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-   -   I vote to call it a Bear Market! (https://www.early-retirement.org/forums/f28/i-vote-to-call-it-a-bear-market-95345.html)

dtbach 12-22-2018 02:43 PM

Quote:

Originally Posted by RAE (Post 2161365)
In many ways, yes, I do. All the things you mention were certainly major shocks to the system, and I would never minimize them (especially 9/11) but in each case, at least a clear path forward was identified as to how to recover. Certainly not everyone agreed on that path, but at least we knew (generally) what course we were going to be on.

I look at the headlines now (take the last two weeks, for example, but even going back further), and all I see is continued chaos, and expectations for more chaos in the weeks ahead. Not only not much agreement on how to address any of the major issues that face us, but outright fear, confusion, and even hatred being expressed as well. I don't want to take this thread in a political direction, so I will stop there. But I think it's hard to dispute that we are living in times of massive uncertainty. It's hard for me to believe that the markets can thrive in a situation like this.


Worse than Pearl Harbor/WWII? Assassination of Presidents (Kennedy/attempt on Reagan)? Turmoil of Vietnam? 15% inflation in the 70's?

I don't think we are in all that horrible of times right now. No major wars, low employment, low inflation, solid GDP. We will muddle through just fine and this will just be another blip on the long term growth of the US.

Lawrence of Suburbia 12-22-2018 03:20 PM

VTI down only 18%. It's a 'correction'. I'm blowing my trumpet loudly from the sidelines as it heads down, though! (Hoping to buy VPGDX and AMJVX on a serious discount, and collect some phat dividends.)

Dtail 12-22-2018 03:24 PM

Quote:

Originally Posted by RAE (Post 2161365)
In many ways, yes, I do. All the things you mention were certainly major shocks to the system, and I would never minimize them (especially 9/11) but in each case, at least a clear path forward was identified as to how to recover. Certainly not everyone agreed on that path, but at least we knew (generally) what course we were going to be on.

I look at the headlines now (take the last two weeks, for example, but even going back further), and all I see is continued chaos, and expectations for more chaos in the weeks ahead. Not only not much agreement on how to address any of the major issues that face us, but outright fear, confusion, and even hatred being expressed as well. I don't want to take this thread in a political direction, so I will stop there. But I think it's hard to dispute that we are living in times of massive uncertainty. It's hard for me to believe that the markets can thrive in a situation like this.

Reading a bit into your reasoning, but staying off the verboten subjects too much, things will probably be clearer by 2020/21 at the latest.

Lsbcal 12-22-2018 03:47 PM

Quote:

Originally Posted by dtbach (Post 2161374)
Worse than Pearl Harbor/WWII? Assassination of Presidents (Kennedy/attempt on Reagan)? Turmoil of Vietnam? 15% inflation in the 70's?

I don't think we are in all that horrible of times right now. No major wars, low employment, low inflation, solid GDP. We will muddle through just fine and this will just be another blip on the long term growth of the US.

In that first sentence you left out the Trojan War! :)

Seriously, much of the chaos is easily walked back. The trade war can be negotiated, the government close down is completely artificial, etc. Some who have been bearish (and wrong) now trot out the negatives but there always has to be risk that goes along with possible rewards.

I may be guilty of too rosy a view but I don't let that set my investment methodology.

RAE 12-22-2018 03:59 PM

Quote:

Originally Posted by Dtail (Post 2161397)
Reading a bit into your reasoning, but staying off the verboten subjects too much, things will probably be clearer by 2020/21 at the latest.


I don't disagree with that. But I'm afraid this next year, maybe 2 years, could be pretty rough. I don't see this as being a minor blip. Just my opinion, time will tell if I'm right or not.

RenoJay 12-22-2018 07:04 PM

Quote:

Originally Posted by dtbach (Post 2161374)
I don't think we are in all that horrible of times right now. No major wars, low employment, low inflation, solid GDP. We will muddle through just fine and this will just be another blip on the long term growth of the US.

The reasons you quote (extremely low unemployment, solid GDP, someone else mentioned crowded restaurants, etc.) are some reasons WHY I'm bearish. When things are going amazingly well, history suggests the most likely direction is down. Corporate profits as a share of revenue are about as high as they've ever been, while employee wages are near as low as they've been. I hear both political parties making waves about wages, which makes me think wages will rise over the next decade as profits levels fall. Again, stocks are forward-looking, so they anticipate what's likely to happen in the future, not what's happening today. Perhaps I'm too early, but logically, with the economy so good, and the stock market having anticipated tax reform and deregulation (in a big jump shortly after 2016 election) how much better can earnings get? When things are great and expectations are high for continued profit growth, it takes huge surprises to move the market up. But with high expectations, it only takes relatively minor negative shocks to move the market down. On the contrary, I've got this great email I sent to my friends on March 7, 2009 suggesting they buy stocks (or at least don't sell) and a couple of my reasons were that I was still seeing people go to Starbucks, there were no breadlines, etc.

hesperus 12-23-2018 01:06 PM

Quote:

Originally Posted by RAE (Post 2161414)
I don't disagree with that. But I'm afraid this next year, maybe 2 years, could be pretty rough. I don't see this as being a minor blip. Just my opinion, time will tell if I'm right or not.

