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Gary
Social climber
Where in the hell is Major Kong?
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Jan 13, 2016 - 05:43pm PT
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I'd say Fatty has succeeded very nicely, thank you very much. Not bad for a former cop!
That said I would give a tad more credence to Vanguard's beta, the link to which is a few
posts back.
IIRC, Fattrad advertised himself falsely as a CPA. What does that do for his credibility?y?
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ecflau
Gym climber
CA
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Jan 13, 2016 - 05:58pm PT
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how good are you are reading the future? ;)
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 13, 2016 - 06:05pm PT
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Studly, I hope you read the rest of the article and some of the sensible
comments. IIRC RBS doesn't have a sterling track record. Read Vanguard's
predictions which I provided a link for on the previous page; they have a
much better track record IMHO.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Jan 13, 2016 - 06:33pm PT
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Equity returns in the 6-8% range, eh Reilly. Still have faith in that outlook?
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Ken M
Mountain climber
Los Angeles, Ca
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Jan 13, 2016 - 07:09pm PT
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The stock market is not undergoing a correction.
It is being dragged down by China.
Absolutely nothing has changed in the US to impact stocks. So once the fear wears off, people who have cashed out (including the Chinese) will be looking for someplace to put their money.
Guess where?
To me, it looks like a good time to buy.
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SteveW
Trad climber
The state of confusion
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Jan 13, 2016 - 08:51pm PT
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Buy low.
Sell high.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 13, 2016 - 09:36pm PT
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Rick, Vanguard is predicting 4-6% equity returns and 2.5% bond returns
this year. I'll take that. China's problems aren't that bad and they seem
to have the cojones to deal with them fairly sanely. The other developing
nations, which fared so poorly in the late 90's, are in much better shape
now even if they are suffering a bit from the commodities deflation. Brasil
is in big trouble although we should still be able to get our orange juice
and coffee. Europe appears like they might put their big girl panties on
and inject some more life into the EU via 'QE' measures and the softening of
the Euro hasn't hurt, either. And BTW, cash inflows into various equities
were the highest in 6 months in the last week. It would seem the savvy
people do see this as a buying opportunity. This is the time it helps to
have done some scary runouts.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Jan 13, 2016 - 10:13pm PT
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How low steve, using the S&P as the metric?
Reilly, increased inflation of the bubble always happens before it pops. The markets are over valued, the consumers cautious with decreased disposable income, China doesn't have the market its machine needs to keep from stalling out, Europe is a failed socialist experiment that has tapped out their citizens money. The oil and mineral producing states from Africa to the Arctic are next to bankrupt.
I'll let you guys retro bolt the runouts before I venture out at this age. Unless Vanguard has supernatural managers I don't see how they'll manage that return.
I don't see the street running red with blood yet.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jan 13, 2016 - 10:30pm PT
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"The markets are over valued"
There is no Golden Rule that the historic 16/1 PE ratio is a given. It is
now around 18 but that may be the new reality and 15% isn't a bubble.
"China doesn't have the market"
In case you missed it China is rapidly becoming a more mature economy that
is less dependent on export manufacturing. Sure, it will have its hiccups
and all but it isn't on the brink. Yes, there is a real estate bubble there
but that isn't going to affect us that much.
"Europe is a failed socialist experiment"
The fat lady isn't even warming up to that tune yet. Portugal and Spain
have come back nicely. Greece was NBD. Italy is still facing its problems
but Renzi is a smart dude and is trying the right moves. France is OK and
Germany and England are more than OK. The ECB has made some good moves and
I think they will make some more.
" The oil and mineral producing states from Africa to the Arctic are next to bankrupt."
What else is new? Like that affects us? It will in the long run in that
their problems just make it easier for the Chinese to continue taking over
Africa as their commodity franchise.
" Unless Vanguard has supernatural managers I don't see how they'll manage that return."
They don't and they don't claim to which is why they make money the old
fashioned way - conservatively.
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Jeremy B.
climber
Northern California
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Jan 14, 2016 - 11:49am PT
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"There is something very wrong with the idea of betting against the stock market, don't you think?
Anti-investment?"
Only in the sense that reining in Joe McCarthy might have been viewed as un-American, or asking someone not to climb at Red Rock in the rain could be viewed as anti-climbing. In simple terms, price should reflect value, and whether you buy or sell should reflect a reasoned opinion about the relationship between the two. Don't confuse individual equity prices, or even those of the indexes, for the health of the markets themselves.
