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Post by djAdvocate on Jan 26, 2014 0:34:34 GMT -5
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djAdvocate
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Post by djAdvocate on Jan 26, 2014 0:38:00 GMT -5
on the other side of the coin, consumer sentiment is at a 6 year high. so i really don't know what to make of this data.....
any guesses?
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Value Buy
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Post by Value Buy on Jan 26, 2014 21:53:20 GMT -5
I see the data is six months old. It would be interesting to see where it ended up at the end of December.
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Post by grits on Jan 26, 2014 21:54:51 GMT -5
In the past, when consumer sentiment reached an all time high, it was time to fasten your seat belt. I have read more than one article lately about the market being over-bought. We could rock on like this for a while or we could be in for a ride.
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djAdvocate
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Post by djAdvocate on Jan 26, 2014 23:51:23 GMT -5
I see the data is six months old. It would be interesting to see where it ended up at the end of December. right you are!
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grits
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Post by grits on Jan 27, 2014 0:01:25 GMT -5
I know you put yourself through college pole dancing. Do you still do it for the fun of it?
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djAdvocate
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Post by djAdvocate on Jan 27, 2014 10:36:43 GMT -5
I know you put yourself through college pole dancing. Do you still do it for the fun of it? i put myself through college using my investments, actually.
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Lizard King
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Post by Lizard King on Jan 27, 2014 11:16:54 GMT -5
What happened in Q1 that set the fundamentals on such a pronounced opposite course in Q2?
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djAdvocate
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Post by djAdvocate on Jan 27, 2014 12:21:32 GMT -5
What happened in Q1 that set the fundamentals on such a pronounced opposite course in Q2? i am not sure what they are watching to compile "macro2".
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beenherebefore
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Post by beenherebefore on Jan 28, 2014 18:13:49 GMT -5
I've never been much of a market timer but do think that we're in for a major correction.
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Post by billisonboard on Jan 28, 2014 18:58:54 GMT -5
... in for a major correction. That is such an interesting term. "By the summer of 1945, Truman felt that Japan was due for a major correction."
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beenherebefore
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Post by beenherebefore on Jan 28, 2014 19:07:49 GMT -5
Yes, but Mr. Truman made it so. No?
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djAdvocate
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Post by djAdvocate on Feb 3, 2014 20:35:58 GMT -5
-6% so far.
that's a good start.....
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Post by Value Buy on Feb 4, 2014 9:29:03 GMT -5
This sell off is a two pronged attack. The tapering has scared professional traders. They know the stock markets are up due to all of the free money. That gravy train is done. The emerging markets are the other prong. The Fed's zero money policy probably helped their economies more than America's. With the easy money drying up, many currencies and their home banks are in trouble. As the emerging markets fall, it causes hick ups for our markets here, and becomes an ever increasing sell off. Look at Japan this morning. Down rather heavy overnight. We either follow suit, or hopefully, break the cycle and have a small positive gain today. If we do not, we could be in for a rough week. Regardless, I actually believe we are in a correction, but by April we will be going up and closing the year with a 7 to 10% gain for the year.
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 10:23:00 GMT -5
10% is a "correction", correct? i think it is 20%, but CORRECT me if i'm wrong..... I'll be happy if that is all we lose on this dip. My totally unprofessional observation is that whenever we start to see 200- 400 point swings in a day we are in for some rocky sledding on the market. Also, people have been parking money in stocks because there has been no other place they've seen as attractive to put it- even if it does create some over-valued stocks. Wall Street and Main Street often don't converge. I don't see other economic headwinds plaguing the "regular" economy at the moment, other than winter conditions. Maybe the market is just due for a deceleration as the rest of the economy comes back? Doubt me. Always. I'm NOT Cramer, and I don't work for CNN. i doubt Cramer a lot.