+1

there's much more to this than just purely economic forces

Cut-Throat 12-23-2018 01:23 PM

I had almost forgot why I was 70% in Bonds.

nash031 12-23-2018 02:06 PM

I vote to call it a Bear Market!
 
Quote:

Originally Posted by RenoJay (Post 2161495)
The reasons you quote (extremely low unemployment, solid GDP, someone else mentioned crowded restaurants, etc.) are some reasons WHY I'm bearish. When things are going amazingly well, history suggests the most likely direction is down. Corporate profits as a share of revenue are about as high as they've ever been, while employee wages are near as low as they've been. I hear both political parties making waves about wages, which makes me think wages will rise over the next decade as profits levels fall. Again, stocks are forward-looking, so they anticipate what's likely to happen in the future, not what's happening today. Perhaps I'm too early, but logically, with the economy so good, and the stock market having anticipated tax reform and deregulation (in a big jump shortly after 2016 election) how much better can earnings get? When things are great and expectations are high for continued profit growth, it takes huge surprises to move the market up. But with high expectations, it only takes relatively minor negative shocks to move the market down. On the contrary, I've got this great email I sent to my friends on March 7, 2009 suggesting they buy stocks (or at least don't sell) and a couple of my reasons were that I was still seeing people go to Starbucks, there were no breadlines, etc.

I find some interesting stuff in your thoughts, notably that you are concerned by optimism... here... on a message board of people who are often contrarian, long term, buy and hold investors, many of whom are not subject to the type of emotional swings you look for when calling a bear. Conversely, Iíve seen a number of pessimists around here and elsewhere for a long time. If all of us optimists and pessimists bide our time long enough, we will be correct.

Iím taking nibbles, letting dividends reinvest and keeping my investments on autopilot. I will not change that behavior regardless of bear or bull, same as in 2008, and ultimately even a flat market or prolonged bear is tolerable at this stage for me. Since I and most here donít move major amounts of money on the emotions of others, Iím not sure how much value there really is in forecasting one way or another. Those who disagree are mostly already in bonds because that suits them. I also donít see much parallel between Japan and the US historically or economically as pertains to market levels and government manipulation, but YMMV.

BeachOrCity 12-24-2018 06:06 AM

Quote:

Originally Posted by RAE (Post 2161365)
In many ways, yes, I do. All the things you mention were certainly major shocks to the system, and I would never minimize them (especially 9/11) but in each case, at least a clear path forward was identified as to how to recover. Certainly not everyone agreed on that path, but at least we knew (generally) what course we were going to be on.

I look at the headlines now (take the last two weeks, for example, but even going back further), and all I see is continued chaos, and expectations for more chaos in the weeks ahead. Not only not much agreement on how to address any of the major issues that face us, but outright fear, confusion, and even hatred being expressed as well. I don't want to take this thread in a political direction, so I will stop there. But I think it's hard to dispute that we are living in times of massive uncertainty. It's hard for me to believe that the markets can thrive in a situation like this.



-1. I am generally one who is less optimistic than the market or people in general but if one sticks to the economic basics (gdp inflation unemployment). Things are not bad.

We had a good 2016 and a fantastic 2017. Ytd we are only down about 8.5 percent total stock market. After two good years having an off year is normal.

This is a pause or correction at this point. Not a bear market yet.

Unless something bad happens at a macro level (serious trade war, military war, brexit meltdown, financial collapse somewhere) the fundamentals are too solid to support a crash. These risks are always present and usually donít happen so I donít try to time the market around them.

target2019 12-24-2018 09:55 AM

I'm a partial pessimist. Optimism is admirable, and I am 50% optimistic. However, the facts that we are fed do change. For example, Q3 GDP is lowered slightly, but the Q4 projections are also lower, and we will see more accuracy when the computers start running early in the year.

https://www.forbes.com/sites/jjkinah.../#3246e7ad690c

Quote:

"We wonít see official numbers for the first estimate of Q4 and annual 2018 GDP until January 30. But for now we can keep watching the Atlanta Fedís GDPNow model estimates. The latest forecast, from Friday, is for Q4 to show a 2.7% seasonally adjusted annual GDP rate. Thatís down from the previous forecast of 2.9%."
Other factors, which are not measurable (and not mentionable), have significantly lowered faith/belief in the market and economy. Of course that is IMO, and we shall see what we shall see (as Mom used to say).

audreyh1 12-24-2018 12:16 PM

OK - I think you can call it a bear now!

W2R 12-24-2018 12:26 PM

Quote:

Originally Posted by audreyh1 (Post 2162147)
OK - I think you can call it a bear now!

:eek: Good gosh! I had no idea until reading your post. Yes, I think it's gone from a Teddy bear market to a bear market by now.

Ed B 12-24-2018 12:56 PM

That didn't take long.

Chuckanut 12-24-2018 01:04 PM

So, is it a black bear or a grizzly bear?

And even more important... Is it attacking because it sees you as a threat, or does it see you as prey?

https://www.businessinsider.com/clin...attack-2016-12

Quote:

If playing dead does not cause the bear to lose interest, you are the rare victim of a predatory attack. The bear intends to kill and possibly eat you, so fight back with any available weapons—a knife, sticks, rocks, your fists. Aim for the eyes and nose, where the bear is most sensitive.

RAE 12-24-2018 01:08 PM

Quote:

Originally Posted by target2019 (Post 2162044)

Other factors, which are not measurable (and not mentionable), have significantly lowered faith/belief in the market and economy.

