Loving the up and up of markets these days

[street]

Quote:

Originally Posted by gcgang 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?

That is something and that was always my goal was to live of off my interest from investments.

[NW-Bound]

There are always the same numbers of buyers as of sellers. But they now agree that the fair price for the transaction should be higher than what it was a month ago.

I've never gained enough in 1 month to equal one year of pay.

But my gain of 4.3% YTD is higher than what I plan to spend for 2017. Of course it may just evaporate before I spend it, or after I spend it for that matter.

If it disappears before I spend it all, then I will lose my enthusiasm, and spend less. If it disappears after I spend it, darn, I will curse, then tighten my belt next year. Either way, I will not like it, but then I am not telling you anything unexpected.

[street]

NW-Bound >>> I also never made more in one month then what I made in one year working but have done well so far. Since I retired just short of 10 months ago I have gained as much as I would of hoped for in 25 years. With SS and what I gained so far in 10 months I could live out my days with out ever spending any of my portfolio. I also know it could go south fast and I could be trying in the next 25 years to get to where it is at today also.

[audreyh1]

This just feels so 2007, with a hint of 1999.

I was looking at CSCO today. After hours (good reaction to earnings report) it finally exceeded its 10 year high price. Last time it was above $33 was September of 2007, and you can see a little mini run-up in the price over just a few months in the summer of 2007.

Of course this new after market high of $33.5 is still 58% below the cray $80 peak it hit in early 2000. A few months later it was knocked down to $16, and spent most of the next 15 years below $25.

Quite a poster child for the tech boom and bust. At least they are still in business.

[W2R]

Quote:

Originally Posted by audreyh1 This just feels so 2007, with a hint of 1999.

I know the feeling. It's almost a little bit eerie. Soon it may be blue light special time again. (or not).

At least it doesn't (yet) seem like 1928-1929. I was reading about that tonight, and apparently between May 1928 and September 1929, the average prices of stocks went up 40 percent. On May 1, 2016 the Dow was 17774. It would have to reach 24884 by September, 2017 in order to be up 40 percent.

[NW-Bound]

From 1/1/1999 to 1/1/2000, the S&P went up a "mere" 21%. The NASDAQ went up 102%! Halleluyah! Now, that's a real bubble.

And then, after New Year 2000 (remember that New Year celebration?), the S&P climbed some more to claim another 4% on March 24, 2000, but the NASDAQ climbed another 27%.

I have been keeping a diary since Dec 13, 1999. It shows that from Jan 1, 2000 to that fateful day on March 24, 2000, my portfolio climbed 16.5%. And I was never fully invested, but had perhaps 70% in stocks. I held a lot of tech stocks, not dot-coms, but they all went ballistic.

I was losing sleep over that much money. It could not be right! Yet, I did not sell until I lost all of that gain, and some more.

[NW-Bound]

To see why investors were so complacent and did not sell when the bubble burst, one has to look back further to see why they were so used to making easy money.

From Jan 1, 1990 to that NASDAQ top on March 24, 2000, a $10K invested in Vanguard S&P would have grown more than 5 times to $55K.

Invested in the NASDAQ? $210K! Yes, 20x times in 10 years. It went straight up.

It's the "new economy". Halleluyah! It's the new millennium. Everything is different now. Nobody has to work anymore. All we do is to buy stocks. The Internet will change everything. It's all about bits and bytes. Everything is digital. Brick-and-mortar businesses are dead meat, who wants them?

[sengsational]

I was told what I was doing at work in 1999 was "old cheese". Then, after the bubble burst, they all wanted to nibble on my old cheese, lol!

[NW-Bound]

Thanks for reminding us of the "cheese fable".

I looked at my diary again. No, I never had investment gain in a month that was large enough to exceed one annual income. Not even during those roiling 3 months in early 2000, though the month of Feb 2000 came close.

I guess my portfolio has been one of an undersaver, or I did not pick good stocks. But what could be hotter than semiconductor and broadband infrastructure stocks in those days? I had them all. Every day, there was a company or another announcing a new superduper chip or transistor made with GaAs, or some exotic semiconductor, or a new fiber that could transmit an entire encyclopedia in seconds, etc...

[RobLJ]

I remember it well--in '99 (or was it 2000?)--the S&P hit close to a 30 PE; the NASDAQ was probably horrifying.
I looked at it and compared to small cap/midcap value, which were sitting at around 10 PE and moved gains from Fidelity Contrafund to LowPrice. The rocket kept blasting for a while, then it hit the fan, and LowPrice went up 27% from Feb 2000 to Feb 2001 while Contra went down 11% (which actually was a triumph for the Contra fund manager Danoff). It was similar the next year.
I got lucky--but it did reemphasize the importance of diversification. The problem now is that all sectors are more correlated.

