Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
How big of a "crash"? I think 10-20% is possible, but I don't see anything bigger anytime soon. There have already been 2 big crashes in recent memory. A third huge crash soon would totally wipe out confidence in the market. Nobody would ever invest in the market again if we have 3 huge crashes in a 12 year span. The powers that be will not let that happen.
It will happen, likely at the next recession. Recessions are easy to predict and are a normal part of economic cycles. When GDP starts heading down you are headed toward a recession.
I also think we will likely to see a bear market in stocks with the next recession (negative GDP growth).
However, I doubt there will be another recession while Obama is in office. So, we're probably good until 2017.
It's not foolish, it's called fundamental analysis, the problem is that it's too complex to figure it out successfully on a consistent basis.
That is not fundamental analysis, that is just macro speculation. It is foolish for the very reason you said. If you agree it's impossible to predict the future, then why would you try?
Fundamental analysis is looking at the company itself.
That is not fundamental analysis, that is just macro speculation. It is foolish for the very reason you said. If you agree it's impossible to predict the future, then why would you try?
Fundamental analysis is looking at the company itself.
Well, sure, there are different aspects of fundamental analysis, when you look at a buying stock in a company you'll probably look at its financial statements, but if you want to buy an index like the S&P you'll probably look at the macro factors. Anyway, we understand each other, I think.
And yeah, it is sort of futile, but I am an economist and I am kind of used to the futility that surrounds most of it, so you'll have to excuse me for that.
It's worse than I thought if CNBC is correct. We have not had a 10% correction, normal and very healthy, since 2011. When it comes it may be quick and maybe deeper.
Last edited by howard555; 11-15-2013 at 12:28 PM..
It's worse than I thought if CNBC is correct. We have not had a 10% correction, normal and very healthy, since 2011. When it comes it may be quick and maybe deeper.
The S&P did have two 10% drops in 2012 - from beginning of Apr to beginning of Jun, and also from mid-Sep to mid-Nov.
Pretty close on both.
In the fall of 2012, lowest close was 1353 and highest close was 1465 or 7.6%.
April 1 was 1419 and June 11 at 1308 or 7.8%.
A couple or three drops in the S&P of 75-100 points this year.
Fibonacci would be rolling over in his grave.
I believe the biggest pullback for the S&P 500 in 2012 was actually 9.9% ... which just missed being classified as an official correction.
It's been about 25 months now since the last market correction ended in October 2011. And sooner or later we're gunna have another big pullback or correction.
But after hearing Yellen's testimony yesterday, I sure hope you guys aren't holding your breath waiting for it...
I continue to be amazed why there's such a prevailing opinion that the present state of the stock market is unstable and a tawdry sham.
To summarize, this view holds that the "real" economy is in pathetic shape, not merely as hangover from the disaster of 2007-2009 but structurally. In this narrative, we've been adrift for some 20 years, misallocating capital and losing our prosperity. Markets respond by succession of inflating and popping bubbles. The present record-closings of the American stock market are the result of corporate malfeasance and government intervention, both ultimately illegitimate even if we take the cynical view of benefits streaming only to the notorious "rich". Our recompense is inevitable, and when it comes, it will be catastrophic.
So goes the prevailing view. Did I capture it correctly?
I counter by saying that the "real economy" is indeed doing just fine, if we consider capital flows, investment opportunities, corporate profits and international trade. Joe Blow lowing his $40/hour manufacturing job and replacing it with food stamps or a $9/hour Walmart job is irrelevant. So is the price of milk or gasoline. What matters is the P/E in relation to interest rates (what's a healthy P/E depends strongly on prevailing interest rates). By that metric, the market is by no means a screaming bargain, but neither is it perched on a phony summit, headed for some inevitable drop.
Well said. I couldn't rep you again.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
