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How Sick Is the Stock Market?

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Re: How Sick Is the Stock Market?

#91

Post by freyr »

outside1234 wrote: post #57
knodi123 wrote: post #49

Earlier quoted context omitted.

The stock market is less than 200 years old. Let's not make any bold predictions about unbreakable trends when we're talking about time periods up to 25% of the age of the market itself. After all, at one time the conventional wisdom was "No football team who plays their home games in a domed stadium will ever win the superbowl." And there were decades of evidence to support that statistical fact!

There are real forces that propel the stock market upwards: productivity and an ever increasing population (so more overall revenue and therefore profits over time). This is why its a pretty safe bet that over 15 year+ time periods that the stock market will go up.

Except that, in many nations around the world, the population growth rate is negative. There is no shortage of space, or food, or energy, but the populations are aging and couples are having fewer children. This is the situation in Japan, Germany, Russia, South Korea, and almost all of Eastern Europe.

The U.S. population growth rate has also been in decline for the past 50 years, dropping from 1.7 percent to 0.7 percent, heading towards negative growth if this trend continues.

So much for "an ever increasing population" to bolster a market that always goes up.

Re: How Sick Is the Stock Market?

#92

Post by zardo »

dismal2 wrote: post #62
debacle wrote: post #38

The stock market is fine. It's probably the healthiest aspect of the global economy right now. All of the bad things about the stock market are because it's the only safe place for investment right now.

Stock market is probably least safe place for investment right now. Why do you think real estate has gone crazy in the past 5 years? Lots of people that I know who manage their money are almost entirely in cash and many of them avoided the carnage last week.

Most people who pull money in and out of the market fail to outperform the S&P500 in the long term.

Re: How Sick Is the Stock Market?

#93

Post by freyr »

n72 wrote: post #48
dharbin wrote: post #20

Earlier quoted context omitted.

So what you're saying is that past performance is indicative of future results...

You realize that phrase is used in terms of stock picking, not the nature of a free market, right?

I'm pretty sure the phrase was just used in terms of the nature of a free market.

Are you suggesting that because the U.S. stock market has risen during the tiny blip in history that the U.S. has been an uncontested world superpower, we can expect it to rise forever?

Re: How Sick Is the Stock Market?

#94

Post by codingdave »

freyr wrote: post #93
n72 wrote: post #48

Earlier quoted context omitted.

You realize that phrase is used in terms of stock picking, not the nature of a free market, right?

I'm pretty sure the phrase was just used in terms of the nature of a free market. Are you suggesting that because the U.S. stock market has risen during the tiny blip in history that the U.S. has been an uncontested world superpower, we can expect it to rise forever?

What else would you have us expect? That when the US is no longer relevant, and the stock market is permanently declining, that somehow a stash of dollars will be meaningful?

No, for all practical purposes, go ahead and expect it to rise forever. Anything that would make that untrue would make your investment balance unimportant.

Re: How Sick Is the Stock Market?

#95

Post by nulltype »

scott_karana wrote: post #87
inversionOf wrote: post #84

Earlier quoted context omitted.

as the trend over a decade or more will always be "up" This is a growth based analysis (in effect a form of pyramid scheme), and it increasingly simply isn't true, as many in Japan are discovering. As populations flatten and eventually decline, most of the established dogma will fall.

I agree with you, but unlike Japan, the immigrant population in America is burgeoning. It'll probably just delay the fall of the curve, but who knows?

codingdave seems pretty certain

Re: How Sick Is the Stock Market?

#96

Post by nulltype »

debacle wrote: post #66
dismal2 wrote: post #62

Earlier quoted context omitted.

Stock market is probably least safe place for investment right now. Why do you think real estate has gone crazy in the past 5 years? Lots of people that I know who manage their money are almost entirely in cash and many of them avoided the carnage last week.

It costs too much to hold cash.

How much does it cost to hold cash vs holding stocks?

Re: How Sick Is the Stock Market?

#97

Post by tacon »

codingdave wrote: post #94
freyr wrote: post #93

Earlier quoted context omitted.

I'm pretty sure the phrase was just used in terms of the nature of a free market. Are you suggesting that because the U.S. stock market has risen during the tiny blip in history that the U.S. has been an uncontested world superpower, we can expect it to rise forever?

What else would you have us expect? That when the US is no longer relevant, and the stock market is permanently declining, that somehow a stash of dollars will be meaningful? No, for all practical purposes, go ahead and expect it to rise forever. Anything that would make that untrue would make your investment balance unimportant.

How to Protect Your Life Savings from Hyperinflation & Depression, 2nd edition by John T. Reed

http://johntreed.com/hyperinflationdepression.html

Re: How Sick Is the Stock Market?

#100

Post by hfpn »

ChuckMcM wrote: post #51
wmeredith wrote: post #37

Earlier quoted context omitted.

So it's made of people.

Which is a good thing I think. The sad thing would be if it had no reaction at all because it was dominated by trading algorithms which don't panic. Then I'd start to wonder whether or not it was a market at all.

Algorithms can panic too... on fake Twitter data for example [1] and many other criterias too...

1. https://secure.marketwatch.com/story/twitter-trading-influen...

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