Is the stock market getting too hot? Discuss...
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Re: Is the stock market getting too hot? Discuss...
I think it's just in a trading range frankly
- dualstow
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Re: Is the stock market getting too hot? Discuss...
Who knows, Happy Man?
I’m still putting in a few hundred dollars every week.
I’m still putting in a few hundred dollars every week.
Re: Is the stock market getting too hot? Discuss...
I know predictions are not his thing but I wish Tyler would weigh in on this thread. I thought I read a post of his recently that the Shiller CAPE 10 Ratio might not be all it's cracked up to be (or something like that).
Re: Is the stock market getting too hot? Discuss...
An indicator of some sort is even sweeter! Let the guy know we are ears around here
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Re: Is the stock market getting too hot? Discuss...
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- mathjak107
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Re: Is the stock market getting too hot? Discuss...
with 91% of companies reporting earnings for 1st quarter , they are up 26% over last year . that sits well for equities . inflation is low and so far the pessimism is high . bull markets have never ended with this much pessimism .
i warned for years that long term bonds and gold could be problems going forward . it has generally been stocks that run with the ball and i could not see having LT bonds and gold putting so much pressure on whatever gains stocks were able to muster.
i run a 50/50 mix being retired but the bond funds i do use are diversified with most of it not all that interest rate sensitive so they have been holding up okay .
as most know i use the fidelity insight models , have been for decades .
so far ytd the conservative income model which is 23% equities is down 1%. that was up 7% last year.
the growth and income model 60/40 is up 3% . that was up 17% last year
and the growth model is up 6% , that was up 24% last year .
so even if we fall a bit there is quite a lot of cushioning because the past years were so good .
i warned for years that long term bonds and gold could be problems going forward . it has generally been stocks that run with the ball and i could not see having LT bonds and gold putting so much pressure on whatever gains stocks were able to muster.
i run a 50/50 mix being retired but the bond funds i do use are diversified with most of it not all that interest rate sensitive so they have been holding up okay .
as most know i use the fidelity insight models , have been for decades .
so far ytd the conservative income model which is 23% equities is down 1%. that was up 7% last year.
the growth and income model 60/40 is up 3% . that was up 17% last year
and the growth model is up 6% , that was up 24% last year .
so even if we fall a bit there is quite a lot of cushioning because the past years were so good .
Re: Is the stock market getting too hot? Discuss...
1. Don't believe anybody who tells you they are retired and then reports 0% cash in their portfolio.
2. No one knows for sure, but I have to think the stock market is reaching dangerous territory when stock bugs tell us how happy they are with their 100% stock portfolios. I can hear the howling even now, but before you reach for the return button, consider this:
-What would you think of someone who was 100% in cash?
-What would you think of someone who was 100% in 30 year Treasury bonds??
-What would you think of someone who was 100% in gold???
2. No one knows for sure, but I have to think the stock market is reaching dangerous territory when stock bugs tell us how happy they are with their 100% stock portfolios. I can hear the howling even now, but before you reach for the return button, consider this:
-What would you think of someone who was 100% in cash?
-What would you think of someone who was 100% in 30 year Treasury bonds??
-What would you think of someone who was 100% in gold???
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
Re: Is the stock market getting too hot? Discuss...
mathjak107,
What percent of your portfolio do you hold as gold?
What percent of your portfolio do you hold as gold?
Re: Is the stock market getting too hot? Discuss...
I would consider 100% T-Bills super conservative but not insane if one were older and using a low withdrawal rate. Or were these question rhetorical?
- mathjak107
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Re: Is the stock market getting too hot? Discuss...
Hi,mathjak107 wrote: ↑Mon May 14, 2018 3:37 am with 91% of companies reporting earnings for 1st quarter , they are up 26% over last year .
Where can one find these statistics?
Also, is there a way to track hit-or-miss of forecast on earnings? In other words, when they forecast earnings of a company, is there statistics whether they hit or miss?