Yep, that is my view also. It's probably true that, over the long term, the market is a reflection of the economic basics (gdp, inflation, unemployment), but in the short term, it can drop a whole lot in response to many non-economic things, whether that seems rational to us, or not. I think this is one of those times.

RenoJay 12-24-2018 01:42 PM

Quote:

Originally Posted by RAE (Post 2162193)
Yep, that is my view also. It's probably true that, over the long term, the market is a reflection of the economic basics (gdp, inflation, unemployment), but in the short term, it can drop a whole lot in response to many non-economic things, whether that seems rational to us, or not. I think this is one of those times.

I think it can be perfectly rational for investors to think, "I've made a killing in the stock market over the past 10 years, I'm now 10 years older than during the financial crisis and 10 years closer to retirement, and I simply want to get off the roller coaster."

audreyh1 12-24-2018 01:51 PM

Quote:

Originally Posted by RenoJay (Post 2162218)
I think it can be perfectly rational for investors to think, "I've made a killing in the stock market over the past 10 years, I'm now 10 years older than during the financial crisis and 10 years closer to retirement, and I simply want to get off the roller coaster."

I donít believe that the retail investor is controlling the market.

street 12-24-2018 01:53 PM

WOW! Just looked at the markets also.
I beleive the bear has woke from his winter nap. I just hope it is a nice bear and not a bad bear and it goes back to sleep in the near future. LOL

RAE 12-24-2018 01:59 PM

Quote:

Originally Posted by RenoJay (Post 2162218)
I think it can be perfectly rational for investors to think, "I've made a killing in the stock market over the past 10 years, I'm now 10 years older than during the financial crisis and 10 years closer to retirement, and I simply want to get off the roller coaster."


+1, Agreed. That basically describes my thought process, although I was retired before I got off the roller coaster.

Luck_Club 12-24-2018 02:02 PM

:eek:Look at the dow volume from 2015-now. UP NEARLY 6-7X!

https://finance.yahoo.com/chart/%5ED...JjaGFydCJ9fX19

MRG 12-24-2018 03:34 PM

Quote:

Originally Posted by Chuckanut (Post 2162189)
So, is it a black bear or a grizzly bear?

And even more important... Is it attacking because it sees you as a threat, or does it see you as prey?

https://www.businessinsider.com/clin...attack-2016-12

The bears are sleepy. Let's not wake them.

I love the bit about grizzly bears having federal protection, so if you shoot one there's an investigation. Really? I'm going to just stand there and let something eat me? I had a different plan.

NW-Bound 12-24-2018 03:58 PM

Quote:

Originally Posted by NW-Bound (Post 2160420)
-1. Not yet.

The S&P high was 2940.91. It closed today at 2467.42. That's -16.1% down. Only 4 more percents to go. It may make it there before New Year. Plenty of time for us to celebrate NY and start 2019 in the pits. Why rush it?

Quote:

Originally Posted by audreyh1 (Post 2162147)
OK - I think you can call it a bear now!

S&P closed at 2351.10 today, which is 79.99% of the recent high.

Hurrah, it is officially a bear market.

We can now all celebrate Christmas with the bear awakened. :dance:

Do we have a word for the market being down 30%? Let's prepare to celebrate NY with that milestone too.

NW-Bound 12-24-2018 04:08 PM

Quote:

Originally Posted by Chuckanut (Post 2162189)
So, is it a black bear or a grizzly bear?

And even more important... Is it attacking because it sees you as a threat, or does it see you as prey?

https://www.businessinsider.com/clin...attack-2016-12

Quote:

If playing dead does not cause the bear to lose interest, you are the rare victim of a predatory attack. The bear intends to kill and possibly eat you, so fight back with any available weapons—a knife, sticks, rocks, your fists. Aim for the eyes and nose, where the bear is most sensitive.


Its color is brown!

Should have deployed my pepper spray, but it's too late. Have to play dead now, and hope for the best.

https://r.ddmcdn.com/s_f/DSC/uploads/...ar-625x450.jpg

braumeister 12-24-2018 04:14 PM

1 Attachment(s)
Maybe it's this sort of bear?

Attachment 30297

steelyman 12-24-2018 04:16 PM

Remember: you donít lose (or gain) a penny until you sell.

GravitySucks 12-24-2018 04:29 PM

1 Attachment(s)
Maybe we'll get lucky and get these bears.Attachment 30299

cbo111 12-24-2018 04:31 PM

Maybe we should just acknowledge this was, in large part, caused by the "elephant" in the room?

Onward 12-24-2018 04:40 PM

NOW it's a bear.

MRG 12-24-2018 04:58 PM

1 Attachment(s)
Quote:

Originally Posted by NW-Bound (Post 2162281)
Its color is brown!

Should have deployed my pepper spray, but it's too late. Have to play dead now, and hope for the best.

Not all brown bears are mean. She's a little cutie.Attachment 30301

Lsbcal 12-24-2018 05:09 PM

Quote:

Originally Posted by audreyh1 (Post 2162224)
I donít believe that the retail investor is controlling the market.

+1

easysurfer 12-24-2018 05:19 PM

Quote:

Originally Posted by Onward (Post 2162302)
NOW it's a bear.

