Nothing can stop this bull market!

[Madison320]

Not 3 hurricanes, a mass shooting, potential nuclear armageddon, 21 trillion in debt, gridlock in Washington, a long overdue recession .... nothing!!!

[kfarnan]

Not 3 hurricanes, a mass shooting, potential nuclear armageddon, 21 trillion in debt, gridlock in Washington, a long overdue recession .... nothing!!!

all bubbles will pop...

[Created4]

[devil21]

Nope. It's not a bull market, really. It's the death of the petrodollar. Think of every day you see the markets go up as an ongoing signal of dollar devaluation. Stocks have always been little more than a dollar hedge and PR tool.

The Saudis just started buying RUSSIAN weapons, setting up investment contracts with Russia banks and partnership deals between Aramco and Gazprom. The petrodollar is, for all intents and purposes, kaput. Like Zippy's sig says....the future is here but it's not evenly distributed yet.

[oyarde]

Anybody remember how bad the last slide was ? I think Oct 09 , 2007 to March 06 , 2009 or about 17 months the Dow dropped 54 percent . 14, 164 to 6,469 . That would take todays 22776 to 10,477 and probably push gold past 4k . Americas savings would be wiped out . No business investment .

[Madison320]

Anybody remember how bad the last slide was ? I think Oct 09 , 2007 to March 06 , 2009 or about 17 months the Dow dropped 54 percent . 14, 164 to 6,469 . That would take todays 22776 to 10,477 and probably push gold past 4k . Americas savings would be wiped out . No business investment .

It's amazing how long this market has gone without a big correction. I think it was like 6 months ago when we almost broke a record for consecutive days without a > 1% drop. Then it dropped by barely over 1% and since then we've only had maybe one other day that it dropped >1%.

A 5-10% drop is going to be like the end of the world to mainstream investors.

[timosman]

It's amazing how long this market has gone without a big correction. I think it was like 6 months ago when we almost broke a record for consecutive days without a > 1% drop. Then it dropped by barely over 1% and since then we've only had maybe one other day that it dropped >1%.

A 5-10% drop is going to be like the end of the world to mainstream investors.

That's why it won't happen. For a while.

[katsung47]

It proves the financial enterprises are manipulated to control the stock price. They want people and ignorant investors to take over the over valued stock, then there will be a big fall. Donald Trump is put to president seat to take this responsibility. That's why he acts like a moron.

[gaazn]

It will take a fake revenue sham from Amazon or Alibaba to burst this. They say half of Americans have Amazon Prime, so why when I ask around not so many people have it?

[Zippyjuan]

It's amazing how long this market has gone without a big correction. I think it was like 6 months ago when we almost broke a record for consecutive days without a > 1% drop. Then it dropped by barely over 1% and since then we've only had maybe one other day that it dropped >1%.

A 5-10% drop is going to be like the end of the world to mainstream investors.

It has never marked the "end of the world" for mainstream investors in the past- why would it do so the next time?

[Zippyjuan]

Anybody remember how bad the last slide was ? I think Oct 09 , 2007 to March 06 , 2009 or about 17 months the Dow dropped 54 percent . 14, 164 to 6,469 . That would take todays 22776 to 10,477 and probably push gold past 4k . Americas savings would be wiped out . No business investment .

You expecting another Great Recession?

[Krugminator2]

You expecting another Great Recession?

You could make an argument that there are a lot of similarities between 1937-38 and right now. You had a large triple digit stock market recovery. There is a lot of complacently. Everyone seems to think things are back to normal. The Fed has started tightening and talk is getting interest rates back to "normal".

If Trump appoints the wrong person to the Fed, the risk from tightening too aggressively is asymmetric to the downside. At some point the market is going to drop but how much and how much it bleeds over to employment will be determined by the Fed. The unemployment rate went to 19% in 1938. It won't go that high now but it could definitely double if the Fed does something stupid.

[Zippyjuan]

You could make an argument that there are a lot of similarities between 1937-38 and right now. You had a large triple digit stock market recovery. There is a lot of complacently. Everyone seems to think things are back to normal. The Fed has started tightening and talk is getting interest rates back to "normal".

If Trump appoints the wrong person to the Fed, the risk from tightening too aggressively is asymmetric to the downside. At some point the market is going to drop but how much and how much it bleeds over to employment will be determined by the Fed. The unemployment rate went to 19% in 1938. It won't go that high now but it could definitely double if the Fed does something stupid.

