100% stock threads as a counter indicator

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
larrydmsn
Posts: 86
Joined: Thu Aug 28, 2008 8:58 pm

100% stock threads as a counter indicator

Post by larrydmsn » Thu Jan 09, 2020 1:19 pm

There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.

User avatar
Watty
Posts: 18034
Joined: Wed Oct 10, 2007 3:55 pm

Re: 100% stock threads as a counter indicator

Post by Watty » Thu Jan 09, 2020 1:29 pm

There is a long thread on this within the last few weeks ago that you can look up.

I suspect that you are right but the problem is that I saw this on other boards during the dot com and the housing/financial bubbles and it was pretty clear there was a bubble long before it burst. Even Alan Greenspan's famous "Irrational Exuberance" was several years before the dot com bubble burst.

Trying to time any actions based on observations like this is a bugger.

Then you also have to time when to get back into the market.

User avatar
305pelusa
Posts: 1247
Joined: Fri Nov 16, 2018 10:20 pm

Re: 100% stock threads as a counter indicator

Post by 305pelusa » Thu Jan 09, 2020 1:32 pm

larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
Join the club. MT said basically this same thing almost a year ago and we proceeded to experience one of the most fantastic rallies right after:
viewtopic.php?f=10&t=275865

Better to tune out the noise, Bogleheads included.

Day9
Posts: 825
Joined: Mon Jun 11, 2012 6:22 pm

Re: 100% stock threads as a counter indicator

Post by Day9 » Thu Jan 09, 2020 1:33 pm

My guess would be that it would be better to survey the opinions of the big money market movers rather than Bogleheads. Though many Bogleheads are millionaires, they are small fish by comparison. Maybe if you see lots of interviews of big pension fund managers bragging about their high returns compared to their peers (which they got by investing more aggressively, but they say is due to their skill) that would be an indicator. Or if you see lots of endowment managers remind each other than endowments are meant to last into perpetuity, rather than a 30-50 year time frame of a retirement investor, so they should be more aggressive in their allocations.
I'm just a fan of the person I got my user name from

lostdog
Posts: 2106
Joined: Thu Feb 04, 2016 2:15 pm

Re: 100% stock threads as a counter indicator

Post by lostdog » Thu Jan 09, 2020 1:36 pm

I don't see the FOMO(fear of missing out) yet from the non investor public or the main stream news. Once i see the crypto peple jumping into the stock market, then I'll get concerned.
95% VTWAX | 5% BNDW

User avatar
anon_investor
Posts: 753
Joined: Mon Jun 03, 2019 1:43 pm

Re: 100% stock threads as a counter indicator

Post by anon_investor » Thu Jan 09, 2020 1:39 pm

When I read those threads, many of the proponents of 100% stocks actually carry large cash emergency funds. So I don't think they are really 100% equities, they are basically replacing bonds with cash. Just my 2 cents.

User avatar
nisiprius
Advisory Board
Posts: 39724
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: 100% stock threads as a counter indicator

Post by nisiprius » Thu Jan 09, 2020 1:53 pm

It's just another way of saying that a bull market has gone on for a long time.

That brings out both extremes. Since it's been a long time since the risk of stocks really showed up, it leads some people to underestimate the risk of stocks and overestimate their personal risk tolerance--anything below 100% stocks just looks like wasted opportunity. Since trees don't grow to the skies, the same fact--it's been going on for a long time--leads other people to ask why they should buy any stocks "now," or why they shouldn't sell stocks "now." The long bull market intensifies the feelings of both optimists and pessimists, but gives us no actionable information on who is right.

Every year that the bull market continues must bring us one year closer to the end, but that tells us nothing.

The lesson I take from the chapter of Stocks for the Long Run about "stocks and the business cycle" is that predicting the beginning and end of a recession is only valuable if the predictions are very reliable and tightly time-constrained. "Sooner or later a crash is coming and it may be terrific" is worth nothing.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Presintense
Posts: 252
Joined: Thu Nov 06, 2014 1:58 pm
Location: "Somewhere in the middle of America"

Re: 100% stock threads as a counter indicator

Post by Presintense » Thu Jan 09, 2020 2:00 pm

larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
I can’t pretend to know how to interpret the volume of 100% stock threads, although I doubt it accurately signals a time to be more cautious, or less.
Performance = Potential - Distraction