Look on the bright side, since World War II bear markets on average lasted only about 13 months :popcorn::

Quote:

Since World War II, bear markets on average have fallen 30.4 percent and have lasted 13 months, according to analysis by Goldman Sachs and CNBC. When that milestone has been hit, it took stocks an average of 21.9 months to recover.

Even when stocks enter “correction” territory, which is defined by at least a 10 percent drop from a recent high, there’s a long road to recovery. History shows corrections last four months, and equities slide 13 percent before finding a bottom.
https://www.cnbc.com/2018/12/24/what...lly-last-.html

CardsFan 12-24-2018 05:42 PM

Not time to buy yet. DW shops at Kohl's. Need to have a 30% off coupon before you can buy anything.;D

20% doesn't cut it.:facepalm:

Ed B 12-24-2018 05:52 PM

Honestly, I am kind of relieved to see it finally arrive so we can begin the countdown to the recovery. And I fully understand we may be quite a ways from the bottom.

I retired June 1 and still have 2 1/2 years expenses split between a Stable value fund for 2019 and early 2020, and the rest in Lockheed Martin bonds yielding ~3.4% (coupon 4.5%) that matures Nov 15, 2019. So barring unforeseen emergencies I won't need to sell an equity until 1st or 2nd qtr 2021.

VFK57 12-24-2018 05:54 PM

Quote:

Originally Posted by steelyman (Post 2162287)
Remember: you donít lose (or gain) a penny until you sell.

That is what keeps me from selling. YTD drop of almost 13%

Scrapr 12-26-2018 03:28 PM

Shortest Bear market evah. Dow up 1k! Nasdaq up 3 and a half bills

Whew

I only check my portfolio on up days. Guess who is pulling out the calculator tonight? :dance:

Dtail 12-26-2018 03:32 PM

Quote:

Originally Posted by Scrapr (Post 2163108)
Shortest Bear market evah. Dow up 1k! Nasdaq up 3 and a half bills

Whew

I only check my portfolio on up days. Guess who is pulling out the calculator tonight? :dance:

Okay so since the SP 500 and Nasdaq hit 20%, but not the Dow, is it official that the Bull Market ended?
Not to ruin the party, but some of the largest % gains was in 2008.

NW-Bound 12-26-2018 03:44 PM

Quote:

Originally Posted by Scrapr (Post 2163108)
Shortest Bear market evah. Dow up 1k! Nasdaq up 3 and a half bills

Whew

I only check my portfolio on up days. Guess who is pulling out the calculator tonight? :dance:

The market has to reclaim its previous high for the bear market to end. Long way to go.

Andre1969 12-26-2018 03:55 PM

Just out of curiosity, how long does the market have to stay down, for it to count as a bear? FWIW, I just ran my own numbers, and as of Christmas Eve, I was down about 17.4% from the end of September, which was where I had peaked.

And, when I look at my numbers for the year, things don't look so scary. For 2018 as a whole, I'm down about 11.5%. This has also been a good lesson in the old adage of focusing on the percentages, rather than actual dollar amounts. That 11.5% translates into a larger $ amount than what I lost back in 2008! But, percentage-wise, I lost about 42%, back then...

audreyh1 12-26-2018 04:02 PM

I don’t believe there is any duration requirement.

NYEXPAT 12-26-2018 04:07 PM

Quote:

Originally Posted by Dtail (Post 2163111)
Okay so since the SP 500 and Nasdaq hit 20%, but not the Dow, is it official that the Bull Market ended?
Not to ruin the party, but some of the largest % gains was in 2008.

That would depend on if this is a cyclical or secular "Bear market"?

Huston55 12-26-2018 04:13 PM

Quote:

Originally Posted by easysurfer (Post 2162314)
Look on the bright side, since World War II bear markets on average lasted only about 13 months :popcorn::

https://www.cnbc.com/2018/12/24/what...lly-last-.html

Quote:

Originally Posted by audreyh1 (Post 2163134)
I donít believe there is any duration requirement.

Does 13 hours count? :rolleyes:

jollystomper 12-26-2018 04:22 PM

Quote:

Originally Posted by Scrapr (Post 2163108)
Shortest Bear market evah. Dow up 1k! Nasdaq up 3 and a half bills

Of course, if the Dow can gain 1K in day, it can also lose 1K in a day... ;D

UnrealizedPotential 12-26-2018 05:00 PM

Quote:

Originally Posted by Scrapr (Post 2163108)
Shortest Bear market evah. Dow up 1k! Nasdaq up 3 and a half bills

Whew

I only check my portfolio on up days. Guess who is pulling out the calculator tonight? :dance:

I don't think this is the shortest bear for a couple of reasons. The 1987 crash gets my vote for the shortest bear. It went down 22% in one day, and the next day it was up 11%. Second reason IMO, is that we don't know if we are out of the woods yet. Yes, it was a great day, but we could retest the lows, and possibly go lower or not, who knows?

Andre1969 12-26-2018 05:13 PM

Quote:

Originally Posted by jollystomper (Post 2163145)
Of course, if the Dow can gain 1K in day, it can also lose 1K in a day... ;D

Hell, considering it tends to drop faster than it rises, it can lose a helluva lot more than that in one day! :o

easysurfer 12-26-2018 05:14 PM

I would call down 650 pts one day then up over 1000 the next a sideways walk :popcorn:.

