Well, those below average returns have already been realized and are now in the rear-view mirror. It's time to start raising your expectations for future returns.
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Old 01-29-2016, 10:30 AM   #22
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We already enjoy the benefits of modern equipment and machinery for industrial and agricultural production. Food is really cheap unless you only shop at Whole Foods, gigantic TVs are dirt cheap, and people are throwing away smartphones after a couple of years to upgrade. Gasoline is cheaper than some bottle water. Companies are working hard to generate profits, despite firing old and highly-paid workers.

And now you want more stock gains too? I do not see how more robots and autonomous cars will help. Technological advances will improve the standard of living, but that does not mean stock prices will rise.

Not saying that there will be a long bear market, but I think Bogle is right in saying that the stock market gain will be subdued in the future.
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Old 01-29-2016, 12:59 PM   #23
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Would not the rise/fall and replacement of mature industries and/or companies in of itself provide intrinsic market gains?

See - I was just practicing to be a talking financial head.

But as a Walmart or Exon matures, aren't gains realized from immature companies? Apple and Google and Facebook and Uber haven't been around since 1940. Who knows who the next ones will be?
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Old 01-29-2016, 01:40 PM   #24
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Yes, disruptive technology will make some companies rich, but at the expense of older companies. But you need to be a good (or lucky) stock pickers. Indexers do not gain, unless it is a rising tide that lifts all boats. The latter is a surer thing that I prefer, even though I do not index.
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Old 01-29-2016, 03:03 PM   #25
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I do not see how more robots and autonomous cars will help. Technological advances will improve the standard of living, but that does not mean stock prices will rise.
In the same way that automation has created wealth for the past ~150 years. Fewer inputs yields more output.
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Old 01-29-2016, 05:12 PM   #26
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More output is good, but only if there's a demand for it. The world is now awash with commodities and products. Yes, there's more wealth, in the sense that everybody now has huge TVs, electronic toys galore, more food to eat to get more obese. But I do not see that the higher standard of living will guarantee higher stock prices.

PS. Developing countries still have quite a bit to go to catch up with the US and other developed countries. That's my hope, but their stock markets have been in the doldrum the last few years. Patient, patient.... Any day now... A leveraged EM ETF I own jumps more than 9% today.
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Old 01-29-2016, 10:17 PM   #27
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Aren't there a few billion people still living in squalor, who need clean water, shelter, medical care, Gucci purses, iPhones, and 5-Hour energy drink?
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Old 01-29-2016, 10:24 PM   #28
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Aren't there a few billion people still living in squalor, who need clean water, shelter, medical care, Gucci purses, iPhones, and 5-Hour energy drink?
You left out BMW's and personal trainers.
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Old 01-29-2016, 10:32 PM   #29
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you left out bmw's and personal trainers.

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Old 01-30-2016, 03:53 AM   #30
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The (growing?) pessimist in me thinks economist Robert J. Gordon is on to something when he points out that the truly big innovations that transformed life and business all happened before the 1930's. The 20th century was a period of exploiting those discoveries resulting in revolutionary economic growth. That growth accounts for the bull market you correctly identify.
Anti-conception. Anti-biotics and virals. Mobile communications. The Internet.

Sure, radio and medicine existed but those four transformed whole societies pretty drastically throughout the 20th century. There's probably better examples out there.

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But will it continue? The 21st century has yet to see anything comparable in terms of revolutionary innovation. Economic growth has slowed accordingly.
We're only 16 years in the new century, but as an indication solar power dropped by several orders in magnitude in cost that's upsetting the energy business, new vaccines and low cost treatments are being launched saving billions of lives, the cost of launching items into space is about to drop with a factor of 10. Not transformative maybe, not peanuts either.

In the pipeline however: driverless cars, replacement organs made from your own cells, specific gene editing to correct faulty DNA and repair diseases, curing cancer by your own cells, reversing alzheimer, artificial intelligence that beats experts in every topic imaginable.

We're talking about approaching biological immortality and machines that can do any job a human can do for a fraction of the cost.

While none of these are available at your nearest supermarket, they for sure will be in the next 80 years if current trends continue. They all have been field demonstrated.

Then again, just my opinion ..
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Old 01-30-2016, 07:54 AM   #31
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Aren't there a few billion people still living in squalor, who need clean water, shelter, medical care, Gucci purses, iPhones, and 5-Hour energy drink?
Yes, there are still people who can use a lot of stuff. Even here in the US too. Or in Greece.

The problem is that they have no money to pay for it. Nor do they have the means to make money. Will that change? I have been waiting patiently with my EM stocks.
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Old 01-30-2016, 08:10 AM   #32
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Have never cottoned to the idea that you can look at a graph of some other point in time and somehow extrapolate to this one and then make predictions. As far as I can tell, every day is unique, let alone every year.
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Old 01-30-2016, 08:16 AM   #33
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Anti-conception. Anti-biotics and virals.
Penicillin was discovered prior to 1930. That really was a huge game changer but it also fits right in with Gordon's second industrial revolution.

