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zBrown
Ice climber
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This is Reilly's accounting "team" on parade, but they ain't talking till after the audit.
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Reilly
Mountain climber
The Other Monrovia- CA
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I just saw a pic of my CPA’s new yacht. I might not be getting squat! 😬
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Jan 5, 2018 - 08:20pm PT
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For the first week of 2018, major U.S. stock indexes are up the most for any first week, since 2006.
Here's what stock-watcher Zacks has to say on the subject:
First Five Days
The "first five days" trend is like the January barometer but on a smaller scale. If the S&P; 500 finishes higher in the first five days of the year, there is an 86 percent chance the stock market will end the year higher, according to a "Wall Street Window" article written by Matt Rego in January 2012. Some analysts, including Mark Hulbert of Hulbert Financial Digest, claim investors would do better avoiding these trends altogether. In a January 2010 Market Watch article, Hulbert points out that investors scared off by a down January in 1982 would have missed the beginning of the greatest bull market in history: The markets gained 25 percent in the last 11 months of 1982.
https://finance.zacks.com/january-stock-market-trends-6977.html
Do you like the odds?
I note, after that great start to 2006, the S & P 500 ended up with a 15.1% gain for the year.
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surfstar
climber
Santa Barbara, CA
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I'll just summarize the thread for anyone just jumping in, like me:
Nobody knows nuthin'.
(that means stay the course. low-cost index funds FTW)
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Jan 5, 2018 - 10:48pm PT
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Surfstar! No arguement here, per your post:
I'll just summarize the thread for anyone just jumping in, like me:
Nobody knows nuthin'.
(that means stay the course. low-cost index funds FTW)
And the next stock market crash will happen very-soon, or not.
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Mungeclimber
Trad climber
Nothing creative to say
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Jan 11, 2018 - 06:13pm PT
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2018
Hedge time.
Cash ain't trash.
Opportunistic investing year.
Anyone watching the VIX?
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EdwardT
Trad climber
Retired
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Jan 12, 2018 - 08:12am PT
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The SP500 is pushing overbought prime/lines, selling at 26.5 earnings.
13 straight weeks with the investors intelligence survey bullish level over 60, which has never happened and the AAII survey bullish level at numbers not seen but twice since 2004.
The market is in need of pullback.
Is this the blow off top?
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 12, 2018 - 08:28am PT
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P/E ratios are not sacrosanct. This could be the new norm. All economic indicators other
than bond yield curves are strong. Europe is doing much better than it has for a long time.
The only potential shocks I see are geo-political, Italian debt, or Canadian housing bubble,
in descending order of likelihood and magnitude. Of course, if too many Norwegians suddenly
move to the US we could be in trouble, mainly due to a lack of fish balls for them to eat.
I just found another potential shock:
https://www.economist.com/news/briefing/21591164-getting-15-trillion-assets-single-risk-management-system-huge-achievement
I’m sure every major hacker in the world is drooling over this juicy target.
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Off White
climber
Tenino, WA
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Jan 12, 2018 - 11:53am PT
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I am divesting all my other investments to stock up on Gjetost for the coming Norweigan influx. I hear it's a better bet than Fish Balls.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 12, 2018 - 05:36pm PT
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Off White, fish balls keep longer, at least the tinned ones do. Those Norwegians might not
stay long so you don’t want to get stuck holding, ya know?
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 24, 2018 - 08:39am PT
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Good article in Forbes:
Is The Stock Market Overvalued?
Jan 24, 2018 @ 11:31 AM
There's a great debate on Wall Street regarding the stock market's valuation right now. The market has soared since the historic 2009 low. Additionally, this is now the longest period in history we have not had a 5% decline in the S&P 500. That is leading many people to question whether or not the market is overvalued as we make our way into 2018.
There are many different ways to determine valuation and, for the most part, they are mostly subjective. For the scope of this article, I will be using the most common metric: The P/E ratio. On one hand, the bears argue that the stock market is overvalued and the bulls believe valuations are justified and the market has more room to rally. Let's take a closer look:
Price/Earnings Ratio:
The most common way to measure valuation is to use the price/earnings ratio (often shortened to the P/E ratio or the PER). The P/E ratio ratio looks at price vs earnings. Typically, one would take a company's stock price and compare it to the company's earnings per share. For the broader indices, one can take the average earnings of the components within the index to calculate the earnings side of the equation and compare it to the price.
Forward And Trailing:
The next step investors look at is to analyze forward and/or trailing earnings. Each has a different outcome. Currently, the market’s forward P/E ratio is above 19X. According to Factset, earnings growth remains strong, especially after the tax reform bill passed in December 2017.