The tug of war is just beginning.

joeea 12-26-2018 05:15 PM

Is it officially an un-Bear market now?

easysurfer 12-26-2018 05:19 PM

Quote:

Originally Posted by joeea (Post 2163162)
Is it officially an un-Bear market now?

Large ups and downs, more like unbearable :coolsmiley:.

BeachOrCity 12-26-2018 05:26 PM

Bear markets are usually called with a more sustained 20% loss. While this market still warrants concern I think the media is hyping a story. it wasnít a bear on Christmas Eve because the loss was not sustained (they usually like to see it for a period of months).

Fundamentals are good. Only thing I have seen that raises concern is the quantitative tightening going on. That will be really hard to fully unwind. donít know if they will send us to recession by trying to do it.

One thing that is NOT a big problem is the current 2.5% fed short term rate. No way a rate like that tanks an otherwise healthy economy.

So if you are trying to read the tea leaves I suggest looking at what the fed is saying and kore importantly DOING regarding getting all the non govt bonds off its balance sheet

NW-Bound 12-26-2018 05:34 PM

The market may just turn around and drops 1500 points tomorrow to satisfy your demand for a longer period of misery for a bear market. Just be patient.

Luck_Club 12-26-2018 05:44 PM

Quote:

Originally Posted by NW-Bound (Post 2163169)
The market may just turn around and drops 1500 points tomorrow to satisfy your demand for a longer period of misery for a bear market. Just be patient.

I was happy to see many of my recent losses reduced today, but I'm waiting to hear the talking heads all screaming how much lower can this market go down, before I reallocate to a higher equity position. I figure 2 years tops and they'll be jumping out of the windows so to speak.

corn18 12-26-2018 05:48 PM

Quote:

Originally Posted by joeea (Post 2163162)
Is it officially an un-Bear market now?

It never officially closed at >20% loss. At least not the S&P 500.

joeea 12-26-2018 05:51 PM

Quote:

Originally Posted by corn18 (Post 2163175)
It never officially closed at >20% loss. At least not the S&P 500.

So that makes it a not quite Bear market?

MRG 12-26-2018 05:57 PM

Quote:

Originally Posted by joeea (Post 2163177)
So that makes it a not quite Bear market?

Neither bear, nor bull. More like a frog market.

NW-Bound 12-26-2018 06:12 PM

Quote:

Originally Posted by corn18 (Post 2163175)
It never officially closed at >20% loss. At least not the S&P 500.

It surely did!

Down 20.06% to be exact, as described in my earlier posts on 12/20/2018, and 12/25/2018.

Quote:

Originally Posted by NW-Bound (Post 2160420)
-1. Not yet.

The S&P high was 2940.91. It closed today at 2467.42. That's -16.1% down. Only 4 more percents to go. It may make it there before New Year. Plenty of time for us to celebrate NY and start 2019 in the pits. Why rush it?

Quote:

Originally Posted by NW-Bound (Post 2162279)
S&P closed at 2351.10 today, which is 79.95% of the recent high.

Hurrah, it is officially a bear market.

We can now all celebrate Christmas with the bear awakened. :dance:


NW-Bound 12-26-2018 06:15 PM

Quote:

Originally Posted by MRG (Post 2163179)
Neither bear, nor bull. More like a frog market.

A frog in a slowly heated pan?

corn18 12-26-2018 06:15 PM

19.99 is not 20

NW-Bound 12-26-2018 06:18 PM

20.06 is not greater than 20?

NW-Bound 12-26-2018 07:02 PM

Quote:

Originally Posted by easysurfer (Post 2162314)
Look on the bright side, since World War II bear markets on average lasted only about 13 months :popcorn::

https://www.cnbc.com/2018/12/24/what...lly-last-.html

Yes.

And it means that on the average, a bear market takes 13 months to recover to where it was.

Just because today the market jumps up 5%, one cannot say that the bear market is over.

Needs another 15% rise from here.

And that is 15% of the top market. As we are now lower, to get back to 2940.91 from where we are today at 2467.70, we need another 19.2%, not 15%.

It's similar to when we lose 50%, we need 100% increase to get back. Not just 50%, because a 50% rise from 50 cents gets us back to 75 cents, not a whole dollar.

Dtail 12-26-2018 07:07 PM

Quote:

Originally Posted by NW-Bound (Post 2163205)
Yes.

And it means that on the average, a bear market takes 13 months to recover to where it was.

Just because today the market recovers 5% of the 20% loss that has occurred recently, one cannot say that the bear market is over.

Needs another 15% rise from here.

I think many folks would take a 15% gain over the next 13 months.;D

MRG 12-26-2018 07:07 PM

Quote:

Originally Posted by NW-Bound (Post 2163183)
A frog in a slowly heated pan?

Could be.

Perhaps a frog in a heated covered pot? Maybe not alive, nor dead? Who knows. [emoji111]

NW-Bound 12-26-2018 07:13 PM

Quote:

Originally Posted by Dtail (Post 2163208)
I think many folks would take a 15% gain over the next 13 months.;D

Yes. I would not complain. It's actually 19% from here, as I corrected myself earlier.

But to declare "victory" in just one day reversal of the decline? :nonono:

zedd 12-26-2018 07:17 PM

The market flash crash was unheard of ... until it finally happened.

What we have just experienced was an on a tear bear

Dtail 12-26-2018 07:18 PM

Quote:

Originally Posted by NW-Bound (Post 2163210)
Yes. I would not complain.

