U.S. stocks in freefall

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Re: What can happen this year?

Postby HomerJ » Mon Nov 21, 2011 4:36 pm

manuvns wrote:
mptfan wrote:
manuvns wrote:stock market have remained at the same level last 13 years .

http://www.google.com//finance?chdnp=1& ... INX&ntsp=0

Umm...let's see...where do I start?

First, the chart you cited is a price chart, so it does not reflect the total return of the S&P500.

Second, the S&P 500 index is an index that reflects the price of 500 stocks, not the whole U.S. stock market, which I think is over 7,000 stocks.

Third, the U.S. stock market is less than half of the world stock market.

Fourth, a wise investor is diversified among different asset classes other than the 500 stocks in the S&P 500, including bonds and cash.


look at annual returns here http://en.wikipedia.org/wiki/S%26P_500

form the end of 1998 the till today the returns/CAGR are close to 1.8% . you can do better with a CD .


How about 1981 to today?
How about July, 2002 to today?
How about March 2009 to today?

Why can't I pick any date I want and say "Look how awesome the stock market is! Nearly 90% return in just 2.5 years!"

What's so special about the last 13 years? Are you predicting the future based on the last 13 years? Why can't I predict the future based on the last 9 years? or the last 2.5 years? Future looks pretty good if you use those numbers.
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Re: U.S. stocks in freefall

Postby nisiprius » Mon Nov 21, 2011 4:55 pm

It does look as if CDs would have done quite a bit better than stocks, though. These are probably jumbo CD rates, since I got them from http://www.jumbocdinvestments.com/historicalcdrates.htm . I'm going to round down just a tad to allow for that. Buy one in 1998 for, say, 6% for five years, roll it over in 2003 for 3.75% for five years, roll it over in 2008 for three years for 3% (from another chart). Excel, click, click... grow $10,000 to $17578 in 13 years for an average annualized rate of 4.43%.

$17,578 compares to, let's see: $16,000 if invested in the S&P 500, $16,968 in Total Stock Market, $17,858 in Total International.

To some extent that depends on the luck of the times I picked, specifically the assumption that I rolled over the last CD in 2008.

It's fair to say "about the same as a CD," I think, and quibbling about S&P versus Total Stock Market versus International doesn't change that much.

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Re: U.S. stocks in freefall

Postby HomerJ » Mon Nov 21, 2011 5:36 pm

nisiprius wrote:It's fair to say "about the same as a CD," I think, and quibbling about S&P versus Total Stock Market versus International doesn't change that much.


How about 50/50 stocks/bonds compared to a CD?
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Re: What can happen this year?

Postby Gumby » Mon Nov 21, 2011 6:02 pm

rrosenkoetter wrote:How about 1981 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 7.12%

rrosenkoetter wrote:How about July, 2002 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 2.39%

rrosenkoetter wrote:How about March 2009 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 20.53%

Source: Investing Through Time
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Re: What can happen this year?

Postby HomerJ » Mon Nov 21, 2011 6:16 pm

Gumby wrote:
rrosenkoetter wrote:How about 1981 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 7.12%


Wait, you mean, even WITH a lost decade, stocks still returned 10% nominal over 30 years... Crazy talk!

This is why lost decades haven't mattered in the past. This is why people say "long-term, stocks do well".

Going through a lost decade like 2000-2011 didn't change that... Going through a 16-year lost period (like from 1966-1982) didn't change that.

Might we have a 30-year downturn this time? Maybe... It's certainly possible. It hasn't happened yet though. But, sure, it might happen this time... But automatically declaring "game over" after a 10 or 15 year downturn is a bit premature... So far, we've still done very well over 30 years even with the "lost decades" included.
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Re: U.S. stocks in freefall

Postby Lbill » Mon Nov 21, 2011 6:27 pm

Thanks to today’s sell-off, the Dow is currently only a few points away from where it ended the last century (11,487 on December 31, 1999). In other words, we haven’t gone anywhere in nearly 12 years.