What The Pros Are Saying:
Hedge fund billionaire, Leon Cooperman told CNBC that the stock market is not overvalued yet. Cooperman said the market is "reasonably fully valued" and because rates are low, valuations are justified here. I spoke to other portfolio managers and here is what they said:
Chad D. Roope, CFA Portfolio Manager – Fundamentum A Division of Stratos Wealth Partners, believes the market is not overvalued. He told me, "With approximately $10 in additional earnings from tax reform, the S&P 500 is trading around 18 times forward earnings. Close to where we entered 2017 (approx. 17x). While earnings are less of a concern to us currently, what investors eventually pay for these earnings is a bigger concern, especially if inflationary pressures increase. A loss of a modest 1 multiple point due to inflation concerns is an approximate 6% hit to equities alone. Without the onset of inflation, we’d expect equities to hold the multiple it has entering the year which could make 2018 another outstanding year for equity investors given the expected earnings growth. "
James D. Hiles, ChFC and Partner, at First Capital Advisors Group, made a great point about historic P/E levels. He told me via email, "There are more high-growth stocks in the S&P 500 than ever before and that given the tectonic shift from tangible assets on corporate balance sheets, to intangible assets, by definition P/E ratios should be higher than the historic norm. Also, if you take the S&P 500’s average P/E starting in 1990 through January of this year it is 23.85x. Currently the S&P is trading at around 18.6x forward earnings. We would also note that four companies dominate the S&P 500, accounting for 10% of the index, and trade at an average P/E of ~29x earnings skewing the P/E to the higher side."
Not everyone is bullish. Sarah L. Jones, CIO, The Pintin Group, a private family office in Europe, is worried that the market is overvalued and the bullish trade is a crowded trade. Sarah believes that valuations are stretched and is concerned that the bullish stock market trade is getting "very crowded."
Remember, In Bull Markets, Surprises Happen To The Upside:
If you go back and study history, this market is fully valued but not egregiously overvalued.
I would be remiss not to note that in bull markets (present market included), surprises happen to the upside, not the downside. So, just because the market is not "cheap" right now, doesn't mean it can't continue to rally.
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dirtbag
climber
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Jan 24, 2018 - 08:52am PT
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The markets have gone up roughly 50% since July 2015. That’s a ton of growth for such a short period. Irrational exuberance? Maybe a bit.
I’m beginning to unwind from the markets somewhat, and not be too greedy. I’d rather pull out too soon than too late.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 24, 2018 - 09:22am PT
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Yes, Dirt, I started cutting back on equities over a year ago. I’m now at about 52%. Even if there is a significant correction I think I’ll live long enough to ride it out. If not then it doesn’t matter - I ain’t takin’ it with me. The Audubon Society could be very happy.
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Jan 24, 2018 - 05:11pm PT
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It's been one hellava January in the U.S. stock market.
The stock market is having its best start to year in more than three decades. Based on historical evidence, that spells even more gains for the rest of 2018.
When the S&P 500 posts a return of at least 5 percent by Jan. 23, the index's median return for the rest of the year has been 11.6 percent, according to Bespoke Investment Group.
"With a 6.1 percent year to date gain and just three down days in the fifteen trading days of 2018, nothing can seemingly stop this market in 2018," the firm's analysts wrote Wednesday.
The S&P 500 has already rallied 6.2 percent in January, posting only three down days and clinching its strongest showing since 1987. The Dow Jones industrial average is also having a banner start, closing above 26,000 one week ago as equities rocket even higher.
The S&P and Dow both notched all-time highs Wednesday morning before surrendering much of their gains.
"The history is pretty good for years where the first week starts off strong and the first month starts off strong," said Art Hogan, chief market strategist at B. Riley FBR. "It's hard to argue that the [stock] drivers are not going to be persistent: Synchronized global economic growth seems to be continuing, better than expected earnings … and we're also finding out how much corporate America's effective tax rates are coming down."
http://www.msn.com/en-us/money/markets/stocks-off-to-best-start-in-31-years-boding-well-for-2018/ar-AAv7ynF?li=BBnbfcL&pfr=1
So------we're on the train from Las Vegas to Los Angeles. Do you want to get off in Barstow? Stay invested!
And, sure as Schist, there will be another "10% to 20% Correction ------sometime.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 24, 2018 - 07:48pm PT
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Funny we haven’t heard from Kingtut about our kneecaps lately, huh?
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 24, 2018 - 10:35pm PT
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The bond yield curve is a metric just like P/E ratios. Neither are causative but do hold
associative value. Shocks cause pullbacks, or worse. The only likely shock would be
geo-political which, of course, would cause economic shocks which, of course create
buying opportunities. Let them eat cake.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 25, 2018 - 09:32am PT
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frostie, if yer counting on yer portfolio for retirement and yer under 50 you’d be foolish to cut
back so drastically. My $.02.
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Brian in SLC
Social climber
Salt Lake City, UT
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Ugh...9-12 months at least?
What should we be looking for?
What are signs of a "melt up"?
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Mungeclimber
Trad climber
Nothing creative to say
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structurally, is there a reason to divest? Doubt it. World is not ending.
But dividend stocks over value, yes.
"The sell-off followed a spike in yields"
I would like to understand this better?
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john hansen
climber
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I am glad I shifted 6% to cash earlier this month.
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