The US stock market is gonna go pop
Discussion
WayOutWest said:
It is a good article, and the 10 year view is not far off what Vanguard and GMO and some others are saying.
He isn't predicting a sudden crash necessarily but a resumption of last years bear market which only really got to "Fear" on the emotional cycle graph but not really "Desperation" let alone "Panic" or "Capitulation" like 2009.
You don't have to sit in cash waiting anyway, there is a whole world of investing outside of the S&P500, which is the point. Why buy the most overvalued market at the worst time when you can make just as much with bonds over the next decade.
Shirley markets always go to panic and desperation as it’s a bag holder scenario.He isn't predicting a sudden crash necessarily but a resumption of last years bear market which only really got to "Fear" on the emotional cycle graph but not really "Desperation" let alone "Panic" or "Capitulation" like 2009.
You don't have to sit in cash waiting anyway, there is a whole world of investing outside of the S&P500, which is the point. Why buy the most overvalued market at the worst time when you can make just as much with bonds over the next decade.
And bonds are great but if inflation stays hot and rates and yields rise further, who wants to hold those guaranteed losses vs cash in bank?
You won’t be able to redeem early, only sell at a loss.
I don’t see an orderly revaluation. I see panic, at some point.
Joey Deacon said:
Exactly, according to Plus 500 "CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money."
How do you think the minority on the stock market get rich, from the 84% of people who have lost before they have even began.
Even groups like wallstreetbets and the whole GameStop thing, I bet the majority of them lost money in the long run.
That's nothing to do with skewing markets or loading the deck against the little man. It's all to do with education and knowing your limits. CFDs are NOT complex instruments. If you don't understand the product don't trade it. But Greed takes over. If you trade off ignorance and greed, arguably you could be considered fair game.How do you think the minority on the stock market get rich, from the 84% of people who have lost before they have even began.
Even groups like wallstreetbets and the whole GameStop thing, I bet the majority of them lost money in the long run.
My personal view is most instruments beyond savings accounts and possibly just about Govt debt are beyond the comprehension of most people, ergo completely not appropriate. I suppose vanilla equities squeeze in, but trading off leverage or margin isn't appropriate for most.
What's weird, if you know a bit you can see that. And probably set appropriate limits. But the real sucker product is Money Market Funds. Instant access, yeah alright. Wait to the next stress event when the gates come down.
News today:
1310 GMT - There is potential for U.K. gilts to rally further if the labour market and inflation data due to be published on Tuesday and Wednesday respectively show easing inflationary pressure and a less tight labor market,
So... as an individual how do you process that information.?
1310 GMT - There is potential for U.K. gilts to rally further if the labour market and inflation data due to be published on Tuesday and Wednesday respectively show easing inflationary pressure and a less tight labor market,
So... as an individual how do you process that information.?
By ignoring it. Honestly, trying to trade based on whatever spurious explanation the article's writer is trying to put forward is usually a fool's errand. Buy diversified ETFs and get on with your life.
In the instance you've quoted we can learn that the price of gilts may go up, or go down. Which I can hardly argue with, but I'm not about to trade off it.
In the instance you've quoted we can learn that the price of gilts may go up, or go down. Which I can hardly argue with, but I'm not about to trade off it.
BobToc said:
By ignoring it. Honestly, trying to trade based on whatever spurious explanation the article's writer is trying to put forward is usually a fool's errand. Buy diversified ETFs and get on with your life.
In the instance you've quoted we can learn that the price of gilts may go up, or go down. Which I can hardly argue with, but I'm not about to trade off it.
My thoughts as well.In the instance you've quoted we can learn that the price of gilts may go up, or go down. Which I can hardly argue with, but I'm not about to trade off it.
Sometimes I wonder about all the time punters put into ‘research’ and wonder whether they’d get better results focusing on improving their job income.
I reckon that you would have to add at least a few percentage points to performance over the trackers to break the equivalent of minimum wage. And that’s with a fair sized portfolio. Fair enough if it’s a hobby I guess.
Mr Whippy said:
WayOutWest said:
It is a good article, and the 10 year view is not far off what Vanguard and GMO and some others are saying.
He isn't predicting a sudden crash necessarily but a resumption of last years bear market which only really got to "Fear" on the emotional cycle graph but not really "Desperation" let alone "Panic" or "Capitulation" like 2009.
You don't have to sit in cash waiting anyway, there is a whole world of investing outside of the S&P500, which is the point. Why buy the most overvalued market at the worst time when you can make just as much with bonds over the next decade.
Shirley markets always go to panic and desperation as it’s a bag holder scenario.He isn't predicting a sudden crash necessarily but a resumption of last years bear market which only really got to "Fear" on the emotional cycle graph but not really "Desperation" let alone "Panic" or "Capitulation" like 2009.