Topic Author
larrydmsn
Posts: 86
Joined: Thu Aug 28, 2008 8:58 pm

Re: 100% stock threads as a counter indicator

Post by larrydmsn » Thu Jan 09, 2020 2:17 pm

As a Boglehead, I don't time the market. I do tweak my allocation slightly (a few percentage points a time) according to market valuations. The more frequent appearance of 100% stock threads serves as one of the indicators that the stock market valuation may be high, although not exorbitant yet.

petulant
Posts: 830
Joined: Thu Sep 22, 2016 1:09 pm

Re: 100% stock threads as a counter indicator

Post by petulant » Thu Jan 09, 2020 2:25 pm

OTOH, you also have to count the "100% stock threads" threads and comments. As many of those that I see, we might be fine.

visualguy
Posts: 1633
Joined: Thu Jan 30, 2014 1:32 am

Re: 100% stock threads as a counter indicator

Post by visualguy » Thu Jan 09, 2020 2:33 pm

The more interesting thing to me is that many here don't really follow what is perceived as the conventional wisdom, or at least what I perceived as the conventional wisdom here. Many report little or no bonds even fairly close to retirement (or after retirement). Many have little or no ex-US. Many own rentals in addition to index funds. It's good that people are not dogmatic, but it's also a bit unsettling to have one impression about what folks are doing, and then realize that it's not really what many are doing.

cashboy
Posts: 194
Joined: Tue Sep 11, 2018 5:03 pm
Location: USA

Re: 100% stock threads as a counter indicator

Post by cashboy » Thu Jan 09, 2020 2:36 pm

fwiw, just my opinion (ymmv),

i tend to look at such threads as 'noise' (ex: Cramer).

my IPS is not based on 'noise', so i do not change my IPS based on 'noise'.

I do enjoy reading some of them.
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)

H-Town
Posts: 2226
Joined: Sun Feb 26, 2017 2:08 pm

Re: 100% stock threads as a counter indicator

Post by H-Town » Thu Jan 09, 2020 2:36 pm

larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
It’s time to be cautious. But it’s a good opportunity ahead. One can make a lot of money coming out of a recession.

milktoast
Posts: 108
Joined: Wed Jul 10, 2019 8:17 pm

Re: 100% stock threads as a counter indicator

Post by milktoast » Thu Jan 09, 2020 2:40 pm

It might be a counter indicator. And CAPE might be. Or something else. Who knows. Not me.

But I have adjusted based on what I see as "irrational exuberance". After maxing out all my tax advantaged opportunities at 70/30, I'm plowing everything else into my 3.875% mortgage rather than building up my 70/30 portfolio in taxable.

I could end up missing out. Oh well.

shess
Posts: 347
Joined: Wed May 17, 2017 12:02 am

Re: 100% stock threads as a counter indicator

Post by shess » Thu Jan 09, 2020 3:04 pm

Watty wrote:
Thu Jan 09, 2020 1:29 pm
I suspect that you are right but the problem is that I saw this on other boards during the dot com and the housing/financial bubbles and it was pretty clear there was a bubble long before it burst. Even Alan Greenspan's famous "Irrational Exuberance" was several years before the dot com bubble burst.
Yeah, this is the big issue. I have a large position in a company I worked for, and it's done well enough to make me nervous, so I sold some off until I was less nervous. But I didn't think the stock market was a good place to put it, for the same reasons, so I paid off our mortgage.

I'm happy with the decision, but that was in 2014. Since then the broad stock market is up 50%, and the specific stock I sold is up almost 3x. So I slept better, but I'm glad I didn't panic and go all-in on that move.

Alaric
Posts: 28
Joined: Tue Feb 05, 2019 1:38 pm

Re: 100% stock threads as a counter indicator

Post by Alaric » Thu Jan 09, 2020 3:37 pm

The thing is there have also been a lot of recent threads expressing worry about the record-length bull, P/E and CAPE, not wanting to invest in all-time high markets, etc.

JakeyLee
Posts: 66
Joined: Sun Dec 31, 2017 11:34 am

Re: 100% stock threads as a counter indicator

Post by JakeyLee » Thu Jan 09, 2020 3:38 pm

Perspective is everything, and confirmation bias is real. I see countless threads/comments on re-balancing on these great boards. I see countless "I'm currently 60-40, but I will probably ramp down to 50-50 as I get closer to retirement". I'm sure it's because those tend to stick out to me. Anyway, my counter indicator is the exact opposite the OP's. I imagine I will be right sometimes, and wrong sometimes. Sort of a metaphor for my life, really. Carry on.

