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Loving the up and up of markets these days
Old 02-15-2017, 12:47 PM   #1
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Loving the up and up of markets these days

Man its been a very nice market for sometime now and I like it a lot. I'm not sure what is feeding it and driving it so nicely. What is your take on the strength of the market these days?
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Old 02-15-2017, 12:51 PM   #2
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Corporate earnings dropped from 2015 to 2016. The outlook for corporate earnings has improved since it bottoming out in mid 2016. The improvement started late 2016.

Once the stocks take off, buying begets more buying. In other words, good old greed.
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Old 02-15-2017, 01:37 PM   #3
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Corporate earnings dropped from 2015 to 2016. The outlook for corporate earnings has improved since it bottoming out in mid 2016. The improvement started late 2016.

Once the stocks take off, buying begets more buying. In other words, good old greed.
Yes, that, plus the economy is actually improving some at present, and investors perceive that the new administration is going to be more business friendly.
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Old 02-15-2017, 01:39 PM   #4
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We definitely need to keep politics out of the discussion, please.
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Old 02-15-2017, 01:53 PM   #5
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Close to historically low interest rates doesn't hurt either.
IOW: The only game in town
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Old 02-15-2017, 01:54 PM   #6
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Business cycles happen without the help of politics.

Read this to see that business earnings picked up even prior to the election: Better Days: Earnings Growth Picks Up Sharply in 2017.
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Old 02-15-2017, 02:43 PM   #7
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The U.S. dollar is still the most stable and reliable home for international investment. Our economy is quite good compared to the rest of the world and our stock market has significantly outperformed the international markets in recent years. For those reasons, I overwhelmingly stick with domestic ETFs and other U.S. investments.

Having said that, my feeling is that prospects are very mixed - earnings growth is not stellar, "free" money is going away, and our domestic market is not the bulwark of consumption it used to be. A lot of corporate earnings comes from offshore, so we are vulnerable to the global economy like everyone else. I find the current affairs in China and Europe to be worrisome and the new norms of market volatility excessive. And lastly, while the [transitional] energy sector takes a powder, relatively meagre U.S. Corporate profits are being boosted by industries like technology and health care that are also notoriously fickle. Huge financial industry profits don't necessarily make me feel good either.

Up cycles are usually followed by down cycles, so I'm not getting too excited about this run. Just when I start to get excited I'm making real money is usually when I get killed. I think there will be a big correction sometime later this year and I'm protecting my profits with a bunch of stop-loss orders that I review and adjust regularly.
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Old 02-15-2017, 02:46 PM   #8
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... I think there will be a big correction sometime later this year and I'm protecting my profits with a bunch of stop-loss orders that I review and adjust regularly.
That's what we all think, but react differently.

Some do nothing. Some rebalance. Some do stop orders. I write out-of-the-money covered calls.

PS. I used to do trailing stop orders. But then, I got some luck with covered calls that did not get exercised, so have been doing that. Should think of doing trailing stops again.
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Old 02-15-2017, 02:54 PM   #9
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I'm loving it but not taking it for granted. I've done the calculation on the impact of a 20% correction from the current levels to my portfolio, and it still keeps me above my FI level. So I'm cautiously happy.
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Old 02-15-2017, 02:57 PM   #10
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earnings growth is not stellar
And for some individual companies, if you take away stock buy-backs, earnings are actually down.
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Old 02-15-2017, 03:05 PM   #11
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If earnings per share are up after the buy-back, that means the shares are worth more, and I don't think that is bad.

If the earnings per share are still down, now, that's something else.
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Old 02-15-2017, 03:27 PM   #12
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... I'm protecting my profits with a bunch of stop-loss orders that I review and adjust regularly.
I'm a 'never say never' kind of guy, but I would never use a stop loss order.

You can get taken out on a wild swing, like the flash-crash. Just make a note, and sell low if you want to violate the 'buy low, sell high' philosophy.

