Starting to feel like the late 1990s?

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garlandwhizzer
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Starting to feel like the late 1990s?

Post by garlandwhizzer » Fri Jan 26, 2018 3:16 pm

Netflix continues to skyrocket as it burns through more and more cash. Netflix reported a quarterly loss last quarter but due to top line subscriber growth its price spiked in after hours trading. Netflix has a PE ratio of 220 and a market cap of 117 billion. Amazon has a stratospheric PE 0f 346. Tesla loses money, burns through cash rapidly, has a trailing 12 month EPS of negative $8.66/share, and yet its market cap is 57+ billion although it is yet to show any profit at all. All these companies enjoy competitive advantages, robust top line growth, strong future prospects, and compelling business models but the profits to justify such valuations lies not in the present but in the anticipated future. The problem is that the future rarely turns out to be exactly what is expected even by the brightest among us. If any of these firms disappoint, there's a long way to drop before hitting the ground floor. Then there's Bitcoin which IMHO demonstrates how easy it is currently to ride a wave of investor optimism in tech and inflate a massive bubble based on nothing more than a compelling and innovating narrative which may or may not turn out to be true in the future. Pure speculation took the price of Bitcoin from $961 to $16,262 in the 12 months of 2017. Tons of money jumped into this MOM trade.

Such lofty investor sentiment reminds me a bit of the late 1990s. I am not making any portfolio changes other than rebalancing from equity into bonds according to my asset allocation model. One thing I know of sure: this price escalation won't continue at this pace for the rest of the year. It's hard to get off the gravy train with PE10 at 34.6 and PE1 at 26.7, but a bump in the road ahead is likely, probably a correction not a bear market, in the not too distant future. If you haven't yet rebalanced in this bull run, now might be a good time to do so.

Garland Whizzer

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KlingKlang
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Re: Starting to feel like the late 1990s?

Post by KlingKlang » Fri Jan 26, 2018 3:20 pm

Been there done that.

Also remember that bonds aren't failsafe. Splitting your rebalancing between bonds and cash may help you to sleep at night.

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David Jay
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Re: Starting to feel like the late 1990s?

Post by David Jay » Fri Jan 26, 2018 3:20 pm

It feels like 1996 ("Irrational Exuberance"). That market had 4 more years to run.
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Re: Starting to feel like the late 1990s?

Post by GoldenFinch » Fri Jan 26, 2018 3:29 pm

It feels like January 2018.

We have no clue what’s next, as usual.

Make sure you’re comfortable with your asset allocation.

Happy Friday and stay the course! :beer

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Re: Starting to feel like the late 1990s?

Post by Seekwhat » Fri Jan 26, 2018 3:30 pm

Doesn’t feel like the late 90s to me. That was a time when every unknown revenueless company with a .com after its name was bid up astronomically. The cases you cite are established companies with real businesses, except for BTC which is pure speculation at this point. These may be overpriced, but it’s not the late 90s. And if it were, I wouldn’t do anything because when I do something, I am far more likely to do something counterproductive.

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Re: Starting to feel like the late 1990s?

Post by Crisium » Fri Jan 26, 2018 3:34 pm

Depends on your time horizon if a repeat of the late 90s is really that bad. The market today is much higher than 1999. I don't intend to touch my stocks for even longer than the 19 years from 1999-2018, so even if things are not as good as then I have time to wait it out.

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JoMoney
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Re: Starting to feel like the late 1990s?

Post by JoMoney » Fri Jan 26, 2018 3:42 pm

Valuations are high, but earnings have not been super hot, it's picked up a bit recently, but 2016 and most of 2017 earnings were below 2013-2014 levels. There is some room for internal growth to catch up. With interest rates still low, bonds still aren't offering much to think about. Momentum and sentiment is picking up and just might move things higher. Leading Economic Indicators are still pointed up. Lower tax burdens, lower regulations on production, potential repatriation of capital, might all be big economic stimulus.
Maybe we have a ways to run :greedy Maybe not :confused Stay the course with an allocation you're comfortable with :beer
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Portfolio7
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Re: Starting to feel like the late 1990s?

