Bubble Alert

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renditt
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Bubble Alert

Post by renditt » Wed Feb 08, 2012 10:09 am

I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.

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Boglenaut
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Re: Bubble Alert

Post by Boglenaut » Wed Feb 08, 2012 10:15 am

Sounds like a market timing troll.

How do you know it's a bubble? The S&P is lower now than it was 12 years ago. So you know both when to sell and when to get back in?

Naw, I won't bite. I am buying bonds like crazy to keep my Asset Allocation. A few months ago I was buying equities. I like how that works.

My views on this:

http://www.youtube.com/watch?v=TWRvaOe6sFU

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ShelbyGus2
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Re: Bubble Alert

Post by ShelbyGus2 » Wed Feb 08, 2012 10:16 am

Thats kind of a random post. I think with the glass half full & and I think its going to be a good 2 more years. Most likely a pull back soon no doubt, but Dec of this year, we'll be higher than we are now. Have a good day.

letsgobobby
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Re: Bubble Alert

Post by letsgobobby » Wed Feb 08, 2012 10:28 am

trailing twelve month earnings on the Nasdaq 100 gives a PE of... gulp... 11. whoa. totally overvalued. and clearly so. :confused

FinanceGeek
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Re: Bubble Alert

Post by FinanceGeek » Wed Feb 08, 2012 10:29 am

I'm not a market timer, but I'd guess that the music won't stop until after the election.

actor10
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Re: Bubble Alert

Post by actor10 » Wed Feb 08, 2012 10:32 am

Ugh, didn't you predict the SP500 to hit 850 back in August 2011?
How's that working for you?

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ShelbyGus2
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Re: Bubble Alert

Post by ShelbyGus2 » Wed Feb 08, 2012 10:40 am

I said no such thing about the SP500. People invest money to make money. If it goes down, it goes down. Ill be buy on the way down and up. Collecting dividends. Long term I cant loss, until 2012 doomsday and we all loss or win depending on your faith. Its defiantly nice to have a place to keep it safe in such times like 08 and 09. But this is not one of those times. Ill be riding this wave through next year. Than pull some back.

Your right about a possible pullback. But I think your thinking something big and bad is going to happen. Its up to you how you allocate. Good luck this year.

actor10
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Re: Bubble Alert

Post by actor10 » Wed Feb 08, 2012 10:48 am

ShelbyGus2 wrote:I said no such thing about the SP500.
Are the OP? My comment was directed to the person who posted the prediction that market was overpriced. I think everyone who makes predictions about the market should have a scorecard of their past predictions. (I wish CNBC did that.)

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ShelbyGus2
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Re: Bubble Alert

Post by ShelbyGus2 » Wed Feb 08, 2012 10:48 am

ahh. sorry

PreserveCapital
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Re: Bubble Alert

Post by PreserveCapital » Wed Feb 08, 2012 10:50 am

renditt wrote:I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.
...and yet, the guy who runs black rock says this:


Fink: Investors Should Be 100% in Equities
Bloomberg


http://finance.yahoo.com/news/fink-inve ... 59419.html



So many opinions....so little time....

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ShelbyGus2
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Re: Bubble Alert

Post by ShelbyGus2 » Wed Feb 08, 2012 10:53 am

actor10 wrote:
ShelbyGus2 wrote:I said no such thing about the SP500.
Are the OP? My comment was directed to the person who posted the prediction that market was overpriced. I think everyone who makes predictions about the market should have a scorecard of their past predictions. (I wish CNBC did that.)
Whats wrong with CNBC? Cramer told everyone to take there money out of the market at 7000, when something bad was about to happen. Saved everyone from the dip to 6600.

leod
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Re: Bubble Alert

Post by leod » Wed Feb 08, 2012 11:16 am

ShelbyGus2 wrote:
actor10 wrote:
ShelbyGus2 wrote:I said no such thing about the SP500.
Are the OP? My comment was directed to the person who posted the prediction that market was overpriced. I think everyone who makes predictions about the market should have a scorecard of their past predictions. (I wish CNBC did that.)
Whats wrong with CNBC? Cramer told everyone to take there money out of the market at 7000, when something bad was about to happen. Saved everyone from the dip to 6600.
he should have told everyone to go out the market at 14000 then come back at 7000 would save everyone headaches and heartaches. :D
telling everyone to go out at 7000 then they would likely miss the return of DOW to 10000

