haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
3) and "gordon equation" bears who don't necessarily expect a big correction, but who are resigned to lower returns going forward
This is a very interesting idea. I think it has <5% chance of occurring. Returns may well be poor going forward, but there will be many peaks and troughs. Investors will ignore high valuations as long as the market is going up. But once it stops that behavior, and it's a lead pipe cinch that it must, if only because trees don't grow to the sky, then the market has a strong bias toward declining. Somebody might think , well, 6% nominal is better than cash, so I'll take it. But as soon as he starts seeing some losses, he will be gone. It's like standing around an angry person until he hits you. Once you think there is a good chance that he will strike, you are either gone or have punched him.
Until the election, a lot of crap will be pulled out of hats to keep both the economy and the markets looking alive. After the election, all bets are off. Even this fall we could be jarred by another audacious terrorist attack.
Markets anticipate. And when the tide changes, it can really go out fast.
Mikey