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Yes! Only the stupid money is panicking and selling now. They sell after the crash (low), then buy back in when everything has calmed down (and the market has gone higher).
Yes! Only the stupid money is panicking and selling now. They sell after the crash (low), then buy back in when everything has calmed down (and the market has gone higher).
This is why people should not watch CNBC or listen to stock analysts.. they always rate stocks strong buys at tops after they've gone up 300% in 2 years while giving sell ratings and telling people to pull out of the market after the market is down 20%... they give emotional, momentum driven advice. They are not very good at spotting bargains, bottoms, or reversals. The time to sell is when bullishness was at 90%... early November... here with bullishness at 46% we shouldn't be far from a short term bottom... we may have bottomed yesterday.. I hope not but it's possible.
Longer term of course it depends on the economic data... we are overdue for a recession now after 7ish years. The stock market is still rich here though admittedly there are a lot of stocks that are not overvalued... this seems to be a big cap growth driven rally. Why some stocks languish with low multiples while others can sport uber multiples has more to do with human emotion and institutional interest than anything... when the organic growth slows in your big high flying tech stock though look out below.. or when the hype dies down (GPRO)
This is really a market by the rich, for the rich... the top 1% of where all that liquidity sits around... everyone else, the average joe, just invests in mutual or index funds that go into the same boring list of stable names that your average "financial adviser" that overcharges to manage your money will put them into.
Yes! Only the stupid money is panicking and selling now. They sell after the crash (low), then buy back in when everything has calmed down (and the market has gone higher).
Stuff Baby Boomers tell themselves that's not true for $1000 Alex.
A lot of the volume in these huge drops is not caused by individual investor hitting the panic button.
Stuff Baby Boomers tell themselves that's not true for $1000 Alex.
A lot of the volume in these huge drops is not caused by individual investor hitting the panic button.
The market is highly over-valued right now.
The Russell 2000 is trading at a trailing earnings P/E of 150. I would say that highly over-valued is one way to put it. Astronomical levels would be another.
The Russell 2000 is trading at a trailing earnings P/E of 150. I would say that highly over-valued is one way to put it. Astronomical levels would be another.
Lots of small caps with negative earnings. I don't really follow small caps much, so can't say if it's a real problem.
The DJ Industrials' trailing p/e is about 15.5. Transports are at 12.5, and Utilities are at 17.5. Those are not crazy numbers.
Lots of small caps with negative earnings. I don't really follow small caps much, so can't say if it's a real problem.
The DJ Industrials' trailing p/e is about 15.5. Transports are at 12.5, and Utilities are at 17.5. Those are not crazy numbers.
The Schiller Cyclical P/E for the S&P is at 25 which is 50% above its historic mean. No guarantee that this Bubble will burst as all of the previous ones, but if it does, a 30-50% retracement is highly probable. It all depends upon whether Fischer prints a few more trillion dollars to bail out the stock market gamblers. It's a 50-50 bet on what Fischer decides to do. My guess is that the Billionaires have sold (insiders have been selling at a record rate over there last year) and there will be no more free money to levitate the market. But at the end it is all a bet.
The Schiller Cyclical P/E for the S&P is at 25 which is 50% above its historic mean.
Something is out of whack with his indicator. It's been above the historic mean for all but a few months of the time I've been investing (close to 25 years now). Just take 2011 as an example. There were many excellent stock values that year, with the CAPE sitting the the low 20s. I don't know what's going on with it, but the CAPE is not of any practical use IMO.
I look at the p/e for many individual stocks, which gives a much better feel for where values are sitting. By doing this, even in 1999 one could see that there were many reasonably-priced stocks even with the market indicators all (correctly) screaming danger.
I know this will sound trite, but just buy good quality when the prices are sensible and hold for the long term. I cannot guess when the next bear market will happen, nor how far the market will drop.
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