12000-16000 based on what? Just cuz its been there before? I still dont see the driving force behind an index getting up to that level, please show me one shred of evidence that share prices should increase even near that level.
tvPM Wrote:
——————————————————-
> 12000-16000 based on what? Just cuz its been there
> before? I still dont see the driving force behind
> an index getting up to that level, please show me
> one shred of evidence that share prices should
> increase even near that level.
agreed. far too many individuals believe that we’ll be incredibly higher in 7 years. not likely. less credit. less power in the hands of banks. less banks. smaller banks.
banks run it all, and i mean the huge banks, C, BOA, etc and when they are contracting severely and not likely return in the size and breadth ala 2007 ever again, how can you justify any other businesses performing well? also, materials cycles don’t hit bottom and peak again within 4 years. all cycles involve metals in some way and unless you see oil hitting 150 again in 4 years, which is ridiculous as you would need all that credit back in the system to float that price, and all other metals hitting their highs in 4 years, than saying the dow will be at 14000 is inconceivable. only scenario where that will happen is 70000000% inflation.
the January 2000 high was not reached again until September 2006 and that wasn’t even a serious bubble and/or recession; we didn’t even feel it.
it takes time for money to move out and move back in. years and years. i would give it 10 years minimum before we hit the high seen in late 2007 under a non-hyperinflationary scenario.
”
the fact that we do not know what future earnings will be and that past earnings mean nothing because they were the result of the best 20-years equity has ever seen, its impossible/invalid to value stocks based on multiples as there is no actual frame of reference comparative to the next 5 years. multiples are useless.
”
They are not over-valued based on Shiller data going 100+ years. I’mn ot saying they’re undervalued by any means, but the combo of reasonable multiples and historically low interest rates does indicate that they are not overvalued.
WHat do you mean past earnings that were the result of the 25 year bull run? I’m talking LTM here, dude.
Ignoring the price you pay for a dollar of earnings is unsound. Just because we are in an awful situation doesn’t mean that you just throw away the basic concepts of investing.
MattLikesAnalysis Wrote:
——————————————————-
> tvPM Wrote:
> ————————————————–
> —–
> > 12000-16000 based on what? Just cuz its been
> there
> > before? I still dont see the driving force
> behind
> > an index getting up to that level, please show
> me
> > one shred of evidence that share prices should
> > increase even near that level.
>
>
> agreed. far too many individuals believe that
> we’ll be higher in 7 years. not likely. less
> credit. less power in the hands of banks. less
> banks. smaller banks.
>
> banks run it all, and i mean the huge banks, C,
> BOA, etc and when they are contracting severely
> and not likely return in the size and breadth ala
> 2007 ever again, how can you justify any other
> businesses performing well? also, materials cycles
> don’t hit bottom and peak again within 4 years.
> all cycles involve metals in some way and unless
> you see oil hitting 150 again in 4 years, which is
> ridiculous as you would need all that credit back
> in the system to float that price, and all other
> metals hitting their highs in 4 years, than saying
> the dow will be at 14000 is inconceivable. only
> scenario where that will happen is 70000000%
> inflation.
>
> the January 2000 high was not reached again until
> September 2006 and that wasn’t even a serious
> bubble and/or recession; we didn’t even feel it.
>
> it takes time for money to move out and move back
> in. years and years. i would give it 10 years
> minimum before we hit the high seen in late 2007
> under a non-hyperinflationary scenario.
There has been so much credit pumped into the system that an inflationary cycle is now unavoidable. Not sure I would go so far as to call it hyperinlfationary…but it will be inflationary enough that I wouldn’t want to be hanging on to a lot of in terms of bonds…particularly at these yields.
I was once one of the biggest bears on this forum too by the way…but we shall never talk of Bear Stearns…sigh.
Deleted User
so you’re saying your only reason to invest in stocks is that you believe inflation is coming and you see no other alternatives? thats not a good reason to invest in stocks.
MattLikesAnalysis Wrote:
——————————————————-
> so you’re saying your only reason to invest in
> stocks is that you believe inflation is coming and
> you see no other alternatives? thats not a good
> reason to invest in stocks.