The purpose of the market is to enable efficient allocation of capital. When people forget that and fixate on the price levels, that no longer happens. Short-selling helps reduce that, and in the worst cases helps to lessen the damage. The people doing it may not be popular, but it's the same sort of unpopularity as a bartender might see when deciding someone's had quite enough to drink for the night. A market where prices get sufficiently divorced from reality is eventually going to leave a lot of people penniless.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Jan 15, 2016 - 07:23am PT
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Where is the bottom of this correction. Who here is the true seer.
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Dapper Dan
Trad climber
Redwood City
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Topic Author's Reply - Jan 15, 2016 - 08:01am PT
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Looks like we're headed to 15,000 territory today ....
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blahblah
Gym climber
Boulder
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Jan 15, 2016 - 08:40am PT
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Where is the bottom of this correction. Who here is the true seer.
We can all take a guess and then pretend that the person who happened to guess closest is the "true seer"--that's how the game is played I think.
I'll guess DJIA down to 15,500.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Jan 15, 2016 - 09:38am PT
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Is that your estimate of today's bottom Blah? In the future, say beyond u.s. market reopenings on tuesday, where will the support level come to rest? I want to buy in. Into conservatively run income producing funds, but I don't want to throw away capital dollars seeking dividend dimes.
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blahblah
Gym climber
Boulder
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Jan 15, 2016 - 10:03am PT
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Not that's my guess as to the bottom of this correction, i.e., I don't think it will go much lower.
But I'm probably very wrong!
I want to buy in. Into conservatively run income producing funds, but I don't want to throw away capital dollars seeking dividend dimes.
I'm not sure what you want is as easy to accomplish as you may think. Whenever you buy into equities, there's at least a reasonable chance the market will go down, and you're in some sense "throwing away" your capital. But on the other hand, remember you haven't really lost it until you sell, and if you're in it for the long term, a respectable view is that either markets will rise in the long term, or if they don't, we'll all have bigger problems than the markets.
You're really just trying to juice your returns with some market timing--probably nothing wrong with that, but whether you succeed is pretty much just gambling.
If I were looking to get into high-dividend equities, I'd probably look at this one:
https://personal.vanguard.com/us/funds/snapshot?FundId=0923&FundIntExt=INT
ETF's seem marginally better than mutual funds (not a big difference, but why not get an ETF?) and super low cost (.1%) as it's an index. But it's not low risk.
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John Duffield
Mountain climber
New York
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Jan 15, 2016 - 10:07am PT
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I'm guessing none of you, have ever been inside the NYSE. Except as tourists.
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Dapper Dan
Trad climber
Redwood City
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Topic Author's Reply - Mar 17, 2016 - 03:37pm PT
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Unbelievable , DOW has regained the 2,000 points it lost in 2016 , we're now in positive territory for the year...
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blahblah
Gym climber
Boulder
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Mar 17, 2016 - 03:53pm PT
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Look at my last 2 posts--I predicted the bottom of the latest correction with almost uncanny accuracy. (I didn't predict the speed of the rebound, but no one asked!)
And no, I've never been to the NYSE, not even as a tourist (and if/when I'm in NY, I hope I have better things to do with my time).
The only real big money investment guy I've known (other than old timers who were in it a long time ago) was a climber friend-of-a-friend who lived in NY--he was firmly of the belief that the "end was nigh" after the 2008 meltdown, and the only reasonable thing to do was liquidate whatever assets you could (and then do what, I don't know).
I shudder to think how much money the guy's clients lost (but who knows, his advice may have been sound with the information he had, just the world took a U-turn for whatever reason).
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Reilly
Mountain climber
The Other Monrovia- CA
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Mar 17, 2016 - 03:58pm PT
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Not unbelievable given the strength of the US economy, the fairly commendable
way the Chinese are dealing with their contraction, and somewhat hopeful
signs in the European markets. Questions still linger about the Chinese
real estate bubble, Greek banks, Brasil's deepening recession, and the
stagflation in Europe. Amazingly just today France reported a modest but
hopeful decline in unemployment. Didn't really see that coming. The Euro,
of course, has clawed back a nickel from the dollar just in time for my
reprise of the Griswold's vacation. That really doesn't help their battle
against stagflation and if I were a little more daring I would short the
Euro again as I really think Draghi has to get more aggressive.
As to the above question about ETF's vs mutual funds here is a good read
on what to be aware of:
http://www.investopedia.com/articles/exchangetradedfunds/11/worst-etf-misconceptions.asp
If yer in it for the long haul there isn't any advantage to ETF's and there
are some definite disadvantages.
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