User avatar
Nate79
Posts: 5295
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: 100% stock threads as a counter indicator

Post by Nate79 » Thu Jan 09, 2020 3:42 pm

larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
Can you post some of these? What is the count of new 100% threads in the last day, week, month?

Truthfully I think there have been very very few of these threads but since you have claimed that there are a lot of them it would be nice to see some examples.

Trader Joe
Posts: 1432
Joined: Fri Apr 25, 2014 6:38 pm

Re: 100% stock threads as a counter indicator

Post by Trader Joe » Thu Jan 09, 2020 3:44 pm

larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
I recommend that you tune out the noise and avoid trying to time the market with "indicators".

PluckyDucky
Posts: 189
Joined: Tue Jan 15, 2019 8:29 pm

Re: 100% stock threads as a counter indicator

Post by PluckyDucky » Thu Jan 09, 2020 3:48 pm

Presintense wrote:
Thu Jan 09, 2020 2:00 pm
...
I can’t pretend to know how to interpret the volume of 100% stock threads, although I doubt it accurately signals a time to be more cautious, or less.
It's interesting to look at Google Trends on search terms. Not sure it means anything.

Here is the Google Trend for S&P500 topic:

Image

MnD
Posts: 4398
Joined: Mon Jan 14, 2008 12:41 pm

Re: 100% stock threads as a counter indicator

Post by MnD » Thu Jan 09, 2020 3:54 pm

Another good contrary indicator (for not being 100% US stock for equities) is the frequency with which "Why Jack Bogle Doesn't Own Non-U.S. Stocks" and "US stocks continue to soar" threads get bumped up to the top. Bonus incentive to buy ex-US if recent responses consist of pics of soaring eagles and apple pies.
70/30 AA, Global market cap equity. Rebalance if FI <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

asif408
Posts: 1836
Joined: Sun Mar 02, 2014 8:34 am
Location: Florida

Re: 100% stock threads as a counter indicator

Post by asif408 » Thu Jan 09, 2020 3:57 pm

I like the BAML fund manager survey as a counter indicator at extremes. It interviews several hundred money managers handling $100s of billions of dollars in assets. One from October indicates that equity position are below historical averages while cash and bond allocations are above historical averages: https://economictimes.indiatimes.com/ma ... 628288.cms. It may have changed somewhat since then but at least at this point the big money is not piled into equities. If anything the high cash levels have historically been a bullish sign for equities. That doesn't mean equities won't go down, just that there is less likelihood of an imminent large crash.

Another good one is the AAII sentiment survey: https://www.aaii.com/sentimentsurvey. It currently indicates below average bullishness, around average bearishness, and above average neutral sentiment. No evidence here either of euphoria in equities.

DesertDiva
Posts: 695
Joined: Thu Mar 01, 2018 12:49 pm
Location: In the desert

Re: 100% stock threads as a counter indicator

Post by DesertDiva » Thu Jan 09, 2020 4:03 pm

"Nobody knows nothing"
-- John C Bogle, founder of Vanguard

Oakwood42
Posts: 204
Joined: Thu Dec 08, 2016 10:48 pm
Location: Philadelphia

Re: 100% stock threads as a counter indicator

Post by Oakwood42 » Thu Jan 09, 2020 4:08 pm

305pelusa wrote:
Thu Jan 09, 2020 1:32 pm
larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
Join the club. MT said basically this same thing almost a year ago and we proceeded to experience one of the most fantastic rallies right after:
viewtopic.php?f=10&t=275865

Better to tune out the noise, Bogleheads included.
+1

Topic Author
larrydmsn
Posts: 86
Joined: Thu Aug 28, 2008 8:58 pm

Re: 100% stock threads as a counter indicator

Post by larrydmsn » Thu Jan 09, 2020 5:02 pm

Nate79 wrote:
Thu Jan 09, 2020 3:42 pm
larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
Can you post some of these? What is the count of new 100% threads in the last day, week, month?

Truthfully I think there have been very very few of these threads but since you have claimed that there are a lot of them it would be nice to see some examples.
I think you got the my wording wrong. I said "multiple" such threads and "a lot of" supporters, which are both easy to find in a search. I didn't say "a lot of" threads.

