patrick.net

Hey fil,
I don't know. But see here
http://patrick.net/?p=1219038
the sharp minimum at March 2009 when QEs began -- and according to Bernanke et al. et al., repeatedly, 'an objective was to elevate stock prices to inspire more consumption, and it worked'.
Take another look at that sharp minimum.

fil says

One word: yams.

Oh no, I bought beets yesterday. Have I made a serious mistake?

I have gotten out of all my investments and am just holding now. Lets see-I thought a big correction would come last year and got out of the majority of my holdings last year. But I think a correction is overdue-but hey, at least I will keep the cash and sit out the market for a year or two and see how it goes. I had a good run the last few years-don't want to lose it!! Been there , done that and then some.

Now I think housing will correct-but again that is just my opinion-so not putitng any money in it-so won't matter to me.

Timing the market seldom works. All that's happening now is that the market is freaking out over what Bernanke said in regards to a change in position.

edvard2 says

Timing the market seldom works. All that's happening now is that the market is freaking out over what Bernanke said in regards to a change in position.

Did he even change his position? Seems like he repeated what he had already said, "I'll gradually cut down on bonds as things improve...later"?

Looking at fundamentals, nothing makes sense. We are 4 decade lows for labor participation. There has barely been any growth in wages for a long time. the quality of new jobs suck and yet stocks and housing is on a tear. Quite often, when there is bad news, the market goes up-because they beleive QE will be extended.

Lets see-maybe Bernake looked at the gyrations of the JGB market and the size of the balooning FED balance sheet and thought it might be better to deal with this now. I am out for a few years-it may be a big mistake and markets may double in 5 months, because of a new QE program-who knows-but sometimes enough is enough!

No, it can work. When you see a massive drop you can be 100% certain of a rally within 9 months. I sold all my stock in December 07, sat it out for half a year while markets cratered, and then started dollar cost averaging back into the market. I got a 70% jump that first year.
Big market moves can be a godsend for those who want to time markets.

edvard2 says

Timing the market seldom works. All that's happening now is that the market is freaking out over what Bernanke said in regards to a change in position.

Your money will grow/contract with QE at this point if you invest. If you go all in right now - more QE, your investments will grow, elimination of easy money and your money will contract. Ain''t too difficult to see based on what we've observed last 4.25 years.

This just reminds me of what happened a few years ago. Everyone panicked and pulled their money only to watch the market come right back again. Its called a long term investment for a reason.

edvard2 says

This just reminds me of what happened a few years ago. Everyone panicked and pulled their money only to watch the market come right back again. Its called a long term investment for a reason.

With 401K, I agree it's a very good idea to retain long term investment horizon and I would not change asset allocation based on the short term movements. With regular taxable investing accounts, however, it's easier said than done.

I think it'll bounce back in a few days. If you invest smart you'll make money on this temporary set back.

Economy tomorrow will be same as today.

FortWayne says

Economy tomorrow will be same as today.

I don't think 99% people get this.

FortWayne says

Economy tomorrow will be same as today.

So are you are saying that the real economy does not depend on interest rates?

Can you define "major"? 20%, 40% or 60% correction?

I think it is time to invest in yam futures. Sell all your gold, buy yam futures before it is too late.

No. For those that pulled their $$ out of the market, answer me this. How are you going to deal w/ inflation as it erodes your wealth, when it's sitting on the sidelines doing nothing. Investing in blue-chip dividend growth companies will grow your $$ faster than inflation. It's fact.

APOCALYPSEFUCK is Shostakovich says

100 percent of your face will be eaten by starving neonazi cannibals.

Which begs the question: Are there any NeoNazi Vegans? I think I dated one in the mid 90s. She had BO that would knock a buzzard off a shitwagon...

Probably not. The market always swoons a little in the summer. Maybe due to slightly decreased productivity/more people on holiday.

AverageBear says

APOCALYPSEFUCK is Shostakovich says

100 percent of your face will be eaten by starving neonazi cannibals.