That’s rough but it’s not unprecedented. On December 12, 1905, the Dow closed at 96.05. It would close at the exact same level on April 17, 1942. That’s 36 years and four months which is roughly the time from Richard Nixon’s resignation to today.

http://www.crossingwallstreet.com/archives/2011/11/some-perspective.html
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Re: U.S. stocks in freefall

Postby HomerJ » Mon Nov 21, 2011 6:37 pm

Lbill wrote:
Thanks to today’s sell-off, the Dow is currently only a few points away from where it ended the last century (11,487 on December 31, 1999). In other words, we haven’t gone anywhere in nearly 12 years.

That’s rough but it’s not unprecedented. On December 12, 1905, the Dow closed at 96.05. It would close at the exact same level on April 17, 1942. That’s 36 years and four months which is roughly the time from Richard Nixon’s resignation to today.

http://www.crossingwallstreet.com/archives/2011/11/some-perspective.html


That's a very interesting statistic... One I did not know... So there HAS been a 30 year period where stocks went nowhere... Sobering... Good thing I'm 50/50 stocks/bonds and a tremendous saver. :)

Still, I'm surprised that when mentioning that 12 years is not unprecedented, he didn't mention the 16 years from 1966 to 1982 where the DOW went from about 1000 to 1000. It seems like NONE of the financial "experts" who talk about the "lost" decade ever mention the lost 16 years we had only a generation ago.
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Re: U.S. stocks in freefall

Postby manuvns » Mon Nov 21, 2011 6:41 pm

do not waste your time buying stocks . Just buy super safe investments like i bonds , TIPS and CD . if you sill have some faith in stocks limit you AA of stocks to 50%
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Re: U.S. stocks in freefall

Postby Gumby » Mon Nov 21, 2011 8:05 pm

Here's how US stocks have done versus Gold, YTD

Image

...and while we're comparing safe havens, here is how Gold performed against 30-year Treasuries, YTD:

Image
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Re: U.S. stocks in freefall

Postby Lbill » Mon Nov 21, 2011 9:42 pm

That's a very interesting statistic... One I did not know... So there HAS been a 30 year period where stocks went nowhere... Sobering... Good thing I'm 50/50 stocks/bonds and a tremendous saver.

If you look at price alone, the picture is instructive. Looking at the real (inflation-adjusted) price of the S&P 500, here's what we see: At the end of Jan, 1906 the S&P closed at 264.39. It didn't surpass that mark until 9/28 when it closed at 277.64; a period of nearly 23 years. Then it stayed above the 1/06 close for just two years until 10/30, when it closed at 246.42. It remained below the 1/06 close for the next 24 years (except for one month - Jan 1937) until 9/54 when it closed at 266.26. So, excluding the two-year blip from 1928-1930, it took 49 years to surpass the close (in real dollars) on 1/1906! From that point the S&P has stayed above the 1/06 close, although it came close to dropping back to that level in 1/82 when it closed at 283.05. These data are available here.

The price data make one aware of a couple things about stock returns: (1) the importance of dividends - these were generous until the last couple of decades, and (2) the price returns that everyone has come to expect as their birthright have mostly occurred since the mid 1950s, and even those have been punctuated by a couple of decade-long droughts: 1972-1982 and 2000 - 2011. So, it is certainly possible that in the span of one's lifetime stocks could generate some pretty meager returns on the basis of price, meaning that total returns will mostly reflect compounded dividends, which you could probably get with a lot less Pepto Bismol by allocating more to bonds.
Last edited by Lbill on Tue Nov 22, 2011 9:35 am, edited 2 times in total.
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Re: U.S. stocks in freefall

Postby HomerJ » Tue Nov 22, 2011 2:04 am

Well, it is important to remember that stocks in the 1906-1942 time period were paying like 4%-5% dividends, so it really wasn't a total loss like looking at just the price suggests. And wasn't there deflation during that time period too?
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Re: U.S. stocks in freefall

Postby HomerJ » Tue Nov 22, 2011 2:11 am

manuvns wrote:Just buy super safe investments like i bonds , TIPS and CD .


This could also be a losing strategy unless one is able to save 50% of your salary. Nothing is super-safe.

