When do you think the market will crash again?

[techcrium]

Originally Posted by Ted Bear

The reason you use those sorts of companies (Wal Mart is another good example which just had a Revenue miss) is because they sell to a broad cross section of consumers. High end, low end, we all buy gasoline. IBM might be skewed a little bit more to corporate, but they are in all walks of society. McDonalds is also everywhere, but might be skewed a little toward the low end. It all evens out. You just want to use large companies who are broadly representative of a large portion of our economy.

I don't have to try and sell you, or persuade you, that this is an issue. MY work suggests that it is, and that this erosion is not healthy longer term for our economy, and the overall equity market. If these sorts of companies are not thriving during the loosest monetary conditions ever in America, once the background changes , and it will, their lot is likely to deteriorate, not improve.

You may have other views, other data, and other conclusions, That is all fine. I am not here to sell you anything, or make recommendations. The question was asked when did people think the equity market would begin to sell off, and I responded that I thought it would likely be some time in the first part of 2014. I offered a little bit of background as to why I thought the market would be challenged during that period of time. Perhaps I should have simply said 1Q 2014 and left it at that . If the Fed continues to pump, the sell off will be delayed, or at least mitigated. But delaying it doesn't reduce its likely evilness.

You think earnings are decreasing and stock prices are "propped" so can you give me some better examples?

You basically gave me 3 companies, 1 which disproved your point and the 2 others didn't increase their share price at all in the last 2 years.

Therefore, your examples are pretty much moot.

You claim to have done "work"...can you show me your "work"?

[bale002]

Originally Posted by Ted Bear

The question was asked when did people think the equity market would begin to sell off, and I responded that I thought it would likely be some time in the first part of 2014. I offered a little bit of background as to why I thought the market would be challenged during that period of time. Perhaps I should have simply said 1Q 2014 and left it at that.

I also interpret this thread in the above terms - a technical discussion about trading opportunities, and not a discussion on long-term macroeconomics and asset allocation or company fundamentals -, dismissing words like "crash", "collapse" and "disaster" as mostly fluff or only remote possibilities, and considering, more precisely, a general 10%-30% sell-off (10%-20% is generally accepted as a "correction", more than 20% a "bear").

In my view, the main factor that may challenge the market in 1Q14 are fiscal negotiations.

Moreover, and related to the above, I just read a major money-center bank report on the effect of US electoral cycles on the stock market since the 1920s, in particular the mid-term election year. In short, the conclusion is that, in a mid-term election year, equity prices tend to drop in February-March and then again in October, but start to recover in November and December. Of course, past performance is no guarantee of future results.

In any case, to answer the OPs question, based on the above, the safe haven may be cash from now to around February, perhaps jump on any opportunities that arise in the February-May or summer period, then maybe again in October until the elections on November 4.

So perhaps short-term opportunities to set long-term asset allocations at more favorable prices, if you want to play that game, at least with a portion of your assets.

Of course these are only best guesses by both the meek and the mighty. In the event, anything is possible.

Good Luck!

[BestintheWest]

Originally Posted by techcrium

You think earnings are decreasing and stock prices are "propped" so can you give me some better examples?

You basically gave me 3 companies, 1 which disproved your point and the 2 others didn't increase their share price at all in the last 2 years.

Therefore, your examples are pretty much moot.

You claim to have done "work"...can you show me your "work"?

a couple of things to consider and that contribute to increased stock prices are QE as well as company stock buybacks.