Birth control meds certainly came after and were a boon to women. But their economic impact may be a bit of a wash. Women's greater ability to enter the workforce was huge but it came at the "expense" (economically speaking) of smaller family sizes and population growth.


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Mobile communications. The Internet.
There's a bit of an interesting question regarding this stuff that no one seems to be able to answer.

All the way back in 1987 economist Robert Solow quipped "you can see the computer age everywhere except in the productivity statistics." Since then computers have gotten so pervasive we all carry at least one around with us constantly. It seems like a revolutionary time to us casual observers, but productivity growth (the thing that drives economic wealth creation) has been a big disappointment.

We had a bit of a bump around 2000, but overall productivity growth in the U.S. is far lower than was typical prior to 1970.

No one knows why, exactly.


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In the pipeline however: driverless cars, replacement organs made from your own cells, specific gene editing to correct faulty DNA and repair diseases, curing cancer by your own cells, reversing alzheimer, artificial intelligence that beats experts in every topic imaginable.

We're talking about approaching biological immortality and machines that can do any job a human can do for a fraction of the cost.
Yup, that's the stuff we're all hoping for.
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Old 01-30-2016, 08:31 AM   #34
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I am not holding my breath for "immortality" medicine advances. I have read books written by MDs who appear to be disillusioned and do not sound as hopeful as laymen.

I am still waiting for robots that can take care of the elderly, like changing their diapers and bathing them. There's a need for that soon for the aging boomers.
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Old 01-30-2016, 08:34 AM   #35
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More output is good, but only if there's a demand for it.
Maybe inadequate demand is a different side of the same coin as inadequate innovation.

I can see most everyone in the country working an extra job or doing everything possible to pay for indoor plumbing, installing electricity, getting an automobile or even to acquire things like air conditioning, a first television or a dishwasher. Getting the latest version of Candy Crush, meanwhile, doesn't seem quite so important by contrast.

Edit to add: Many of the "new things" we're buying today are just replacements of old things we used to buy. How many individual items does a smartphone replace (landlines phones, camera, clocks, watches, calculator, computer(?), etc.)

Solar power, while great for the environment, will just replace existing power stations. Driverless cars will replace the ones we already buy. Moreover, driverless cars will likely result in fewer cars demanded because many more of us will just Uber up one on demand rather than having millions of them constantly parked idle.
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Old 01-30-2016, 09:01 AM   #36
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[QUOTE=Gone4Good;1689926]So looking more closely at the article it says a couple of things:





I think this grow directly relates to inflation. Compare dollar value of 1940 and 2016. In 1940 minimum pay was $0.30 p hour while currently it is about $9 p hour and many States push it to $13 -$15 p hour.
If the Feds are going to succeed in their goal on inflation then Market is going to continue secular drive up, although much slower than during past 7 years (unless another round of money printing is in their plans).
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Old 01-30-2016, 09:15 AM   #37
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If I read his article correctly, am I alone in not realizing that the past 17 years have been a bear market?

A year or two ago, someone here posted this chart which I found helpful. Now I'm just confused..

A history of bull markets in one Morningstar.jpg
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Old 01-30-2016, 09:27 AM   #38
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I have no control over the stock market and can't predict where it will go. The value of stocks has something to do with history in as much as it influences the present economy and investor sentiment and of course future events are important too. But as I like to be in control rather than trusting my fortunes to past results and Monte Carlo mathematics (at least directly), I do two things that I can control. I control my spending and use a liability matching portfolio based on pensions, rental income and SS. If your income comes from these sources and maybe dividends, bond ladder and CD interest too and you never have to use principal a Bear market shouldn't be a worry.
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Old 01-30-2016, 09:59 AM   #39
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If I read his article correctly, am I alone in not realizing that the past 17 years have been a bear market?

A year or two ago, someone here posted this chart which I found helpful. Now I'm just confused..

Attachment 23117
Well, certainly those of us who retired in 1999 or 2000 have been very aware we have been in a long bear market phase. Maybe for those who retired later it was not so obvious.
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Old 01-30-2016, 11:49 AM   #40
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Quote:
Originally Posted by Totoro View Post
Anti-conception. Anti-biotics and virals. Mobile communications. The Internet.

Sure, radio and medicine existed but those four transformed whole societies pretty drastically throughout the 20th century. There's probably better examples out there.



We're only 16 years in the new century, but as an indication solar power dropped by several orders in magnitude in cost that's upsetting the energy business, new vaccines and low cost treatments are being launched saving billions of lives, the cost of launching items into space is about to drop with a factor of 10. Not transformative maybe, not peanuts either.

In the pipeline however: driverless cars, replacement organs made from your own cells, specific gene editing to correct faulty DNA and repair diseases, curing cancer by your own cells, reversing alzheimer, artificial intelligence that beats experts in every topic imaginable.

We're talking about approaching biological immortality and machines that can do any job a human can do for a fraction of the cost.

While none of these are available at your nearest supermarket, they for sure will be in the next 80 years if current trends continue. They all have been field demonstrated.

Then again, just my opinion ..

Why do they continue focusing on all the meaningless transformations. Lets get the best minds together and focus on something important....Like growing a real scalp full head of hair.


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