Is anyone still bullish equities?

I was surprised how quickly this became apparent during August of 2011. The US was in a recession and Europe had a debt problem and it seemed like everyone knew that. The market was fine. Then all’a sudden everyone was like “WOAH, THE US IS IN A RECESSION AND EUROPE HAS A DEBT PROBLEM” and there was a rush for the doors. It was pretty impressive, actually.

stock look overbought in my view. The 10y PE is high (see http://www.multpl.com/) and the dividend yields are low (http://www.multpl.com/s-p-500-dividend-yield/) at 1.94 they are equal to the 10y treasuries (no premium? no thanks)

definitely not easy to find bargains right now…guess we better do some real work…

The S&P has been addicted to Fed actions since the 2008 decline. First QE1 and a rally, then the big decline almost as soon as QE1 ended. 4-5 month of sideways trading then QE2. Market rallies again, QE2 ends and the market declines sharply, finds a new level and trades sideways. Then we get Operation Twist (followed by slight rally) then LTRO and we are in the midst of this current rally. The Fed’s current program is scheduled to end in June, and without more intervention I think we will likely see another “risk off” scenario.

Looking at it from a longer time perspective, I find the below pattern interesting. Maybe we are looking at 2006 right now (given how 2012 has started off), then slowing, late cycle market next year, then the next true recession.

2013 2012 2011 2010 2009 2008

??? ??? 2.11% 15.1% 26.5% -37%

2007 2006 2005 2004 2003 2002

5.5% 15.8% 4.9% 10.9% 28.7% -22.1%

Short in June with Operation Twist ends. Go long when they announce the next QE-type program…probably around August.

I’ll throw my 2cents in. I think without a better place to go, equities will continue to go up for the rest of the summer and probably for the year.

If there is no QE program past twist whatsoever, then I’d bet on a pullback. Obviously if Europe gets bad it will pull back.

I don’t really trade outside of what I know well (medical devices) and even then I’m selective to what companies I know fairly well. Thus I only focus on fundamentals. I’ve made some decent gains this year. Any of the losses were in sub-sectors I don’t know as well (ex/ healthcare IT, biotech).

What’s interesting about the above stats is that it equates to less than 3% annual growth. There is certainly $$ to be made in the equity markets if you do your homework, but there’s a heck of a lot of volatility (i.e. stress) for such lousy returns for the average Joe socking away his savings.

Well, performance numbers are always start and end period dependent. Given how well bonds have done over the trailing 10 or 15 years, I would be biased towards equities for the next 15.

On another topic, anybody else sick of the boomers who benefited from the greatest secular stock market rise in US history during the 90s complaining now? Just checked quick, from 1992 to 2002 the S&P 500 returned 9.2% annualized. From 2003 to the end of March 2012 it returned 7.4%. From 1992 to the end of March 2012 returns are around 8%. It’s not my fault you moved to bonds at the bottom, didn’t save enough, withdrew money, etc. That is why for most people it is best to “set it and forget it”, which is what I advocate for most peole until they are within 5-7 years of retirement.

Everyone complains. San Jose policemen complain about retiring at 50 with only a 90% pension. College students complain about being unemployed despite majoring in Anthropology. US retirees complain about low COL increases in Social Security despite being already better off than 99% of people in the world. Investment bankers in 2011 complain about only making $300k, making it hard to make payments on their $2 million house.

And so on.

Well, I do think that retirees that voted themselves a ton of entitlements as well as a ton of tax cuts, while enjoying 20-30 years of a bull market in bonds, stocks, and housing, don’t get to complain too much that their golden years don’t get to look like the last 30. It’s a bit like a diner ordering the best meals, the best wine, and the most flamboyant desserts, then getting all miffed when the final bill comes and it turns out to be big. “What??? I thought I could keep eating forever!”

“Just have the next guest pay it,” they say. We’re too full to reach for our wallets. Those young’uns look hungry, so they’ll pay.

We shouldn’t forget, though, that the boomers did have some hard times and did contribute to society. Civil rights in the 50s and 60s; Vietnam (for better or worse) in the 1960s and 70s. Inflation in the 1970s and early 80s. But they had plenty of good times too, plus a substantially longer lifespan than their parents.

I feel for them, but not as much as I feel for Gen X, Gen Y/Millenials.

Just buy the dip idiot! I love these videos…

http://www.zerohedge.com/news/btfd

Any of you guys own Coal MLPs? Not a sexy industry but damn prices are depressed here.

Palantir, let me know if you working on initiating a position in Lowes…

Prices are depressed because no new coal plants are being built.

Yeah, I’m definitely looking at it pretty seriously, I just don’t know enuf abt insurance firms to analyze it well. might have to follow this company for longer.

the insurance i can do…already did, isn’t too great…i can handle insurance…CNA Financial trades on its own too…

its those pipelines and nat gas related assets i can’t deal with…