I'm guessing we get a bounce here.

[dex]

I'm guessing we get a bounce here - S&P to 1290 maybe and then the decline continues.

VIX bottom, S&P top

 

[Dawg52]

If I made a prediction, it would indeed be a guess.

 

[Retire Soon]

Once the nuclear power plant problem in Japan is resolved the bull market will continue until the end of 2011. At least, that is my crystal ball reading.

 

[Westernskies]

Once the nuclear power plant problem in Japan is resolved the bull market will continue until the end of 2011. At least, that is my crystal ball reading.

I like your scenario better, RetireSoon. (Sorry, Dex.)

Now if W2R can just keep her thoughts to herself...

 

[W2R]

I like your scenario better, RetireSoon. (Sorry, Dex.)

Now if W2R can just keep her thoughts to herself...

I promise, I promise, not a word....






(I like RetireSoon's scenario, too....)

 

[73ss454]

Not to worry Dex, when you are all cash you are safe. You don't have to guess any longer.

 

[dex]

Once the nuclear power plant problem in Japan is resolved the bull market will continue until the end of 2011. At least, that is my crystal ball reading.

There are other headwinds
- How deep with this move be? That could scare a lot of people out.
- Bahrain and Saudi Arabia protests
- Libya
- Oil Prices
- End of QE2
- European sovereign debt
- Sell in May and go away?
- 10 years since 9/11?

The 3rd year of a president's term is supposed to be very good for the stock market. If it isn't what does that mean for 2012?

Looking to year 3 of presidential cycle Mark Hulbert - MarketWatch

If the dollar starts to significantly strengthen - Kattie bar the door!

 

[traineeinvestor]

There are other headwinds
- How deep with this move be? That could scare a lot of people out.
- Bahrain and Saudi Arabia protests
- Libya
- Oil Prices
- End of QE2
- Sell in May and go away?
- 10 years since 9/11?

The 3rd year of a president's term is supposed to be very good for the stock market. If it isn't what does that mean for 2012?

Looking to year 3 of presidential cycle Mark Hulbert - MarketWatch

If the dollar starts to significantly strengthen - Kattie bar the door!

All of these are widely known and, if you believe in the efficiency (as opposed to rationality which is an entirely different issue) of markets, should already be priced into the markets. Then again, there will no doubt be a divergence of views as to the eventual outcome of each of these issues. To pick one as an example, some people may be betting on the problems in the Middle East getting worse and others that they will be resolved without any major disruption to oil supplies or regional conflict.

And, of course, there are the "unkown unknowns".

So I have no idea what the markets will do in the near term. What I do feel comfortable with is believing that (i) even if it dips first, the global economy will sooner or later resume growing and corporates will benefit from that and (ii) I am finding reasonable to good value in the local stock market (which is 11% off its 52 week high).

 

[dex]

All of these are widely known and, if you believe in the efficiency (as opposed to rationality which is an entirely different issue) of markets, should already be priced into the markets.

I don't. And if anyone knows that al-Qaeda will commit a terrorist act in the USA on 9/11/11 they should speak up now and not keep quiet and incorporate that information in to their stock market investments.

 

[traineeinvestor]

I don't. And if anyone knows that al-Qaeda will commit a terrorist act in the USA on 9/11/11 they should speak up now and not keep quiet and incorporate that information in to their stock market investments.

I tend to view markets as being somewhat efficient (but well short of perfect) in terms of disseminating publically available information which is relevant to determining prices and at matching buyers and sellers. In other respects I do not believe that markets are very efficient at all.

Also, even if markets were perfectly efficient in all respects (which they are not) efficiency does not imply (i) that markets are rational (they're not) or (ii) that perfectly efficient markets would result in all market participants forming identical views as to the relevance of available information or (iii) that known information would enable us to predict future price movements (today's market prices are at least partly a function of future expectations which, by definition, cannot be known).

As a side note, if markets "hate uncertainty", should it follow that we, as investors, should equate uncertainty with opportunity?