You don't have to sit in cash waiting anyway, there is a whole world of investing outside of the S&P500, which is the point. Why buy the most overvalued market at the worst time when you can make just as much with bonds over the next decade.
And bonds are great but if inflation stays hot and rates and yields rise further, who wants to hold those guaranteed losses vs cash in bank?
You won’t be able to redeem early, only sell at a loss.
I don’t see an orderly revaluation. I see panic, at some point.
Here are two more made recently for the FTSE100 and 250 - and the 250 in particular looks rosy
https://www.ukdividendstocks.com/blog/ftse-100-cap...
https://www.ukdividendstocks.com/blog/ftse-250-cap...
So not a bad argument to have some decent exposure to those two indices, or just a FTSE All Share tracker. Plus some in a diversified bunch of bonds and the rest in cash - especially if you can get 4% plus on it. That whole combination is likely to give you a much better risk adjusted return over the next decade. I agree with you on inflation - who knows where it could go. Which is why I prefer shorter duration to longer duration bonds.
There isn't a need to sink everything into the S&P500 and wait 20-30 years to be proven right. Yes, in the long run it will probably win out, but your time horizon may not be 20-30 years, and you get virtually no dividends in the meantime on the S&P500 (about 1.5%).
Edited by WayOutWest on Monday 13th February 17:57
BobToc said:
By ignoring it. Honestly, trying to trade based on whatever spurious explanation the article's writer is trying to put forward is usually a fool's errand. Buy diversified ETFs and get on with your life.
In the instance you've quoted we can learn that the price of gilts may go up, or go down. Which I can hardly argue with, but I'm not about to trade off it.
Since there is no source, you actually can't infer the writers expertise or bias... buying diversified ETFs is for punters who need protecting, not people who know what they are doing. In the instance you've quoted we can learn that the price of gilts may go up, or go down. Which I can hardly argue with, but I'm not about to trade off it.
Until those inflation and job prints land, you can only look at what the market is future pricing. That won't be available to everyone, but your quote is interesting... you only pick winners off the back of news articles, not your own research????
gotoPzero said:
Numbers are slightly higher than expected but nothing crazy. Seems like things are going in the direction that the FED wants.
But some of the big players are still doing tough things housing still up 0.7%.
Markets are liking the numbers so far.
The reason the market is taking these numbers well despite the higher core than consensus and upward revision to the previous months data is, despite shelter rising 0.7%, core services ex shelter fell to 0,286% from 0,369%.But some of the big players are still doing tough things housing still up 0.7%.
Markets are liking the numbers so far.
This has previously been mentioned by J Powell as a sector he is concerned about.
Thought you might like a littel colour!
clubsport said:
The reason the market is taking these numbers well despite the higher core than consensus and upward revision to the previous months data is, despite shelter rising 0.7%, core services ex shelter fell to 0,286% from 0,369%.
This has previously been mentioned by J Powell as a sector he is concerned about.
Interesting, thanks clubsportThis has previously been mentioned by J Powell as a sector he is concerned about.
Do you have any personal thoughts on the direction of the US stock market (apart from up and down lol) over the course of the next 6-12 months? I was listening to something earlier which said the "consumer might be starting to roll over" or in other words the resilience of the consumer to keep spending might just now be starting to feel the bite of previous rate hikes = what the Fed is doing is working, but companies (earnings) are yet to react / reprice
Phooey said:
clubsport said:
The reason the market is taking these numbers well despite the higher core than consensus and upward revision to the previous months data is, despite shelter rising 0.7%, core services ex shelter fell to 0,286% from 0,369%.
This has previously been mentioned by J Powell as a sector he is concerned about.
Interesting, thanks clubsportThis has previously been mentioned by J Powell as a sector he is concerned about.
Do you have any personal thoughts on the direction of the US stock market (apart from up and down lol) over the course of the next 6-12 months? I was listening to something earlier which said the "consumer might be starting to roll over" or in other words the resilience of the consumer to keep spending might just now be starting to feel the bite of previous rate hikes = what the Fed is doing is working, but companies (earnings) are yet to react / reprice
It's never easy, but fed rate moves used to take 12-18 months to have a full effect, now we have the unwinding of the mega balance sheet to consider, so that should not be forgotten?
So the next 6 - 12 months is difficult,,, if you are "investing" over a 5+ year term, keep dripping the monthlies to average in.
On the earnings front, they are are showing some weakness, you need to watch the front end of the bond market cheapening (increasing in yield) to make the stock market look (relatively) expensive for any buying opportunities.
