So much bullish sentiment

[monte1022]

"Rates are rising and that can be a green light for stocks," "..money in savings will be 'rocket fuel' for assets," And bitcoin, "it's probably going to $100,000, then $150,000, the $200,000." (All quotes from CNBC)

Why am I even here? I should be day trading

 

[UnrealizedPotential]

Not exactly bullish sentiment across the board. There have been a number of billionaires that have expressed concerned that either we are in a stock market bubble or entering one. That is not to say stocks can't go higher from here, but at some point we will have another bear market and all those chasing hot stocks will be caught swimming naked.

 

[erkevin]

Remember what the Oracle of Omaha said...................

 

[audreyh1]

As long as there is abundant QE, asset prices will continue to rise.

Interest rates remain extremely low.

 

[UnrealizedPotential]

As long as there is abundant QE, asset prices will continue to rise.

Interest rates remain extremely low.

Well , Mr. Bullard from the Fed did say today inflation is going higher.
Correction: He said inflation is expected to move higher. If inflation moves higher than expected what happens to the stock market then?

 

[Montecfo]

My assessment is that sentiment is neither bullish nor bearish at the moment. But there are a lot of bullish facts right now.

So my overall market view is bullish. But all my recent moves have been to closeout positions that were fully valued in my view, had run their course or to make room for new positions.

I expected a good selloff on the Ga election results, so what do I know?

 

[statsman]

I expected a good selloff on the Ga election results, so what do I know?

Give it time. I think you will be proven right after the propping up has run its course.

 

[Bamaman]

Without getting political, let me just say I'm not feeling too bullish right now. I feel as if I'm going to be inflated after future government spending like drunk sailors.

Let me also say that I'd hate to be a 25 year old starting a retirement portfolio with record low interest rates and the highest stock market indexes ever.

A millennial's best characteristic is that time is on their side.

They may have a new government coming into Italy shortly. Remember they've had dozens and dozens of new governments since WWII. My first visit was 50 years ago, and the country is still there in spite of themselves.

 

[corn18]

My gut tells me we are in the midst of a 1999-2000 type market. Everything going up. FOMO. Add extremely low rates and maybe it's worse. I picked 60/40 just for this type of situation. Inflation is an evil mistress. Much worse than SORR because it can hang around for long periods. But, who knows, right?

 

[MichaelB]

Let’s all make an effort to keep politics from infecting this otherwise interesting thread discussion.

 

[njhowie]

"Rate are rising and that can be a green light for stocks," "..money in savings will be 'rocket fuel' for assets," And bitcoin, "it's probably going to $100,000, then $150,000, the $200,000." (All quotes from CNBC)

Why am I even here? I should be day trading

Rising rates are good for financial stocks, bad for others.

Higher rates leads folks to pull money from the stock market and put it into savings where they get higher guaranteed return. Money flows from savings to the stock market when rates go down and folks are willing to take more risk to be able to get some kind of return.

 

[chassis]

Well , Mr. Bullard from the Fed did say today inflation is going higher.
Correction: He said inflation is expected to move higher. If inflation moves higher than expected what happens to the stock market then?

If the Fed “expects” inflation, it means to me they are seeing it now in leading/below the radar data.

Three examples are single family homes, building materials and vehicle prices.

I say inflation is here now, it will take a couple of quarters to become “official”. Early case scenario is higher interest rates by year end 2021.

 

[corn18]

If the Fed “expects” inflation, it means to me they are seeing it now in leading/below the radar data.

Three examples are single family homes, building materials and vehicle prices.

I say inflation is here now, it will take a couple of quarters to become “official”. Early case scenario is higher interest rates by year end 2021.

Am I wrong to root for some inflation? Like 3-4%? Nothing crazy. I have a COLA pension and a 2.75% mortgage.

 

[DawgMan]

Ahh, so here we are again. I would have bet Wed's market would have sunk by a 1% - 2%, min. I sure would not have thought a rally followed by another rally today. What will I do... nothing. I will stay with my original plan of 60/40, perhaps allow myself to drift to 55/45 (part of my plan flexibility when my spidey sense starts tingling), but realize I am in it for the long hall. Either I believe in my plan or I don't... at least that's what I continue to tell myself

 

[Montecfo]

My gut tells me we are in the midst of a 1999-2000 type market. Everything going up. FOMO. Add extremely low rates and maybe it's worse. I picked 60/40 just for this type of situation. Inflation is an evil mistress. Much worse than SORR because it can hang around for long periods. But, who knows, right?