Post by Portfolio7 » Fri Jan 26, 2018 3:48 pm

Only if you're watching your daily returns, it seems to me. There is a lot less consternation over lack of fundamentals (i.e. companies bid up despite lack of revenue, let alone profit.)
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bligh
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Re: Starting to feel like the late 1990s?

Post by bligh » Fri Jan 26, 2018 3:50 pm

It's days like this that make me feel I have too much in bonds... or do some market timing :oops:

I agree though.. it does feel frothy doesn't it? I will stay the course. Why? Because 2017 went nothing like what I had predicted. January 2018 has also gone nothing like I had predicted. So that continues to confirm that I am really bad at making predictions.

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Re: Starting to feel like the late 1990s?

Post by greg24 » Fri Jan 26, 2018 3:54 pm


Stormbringer
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Re: Starting to feel like the late 1990s?

Post by Stormbringer » Fri Jan 26, 2018 3:57 pm

The dotcom bubble had crazy volatility., which really encouraged day trading. This rise has been almost straight up (which is in some ways more scary). Also, I'm not getting stock tips from cab drivers yet, just talk of bitcoin.
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Re: Starting to feel like the late 1990s?

Post by LukeHeinz57 » Fri Jan 26, 2018 3:58 pm

I find it harder to stick to my AA in up markets like this than in down markets. I am very tempted to try and market time despite knowing better when riding a wave up like this. Wasn't invested in the late 90's, didn't buy my first stock until 2000...I "know" the price today could be the best I will ever see again because the market could run 50% up in the next few years before crashing 33%, but it's hard to accept. :oops:
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Re: Starting to feel like the late 1990s?

Post by kosomoto » Fri Jan 26, 2018 4:00 pm

If this bothers you just buy the vanguard value fund which excludes all these companies. The return is basically the same as the total market return and you don’t need to worry about owning companies that may never be profitable.

There, problem solved.

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Re: Starting to feel like the late 1990s?

Post by IngognitoUSA » Fri Jan 26, 2018 4:13 pm

Shiller called Housing in Bubble in 2003.

Shiller called Stock market bubble July 2015.

Shiller is supposed to be source of 'Irrational exuberance' by Greenspan in 1996.

Listening to armchair economists can be injurous to your wealth.

Is it different this time, who knows, but we have not had such low Corporate tax rates since the 40s.

Always passive
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Re: Starting to feel like the late 1990s?

Post by Always passive » Fri Jan 26, 2018 4:22 pm

Don't we all have an Investment Policy Statement (IPS)? If yes, just follow it. If not, you may be in trouble!

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Re: Starting to feel like the late 1990s?

Post by Tycoon » Fri Jan 26, 2018 4:34 pm

IngognitoUSA wrote:
Fri Jan 26, 2018 4:13 pm
Listening to armchair economists can be injurous to your wealth.
Listening to Nobel winning economists can also derail one's path to wealth. One boastfully declared the market would NEVER recover after the last election.
...I might be just beginning | I might be near the end. Enya | | C'est la vie

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zaboomafoozarg
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Re: Starting to feel like the late 1990s?

Post by zaboomafoozarg » Fri Jan 26, 2018 4:39 pm

Nah, this website loaded instantly for me. Back in the late 90's it would have taken a good 10 seconds to pull this page up over 14.4 kbps.

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sunnywindy
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Re: Starting to feel like the late 1990s?

Post by sunnywindy » Fri Jan 26, 2018 4:40 pm

One characteristic of the late 1990's was that the dot.coms were the drivers of the indexes and the rest of the stocks were relatively tame. Thus, the gains were not shared by all sectors and when the bubble popped value stocks actually did quite well.