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 10:25:12 GMT -5
This sell off is a two pronged attack. The tapering has scared professional traders. They know the stock markets are up due to all of the free money. That gravy train is done. The emerging markets are the other prong. The Fed's zero money policy probably helped their economies more than America's. With the easy money drying up, many currencies and their home banks are in trouble. As the emerging markets fall, it causes hick ups for our markets here, and becomes an ever increasing sell off. Look at Japan this morning. Down rather heavy overnight. We either follow suit, or hopefully, break the cycle and have a small positive gain today. If we do not, we could be in for a rough week. Regardless, I actually believe we are in a correction, but by April we will be going up and closing the year with a 7 to 10% gain for the year. that's possible. but keep in mind that a secular bear has rarely (never?) ended with S&P500 PE of over 10. it is currently 18.6
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Post by Deleted on Feb 4, 2014 10:26:38 GMT -5
I've never been much of a market timer but do think that we're in for a major correction. maybe another 3-5% on top of what has already happened i have been waiting for this for over a year..... i have bought a few shares....but mostly kept all dividends and new money in cash i have ammunition....waiting on kmart blue light specials i almost hear the bell ringing.....
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Post by Deleted on Feb 4, 2014 10:31:08 GMT -5
This sell off is a two pronged attack. The tapering has scared professional traders. They know the stock markets are up due to all of the free money. That gravy train is done. The emerging markets are the other prong. The Fed's zero money policy probably helped their economies more than America's. With the easy money drying up, many currencies and their home banks are in trouble. As the emerging markets fall, it causes hick ups for our markets here, and becomes an ever increasing sell off. Look at Japan this morning. Down rather heavy overnight. We either follow suit, or hopefully, break the cycle and have a small positive gain today. If we do not, we could be in for a rough week. Regardless, I actually believe we are in a correction, but by April we will be going up and closing the year with a 7 to 10% gain for the year. my number is very close to yours the dow will NOT do as well as the s&p 500 a couple of equities will really hurt that index be very careful of banks, autos, and technology health care and construction will do well later in the year
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 10:37:29 GMT -5
my prediction: SP500 doesn't break 2000 until 2015 at earliest, 2020 at latest, and we go a lot lower than this.
the SP500 would be "well valued" in terms of a secular bear market at 1000. do i think it is going there? doubtful. but what that means is several years of decline coupled with decent earnings. imo.......
i am really worried about the number of economic turns in the money supply, which has been falling for well over a decade. that is probably due to the fact that there is way too much supply.....but i digress.....
edit: some historical perspective on that PE number: other than a couple of years in the 1890's (no kidding), PE's were NEVER above 23 at market peak. that all changed in the 90's. current PE of 19 is quite high by historical standards. were it not for the fact that interest rates are so low, it would be an outrageous price to pay for stocks. therefore, the only ingredient needed to crash the market is the return of normal returns on fixed income securities.
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Post by djAdvocate on Feb 4, 2014 11:46:26 GMT -5
PE is what a probably distrust the most about public companies. I just can't justify 20 or better in my own mind. that is a really high price to pay for a stock, imo. have you ever done a corporate valuation? i have. it came in @ about 2-3x earnings + equity. that is a good value. when Buffett goes shopping for companies, he looks to buy them for 0x earnings + equity. that is a real bargain. 20x earnings is a joke, not a value. this market is highly speculative, imo. it could lose 25% tomorrow and still be speculative.
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Post by Deleted on Feb 4, 2014 13:30:52 GMT -5
2-5x time earnings may work in some businesses, not in others
for instance
try to buy a Lexus retail dealership....you will pay 7-11 times earnings + assets
same for some of the other luxury brands ie mercedes, bmw, etc
the fastest rising multiple belongs to hyundai stores.....has gone from a 3-4 eight years ago to 10-12 now
and as far valuing companies....it depends on a LOT of factors
growth rate margin rate
you will pay a lot more for a company with expanding multiples in margins that is growing at 20% a year, than a company like sears or jc penny's where they are closing stores
i have a number of blue chip companies that are around 12-14x pe
i have zero issue with their valuation.....
some companies are the new "hot thing" and everyone bids them up.....