Best to be diversified in many assets instead of choosing just one or two subsets and hoping you picked the right ones.

do not waste your time buying stocks. if you sill have some faith in stocks limit you AA of stocks to 50%


I'm pretty sure people were saying the EXACT same thing in 1977 after 11 years of poor returns. You may be right, but you may be wrong... Let's talk again in 2040. I'm guessing I'll probably be pretty rich because of my stocks and the great stock bull market of 2020-2040 (1 billion people entering the middle class over the next 20-30 years in China and India will buy a LOT of stuff)... but maybe I'm wrong about stocks. So I also have CDs and I-bonds, and corporate bonds, and some gold and silver.
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Re: U.S. stocks in freefall

Postby Lbill » Tue Nov 22, 2011 10:20 am

Well, it is important to remember that stocks in the 1906-1942 time period were paying like 4%-5% dividends, so it really wasn't a total loss like looking at just the price suggests. And wasn't there deflation during that time period too?

I edited my upthread post to make it clear that the price returns from 1906 are real returns and not nominal returns. Regarding dividends, until post WWII period, stocks were regarded as so risky that dividends had to be higher than the interest rates on bonds in order to attract investors. Of course, that would have been a good time to be invested in stocks (when most people thought this was imprudent). Now the prevailing view seems to be the opposite, which should offer some caution to investors about the future of equity returns. The "risk premium" concept is often misinterpreted, IMO. The "risk" part is guaranteed but the "premium" part is not - there might be no returns whatsoever over 10 years or a 100 years. Certainly OK to invest in stocks but important to do so with some perspective about the possible downside.
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Re: What can happen this year?

Postby grayfox » Tue Nov 22, 2011 11:07 am

Gumby wrote:
rrosenkoetter wrote:How about 1981 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 7.12%

rrosenkoetter wrote:How about July, 2002 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 2.39%

rrosenkoetter wrote:How about March 2009 to today?


Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 20.53%

Source: Investing Through Time


Code: Select all
Average Annual Rate of Return to Sept-2011

Mn/Year   DY    EY    AVG RETURN
12/1981 5.36% 12.77%     7.75%
12/1998 1.36%  2.68%    -0.85%   <- NEGATIVE REAL RETURN
12/1999 1.15%  2.26%    -2.31%   <- NEGATIVE REAL RETURN
07/2002 1.77%  4.26%     2.39%
03/2009 3.60%  7.51%    20.53%



The low-return periods started with low dividend yield and low earnings yield; the high-return periods started with high DY and high EY. Not too hard to figure out, IMO.

Today S&P500 DY=2% and EY=5%, better than 2002; not as good as March 2009. Not great, not bad. Better than TIPS with YTM=0.821% for 30 years.

But International stocks look better than U.S. stocks.
Vanguard MSCI Europe ETF (VGK) has DY=5% and EY=9%
(Disclosure: I have a position in VGK. Bought some yesterday. Maybe I'll buy some today.)
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Re: U.S. stocks in freefall

Postby Gumby » Tue Nov 22, 2011 11:57 am

rrosenkoetter wrote:I'm guessing I'll probably be pretty rich because of my stocks and the great stock bull market of 2020-2040 (1 billion people entering the middle class over the next 20-30 years in China and India will buy a LOT of stuff)... but maybe I'm wrong about stocks. So I also have CDs and I-bonds, and corporate bonds, and some gold and silver.


China will have a large aging population problem, due to its "One Child" program.

Image

Japan already has an aging population and it's highly deflationary.

Image

India is where all the demographic growth is. But, will they be stable enough to prosper?

Image

Demographics play a huge role in investments:

Image

Image

Image

Source: The World in 2030: Super-cycle or Grey Age
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Re: U.S. stocks in freefall

Postby nisiprius » Mon Dec 05, 2011 10:06 am

The dreaded "Johnny-Johnny-Whoops-Johnny" formation that has infallibly preceded every occurrence of the month of March, 2009 has just appeared yet again for the second time in history, but a thousand points lower this time. This augurs a likely retrograde motion unless the sesquisquare-8 harmonic resonance undergoes a dotted demisemiquaver conversion, suggesting a high likelihood that the Dow will fluctuate.

Image
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Re: U.S. stocks in freefall

Postby Munir » Mon Dec 05, 2011 2:06 pm

nisiprius wrote:The dreaded "Johnny-Johnny-Whoops-Johnny" formation that has infallibly preceded every occurrence of the month of March, 2009 has just appeared yet again for the second time in history, but a thousand points lower this time. This augurs a likely retrograde motion unless the sesquisquare-8 harmonic resonance undergoes a dotted demisemiquaver conversion, suggesting a high likelihood that the Dow will fluctuate.

