Commentary: Equity markets are dying

[azphx1972]

I know this seems odd given the spectacular returns of the past year, but I saw this posted on another forum:

Equity markets are dying - Matthew Lynn's London Eye - MarketWatch (1/2/13)

I read the article comments and did a quick Google search. Apparently there have been prior proclaimers of the death of equities, but I have not had time to investigate them thoroughly:

The Death of Equities - Businessweek (8/13/79)
Bill Gross Proclaims Death of Equities: We've Heard That Before - MarketBeat - WSJ (8/1/12)

Is there any water to the arguments raised in the commentary, or is it another piece of sensationalist journalism?

 

[REWahoo]

... is it another piece of sensationalist journalism?

+1

And perhaps a buy signal...

 

[Midpack]

Is there any water to the arguments raised in the commentary, or is it another piece of sensationalist journalism?

Yes to both...

If it ever really happens, we'll all be blindsided, even the pros though they'll recognize it before mainstream investors. Someone will undoubtedly "call it" - for the same reason that chimps playing darts can pick stocks (some have to be right if only by chance).

You've noted the most famous earlier example, I'll never forget that issue. They sold a lot of issues, which was the objective...the content is secondary.

 

[nun]

LONDON (MarketWatch) — Anyone who invests regularly will inevitably spend a lot of time thinking about which nations and bourses are doing well, where the smart money is going, and which is likely to be the next index to soar or collapse.

Well the start of the article isn't too promising, he's got me all wrong!

 

[Bestwifeever]

I'm putting my money in tulip bulbs.

 

[Lazarus]

I'm putting my money in tulip bulbs.

No, Emu oil is where its at for smart investors.

 

[bondi688]

The two other books this perpetual optimist will be publishing are

Bust: Greece, the Euro and the Sovereign Debt Crisis (2010)
The Long Depression: The Slump of 2008 to 2031

 

[Texas Proud]

Much to do about nothing....

This past decade has not been the best time to do an IPO for most industries....

Wait until the economy is doing well (whenever that will be) and this will be a non-story...

 

[arky]

No, Emu oil is where its at for smart investors.

How about chinchilla fur !!??

 

[easysurfer]

Dow was up by only a measly 300 points or so yesterday

 

[audreyh1]

Don't worry, Nouriel Roubini a.k.a Dr. Doom has a special message for everyone today:

Dr Doom: The US has not yet woken up to its fiscal nightmare

 

[nun]

Don't worry, Nouriel Roubini a.k.a Dr. Doom has a special message for everyone today:

Dr Doom: The US has not yet woken up to its fiscal nightmare

Nou Nou was a drinking buddy of mine back in the late 1980s. He talks more sense now than he did back then and I pretty much agree with everything he says in the article. I'd also include a need to cut military spending. increasing the age for SS and Medicare, maintaining growth and halving the cost of US healthcare.

 

[marko]

Sooner or later the $4B that is still sitting on the sidelines has to go somewhere in the 'new normal'. IMO equities are still cheap.

 

[Texas Proud]

Sooner or later the $4B that is still sitting on the sidelines has to go somewhere in the 'new normal'. IMO equities are still cheap.

Don't you mean "T", as in trillions

 

[marko]

Don't you mean "T", as in trillions

Billions, trillions...whats the difference!! Just a few zeros.

Thanks, you're right.

 

[imoldernu]

The coming few months should be interesting for chartists. The confluence of change in a great number of market factors promises more volatility than we've seen in some time.
If Bernancke backs off on interest rates, we may be looking at some major changes in Shadow Banking. This may not be all bad, but the bond market could become scary.
At the same time, the US is not alone in debt-driven assets. A good guess might be that there will not be a safe haven in international currency... particularly China. If this brings a degree of worldwide stability, the long term result could be good.

At the least, moderate to small increases in the Fed rate can stave off inflation, which is more of a threat to the economy and personal wealth than a drop in equities.

Watch the VIX for indications of a correction in the coming 6 to 9 months. Some prognosticators are looking for a new floor with a 20% drop.

Finding the right buy-sell point is going to be a challenge.

My opinion only... just reading between the lines.

 

[MichaelB]

Is there any water to the arguments raised in the commentary, or is it another piece of [-]sensationalist journalism[/-] financial porn?

FIFY. The latter.

 

[azphx1972]

Thanks. Personally I'm betting the farm (my retirement savings) on equities, so I'm hoping the author is wrong as well.

 

[ripper1]

I know this seems odd given the spectacular returns of the past year, but I saw this posted on another forum:

Equity markets are dying - Matthew Lynn's London Eye - MarketWatch (1/2/13)

I read the article comments and did a quick Google search. Apparently there have been prior proclaimers of the death of equities, but I have not had time to investigate them thoroughly:

The Death of Equities - Businessweek (8/13/79)
Bill Gross Proclaims Death of Equities: We've Heard That Before - MarketBeat - WSJ (8/1/12)

Is there any water to the arguments raised in the commentary, or is it another piece of sensationalist journalism?

When we brake through 20,000 on the Dow these same people will be saying we are going to 40,000.

 

[REWahoo]

When we brake through 20,000 on the Dow...

I'm hoping we'll coast through or maybe even accelerate through, not brake through, but who knows...

 

[ripper1]

Pessimism is on our side.

 

[bssc]

As long as W2R doesn't say Whee, we are safe.

 

[GrayHare]

So, the supply of equities is decreasing, while the demand for them is increasing. Gee, I wonder what that could mean for their prices.

 

[FUEGO]

So, the supply of equities is decreasing, while the demand for them is increasing. Gee, I wonder what that could mean for their prices.

It could lead to an increase in market participants on the supply side until we reach equilibrium. More companies might have an IPO if the valuations increase. Funny how markets work!

 

[REWahoo]

Lot's of screwy stuff in these articles. Maybe I'm missing something, but this quote from the Matthew Lynn article seems blatantly inaccurate:

...2012 was yet another dismal year for stock markets around the world — not in the sense of their performance, which was just as mediocre as it has been for the last decade...

Markets in the US grew by double digits last year: including dividends the S&P increased by 16%. What's mediocre about that?