Do you think Dow 18,000 was the bottom?

[street]

As long as you are prepared to "enjoy the ride" irrespectivel of whether it is sharply up or sharply down, then by all means go for it.

Not any disrespect to you but that is kind of an odd statement for this site and the people that represent this site? Isn't that that what the market does??

 

[brewer12345]

Not any disrespect to you but that is kind of an odd statement for this site and the people that represent this site? Isn't that that what the market does??

Each one of us only represents ourselves.

 

[WyomingLife]

Not any disrespect to you but that is kind of an odd statement for this site and the people that represent this site? Isn't that that what the market does??

+1

Nobody can tell the future. Stay invested in a risk-appropriate balanced portfolio considering one's circumstances -- age, risk tolerance, etc. Stuff goes up and down. When some stuff is up, other stuff is down. Over time, most of the stuff compounds and grows. Reinvest. Let it ride.

The Dutch figured this out centuries ago; that's largely how they surpassed the British and Spanish, both of which had larger armies and navies.

Oh, and LBYM. Avoid debt. Be prudent in one's decisions in all relevant matters.

At some level this isn't hard.

I don't understand the Federal Reserve criticisms here either. The Fed is doing what it was formed to do more than a century ago under the Federal Reserve Act of 1913. Here's the statute: https://fraser.stlouisfed.org/title/federal-reserve-act-975.

One of the Fed's primary duties is promoting the financial stability of the economy, including the banking system. Here's a good overview: https://www.federalreserve.gov/aboutthefed/files/pf_4.pdf. For more of the Fed's duties, see https://www.federalreserve.gov/aboutthefed/pf.htm.

Personally, I'm happy that the Fed is doing its job.

 

[RobLJ]

I'm ecstatic--I'm up 1.5x my planned withdrawal over 12 months and almost back to even for the year. That said, I think the recent move up pretty much ignores the future struggle to get back to last year's employment or profits.
I'm scraping off another 2-3% next week to put in the vault, either for withdrawals for the next 4 years or to buy back at lower prices. I'll keep doing that as long as the market continues to go up; if it goes down, I'll use some of the cash to buy back the way I did in ..... March. I'm not looking a gift horse in the mouth; I just don't trust it, or the virus or profits. I'm expecting a 2-5 year real recovery (I recognize the market is not the economy).

I'm now in the slow trudge towards SS with no income, so what I fear most is another drop like the one in Feb/March, so I'm keeping tightly to no more than 46% equities for a while. I hit that today, so sell, rinse and repeat like I did in Jan & Feb.

it seems quite a few on this board are not only pessimistic, but almost upset the market is rallying; i guess i don't understand negative comments about a positive market.


the market has never really been predictable, nor does it care if you think it's overvalued...so why not just enjoy the ride?

 

[targatom2019]

it seems quite a few on this board are not only pessimistic, but almost upset the market is rallying; i guess i don't understand negative comments about a positive market.


the market has never really been predictable, nor does it care if you think it's overvalued...so why not just enjoy the ride?

+1

Yep, enjoy the ride to all time high and the FOMO $$$ will push the DOW up even higher !!

 

[tdv2]

Not any disrespect to you but that is kind of an odd statement for this site and the people that represent this site? Isn't that that what the market does??

Regardless of the differences in sentiment from the folks here, I get a lot out of the discussion. It would be less enjoyable if we didn't have a multitude of diverse opinions. When the markets get roiled by rare events, the noise reflected in prices gets real loud and so does the discussion. I take what works for me and leave the rest and occasionally add my thought process. Times like this have me going back and re-reading the countless books I have in my library the contain real substance including market history, risk management, portfolio construction etc. The most important thing for me to remember is that in a world that isn't regular enough to know with any certainty what will happen next month, six months or two years from now.

 

[Tiger8693]

It's a small sample, but I posted in the YTD 2020 Performance thread about a Mfg Ext Partnership meeting I attended (approx. 60 manufacturers) and the overwhelming statement was significant increase in demand, and extreme difficulty in hiring to meet it. I think this may be due to Fed UE subsidy which ends July 31st. Who really knows about market valuation, but demand seems to be coming back much stronger than companies expected.

