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U.S. stock valuations haven’t been this extreme since 1929 and 2000

marketwatch.com

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Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#31

Post by brndnmtthws »

KKKKkkkk1 wrote: post #30

Some dude with a blog predicts an impending stock-market crash. Well, Robert Shiller, the Nobel Prize laureate, has been predicting a stock-market crash since what, 2016? And the market kept on rising. This is not to imply that a crash or a long period of low returns is not coming, just that the opinions of financial pundits are just that.

It's the same news cycle over and over:

https://trends.google.com/trends/explore?date=today%205-y&q=...

Doomsday predctions have always been good at generating ad revenue for publishers.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#32

Post by Spooky23 »

brndnmtthws wrote: post #20
aswanson wrote: post #7

We are long overdue for a correction. Put your money into bonds and buy into the fire sales in inevitable upcoming crash.

This is the wrong thing to do. Don't try to time the market. Here's some reading for anyone that wants to understand the basics and learn how to avoid investing emotionally: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_... Pay close attention to the "Diversify", and "Never try to time the market" sections.

Bogleheads are always thinking in a tight set of assumptions that may not be meaningful to you. There's also an assumption that you aren't capable of meaningful analysis.

If I'm following boglehead dogma, I have at least my age in fixed income and cash. When you see a market crash or correction, it's wise to stick your head up and look around. In 2009 was it smarter to buy good companies driven down in price due to the financial panic?

I would argue yes. When you can buy a quality equity at a firesale price, it's a better investment than BND.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#33

Post by [deleted] »

TheAdamAndChe wrote: post #8

The miscalculation that I believe economists are making is the massive shift in leverage between the laborers and the owners. Historically, the two were balanced to the point that creating greater economic growth would tip the scales in the laborers' favor, thus increasing wages and inflation. What's happening now is that, due to many factors including outsourcing, illegal immigration, lobbying(bribery), capital conc…

[deleted]

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#34

Post by nemo44x »

aswanson wrote: post #7

We are long overdue for a correction. Put your money into bonds and buy into the fire sales in inevitable upcoming crash.

Bonds are like the biggest bubble! With interest rates being so low they have almost nowhere to go but up in interest meaning today's bonds will lose incrediable amounts of value.

If you're going to buy bonds the should be rather short term and at today's interest rates and low inflation you could also hold cash.

For that reason I'm mainly in stocks with a some bonds and cash.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#35

Post by brndnmtthws »

Spooky23 wrote: post #32
brndnmtthws wrote: post #20

Earlier quoted context omitted.

This is the wrong thing to do. Don't try to time the market. Here's some reading for anyone that wants to understand the basics and learn how to avoid investing emotionally: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_... Pay close attention to the "Diversify", and "Never try to time the market" sections.

Bogleheads are always thinking in a tight set of assumptions that may not be meaningful to you. There's also an assumption that you aren't capable of meaningful analysis. If I'm following boglehead dogma, I have at least my age in fixed income and cash. When you see a market crash or correction, it's wise to stick your head up and look around. In 2009 was it smarter to buy good companies driven down in price due to t…

If you stick to your target allocation and rebalance as needed, you'd be doing just that.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#36

Post by enraged_camel »

1_2__4 wrote: post #24
nfriedly wrote: post #22

Earlier quoted context omitted.

You're correct, I'm gong to edit it to say "not directly related", but the point I was trying to get to remains: don't worry about things that you have absolutely no control over and no good reason to worry about.

I'm sorry but that's just awful advice. Just because you don't have control over something doesn't mean you can't foresee it and take appropriate action to protect yourself in advance.

You cannot time the stock market. Trying to predict a crash and taking money out in an attempt to avoid losses is a recipe for disaster.

For individual investors who use the stock market for their retirement funds, the appropriate action to protect oneself from the fluctuations of the market, including crashes, is to have the appropriate retirement target set, along with the proper level of acceptable risk (which automatically allocates the funds among different asset classes). After that, it's a matter of waiting... and not doing anything rash during extreme events.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#37

Post by bdcravens »

nfriedly wrote: post #11

If you're working a job that isn't directly related to the stock market, and are not about to retire, then you really shouldn't care if the stock market is about to crash or not. Set up automatic investments into a Vanguard Target Retirement fund (or whatever), and know that whenever the next crash does come, you'll get an exceptionally good deal that month. Here's some good advice on the subject: http://www.mrmoneym…

Many jobs are tied to the stock market that aren't obvious.

Even though the circumstances were different, in 2001 I was a contractor on Sabre's HR team. 9/11 devastated the stock, so much of the software we were building (mostly related to performance-based payouts) was no longer needed.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#38

Post by Dangeranger »

gragas wrote: post #21
TheAdamAndChe wrote: post #8

The miscalculation that I believe economists are making is the massive shift in leverage between the laborers and the owners. Historically, the two were balanced to the point that creating greater economic growth would tip the scales in the laborers' favor, thus increasing wages and inflation. What's happening now is that, due to many factors including outsourcing, illegal immigration, lobbying(bribery), capital conc…

>lobbying(bribery), capital concentration, anti-union legislation, anti-small business legislation We've learned through the decades---and especially through the bailouts in the late 2000s---that slapping big business on the wrist is not enough to stop cronyism and government-enabled monopoly. The only way to eliminate that is to cut the snake off at its head; if there is no power to dole out, lobbying wouldn't exist…

This statement is a bit nonsensical, because most lobbying has to do with encouraging the creation of laws that are favorable to a business and unfavorable to a businesses competitors.

Your statement; > if there is no power to dole out, lobbying wouldn't exist.

Implies that the government is picking the winner, when in fact they are writing and passing a law or regulation/deregulation. Any of these actions have effects that favor one group over another.

In order to have "no power to dole out" the government would need to not pass ANY laws, which isn't possible as that is critical to a governments function.

So it's a paradox. A government cannot function without the process of creating laws and all laws will inevitably favor one party or another no matter the effort to avoid such an outcome.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#39

Post by QAPereo »

aswanson wrote: post #14
TheAdamAndChe wrote: post #8

The miscalculation that I believe economists are making is the massive shift in leverage between the laborers and the owners. Historically, the two were balanced to the point that creating greater economic growth would tip the scales in the laborers' favor, thus increasing wages and inflation. What's happening now is that, due to many factors including outsourcing, illegal immigration, lobbying(bribery), capital conc…

That sounds like a suggestion that something very bad has to happen.

It almost always is.

Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000

#40

Post by CuriouslyC »

aswanson wrote: post #7

We are long overdue for a correction. Put your money into bonds and buy into the fire sales in inevitable upcoming crash.

Personally I would prefer a diversified portfolio of stocks whose value haven't displayed correlation with previous market corrections.
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