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The stock market is not going to end. It may get bad or it could get downright dismal, different reasons than 2008. It could even crash. But it's not like every company in this country and in the world will go bankrupt and be out of business. Eventually....at some point in the future...who knows how far in the future....sentiment will turn positive.
Lots of B&W thinking yet again on C-D. It's like few realize there are many degrees in between 0% in the market and 100% in market equities. Fewer people are living at the end of each bell curve than in the the middle sections of the curve. Yet posts are usually about the extreme outliers, who comprise many fewer people.
The stock market is not going to end. It may get bad or it could get downright dismal, different reasons than 2008. It could even crash. But it's not like every company in this country and in the world will go bankrupt and be out of business. Eventually....at some point in the future...who knows how far in the future....sentiment will turn positive.
Lots of B&W thinking yet again on C-D. It's like few realize there are many degrees in between 0% in the market and 100% in market equities. Fewer people are living at the end of each bell curve than in the the middle sections of the curve. Yet posts are usually about the extreme outliers, who comprise many fewer people.
I agree and another thing is usually big crashes happen when everyone and their mothers are taking out loans to invest in real estate and stocks thinking the sky is the limit. Right now, it's quite bearish overall. History doesn't always repeat itself, but I just don't see a major crash happening anytime soon. The economy is doing well and there are too many bearish retail investors. We could see a long period of a choppy range bound market though.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Went for a walk when DJI was +250. Got back at close, -350.
Officially hit my -15% on my largest holding. OK, think maybe oversold but momentum is towards the down side.
Last edited by leastprime; 12-19-2018 at 03:17 PM..
I agree and another thing is usually big crashes happen when everyone and their mothers are taking out loans to invest in real estate and stocks thinking the sky is the limit. Right now, it's quite bearish overall. History doesn't always repeat itself, but I just don't see a major crash happening anytime soon. The economy is doing well and there are too many bearish retail investors. We could see a long period of a choppy range bound market though.
It baffles me, as to the relentless drumbeat of bearishness... and yet, market action seems to be following this sentiment, instead of acting contrary to it. We seem to be in one of those rare situations, which is in diametrical contrast to shoe-shine boys and cabbies offering unsolicited stock tips, and grandmas meeting for cake-and-coffee to discuss options-trading. Indeed, everyone is fearful and glum. Why then isn't the market... rising?
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Originally Posted by Lovehound
Here is what people really mean, or it's what I mean. I just don't think the market can go up forever. Everybody knows it is cyclic. My strongest opinion about today's market is that it is irrevocably ruined and can never return to recent record highs until it goes far lower than today.
I just want to get started on the next bull market. I don't want anybody to lose more money. I took my own money out of the market because I just have a bad feeling.
However generous and empathetic our intentions, everyone wants to be proven right. Those who took money out of the market, can't help wishing for further declines, for this validates their hunch. Those of us who buy-and-hold-forever, wish for a placid and gently ascending market. We hate volatility.
But, pray tell: why are you of the opinion that the market is "irrevocably ruined" until it "goes far lower than today"? What broke in late-September, that was sound and robust before then? What is this great impending crisis, which we must endure, before resuming ascendancy?
I understand your feelings because on its face it appears that the ill-wishers are wishing ill on people who are invested in the market. I don't think it's that at all. Investing isn't a zero sum game.
That poster certainly was.
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Originally Posted by Lovehound
Here is what people really mean, or it's what I mean. I just don't think the market can go up forever. Everybody knows it is cyclic. My strongest opinion about today's market is that it is irrevocably ruined and can never return to recent record highs until it goes far lower than today.
I just want to get started on the next bull market. I don't want anybody to lose more money. I took my own money out of the market because I just have a bad feeling.
I don't think any of us think that. Again, that poster expressed a different thought from what you have.
However generous and empathetic our intentions, everyone wants to be proven right. Those who took money out of the market, can't help wishing for further declines, for this validates their hunch. Those of us who buy-and-hold-forever, wish for a placid and gently ascending market. We hate volatility.
No, you're wrong, or wrong in some (probably many) cases.
I care nothing about my validation beyond I don't want the regulars here at CD-Investing to laugh at me for making stupid posts. I put a lot of thought in my posts at the same time that I am learning more about investing, and following business news.
The reason I want it to go down that it would be better than stagnation or this continued miasma we are currently in. I want to rip the Band-Aid off all at once, not slowly peel it off and extend the pain.
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Originally Posted by ohio_peasant
But, pray tell: why are you of the opinion that the market is "irrevocably ruined" until it "goes far lower than today"? What broke in late-September, that was sound and robust before then? What is this great impending crisis, which we must endure, before resuming ascendancy?
Pardon me if I turn it around and ask you why you think the market is going to recover any time soon.
I think one big piece of it is stock buybacks. What happens when they stop?
But, pray tell: why are you of the opinion that the market is "irrevocably ruined" until it "goes far lower than today"? What broke in late-September, that was sound and robust before then? What is this great impending crisis, which we must endure, before resuming ascendancy?
Capitulation has to happen first for a strong rebound. I don't think this is capitulation yet, but it could be getting close.
"After capitulation selling, many traders think there are bargain buying opportunities. The belief is that everyone who wants to sell a stock for any reason, including forced selling due to margin calls, has already sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that capitulation is the sign of a bottom." -Investopedia
Pardon me if I turn it around and ask you why you think the market is going to recover any time soon.
