Hogville Info
• 9,493,484 Posts
• 388,903 Topics
• 22,012 Hogvillians
THE RULES (Read 'em!)
Quick Links
Pick'Ems:Football      Basketball      Baseball
Sister Sites:Gridiron HistoryFearless Friday
Listen NOW:Game ON 103.3 
  
Pages: [1]   Go Down

Author Topic: irrational exhuberance?  (Read 558 times)

0 Members and 1 Guest are viewing this topic.

HawgWild

  • All-American Hogvillian
  • *******
  • Karma: +239/-209
  • Offline Offline
  • Gender: Male
  • Posts: 4,643
  • Left lane, hammer down.
irrational exhuberance?
« on: March 02, 2017, 01:13:16 pm »

What would Greenspan say about today's markets? Shiller PE @ 29.39. I get nervous when everyone gets giddy.
Logged

ricepig

  • Gold Hogvillian
  • *********
  • Karma: +5414/-5818
  • Offline Offline
  • Posts: 43,380
  • Hogville.net
Re: irrational exhuberance?
« Reply #1 on: March 02, 2017, 01:36:21 pm »

I'm lighting my La Punta cigars with $100 bills, are you saying this won't last for ever?
Logged

Sponsored Ad



Hogville encourages you to do business with the following...

HawgWild

  • All-American Hogvillian
  • *******
  • Karma: +239/-209
  • Offline Offline
  • Gender: Male
  • Posts: 4,643
  • Left lane, hammer down.
Re: irrational exhuberance?
« Reply #2 on: March 02, 2017, 02:57:06 pm »

Heck, even I am feeling good about my investments. That's what scares me.
Logged

BigBrandonAllenFan

  • Hogvillian
  • ******
  • Karma: +61/-291
  • Offline Offline
  • Posts: 1,885
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #3 on: March 02, 2017, 04:43:53 pm »

I've actually lagged behind during the unprecedented Trump rally.  While I have made some short term trades that were profitable, I have had fifty to sixty percent of my portfolio sitting in federal cash reserve during this rally since November.  Of course I haven't lost a dime of that money in cash reserve either though.  So there is a small upside I guess.
Logged

BigBrandonAllenFan

  • Hogvillian
  • ******
  • Karma: +61/-291
  • Offline Offline
  • Posts: 1,885
  • Surfing the web at Hogville.net
Whuuu..
« Reply #4 on: March 02, 2017, 04:46:36 pm »

I'm lighting my La Punta cigars with $100 bills, are you saying this won't last for ever?



Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #5 on: March 02, 2017, 04:50:33 pm »

IMHO the market is getting ahead of itself. If we had a 5-10% correction (or more) from here it actually would be healthier in the long run. What concerns me is that with all the promises Trump has made, many of them good for the economy and consumers IF he can actually accomplish them, there's a lot of air being pumped into stock prices based on HOPE. While fundamentals are improving, eps/sales, etc. in the last couple of quarters, IMO at this point they don't justify some of the recent run up. Keep one thing in mind though: there's an old saying that "the market crawls a wall of worry". It's when you have the average "John Doe" throwing all his money in the market(s), magazines with articles about the markets splashed on the front page(s), and commentators on virtually every channel touting stocks that you REALLY need to worry.

One other thought on Trump's hoped for policies: the old saying goes that "the devil's in the details". No doubt the actually achieving of many of these hoped for policy changes, tax reform, corporate tax repatriation, etc. in theory sounds great. However, it's what actual form any/all these end up taking, IF they're actually passed at all.
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #6 on: March 02, 2017, 04:53:21 pm »

I've actually lagged behind during the unprecedented Trump rally.  While I have made some short term trades that were profitable, I have had fifty to sixty percent of my portfolio sitting in federal cash reserve during this rally since November.  Of course I haven't lost a dime of that money in cash reserve either though.  So there is a small upside I guess.
Well then on the "back end" WHEN (not IF) the market does correct at least you'll have plenty of liquidity to take advantage of some great opportunities for the next phase of the move upward. The poor smucks are going to be the ones caught all or virtually all "in" that will obviously suffer the most when the party stops (at least for the moment).
Logged

ricepig

  • Gold Hogvillian
  • *********
  • Karma: +5414/-5818
  • Offline Offline
  • Posts: 43,380
  • Hogville.net
Re: irrational exhuberance?
« Reply #7 on: March 02, 2017, 05:02:52 pm »

