So buy gold? I'm only sort of joking with that question.
I don't want to be responsible for anyone else's portfolio. There's a lot of shade thrown on precious metal investing and more than one financial analyst has referred to cryptocurrency as "goldbugging for nerds." I've got a friend who owns a shit-ton of GM stock. He sells puts, buys options and collects the dividends. I've got another friend who throws his money at brands he likes and pulls out when he thinks he's made enough. Me? I've been lucky enough to have no cash to invest in companies I truly believed in twice in my life, because they never once made it back to IPO levels. The dumber things get, though, the smarter Warren Buffett looks: - Berkshire Hathaway yearly letter to investors, 1990 Lethargy bordering on sloth remains the cornerstone of our investment style: This year we neither bought nor sold a share of five of our six major holdings.
One could argue that the day-to-day market swings don't have a lot to do with any longer term movements. One could also make the case that this kind of financial reporting is just picking whichever cause feels like a good fit for the effect observed. Not by which is plausible. Kleinbl00 you told us you aren't optimistic and went to cash for now, but what makes you think there isn't more time left in this bull market. Housing has gone out of control in a few places, but not so bad everywhere else. The equity bull market is historically long, but not so remarkable in gains, and there have been some corrections (Jan 2016) which have let of steam and kept people at least partially risk-aware. I think there's a couple years left before there is a big drop in prices. (I'm not trying to convince you, I'm just curious what you think about it.)
Point by point: I think that by definition, day-to-day swings don't have anything to do with longer-term movements. At the same time, a market that responds so swiftly to any signal - regardless of its provenance - is not a healthy, durable nor rational market. One could indeed. However, the assertion gains credibility in the absence of an alternative or contradictory hypothesis. Historically speaking, bubbles last much longer than the doom-callers predict. The Crash of 1929 was being called in 1926; the Crash of '87 was being called in '86. Some of the guys I have been following have been predicting a bear market for eighteen months now; none of them has called the top yet. In other words, there's every reason to predict that the bull market will go on a little longer. However, if you look at market trends over the past year or so we have gradual (or negligible) rises followed by abrupt, catastrophic falls. When the market moves, it moves like a ski jump. I, personally, am willing to skip out on some of the rise if I can skip out on most of the fall. Housing didn't go out of control "everywhere else" last time. It was the response of superheated markets that broke the world, not national or global uniformity. This is why most people assert that markets are currently overpriced - market performance has been sluggish-to-even but equity prices are nuts. What corrections there have been have been negligible. Rather than simply stating "I think you're 18-21 months long on that one" I will ask why you think this. What aspect of market behavior are you seeing right now that indicates there's another 2 years of runway on this bull market? What tea leaves are you reading? Because history doesn't repeat itself but it rhymes and apparently I'm not seeing what you're seeing.One could argue that the day-to-day market swings don't have a lot to do with any longer term movements.
One could also make the case that this kind of financial reporting is just picking whichever cause feels like a good fit for the effect observed. Not by which is plausible.
Kleinbl00 you told us you aren't optimistic and went to cash for now, but what makes you think there isn't more time left in this bull market.
Housing has gone out of control in a few places, but not so bad everywhere else.
The equity bull market is historically long, but not so remarkable in gains, and there have been some corrections (Jan 2016) which have let of steam and kept people at least partially risk-aware.
I think there's a couple years left before there is a big drop in prices.
On news: An old, misleading, video may be the most plausible trigger for a bad day for the market, but I think it's more accurate to say the cause is the guessing-game of interpreting the effect of any info, and the effects of effects, and so on. I think nearly all reporting on daily fluctuations is a search for a story that feels right, and I think the weirdness of the stories or the size of the reaction doesn't shed light on the health or durability of any long term trends. I am skeptical of believing in the market's rationality even while it looks like it's rational. That's my interpretation of it. A relationship between daily market news and anything would be hard to prove or disprove in any meaningful way. On time until a correction/recession/meltdown: I am not making a confident prediction that there is 2 years left moving up, just that I don't think a big correction is immanent. I think really slow growth or flat over the next couple years is more likely than big growth or a crash. I don't see much of the "irrational exuberance" that I would expect in the lead up to a large correction. There are a lot (A) who seem overconfident that the stock market will preform well, a lot (B) who are trying weird things to get a good return, and a lot (C) who are sure it is about to crash. When someone in group B finds a silver bullet and group A starts to join in on the wonderful new thing, I'll be scared and join group C. I hope I will anyway. Market breadth - was under the impression that market breadth was in a pretty boring range, but while trying to double check that I found a lot of conflicting info, I'll update on that when I get time to look more deeply. Debt & Housing Some regions are ripe for a big drop in housing prices, but I don't believe that will have much affect outside of those regions because: There is less investment money riding on mortgages because rates have dropped, so the financial effects of a housing drop are smaller. A broad drop in housing is less likely because the delinquency rate is lower and the housing debt service load is lower (because of lower rates). Some of the warning signs you see look like unimportant noise to me. And without the warning signs, I think slow overall growth is likely, with some small corrections and rallies along the way. What aspect of market behavior are you seeing right now that indicates there's another 2 years of runway on this bull market? What tea leaves are you reading? Because history doesn't repeat itself but it rhymes and apparently I'm not seeing what you're seeing.
Really, our point of contention is about market cycles and their causes. We both agree on the guessing game, but I'm arguing that the guesses get wilder when the market gets more chaotic. You don't see much "irrational exuberance" but it's possible you're not seeing what I'm seeing. You don't think a broad drop in housing is lower - yet the bankruptcy laws that led to it the first time (harder to discharge debt through bankruptcy) remain and now, the bulk of the workforce is dealing with student loan debt. So really, it comes down to what we think is important... and you're right - I think this stuff is important.
It's crazy time, and everyone is starting to agree that it's crazy time. I think that consensus means that once things really start going south, people aren't going to be so inclined to buy the dip.“You’re not trading on what’s true and what’s false. You’re trading on what the average voter believes is true. It’s a propaganda war.”
While on a vacation a few weeks ago, I was chatting with a fellow traveler who happens to be a financial planner. He advised me to move some things in my 401k around into more "stable" funds. I hope he's right and I hope he's wrong all at the same time.
The old adage is that bear markets return money to its rightful owners. I've been reading Galbraith's Great Crash. It could have been written yesterday about today, instead of in 1955 about 1929.
I'm considering liquidating my savings today, in fact. Edit: Quick update: I didn't do it