I’m saying I’m a contrarian. When Joe Schmoe on the street is scared stiff about the economy and thinks the equity markets are a big sham and that the world is about to end, I want to buy.
The opposite also holds true…
I think sometimes people overthink the markets somewhat…sure all of these metrics matter, but at the end of the day I think more of it is driven by emotions for me.
Found this old gem…probably the only good call I’ll ever make my whole life:
were you a contrarian at Dow 14,000 and felt all the Joe Schmoes were stuffing money in and that you should step out? did you sell out to cash or equivalent at that time? I see a lot of part-time contrarians nowadays.
Matt-right on, there is just no catalyst or ability to move the economy like there was before. Saying stuff is cheap now is just saying that this scotch is older today, still doesn’t mean its aged….or reasonably valued.
I’m not ripping on you, I am just asking a question. Same question I asked a FA friend of mine who kept throwing money in because he read the line about “be fearful when others are greedy, and be greedy when others are fearful…”. My point is he wasn’t following the first part of the line.
Thread from October about going to cash or sitting things out for awhile…I feel bad for those who said it was such a stupid idea and watched their equities go from 9500 down to 8000 since. I know hindsight is 20/20, and have made plenty of mistakes in investing to not have hubris, but sometimes I think people sit back on a lot of dogma and dont think for themselves, relying on quotes or history without opening their eyes…just my view.
Deleted User
but this is exactly what i’m saying. there is bound to be a “correction” ala 1930 whereby institutional guys buy because they have no alternatives. because the market and the economy will seem to be doing better and the average joe is no longer scared, he will invest, but come 1931, things fall off and never look back. its okay to be bullish, but i would not be bullish for more than a year. just as its dumb to think that the market will increase 100% based on fundamentals, it is also dumb to think that the market will drop 89% within 9 months based on panic and deleveraging. the overall trend is down, starting in 2007 and and i believe it will take years to come down and hit a bottom. the natural flow of money.
Well, I’m actually pretty worried about inflation as I think there is so much liquidity being pumped into the system via global central banks and fiscal policies.
I think this will lead to another asset bubble and high inflation (the two are obviously correlated).
I think in the longer term, the equity markets are driven by macro events…and in this case I don’t see anything that has fundamentally changed about our longer term economic fundamentals. Living standards are still broadly stagnant in the developed world while rapidly growing in the largest developing nations. Global trade is still on the long term exploding. Our world is still becoming integrated and smarter in terms of the terms of production in the economy…this is in my mind a form of inherent leverage for the returns to capital.
There are things that could disturb this on a macroeconomic level, but I think in the short-medium term at least, the trend towards smarter economies, converging global living standards and a more integrated global economic and financial framework will only continue.
We’ve probably come to far this time for it to collapse the way it did after the market crash of 29. Perhaps in 20-30 yrs when today’s developing economies are tommorow’s economic powerhouses, we will see a rise in nationalist tension that will cause the global economic framework to collpase, and the potential for massive amounts of capital to be destroyed…but I just don’t see that as being in anyone’s interest in the forseeable future.
Told you, big picture, long term macro.
Deleted User
there’s the difference. i now call the once emerging markets, submerging markets and they will be until WE have the dough to invest in them. China is in rough shape. sure they have a workforce who is desperate and dying to work, but without our consumption, they have massive job losses. you’ll see their job losses lag ours and as our consumption dictates their employment and our consumption has only begun to drop. this goes for most other submerging economies.
its obvious they will grow and their standard of living will improve in the long-term, but you don’t make much money saying something will increase 100%, 20 years from now.
It’s meaningless to compare now to the 1930’s. In Q4 last year, GDP contracted .96% for the quarter. During the depression, it contracted 25% or more! Our output is actually higher now than at the beginning of the recession in October 2007, thanks to growth during the first half of 2008. I think it makes more sense to look at the markets this decade in the context of the 1965-1982 secular bear market than the 1930’s.