IMHO the market is getting ahead of itself. If we had a 5-10% correction (or more) from here it actually would be healthier in the long run. What concerns me is that with all the promises Trump has made, many of them good for the economy and consumers IF he can actually accomplish them, there's a lot of air being pumped into stock prices based on HOPE. While fundamentals are improving, eps/sales, etc. in the last couple of quarters, IMO at this point they don't justify some of the recent run up. Keep one thing in mind though: there's an old saying that "the market crawls a wall of worry". It's when you have the average "John Doe" throwing all his money in the market(s), magazines with articles about the markets splashed on the front page(s), and commentators on virtually every channel touting stocks that you REALLY need to worry.

One other thought on Trump's hoped for policies: the old saying goes that "the devil's in the details". No doubt the actually achieving of many of these hoped for policy changes, tax reform, corporate tax repatriation, etc. in theory sounds great. However, it's what actual form any/all these end up taking, IF they're actually passed at all.

I'm guessing that's the same as "when the shoe clerks are giving you market advice" it's time to get out??? I'm always about 33% in cash, it's just the way I operate. Out of my 30 or so stocks, I think only a couple are at their high, or within 5% of it.
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #8 on: March 02, 2017, 09:43:16 pm »

I'm guessing that's the same as "when the shoe clerks are giving you market advice" it's time to get out??? I'm always about 33% in cash, it's just the way I operate. Out of my 30 or so stocks, I think only a couple are at their high, or within 5% of it.
Your illustration is pretty much right on. Yep, just keep some cash in the bank and you WILL get an opportunity to do so.
Logged

HawgWild

  • All-American Hogvillian
  • *******
  • Karma: +239/-209
  • Offline Offline
  • Gender: Male
  • Posts: 4,643
  • Left lane, hammer down.
Re: irrational exhuberance?
« Reply #9 on: March 03, 2017, 11:21:22 am »

ricepig, if you don't mind me asking, what kind of interest rate are you getting on your "cash"?

I'm wanting to pull some money out of the market but I was waiting on the Fed to raise rates first.

Logged

ricepig

  • Gold Hogvillian
  • *********
  • Karma: +5414/-5818
  • Offline Offline
  • Posts: 43,380
  • Hogville.net
Re: irrational exhuberance?
« Reply #10 on: March 03, 2017, 12:40:07 pm »

ricepig, if you don't mind me asking, what kind of interest rate are you getting on your "cash"?

I'm wanting to pull some money out of the market but I was waiting on the Fed to raise rates first.



Terrible, probably around 2% average. There are a couple of local banks that pay from 1.51% to 3.01% on small amounts, $15,000-25,000. Some still in CD's paying 2.31%, but too much only getting .21% at the brokerage MMA. I too expect some rate hikes to bring those up, but how much, and when?

Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #11 on: March 03, 2017, 03:16:25 pm »

ricepig, if you don't mind me asking, what kind of interest rate are you getting on your "cash"?

I'm wanting to pull some money out of the market but I was waiting on the Fed to raise rates first.
Well even if they "bump" the rates you're still definitely NOT going to get rich. IMO the main purpose of holding cash would be to mitigate the risk you have in your equities, not the yield. Anything you get from the interest is pure "gravy".
Logged

ricepig

  • Gold Hogvillian
  • *********
  • Karma: +5414/-5818
  • Offline Offline
  • Posts: 43,380
  • Hogville.net
Re: irrational exhuberance?
« Reply #12 on: March 03, 2017, 03:20:31 pm »

Well even if they "bump" the rates you're still definitely NOT going to get rich. IMO the main purpose of holding cash would be to mitigate the risk you have in your equities, not the yield.
Correct, my 102 year old uncle was in the stock market since the 40's, he just passed away in Dec, but he always kept 30% in cash. He said you can't lose that money.
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #13 on: March 03, 2017, 03:35:02 pm »

Correct, my 102 year old uncle was in the stock market since the 40's, he just passed away in Dec, but he always kept 30% in cash. He said you can't lose that money.
Your uncle was indeed a very wise man. One of Warren Buffett's secrets to making money is to keep a very good idea on potential long term risk(s). As such, one piece of sage advice he's offered is to not lose money. As simple as it may sound at times many of us fail to keep that in mind. 

