Do you really think the market is cheap?

[riskadverse]

New poster. 30, on my way to my goals

I'm not in the S&P or any major index. I subscribe to the idea that the late 90's were a once in a lifetime boom, stocks got ridiculously overpriced, and it's going to take a long time to work the excesses of.

Same cycle as, late 20's to early 50's. And mid, late 60's, to the early 80's. When the public buys big, unfortunately everyone loses

I read books like Money Game (great book about the market of the 60's, reocmmended by Buffett and others). Its saved me a lot of money, the market isnt what it seems.

Also, I think we're in a commodity up cycle (Jim Rogers), of 10-15-20 years, starting in 99. Not good for stocks.

I'm not touching the big cap names (msft, etc). The banks and financials are way out of my competence level, although would be fun to guess.

I use to believe in p/e and other published figures and numbers. They dont tell you about stocks or whats going on. They wouldn't have told you about lehman's balance sheet or fnm's balance sheet.

I think we're getting close to a tradable rally (you should generally buy when guys are white with fear on tv). But I still think we're in the 4th or 5th inning of working off the 90's excesses.

I couldn't have said it better. I'll read the Money Game on your recommendation. Welcome to the early-retirement board. My guess is you'll accomplish your goals pretty quickly.

 

[John23]

Thanks.

I've already accomplished some of my financial goals (part of it is avoiding mistakes like buying Intel at $80 or Cisco at $100)

Money Game is awesome, it tells you alot about the market of the 60's. The parallels to the 90's are eerie. The only thing that changed are the ticker symbols. The big growth stocks then were bowling, airlines. Makes me think twice about Google, Apple, or anything tech.

The S&P 500 after 94, 95, 96 (Greenspan's irrational exuberance), it's not going to end well for todays investors. Some of the big names like Mrk, Pfe, they're where they in 95. Buying the S&P now long term would be like buying Japan at 25,000.

Mostly, I follow Jim Rogers (loved Investment Biker and Adventure Capitalist), Buffett, Charlie Munger, guys like that.

Also, I don't think we've had the pain for a real tradable rally, one you can hold for 6 months or a few years. The S&P has been flat for 10 years after all the hype from the 90's, but no one has really abandoned stocks yet.

 

[Gone4Good]

Mostly, I follow Jim Rogers (loved Investment Biker and Adventure Capitalist), Buffett, Charlie Munger, guys like that.

Buffett's been jumping into the market with both feet (not in indexes of course).

 

[wildcat]

Thanks.

I've already accomplished some of my financial goals (part of it is avoiding mistakes like buying Intel at $80 or Cisco at $100)

Money Game is awesome, it tells you alot about the market of the 60's. The parallels to the 90's are eerie. The only thing that changed are the ticker symbols. The big growth stocks then were bowling, airlines. Makes me think twice about Google, Apple, or anything tech.

The S&P 500 after 94, 95, 96 (Greenspan's irrational exuberance), it's not going to end well for todays investors. Some of the big names like Mrk, Pfe, they're where they in 95. Buying the S&P now long term would be like buying Japan at 25,000.

Mostly, I follow Jim Rogers (loved Investment Biker and Adventure Capitalist), Buffett, Charlie Munger, guys like that.

Also, I don't think we've had the pain for a real tradable rally, one you can hold for 6 months or a few years. The S&P has been flat for 10 years after all the hype from the 90's, but no one has really abandoned stocks yet.

Yeah, I was gonna say Rogers and Buffet seem to be a strange couple. Rogers is preparing/warning of long recession and doesn't seem to be all that optimistic about the US going forward while Buffet is pretty optimistic long term.

Kinda hard to follow in Buffet's footsteps as I doubt you have the captial and can demand your own terms like the GS deal. Also kinda hard to follow some of Rogers' specific ideas/recommendations when he doesn't file SEC documents but he as made some good calls.

SOB said Fannie and Freddie would be bankrupt when the stocks were in the $40s-$50s.

 

[Gardnr]

Also kinda hard to follow some of Rogers' specific ideas/recommendations .....

Well, you could move to Asia (Singapore specifically, I think)! Might not be a bad idea.

 

[John23]

With Jim, just reading Investment Biker, Adventure Capitalist, and keeping up with his views (I follow his youtube interviews). And it's easy to get his interviews on Google News. He sold his house for $15 or $17 million in NYC. Anyone that has a house worth $17 million, I'll pay attention to .

The difference between the two about the economy...the two scenarios can still play out...hard times, bad recession, weak dollar. The indexes are flat to down. But Buffett still makes money on his sweet heart deals.

Buffett...mostly I've gotten investor psychology, and he points out so much stupidity that goes on. Also some good book recommendations I had not read before.

"Where are the customers yachts." Suprise, there are no customers yachts. It's a funny book.

Also from Buffett, stop trying to be a master of everything. All these guys on tv are trying to master every sector, every asset class, every economic indicator. Stop trying to do everything and know your limits. Stop thinking that everything is knowable.

And Munger has a fantastic book, Poor Charlie's Almanack.

 

[cjking]

The valuation measure I refer to was revised yesterday. The original measure says the market was undervalued by 1% on 24th September, but they seem to think mark-to-market accounting has affected it adversely and have computed a new version, which gives the same verdict as CAPE, that the market was still 35% overvalued on 24 September (S&P 500 at 1186.)

The new measure

Smithers & Co. - US CAPE and q chart

The original measure

Smithers & Co. - US q chart