But to declare "victory" in just one day reversal of the decline? :nonono:

Absolutely, not a victory at all; just mostly short sellers covering I believe.

Winemaker 12-26-2018 07:30 PM

Quote:

Originally Posted by cbo111 (Post 2162298)
Maybe we should just acknowledge this was, in large part, caused by the "elephant" in the room?

Don't be an ass!;D

audreyh1 12-26-2018 07:47 PM

Quote:

Originally Posted by NW-Bound (Post 2163205)
Yes.

And it means that on the average, a bear market takes 13 months to recover to where it was.

Just because today the market jumps up 5%, one cannot say that the bear market is over.

Needs another 15% rise from here.

And that is 15% of the top market. As we are now lower, to get back to 2940.91 from where we are today at 2467.70, we need another 19.2%, not 15%.

It's similar to when we lose 50%, we need 100% increase to get back. Not just 50%, because a 50% rise from 50 cents gets us back to 75 cents, not a whole dollar.

That information is not quite correct. See the article.
Quote:

Since World War II, bear markets on average have fallen 30.4 percent and have lasted 13 months, according to analysis by Goldman Sachs and CNBC. When that milestone has been hit, it took stocks an average of 21.9 months to recover.
The bear market duration is the market dropping. It is measured from peak to trough - the time the market takes to go down. 13.2 months on average.

Followed by the period it takes to recover, which is usually longer. 21.9 months on average.

Add the two together, peak to new high recovered, you are talking 35.1 months, or almost 3 years on average.

NW-Bound 12-26-2018 08:12 PM

Thanks for the correction. I was so wrong in my post! I usually follow the link before making a comment, but was sloppy this time.

And so, instead of grinding out 13 months for a decline of 30.4%, we took less than 4 months to wipe out 20%. Of course, we do not know if the market will not turn around tomorrow, and then bounces around the bottom for another year, perhaps setting new low along the way.

And then, another 21.9 months to recover. Yikes!

Not so long ago, people called Bogle names for saying the market return will be not so hot for the next 10 years. Heck, we may be spending the next 3 years just to get back to where we were in September. And before you realize it, a decade has gone by.

Say hello to 4%/yr average return for the next decade.

PS. The above numbers are based on stock prices, I believe. Add to that the dividend, and the total return will get us back sooner.

But then, we have to figure in the inflation, which is roughly the same as the dividend. Oh well.

jcfradio 12-26-2018 09:55 PM

What is that sound that I hear???

Meow, thump, boing!:angel:whistling::whistling::whistling::whis tling:

Was today, a dead cat bounce? I did some tax loss selling today to have a bit more cash on the sidelines for buying opportunities.

corn18 12-27-2018 05:05 AM

Quote:

Originally Posted by jcfradio (Post 2163232)
What is that sound that I hear???

Meow, thump, boing!:angel:whistling::whistling::whistling::whis tling:

Was today, a dead cat bounce? I did some tax loss selling today to have a bit more cash on the sidelines for buying opportunities.

Futures seem to indicate the cat is still falling.

DrRoy 12-27-2018 05:45 AM

-19.8% on a closing basis. Close enough for me, but the semantics make no difference anyway, and 20% is arbitrary to begin with.

DEC-1982 12-27-2018 06:25 AM

On Dec 25, I did a calculation two ways:

1) using end of day numbers (2930.75). The S&P was -19.77 or -19.78%%
2) using intra-day highs (2940.91). The S&P was -20.05%
Low 2351.10

I was reading some articles yesterday, and while some report a bear, others (like from Bloomberg) don't. I thought end of day numbers were what were typically used, but perhaps it's not just numbers it's a "feeling" also. If the numbers are close enough, depending on who you are and how you think, you choose the numbers you like to buttress your position.

NW-Bound 12-27-2018 11:10 AM

Once more, I stand corrected.

The S&P high of 2940.91 I quoted earlier is intraday, not at closing as I thought.

One article I just read says "we have entered the bear market" and carefully adds "on an intraday basis". I guess in the old days there was no computer to keep track of the intraday highs and lows, and the tradition has been to use the closing values.

Well, all we need is a 1/10 of a point more. Should there be a poll to see if we are going to make this infamous milestone? :) According to historical records in the link in earlier posts, the night is still young with this market rout. We have another 9 or 10 months to get to the bottom yet.

Dtail 12-27-2018 01:39 PM

Quote:

Originally Posted by NW-Bound (Post 2163394)
Once more, I stand corrected.

The S&P high of 2940.91 I quoted earlier is intraday, not at closing as I thought.

One article I just read says "we have entered the bear market" and carefully adds "on an intraday basis". I guess in the old days there was no computer to keep track of the intraday highs and lows, and the tradition has been to use the closing values.

Well, all we need is a 1/10 of a point more. Should there be a poll to see if we are going to make this infamous milestone? :) According to historical records in the link in earlier posts, the night is still young with this market rout. We have another 9 or 10 months to get to the bottom yet.

Perhaps with the speed that this market has gone down, the bear bottom will be reached sooner.

El Magnifico Loco 12-27-2018 01:53 PM

Quote:

Originally Posted by audreyh1 (Post 2163215)
That information is not quite correct. See the article.

The bear market duration is the market dropping. It is measured from peak to trough - the time the market takes to go down. 13.2 months on average.