Re: Is the stock market getting too hot? Discuss...
mathjak107,
You don't believe in long bonds for times of deflation, and you don't believe in gold for inflation and uncorrelated diversification. I am curious, why do you like to read and post on this forum, which is set up around an investing strategy that believes in both of those things?
You don't believe in long bonds for times of deflation, and you don't believe in gold for inflation and uncorrelated diversification. I am curious, why do you like to read and post on this forum, which is set up around an investing strategy that believes in both of those things?
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Re: Is the stock market getting too hot? Discuss...
i don't believe gold and long term bonds are the place to be for the last few years . i only post in the variable forum . the mods removed my ability to post in the other forums when i warned a year ago about hanging on to high positions in gold and long term bonds in rising rates . the equal weightings have anything but an equal chance of playing out , especially when rates rise and the economy is growing .stuper1 wrote: ↑Mon May 14, 2018 9:57 pm mathjak107,
You don't believe in long bonds for times of deflation, and you don't believe in gold for inflation and uncorrelated diversification. I am curious, why do you like to read and post on this forum, which is set up around an investing strategy that believes in both of those things?
for 30 years i have always used a dynamic portfilio that changes as the big picture changes as well as my needs . deflation is sure not an issue and rising rates are a game changer . so at this point i have had no use for either.
the portfolio's i use have done very well , grew a lot of money over the years and have not been a problem . they range from 40 to 60% equities in retirement , currently 50%.prior to retiring i was always 100% equities .
prior to retiring i never saw the logic to mitigating temporary short term dips when you have a long term perspective , why permanently hurt long term returns to mitigate temporary short term dips . it never made sense to me until i needed more shorter term money in retirement .
there is no correlation that going with less equities keeps you in the game longer . those who opt for more conservative models are typically going to have lower bad behavior points and still exhibit the same bad investor behavior .
in fact you see in the pp forum all the time the high fiving and back slapping because they side stepped a dip in equities but those dips they missed are down to levels that are still way higher than they would be following a very conservative model .
it is like my 25% income model is still down about .75% ytd . the growth and income model i run which is 60/40 is up 3% and the 100% equity growth model up 6% . so yeah the growth model fell more but it fell from levels the income model would never have seen .
Re: Is the stock market getting too hot? Discuss...
Ok, I've read all of that info that you just posted many times in the past. It's almost like you have it on auto-repeat or something. Anyway, you still didn't answer my question on why you like to read and post in this forum that is set up around a very different viewpoint than yours?
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Re: Is the stock market getting too hot? Discuss...
i still find some of the posts entertaining and educational . i am open to learning things from all different sources whether i agree or not. i have always found the best way to really learn is sleep with the enemy .
when you hang out with only those who support your view and high five the people who support your view , you never really learn the other side well enough to make a valid decision about so many things ..
i have changed my view on so many things over the years once i slept with the enemy and stopped believing my own bull-shit and realized my view was not the whole story and there were so many aspects i failed to consider or that i was handed a bill of goods who's time has come and gone , so the enemy were the ones with the better idea once all these other aspects were considered ..
when you hang out with only those who support your view and high five the people who support your view , you never really learn the other side well enough to make a valid decision about so many things ..
i have changed my view on so many things over the years once i slept with the enemy and stopped believing my own bull-shit and realized my view was not the whole story and there were so many aspects i failed to consider or that i was handed a bill of goods who's time has come and gone , so the enemy were the ones with the better idea once all these other aspects were considered ..
Re: Is the stock market getting too hot? Discuss...
Fair enough. I guess if you keep saying the same things to us it might sink in after a while.
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Re: Is the stock market getting too hot? Discuss...
to late for that . i tried to do that prior to the bond market turning up and it got me put in time out lol .
Re: Is the stock market getting too hot? Discuss...
What does William Bernstein think about long-term Treasuries and gold?
Re: Is the stock market getting too hot? Discuss...