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ShelbyGus2
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Re: Bubble Alert

Post by ShelbyGus2 » Wed Feb 08, 2012 11:20 am

lol I know. I was kidding. There is a video of him on you tube telling people to take all money out. But I don't know where the DOW was than. 7000 was sarcasm :D

YDNAL
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Re: Bubble Alert

Post by YDNAL » Wed Feb 08, 2012 11:29 am

renditt wrote:I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.
I'm having problems with your predictive skills. :)
2011 Boglehead Contest (S&P 500)
Place.. Name.. Projection.. Difference from Final S&P 500
359 renditt 950.00 307.60
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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HomerJ
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Re: Bubble Alert

Post by HomerJ » Wed Feb 08, 2012 11:43 am

YDNAL wrote:
renditt wrote:I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.
I'm having problems with your predictive skills. :)
2011 Boglehead Contest (S&P 500)
Place.. Name.. Projection.. Difference from Final S&P 500
359 renditt 950.00 307.60
LOL.

alanf56
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Re: Bubble Alert

Post by alanf56 » Wed Feb 08, 2012 11:55 am

actor10 wrote:Ugh, didn't you predict the SP500 to hit 850 back in August 2011?
How's that working for you?
Indeed!! :) Only it was 950 predicted. http://www.bogleheads.org/forum/viewtop ... 3#p1139993

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zaboomafoozarg
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Re: Bubble Alert

Post by zaboomafoozarg » Wed Feb 08, 2012 12:21 pm

YDNAL wrote:I'm having problems with your predictive skills. :)
2011 Boglehead Contest (S&P 500)
Place.. Name.. Projection.. Difference from Final S&P 500
359 renditt 950.00 307.60
/thread

masteraleph
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Re: Bubble Alert

Post by masteraleph » Wed Feb 08, 2012 12:23 pm

renditt wrote:I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.
Sorry, but does this really qualify as a "bubble?" On the S&P 500, a 15% drop would still be above the lows from October 2011, and only 20 points below the low around Thanksgiving. A 20% drop would be about 20 points below the October low. The market goes up, the market goes down, but I'm not sure that "bubble" does a very good job of describing expected stock losses of 15-20%.

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renditt
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Re: Bubble Alert

Post by renditt » Wed Feb 08, 2012 12:30 pm

YDNAL wrote:
renditt wrote:I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.
I'm having problems with your predictive skills. :)
2011 Boglehead Contest (S&P 500)
Place.. Name.. Projection.. Difference from Final S&P 500
359 renditt 950.00 307.60
I was equally wrong in the 2010 Contest.

But then again, this one was better:

http://www.bogleheads.org/forum/viewtopic.php?t=69324

I guess we will find out.

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HardKnocker
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Re: Bubble Alert

Post by HardKnocker » Wed Feb 08, 2012 12:32 pm

I'm buying pork belly futures like crazy if anyone's interested.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett

exoilman
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Re: Bubble Alert

Post by exoilman » Wed Feb 08, 2012 12:45 pm

I am breathing heavy now!

Sam :peace

yobria
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Re: Bubble Alert

Post by yobria » Wed Feb 08, 2012 12:46 pm

I'd like to go on record as saying that thinking you know more than you do, and more than the market does, is a very human failing.

YDNAL
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Re: Bubble Alert

Post by YDNAL » Wed Feb 08, 2012 1:26 pm

renditt wrote:
YDNAL wrote:I'm having problems with your predictive skills. :)
2011 Boglehead Contest (S&P 500)
Place.. Name.. Projection.. Difference from Final S&P 500
359 renditt 950.00 307.60
I was equally wrong in the 2010 Contest. <- OK, 0 for 2

But then again, this one was better: <- OK, what are you saying?.. I don't get it
http://www.bogleheads.org/forum/viewtopic.php?t=69324

I guess we will find out.
Look, risky investments (1) have risk, (2) have expected compensation for risk. These expectations are not guaranteed. You appear to be hung-up on basing your investments on predictions and gut feelings (about Europe, weaker US Economy, etc).
I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger.
  1. Are these predictions for fun?
  2. Do you invest for the long term?
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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hollowcave2
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Re: Bubble Alert

Post by hollowcave2 » Wed Feb 08, 2012 1:27 pm

Thanks for the warning.