User avatar
Nate79
Posts: 5295
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: 100% stock threads as a counter indicator

Post by Nate79 » Thu Jan 09, 2020 6:31 pm

larrydmsn wrote:
Thu Jan 09, 2020 5:02 pm
Nate79 wrote:
Thu Jan 09, 2020 3:42 pm
larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
There have been multiple 100% stock portfolio threads popping up lately on the forum. And many members are fine with or even advocating this kind of allocation. I see a lot of these supporters joined the forum after the last real bear market of 2008-2009 and may have no painful memory of the bear market. I take this as a counter indicator that the stock markets may be at the initial stage of a bubble. But then you can take my suspicion as another counter indicator that this bubble may continue inflating for a whole while. Anyway it is time to be cautious.
Can you post some of these? What is the count of new 100% threads in the last day, week, month?

Truthfully I think there have been very very few of these threads but since you have claimed that there are a lot of them it would be nice to see some examples.
I think you got the my wording wrong. I said "multiple" such threads and "a lot of" supporters, which are both easy to find in a search. I didn't say "a lot of" threads.
I just went thru the first 3 pages of threads in this section and found one, maybe two (and that one was older but still active). So maybe 1 in 100 threads? And counteracted by dozens of threads of very high bond/CD/cash and worry about valuations, stock all time highs, etc. In fact looking at the breakdown I think there are FAR more threads on the opposite of your topic.

More likely you had a preconceived notion on people posting about 100% stocks and it just isn't true.

chevca
Posts: 2987
Joined: Wed Jul 26, 2017 11:22 am

Re: 100% stock threads as a counter indicator

Post by chevca » Thu Jan 09, 2020 6:47 pm

Maybe "lately" meant the last 5 years or so? :happy

User avatar
dmcmahon
Posts: 2079
Joined: Fri Mar 21, 2008 10:29 pm

Re: 100% stock threads as a counter indicator

Post by dmcmahon » Thu Jan 09, 2020 6:53 pm

cashboy wrote:
Thu Jan 09, 2020 2:36 pm
fwiw, just my opinion (ymmv),

i tend to look at such threads as 'noise' (ex: Cramer).

my IPS is not based on 'noise', so i do not change my IPS based on 'noise'.

I do enjoy reading some of them.
I enjoy reading them and that’s a lot cheaper than actually doing anything! :D

User avatar
nisiprius
Advisory Board
Posts: 39724
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: 100% stock threads as a counter indicator

Post by nisiprius » Thu Jan 09, 2020 6:59 pm

Contrarian investing is doing the opposite of what the crowd does.

The crowd sometimes veers to port and sometimes veers to starboard. In my opinion, the opposite of "veering" isn't "veering in the opposite direction." The opposite of "veering" is "not veering."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

JustinR
Posts: 1140
Joined: Tue Apr 27, 2010 11:43 pm

Re: 100% stock threads as a counter indicator

Post by JustinR » Thu Jan 09, 2020 6:59 pm

There was a study about this:

http://www.aaii.com/journal/article/is- ... -indicator

It's behind a paywall but you can see the data here:
https://greenbackd.com/2013/06/10/is-th ... indicator/
https://www.valuewalk.com/2013/06/is-th ... indicator/

Some excerpts:
Bullish Sentiment
Neither unusual nor extraordinarily high levels of optimism are highly correlated with declining stock prices when the entire survey’s history is considered. The 44 periods with bullish sentiment readings more than two standard deviations above average were followed by a six-month fall in the S&P 500 only 48% of the time. The average six-month decline was 0.7%.

Bearish Sentiment
Extraordinarily high levels of pessimism have a mixed record of being correlated with higher stock prices. On a six-month basis, the S&P 500 rose 60% of the time following a bearish sentiment reading more than two standard deviations above the historical mean. The average and median gains were 2.8% and 5.3%, respectively. On a 12-month basis, the S&P 500 rose 60% of the time, with an average gain of 3.1% and a median gain of 14.3%. The average increases in prices are well below the typical increases realized throughout the entire history of the survey, though the median increases are greater than the typical gains.

Sentiment’s Role as a Market Indicator
When our Sentiment Survey was started in 1987, there was little data on the moods of individual investors. Since that time, our survey has developed a following for both its insights and as its role as a potentially contrarian indicator for market direction. As the data shows, extraordinarily low levels of optimism have consistently preceded larger-than-average six- and 12-month gains in the S&P 500.