Image


Can you say it in simple English please?
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Re: U.S. stocks in freefall

Postby Toons » Mon Dec 05, 2011 3:01 pm

Munir wrote:
nisiprius wrote:The dreaded "Johnny-Johnny-Whoops-Johnny" formation that has infallibly preceded every occurrence of the month of March, 2009 has just appeared yet again for the second time in history, but a thousand points lower this time. This augurs a likely retrograde motion unless the sesquisquare-8 harmonic resonance undergoes a dotted demisemiquaver conversion, suggesting a high likelihood that the Dow will fluctuate.

Image


Can you say it in simple English please?


"Harmonic Astrology
A development of the late 20th century. Harmonics are measured intervals of a complete cycle. An example of this is the scale of music. Harmonics provide a means of linking planets together in the manner of musical intervals and chords. This of course ain't really so new, as Pythagoras in the 5th century BCE also had a somewhat similar idea.."
"Harmonic
"Resonant relationship, or overtone of planetary aspects. If an aspect is expressed as a fraction of 360°, the denominator of that fraction is the harmonic number of the aspect. Each of the following aspects is followed by its harmonic number: conjunction-1, opposition-2, trine-3, square-4, quintile-5, sextile-6, septile-7, semisquare-8, sesquisquare-8, novile-9, semisextile-12, inconjunct (quincunx)-12. 11th and 13th harmonics are also used on occasion. Prime numbers are favoured in Harmonic Astrology, as the others (sub-harmonics) are considered intensifications, or buttresses of their prime factors. Hard aspect harmonics are considered more significant.""

Does it all make sense now?? :sharebeer
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Re: U.S. stocks in freefall

Postby peppers » Mon Dec 05, 2011 7:50 pm

Toons wrote:
Munir wrote:
nisiprius wrote:The dreaded "Johnny-Johnny-Whoops-Johnny" formation that has infallibly preceded every occurrence of the month of March, 2009 has just appeared yet again for the second time in history, but a thousand points lower this time. This augurs a likely retrograde motion unless the sesquisquare-8 harmonic resonance undergoes a dotted demisemiquaver conversion, suggesting a high likelihood that the Dow will fluctuate.

Image


Can you say it in simple English please?


"Harmonic Astrology
A development of the late 20th century. Harmonics are measured intervals of a complete cycle. An example of this is the scale of music. Harmonics provide a means of linking planets together in the manner of musical intervals and chords. This of course ain't really so new, as Pythagoras in the 5th century BCE also had a somewhat similar idea.."
"Harmonic
"Resonant relationship, or overtone of planetary aspects. If an aspect is expressed as a fraction of 360°, the denominator of that fraction is the harmonic number of the aspect. Each of the following aspects is followed by its harmonic number: conjunction-1, opposition-2, trine-3, square-4, quintile-5, sextile-6, septile-7, semisquare-8, sesquisquare-8, novile-9, semisextile-12, inconjunct (quincunx)-12. 11th and 13th harmonics are also used on occasion. Prime numbers are favoured in Harmonic Astrology, as the others (sub-harmonics) are considered intensifications, or buttresses of their prime factors. Hard aspect harmonics are considered more significant.""

Does it all make sense now?? :sharebeer


So you are saying that the linear progression does translate into a positive convection with regards to the slope of the transversal curve. Amazing explicit. :o
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Re: U.S. stocks in freefall

Postby Lbill » Mon Dec 05, 2011 8:45 pm

If this thread is being bumped, does that mean a big market decline is imminent? Investing in stocks these days feels like being locked in a small room with a crazy person on LSD. They should start selling tickets. :shock:
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Re: U.S. stocks in freefall

Postby baw703916 » Mon Dec 05, 2011 10:38 pm

Lbill wrote:If this thread is being bumped, does that mean a big market decline is imminent? Investing in stocks these days feels like being locked in a small room with a crazy person on LSD. They should start selling tickets. :shock:


Let me quote one of your other posts:

9) Since I'm following John Bogle's Age in Bonds guideline, I began to realize that I don't need to worry much about how the stock market is doing.


