This time it's different..

Discussion in 'Trading' started by Ash1972, Feb 11, 2011.

  1. Ash1972


    Feb 2000: The stock market, driven by the 'dot com' internet firms, is on an inexorable upward trend. Miss out at your peril. The internet is the most revolutionary transformational technology of the last 100 years - so, who knows how high shares could go? Normal price/earnings valuations just don't apply. If you don't get it by now, you probably never will. Just don't bet against the future.

    Feb 2011: The stock market, driven by everyone's fear of hyperinflation and the Fed's commitment to ease monetary conditions, is on an inexorable upward trend. Miss out at your peril. The Fed is committed to as many rounds of quantitative easing as are required to get the economy back on its feet. Stock market investment is probably the only sure way to protect your wealth, so who knows how high shares could go? Normal price/earnings valutions just don't apply. If you don't get it by now, you probably never will. Just don't bet against the Fed.
  2. Locutus


  3. Maverick74


    Huh? In 2000 that was the 8th year of the bull market that started in 1992. Over that 8 year period the market was up about 400%. The average bull market lasts about 7 years. We are 3 years into this one. Over the last 10 years this market is actually down, not up 400%. There are almost no similarities to where we are in the cycle compared to 2000. The only people who are saying it's different this time are the bears. Oh btw, another major difference, in 2000 almost everyone was in the market. This bull market is leaving everyone behind. Even those that actually were long got off the train a lot lower from here.
  4. Locutus


    What? Facts and figures please, or do you think that stock prices move by themselves without anyone buying?

    I can produce facts and figures that say pretty much the contrary, but then I again I will cede that these figures show the market is a lot less "all chips on black" than it was in 2000 however it also is a lot more chips on black than it was in 2007, when we didn't have super-duper easy money policies (just easy) and POMO and TARP and all the other front-loading of the collapse that's inevitably coming sooner than you think.
  5. Maverick74


    Here you go: facts and figures.

    Get to know that site really well. They track all the inflows and outflows month to month of mutual funds and ETF's.

    What you will see is over the last year, money has been pouring out of domestic stock mutual funds to the tune of billions each and every month. What you will also see is that the small investor has been piling into international stock funds and bond funds over the last year.

    This would be obvious if you looked at how badly we are actually under performing other markets around the world as I cited on another thread.

    Here are the return numbers for the last 12 months:

    Argentina 55%
    Singapore 54%
    Germany 37%
    Australia 37%
    Taiwan 36%
    South Africa 36%
    Peru 35%
    Canada 35%
    Chile 32%
    Sweden 31%
    Netherlands 29%

    USA 28%

    And year to date:

    Spain 16%
    Germany 12.5%
    Italy 11.5%
    Greece 11.0%
    France 10.0%
    Sweden 7.5%

    USA 5%
  6. I traded in the 1990s and today's market is more like mid-1990s then any other time period the last 30 years. You need to learn the basics of most bull markets I've been saying they last a minimum of 3-4 years over and over again.

    Valuations based on current earnings are quite modest still. The only reason people haven't driven equity prices much higher is the economic worries like foreclosures ( this is all priced in though ). This is the give and take on the way up but a P/E of 14 for the S&P is not even close to expensive. And earnings are growing every quarter.

    You don't seem to understand how important earnings are to markets. All the "POMO" chatter on this site is way overdone, as Maverick says look at market performance elsewhere in the world. In Canada, we don't have POMO, any government bailout programs have been fairly minimal since 2009 ended ( eg we helped bail out GM/Chrysler ). Our markets outperformed US markets every year for 7 years.

    I don't know why you are obsessed with collapses they happen far less often then you seem to think. Someone taking your viewpoint in the mid-1990s had 4-5 more years of wondering why markets keep rising. Eventually, things got out of hand in technology. Lot of money to be made before the bubble formed.
    It was very obvious when it existed though, with firms with no revenues and profits going up in price every week. We are nowhere near such a situation. IPOs were crazy.

    Nothing about today's market is like 2007. Not even investor psychology, too many people got out at the bottom and are pissed off at so called "experts" who told them to sell. You can keep saying "sell, sell, sell" but nobody cares. You make that your motto and if it works out for you well congrats you guessed a retracement. Its a free world take your shot sometimes guesses hit.

    Eventually, some of you have to realize when a market rises 20% or more from the point you called a correction, even if there is a 10% correction you're still in a hole. You lost money chasing a home run. So much easier buying into the rally. If only you could have turned your thinking around 6 months ago you'd be doing very well right now.
  7. Terrible, terrible analysis. Normal P/E valuations clearly do apply, and this is why markets are rising. You need to get better with numbers.
  8. It's possible to be both long stocks and a bearish on the medium-term economic outlook.

    The original poster got it right. Bernacke has got us boxed in against downside/deflationary risk. That means it's only asset inflation ahead. The sovereign debt problem means it's unlikely we get any meaningful raise in the Fed funds rate. So we fuck around in a slow grind up until the US consumer pays down a good chunk of their horrendous debt, and then we get a new upswing in credit. Whereupon equities and commodities will go absolutely batshit. We'll have serious fiscal problems in 3-4 years. On order of magnitude as Greece or Iceland with no IMF bailout. Just bubbleboy and his printing press. Better to be long commodities then stocks, imo.
  9. Lucrum


    "This time it's different..."

    Seems like I've heard this before...somewhere.
  10. my projection is that s&p would be somewhere near 4444
    #10     Feb 12, 2011