...

The failure of sentiment to work perfectly highlights two important points. Though correlations between sentiment levels and market direction have appeared in the past, the AAII Sentiment Survey does not predict future market direction. Overly optimistic and pessimistic investor attitudes are characteristics of market tops and bottoms, but they do not cause stock prices to change direction. Rather, it is changes in expectations of future earnings and economic and valuation trends that move stock prices. The timing of such changes has proven to be difficult to predict with accuracy.

This leads to my second concluding point: Never rely on a single indicator when forecasting market direction. Rather, consider a variety of factors—including prevailing valuations, economic data, Federal Reserve policy, government policies and other prevailing macro trends—and allow for a large margin of error in your forecast. As the saying attributed to John Maynard Keynes goes, the market can stay irrational longer than you can stay solvent.

H-Town
Posts: 2226
Joined: Sun Feb 26, 2017 2:08 pm

Re: 100% stock threads as a counter indicator

Post by H-Town » Thu Jan 09, 2020 7:12 pm

MnD wrote:
Thu Jan 09, 2020 3:54 pm
Another good contrary indicator (for not being 100% US stock for equities) is the frequency with which "Why Jack Bogle Doesn't Own Non-U.S. Stocks" and "US stocks continue to soar" threads get bumped up to the top. Bonus incentive to buy ex-US if recent responses consist of pics of soaring eagles and apple pies.
LOL it gets ridiculous in "US stocks continue to soar" thread.

marcopolo
Posts: 2786
Joined: Sat Dec 03, 2016 10:22 am

Re: 100% stock threads as a counter indicator

Post by marcopolo » Thu Jan 09, 2020 7:25 pm

Day9 wrote:
Thu Jan 09, 2020 1:33 pm
My guess would be that it would be better to survey the opinions of the big money market movers rather than Bogleheads. Though many Bogleheads are millionaires, they are small fish by comparison. Maybe if you see lots of interviews of big pension fund managers bragging about their high returns compared to their peers (which they got by investing more aggressively, but they say is due to their skill) that would be an indicator. Or if you see lots of endowment managers remind each other than endowments are meant to last into perpetuity, rather than a 30-50 year time frame of a retirement investor, so they should be more aggressive in their allocations.
I think the opposite end of the spectrum is more telling.
When whatever the equivalent of "the shoe shine boy" is today, starts giving you stock tips, that would be a strong indicator things have gotten over blown.
Once in a while you get shown the light, in the strangest of places if you look at it right.

stocknoob4111
Posts: 899
Joined: Sun Jan 07, 2018 12:52 pm

Re: 100% stock threads as a counter indicator

Post by stocknoob4111 » Thu Jan 09, 2020 7:51 pm

The S&P 500 index is up only 13.7% over the last 2 years... that hardly irrational exuberance.

2018 may be analogous to 1991, a year which had a similar near 20% pullback and the PEs were similar as well in the low 20s. The rally continued until 1999 so it's certainly possible we may continue with this bull market sending the S&P 500 going to 8000 by the end of 2029 then we have the big 50% crash to 4000.
Last edited by stocknoob4111 on Thu Jan 09, 2020 7:54 pm, edited 2 times in total.

User avatar
dogagility
Posts: 759
Joined: Fri Feb 24, 2017 6:41 am

Re: 100% stock threads as a counter indicator

Post by dogagility » Thu Jan 09, 2020 7:52 pm

larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
... Anyway it is time to be cautious.
I don't think investing by "feelings" is prudent.

Pick an asset allocation and stay the course.
"The stock market is a device for transferring money from the impatient to the patient" -- Warren Buffett

User avatar
ThereAreNoGurus
Posts: 379
Joined: Fri Jan 24, 2014 11:41 pm

Re: 100% stock threads as a counter indicator

Post by ThereAreNoGurus » Thu Jan 09, 2020 8:32 pm

asif408 wrote:
Thu Jan 09, 2020 3:57 pm

Another good one is the AAII sentiment survey: https://www.aaii.com/sentimentsurvey. It currently indicates below average bullishness, around average bearishness, and above average neutral sentiment. No evidence here either of euphoria in equities.
I like this one, also from AAII, since it shows investor's actual asset allocations: https://www.aaii.com/assetallocationsurvey

And I find it mildly interesting what this guy did with that info: https://ofdollarsanddata.com/why-the-be ... s-useless/
Trade the news and you will lose.