You really should follow your own advice! :sharebeer
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Re: U.S. stocks in freefall

Postby Munir » Mon Dec 05, 2011 10:47 pm

Nisi's conclusion from the above impressive graph is that "stocks will fluctuate". Does that mean down?

I appreciate Toons's efforts to explain this subject to me but I am ignorant about astrology and my mind won't open up.

I also have my age in bonds but equities still have a significant impact on the portfolio.
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Re: U.S. stocks in freefall

Postby Lbill » Tue Dec 06, 2011 10:41 am

Here's John Hussman's take on the stock market - somewhat similar to mine:
Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house.
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Re: U.S. stocks in freefall

Postby Jay69 » Thu Dec 08, 2011 4:41 pm

Is it time to bring this back to the top?

Lots of noise from across the pond today!

Not really US stocks so much, just to lazy to start a across the pond stock freefall thread!

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Re: U.S. stocks in freefall

Postby Lbill » Mon Dec 12, 2011 9:59 am

Plunge watch back on:
Based on a wide variety of evidence and its typical market implications over an ensemble of dozens of subsets of historical data, the expected return/risk profile of the stock market has shifted to hard-negative. This places us in a tightly defensive position. This isn't really a forecast in the sense that shifts in the evidence even over a period of a few weeks could move us to adjust our investment stance, but here and now we observe conditions that have often produced abrupt crash-like plunges. This combination of evidence includes elevated valuations, overbullish sentiment, market internals best characterized as a "whipsaw trap" on the basis of typical follow-through, heightened credit strains, and clear evidence (on reliable forward-looking indicators) of oncoming recession, among other factors.

Hussman commentary 12-12-11
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Re: U.S. stocks in freefall

Postby nisiprius » Mon Dec 12, 2011 10:15 am

Let's add some boldface to that:
Based on a wide variety of evidence and its typical market implications over an ensemble of dozens of subsets of historical data, the expected return/risk profile of the stock market has shifted to hard-negative. This places us in a tightly defensive position. This isn't really a forecast in the sense that shifts in the evidence even over a period of a few weeks could move us to adjust our investment stance, but here and now we observe conditions that have often produced abrupt crash-like plunges. This combination of evidence includes elevated valuations, overbullish sentiment, market internals best characterized as a "whipsaw trap" on the basis of typical follow-through, heightened credit strains, and clear evidence (on reliable forward-looking indicators) of oncoming recession, among other factors.
In other words, stocks could crash, unless they don't.

Every one of my predictions has been infallible. Whenever one failed, it has always been the result of new evidence coming to light in the interval between prediction and outcome, and therefore shouldn't count.
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Re: U.S. stocks in freefall

Postby Jay69 » Mon Dec 12, 2011 4:05 pm

Well todays not preaty.

Across the pond down over 3% with the US on the heals of about 2% down.

When Europe sneezes everyone listens :wink:
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Re: U.S. stocks in freefall

Postby xerty24 » Mon Dec 12, 2011 4:28 pm

Jay69 wrote:Well todays not preaty.

Across the pond down over 3% with the US on the heals of about 2% down.

When Europe sneezes everyone listens :wink:

If that's not exciting enough for you, check out the Russian markets - they're down something close to 20% in the past week in the wake of all the political uncertainty (on top of plenty of general economic woes).
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Re: U.S. stocks in freefall

Postby Jay69 » Mon Dec 12, 2011 5:23 pm

xerty24 wrote:
Jay69 wrote:Well todays not preaty.

Across the pond down over 3% with the US on the heals of about 2% down.

When Europe sneezes everyone listens :wink:

If that's not exciting enough for you, check out the Russian markets - they're down something close to 20% in the past week in the wake of all the political uncertainty (on top of plenty of general economic woes).



Ok I will bite, whats a good Russian ticker to check?

I was looking at this
http://www.bloomberg.com/quote/INDEXCF:IND

The MICEX Index is the real-time cap-weighted Russian composite index. It comprises 30 most liquid stocks of Russian largest and most developed companies from 10 main economy sectors. The MICEX Index was launched on September 22, 1997, base value - 100. The MICEX Index is calculated and disseminated by the MICEX Stock Exchange - the main Russian stock exchange.