As far as today's market, I haven't read any analysis about the breadth of the gains (I imagine it's all sectors), so I'd imagine that when a bear market comes it may hurt most sectors.

And yes, regardless of the data, it does feel a bit like the late 1990's.
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Re: Starting to feel like the late 1990s?

Post by dmk395 » Fri Jan 26, 2018 4:42 pm

If you keep predicting a downtown, at some point you will be CORRECT.

-stay the course and dollar cost average
-don't market time

Don't be afraid to take some chips off the table if you're close to retirement, can pay off your mortgage with the gains etc. Those BILLS you have forever.

I'm 38 and haven't seen this as many times as others, but as a business owner I've never felt this level of optimism before and I'm 20 years in the game almost.

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Re: Starting to feel like the late 1990s?

Post by KyleAAA » Fri Jan 26, 2018 4:47 pm

Valuations are definitely high but we don't have ridiculous situations where companies with no revenue (not just companies that were operating at a loss, companies that actually didn't have any significant revenue) were valued in the hundreds of millions based on eyeballs. There were other crazy happenings such as when the market cap of the parent company of a dotcom, which actually owned a majority stake in said company, was lower than the market cap of the outstanding 30% of the dotcom that it owned.

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Re: Starting to feel like the late 1990s?

Post by z3r0c00l » Fri Jan 26, 2018 4:49 pm

Image

It feels like either 1996 or 1998 to me. That is a very disturbing graph to say the least, it looks like an unsustainable melt-up. But check it out in Log:

Image
Now I only see one bubble, in 1999, surrounded by a rather steady trend. I choose to watch the Log graph instead. The value of some companies, like Amazon, are just goofy right now. But the market as a whole has a while before it gets to 1999 territory. And if it is going that way, I will want to hold on for the next 50%.

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Re: Starting to feel like the late 1990s?

Post by snowman » Fri Jan 26, 2018 4:59 pm

Tycoon wrote:
Fri Jan 26, 2018 4:34 pm
IngognitoUSA wrote:
Fri Jan 26, 2018 4:13 pm
Listening to armchair economists can be injurous to your wealth.
Listening to Nobel winning economists can also derail one's path to wealth. One boastfully declared the market would NEVER recover after the last election.
I remember that - he literally said that if so and so (we know who) wins the election, the market will crash and will never recover ever again! I could not believe that a Nobel prize winning economist would make such a statement, as that could literally destroy his reputation forever. I feel sorry for his readers who followed his advise and sold. Just another example of ignoring the noise and staying the course.

Back to OP - no, it does not feel that way to me at all. Yes, the valuations are high, but we do have ultra low interest rates (bonds are even less attractive than stocks), and US companies just got the biggest tax cut in generations. And I don't see companies en mass booking phony orders and marking them as revenues. I also don't see "new" valuation metrics, like clicks or ad exposure. It was crazy!

The markets seem frothy, no doubt. But it was the experience from 1998-2003 that thought me to pick AA and stay the course, so that's my intent. Every time I tried to time the market, I was wrong, so I don't try anymore. Much easier!

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snodog
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Re: Starting to feel like the late 1990s?

Post by snodog » Fri Jan 26, 2018 5:06 pm

Despite the run up I am feeling somewhat bullish. US stocks are indeed frothy but overseas they are rather cheap. The PE ratio of my portfolio is only 14.7 according to Morningstar and Paul Krugman should have known better. At least he didn't say "We will be able to say merry christmas again". :twisted:
Last edited by snodog on Fri Jan 26, 2018 6:23 pm, edited 1 time in total.

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Re: Starting to feel like the late 1990s?

Post by CnC » Fri Jan 26, 2018 5:11 pm

bligh wrote:
Fri Jan 26, 2018 3:50 pm
It's days like this that make me feel I have too much in bonds... or do some market timing :oops:

I agree though.. it does feel frothy doesn't it? I will stay the course. Why? Because 2017 went nothing like what I had predicted. January 2018 has also gone nothing like I had predicted. So that continues to confirm that I am really bad at making predictions.
I love it great statement. Just like the person sitting on the sidelines through a 30% gain waiting to buy on a 15% drop.

