A new feature for DGTD. In the past I've saved up predictions from the year and shown them to y'all in December. Which I've enjoyed, but it's a bit crammed.
So for the past 6 months or so I've been putting predictions in to almost every date on the calendar so we can always have one to review. Fun, right?
The point is to show that predictions are mostly useless and fear-mongering. But sometimes they are right.
Here's one generally correct:
From 9/22 JPM predicting the Fed would start hiking at a lower rate so 10 year yields would moderate to the mid-3 range. That happened, yes. Good call. Owners of intermediate bond have made a nice capital gain based on this action.
Carl Quintanilla @carlquintanilla A thread JPMORGAN: “The market has now settled into a view that the Fed will continue with outsized hikes. But .. Next 6-9 months are likely to look quite different. .. it should be increasingly probable that the next months could see some dovish tilt by the Fed.” [Kolanovic]
2. “This could act to limit further moves up in long yields, which look oversold .. JPM rates team is looking for only a marginal further move up in US 10-year yields from here into year end, to 3.75% .. there could be an opportunity for another tactical bounce in Growth ..”
The numbers posted by Agip, which are very much appreciated, are not showing much lag by the US - Less than a percent in the YTDF numbers? Hardly worth worrying about,. And frankly, it fits my very different interpretation, which is, time to buy the dip in US (and Tech in particular).
At some point allocators are going to realize that the US is lagging and move more money overseas. Those who already have are reaping.
Year to date
USA +2.58%
SP500 +2.93%
Rest of World +3.34%
One Year
USA -12.46%
SP500 -11.3%
Rest of World: -7.95%
Where exactly is the money going?
Europe? Don't make me laugh.
China? Finally properly recognized as an enemy of the West (and I for one am excited about a new Cold War Space Race).
That basically leaves South America (in absolute shambles) and Africa - which is actually doing OK I think at the moment.
tl;dr - USA still #1
Hey I don't make up these numbers.
we should all have sold our US stocks and put the proceeds into Europe, Canada, Japan, Australia, China etc. We would have made more money that way. Or lost less, depending on the timeframe.
China? Finally properly recognized as an enemy of the West (and I for one am excited about a new Cold War Space Race).
That basically leaves South America (in absolute shambles) and Africa - which is actually doing OK I think at the moment.
tl;dr - USA still #1
The numbers posted by Agip, which are very much appreciated, are not showing much lag by the US - Less than a percent in the YTDF numbers? Hardly worth worrying about,. And frankly, it fits my very different interpretation, which is, time to buy the dip in US (and Tech in particular).
fair enough on YTD but the 12m number favors non-US stocks pretty strongly, esp if you get out of the just the SP500.
In regards to returns, MSFT and AAPL are 13% of the S&P 500. That is the first time since 1970s that two stocks represented that large a proportion of the index. Technology is the most vulnerable sector of the index on speculation and fundamentals, imho.
Igy you forever think the goverment can't solve financial crises despite the fact that the government has a long history of solving financial crises. One after the next.
I'd argue that while the Fed (and the government to a lesser degree) are bad at tending to a basically sound economy, on the other hand the Fed/gummint are pretty good at solving crises. They round up the key people, print the money, etc.
The Fed pretty clearly should not have had low interest rates so long...they should have been rising as the covid cash hit the economy and people started spending their savings. Bad Fed. Fine. Didn't tend to the economy well. Negative real rates are a bad thing.
But betting that the Fed/gummint complex will fail to solve a crisis is not betting with the odds or with history.
In regards to returns, MSFT and AAPL are 13% of the S&P 500. That is the first time since 1970s that two stocks represented that large a proportion of the index. Technology is the most vulnerable sector of the index on speculation and fundamentals, imho.
I think what's happening is that people want quality and there are no more quality companies in America than the big techies.
But yeah pretty scary how much we depend on just 2-5 names. not good.
Igy you forever think the goverment can't solve financial crises despite the fact that the government has a long history of solving financial crises. One after the next.
I'd argue that while the Fed (and the government to a lesser degree) are bad at tending to a basically sound economy, on the other hand the Fed/gummint are pretty good at solving crises. They round up the key people, print the money, etc.