12000-16000 based on what? Just cuz its been there before? I still dont see the driving force behind an index getting up to that level, please show me one shred of evidence that share prices should increase even near that level.
tvPM Wrote:
——————————————————-
> 12000-16000 based on what? Just cuz its been there
> before? I still dont see the driving force behind
> an index getting up to that level, please show me
> one shred of evidence that share prices should
> increase even near that level.
agreed. far too many individuals believe that we’ll be incredibly higher in 7 years. not likely. less credit. less power in the hands of banks. less banks. smaller banks.
banks run it all, and i mean the huge banks, C, BOA, etc and when they are contracting severely and not likely return in the size and breadth ala 2007 ever again, how can you justify any other businesses performing well? also, materials cycles don’t hit bottom and peak again within 4 years. all cycles involve metals in some way and unless you see oil hitting 150 again in 4 years, which is ridiculous as you would need all that credit back in the system to float that price, and all other metals hitting their highs in 4 years, than saying the dow will be at 14000 is inconceivable. only scenario where that will happen is 70000000% inflation.
the January 2000 high was not reached again until September 2006 and that wasn’t even a serious bubble and/or recession; we didn’t even feel it.
it takes time for money to move out and move back in. years and years. i would give it 10 years minimum before we hit the high seen in late 2007 under a non-hyperinflationary scenario.
Damn, that’s a 100%+ gain in 3-4 years.
I wonder what the catalyst for that will be…
”
the fact that we do not know what future earnings will be and that past earnings mean nothing because they were the result of the best 20-years equity has ever seen, its impossible/invalid to value stocks based on multiples as there is no actual frame of reference comparative to the next 5 years. multiples are useless.
”
They are not over-valued based on Shiller data going 100+ years. I’mn ot saying they’re undervalued by any means, but the combo of reasonable multiples and historically low interest rates does indicate that they are not overvalued.
WHat do you mean past earnings that were the result of the 25 year bull run? I’m talking LTM here, dude.
Ignoring the price you pay for a dollar of earnings is unsound. Just because we are in an awful situation doesn’t mean that you just throw away the basic concepts of investing.
MattLikesAnalysis Wrote:
——————————————————-
> tvPM Wrote:
> ————————————————–
> —–
> > 12000-16000 based on what? Just cuz its been
> there
> > before? I still dont see the driving force
> behind
> > an index getting up to that level, please show
> me
> > one shred of evidence that share prices should
> > increase even near that level.
>
>
> agreed. far too many individuals believe that
> we’ll be higher in 7 years. not likely. less
> credit. less power in the hands of banks. less
> banks. smaller banks.
>
> banks run it all, and i mean the huge banks, C,
> BOA, etc and when they are contracting severely
> and not likely return in the size and breadth ala
> 2007 ever again, how can you justify any other
> businesses performing well? also, materials cycles
> don’t hit bottom and peak again within 4 years.
> all cycles involve metals in some way and unless
> you see oil hitting 150 again in 4 years, which is
> ridiculous as you would need all that credit back
> in the system to float that price, and all other
> metals hitting their highs in 4 years, than saying
> the dow will be at 14000 is inconceivable. only
> scenario where that will happen is 70000000%
> inflation.
>
> the January 2000 high was not reached again until
> September 2006 and that wasn’t even a serious
> bubble and/or recession; we didn’t even feel it.
>
> it takes time for money to move out and move back
> in. years and years. i would give it 10 years
> minimum before we hit the high seen in late 2007
> under a non-hyperinflationary scenario.
There has been so much credit pumped into the system that an inflationary cycle is now unavoidable. Not sure I would go so far as to call it hyperinlfationary…but it will be inflationary enough that I wouldn’t want to be hanging on to a lot of in terms of bonds…particularly at these yields.
I was once one of the biggest bears on this forum too by the way…but we shall never talk of Bear Stearns…sigh.
so you’re saying your only reason to invest in stocks is that you believe inflation is coming and you see no other alternatives? thats not a good reason to invest in stocks.
why not just buy TIPS?
MattLikesAnalysis Wrote:
——————————————————-
> so you’re saying your only reason to invest in
> stocks is that you believe inflation is coming and
> you see no other alternatives? thats not a good
> reason to invest in stocks.
