So you started buying the S&P in the summer/Fall of 2008 (after college graduation). You just happened to start buying a few months before the start of the longest bull market in S&P history (now in its 11th year). Hope you aren’t counting on 20% annualized gains every year. It’s not that easy. Good luck though.
Exactly. The conservative will simply move money from higher-risk (equities) into lower-risk fixed income (bonds); the risk-takers will sell short, buy puts, sell calls, buy gold.... generally take bearish positions. That's what the bond yield/curve is telling us: money is flowing into US T-bonds; the German bond ("Bund") even went into negative yield territory because people are concerned. https://www.marketwatch.com/story/y...d-dips-below-0-after-downbeat-data-2019-03-22 ...but, all that being said, as peilthetraveler and others have said, experience has shown that the market may very well spike in the opposite direction. Unless you are in the Inner Sanctum, we are all operating with incomplete information. When every indicator out there is screaming for a move one way, there is every chance that it's just smoke and mirrors. For God's sake, if they can manipulate LIBOR, they can paint any tape. https://www.investopedia.com/terms/l/libor-scandal.asp
Rip your face off, 1000 point dow days, biggest point change in history, did i say rip your face off, most shorted stock and rallies temper the eager. Well, they be coming as well. Decembers rally started with just such a day and has lasted months. It hasn't started yet , says price. Jimmy Rogers held through hundreds dollars heat in a 1970's gold short . Seems you can only do that with OPM or terminal cancer. The market can stay insolvent longer than you can stay crazy........Bera?
oh yo yo yo. .... experts now generally saying BEAR is over. Like you said, they see the 1k rally and ongoing and say with near certainty, "bear is over" But I ask have you ever seen such a wimpy BEAR that drags Dow, Nas and SPX and NYA into Bear territory (20%) and ends that fast. Smells like a huge bull trap set up to me. Time will confirm. If true that Bear is over, then thisBear is a wanker. . No Sir, he ain't. Anything but a wanker. This bloak's going about destruction systematically, taking out all the small armies first, then he comes to the United States for THE prize. They be talking about a BEAR that has already done the following. ...... oh yo yo yoi. .... . Europe Bear market deep ongoing since 2018, now in bear rally upwave China down 40%. whole areas of Shanghai ghost blvds, rural towns ghastly and ghostly Hong Kong, Singapore, Korea, Taiwan, Malaysia. ... Established Bear markets Middle East Established Bear markets, Saudi in the crapper, Dubai with BEAR beating him to pulp Orthello aka Australia total CRASH of real estate already underway like what we had in 2008 Canada real estate up the yazoo. San Fran, Palo Alto, Manhattan already reeling and Bear has not even arrived, only his breath has Hide and watch amigos
Yeah, that's continuously compounded rate of about 3%. Not bad indeed, but certainly not a beacon of stability, all things considered (e.g. buying US treasuries would have returned more).
OP starts such beautiful threads that inspire deep thinking, regardless right or wrong, its just very refreshing. Honor to comment here. .
Are things different? Pre-2008 and more so prior, noise margins, or room for policy change(error) were wide. The spread in the 10over2or 10over fed funds may have been 500 bp. Or more. Now, whoops, a precise scalpel is required else inversion. Powell is the first to operate in this environment . Gone the days of big hammer , half point increase , rare but did happen, tightening campaign. Gone are days of inflation expectations due to deficit spending and past QE's so,of course there is not much happening out 10-30 years these days. Different times and possibly different market reactions? We have had 1% GDP quarter post 2012( Centarl bank collusion epoch year zero) and we have been ok. Hasnt any past vol. 2015 summer etc. been weird where the safety flight(dollar, bonds) has been tame? Seems to me , going forward , trying for a normalized (2%) fed funds rate, any deflatinary data or increased vol, will pound the yield further out on the curve and cause inversion. Structural no? new days? Markets are gonna adapt to this and carry on without the mother of all bears....IMO. Maybe the new, better normalized fed funds rate is 1.25%, the 2nd attemp/ iteration at this. I look for this as Sle has already said.....markets are pricing in policy change. Summary: the curve is to tight nowadays and it dont mean THAT anymore! Maybe dull, muted, managed times are coming....OK....too far, too extreme?
I forgot to mention another "excess" situation. My wife runs a log home business in NorCal and their business is booming more than ever. Most of the homes they do are second homes or wealthy people retiring to the mountains to live in their dream home. The situation is even worse now than it was for the subprime infused 2007...just before the great recession.
Who knows but it might help. If it does not, hey no biggie, but if it does, that I had something to do with it is all the remuneration I need. . When in similar market junctures. ... as 2018-2019 ignore TV, ignore who's having sex with whom, who stock bought back and all the bla bla bla associated with HERD gossip, trash talk and EsPecIaLLy ET. Especially ignore Fundamental anal-ysis Rules: (at major top/bottom junctures) (1). Warren Buffet. Blood in street = Buy. ..... Euphoria/complacency = SELL (2). ET. ..... do the opposite of the consensus here. ET is a prison sentence, you want to do your time and split. (3). How to combine Warren with TA? Only 1 tool required. Vix. Place side by side with SPX for market direction before you go stock hunting (4) Do your homework on all frames, M, W, D, RT. Vix leads. Fear/complacency is a dead giveaway of the HERd. Trendline in Vix is all you need. Now go to 2007 top, 2015 top, 2018 & 2019 and examine Vix. Its all about fear and greed/complacency. Warren does not do technicals but he had this concept down COLD. Now, with Vix, you can easily beat him because he does not have timing but you do. With Vix as your weaponry you can trade from a nice hi rise fully stacked condo with stunning view of Copacabana or Ipanema beach, or anywhere else for that matter - but Brazil is hard to beat and the soft stuff is ultra-feminine with tantalizing accents and tone .
I think whenever people look at the Libor scandal or the futures spoofing, they wildly overestimate the magnitude of the cheating. The manipulation in LIBOR was changing the level of the rate by several basis points and the spoofing in the S&P futures was moving the market intermittently by a single tick. While in both cases it was truly egregious in the context of this particular market and should certainly be treated as a crime, the effect on the general population or even market participant is virtually zero. It's a market equivalent of a cashier at a supermarket "forgetting" to give you a penny of change.