One thing that has been clear and unusual since the sell off in October is that we didn't have a rout, in previous cyce lows, you normally get a point where sellers capitulate (fear) and the market recovers....... we haven't had that yet...... it;'s not a definite that it happens either! More an observation to play if it does occur?
I personally feel there will be better opportunities to buy in the next 6 months then today, particularly as Powell has mentioned Volkers mantra of "Keeping at it" in the fight against inflation, but you won't necessarily know that until ex post.
Good luck!
clubsport said:
Sorry, bad typing that should be 0.286%.. no commas!
It's never easy, but fed rate moves used to take 12-18 months to have a full effect, now we have the unwinding of the mega balance sheet to consider, so that should not be forgotten?
So the next 6 - 12 months is difficult,,, if you are "investing" over a 5+ year term, keep dripping the monthlies to average in.
On the earnings front, they are are showing some weakness, you need to watch the front end of the bond market cheapening (increasing in yield) to make the stock market look (relatively) expensive for any buying opportunities.
One thing that has been clear and unusual since the sell off in October is that we didn't have a rout, in previous cyce lows, you normally get a point where sellers capitulate (fear) and the market recovers....... we haven't had that yet...... it;'s not a definite that it happens either! More an observation to play if it does occur?
I personally feel there will be better opportunities to buy in the next 6 months then today, particularly as Powell has mentioned Volkers mantra of "Keeping at it" in the fight against inflation, but you won't necessarily know that until ex post.
Good luck!
Thanks for the insight It's never easy, but fed rate moves used to take 12-18 months to have a full effect, now we have the unwinding of the mega balance sheet to consider, so that should not be forgotten?
So the next 6 - 12 months is difficult,,, if you are "investing" over a 5+ year term, keep dripping the monthlies to average in.
On the earnings front, they are are showing some weakness, you need to watch the front end of the bond market cheapening (increasing in yield) to make the stock market look (relatively) expensive for any buying opportunities.
One thing that has been clear and unusual since the sell off in October is that we didn't have a rout, in previous cyce lows, you normally get a point where sellers capitulate (fear) and the market recovers....... we haven't had that yet...... it;'s not a definite that it happens either! More an observation to play if it does occur?
I personally feel there will be better opportunities to buy in the next 6 months then today, particularly as Powell has mentioned Volkers mantra of "Keeping at it" in the fight against inflation, but you won't necessarily know that until ex post.
Good luck!
keep hearing the mentions of "yields" and occasionally follow this guy (below) but have to admit most of his tweets are far beyond my qualifications
Phooey said:
Or it might not. But either way an interesting read on the CAPE valuation and forecast from this author https://www.ukdividendstocks.com/blog/sp500-cape-v...
My 2p amateur opinion is it still feels like money is chasing the short-term Fed optimism rather than the medium-to-longer-term earning fundamentals
Thoughts?
The key is to follow Step 1 before spending time on Step 2, the actual analysis of the content. My 2p amateur opinion is it still feels like money is chasing the short-term Fed optimism rather than the medium-to-longer-term earning fundamentals
Thoughts?
Step 1 being to establish a reason for the post to exist.
The URL is the first clue. It clearly explains that this is a website specifically targeting the retail
Investor.
Now read the website from the bottom up. There's no charity number so that rules out altruism. And there's no FCA number so that rules out broking fees or broker payments.
It's a well structured website so it must be selling something.
It has a newsletter. Signing up to that would reveal what it is selling and companies house will tell us how many people are buying. It'll also usually tell you the name of the salesmen which can sometimes be used to see what they've sold in the past.
Anyway, we can see one of the things he is selling. A portfolio management system. I'll hesitate to say investment as he talks about active management so I would surmise the following:
He is using the allure of dividend yields to sell a trading system to British, male, over 55s.
And the central medium by which to do that is fear and cognitive bias. That target demographic is paranoid about things crashing so your marketing posts will talk about things crashing.
At which point, after that brief analysis I would return to Reuters or Bloomberg for content.
DonkeyApple said:
Phooey said:
Or it might not. But either way an interesting read on the CAPE valuation and forecast from this author https://www.ukdividendstocks.com/blog/sp500-cape-v...
My 2p amateur opinion is it still feels like money is chasing the short-term Fed optimism rather than the medium-to-longer-term earning fundamentals
Thoughts?
The key is to follow Step 1 before spending time on Step 2, the actual analysis of the content. My 2p amateur opinion is it still feels like money is chasing the short-term Fed optimism rather than the medium-to-longer-term earning fundamentals
Thoughts?
Step 1 being to establish a reason for the post to exist.