A very fair and reasonable question! My attempts at answers:
1) Recovery from the Great Recession has been robust in the US, but lackluster in most other markets, in particular in Europe. This means that, unless we regard America as being somehow economically-special, there's ample room for strong residual growth elsewhere in the world. This means, first, that foreign stock markets ought to outperform (and they have not), and second, that large US-based companies with a high percentage of foreign revenue out to outperform.
2) On the scale of multiple decades, the entire 21st century has thus far been pretty lackluster. Indeed, other than low inflation, which makes inflation-adjusted stock market returns look better, we have been doing poorly, as compared to the second half of the 20th century. Instead, our 21st century market resembles more the first half of the 20th century - with its myriad horrors and upheavals. Ought there not be a return to the mean?
3) Structural and technological changes over the past 30-50 years have favored capital over labor. It stands to reason that stock market returns should follow. Trends that were visible in the 80s and 90s have only accelerated. Why then has the market done so much worse over the past 20 years, than over the prior 20?
4) Millennials have finally reached an age where they have found serious, adult careers. Thus they should be in a position to start feeding their 401K plans, creating demand for stocks.
5) Unless we hit another earnings-recession, as we did say in 2015, P/E ratios are pretty reasonable by recent historical standards (since the early 1980s).
Capitulation has to happen first for a strong rebound. I don't think this is capitulation yet, but it could be getting close.
"After capitulation selling, many traders think there are bargain buying opportunities. The belief is that everyone who wants to sell a stock for any reason, including forced selling due to margin calls, has already sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that capitulation is the sign of a bottom." -Investopedia
Thanks! That explains what I was feeling exactly!
I'm not hurting. I don't know anybody who is hurting. I think it's gonna have to hurt real bad before we can get a new, strong market.
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Originally Posted by ohio_peasant
A very fair and reasonable question! My attempts at answers:
I just wanted to add, I'm not an expert. I'm learning and I've learned a lot this year (and paid for it ) and I beg off answering when I don't know the answer!
Quote:
Originally Posted by ohio_peasant
1) Recovery from the Great Recession has been robust in the US, but lackluster in most other markets, in particular in Europe. This means that, unless we regard America as being somehow economically-special, there's ample room for strong residual growth elsewhere in the world. This means, first, that foreign stock markets ought to outperform (and they have not), and second, that large US-based companies with a high percentage of foreign revenue out to outperform.
Actually I do believe America is economically special, but I also believe it's ours to lose and we are headed towards losing it. As far as Europe, having "ample room for strong residual growth" I think they (EU) are making a hell of a mess of Europe and with Brexit as the cherry on top. I think EU is going to be hors de combat for 2019. And China? They are facing problems of their own and their currency manipulation is a big part of it. Kids say "cheaters never prosper" and I have the feeling this may apply to China.
America on the other hand is hamstrung by psychotic politics. (I'm not going to discuss this further.)
Quote:
Originally Posted by ohio_peasant
2) On the scale of multiple decades, the entire 21st century has thus far been pretty lackluster. Indeed, other than low inflation, which makes inflation-adjusted stock market returns look better, we have been doing poorly, as compared to the second half of the 20th century. Instead, our 21st century market resembles more the first half of the 20th century - with its myriad horrors and upheavals. Ought there not be a return to the mean?
We need to have at least two decades to discuss the 21st century in terms of a scale of decades.
I don't feel like I'm in a different century. We could call it the '90s but with better technology, and I wouldn't quibble. All I've seen so far is better technology and worse politics. I do agree with your characterization as lackluster.
I think you and I are in the area of differing opinions with no objective way to reconcile them.
Quote:
Originally Posted by ohio_peasant
3) Structural and technological changes over the past 30-50 years have favored capital over labor. It stands to reason that stock market returns should follow. Trends that were visible in the 80s and 90s have only accelerated. Why then has the market done so much worse over the past 20 years, than over the prior 20?
Sure. Manual labor is becoming obsolete. One day we'll have a bunch of uneducated poor people in an era where manual labor is almost worthless. It makes for good dystopian novels.
As far as the stock market following, logically it should. The problem is that the stock market follows emotion, not logic.
The current 20 years differs from the preceding years because 20 years ago America began its decline from being great. That's approximate since it's an ongoing process, I'll call 20 years ago "in the slope of America's decline." That's my opinion but I can't prove it.
BTW I do not believe at all that America has lost it. I believe we are on the road to losing it until we come to our senses and change course. And I do believe that is going to happen.
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Originally Posted by ohio_peasant
4) Millennials have finally reached an age where they have found serious, adult careers. Thus they should be in a position to start feeding their 401K plans, creating demand for stocks.
Right now I am seeing a mix of amazing young people (some of them my friends) who are pushing their education to the max and they are really impressing me—and a bunch of losers living in their parents' basements taking ADD drugs and gaming.
Maybe there is a tipping point.
I'll agree with this one 50%.
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Originally Posted by ohio_peasant
5) Unless we hit another earnings-recession, as we did say in 2015, P/E ratios are pretty reasonable by recent historical standards (since the early 1980s).
Thanks for the discussion! You've reached my level of incompetence and I can't answer that one.
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Again, that poster expressed a different thought from what you have. 
) and I beg off answering when I don't know the answer! 