Which begs the question: Are there any NeoNazi Vegans? I think I dated one in the mid 90s. She had BO that would knock a buzzard off a shitwagon...

You should not insult the assault pheromones of the enlightened.

I have pulled some of my money out of equities starting when the S&P was around 1430 or so. I don't plan on moving everything out, when the S&P corrects below a certain point, I will average back in. I'm not expecting it to hit the previous low. I've done pretty well buying when things are down.

I need to stock up on Yams though. I wonder if I could substitute sweet potatoes?

I think that it is more than just a remote possibility that DOW will hit 13K before it hits 17K. In fact, I would not be shocked at all if it hits 13K before mid october.

AverageBear says

For those that pulled their $$ out of the market, answer me this. How are you going to deal w/ inflation as it erodes your wealth

Couple of points:
1. Real inflation is pretty low at the moment and we might even be headed for mild deflation: http://www.marketwatch.com/story/bernanke-doesnt-fear-deflation-but-should-2013-06-21.
2. If I pull out now, and the indices drop by 10-15% during the course of the summer and then I get back in, I just saved myself 10-15%. I can tolerate a lot of inflationary losses for those kind of savings.

(For reference I didn't pull out back in '03 and lost 40% of my 401k) How did Bush put it? " Fool me once, shame, shame on you..... It fooled me, you can't get fooled again".

fil said: I need to stock up on Yams though. I wonder if I could substitute sweet potatoes?
Yes, preferably the high starch variety that have been genetically engineered with DNA from bacteria that live near deep sea underwater vents. You throw them into a fire, and enzymes begin to break down the starch into sugars. Next step, fermentation to produce ethanol for your flamethrower or E85-compatible post-apocalyptic vehicle. GMO sweet potaters -- the preferred tuber of the discerning cannibal anarchist. No, I'm not making this up.

fil says

I've been expecting one this year. Any thoughts?

No. Next!

gbenson says

AverageBear says

For those that pulled their $$ out of the market, answer me this. How are you going to deal w/ inflation as it erodes your wealth

Couple of points:

1. Real inflation is pretty low at the moment and we might even be headed for mild deflation: http://www.marketwatch.com/story/bernanke-doesnt-fear-deflation-but-should-2013-06-21.

2. If I pull out now, and the indices drop by 10-15% during the course of the summer and then I get back in, I just saved myself 10-15%. I can tolerate a lot of inflationary losses for those kind of savings.

(For reference I didn't pull out back in '03 and lost 40% of my 401k) How did Bush put it? " Fool me once, shame, shame on you..... It fooled me, you can't get fooled again".

You bring up some good points... True, inflation is low, for now. But your $$ still isn't doing anything.. As for timing, it's EXTREMELY hard to do. I was positively certain that the market would 'correct' at the beginning of the year. I had 1/3rd of my 401K in cash, ready to buy some stocks on a downswing I was certain was going to happen. By around the end of Feb, I said "F this"... If I was still out of the market, I would have lost out on 1-2 rounds of dividend payments, and some decent capital appreciation... If you think you can time a correction, and the possible upswing, good luck....If you are a trader, or short-term holder of equities, then my advice and words wouldn't apply to you. I'm mostly and buy/hold guy for over 70% of my holdings...

Me? I'll be cost-averaging on the way down on stocks on my watch list, that I plan on holding on for a few decades.

AverageBear says

Are there any NeoNazi Vegans?

Hitler was a vegetarian.

AverageBear says

If you think you can time a correction

If I could time the market, I'd be retired by now.

dublin hillz says

I think that it is more than just a remote possibility that DOW will hit 13K before it hits 17K. In fact, I would not be shocked at all if it hits 13K before mid october.

I'm thinking 14K before going up in the fall, but like I already write, if I was that good at this stuff, I'd be retired by now.

Dow is in for a multi-year up trend. The correction will be short lived.

My predictions : Dow keeps moving up for few years along with dollar.
US economy performs much better than all other economies for those years.

