# Market 2014



## Mortgage u/w (Feb 6, 2014)

So is the market crashing in 2014 or what?

Predictions? Is selling wise? Are any stocks sheltered from this possible upcoming crash?


----------



## Nemo2 (Mar 1, 2012)

Personally I always get nervous when things are (appear to be) going really well for little or no valid reason.


----------



## wendi1 (Oct 2, 2013)

Mortgage, yah wanna borrow my crystal ball?
:cower:


----------



## dubmac (Jan 9, 2011)

nobody knows - 
with the onset of Spring, some will "Sell in May and go away" 
I've realised that I cannot predict the market with any real success - so I buy and I hold.


----------



## Pano (Oct 16, 2012)

Tough to predict.
I wouldn't mind a correction though as equities are getting too overvalued.
Thinking of shorting. Putting a little money into something like HUV.


----------



## Taraz (Nov 24, 2013)

I think the American market will do OK. As for the Canadian market, it all depends on when the housing bubble pops...


----------



## cainvest (May 1, 2013)

There's a lunar eclipse on the 14/15, might be sign.


----------



## Eder (Feb 16, 2011)

We are in secular bear 3 more years yet!


----------



## Synergy (Mar 18, 2013)

^ secular bear??


----------



## My Own Advisor (Sep 24, 2012)

Maybe a small correction here, but I recall I had the TSX finishing at 14,200 and the Dow at 16,700 in the predictions contest.


----------



## canucked_up (Feb 23, 2014)

Now that I know what a secular bear is...maybe. 3 more years of what though? Same as last year I hope. Followed by what?


----------



## Pluto (Sep 12, 2013)

I have no idea if the market will crash this year. It is apparently overvalued according to many measures. The S&P 500 is not terribly over valued, so the over valuation is mostly elsewhere in the market, eg Russell 2000. Some in the media that say the market is not overvalued point only to the large caps, and overlook the rest of the market. But valuation methods don't tell us much about when stocks will crumble. I don't like buying now, but on the other hand shorting is out of the question. We are in some in between land, where the direction in the next few months isn't obvious. The thing that's going to spook the market, if nothing else does, is the withdrawal of stimulus especially in the form of higher interest rates. 

For me the key is the same as analyzing a real estate deal. You look at the numbers, and if one has to pay too much for too little, its a bad deal. For me I have some stocks on my shopping list, but I have to pay too much for too little right now. I want to buy Canadain bank stock, but I won't buy until the PEG is 1 or lower. Right now the PEG on some bank stocks is about 1.2 - roughly 20% over valued which implies a risk of capital loss, and lower yield. Why would I do that? Would I buy a rental property that didn't make sense? Nope. So why would I buy a stock that didn't make sense? 

There are times when it is very difficult to find investments that make sense, and this is one of them. The market for real estate and stocks is sending us a message. The general message is: Do Not Buy. If one just looks at value measures, for instance, PEG, and wait until it is 1 or better, you put the odds in your favour, and you don't have to try and predict market direction. The important P is patience, not prediction. 

Zweig's Don't fight the Fed rule of thumb is not a bad one. We have been riding the wave of stimulation since 2008-9. It's been very profitable. It's obvious, now, that the Fed is gradually withdrawing stimulus. That has to be a mildly bearish sign. It doesn't mean the market will tank tomorrow. Markets can with stand some rate increases, making the worry warts look foolish, and those who stayed in look like geniuses - until the fall. 

And speaking of falls, I'm not too concerned until the indexes cross below their 270 day sma. Then, I think I'm gong to buy some puts on some index etf's. Around the time I sell the puts, the plan is to buy some bank stock with PEG's at 1 or lower.


----------



## richard (Jun 20, 2013)

If you need the cash in 2014, sell today.


----------



## Eder (Feb 16, 2011)

canucked_up said:


> Now that I know what a secular bear is...maybe. 3 more years of what though? Same as last year I hope. Followed by what?


Sorry...the "secular bear" reference is Warren Buffet's a long time ago. He said we are in a 17 year cycle that is due to end in 2017 when rainbows & unicorns will once again adorn the economy. I don't think he will be too far off with his prediction.

Here's an old link 

http://money.cnn.com/magazines/fortune/fortune_archive/2001/12/10/314691/


----------



## jamesbe (May 8, 2010)

dubmac said:


> nobody knows -
> with the onset of Spring, some will "Sell in May and go away"
> I've realised that I cannot predict the market with any real success - so I buy and I hold.


Sell in May was true last year for sure. I forgot about this. I'm holding a bunch of cash from selling Mutual funds... been waiting for something to drop to shell it out. Maybe I'll wait till June.


----------



## gibor365 (Apr 1, 2011)

Any bad news today? Market started high, but dropped very sharply....