The URL is the first clue. It clearly explains that this is a website specifically targeting the retail
Investor.
Now read the website from the bottom up. There's no charity number so that rules out altruism. And there's no FCA number so that rules out broking fees or broker payments.
It's a well structured website so it must be selling something.
It has a newsletter. Signing up to that would reveal what it is selling and companies house will tell us how many people are buying. It'll also usually tell you the name of the salesmen which can sometimes be used to see what they've sold in the past.
Anyway, we can see one of the things he is selling. A portfolio management system. I'll hesitate to say investment as he talks about active management so I would surmise the following:
He is using the allure of dividend yields to sell a trading system to British, male, over 55s.
And the central medium by which to do that is fear and cognitive bias. That target demographic is paranoid about things crashing so your marketing posts will talk about things crashing.
At which point, after that brief analysis I would return to Reuters or Bloomberg for content.
"My name is John Kingham and I'm an ex-engineer (mechanical and software) turned full-time investor, blogger and newsletter
Seeking Alpha is okay especially as they were doing the premium for $39.99 for a year, it renews at more but easy to cancel, plenty of content and up to date news releases but caution must be exercised on all articles and replies.
Bloomberg is good often free with a brokerage account but best of all is Youtube, Bloomberg, CNBC, Yahoo finance interviews with "proper" bank and investment people, stay away from listening to CNBC roundtable contributors as it's a hot bed of confirmation bias.
The other day I listened to a couple of interviews with Wei Li , the Global chief investment strategist at Blackrock, before anyone shouts that these people can't know the future, I get it but she has over 100 analysts working for her and sight of inflows etc.
There's always interviews with Goldman, Bank of America, JP Morgan etc
I listen to various technical strategists and to be honest I have to steel myself from pre-judging them but in short term moves they can be insightful but I am not sure that a "cup and saucer" retracement from a trend line is something for a medium term investor
On the other hand, 200 day moving averages are actually something that affects stock prices as lots of money managers watch them.
Do not even consider the likes of Motley Fool or to be fair the marketplace on Seeking Alpha, on the Motley fool, you would have been better off buying a Nasdaq ETF both upside and downside than their so called Tech picks, it now amounts to about 70 stocks.
Stock Gumshoe is okay and cheap and I think he is one of the few honest people, the idea is he deciphers tip sheet tips and offers comment but I never found a tradeable idea for me and didn't renew as it's more information overload.
Bloomberg is good often free with a brokerage account but best of all is Youtube, Bloomberg, CNBC, Yahoo finance interviews with "proper" bank and investment people, stay away from listening to CNBC roundtable contributors as it's a hot bed of confirmation bias.
The other day I listened to a couple of interviews with Wei Li , the Global chief investment strategist at Blackrock, before anyone shouts that these people can't know the future, I get it but she has over 100 analysts working for her and sight of inflows etc.
There's always interviews with Goldman, Bank of America, JP Morgan etc
I listen to various technical strategists and to be honest I have to steel myself from pre-judging them but in short term moves they can be insightful but I am not sure that a "cup and saucer" retracement from a trend line is something for a medium term investor
On the other hand, 200 day moving averages are actually something that affects stock prices as lots of money managers watch them.
Do not even consider the likes of Motley Fool or to be fair the marketplace on Seeking Alpha, on the Motley fool, you would have been better off buying a Nasdaq ETF both upside and downside than their so called Tech picks, it now amounts to about 70 stocks.
Stock Gumshoe is okay and cheap and I think he is one of the few honest people, the idea is he deciphers tip sheet tips and offers comment but I never found a tradeable idea for me and didn't renew as it's more information overload.
The new game in town, at least this year seems to be massive increase in flows on 0DTE options (zero days to expiry).
Yesterday, after the market spent most of the day taking the higher than expected PPi inflation data on the chin, the huge flows into near strike S&P puts in the last 1.5 hours of the day led to gamma hedging (greeks is a the language of the options formula) of the index pushing it down heavily into the closing bell!
This works both ways, the market has traded up into the close on strong data fueled by these on the day options, just a heads up that we should continue to see more volatility in stocks....too much volatility could lead to a liquidity problem where the market cannot function as we saw in 2018, that may or may not happen?
Yesterday, after the market spent most of the day taking the higher than expected PPi inflation data on the chin, the huge flows into near strike S&P puts in the last 1.5 hours of the day led to gamma hedging (greeks is a the language of the options formula) of the index pushing it down heavily into the closing bell!
This works both ways, the market has traded up into the close on strong data fueled by these on the day options, just a heads up that we should continue to see more volatility in stocks....too much volatility could lead to a liquidity problem where the market cannot function as we saw in 2018, that may or may not happen?
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