Followed by the period it takes to recover, which is usually longer. 21.9 months on average.

Add the two together, peak to new high recovered, you are talking 35.1 months, or almost 3 years on average.

Which I guess is why people say you should have 3 years worth of expenses stashed away as cash.

Re: where the bottom is, I think we should keep in mind the straight P/E is around 18 today and the CAPE is >25. I think we have further to go . . . .

audreyh1 12-27-2018 02:10 PM

Quote:

Originally Posted by El Magnifico Loco (Post 2163460)
Which I guess is why people say you should have 3 years worth of expenses stashed away as cash.

Re: where the bottom is, I think we should keep in mind the straight P/E is around 18 today and the CAPE is >25. I think we have further to go . . . .

It is conventional to talk about length of bear markets as the time period of the drop, but easily confusing and not clear that it does not include the time for recovery.

The drops and recovery periods from April 2000 and Oct 2007 were much longer than three years.

aja8888 12-27-2018 02:30 PM

The way I see it, is if you are counting on an equities "recovery" to fund your retirement future, you really need rethink your plan. Look what happened in Japan.

NW-Bound 12-27-2018 02:39 PM

Quote:

Originally Posted by Dtail (Post 2163454)
Perhaps with the speed that this market has gone down, the bear bottom will be reached sooner.

I think we all hope for that.

And then, we can all look back and say "See, it's only a correction. I told ya". ;D

El Magnifico Loco 12-27-2018 02:51 PM

Quote:

Originally Posted by audreyh1 (Post 2163464)
It is conventional to talk about length of bear markets as the time period of the drop, but easily confusing and not clear that it does not include the time for recovery.

The drops and recovery periods from April 2000 and Oct 2007 were much longer than three years.

Yes. As I recall, we did not truly recover from the 2000 bear until after we experienced the 2007 bear. But I think on average, from peak to peak, it's 3 years.

Another interesting question is whether we are still in a secular bull, or at the beginning of a secular bear.

audreyh1 12-27-2018 02:58 PM

Quote:

Originally Posted by El Magnifico Loco (Post 2163477)
Yes. As I recall, we did not truly recover from the 2000 bear until after we experienced the 2007 bear. But I think on average, from peak to peak, it's 3 years.

Another interesting question is whether we are still in a secular bull, or at the beginning of a secular bear.

Just looking at indexes, not counting dividends, the market had finally recovered in Oct 2007, just in time for the next bear!

But if you count in dividends, that shortens it. But when you take into account inflation, its drain is worse than the gains from dividends. They very roughly cancel each other out. Accounting for inflation and dividends the 2000 bear market never recovered and continued into the 2007 bear market, taking another 5 years or more to completely recover.

NW-Bound 12-27-2018 03:00 PM

Should I remind everyone why 2000-2010 was called "the Lost Decade"?

Don't you now wish you will get what Bogle suggested for the next 10 years' return?

JoeWras 12-27-2018 03:27 PM

My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

cyber888 12-27-2018 03:39 PM

I vote to call it a Bear Market!
 
Quote:

Originally Posted by JoeWras (Post 2163498)
My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.



Lol. I saw that .. down 600 red .. then last 15-30 minutes went 200+ green .. low volume trades push it to green. Was that the Plunge Protection Team at work ?[emoji12]

Scrapr 12-27-2018 04:23 PM

Quote:

Originally Posted by JoeWras (Post 2163498)
My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

Roll on Bull market roll on :dance:;D

NW-Bound 12-27-2018 04:35 PM

Quote:

Originally Posted by JoeWras (Post 2163498)
My neck is sore from watching the wild swings today. Down 600 intraday and closing up 250. Madness. I don't generally watch, but peaked in at things during breaks from working on my garden.

I watched the market a bit in the morning, wrote 3 out-of-the-money covered calls on some stocks that were green while the market was red. Then, got tired of seeing everything going down, so went out to the backyard to do some work.

Needed to run to Home Depot for some "stuff". Stopped by my laptop to check on the market about 1/2 hour before close. Nice!

Quote:

Originally Posted by cyber888 (Post 2163503)
Lol. I saw that .. down 600 red .. then last 15-30 minutes went 200+ green .. low volume trades push it to green. Was that the Plunge Protection Team at work ?[emoji12]

The market declined until 1.5 hrs before close, then it started to turn around.

Total volume of the day was indeed lower than the daily average, but most of the trades were during the last hour and trading stayed heavy until close.

ShokWaveRider 12-27-2018 04:46 PM

The "Day" traders are taking advantage of the swings.

NW-Bound 12-27-2018 05:03 PM

Well, I do not care who is buying, as long as there's somebody buying, and buys a lot. :)

Dtail 12-27-2018 07:34 PM

Quote:

Originally Posted by ShokWaveRider (Post 2163538)
The "Day" traders are taking advantage of the swings.

The Wall Street hedge fund firms who have "Program trading" algorithms set up, are probably cleaning up.

TravelinFamilyMan 12-28-2018 09:53 PM

-1. Not yet!!!

Scarab 12-29-2018 07:47 AM

-1 Reminds me of when the wife waits for a Kohl's sale, and she has a handful of % off stackable coupons, and Kohl's cash. Buying along the way.

VanWinkle 12-29-2018 07:50 AM

Quote:

Originally Posted by Scarab (Post 2164268)
-1 Reminds me of when the wife waits for a Kohl's sale, and she has a handful of % off stackable coupons, and Kohl's cash. Buying along the way.