I’m saying I’m a contrarian. When Joe Schmoe on the street is scared stiff about the economy and thinks the equity markets are a big sham and that the world is about to end, I want to buy.
The opposite also holds true…
I think sometimes people overthink the markets somewhat…sure all of these metrics matter, but at the end of the day I think more of it is driven by emotions for me.
Found this old gem…probably the only good call I’ll ever make my whole life:
http://www.analystforum.com/phorums/read.php?1,580192,580274#msg-580274
were you a contrarian at Dow 14,000 and felt all the Joe Schmoes were stuffing money in and that you should step out? did you sell out to cash or equivalent at that time? I see a lot of part-time contrarians nowadays.
Matt-right on, there is just no catalyst or ability to move the economy like there was before. Saying stuff is cheap now is just saying that this scotch is older today, still doesn’t mean its aged….or reasonably valued.
Dude, I really couldn’t care less what you think of my investment decisions…I saw the thread title, and I made a comment.
I’m not ripping on you, I am just asking a question. Same question I asked a FA friend of mine who kept throwing money in because he read the line about “be fearful when others are greedy, and be greedy when others are fearful…”. My point is he wasn’t following the first part of the line.
http://www.analystforum.com/phorums/read.php?1,842795,page=1
Thread from October about going to cash or sitting things out for awhile…I feel bad for those who said it was such a stupid idea and watched their equities go from 9500 down to 8000 since. I know hindsight is 20/20, and have made plenty of mistakes in investing to not have hubris, but sometimes I think people sit back on a lot of dogma and dont think for themselves, relying on quotes or history without opening their eyes…just my view.
but this is exactly what i’m saying. there is bound to be a “correction” ala 1930 whereby institutional guys buy because they have no alternatives. because the market and the economy will seem to be doing better and the average joe is no longer scared, he will invest, but come 1931, things fall off and never look back. its okay to be bullish, but i would not be bullish for more than a year. just as its dumb to think that the market will increase 100% based on fundamentals, it is also dumb to think that the market will drop 89% within 9 months based on panic and deleveraging. the overall trend is down, starting in 2007 and and i believe it will take years to come down and hit a bottom. the natural flow of money.
Well, I’m actually pretty worried about inflation as I think there is so much liquidity being pumped into the system via global central banks and fiscal policies.
I think this will lead to another asset bubble and high inflation (the two are obviously correlated).
I think in the longer term, the equity markets are driven by macro events…and in this case I don’t see anything that has fundamentally changed about our longer term economic fundamentals. Living standards are still broadly stagnant in the developed world while rapidly growing in the largest developing nations. Global trade is still on the long term exploding. Our world is still becoming integrated and smarter in terms of the terms of production in the economy…this is in my mind a form of inherent leverage for the returns to capital.
There are things that could disturb this on a macroeconomic level, but I think in the short-medium term at least, the trend towards smarter economies, converging global living standards and a more integrated global economic and financial framework will only continue.
We’ve probably come to far this time for it to collapse the way it did after the market crash of 29. Perhaps in 20-30 yrs when today’s developing economies are tommorow’s economic powerhouses, we will see a rise in nationalist tension that will cause the global economic framework to collpase, and the potential for massive amounts of capital to be destroyed…but I just don’t see that as being in anyone’s interest in the forseeable future.
Told you, big picture, long term macro.
there’s the difference. i now call the once emerging markets, submerging markets and they will be until WE have the dough to invest in them. China is in rough shape. sure they have a workforce who is desperate and dying to work, but without our consumption, they have massive job losses. you’ll see their job losses lag ours and as our consumption dictates their employment and our consumption has only begun to drop. this goes for most other submerging economies.
its obvious they will grow and their standard of living will improve in the long-term, but you don’t make much money saying something will increase 100%, 20 years from now.
It’s meaningless to compare now to the 1930’s. In Q4 last year, GDP contracted .96% for the quarter. During the depression, it contracted 25% or more! Our output is actually higher now than at the beginning of the recession in October 2007, thanks to growth during the first half of 2008. I think it makes more sense to look at the markets this decade in the context of the 1965-1982 secular bear market than the 1930’s.
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