TL;DR - nobody actually knows what the stock market is going to do, but everyone has a theory.
Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
61–70 of 260 posts
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#62> “There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir. Adjusting for inflation, the stock market was not "flat" during this period [0]. The DJIA, for example, closed at an effective price of 9,160.41 in January 1966 and closed at an effective…
What about S&P 500? The Dow Jones Industrial Average indexes a mere 30 companies.
S&P was about the same, large decline in real dollars over that time.
https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#63At this point, I’m expecting both stagflation and a flat market for years to come. Odd that mortgage rate is above 6%, inflation is high, layoffs are happening, and yet the White House is pretending it’s not a recession and won’t say the word.
I don't doubt that high interest rates will cause unemployment to rise, but saying "layoffs are happening" is a little disingenuous. We are still in the midst of one of the strongest labor markets in US history.
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#64"There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period" From another article on '66-'82: > The Dow went sideways, but the S&P actually earned a respectable 6.8% return in that time. 6.8% is hardly apocalyptic. The S&P 500 usually averages 10% over long timescales. His former hedge fund also delivered an annual average rate of…
6.8% with 6.8% inflation, according to that article.
Edit: just got to the conclusion of this article, from 2014: "Many smart people in the industry are predicting lower investment returns over the next decade or so."
Funny.
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#65I think the investing goal for the next decade is to pick the asset class that will lose the least. Stocks wont do well, but that asset class could still be stocks.
Let's say the market does what he is warning it will do:
Dividend reinvestment will be a major component of you portfolio returns. So you need to focus on companies that pay dividends. Also, avoiding obvious scam companies. Hanging out here has already given you a picture of how to identify a certain class of such companies long before their IPO ;)
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#66At this point, I’m expecting both stagflation and a flat market for years to come. Odd that mortgage rate is above 6%, inflation is high, layoffs are happening, and yet the White House is pretending it’s not a recession and won’t say the word.
Inflation isn't high any more. July was 0% and August was 0.1%. The headline number looks at a 12 month window. Until the very high inflation months earlier this year drop out of that window the headline number will be high. But it does not look like prices are increasing much anymore.
All of the long term trends still point to low inflation like they did before Covid. Slow population growth, technology, and boomers aging out are strong forces keeping inflation in check. IMHO we are going to go back to worrying about deflation in the next 12 months or so.
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#67> “There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir. Adjusting for inflation, the stock market was not "flat" during this period [0]. The DJIA, for example, closed at an effective price of 9,160.41 in January 1966 and closed at an effective…
What about S&P 500? The Dow Jones Industrial Average indexes a mere 30 companies.
I wish we’d stop talking about the Dow. It isn’t useful.
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#68Earlier quoted context omitted.
Dividends would balance out a 65% drop during the same period, how so?
A 65% drop in price over 17 years is "only" about 6% per year. The S&P500 annual dividend yield during 1966-1982 was not much less than 6%, especially during the latter half of that period. If you look at an inflation-adjusted total return chart (as opposed to just price), the actual drop in investment value was much smaller. I think "flat" isn't a terrible way to describe it. https://www.multpl.com/s-p-500-dividend-…
Total return (dividends reinvested, inflation adjusted) is -13.4% for 1965-1983.
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#69Earlier quoted context omitted.
I think the poster is saying he expects the stock market to fall a few more months before turning around. Not that green energy will complete its transition in a few months. If you think oil/gas will demand the backbone, you ask yourself why none of the oil and gas majors are drastically expanding their production capacity during this time of high prices. Oil and gas, and their investors, are planning for their phase…
> why none of the oil and gas majors are drastically expanding their production capacity during this time of high prices Because its a short-lived blip? Didn't we just have record lows less than 2-years ago?
When there's an influx of cash like now, it's usually an ideal time to invest that money in new production because you have the cash in hand.
General consensus is that new development should be small and only in a few types of projects, due to the transition under way. For example see this BCG report (PDF):
https://web-assets.bcg.com/5e/73/dcd6e1544ba2a964e6c082d684e...
Re: Stanley Druckenmiller warns the stock market will be ‘flat’ for an entire decade
#70> “There’s a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this ’66 to ’82 time period,” he said in an interview with Alex Karp, CEO of software and A.I. firm Palantir. Adjusting for inflation, the stock market was not "flat" during this period [0]. The DJIA, for example, closed at an effective price of 9,160.41 in January 1966 and closed at an effective…
Presumably dividends would balance it out though.
With dividends reinvested you get -25.096%, https://dqydj.com/dow-jones-return-calculator/.
S&P 500 is -3.745%.