sometimes that is warranted (google, apple)
sometimes it isnt, and the price eventually comes crashing back to earth
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 14:08:51 GMT -5
2-5x time earnings may work in some businesses, not in others for instance try to buy a Lexus retail dealership....you will pay 7-11 times earnings + assets same for some of the other luxury brands ie mercedes, bmw, etc the fastest rising multiple belongs to hyundai stores.....has gone from a 3-4 eight years ago to 10-12 now and as far valuing companies....it depends on a LOT of factors growth rate margin rate you will pay a lot more for a company with expanding multiples in margins that is growing at 20% a year, than a company like sears or jc penny's where they are closing stores i have a number of blue chip companies that are around 12-14x pe i have zero issue with their valuation..... some companies are the new "hot thing" and everyone bids them up..... sometimes that is warranted (google, apple) sometimes it isnt, and the price eventually comes crashing back to earth we were speaking very generally, gd. dealerships must have a lot of profit generating capability to demand that kind of multiple. as i said, i did a valuation on this business, and it came to 3 year's earnings + equity. fact. dem puts it at 2-5. i presume he is not talking out of his backside. 12-14x earnings is good in this market. that is not the point. the point is that this MARKET sucks, and it has sucked for a very long time. valuations started coming out of whack in 1996. they were insane in 2001. in 2011, the S&P PE was "ok" at 14. but if you look at bear market bottoms, the PE is RARELY (if ever) less than 10. it was about 5 during the WW1 bottom. it was about 10 in the crash of '29. it was about 8 in 1942, and 7 @ the end of WW2. it was 7 again in 1980. and it has been nowhere near that since. i don't believe in new paradigms. i don't believe, as they told me in 2000 when i said that a PE of 50 was absurd, and that multiples didn't matter anymore, that they were thinking straight. and i think now, when people tell me that 19 is the new 10 that they are also completely disconnected from historical reality. in my world, the prospects are LOWER today than they were in 1980 for US corporations. therefore, a PE of 8 would be LESS of a bargain than it was, then. if you want me to explain that, i will.
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Post by Deleted on Feb 4, 2014 14:17:30 GMT -5
you apparently feel that we have entered, or are entering a bear market
those multiples are historical norms for bad bear markets
you could be right......
but i dont believe so
the world's economy cant go through much worse than what happened in 2008-9
some economies will do well, some not so well, as the world's economy sputters along
you make a blanket statement that the MARKET sucks.....i dont agree
most of the companies i own are in the 12-14x ranges....i am comfortable with that
i think some companies are overvalued, and others are fairly valued
if you are waiting for the s&p index to go back to 1300-1400, you are going to have a long wait imo
we are in a correction....much needed, and overdue
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 14:25:57 GMT -5
you apparently feel that we have entered, or are entering a bear market we entered a secular bear market in 2001. real returns have been negative since that time.incidentally: i think that 2009 low will hold. i don't expect we are heading back there. but i don't expect to break the old inflation adjusted high of 2121 for a while, either. probably another 3-5 years?those multiples are historical norms for bad bear markets no, those are historical norms for secular bear markets. you could be right...... but i dont believe so the world's economy cant go through much worse than what happened in 2008-9 some economies will do well, some not so well, as the world's economy sputters along you make a blanket statement that the MARKET sucks.....i dont agree you are free to disagree. this is America. but i was talking about valuation, not performance. you can make money in a secular bear market by playing the cyclic bull and bear game. but it takes a way more saavy investor than average. the average investor will have negative returns in a secular bear market, and this one is no exception. if you have done better than 0%, congrats, but you are NOT the norm.most of the companies i own are in the 12-14x ranges....i am comfortable with that most of the companies i own are way higher than that, and i am totally uncomfortable with that. but i would be uncomfortable even if they were 12-14, because there is no fighting a cyclic bear- and yes, i think we are either entering one, or will do so before 2015.i think some companies are overvalued, and others are fairly valued it won't matter. a falling tide sinks all ships. or almost all.if you are waiting for the s&p index to go back to 1300-1400, you are going to have a long wait imo i am not waiting for anything. but i am not buying when the S&P500 PE is 19, and interest rates are @ 0%. there is far too much bubble in that bathtub for me. i am very defensive right now. if you want to be aggressive, be my guest. but if you are within 5 years of retirement, i would strongly recommend that you revise your thinking.we are in a correction....much needed, and overdue truly. my only problem is that the forward risks are way higher than the possible favorable outcomes, from where i sit. it actually has nothing to do with how businesses will perform in the next 5 years, honestly. if you own a business, you will probably do fairly well. this is far more fundamental than that. it has to do with "competition for investor capital". equity markets are literally drowning in capital right now. that has to change, and it will change.