The Fed pretty clearly should not have had low interest rates so long...they should have been rising as the covid cash hit the economy and people started spending their savings. Bad Fed. Fine. Didn't tend to the economy well. Negative real rates are a bad thing.
But betting that the Fed/gummint complex will fail to solve a crisis is not betting with the odds or with history.
My comment would be similar to the thesis of the article. That is, the Fed and Treasury have increased activism at each point since the Housing Bubble. To the point now, it is a stretch to believe it has not undermined economic growth, and encouraged non-viable investment. The net result debasement of the currency, and viability of Treasury debt. Another reason to believe the dollar has peaked, and inflation will remain a problem.
This post was edited 1 minute after it was posted.
In regards to returns, MSFT and AAPL are 13% of the S&P 500. That is the first time since 1970s that two stocks represented that large a proportion of the index. Technology is the most vulnerable sector of the index on speculation and fundamentals, imho.
Aren’t you the same guy that predicted AAPL would bottom out in 2023?
In regards to returns, MSFT and AAPL are 13% of the S&P 500. That is the first time since 1970s that two stocks represented that large a proportion of the index. Technology is the most vulnerable sector of the index on speculation and fundamentals, imho.
Aren’t you the same guy that predicted AAPL would bottom out in 2023?
Perhaps investors are sadly mistaken if one thinks 1) 2023 is over, and 2) that AAPL will not reach new 52 week lows by year end. Investors are fooled by the quality argument, since all stocks will be influenced negatively by the current macro environment. And when an asset goes up driven by the previous cycle investment playbook, typically these assets underperform the market.
This post was edited 13 minutes after it was posted.
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I would say we bounce from here to ~4,000 then rollover to ~3,500 over the next month. ~3,200 by Labor Day, another 1,000 points lower over winter. I believe Covid lows of ~2,200 are the most optimistic low outcome this cycle.
straight into my 12/31/22 list of predictions!
here's a prediction from the Vault. 6/14/22, page 2804.
Igy would have us down at the SPX 2200 by now.
We're almost double that at 3,964 at the end of winter, so I'm going to call this a failure.
Igy has won a lot of bets lately but this is a clear loss.
here's a prediction from the Vault. 6/14/22, page 2804.
Igy would have us down at the SPX 2200 by now.
We're almost double that at 3,964 at the end of winter, so I'm going to call this a failure.
Igy has won a lot of bets lately but this is a clear loss.
Igy - I haven't forgotten about shoveling snow at your house! Has it snowed in Idaho lately?
Sally, actually it has. The other night snowed, but gone by noon with golfers in full force. My son and I are going to hit Bogus Basin our local ski slope for some downhill tomorrow. I do think the Valley is about played out for snow this year. How about 2024, or double or nothing on our current bet?
The numbers posted by Agip, which are very much appreciated, are not showing much lag by the US - Less than a percent in the YTDF numbers? Hardly worth worrying about,. And frankly, it fits my very different interpretation, which is, time to buy the dip in US (and Tech in particular).
fair enough on YTD but the 12m number favors non-US stocks pretty strongly, esp if you get out of the just the SP500.
12m:
USA -12.46%
Rest of World -7.95%
that's no joke. Scherzo. Witz.
Come on, Agip. Of course, in hindsight.
But no one, no one, not even the love-twins Flaggy and Sally, the two self-proclaimed greatest investors of all time with untold fortunes they will tell you about, could have seen that coming after a decade of overseas greatly underperforming US stocks.
Sectors will fluctuate as might be expected.
But the mass mover of the last decade offered up an opportunity to buy a dip in an otherwise epic wealth-building ascension. Admittedly, not without some risk and no guarantees, since there never are, but to my mind it may be this simple - the tremendous bull market of the last 13 years was interrupted with pesky inflation and the Fed promising to real it in with interest rate hikes. It was doing so aggressively, and to most everyone's consternation, signs of strong growth in the economy (as evidenced in employment numbers particularly) persist even though the pesky inflation was slowing. So the Fed had to keep promising to be keep rates high for longer and be persistent about rate increases.
Then, and this is the new part, weakness in the banking sector sent a signal to the Fed of some unintended and rather serious consequences to what they were doing, and perhaps there were limits. So, investors see a Fed now finally easing off, and move in. My bet: this rebound has legs.