User avatar
JoMoney
Posts: 8136
Joined: Tue Jul 23, 2013 5:31 am

Re: 100% stock threads as a counter indicator

Post by JoMoney » Thu Jan 09, 2020 8:56 pm

I've been participating on this board since 2013. There's been plenty of "100% Stock Threads" spanning the entire time since then.
There's also been plenty of people saying that the presence of these threads must indicate the market top... Eventually, the market will see a down-turn and they'll hit one right. In the mean time, I'm going to go along with what I posted in a '100% stock thread' last year:
JoMoney wrote:
Sat Sep 21, 2019 9:19 pm
I'm just hoping someone comes along and says something to the effect "... all these 100% stock threads must be a sign the market has peaked ..."
You might think it specious reasoning, but so far having someone say that has kept the bull market strong ;)
So far, it's been a good indicator for the market continuing to go up ;)
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Topic Author
larrydmsn
Posts: 86
Joined: Thu Aug 28, 2008 8:58 pm

Re: 100% stock threads as a counter indicator

Post by larrydmsn » Thu Jan 09, 2020 9:12 pm

Yes, that was exactly why I also felt my suspicion might be another indicator that the market would continue to go up :D

Anyway I've learnt a long time ago that I can't outsmart the markets. Although I often have fun analyzing the markets and their indicators (AAII sentiment survey is one of them. BTW, it was showing very high bullishness 2 weeks ago), I am staying the course and any of my asset allocation change is marginal.

User avatar
bogglizer
Posts: 271
Joined: Tue Aug 16, 2016 8:56 pm

Re: 100% stock threads as a counter indicator

Post by bogglizer » Thu Jan 09, 2020 10:26 pm

milktoast wrote:
Thu Jan 09, 2020 2:40 pm
But I have adjusted based on what I see as "irrational exuberance". After maxing out all my tax advantaged opportunities at 70/30, I'm plowing everything else into my 3.875% mortgage rather than building up my 70/30 portfolio in taxable.
Almost exactly what I am doing. Only difference is that I couldn't get my AA and contributions to be the same across all my pre-tax accounts without going 68/72. Taxable investing is so much more arcane that I want to avoid it as long as possible.
My intellectual superiority will shortly be demonstrated here by a pithy quotation.

lostdog
Posts: 2106
Joined: Thu Feb 04, 2016 2:15 pm

Re: 100% stock threads as a counter indicator

Post by lostdog » Tue Jan 14, 2020 9:52 am

MnD wrote:
Thu Jan 09, 2020 3:54 pm
Another good contrary indicator (for not being 100% US stock for equities) is the frequency with which "Why Jack Bogle Doesn't Own Non-U.S. Stocks" and "US stocks continue to soar" threads get bumped up to the top. Bonus incentive to buy ex-US if recent responses consist of pics of soaring eagles and apple pies.
+1

I agree, this is an excellent indicator to stay diversified. Even more when you see the Pabst Blue Ribbon red white and blue pics.
95% VTWAX | 5% BNDW

Quirkz
Posts: 248
Joined: Mon Jan 14, 2019 5:32 pm

Re: 100% stock threads as a counter indicator

Post by Quirkz » Tue Jan 14, 2020 10:51 am

dogagility wrote:
Thu Jan 09, 2020 7:52 pm
larrydmsn wrote:
Thu Jan 09, 2020 1:19 pm
... Anyway it is time to be cautious.
I don't think investing by "feelings" is prudent.

Pick an asset allocation and stay the course.
What do you think most people's AAs are based on? Feelings are likely a large component.

harvestbook
Posts: 724
Joined: Sat Mar 18, 2017 7:12 pm

Re: 100% stock threads as a counter indicator

Post by harvestbook » Tue Jan 14, 2020 1:11 pm

It's probably my recency and confirmation biases, but I see more posts on gold and increasing bond allocations than I do on increasing stock allocations, and much more pessimism than FOMO (in fact, most of the "100 percent stock" threads seem to be posted by people warning about the proliferation of such threads, not by those actually doing it). And since I don't trust my perceptions, I discount everything.

2018's 20 percent drop and last year's big increase felt pretty much the same to me--this is what I signed up for. It's all normal.
I'm not smart enough to know, and I can't afford to guess.

Post Reply