I agree some here seem pretty pessimistic, but I think think that may be the audience with many in drawdown phase? I am still a few years away from that, and was thinking that "few years" was "more years" a month or so ago, but luckily held on and didn't make any portfolio changes. Here's to hoping that continues to be a good move!

 

[38Chevy454]

Count me in with the people that are trying to figure out what is happening in the market. I struggle with the "market is not the economy", which I inherently understand. But it also seems the market tends to overreact to economic events, such as the recent plunge due to covid19. If the market was completely independent of the economy, and has the long term outlook, then the market should not have dipped down as much as it did. There does seem to be some degree of correlation between the economy and the market, even if theory says it is not supposed to be.
So I just go along, not making any substantial changes and riding the volatility up and down. Just hope there are more ups than downs. Most of my investments are long term, so ultimately what matters is what the result is on net increase from purchase price to selling price and accumulated dividend payouts.

 

[cyber888]

While I remain cautious, the Feds have done much to prop up the market. People are awashed with cash and interest rates are at an all time low. So this will bolster equities. I think i might add a little bit more equities next week. We may see a dip with bad Q2 earnings in July, BUT if the economy is open w social distancing .. companies will have Positive Forward Looking statements about their recovery. And you know, if the market dips, Trump will spin nice stories about the China trade deal. He only attacks China when the market trend is going up. So when the market dips, he will spin nice conciliatory trade stories. The Dow may have a 20000-30000 range this year. There will be strong support at 21000

 

[Montecfo]

Count me in with the people that are trying to figure out what is happening in the market. I struggle with the "market is not the economy", which I inherently understand. But it also seems the market tends to overreact to economic events, such as the recent plunge due to covid19. If the market was completely independent of the economy, and has the long term outlook, then the market should not have dipped down as much as it did. There does seem to be some degree of correlation between the economy and the market, even if theory says it is not supposed to be.
So I just go along, not making any substantial changes and riding the volatility up and down. Just hope there are more ups than downs. Most of my investments are long term, so ultimately what matters is what the result is on net increase from purchase price to selling price and accumulated dividend payouts.

The market is not completely independent of the economy. I am not aware of any theory that suggesta that. I nstead, it represents a subset of the economy consisting of well capitalized, larger and higher quality firms than exist on average within the economy at large. Accordingly the equity markets do not "track" the economy, yet the economy can offer clues to future market performance.

In my opinion the market is inefficient, and does react with emotion to large shocks as well as to news in general at times.

As Ben Graham said, in the short term the equity markets are a voting mechanism, over the longtern a weighing mechanism.

 

[pb4uski]

Totally agree that the 13% unmployment doesn't make sense in relation to 40+m initial claims..... I'm betting that the BLS numbrs are jacked.

I wonder why.

Those of us who were skeptical of the 13% were right. The government reported a major error... it should have been 16%. Embarassing.


From the Washington Post:

When the U.S. government's official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major "error" indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.

The special note said that if this "misclassification error" had not occurred, the "overall unemployment rate would have been about 3 percentage points higher than reported," meaning the unemployment rate would be about 16.3 percent for May. But that would still be an improvement from an unemployment rate of about 19.7 percent for April, applying the same standards.

The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.

https://www.stamfordadvocate.com/bu...port-had-misclassification-error-15320999.php

From CNN:

In its monthly jobs report released Friday, the BLS showed the US unemployment rate fell to 13.3% in May, as the economy gained 2.5 million jobs. Capitalizing on the good news, Trump took a victory lap Friday, touting the lower unemployment numbers as the nation deals with health and economic crises and major protests over racial injustice.

BLS, however, noted its data collectors — for the third month in a row — misclassified some workers as "employed not at work," when they should have been classified as "unemployed on temporary layoff."

Barring that issue, the unemployment rate could have been as high as 19.2% in April and 16.1% in May, not including seasonal adjustments, the BLS said.

 

[Dtail]

Those of us who were skeptical of the 13% were right. The government reported a major error... it should have been 16%. Embarassing.


From the Washington Post:


https://www.stamfordadvocate.com/bu...port-had-misclassification-error-15320999.php

From CNN:

Are there ANY areas of govt reporting left that are clean?
Perhaps the BLS dept needs to subtract one letter.

 

[brewer12345]

Are there ANY areas of govt reporting left that are clean?
Perhaps the BLS dept needs to subtract one letter.