In what ways are we like 1937- 38? Unemployment went from 14.3% to 19%. Unemployment stayed high until 1941 when we entered WWII. Taxes and interest rates were raised. We are not seeing any of that. (it was a recession).

What went on in the years before that?

http://www.economist.com/node/13856176

But the truth is the recovery in the four years after Franklin Roosevelt took office in 1933 was incredibly rapid. Annual real GDP growth averaged over 9%. Unemployment fell from 25% to 14%. The second world war aside, the United States has never experienced such sustained, rapid growth.

http://www.economist.com/node/13856176


GDP growth of 9%. Huge booming economy. We have something like 2% growth. Slow but steady.

The fundamental cause of this second recession was an unfortunate, and largely inadvertent, switch to contractionary fiscal and monetary policy. One source of the growth in 1936 was that Congress had overridden Mr Roosevelt's veto and passed a large bonus for veterans of the first world war. In 1937, this fiscal stimulus disappeared. In addition, social-security taxes were collected for the first time. These factors reduced the deficit by roughly 2.5% of GDP, exerting significant contractionary pressure.

[Krugminator2]

In what ways are we like 1937- 38? Unemployment went from 14.3% to 19%. Unemployment stayed high until 1941 when we entered WWII. Taxes and interest rates were raised. We are not seeing any of that.

Well... I would say in almost every way they are alike. The stock market crashed in 1929. The market made a couple hundred percent move off the lows. Interest rates went to zero and stayed very low along with quantitative easing. The Fed started tightening and you had a depression in 1937 8 years after the initial crash.

The market crashed in 2008. The market made a couple hundred percent move off the lows. Interest rates went to zero and stayed very low along with quantitative easing. The Fed has (gradually) started tightening. And we will see what happens 9 years later.


It seems like they are pretty close analogs. You also have similarities in the wealth gap. Things haven't gotten better for a significant part of the country. People are embracing populism in elections like in the 1930's. Not to mention taxes did go up. Obama raised taxes in 2013. The top rate went up. Payroll taxes went up. And you had the Obamacare taxes. You had a dramatic increase in regulations under Obama. Regulations are tax. That is beside the point though. You probably won't see a tax hike with Trump.

[Zippyjuan]

Well... I would say in almost every way they are alike. The stock market crashed in 1929. The market made a couple hundred percent move off the lows. Interest rates went to zero and stayed very low along with quantitative easing. The Fed started tightening and you had a depression in 1937 8 years after the initial crash.

The market crashed in 2008. The market made a couple hundred percent move off the lows. Interest rates went to zero and stayed very low along with quantitative easing. The Fed has (gradually) started tightening. And we will see what happens 9 years later.


It seems like they are pretty close analogs. Not to mention taxes did go up. Obama raised taxes in 2013. The top rate went up. Payroll taxes went up. And you had the Obamacare taxes. That is beside the point though. You probably won't see a tax hike with Trump.

The Fed sharply tightened in the 1930's. They have not been sharply tightening money today. From its low, stocks increased 400% in just five years. In eight years since the bottom in 2009, stocks are up about 2.5 times. Unemployment back then was double digits.

[Krugminator2]

The Fed sharply tightened in the 1930's. They have not been sharply tightening money today. From its low, stocks increased 400% in just five years. In eight years since the bottom in 2009, stocks are up about 2.5 times.

I'll just repost what I said. And the second part of what you said would seem to confirm that the two time periods are very similar. I can't tell if you are purposely trolling.

If Trump appoints the wrong person to the Fed, the risk from tightening too aggressively is asymmetric to the downside. At some point the market is going to drop but how much and how much it bleeds over to employment will be determined by the Fed. The unemployment rate went to 19% in 1938. It won't go that high now but it could definitely double if the Fed does something stupid.

[Zippyjuan]

There will eventually be a correction. Will it be 1937 all over again? Not likely.

[oyarde]

You expecting another Great Recession?

I really have no idea and it would have little effect on me personally but at some point the inflated markets will slide and we learned last time they can slide quickly all of which would be very negative for most americans . Most of whom have nothing and those that do are in the markets in 401k's .

[enhanced_deficit]

The biggest, the greatest ever... as Don J Master would put it.

[devil21]

I don't have specific evidence to support it but I think a lot of what we're seeing in the markets are a lot of offshore dollars being repatriated, as petrodollar unwinds, and put directly into the stock market in the form of corporate buybacks. The result is major price inflation of the stock markets but not price inflation of Main St. Main St., however, is in deflation.