BTW I found from long experience as a financial advisor (35+ years)was that one of the absolute most responsible and wisest thing I could offer my clients was to help them mitigate/lessen their overall investment risks. So many folks want to concentrate strictly on an investment's upside potential; that's all well and good; however, while doing that one should NEVER EVER fail to judge/measure the potential risk to their financial well being. Perhaps a twist on "The Oracle of Omaha's" approach.
Logged

HawgWild

  • All-American Hogvillian
  • *******
  • Karma: +239/-209
  • Offline Offline
  • Gender: Male
  • Posts: 4,643
  • Left lane, hammer down.
Re: irrational exhuberance?
« Reply #14 on: March 03, 2017, 04:19:26 pm »

FWIW, I'm almost 85% in the market. I want to put some money aside at a decent rate in case we experience another multi year downturn like we did in 2008. I'm currently getting 3.5% but I'm wanting something more than that and I need the Fed to up rates.
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #15 on: March 03, 2017, 04:59:00 pm »

FWIW, I'm almost 85% in the market. I want to put some money aside at a decent rate in case we experience another multi year downturn like we did in 2008. I'm currently getting 3.5% but I'm wanting something more than that and I need the Fed to up rates.
While we very well may get a March "bump" in rates I seriously doubt it will be much more than a 1/4 percent. While Yellen and gang seem to be itching for a hike this month, I honestly don't see a particular reason for it. While inflation his moved somewhat higher, primarily to a huge jump in oil prices, the overall rate is still mild. And even with OFFICIAL unemployment figures at 40+ year lows the overall level of income improvement is a joke. BTW one real issue the government doesn't reveal in it's employment figures are the number of folks who've fallen out of the work place for whatever various reasons. I can promise you that if those folks were countered/considered the unemployment figures would be far less rosy. In any event, the Fed is still stuck with a very difficult decision: raise rates to keep some "street cred" with the financial markets (after all they've been 'jaw boning" for months about needing to raise rates) or do nothing. Problem is that if they get too aggressive the paltry 2% or so growth we currently have, tenuous at best, will very likely go into the sh#t can. They also risk continuing to push up the $ which further pressures international business for U.S. based companies. So as low as current rates may be, don't expect a huge change even looking at things in the most optimistic of ways.
Logged

ricepig

  • Gold Hogvillian
  • *********
  • Karma: +5414/-5818
  • Offline Offline
  • Posts: 43,380
  • Hogville.net
Re: irrational exhuberance?
« Reply #16 on: March 03, 2017, 07:49:38 pm »

FWIW, I'm almost 85% in the market. I want to put some money aside at a decent rate in case we experience another multi year downturn like we did in 2008. I'm currently getting 3.5% but I'm wanting something more than that and I need the Fed to up rates.

I don't see getting much better than that, so I don't think you'll find a place to put your money, or not anytime soon. I've got some dividend stocks that don't pay 3.5%, lol.
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #17 on: March 03, 2017, 09:40:31 pm »

FWIW, I'm almost 85% in the market. I want to put some money aside at a decent rate in case we experience another multi year downturn like we did in 2008. I'm currently getting 3.5% but I'm wanting something more than that and I need the Fed to up rates.
One other thing to consider: as paltry as money market and other interest rates may be at least we're getting positive returns. Can you imagine living in parts of Europe, Japan and some other economies where you have NEGATIVE rates?! Imagine handing over your money through buying government securities (and even some higher grade corporates) and YOU PAYING THEM to keep your money for the length of the paper. Heck, five, ten years and even longer to get LESS than what you put in originally. What a deal :o ??? >:( :puke:
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #18 on: April 09, 2017, 11:14:29 am »

Learned something very interesting and disturbing earlier today. While I'm not saying it will impact the market(s) immediately, it is an issue that I believe will have to be addressed at some point. Lest we think this economy and corporate balance sheets are as healthy as the stock market's performance performance of late, just consider these facts.

On average corporate America is carrying $12 in debt for every $1 on cash on its balance sheet. In addition, roughly half of that $1 in cash is held by only 1/2 the listed companies. Much of this debt has been piled up by company's buying back stock (witness someone like Apple).