Year to date losses about 16% with a good dump this past Aug and Sept. A little haircut.
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Re: U.S. stocks in freefall

Postby xerty24 » Mon Dec 12, 2011 5:44 pm

Jay69 wrote:Ok I will bite, whats a good Russian ticker to check?

iShares Russia ETF is RSX. It closed at $30.85 last Monday (12/5) and closed today at $26.25., for a 15% loss for the week and almost a 5% loss for today.
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Re: U.S. stocks in freefall

Postby Jay69 » Mon Dec 12, 2011 5:54 pm

xerty24 wrote:
Jay69 wrote:Ok I will bite, whats a good Russian ticker to check?

iShares Russia ETF is RSX. It closed at $30.85 last Monday (12/5) and closed today at $26.25., for a 15% loss for the week and almost a 5% loss for today.



Just for fun I stacked TSM (VTI) and foregin (VXUS) on top of RSX. Kinda intresting that they were mostly neck and neck until Aug/sept, all bets off at that point.
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Re: U.S. stocks in freefall

Postby Soren Aabye » Mon Dec 12, 2011 6:22 pm

I love the way this thread pops up whenever the market hiccups. But, @NisiPrius, your post about the dreaded Johnny-Johnny-whoops-Johnny was really priceless.
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Re: U.S. stocks in freefall

Postby Jay69 » Mon Dec 12, 2011 9:41 pm

Soren Aabye wrote:I love the way this thread pops up whenever the market hiccups. But, @NisiPrius, your post about the dreaded Johnny-Johnny-whoops-Johnny was really priceless.


I try to make it my mission to pop it to to the top, just doing my part to keep the sky is falling thread count down. Besides what else is a Boglehead to :sharebeer
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Re: U.S. stocks in freefall

Postby Trader007 » Sat Dec 17, 2011 9:38 am

Stock indices should continue down for several months now. Looks like end of February-end of March. Will be more specific later.
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Re: U.S. stocks in freefall

Postby zaboomafoozarg » Sat Dec 17, 2011 10:25 am

Trader007 wrote:Stock indices should continue down for several months now. Looks like end of February-end of March. Will be more specific later.


When you're done using the crystal ball, can I have it for a few minutes?
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Re: U.S. stocks in freefall

Postby umfundi » Sat Dec 17, 2011 10:29 am

Top early December
That downward trend of the last two weeks is killing me!!
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Re: U.S. stocks in freefall

Postby HomerJ » Tue Jan 03, 2012 6:02 pm

The day this thread was posted, the DJIA closed at 10810...

I rebalanced (just a little - I too thought it might continue) into that freefall.

Since then, the DJIA is up 15%. I rebalanced again today, and locked in a nice little gain. Oh wait, I forgot, it's impossible to make money in this "lost decade plus". Since the DJIA is just barely above it's peak in 1999, there's no way I could be making money in the stock market (why do they assume I invested all my money at the peak in 1999, none before that, and not another cent since?)

Lucky for me I didn't sell back when some people were doing their best to convince us that the sky was falling.

(Sorry for jinxing us everyone... Tomorrow the market will drop 1500 points) :shock:
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Re: U.S. stocks in freefall

Postby nisiprius » Tue Jan 17, 2012 3:40 pm

Bumping for the sake of mischief. I'm not saying off we go into the wild blue yonder, I'm just saying that's not "freefall" and that's not a "dead cat bounce." That's looks to me, like... what?

If you wrote it on a musical staff and played it, it would be gypsy fiddle music.
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Re: U.S. stocks in freefall

Postby hsv_climber » Tue Jan 17, 2012 4:13 pm

I can understand why stocks can go up (or down). I can understand why bond yields can go up or down.

What I don't understand is why stocks go up and bond yields go down on the same day. That would mean that investors are buying stocks & bonds at the same time.
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Re: U.S. stocks in freefall

Postby Lollytiger » Tue Jan 17, 2012 4:39 pm

I'm not concerned unless I see a Hindenburg Omen.
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Re: U.S. stocks in freefall

Postby umfundi » Tue Jan 17, 2012 6:39 pm

Nisiprius,

When your chart looks like a Google doodle, it will be a clear buy signal.