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Re: Starting to feel like the late 1990s?

Post by Rashen » Fri Jan 26, 2018 5:30 pm

funny you posted about FANG stocks, i just created a FANG motif and plan to buy some in the coming weeks.

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Re: Starting to feel like the late 1990s?

Post by asif408 » Fri Jan 26, 2018 5:37 pm

sunnywindy wrote:
Fri Jan 26, 2018 4:40 pm
As far as today's market, I haven't read any analysis about the breadth of the gains (I imagine it's all sectors), so I'd imagine that when a bear market comes it may hurt most sectors.
Other than the energy sector and a few of the materials sub-sectors (e.g., PME), you are correct, there isn't much that hasn't been along for the ride. Energy has done particularly poorly, and had another bear market (20% drop) from late 2016 to August 2017.

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Re: Starting to feel like the late 1990s?

Post by RRAAYY3 » Fri Jan 26, 2018 5:49 pm

This run is a collective effort - us and int’l, multiple sectors, with interest rates still low

I’ll worry in 2020

And buy worry, I mean buy even more when people freak out

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Re: Starting to feel like the late 1990s?

Post by SlowMovingInvestor » Fri Jan 26, 2018 6:07 pm

One remember to remember about the dotcom boom is that while the profitless .coms (the globe, pets etc.) got the bulk of the attention (and derision), a number of generally solid companies (Cisco, Juniper, JDSU) and solid looking companies (several ISPs and telcos) were also bid up unsustainably and collapsed after the bust (many new telcos went bust). And my recollection is that most of the rise in broader indexes in the late 90s was driven by the 'solid' companies.

So the fact that we have fewer .com style companies (excluding some of the ICOs) right now doesn't mean that the market isn't overvalued. Even very good companies can be overvalued.

Personally, I think Amazon (an excellent company) is definitely overvalued, since the assumption seems to be that it'll take over the world. Admittedly, Amazon did recover from the dotcom era, but it took 8-9 years to reach it's peak.
Last edited by SlowMovingInvestor on Fri Jan 26, 2018 6:14 pm, edited 1 time in total.

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Re: Starting to feel like the late 1990s?

Post by SlowMovingInvestor » Fri Jan 26, 2018 6:10 pm

snodog wrote:
Fri Jan 26, 2018 5:06 pm
Despite the run up I am feeling somewhat bullish. US stocks are indeed frothy but overseas they are rather cheap.
Overseas stocks have indeed been doing very well (indeed, after years of being a drag on my portfolio, they outperformed my domestic portfolio last year), but I'm not entirely sure they are 'cheap'.

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Re: Starting to feel like the late 1990s?

Post by SlowMovingInvestor » Fri Jan 26, 2018 6:13 pm

asif408 wrote:
Fri Jan 26, 2018 5:37 pm
sunnywindy wrote:
Fri Jan 26, 2018 4:40 pm
As far as today's market, I haven't read any analysis about the breadth of the gains (I imagine it's all sectors), so I'd imagine that when a bear market comes it may hurt most sectors.
Other than the energy sector and a few of the materials sub-sectors (e.g., PME), you are correct, there isn't much that hasn't been along for the ride. Energy has done particularly poorly, and had another bear market (20% drop) from late 2016 to August 2017.
REITs haven't been doing too well either.

About Bitcoin, I think the significance of the rise is that it indicates high speculative fever. Towards the end of the dotcom boom, a bunch of biotechs -- Celera, Incyte etc. exploded (partly driven by speculative hype about the Human Genome Project). That was significant in that it indicated a speculative boom.

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Re: Starting to feel like the late 1990s?

Post by TRC » Fri Jan 26, 2018 7:43 pm

I work in tech and I agree - these tech IPOs and soaring Tech stocks scare me a tad.

