Down goes the Dow

Swaglord369 wrote:

Ghost of Igloi wrote:

The entire paragraph strikes me as fantasy.

The real economy is firing on all cylinders, and a spring with covid pretty much done + infrastructure and native chip investments in the US... how is this not a situation for sustained growth. There are no systemic issues lurking like in 2008. And it's not a super bubble like 2000.

Respectfully, I think you need to educate yourself on market history and generally. Sorry, but no other way to say it.

Comical is looking backward from the greatest financial bubble in history and extrapolating that is the future.

Ghost of Igloi wrote:

Comical is looking backward from the greatest financial bubble in history and extrapolating that is the future.

I'm curious what an ideal financial situation would even look like to you.

Like anything beyond a P/E of 1 would be considered "rampant speculation" or something?

Prof. Racket wrote:

Ghost of Igloi wrote:

Comical is looking backward from the greatest financial bubble in history and extrapolating that is the future.

I'm curious what an ideal financial situation would even look like to you.

Like anything beyond a P/E of 1 would be considered "rampant speculation" or something?

I will begin to nibble at S&P 500 ~1800, which to you I assume sounds ridiculous.

Financial conditions: discrediting Fed QE and Government stimulus policies. Blow up of FAANMG, SPACs, NFTs, real estate and crypto. Collapse of interest in stock trading and financial shows like Fast Money and Cramer.

https://realinvestmentadvice.com/wp-content/uploads/2022/02/SP500-Deviation-Exponential-Growth-Trend-020622.png

Ghost of Igloi wrote:

Prof. Racket wrote:

I'm curious what an ideal financial situation would even look like to you.

Like anything beyond a P/E of 1 would be considered "rampant speculation" or something?

I will begin to nibble at S&P 500 ~1800, which to you I assume sounds ridiculous.

And what would be the cause of such a massive loss of value?

Prof. Racket wrote:And what would be the cause of such a massive loss of value?

Here's where my monicker comes in.

There are no predictable causes of market crashes, detectable in advance, so there's little point speculating about what might cause such an extreme drop. Market crashes are only a little more reliably predicted backwards (i.e., hindcast), after the fact.

Or maybe it's only me, as a self-identified idiot, who's incapable of forward prediction. Probably that's it.

Or, stated another way, stare at noise long enough, you will start to see what looks to you like a signal.

Prof. Racket wrote:

Ghost of Igloi wrote:

I will begin to nibble at S&P 500 ~1800, which to you I assume sounds ridiculous.

And what would be the cause of such a massive loss of value?

I think Igy is becoming much more optimistic. I believe he predicted an S & P of 1200 a while back.

Prof. Racket wrote:

Ghost of Igloi wrote:

I will begin to nibble at S&P 500 ~1800, which to you I assume sounds ridiculous.

And what would be the cause of such a massive loss of value?

General thought would be: You write often about the rise in GDP, but seem to ignore the manufactured nature of the same. It is a fact that GDP has required ever rising amounts of stimulus to generate growth. So lower interest rates do not justify higher stock prices; they are symptoms of a stagnant economy. The Fed is now in the box it created, the purgatory of stagnation or the hell of inflation. Loss of confidence that Fed policies are effective is already here. The Ten Year Treasury will likely move toward 3.25%.

VS-SJW-IR-TS idiot wrote:

Prof. Racket wrote:And what would be the cause of such a massive loss of value?

Here's where my monicker comes in.

There are no predictable causes of market crashes, detectable in advance, so there's little point speculating about what might cause such an extreme drop. Market crashes are only a little more reliably predicted backwards (i.e., hindcast), after the fact.

Or maybe it's only me, as a self-identified idiot, who's incapable of forward prediction. Probably that's it.

The market for credit default swaps in 2006 was up to around $65T in value and everyone knew it was a huge powder keg. On top of that you had some banks that were leveraged out like 35:1 and all in on CDOs (which is what the general public didn't know until after they went belly up).

So, with banking regulations having changed to limit leverage, requirements on cash reserves, annual bank stress tests, and more, I ask - where is the enormous $100T+ ticking time bomb that will cut the US economy in half if it blows? Where is the systemic risk of all systemic risks?

Sally Vixxxxxxxxens wrote:

Prof. Racket wrote:

And what would be the cause of such a massive loss of value?

I think Igy is becoming much more optimistic. I believe he predicted an S & P of 1200 a while back.

If the next bear market approaches a 75% drop we will reach that level. If that sounds improbable, the NASDAQ was down 83% 2000-2002 and did not reach a new durable high for 16 years.

Prof. Racket wrote:... everyone knew it was a huge powder keg. ...

OK millennial.

These things are usually pretty easy to say after the fact. If you had a time machine and went back, however...

Critical for crypto that Bitcoin holds $43k….

Ghost of Igloi wrote:Critical for crypto that Bitcoin holds $43k….

Actually, I've noticed that BTC has been uncorrelated with equity markets the past week or so.

Ghost of Igloi wrote:

Flagpole wrote:

The trend IS always upward, yes. I have been investing since 1989, so my view is definitely not just looking at the last dozen years.

OK. If we get a 2000-2002 or 2007-2009 like bear market I hope you post your views. It would be interesting to see if they evolved as an older investor.

I won't. I already have all protections in place.

1) I am debt free and own my home outright.

2) While I will be completely retired in just a few months, my college professor wife is planning to work for 5 more years, so we still have income that way, but when we are both done working, we will have 3 YEARS of expenses liquid (not invested in stocks or bonds). If there is a big market drop, we can easily live off of that for 3 years without having to dip into investment accounts, AND if that happens after we start taking social security, we can do it for MUCH longer.

3) I put the plan in place mentioned in #2 above about 15 years ago, but since then, our investing and our returns have gone much better than projected, so at this point it really doesn't even matter. We could have another market crash like we did in late 2007-early 2009 and I could still take from my investments if I wanted to and be more than fine.

Congratulations Flagpole. Good plan and life well lived. Enjoy.

Igy

wondering wrote:

investing noob wrote:

Put a deposit down in November and it's expected to come in March.

I asked another dealer and they say wait time is 16-22 weeks for this vehicle. The Prime one of the most sought after vehicles. If you just want a regular hybrid or ICE version then they won't have long wait lists.

Thanks for that info. We are looking to replace our current Camry with a new hybrid one. I feel we need the upgrade to get the modern safety tools that the car comes with. Now I just need to decide when to go for it…thinking about waiting for the 2023 model year.

If money is not an issue, and the car you want is available, I say go for it. I bought a 2022 Hyundai Kona in the fall, making it the newest of 3 cars I own by 11 years. The extra safety features are great. Backup camera is nice. Lane assist is nice, big screen with gps is nice, etc. We also decided to get AWD (which becomes 4WD at the push of a button) which we've never had before, and that has been great so far this winter.

I DID get my second choice vehicle though. I had decided I wanted a Subaru Crosstrek, but due to the chip problem, there were none available in my city in the fall. The Kona was a very close second on my list though, and one was available, so I bought it. I am very pleased with the purchase.

Ghost of Igloi wrote:

General thought would be: You write often about the rise in GDP, but seem to ignore the manufactured nature of the same. It is a fact that GDP has required ever rising amounts of stimulus to generate growth. So lower interest rates do not justify higher stock prices; they are symptoms of a stagnant economy. The Fed is now in the box it created, the purgatory of stagnation or the hell of inflation. Loss of confidence that Fed policies are effective is already here. The Ten Year Treasury will likely move toward 3.25%.

This economy is anything but stagnant.