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Re: U.S. stocks in freefall

Postby GregLee » Tue Jan 17, 2012 8:04 pm

The outlook for stocks seems rosy and that for bonds rather gloomy. Being something of a contrarian, I'm starting to give some thought to selling stocks and buying bonds. But not yet.
Greg, retired 8/10.
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Re: U.S. stocks in freefall

Postby honkeoki » Tue Jan 17, 2012 9:17 pm

hsv_climber wrote:I can understand why stocks can go up (or down). I can understand why bond yields can go up or down.

What I don't understand is why stocks go up and bond yields go down on the same day. That would mean that investors are buying stocks & bonds at the same time.


Yes, but this really does happen. I think this is when money comes into the market off the "sideline" that finance columnists make so much of. Maybe it's individual investors but it's more likely big institutional investors coming out of extremely short-term investments and into more volatile assets. But maybe it's little people like me -- who knows, really?

(It's even weirder when stocks and bonds and oil and GOLD all go up on the same day...)
Be smug when others are fearful; be fearful when others are smug.
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Re: U.S. stocks in freefall

Postby ftobin » Wed Jan 18, 2012 2:37 am

hsv_climber wrote:What I don't understand is why stocks go up and bond yields go down on the same day. That would mean that investors are buying stocks & bonds at the same time.

Example: Walmart opens up 5% from yesterday's close tomorrow morning. Did a bunch of people suddenly buy Walmart? No, people are just valuing Walmart higher. Don't think of people buying and selling that causes the stock prices to go up or down, but market-makers re-pricing them (and the two don't necessarily act oppositely to the same signal).
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Re: U.S. stocks in freefall

Postby Tim_in_GA » Wed Jan 18, 2012 8:28 am

honkeoki wrote:Yes, but this really does happen. I think this is when money comes into the market off the "sideline" that finance columnists make so much of. Maybe it's individual investors but it's more likely big institutional investors coming out of extremely short-term investments and into more volatile assets. But maybe it's little people like me -- who knows, really?

(It's even weirder when stocks and bonds and oil and GOLD all go up on the same day...)


Yeah, I peeked at my portfolio summary on Morningstar and everything was green. That rarely happens but it's nice to see once in a while.
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Re: U.S. stocks in freefall

Postby nisiprius » Tue Apr 10, 2012 7:56 pm

Image
Furthermore, from August 2011 through today, the plot of the Dow obviously resembles the clarinet trill and upward glissando that open Gershwin's Rhapsody in Blue. I hardly need tell you what comes next.

Furthermore, the Dow closed at 12,715.93. Add the digits and you get 28. The divisors of 28 are 1, 2, 4, 7, and 14. Add those divisors and you get... 28! How often does that happen?
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Re: U.S. stocks in freefall

Postby Beagler » Tue Apr 10, 2012 7:59 pm

Trader007 wrote:Stock indices should continue down for several months now. Looks like end of February-end of March. Will be more specific later.


Here's what happened to the S&P 500 from the date of your prediction to the end of March 2012:
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Re: U.S. stocks in freefall

Postby 3CT_Paddler » Tue Apr 10, 2012 8:09 pm

nisiprius wrote:Furthermore, from August 2011 through today, the plot of the Dow obviously resembles the clarinet trill and upward glissando that open Gershwin's Rhapsody in Blue. I hardly need tell you what comes next.

Furthermore, the Dow closed at 12,715.93. Add the digits and you get 28. The divisors of 28 are 1, 2, 4, 7, and 14. Add those divisors and you get... 28! How often does that happen?


How can I invest in your newsletter? The cultural references alone would be worth the price of admission. :D
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Re: U.S. stocks in freefall

Postby Jacotus » Tue Apr 10, 2012 8:14 pm

nisiprius wrote:Furthermore, the Dow closed at 12,715.93. Add the digits and you get 28. The divisors of 28 are 1, 2, 4, 7, and 14. Add those divisors and you get... 28! How often does that happen?

Pretty rarely, as all the Perfect Numbers that we know of are obtained from Mersenne Primes, and we know of only about 47 Mersenne Primes. Thus there are 47 known instances of perfect numbers.
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Re: U.S. stocks in freefall

Postby dave66 » Tue Apr 10, 2012 8:32 pm

I would be interested to know how many people who believe a few days of market activity, indicate the overall trend of the market... also believe a few hot summer days indicate global warming is guaranteed to doom us all.
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