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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)

Chuckanut 12-21-2018 11:18 PM

I took advantage of a pretty good Holiday sale today. I shopped at the stock market. Just a bit.

NW-Bound 12-21-2018 11:39 PM

Quote:

Originally Posted by Chuckanut (Post 2161048)
I took advantage of a pretty good Holiday sale today. I shopped at the stock market. Just a bit.

What? Is it 20% sale already? :coolsmiley:

Chuckanut 12-21-2018 11:42 PM

I vote to call it a Bear Market!
 
Quote:

Originally Posted by NW-Bound
What? Is it 20% sale already? :coolsmiley:


Touchè

It was just a bit. I’m still planing on a good night’s sleep.

rocketjockey 12-22-2018 12:20 AM

Quote:

Originally Posted by Chuckanut (Post 2161048)
I took advantage of a pretty good Holiday sale today. I shopped at the stock market. Just a bit.

Me too, put about 25% of my "dry powder/wait for the inevitable downswing to buy" money to work on VTI.

And then it went down some more....;) Insert falling knife jokes here...

DEC-1982 12-22-2018 06:38 AM

If your equity investments are only Nasdaq or Russell 2000, then yes it is a bear market. But most folks are not invested like that (if they are invested in equities at all).

I saw 400 point drops 4 out of 5 days this week, which almost looked like an orderly decline if you were not watching the market minute by minute. Not a capitulation. I think the average bear goes down around 28% and we are still 10-12% from there.

Timeisprecious 12-22-2018 08:38 AM

Historically, this too shall pass.
 
+0.5

I don't think we should call it "bear" yet, but yes - it's been a wild ride since October. I tried not to look at the Dow yesterday, but I couldn't help myself. I'm keeping two things in mind: (1) They're not actually losses 'til you cash them out, and (2) historically, this too shall pass. It may take years, but that portion of my portfolio is a 10+ year investment anyway.

Funny - that chunk of my portfolio was invested conservatively until my annual portfolio review at the end of September. The counselor said, "you need more buffer against inflation." So, I made an adjustment and well, you know the rest of the story ... :laugh:

cb7010 12-22-2018 10:38 AM

Is A Correction/Bear After Bubble Really A Correction
 
The markets had a meteoric rise over the past 8-9 years fueled by 0% interest rates, so now a pullback, because Fed Funds rate is at 2.25% (Still 0% nominally), that really illustrates the entire market is indeed an easy money fueled bubble. Is it really rational to call any form of retracement tied to the normalization of rates a correction or bear market?

Thus, I'm voting "0"!

Chuckanut 12-22-2018 10:51 AM

Quote:

Originally Posted by rocketjockey (Post 2161065)
Me too, put about 25% of my "dry powder/wait for the inevitable downswing to buy" money to work on VTI.

I did not put much additional into the stock market. What I actually did was do some of my re-balancing early in case the doom and gloom crowd is wrong. I increased my light holdings of international stocks a bit to get the high returns I need to fund my profligate lifestyle. :dance:

Now it's back to sleep until the market is down 20% or more.
This may be a very short nap. Who knows?

HFWR 12-22-2018 11:11 AM

My BIV holding (VG intermediate BF) dropped below my 10% rebalance band during late summer. I held off rebalancing until the September rate hike, and even then was concerned about losses on the way to several more rate hikes. Funny, BIV is now 11% over, but no stock fund is below -10% yet (VTI is at -6.1%), so holding off on rebalancing. May get a chance still yet. On a good note, should be a nice chunk of income coming from December dividends/interest.

NYEXPAT 12-22-2018 11:16 AM

Quote:

Originally Posted by O2Bfree (Post 2160827)
Bear market? Are layoffs coming?? I want to go out with a severance package!

Bear Market, not to be confused with a recession!

Winemaker 12-22-2018 11:37 AM

It will continue in this calendar year for harvesting tax losses, and into January when folks begin their withdrawals. Then, when corporate earnings start coming out and asset re allocation begins, things should get better. Or not. That's my wine sludge interpretation, and it's worth about the same.

RenoJay 12-22-2018 12:11 PM

I vote to call it a Bear Market!
 
There is a ton of “confidence” in this thread that what’s happened already is either a buying opportunity or close to one. I’ll suggest that even though there will likely be short term big bounces, we still have a lot farther down to go and that the next 7,000 point Dow move will be down, not up. After the Great Depression stock drop of 90% in 1929-1932, stocks rallied big time on govt. intervention. Then as that intervention waned, stocks dropped 60% in 1937. (Most people know of the first drop but not the second.) In Japan, their market (admittedly MUCH more overvalued than U. S.) peaked in....wait for it....1989 and is currently around half that peak in nominal terms. Their govt has pumped unbelievable amounts of stimulus into market but at this point it appears their buyers are on strike. The US govt and corporations have incredible amounts of debt that dwarf the Great Recession. Much of the market’s awesome 10 year gains were built on the back of “easy money.” Each successive QE proved much less effective than the previous one implying that there’s a limit to borrowing our way to prosperity. Yes, stocks look cheap compared with near term earnings. But ultimately the market is a forward-looking mechanism that cares about long term expected performance. Serious weakness in housing, global oil demand and other things imply that the ultimate consumers of goods and services may be more tapped out than near term earnings suggest. Be wary of catching a falling knife. Often the time to get excited is when you can’t find anyone who feels the market is a deal, your neighbors give you dirty looks when you talk stocks, and people quietly nurse their losses. Currently it seems there are tons of people in a rush to call a bottom (which would make this bear WAAAAY shorter than an average one) which makes me believe it’s a “bear trap” where a bunch of folks jump in for “bargains”, get a nice bounce, just to watch their newfound gains disappear shortly thereafter while market hits lower lows.