Unicorns that are going public have increasing Annual Recurring Revenue, but most are losing money hand over fist. It seems like Wall Street just cares about increasing ARR and doesn't factor in whether or not companies are actually making money.

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Re: Starting to feel like the late 1990s?

Post by asif408 » Fri Jan 26, 2018 11:13 pm

SlowMovingInvestor wrote:
Fri Jan 26, 2018 6:13 pm
REITs haven't been doing too well either.
True, they haven't been doing great, though they've only fallen 10-15% in the last year and a half, so I don't think they've quite reached a bear market. By contrast, energy and of some of the materials sub-sectors were in a bear market for multiple years between 2011 and 2016, with drops between 40 and 80%.

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Re: Starting to feel like the late 1990s?

Post by willthrill81 » Fri Jan 26, 2018 11:49 pm

If you're a buy-and-hold investor, then it shouldn't matter what it feels like.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Starting to feel like the late 1990s?

Post by aj76er » Sat Jan 27, 2018 12:11 am

This feels different than the late 90s in that many people are genuinely still scared of the stock market. I hear many more people talking about bitcoin these days.

Over the thanksgiving holiday, my BIL was talking about friends that have been sitting in cash scared to jump into the market. Then he sincerely asked me what I thought about him taking out a loan to buy bitcoin :oops: . Two weeks later, my mom sends me a text asking if I know anything about bitcoin.

So, yeah, different ...
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Re: Starting to feel like the late 1990s?

Post by wootwoot » Sat Jan 27, 2018 12:33 am

These market timing threads are becoming very prolific. Is bogleheads being hijacked by non-bogleheads?

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Re: Starting to feel like the late 1990s?

Post by JoMoney » Sat Jan 27, 2018 12:38 am

In the late 1990's people were scared of missing out on the boom, today people seem to still be more 'scared of heights'.
In the late 1990's you could buy high quality bond funds yielding 7%, Series-I Savings Bonds over 3% fixed rate + inflation, and bank savings accounts paying 5%.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Starting to feel like the late 1990s?

Post by Theoretical » Sat Jan 27, 2018 12:47 am

wootwoot wrote:
Sat Jan 27, 2018 12:33 am
These market timing threads are becoming very prolific. Is bogleheads being hijacked by non-bogleheads?
Nope, they've been on the forum as long as I can see. Boglehead investing is fundamentally honest investing, because of a focus on transparency, costs, and shared investor interests, and part of that honesty is acknowledging one's own emotions.

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Re: Starting to feel like the late 1990s?

Post by visualguy » Sat Jan 27, 2018 12:55 am

It is very frightening for people who put a very large lump sum in the market at these levels - I would hate to be in those shoes. For the rest of us who rode this up, we can probably ride it back down without too much anxiety unless it really overshoots on the way down, and there's no catalyst on the horizon for a real crash as opposed to a correction.

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Re: Starting to feel like the late 1990s?

Post by willthrill81 » Sat Jan 27, 2018 1:02 am

visualguy wrote:
Sat Jan 27, 2018 12:55 am
It is very frightening for people who put a very large lump sum in the market at these levels - I would hate to be in those shoes. For the rest of us who rode this up, we can probably ride it back down without too much anxiety unless it really overshoots on the way down, and there's no catalyst on the horizon for a real crash as opposed to a correction.
Whether you put a lump sum in the market or dollar cost averaged in is irrelevant at this point. Either way, you have the same stake in what happens going forward.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Starting to feel like the late 1990s?

Post by visualguy » Sat Jan 27, 2018 2:07 am

willthrill81 wrote:
Sat Jan 27, 2018 1:02 am
visualguy wrote:
Sat Jan 27, 2018 12:55 am
It is very frightening for people who put a very large lump sum in the market at these levels - I would hate to be in those shoes. For the rest of us who rode this up, we can probably ride it back down without too much anxiety unless it really overshoots on the way down, and there's no catalyst on the horizon for a real crash as opposed to a correction.
Whether you put a lump sum in the market or dollar cost averaged in is irrelevant at this point. Either way, you have the same stake in what happens going forward.
Seeing some of your hard-earned money evaporate is a lot more painful than seeing stock market gains evaporate.