While this huge debt burden may not be of particular concern at the moment, this ability to continue funding the borrowing assumes that credit markets will continue to be available for such. Much like the mortgage situation back in 2077-08, what happens IF the credit tap gets turned off or severely curtailed? What happens if lenders decide enough is enough or they're going to have to be more selective to whom they lend money and for what reason(s)? It will NOT be pretty to say the least. As the wise old saying observes: "something's not a problem until it is".

While no one obviously knows if, and when, such a issue could occur, IMO it's still a factor we should all keep in the back of our minds. It's one reason that I believe now more than ever anyone investing in stocks and even debt should consider when making choices and decisions about their investments. Balance sheet health still very much matters, perhaps even more so. Unfortunately in this run of good fortune we've had over the past 7-8 years it's a lesson that many of us may have forgotten as we've been lulled into (perhaps) a false sense of security that somehow "this time it's different".
« Last Edit: April 09, 2017, 11:35:39 am by Vantage 8 dude »
Logged

HotlantaHog

  • All-American Hogvillian
  • *******
  • Karma: +444/-389
  • Offline Offline
  • Gender: Male
  • Posts: 4,433
Re: irrational exhuberance?
« Reply #19 on: September 26, 2017, 08:22:12 am »

HawgWild, Shiller ratio is now over 30. Median ratio is 16, mean ratio is 17. Yeah, it is making me nervous. Not bearish with the economy growing and interest rates low, but returns have got to be a lot lower than in more normal times.
Logged

HawgWild

  • All-American Hogvillian
  • *******
  • Karma: +239/-209
  • Offline Offline
  • Gender: Male
  • Posts: 4,643
  • Left lane, hammer down.
Re: irrational exhuberance?
« Reply #20 on: September 26, 2017, 12:00:20 pm »

Most of my money is still in the market but a pull back is not a question of if but when and how large. I read an article about the fearless 26 year old investors. They've never experienced a market crash and don't really think about one happening.
Logged

ricepig

  • Gold Hogvillian
  • *********
  • Karma: +5414/-5818
  • Offline Offline
  • Posts: 43,380
  • Hogville.net
Re: irrational exhuberance?
« Reply #21 on: September 26, 2017, 12:48:17 pm »

Most of my money is still in the market but a pull back is not a question of if but when and how large. I read an article about the fearless 26 year old investors. They've never experienced a market crash and don't really think about one happening.

I'll be real surprised if we don't get a 5% pullback before Christmas, JMO.
Logged

Vantage 8 dude

  • Hall of Fame Hogvillian
  • *******
  • Karma: +974/-2284
  • Offline Offline
  • Posts: 11,022
  • Surfing the web at Hogville.net
Re: irrational exhuberance?
« Reply #22 on: October 03, 2017, 12:06:09 pm »

I'll be real surprised if we don't get a 5% pullback before Christmas, JMO.
Obviously we could one of those (or more) at any time. There are always things to worry about, at least short term, that could "clock" the market at any time. Some "black swan" (unexpected) event that comes out of no where and catches most investors unprepared. Having said that, one misconception I hear over and over again is that a market declines because it's been going up too long. Nope, while a long market run may stretch valuations, like today, bull markets ultimately die because the economy (along with earnings, sales, and other fundamentals) are turning down. All things being equal as long as CEOs are fairly optimistic, which most still seem to be, the chances of a end to the bull market are reduced.

Having said that, one thing that IS a major force to monitor over the coming months is the withdrawal/draining of liquidity out of the banking system/overall economy by the Fed. While rising interest rates are being cited as a major worry, IMO it's the Fed's decision to discontinue buying treasuries and other debt that will have more of an overall impact. The "easy money" and huge pools of liquidity that have existed since the financial crisis of 2007/8 has in great part fueled the desire of investors to pursue more aggressive, risk oriented assets. If their less money out there chasing investment opportunities in the stock market then it's pretty clear the "free lunch" provided by the folks in Washington is coming to an end. All this latter subject matter goes back to the age old wisdom that one should "Never fight the Fed" (either positively or negatively).
« Last Edit: October 03, 2017, 02:09:25 pm by Vantage 8 dude »
Logged
Pages: [1]   Go Up
 

KARK
KWNA
Fox 16 Arkansas