----------



## Mortgage u/w (Feb 6, 2014)

If a crash were to occur, what would you do to prepare for that?
When would you know the crash(or correction) has begun? 
Are there stocks or sectors that can be affected more than others by an eventual correction in the market?


----------



## daddybigbucks (Jan 30, 2011)

im at 20% cash right now and would like that to be at 25% by the next week and a half.
Pretty much sold all my non-essentials and just hold my foundation stocks + utilities and REITs.


----------



## Nemo2 (Mar 1, 2012)

A somewhat depressing viewpoint:

http://blogs.telegraph.co.uk/financ...ows-as-world-recovery-wilts-growls-saxo-bear/


----------



## gibor365 (Apr 1, 2011)

Mortgage u/w said:


> When would you know the crash(or correction) has begun?


When would you know that rouletta will hit red?!


----------



## Pluto (Sep 12, 2013)

Russell 2000 down 2.3% and NASDAQ down 2.6% on higher than average volume. Suggests that if this is a crash, these two indexes will lead the way. Doesn't prove the crash is at hand: we'd need one or two additional 2% down days on heave volume in the next week or two, for it to be probable.


----------



## Pluto (Sep 12, 2013)

Mortgage u/w said:


> If a crash were to occur, what would you do to prepare for that?
> When would you know the crash(or correction) has begun?
> Are there stocks or sectors that can be affected more than others by an eventual correction in the market?


Some people just hold through thick and thin. Their preparation is by buying indexes or stocks they have faith in to recover. That way they don't have to do any other special preparation. 
Others just sell some and hold cash until prices are more reasonable, then buy back in. 
Others, might buy some puts to try and mitigate losses. However if the expected fall does not arrive in time, one will likely lose on the puts. 

How do you know it has begun? The best I can do is two conditions: 1. if market cap value is > GNP or GDP, and 2. Major index falls below its 270 day ma, it will be serious. Other obvious signs are major indexes having more than one > 2% daily drop on higher than average volume < two weeks apart. 

The high beta stocks will likely fall more than the other stocks. The ones with heady valuations will likely fall more as well. SSYS has already dropped from 130 to 110.


----------



## MoreMiles (Apr 20, 2011)

No no no... you guys got it wrong. 

Now is the time to go big and mortgage your house to leverage for more investment!!!

http://www.financialpost.com/m/wp/n...en-it-makes-sense-like-now&pubdate=2014-04-05


----------



## Nemo2 (Mar 1, 2012)

MoreMiles said:


> No no no... you guys got it wrong.
> 
> Now is the time to go big and mortgage your house to leverage for more investment!!!
> 
> http://www.financialpost.com/m/wp/n...en-it-makes-sense-like-now&pubdate=2014-04-05


OK, glad _that's_ settled....Monday I fully mortgage the house, sell a couple kidneys, and 'invest' in a highly leveraged hedge fund.......think I've still got Bernie M's phone number around here somewhere.


----------



## sags (May 15, 2010)

There is no such thing as a "market crash" anymore.

That phrase has been stricken..........and replaced with "buying opportunity".

Rather than saying....."I lost 50% of my money in the last market crash"...it is now correct to say..."I lost 50% of my money during the last buying opportunity".


----------



## Eder (Feb 16, 2011)

I actually made a quick ~50% during the last "buying opportunity"....so did many others. That is why the phrase has been changed.


----------



## Killer Z (Oct 25, 2013)

Pluto said:


> Some people just hold through thick and thin. Their preparation is by buying indexes or stocks they have faith in to recover. That way they don't have to do any other special preparation.
> Others just sell some and hold cash until prices are more reasonable, then buy back in.
> Others, might buy some puts to try and mitigate losses. However if the expected fall does not arrive in time, one will likely lose on the puts.
> 
> ...


Very informative post Pluto. Thank you.


----------



## Pluto (Sep 12, 2013)

MoreMiles said:


> No no no... you guys got it wrong.
> 
> Now is the time to go big and mortgage your house to leverage for more investment!!!
> 
> http://www.financialpost.com/m/wp/n...en-it-makes-sense-like-now&pubdate=2014-04-05


If this guy would have wrote that in 2009 or 10, I'd think it was a fine idea, but I suspect most would say he was nuts because the memory of the crash was too fresh. Of course now, especially after a stellar 2013, articles such as this are more accepted. Human psychology in the stock market never changes. Usually they say it is greed at the top and fear at the bottom. I suspect greed is not quite the right word. It's more like projecting the immediate past into the future that makes them feel safe to buy and even use enormous amounts of leverage. I wish him luck with his diversified overvalued leveraged portfolio. A foolish idea presented as safe, is another sign of a top.


----------