That Kohl's cash has cost us more money than it ever saved. ;D

REWahoo 12-29-2018 07:55 AM

Quote:

Originally Posted by VanWinkle (Post 2164272)
That Kohl's cash has cost us more money than it ever saved. ;D

Khol's Cash = thinly disguised Crack Cocaine

VanWinkle 12-29-2018 08:00 AM

Quote:

Originally Posted by REWahoo (Post 2164276)
Khol's Cash = thinly disguised Crack Cocaine

:laugh:

Scarab 12-29-2018 08:10 AM

Quote:

Originally Posted by VanWinkle (Post 2164272)
That Kohl's cash has cost us more money than it ever saved. ;D


LOL!!

NW-Bound 12-29-2018 09:13 AM

I am proud of my wife. She went in, found something that she liked and her receipt showed excess of $1 or $2 above that free cash.

I was there with her, and it made me feel guilty. But I think they figure it out, and I have not seen a coupon in the mail recently.

Closet_Gamer 12-29-2018 09:27 AM

Quote:

Originally Posted by audreyh1 (Post 2163482)
Just looking at indexes, not counting dividends, the market had finally recovered in Oct 2007, just in time for the next bear!

But if you count in dividends, that shortens it. But when you take into account inflation, its drain is worse than the gains from dividends. They very roughly cancel each other out. Accounting for inflation and dividends the 2000 bear market never recovered and continued into the 2007 bear market, taking another 5 years or more to completely recover.

A few years back, I read an article that said the Fed's various QE policies to drive down rates essentially amounted to price fixing the most important financial assets on the planet -- US Treasury bonds -- because virtually everything else finds its value as a risk premium relative to that risk-free return.

The fed used its limitless balance sheet to wrestle control away from the market on the price of treasuries and thereby removed from the market a very important pricing mechanism for everything else. Obviously, the fed always nudges these things via its rate actions, but QE was an entirely different beast.

I found that to be an interesting way of looking at it.

If you concur that's what happened, we should be prepared for a very out-of-the-ordinary market (up/down) as the Fed unwinds QE and allows the market to once again have more of a voice in setting the price of Treasuries and other assets. It took a decade (perhaps 2 decades to Audrey's point) in order to get here. The odds that this gets unwound in 36 months is shockingly low.

El Magnifico Loco 12-29-2018 09:42 AM

Agreed. I too doubt the Fed will unwind their balance sheet anytime soon. As soon as there is a hint of an economic slowdown, I believe they will stop and, depending upon the slowdown's severity, increase their holdings again.

Does anyone know how the US Fed's holdings compare to the ECB's, particularly as a % of GDP?

audreyh1 12-29-2018 10:37 AM

Quote:

Originally Posted by Closet_Gamer (Post 2164322)
A few years back, I read an article that said the Fed's various QE policies to drive down rates essentially amounted to price fixing the most important financial assets on the planet -- US Treasury bonds -- because virtually everything else finds its value as a risk premium relative to that risk-free return.

The fed used its limitless balance sheet to wrestle control away from the market on the price of treasuries and thereby removed from the market a very important pricing mechanism for everything else. Obviously, the fed always nudges these things via its rate actions, but QE was an entirely different beast.

I found that to be an interesting way of looking at it.

If you concur that's what happened, we should be prepared for a very out-of-the-ordinary market (up/down) as the Fed unwinds QE and allows the market to once again have more of a voice in setting the price of Treasuries and other assets. It took a decade (perhaps 2 decades to Audrey's point) in order to get here. The odds that this gets unwound in 36 months is shockingly low.

Well the QE thatís unwinding now was started in 2013, so it really hasnít been that long. Plus the asset inflation that happened as a result also occurred in 2013 onwards. Unwind a few years gains and/or go sideways for a few years and we are probably back on track. Having interest rates at higher levels is a big part forcing return to less inflated asset levels.

FinancialDave 12-29-2018 10:53 AM

Quote:

Originally Posted by W2R (Post 2160358)
I changed my avatar when I saw this thread. Maybe this is a "Teddy Bear Market"? ;D At least, so far. I agree with others that it's probably not a full fledged Bear Market quite yet.

TBH I expect it to get much worse before long, but then what do I know about it?
(answer: absolutely nothing).

I agree

jimbee 12-29-2018 11:03 AM

Quote:

Originally Posted by W2R (Post 2162152)
:eek: Good gosh! I had no idea until reading your post. Yes, I think it's gone from a Teddy bear market to a bear market by now.


This bear may be more applicable than a Teddy bear. ;)


https://www.youtube.com/watch?v=i9qv8RSreIM

SecondCor521 12-29-2018 12:12 PM

Quote:

Originally Posted by El Magnifico Loco (Post 2164329)
Agreed. I too doubt the Fed will unwind their balance sheet anytime soon. As soon as there is a hint of an economic slowdown, I believe they will stop and, depending upon the slowdown's severity, increase their holdings again.

Does anyone know how the US Fed's holdings compare to the ECB's, particularly as a % of GDP?

US Fed balance sheet is basically $4T and falling on a GDP of $19.8T. ECB balance sheet is euro4.5T and rising on euro16.4T of GDP.

That's on a quick couple of google searches, so the recency and quality of the data points may vary.


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