NYEXPAT 12-22-2018 01:06 PM

Many on this board do not put much weight into the CAPE ratio and the one's that do talk about reverting to the mean at Cape "15". I wonder how many here believe it is likely to go to 10 or 5 even before reverting to the mean?

RAE 12-22-2018 01:07 PM

Quote:

Originally Posted by RenoJay (Post 2161298)
There is a ton of “confidence” in this thread that what’s happened already is either a buying opportunity or close to one. I’ll suggest that even though there will likely be short term big bounces, we still have a lot farther down to go and that the next 7,000 point Dow move will be down, not up.



The US govt and corporations have incredible amounts of debt that dwarf the Great Recession. Much of the market’s awesome 10 year gains were built on the back of “easy money.” Each successive QE proved much less effective than the previous one implying that there’s a limit to borrowing our way to prosperity. Yes, stocks look cheap compared with near term earnings. But ultimately the market is a forward-looking mechanism that cares about long term expected performance. Serious weakness in housing, global oil demand and other things imply that the ultimate consumers of goods and services may be more tapped out than near term earnings suggest. Be wary of catching a falling knife. Often the time to get excited is when you can’t find anyone who feels the market is a deal, your neighbors give you dirty looks when you talk stocks, and people quietly nurse their losses.


+1, I totally agree. After the way the markets bounced back strongly after 2008/09, it's easy to see why many investors are anxious to buy at the current level, which seems like a bargain on the surface. And, if your time horizon is long, it might work out just fine. But for those with a shorter time horizon, I would not be buying right now. The 4.5 trillion dollar QE was an artificial stimulus that will likely not be repeated anytime soon, for one thing. Also, markets don't like uncertainty, and I can't think of any time in the last several decades when there was more uncertainty in the world than right now. And if anything, it's going to get worse before it gets better. I could easily see markets struggling for the next several years or so. I might be all wrong, but for me personally, this is a time to be very cautious, not aggressive.

dtbach 12-22-2018 01:20 PM

A couple of years from now we will know who is right. I'm waiting until at least mid January before using any "dry powder".


Has anyone thought about how 401K plans might effect the market. Every month millions of employees send billions of dollars to fund managers. They rather quickly have to put it to work in the equity funds they run. At some point this may turn the corner.

USGrant1962 12-22-2018 01:32 PM

Quote:

Originally Posted by RAE (Post 2161326)
...Also, markets don't like uncertainty, and I can't think of any time in the last several decades when there was more uncertainty in the world than right now...

So you think there is more uncertainty now than the bottom of the dot.com crash, the day after 9/11, or the depths of the Great Recession? Wow.

aja8888 12-22-2018 01:48 PM

Quote:

Originally Posted by NYEXPAT (Post 2161267)
Bear Market, not to be confused with a recession!

There's no recession where we live. Every restaurant has at least an hour wait time Tuesday thru Saturday, BMW's are like the state bird, last year 46 new restaurants opened up in our unincorporated township, and "help wanted" signs are everywhere.

I think this is the case in most of the U.S.

El Magnifico Loco 12-22-2018 01:53 PM

Quote:

Originally Posted by cb7010 (Post 2161243)
The markets had a meteoric rise over the past 8-9 years fueled by 0% interest rates, so now a pullback, because Fed Funds rate is at 2.25% (Still 0% nominally), that really illustrates the entire market is indeed an easy money fueled bubble. Is it really rational to call any form of retracement tied to the normalization of rates a correction or bear market?

Thus, I'm voting "0"!

Good point re: retracement.
Even after retracing, the S&P has a P/E of 18-19, which is above historical levels. I believe the WORST bear markets have ended with a P/E of ~7. And we haven't had one of those in a while. Personally, I'm keeping my powder dry until the S&P hits 12. But I've been saying this for years . . . .:facepalm:

Chuckanut 12-22-2018 02:07 PM

Quote:

Originally Posted by RenoJay (Post 2161298)
There is a ton of “confidence” in this thread that what’s happened already is either a buying opportunity or close to one. I’ll suggest that even though there will likely be short term big bounces, we still have a lot farther down to go and that the next 7,000 point Dow move will be down, not up. After the Great Depression stock drop of 90% in 1929-1932, stocks rallied big time on govt. intervention. Then as that intervention waned, stocks dropped 60% in 1937.

You may be right. Or wrong. Who knows for certain?

I figure that if I have setup my situation properly, I can survive even a 60% drop in the market that lasts for 3-5 years. However, if the worst happens, y'all will have to BYOB to my parties or drink my very cheap beer. Your choice.

FWIW, I thought that one reason the great crash of the 30's was so bad was many margin buyers putting down $1 for every $10 worth of stock they bought. Can't do that today. And, of course, new tariffs that restricted trade. We can do that today. :eek:

In the meantime anybody else's guess is as good as mine. So......

:popcorn:

RAE 12-22-2018 02:07 PM

Quote:

Originally Posted by USGrant1962 (Post 2161343)
So you think there is more uncertainty now than the bottom of the dot.com crash, the day after 9/11, or the depths of the Great Recession? Wow.

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.


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