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Re: Starting to feel like the late 1990s?

Post by AtlasShrugged? » Sat Jan 27, 2018 6:59 am

garlandwhizzer....From my perspective, the answer to your question is: Nope.

I remember well the time period of 1995-2000. It does not feel even remotely the same. Why do I write this?

First, I have never seen such a great market so unloved by it's participants.
Second, I do not see a bevy of truly stupid things happening in the investing public (e.g. people quitting their jobs to day trade).
Third, I think the investing public has been conditioned to expect a market drop at any time. It was not like that back then.
Fourth, I think there is a significantly higher amount of regulation relative to valuation today then there was at that time.
Fifth, I don't see widespread signs of 'irrational exuberance'. There are always a couple of dummies, but I don't see widespread lunacy.

I re-read the infamous 'Sheepdog' thread (Panic and Survival) late last year, as I was contemplating my January 2 contribution. Sheepdog wrote something back to me that will stay with me forever (I am indebted to him) - Don't be Greedy! In light of that, I made the decision to step 'outside' my glidepath for a short time, and put somewhat more into bonds. That was an outcome when I decided to simplify and make all of my funds Premium class, and went to a three fund portfolio (in my Roth). The 'net net' - instead of having ~19% in bonds, I now have 22% in my overall allocation. Instead of having 40% of my domestic equity funds as large cap, I have 27%. So my 'intra-equity' allocation is all out of whack - I have a much higher allocation to mid-and small-cap (in the form of FSEVX). In my 401K, I have continued to increase my contributions to bonds (now up to 33%) to keep keep pace with the strong growth we are seeing currently. If all goes more or less to plan, I will be back on my planned glidepath sometime in the middle of 2019.

Summing up, I just don't see the parallel to the late 90's. I don't.

What I also remind myself is the timeless advice given to me by Taylor Larimore (relayed from Jack Bogle): Stay the course. And so I am.
“If you don't know, the thing to do is not to get scared, but to learn.”

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Re: Starting to feel like the late 1990s?

Post by z3r0c00l » Sat Jan 27, 2018 7:46 am

The only thing starting to feel like the 1990s is the ICO (initial coin offering) thing going on for the past year. ICOs are almost identical in appearance to the stock frenzy of 1720. I can't wait for one to sell an ICO for "a company for carrying out an undertaking of great advantage, but nobody to know what it is." But that is only confirmation of the crypto bubble, not a wider stock market bubble.

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Re: Starting to feel like the late 1990s?

Post by GoldenFinch » Sat Jan 27, 2018 7:50 am

visualguy wrote:
Sat Jan 27, 2018 2:07 am
willthrill81 wrote:
Sat Jan 27, 2018 1:02 am
visualguy wrote:
Sat Jan 27, 2018 12:55 am
It is very frightening for people who put a very large lump sum in the market at these levels - I would hate to be in those shoes. For the rest of us who rode this up, we can probably ride it back down without too much anxiety unless it really overshoots on the way down, and there's no catalyst on the horizon for a real crash as opposed to a correction.
Whether you put a lump sum in the market or dollar cost averaged in is irrelevant at this point. Either way, you have the same stake in what happens going forward.
Seeing some of your hard-earned money evaporate is a lot more painful than seeing stock market gains evaporate.
It is true that it’s hard to watch “new” money decrease in value after you invest it, BUT this is where “time in the market” and “buying low” come in to play!