I see it more as the 1920s. We are about to have a post-war post pandemic boom after the vaccines hit. Understand I mean early 20s not 1929.

 

[DawgMan]

I see it more as the 1920s. We are about to have a post-war post pandemic boom after the vaccines hit. Understand I mean early 20s not 1929.

That would be great for the "neighborhood"... until it isn't. I definitely prefer optimistic viewpoints since I am glass half full guy, but at some point, we are going to have write a check for all of this.

 

[Montecfo]

If the Fed “expects” inflation, it means to me they are seeing it now in leading/below the radar data.

Three examples are single family homes, building materials and vehicle prices.

I say inflation is here now, it will take a couple of quarters to become “official”. Early case scenario is higher interest rates by year end 2021.

The Fed is hoping for inflation. They have said they will let the economy run hot before raising rates, signaling their tolerance for some inflation. They're doing this hoping to get above their 2% target. They have been hoping this for over 10 years.

Some prices are up and up sharply. Most of this is due to temporary factors tied to the lockdowns. Vehicle prices up because of few people selling their used vehicles, yet more people buying vehicles to avoid public transportation and air travel.
Building material prices are up due to high demand for home improvements and housing formation, again tied to the lockdowns as well as to government imposed supply constraints. (Note to mods: nothing political there, just factual statements).

But yes, once higher rates return the market will correct and sentiment changes can come quickly. Taper tantrum in 2021? I'm thinking it comes later but actual results may vary.

 

[GravitySucks]

I miss read "Bullish" [emoji6]

I'm thinking now the market pricing is unrelated to reality. The only positives I've seen is expected earnings growth for the S&P have generally revised up for 2nd half 2021 and 2022, and possibly lower unemployment.

But since I don't really know nothing I'll just stick to what I've been doing: 60/40 and rebalance now and then.

 

[ER Eddie]

I'm pessimistic. I think the economy will tank within the next year, followed by a prolonged recession (or at best, a long period of limping, anemic growth). I see the current situation as similar to a sugar high. We gonna crash.

Of course, I have no idea what I'm talking about, so my prediction is worth what you paid for it.

On the other hand, I was more optimistic than most about when the bounce-back would happen after the March collapse, and I was right about that. So I'm 1 for 1 in my predictions. In other words, I have a 100% accuracy rate. You can trust my expertise.

 

[Montecfo]

The content of this thread appears to be refuting its title.

 

[corn18]

The content of this thread appears to be refuting its title.

Different demographic. Us RE folks are a little odd when it comes to finances.

 

[enjoyinglife102]

The past is often referenced as evidence that markets will bounce back. Personally, I don't think the relevant sample size is significant enough to draw conclusions with a high degree of confidence and often think of Japan's last 35 years as something we could easily experience. When one revisits the past of bubble like valuations that exist today, they have all ended terribly. When that will happen is anyone's guess as is if a rebound will occur during most of our lifetimes. At this stage of life, return of capital is so much more important than return on capital. Bernstein winning the game resonates with me.

 

[statsman]

I'm thinking now the market pricing is unrelated to reality.

Sure seems that way, for quite some time.

 

[Montecfo]

The past is often referenced as evidence that markets will bounce back. Personally, I don't think the relevant sample size is significant enough to draw conclusions with a high degree of confidence and often think of Japan's last 35 years as something we could easily experience. When one revisits the past of bubble like valuations that exist today, they have all ended terribly. When that will happen is anyone's guess as is if a rebound will occur during most of our lifetimes. At this stage of life, return of capital is so much more important than return on capital. Bernstein winning the game resonates with me.

I don't disagree with the Japan thought, but what is your evidence of a "bubble"?

I also agree with your statement regarding return of capital. In fact regularly I seriously consider reducing my allocation to equity sharply. But not because I think we are in a bubble.

 

[corn18]

I don't disagree with the Japan thought, but what is your evidence of a "bubble"?

I also agree with your statement regarding return of capital. In fact regularly I seriously consider reducing my allocation to equity sharply. But not because I think we are in a bubble.

It does intrigue me that the success rate goes up in firecalc the more conservative I get. 20/80 is 100% while 60/40 is 99%. But I can't resist getting some return for my heirs. I could go to a liability matching portfolio, but that seems overkill to me. I need $1.1M in today's dollars to fund all of my budget minus travel/blow that dough. I will have $800k in bonds when I retire (actually it's all in a stable value fund in my 401k yielding 2.1%). I figure that's close enough to safe with some upside for the kids.