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I believe his opinion was that the market will get cut in half again, just like it has done two times in the last 13 years. In the first two parts of the video he felt fair value at that time was around 950. Then he said it could easily overshoot as markets tend to do, and that is when he said 700. 1500 to 950 = 37%.
Maybe it will be 2000 down to 1250. Same %.
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The market has been way above it's 200 day moving average for over a year now, and getting close to being unprecedented. ^GSPC Technical Analysis | S&P 500 Stock - Yahoo! Finance=
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.
Last edited by howard555; 11-13-2013 at 01:24 PM..
I believe his opinion was that the market will get cut in half again, just like it has done two times in the last 13 years. In the first two parts of the video he felt fair value at that time was around 950. Then he said it could easily overshoot as markets tend to do, and that is when he said 700. 1500 to 950 = 37%.
Maybe it will be 2000 down to 1250. Same %.
----------------------------------------------------
The market has been way above it's 200 day moving average for over a year now, and getting close to being unprecedented. ^GSPC Technical Analysis | S&P 500 Stock - Yahoo! Finance=
It will happen, likely at the next recession. Recessions are easy to predict and are a normal part of economic cycles.
Recessions are actually incredibly hard to predict, as any half-economist knows, but okay, if you say so.
I believe his opinion was that the market will get cut in half again, just like it has done two times in the last 13 years. In the first two parts of the video he felt fair value at that time was around 950. Then he said it could easily overshoot as markets tend to do, and that is when he said 700. 1500 to 950 = 37%.
Maybe it will be 2000 down to 1250. Same %.
----------------------------------------------------
The market has been way above it's 200 day moving average for over a year now, and getting close to being unprecedented. ^GSPC Technical Analysis | S&P 500 Stock - Yahoo! Finance=
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 would agree with you but I don't know about that easy part.
I would say somewhere 2014/2015 might be recession but who knows. We can have record sky high.
I would agree with you but I don't know about that easy part.
I would say somewhere 2014/2015 might be recession but who knows. We can have record sky high.
By easy I meant when GDP starts to fall then we are headed toward recession not out of one.
Whether it reaches 0 growth and continues down, or turns back up, no one knows.
Third quarter GDP was revised up to 2.8% a couple weeks ago which was good. Recessions are 0% or negative growth for at least 2-3 consecutive quarters. That is one definition. And the market tries to be ahead of things roughly 6 months. These are the opinions of professionals who make a living with stocks, not me. We can be half way into a recession before we know we are. The last one was a deep one. One quarter I think GDP was down near 5% (-5%). That's deep for an average recession.
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.
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.
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