You put in your lump sum of 100k and it slowly goes down to 80k. You keep investing smaller amounts on schedule because you are in accumulation phase and are automatically periodically investing x% of your income on a regular basis. You are also auto investing dividends and capital gains. TIME marches on and on (it always does, this is guaranteed). The stock market eventually regains its footing and marches upward (either slowly, quickly or chaotically). Holy cow it’s now the future! You look at your portfolio and say, “Wow! I’m sure glad I stayed the course!” Then you write a post on Bogleheads thanking everyone and saying how you’re so glad you found this site when you did. Then people respond with pictures of smilies with beers clanking because they did the same thing and they’re happy that you did too.

The End

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Re: Starting to feel like the late 1990s?

Post by gd » Sat Jan 27, 2018 7:50 am

The point I'd be more concerned about with respect to 1990s is the overall increase of spending with respect to disposable income, and decrease in savings.

Regarding pundits, I pay attention to their overall, long term accuracy and perception, and their behavior when mistaken. The one in question openly retracted his statement quickly. Everyone gets stuff wrong, the question is what they do next- acknowledge or double-down?

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Index Fan
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Re: Starting to feel like the late 1990s?

Post by Index Fan » Sat Jan 27, 2018 9:38 am

Tycoon wrote:
Fri Jan 26, 2018 4:34 pm
Listening to Nobel winning economists can also derail one's path to wealth. One boastfully declared the market would NEVER recover after the last election.
In particular, a Nobel-prize-winning economist that is often lauded here.

An excellent example of letting politics interfere with investing.
"Optimum est pati quod emendare non possis." | -Seneca

nativenewenglander
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Re: Starting to feel like the late 1990s?

Post by nativenewenglander » Sat Jan 27, 2018 9:44 am

I'm not changing any allocations either, but it feels much like 1999.
Other than utilities all other ETF sector choices say higher.

CULater
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Re: Starting to feel like the late 1990s?

Post by CULater » Sat Jan 27, 2018 9:57 am

I'm calling this the "THIS TIME IT'S DIFFERENT" stock market. If it isn't, then we're toast and we should be getting out the butter and jelly...
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

feh
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Re: Starting to feel like the late 1990s?

Post by feh » Sat Jan 27, 2018 10:11 am

LukeHeinz57 wrote:
Fri Jan 26, 2018 3:58 pm
I find it harder to stick to my AA in up markets like this than in down markets. I am very tempted to try and market time despite knowing better when riding a wave up like this. Wasn't invested in the late 90's, didn't buy my first stock until 2000...I "know" the price today could be the best I will ever see again because the market could run 50% up in the next few years before crashing 33%, but it's hard to accept. :oops:
For those of us that don't follow an IPS to the letter and are concerned about PE ratios, consider moving equities from the US to ex-US and EM. Valuations are much more attractive overseas.

This is not advice, and I haven't done this myself, but if you want to keep your AA the same but are worried about the current PE of the S&P 500...

investingdad
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Re: Starting to feel like the late 1990s?

Post by investingdad » Sat Jan 27, 2018 10:12 am

I did some rebalancing this week.

With the market climb, it's hard to complete the gradual transition from 80/20 to 70/30 I'm trying to do from age 40 to late 40s.

It's back to 76/24 for now. I should probably be aiming for 65/35 at this point.

SlowMovingInvestor
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Re: Starting to feel like the late 1990s?

Post by SlowMovingInvestor » Sat Jan 27, 2018 10:22 am

Index Fan wrote:
Sat Jan 27, 2018 9:38 am
Tycoon wrote:
Fri Jan 26, 2018 4:34 pm
Listening to Nobel winning economists can also derail one's path to wealth. One boastfully declared the market would NEVER recover after the last election.
In particular, a Nobel-prize-winning economist that is often lauded here.

An excellent example of letting politics interfere with investing.

Well, he recanted within 3-4 days, as I recall, so even if you had taken that as gospel, you wouldn't have missed more than 3-4% of gain.

That being said, even Nobel Prize winning financial economist don't have good handles on investing. See Long Term Capital, Collapse of.

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