Gold and emerging markets keep going down. Emerging markets pickup after few years while gold story is over.

Note : Not an investment advice just an opinion.

chanakya4773 says

Dow is in for a multi-year up trend. The correction will be short lived.

My predictions : Dow keeps moving up for few years along with dollar.

US economy performs much better than all other economies for those years.

Gold and emerging markets keep going down. Emerging markets pickup after few years while gold story is over.

Note : Not an investment advice just an opinion.

Any prediction for national debt, debt / gdp ratio and consumer debt in the coming years?

mell says

chanakya4773 says

Dow is in for a multi-year up trend. The correction will be short lived.

My predictions : Dow keeps moving up for few years along with dollar.

US economy performs much better than all other economies for those years.

Gold and emerging markets keep going down. Emerging markets pickup after few years while gold story is over.

Note : Not an investment advice just an opinion.

Any prediction for national debt, debt / gdp ratio and consumer debt in the coming years?

Debt keeps going up. GDP and Debt can only go up.. The important ratio is debt/GDP which will regress to mean.

The secular bear market will continue.

Look at the Vanguard S&P 500's performance over the last 15 years:

http://performance.morningstar.com/fund/performance-return.action?t=VFINX&region=USA&culture=en-us

The fund's total annual return has average only about 4% for the last 15 years !

chanakya4773 says

My predictions : Dow keeps moving up for few years along with dollar.

US economy performs much better than all other economies for those years.

Gold and emerging markets keep going down. Emerging markets pickup after few years while gold story is over.

I think I've heard this decoupling story before.

the market is bleeding off "greed"
this is a natural process
sit tight + eat your yams

Hmm, worforce participation at 40 year lows, food stamp usage at lifetime highs, fed pumping liquidity unlike naything the world has ever seen before, most jobs created are without benefits and lower wages, reulting in stagnant wages for decades-yet dow is still at lifetime highs. Sure this is just a correction -we are still in the booming 90s!!

Now, the market is like a sick man pumped with all sorts of drugs-so one never knows when it will give out-but at some stage it will-that could be a few years or months. i have made a very, very decent profit the last few years and so am out and will stay out for a few years, till it makes sense again.

treatmentreport says

FortWayne says

Economy tomorrow will be same as today.

So are you are saying that the real economy does not depend on interest rates?

Feel free to look at the WS, stocks are back up. It was just a naturally occurring bear trap.

treatmentreport says

FortWayne says

Economy tomorrow will be same as today.

So are you are saying that the real economy does not depend on interest rates?

The interest rate increase is a risk only when there is a bubble fueled by the low rates. I don't see that in stock market.
Most of the companies have hoards of cash and very few are running on low interest credit.

At some point it has to go down-I just don't think these prices are justified given our current fundamentals. I just don't know when. While I have gotten out, I am not going to bet against a multi year prevailing trend. Just sit it out and be happy! If it goes down by a lot , then get in again or just stop watching financials for a while.

lostand confused says

At some point it has to go down-I just don't think these prices are justified given our current fundamentals. I just don't know when. While I have gotten out, I am not going to bet against a multi year prevailing trend. Just sit it out and be happy! If it goes down by a lot , then get in again or just stop watching financials for a while.

Looks like you don't know lot of stuff just like everybody else. have you ever given a though on not timing the market and just buying high quality companies at attractive prices.

Technical jargon is easy to use. Ultimately what works for one will not work for another-different personalities, personal risk tolerance and a whole host of factors.

What I am seeing is that from 2009 low, the Dow has gone up close to what-almost 150%??? I don't see the underlying support for this. Now I have been expecting it to go down for a year or two-but held on-dumped a chunk last year and the rest this year.

With all the intervention going on around the world, things can be distorted for a while-but not ever. I have had enough, made quite a chunk of change and am not dependent on the stock market for my expenses-so am going to sit out and enjoy. You are supposed to be making money to make your life easier-rather than make you more stressed!