I'll put all of my money in my mattress right now and hide under my bed.

:lol

BTW, the S&P500 P/E ratio is 22.5 and the dividend yield is equal to the 10-yr Treasury note at just under 2%. Those numbers are reasonable and I don't see anything to indicate a bubble at this time.

You have a better case with technical analysis and a double-top forming. Even so, I don't believe in that either.

Don't worry..... be happy.
:wink:
Last edited by hollowcave2 on Wed Feb 08, 2012 1:45 pm, edited 1 time in total.

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slayed
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Re: Bubble Alert

Post by slayed » Wed Feb 08, 2012 1:36 pm

i don't know about the overall market but it definitely feels like there is a bubble forming around the various "social media" companies (facebook, zynga, groupon, etc). the good thing is if you own the whole market then a bubble in a particular sector is just noise.

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bob90245
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Re: Bubble Alert

Post by bob90245 » Wed Feb 08, 2012 2:02 pm

Gee, I wish the market was in a bubble. That's when you make the really big bucks (provided you get out near the peak).

Image

We should still stay in gold, right? :wink:
Ignore the market noise. Keep to your rebalancing schedule whether that is semi-annual, annual or trigger bands.

TigerNest
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Re: Bubble Alert

Post by TigerNest » Wed Feb 08, 2012 2:09 pm

HardKnocker wrote:I'm buying pork belly futures like crazy if anyone's interested.
Sadly, you cannot anymore!

"Because of a prolonged lack of trading volume and after significant discussion with industry participants, CME will be delisting Frozen Pork Bellies Futures and Options effective Monday, July 18, 2011.”

http://www.cmegroup.com/rulebook/files/S_5853.pdf

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thirdman
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Re: Bubble Alert

Post by thirdman » Wed Feb 08, 2012 2:09 pm

FinanceGeek wrote:I'm not a market timer, but I'd guess that the music won't stop until after the election.
+1

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SSSS
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Re: Bubble Alert

Post by SSSS » Wed Feb 08, 2012 2:27 pm


Easy Rhino
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Re: Bubble Alert

Post by Easy Rhino » Wed Feb 08, 2012 2:56 pm

Gee, a 20% drop/discount doesn't really seem like much of a bubble

CMMCC
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Re: Bubble Alert

Post by CMMCC » Wed Feb 08, 2012 3:40 pm

Stocks are in a bubble, bonds are in a bubble, and inflation is coming! Buy gold? oh wait its in a bubble too!

maybe ill just stick with my allocation and see what happens :D
Just getting started

riskonoff
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Re: Bubble Alert

Post by riskonoff » Wed Feb 08, 2012 3:54 pm

ShelbyGus2 wrote:
actor10 wrote:
ShelbyGus2 wrote:I said no such thing about the SP500.
Are the OP? My comment was directed to the person who posted the prediction that market was overpriced. I think everyone who makes predictions about the market should have a scorecard of their past predictions. (I wish CNBC did that.)
Whats wrong with CNBC? Cramer told everyone to take there money out of the market at 7000, when something bad was about to happen. Saved everyone from the dip to 6600.
don't forget cramers Januar 2007 call. nyx # 1 growth stock. it was trading at $98 and trading at $28 today. the exchange stocks had a 'bubble era' and cramer got sucked in.

califboglehd
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Re: Bubble Alert

Post by califboglehd » Wed Feb 08, 2012 5:43 pm

I think I'll go over to the Seeking Alpha site and advise everyone to 'stay the course'.
At the end of the day... it's the end of the day.

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SSSS
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Re: Bubble Alert

Post by SSSS » Wed Feb 08, 2012 5:49 pm

CMMCC wrote:Stocks are in a bubble, bonds are in a bubble, and inflation is coming! Buy gold? oh wait its in a bubble too!

maybe ill just stick with my allocation and see what happens :D
Better hope that modern portfolio theory isn't in a bubble too!