-ERD50
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Old 02-15-2017, 03:57 PM   #13
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I would use only trailing-stop-limit orders. They may not get me out at all if the market drops right through the limit, but that would be the same as not doing anything.

And I would use it only on stocks that I feel that they are topping out.
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Old 02-15-2017, 04:26 PM   #14
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Besides rebalancing once a year my investing strategy is: 1) look everyday when the markets are on an upward streak; 2) don't look on all other occasions.
I've been looking lately!!
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Old 02-15-2017, 05:19 PM   #15
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Thanks for responding and I'm glad no political issue was posted. Interesting replies to what is driving these times and I appreciate all your knowledge in financing.
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Old 02-15-2017, 05:24 PM   #16
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Somewhere, I read that institutional investors are not buying much, but it is individual investors who are now piling in. Also, money starts coming out from fixed income to go to equities. Buy, buy, buy!

If I find it again, will post the link here.
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Old 02-15-2017, 05:54 PM   #17
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Man its been a very nice market for sometime now and I like it a lot. I'm not sure what is feeding it and driving it so nicely. What is your take on the strength of the market these days?
I love it!!

Honestly I don't think anybody actually has the slightest clue as to why the market does what it does. Look at the financial pages! Their predictions are worse than a Magic 8 ball. But who cares; we are on a roller coaster having the time of our lives and we know how to make money when the market is down as well as when it is up. Meanwhile I sure love looking at my numbers.



Of course I am taking advantage of the bull market to prepare for the next bear. I am gradually reducing my bare bones monthly expenses a little here, a little there. And, I am taking care of big irregular expenses that need to be taken care of, rather than putting them off.

This responsibility (to prepare for the next bear) doesn't dampen my enthusiasm or happiness with how my portfolio is doing these days. This is so cool!
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Old 02-15-2017, 05:56 PM   #18
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It is nice to make almost as much in the first month, doing NOTHING, as I made in my highest income years!

Why the market is up? No idea. More buyers than sellers?
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Old 02-15-2017, 06:26 PM   #19
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Yeah Baby!

Now making more dough sittin on my tookas that I ever did working.

Making more dough than I'm spending and I'm trying to spend more every day.

Gotta Blow More Dough -
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Old 02-15-2017, 08:30 PM   #20
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I'm a 'never say never' kind of guy, but I would never use a stop loss order.

You can get taken out on a wild swing, like the flash-crash. Just make a note, and sell low if you want to violate the 'buy low, sell high' philosophy.

-ERD50
Everyone is different. I don't obsess over my stocks and ETFs on a daily basis. I prefer to buy and hold, but I'm uncomfortable with the current economic climate and think it's somewhat a house of cards. Since 2009, Corporations have been cutting expenses to the bone to make their numbers [and line their pockets] and there's not a lot of fat left to cut to keep EBIT high - certainly not on the wage side. And low wages don't bode well for consumer demand and discretionary spending - especially as interest rates start to climb.

My security blanket are open limit orders, 12.5% off my current price which keeps me in the black for this cycle. Strictly in case of emergency and not an amount likely to happen on a short swing. I am not super active with my funds and I prefer having an automated emergency backup plan, than finding out with a three hour time difference on the West Coast that the markets have gone into the toilet. I was on an 18-hour flight to Malaysia when it happened in '09 and watched the TV monitors helplessly in the KL airport as the world economy collapsed. Maybe next time I'll be on a cruise ship...

Since I'm not an insider, i'd rather be out comfortably and live to play another day. When it happens I can always get back in when I'm ready. I admit it is crude, but it's strictly for asset protection, since I don't trust Wall Street and think they will be screwing us again soon. If everything goes south and later turns out super, then I shouldn't have anything to worry about. If not, at least I'll have cash to invest in the wreckage. [That's the reason why 70% of my portfolio is in rental real estate.] We'll see how it works out...

Edit: Looked into institutional investment levels and found this fascinating article... http://www.zerohedge.com/news/2017-0...errified-asset
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