[Influenza]

if only investors would be bullish about the stocks I'm invested in

[Zippyjuan]

if only investors would be bullish about the stocks I'm invested in

Picking individual stocks can be difficult. I use a couple of index funds to spread things around (index funds are also very low cost- higher costs reduces returns) and I have a dividend paying utility in a Dividend Re-Investment plan- they use dividend payouts to buy more shares at no cost to me. I pay little if anything if I want to buy more shares too. The dividend gives me a return even if the price of the stock stays the same.

[Influenza]

Picking individual stocks can be difficult. I use a couple of index funds to spread things around (index funds are also very low cost- higher costs reduces returns) and I have a dividend paying utility in a Dividend Re-Investment plan- they use dividend payouts to buy more shares at no cost to me. I pay little if anything if I want to buy more shares too. The dividend gives me a return even if the price of the stock stays the same.

Yeah I'm actually decently experienced with stock trading now (1 year.) I use Robinhood, which is an app that lets you trade completely for free. Unfortunately they don't yet have some important features (DRIP like you mentioned.) I'm not too interested in most ETFs right now cuz I'd prefer to trade actively rather than just pick some tickers and sit on them. I have most of my portfolio in biopharma right now so I basically just wait for FDA approvals haha

[Madison320]

I don't have specific evidence to support it but I think a lot of what we're seeing in the markets are a lot of offshore dollars being repatriated, as petrodollar unwinds, and put directly into the stock market in the form of corporate buybacks. The result is major price inflation of the stock markets but not price inflation of Main St. Main St., however, is in deflation.

That's a really good point. I don't know if it's corporate buybacks but logically foreigners have to do something with all the dollars they are accumulating. I think the real problem will be when Main St prices start climbing and there's a panic to unload dollars.

[Zippyjuan]

Yeah I'm actually decently experienced with stock trading now (1 year.) I use Robinhood, which is an app that lets you trade completely for free. Unfortunately they don't yet have some important features (DRIP like you mentioned.) I'm not too interested in most ETFs right now cuz I'd prefer to trade actively rather than just pick some tickers and sit on them. I have most of my portfolio in biopharma right now so I basically just wait for FDA approvals haha

Trading actively raises costs -which as mentioned, lowers returns. Both in terms of taxes and trade costs. You pay short term capital gains which is higher than long term gains. If you are about the median income bracket, you lose 25% of your return in taxes alone. If you sold stocks for a $1000 gain, you lose $250 of that. That can add up quickly the more you turn over your stocks. If you re-invest that money, you have $750 to work with. If you didn't sell that stock, you have $1000 still invested. That $750 needs to gain 33% to catch up.

Over the long run, you can't consistently beat the market. You may get lucky short term but those gains level out over time which means the average investor cannot do better than the overall market in the long term (the market being the sum of all investors). Then taxes and trading costs lower those average market returns for you meaning you do worse than the overall market. That is why I invest in an index, buy and hold- to keep my costs low.

[Influenza]

Trading actively raises costs -which as mentioned, lowers returns. Both in terms of taxes and trade costs. You pay short term capital gains which is higher than long term gains. If you are about the median income bracket, you lose 25% of your return in taxes alone. If you sold stocks for a $1000 gain, you lose $250 of that. That can add up quickly the more you turn over your stocks. If you re-invest that money, you have $750 to work with. If you didn't sell that stock, you have $1000 still invested. That $750 needs to gain 33% to catch up.

Over the long run, you can't consistently beat the market. You may get lucky short term but those gains level out over time which means the average investor cannot do better than the overall market in the long term (the market being the sum of all investors). Then taxes and trading costs lower those average market returns for you meaning you do worse than the overall market. That is why I invest in an index, buy and hold- to keep my costs low.

Your plan is better in the long run of course, mine's just a get rich quick scheme.

[Zippyjuan]

Your plan is better in the long run of course, mine's just a get rich quick scheme.

Get rich quick schemes can end up being get poor quick schemes. But good luck to you!

[devil21]

That's a really good point. I don't know if it's corporate buybacks but logically foreigners have to do something with all the dollars they are accumulating. I think the real problem will be when Main St prices start climbing and there's a panic to unload dollars.

Trump said offshore corporate money would be repatriated, though he neglected to mention why of course. I think that's quietly occurring now. Those corps would rather do something with those offshore dollars instead of just sitting in accounts devaluing daily. So either those dollars are invested into the business or used to buy back their stock.

[LibForestPaul]

You expecting another Great Recession?

No, another great war.
Hopefully, just like the Red Elites who thought they were with the in-crowd, you will be outside the bunkers with the rest of us when the SHTF.