In fairness to the bls, they have a monthly figure that is hard to produce. They make use of models to close the gaps, but those models are not calibrated with an extreme tail event such as our current situation.

 

[Dtail]

In fairness to the bls, they have a monthly figure that is hard to produce. They make use of models to close the gaps, but those models are not calibrated with an extreme tail event such as our current situation.

Okay then.
Supposedly, they have made this same conceptual error for 3 months running now.
Secondly, if on the report itself, they are mentioning in a footnote type statement that there could be an error of ~3%, then why not more heavily emphasize what the adjusted number could be, since they are able to already identify the magnitude of that error on a timely basis?

 

[RetireAge50]

From the Washington Post:

From CNN:

Whatever dude. I hope you are not making your investment decisions based on these sources.

 

[brewer12345]

Okay then.
Supposedly, they have made this same conceptual error for 3 months running now.
Secondly, if on the report itself, they are mentioning in a footnote type statement that there could be an error of ~3%, then why not more heavily emphasize what the adjusted number could be, since they are able to already identify the magnitude of that error on a timely basis?

You have to remember that they are producing data series in part for economists and other researchers. You change your process and you introduce a massive source of error in the data crunching. So they have an institutional bias against sudden changes.

 

[donheff]

The impression I got was the BLM didn’t make the mistake, the reporting parties did. BLM reported an estimate of the scope of the error so data users would be cautious.

 

[Montecfo]

Those of us who were skeptical of the 13% were right. The government reported a major error... it should have been 16%. Embarassing.


From the Washington Post:


https://www.stamfordadvocate.com/bu...port-had-misclassification-error-15320999.php

From CNN:

This was all in the release which I read on Friday and, again such discrepancies are nothing new. These in particular were inconsistencies in how data were gathered, unique to the current environment. And the 13 percent is the official number from the household survey, nothing changed from Friday.

Further, the establishment survey, which reported 2.5m jobs added, was not effected by discrepancies in the household survey, which creates the employment rate. This was 11m more than the market expected. THAT was the big news.

The two surveys are not connected with each other.

 

[Montecfo]

You have to remember that they are producing data series in part for economists and other researchers. You change your process and you introduce a massive source of error in the data crunching. So they have an institutional bias against sudden changes.

Correct. They do not make topside changes to the raw data.

 

[brewer12345]

Adding to the murk is that I estimate that ppp translates to 8 weeks of pay for in excess of 30 million workers. Obviously a lot of these people would otherwise be employed, but we have ?? Million shadow unemployed who will be back on the street in 8 weeks when the free money runs out.

 

[aja8888]

Adding to the murk is that I estimate that ppp translates to 8 weeks of pay for in excess of 30 million workers. Obviously a lot of these people would otherwise be employed, but we have ?? Million shadow unemployed who will be back on the street in 8 weeks when the free money runs out.

Businesses around here can't seem to hire anybody as they stores and eateries are going pretty much 50% to full blast.

A friend of mine owns several Burger Kings and a mexican restaurant and told me today that he can't get his employees who had to be laid off to come back. It's nuts.

 

[njhowie]

A friend of mine owns several Burger Kings and a mexican restaurant and told me today that he can't get his employees who had to be laid off to come back. It's nuts.

Not nuts - perfectly expected and as Capitalism would have it.

Has your friend offered to raise wages to/above what employees are getting in unemployment benefits plus the additional $600/week, at least until the end of July?

 

[tdv2]

When the $600/ week runs out they will be back. It's absolutely amazing how much traffic is on the roads in the past week. Still getting take out food once or twice a week and my favorite restaurants....they tell me they are hanging in there...they are not talking about going under.

 

[Toocold]

Would most people agree that April and May were likely the bottom of the economic cycle of the shock (both the virus and oil) if the unemployment rate was truly closer to 16%? This doesn't mean there aren't many boogeymen out there, such as China, protests, mutation of the virus, hyperinflation, geopolitics, that can still negatively impact the market.

 

[Dtail]

Would most people agree that April and May were likely the bottom of the economic cycle of the shock (both the virus and oil) if the unemployment rate was truly closer to 16%? This doesn't mean there aren't many boogeymen out there, such as China, protests, mutation of the virus, hyperinflation, geopolitics, that can still negatively impact the market.

I would agree from an unemployment rate %, but not sure from a total picture yet.