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grap0013
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Re: Bubble Alert

Post by grap0013 » Wed Feb 08, 2012 5:57 pm

renditt wrote:
YDNAL wrote:
renditt wrote:I'm sure this will be a very popular post :) , but just wanted to go on record that the stock market is (again) clearly overvalued and it's time to go into cash. In my view, the problems in Europe have neither been resolved nor are the fully priced in the market and the US economy will probably get weaker this year and not stronger. I find it fascinating how people get more comfortable with a climbing market, rather than getting more nervous.

So, sell now and buy again at a 15-20% discount.
I'm having problems with your predictive skills. :)
2011 Boglehead Contest (S&P 500)
Place.. Name.. Projection.. Difference from Final S&P 500
359 renditt 950.00 307.60
I was equally wrong in the 2010 Contest.

But then again, this one was better:

http://www.bogleheads.org/forum/viewtopic.php?t=69324

I guess we will find out.
Permabear.
There are no guarantees, only probabilities.

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Liquid
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Re: Bubble Alert

Post by Liquid » Wed Feb 08, 2012 6:11 pm

S&P does not look like a bubble yet, though it is not looking like a bargain either. :|

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renditt
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Re: Bubble Alert

Post by renditt » Mon May 14, 2012 8:57 am

Just to check how markets have done since the bubble alert:

US Market (VTI): almost unchanged, down 1%
US Small Cap Value (VBR): down 4%
International (VEU): down 8%
Emerging Markets (VWO): down 11%

The overall US market clearly has some catching up to do :twisted:

Tom_T
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Re: Bubble Alert

Post by Tom_T » Mon May 14, 2012 9:09 am

renditt wrote:Just to check how markets have done since the bubble alert:

US Market (VTI): almost unchanged, down 1%
US Small Cap Value (VBR): down 4%
International (VEU): down 8%
Emerging Markets (VWO): down 11%

The overall US market clearly has some catching up to do :twisted:
And as for the bond bubble, the 10-year Treasury might be hitting a record low soon. It's close. To think that less than two months ago, when it hit 2.38, that was a sign that the bond market was about to collapse. :wink:

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NAVigator
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Re: Bubble Alert

Post by NAVigator » Mon May 14, 2012 9:49 am

I'm going to start investing in bubbles!

Image

Jerry
"I was born with nothing and I have most of it left."

letsgobobby
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Re: Bubble Alert

Post by letsgobobby » Mon May 14, 2012 10:19 am

renditt wrote:Just to check how markets have done since the bubble alert:

US Market (VTI): almost unchanged, down 1%
US Small Cap Value (VBR): down 4%
International (VEU): down 8%
Emerging Markets (VWO): down 11%

The overall US market clearly has some catching up to do :twisted:
Can you please post your exact positions at the time you made your prediction and your exact positions now? For me, I've done nothing since January 4... And don't plan on doing anything either.

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FabLab
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Re: Bubble Alert

Post by FabLab » Mon May 14, 2012 10:30 am

NAVigator wrote:I'm going to start investing in bubbles!

Image

Jerry
Seemed to work for Lawrence Welk :D
The fundamental things apply as time goes by -- Herman Hupfeld

Tom_T
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Re: Bubble Alert

Post by Tom_T » Mon May 14, 2012 10:34 am

FabLab wrote:
NAVigator wrote:I'm going to start investing in bubbles!

Image

Jerry
Seemed to work for Lawrence Welk :D
And Don Ho, although his bubbles were much smaller.

Long Term Holder
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Re: Bubble Alert

Post by Long Term Holder » Mon May 14, 2012 12:57 pm

NAVigator wrote:I'm going to start investing in bubbles!

Image

Jerry

You can make plenty of money doing this provided you get out before it pops.

As for equities now - they suck. The US is in a terrible position. I am usually all for buying when stocks go down but just look at the economy. What happens when interest rates go up (which they will do in order to prevent major inflation)? The economy collapses and the interest on government debt goes through the roof. Invest in solid things and companies abroad imo.

aac74
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Re: Bubble Alert

Post by aac74 » Tue May 15, 2012 9:17 am

Property isn't in a bubble ! But no one is buying ? It's going to zero with natural gas, right. Who needs houses or heating ? :oops:

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