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 14:40:32 GMT -5
incidentally- i am going to advise my son to save 10% of his earnings and invest it in mutal funds. he is going to catch the next bull leg up, and it is bound to start sometime before he becomes an adult. he can ride that sucker for a good 15-20 years without having to do what i do: watch every turn with suspicion, and invest with zealous care and thought. lucky him.
of course, i was able to do that in the 80's and 90's......a very relaxing time to invest.
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Post by Deleted on Feb 4, 2014 14:46:28 GMT -5
as long as the fed keeps interest rates artificially low, there is no other place to really put one's money
what? buy tbills paying 2.7% for 10 years? are you nuts?
real estate....sure....if you are careful, and the market you are buying in has not already skyrocketed
or worse yet....has never recovered from the 08 debacle
gold and silver? maybe...5-10% would be a good hedge, but any more than that is playing with fire
art? stamps? wine?
or how about passbook savings where the banks almost charge you to keep your money
dividend paying blue chip stocks are still the best bet imo
once rates start rising, that may not hold.....but for today and the foreseeable future, i see no real alternatives
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beenherebefore
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Post by beenherebefore on Feb 4, 2014 18:07:46 GMT -5
Well, there's always Bitcoin.
Just kidding!!! Kidding!!
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djAdvocate
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Post by djAdvocate on Feb 4, 2014 18:31:57 GMT -5
as long as the fed keeps interest rates artificially low, there is no other place to really put one's money that is precisely the problem. good. we are making headway.what? buy tbills paying 2.7% for 10 years? are you nuts? no, i am quite sane. and any rate less than 3.5% is a guaranteed loser. however, when you get above 3.5%, then you have a return that will probably exceed inflation, although in an environment where we are adding $1T to the money supply per annum, i am not sure how long that will hold out.real estate....sure....if you are careful, and the market you are buying in has not already skyrocketed or worse yet....has never recovered from the 08 debacle gold and silver? maybe...5-10% would be a good hedge, but any more than that is playing with fire gold and silver only does well in high inflation environments. it sucks right now.art? stamps? wine? or how about passbook savings where the banks almost charge you to keep your money dividend paying blue chip stocks are still the best bet imo once rates start rising, that may not hold.....but for today and the foreseeable future, i see no real alternatives the latter is my entire point, gd. rates are artificially low right now. that will NOT last. it can't. now, if PE's were 10, i might take the risk of getting caught in a downdraft. but not at 19. not with this fed. nfw.
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Post by Deleted on Feb 5, 2014 8:59:55 GMT -5
probably the other difference is most of my investments i do myself
from early 90's through 2006, i like most people, just owned mutual funds for the majority of everything i had
in 2006, i really got more interested in investing, and really started reading a lot
i sold most of my mutual funds....i thought i could do better myself, and didnt like the fees i was paying for someone to do what i thought i could do for free
i have averaged just under a 20% return over that 6 year period......including the 08-09 disasters
right now approx 25% in in mutual funds (intl funds, bond funds, and etf's that i think will do well)
the rest i actively invest.....in a basket of no fewer than 10, and no more than 20 individual equities
i have had a lot of success finding beaten down companies, buying low and holding them
some of my big winners include MTW, GE, MAS, WFM, SYY
when my average share purchase price for GE is $ 9.xx and the stock is 24-25 a share, a correction back to $ 20 doesnt bother me
i read every quarterly report from every company i own, and every company i want to buy
i am willing to spend my time and energy to make the best possible decisions i can make
i understand that as rates rise, equities MAY NOT hold up.....
i will adjust as the market dictates.....
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Post by Deleted on Feb 5, 2014 9:23:33 GMT -5
i would bet i spend a good 30-40 hours reading reports a quarter
and i get every transcript from the earnings calls.....which adds time also
if you are willing to spend the time, and set and follow rules, then you can do it too
let me put this out there....you WILL make mistakes.....and you are losing your hard earned money when you do
i havent made the same mistake twice....at least yet....
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