 

[dex]

I tend to view markets as being somewhat efficient (but well short of perfect) in terms of disseminating publically available information which is relevant to determining prices and at matching buyers and sellers. In other respects I do not believe that markets are very efficient at all.

Also, even if markets were perfectly efficient in all respects (which they are not) efficiency does not imply (i) that markets are rational (they're not) or (ii) that perfectly efficient markets would result in all market participants forming identical views as to the relevance of available information or (iii) that known information would enable us to predict future price movements (today's market prices are at least partly a function of future expectations which, by definition, cannot be known).

I think the key aspect of the theory i.e. the market is aware of information and incorporates it into the stock price - one way or another - is flawed or at best unprovable. Think of the number of people that are working, know the 'information' but regardless continue to make regular monthly purchases. Or, those just adjust their Asset Allocation regardless of the 'information'

Compared to the total number of shares outstanding, it takes very few to move the stock market.

As a side note, if markets "hate uncertainty", should it follow that we, as investors, should equate uncertainty with opportunity?

Should "investor" be trader?

 

[clifp]

For those of you with a sufficiently long term horizon, today's market is indeed a buying opportunity.*



*Unless it is actually the beginning of the next stage in the generation long secular bear market.

 

[traineeinvestor]

I think the key aspect of the theory i.e. the market is aware of information and incorporates it into the stock price - one way or another - is flawed or at best unprovable. Think of the number of people that are working, know the 'information' but regardless continue to make regular monthly purchases. Or, those just adjust their Asset Allocation regardless of the 'information'

Compared to the total number of shares outstanding, it takes very few to move the stock market.



Should "investor" be trader?

I agree completely with respect to the flaws in the theory (hence my heavily qualified statement about the extent of the efficiency of financial markets) and the distinction between efficiency and rationality.

Whether there is a difference between "investor", "trader", "speculator" and "gambler" is a semantic question. I ceased to view the distinction as meaningful long ago - at about the same time that a succession of salesmen tried to convince me about the alleged merits of term life as an investment.

 

[traineeinvestor]

For those of you with a sufficiently long term horizon, today's market is indeed a buying opportunity.*



*Unless it is actually the beginning of the next stage in the generation long secular bear market.

Or you believe in the Mayan calender.

 

[clifp]

Or you believe in the Mayan calender.

So maybe the selling is because all of the believers of the Mayan calendar are looking at the situation in Japan as a warning and figuring this is there last chance to spend 300K+ a year.

Is that enough thread references in one paragraph?

 

[donheff]

So maybe the selling is because all of the believers of the Mayan calendar are looking at the situation in Japan as a warning and figuring this is there last chance to spend 300K+ a year.

Is that enough thread references in one paragraph?

We should push that idea - a stimulus without deficit

 

[HFWR]

So maybe the selling is because all of the believers of the Mayan calendar are looking at the situation in Japan as a warning and figuring this is there last chance to spend 300K+ a year.

Is that enough thread references in one paragraph?

Should provide a boost to consumer spending.

 

[dex]

Whether there is a difference between "investor", "trader", "speculator" and "gambler" is a semantic question. I ceased to view the distinction as meaningful long ago - at about the same time that a succession of salesmen tried to convince me about the alleged merits of term life as an investment.

That is a good point.

Now if we can get Asset Allocators to admit they are market timers it could be the Age of Aquarius.

 

[MasterBlaster]

- J.P Morgan, when asked what the stock market will do, replied,

"It will fluctuate. "

 

[Westernskies]

So maybe the selling is because all of the believers of the Mayan calendar are looking at the situation in Japan as a warning and figuring this is there last chance to spend 300K+ a year on bacon, pancake batter in a can, and one-use-only dryer sheets, after paying off the mortage on their union-pension financed house in Wisconsin, installing a tankless water heater and buying a variable annuity from a relative with a gambling problem. Is that enough thread references in one paragraph?

maybe now...

 

[clifp]

maybe now...

You win.

 

[Rustward]

50/50 chance of getting it right. Congratulations.