Also, I think the market over the last few months is counting in corporate tax reform in the future particularly for large caps, which could be counting chickens before they hatch. We'll see.

Quote:

Originally Posted by NW-Bound To see why investors were so complacent and did not sell when the bubble burst, one has to look back further to see why they were so used to making easy money. From Jan 1, 1990 to that NASDAQ top on March 24, 2000, a $10K invested in Vanguard S&P would have grown more than 5 times to $55K. Invested in the NASDAQ? $210K! Yes, 20x times in 10 years. It went straight up. It's the "new economy". Halleluyah! It's the new millennium. Everything is different now. Nobody has to work anymore. All we do is to buy stocks. The Internet will change everything. It's all about bits and bytes. Everything is digital. Brick-and-mortar businesses are dead meat, who wants them?

[marko]

Quote:

Originally Posted by audreyh1 This just feels so 2007.....

You mean the moment just before the biggest buying opportunity in a generation, right?

But I do have to disagree. It IS a little spooky right now but my take is that there had been sooooo much money sitting on the sidelines for quite a while that's starting to come back into the market.

My personal belief is that the market is returning to where it should have been all along.

I seem to remember a chart from Fido's Timmer last week (I had just glanced at it) that --I think-- showed money moving into the market that was NOT just coming from bonds.

[MichaelB]

Quote:

Originally Posted by audreyh1 This just feels so 2007, with a hint of 1999.

So true. Still, an important difference. Both '00 and '08 were recessions, and right now all economic indicators point to continued expansion. In fact, the NY Fed just published a bit of good news. The rate of home equity withdrawal is still very low, which means equity is not being used to fund consumer spending. Houses as ATMs No LongerÂ*Â* Liberty Street Economics

[NW-Bound]

2007 and 1999 are fine years. 2008 and 2000 are bad years.

Bring out the champagne bottles. We still have time. Heh heh heh.

[Amethyst]

I would like to sell, but the tax hit would be awful. Guess we'll wait it out...again.

[street]

Some great insight and knowledge once again. Thanks

[audreyh1]

Quote:

Originally Posted by NW-Bound To see why investors were so complacent and did not sell when the bubble burst, one has to look back further to see why they were so used to making easy money. From Jan 1, 1990 to that NASDAQ top on March 24, 2000, a $10K invested in Vanguard S&P would have grown more than 5 times to $55K. Invested in the NASDAQ? $210K! Yes, 20x times in 10 years. It went straight up. It's the "new economy". Halleluyah! It's the new millennium. Everything is different now. Nobody has to work anymore. All we do is to buy stocks. The Internet will change everything. It's all about bits and bytes. Everything is digital. Brick-and-mortar businesses are dead meat, who wants them?

Where is that link to the article explaining how even experienced investors get sucked into new-fangled bubbles as everyone is hoping to sell to the greater fool to take maximum advantage of the huge price increases?

[audreyh1]

Quote:

Originally Posted by MichaelB So true. Still, an important difference. Both '00 and '08 were recessions, and right now all economic indicators point to continued expansion. In fact, the NY Fed just published a bit of good news. The rate of home equity withdrawal is still very low, which means equity is not being used to fund consumer spending. Houses as ATMs No LongerÂ*Â* Liberty Street Economics

That is true, as even the ECRI folks are showing economic growth ahead and no recession indication at all. However, you can have market crashes without recessions.

Market indices and economic can run independently. And I suspect a big part of the 2009 recession was actually caused by the 2008 credit crisis and crash. Companies suddenly found themselves with no short-term cash supply and had to pull back and cut like crazy.

[DrRoy]

My stock AA rose a point already this year so I sold 1% this morning.

[DrRoy]

Quote:

Originally Posted by Amethyst I would like to sell, but the tax hit would be awful. Guess we'll wait it out...again.

Sell in an IRA or 401K and there are no current tax events.

[NW-Bound]

Quote:

Originally Posted by audreyh1 Where is that link to the article explaining how even experienced investors get sucked into new-fangled bubbles as everyone is hoping to sell to the greater fool to take maximum advantage of the huge price increases?

Well, the bears have been calling us who have holdings in the stock market all fools who try to sell to each other.

We in turn thumb our nose at them saying if they are so smart how come they are not rich.