See Bernstein's curious but at times insightful 2010 review of the Permanent Portfolio, "Wild About Harry," in his blog, The Efficient Frontier":
"In many respects, this allocation [25% stocks /25% bonds /25% LTTs /25% gold] is a thing of beauty. Not only does it
provide some protection against all but the most dire of scenarios, but its correlation grid is one rarely seen in finance: four non-derivative assets populated entirely by near-zeros:"
In sum, Bernstein seemed to think that the HBPP was theoretically elegant, but too difficult for most investors to put into practice.
"In many respects, this allocation [25% stocks /25% bonds /25% LTTs /25% gold] is a thing of beauty. Not only does it
provide some protection against all but the most dire of scenarios, but its correlation grid is one rarely seen in finance: four non-derivative assets populated entirely by near-zeros:"
In sum, Bernstein seemed to think that the HBPP was theoretically elegant, but too difficult for most investors to put into practice.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
- mathjak107
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Re: Is the stock market getting too hot? Discuss...
i get the fidelity monitor newsletter so they have an earnings update section .HappyMan wrote: ↑Mon May 14, 2018 9:17 pmHi,mathjak107 wrote: ↑Mon May 14, 2018 3:37 am with 91% of companies reporting earnings for 1st quarter , they are up 26% over last year .
Where can one find these statistics?
Also, is there a way to track hit-or-miss of forecast on earnings? In other words, when they forecast earnings of a company, is there statistics whether they hit or miss?
- mathjak107
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Re: Is the stock market getting too hot? Discuss...
in deep risk the take away is that the wagering of equal amounts of dollars on outcomes that stand anything but an equal chance of happening is not the best way to invest money, which is an idea i totally subscribe to myself
Re: Is the stock market getting too hot? Discuss...
barrett,
1. Nobody on this forum loves cash more than I do, but being 100% in cash long term is not really a safe long term investment strategy-- unless you are really old and have a really low withdrawal rate. If it was completely safe, we could just close down this forum and stick our stash under the mattress. To visualize the dangers of cash, we need go no further than Tyler's wonderful heat maps and drop in "100" for "T-bills/cash." It may surprise some people that cash can have years-long stretches of negative real returns.
I am aware that Harry Browne did advise people who were afraid of any kind of volatility to just put their savings in STTs. I think he was trying to helping successful (but fearful) savers take the first step to becoming successful investors.
2. The purpose of my questions is not so much rhetorical, as it is to prod investors who I believe are altogether unaware the dangers of a 100% stock portfolio. At the moment, it might look clever and smart. In the long run, it will certainly not be wise.
Last edited by jhogue on Wed May 16, 2018 8:16 am, edited 1 time in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
- mathjak107
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Re: Is the stock market getting too hot? Discuss...
a more than 40 year bull market in bonds made investing very different . we had a few speed bumps along the way but basically it was one downward slide for decades .jhogue wrote: ↑Wed May 16, 2018 8:01 ambarrett,
Nobody on this forum loves cash more than I do, but being 100% in cash long term is not really a safe long term investment strategy-- unless you are really old and have a really low withdrawal rate. If it was completely safe, we could just close down this forum and stick our stash under the mattress. To visualize the dangers of cash, we need go no further than Tyler's heat maps and drop in "100" for "T-bills/cash." It may surprise some people that cash can have years-long stretches of negative real returns.
I am aware that Harry Browne did advise people who were afraid of any kind of volatility to just put their savings in STTs. I think he was trying to helping successful (but fearful) savers become successful investors.
it is a very different investing world today with not only various other ways of betting against the markets but in rising rates you have two powerful asset classes, gold and long term bonds making for very powerful strange bedfellows .
Re: Is the stock market getting too hot? Discuss...
mathjak,
I am not sure of the point of your last post and chart. Are you inferring that 30 year Treasury bond interest rates have no place to go but up?
I am not sure of the point of your last post and chart. Are you inferring that 30 year Treasury bond interest rates have no place to go but up?
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"