# I think it's worse than the stock market lets on



## james4beach (Nov 15, 2012)

I think the global financial situation is a lot more serious than the stock market lets on. Stocks have hardly fallen at all. The S&P 500 is mildly lower and has declined in an orderly fashion. The TSX doesn't even have much elevated volume. I interpret this as meaning that the stock market is not too worried, yet. I think stocks have not yet caught on to how serious the situation is elsewhere.

Low grade credit is absolutely crashing. See JNK or HYG as proxies. Lower lows were just reached today and this is a big deal ... there is tremendous destruction happening in junk bonds and billions $ are vaporizing. This also impacts all the credit derivatives that piggy back on it. (Similar story to subprime credit in 2007, actually).

What has me concerned, more recently, is the action of large global banks. Deutsche Bank seems to be ground zero in this, and is absolutely crashing at 4x normal volume. The steep selloff on very high volume is also seen in other large, derivatives-heavy banks such as HSBC (3x normal volume today), BAC, C, etc.

Add to this the intense rally in short term treasuries ... a sector which I've explicitly endorsed over the last year by the way ... and the picture is clear to me: there's a global flight to safety happening. Bank equities are being dumped in anticipation of enormous losses ahead.

In my opinion these are bad signs. Global banks are heavily interconnected, and it's just about impossible for a large global bank in one country to avoid trouble that another large global bank is experiencing.

*Conclusion*, again my opinion: the stock market hasn't caught up to the story, and will fall more in the couple years ahead. There is high risk of a European banking crisis and therefore a global financial crisis.


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## james4beach (Nov 15, 2012)

Zerohedge also shows the Deutsche Bank CDS chart. The cost to insure DB against default has shot way up:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/03/DB CDS c.jpg

There's a lot of crap on the ZH site, but I still pay attention to their posts about credit risk.


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## sags (May 15, 2010)

I don't think stock markets represent anything because.........

Most small investors put their money into mutual funds or other funds and have no idea about the market. The managers of the funds put the money into stocks because that is what they were designed to do. Institutions put money into stocks because they have no choice.

When you consider who is investing the bulk of the money into stock markets, they are forced to be there and their presence doesn't reflect confidence or anything else.


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## Pluto (Sep 12, 2013)

Russell 2000 is down 25%. Lots of stocks are down that are not in the other large cap indexes. 

There is no upward leadership right now. Bio techs have sagged. FANG stocks collapsed. There are few to no stocks with growing earnings pushing into new highs. Where will it end? Me I don't know. But the bulls have not given up yet, so it doesn't seem like the downside is over. 

Jan 29 it looked like US stocks could have a serious rally, but that has failed. The collective consciousness of market participants has hesitated. He who hesitates is lost.


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## OptsyEagle (Nov 29, 2009)

OK. Time for a happy article.

http://www.fool.com/investing/general/2016/01/21/why-does-pessimism-sound-so-smart.aspx

Disclosure: I neither agree or disagree with the article. My own opinion, as always, is that I have no idea where the stock market will close on any given day and that my overriding opinion is simply "the world will be OK".


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## Chris L (Nov 16, 2011)

It's almost like this 'crash' is being forced...like we need to correct the market, so let's do it. Let's force this to happen. The world is growing as is consumption. The US has a pretty low unemployment rate. But people are just panicking to panic. That's just my sense of things. My guess is that it will just end up being a pretty deep correction once we blow through all these feelings. "We're due for a correction," so one is happening.


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## agent99 (Sep 11, 2013)

Listening to CNBC panel and "experts" while in USA, it seems they don't see much contagion this time between Euro and NA banks. But on the other hand, they have been talking about a major oil related recession looming for some time and commented that major players are now starting to predict same. For example:

http://www.reuters.com/article/us-global-economy-idUSKBN0TL18F20151202

So what do 'we' do about it? In this case, the 'we' I am referring to are retirees living off savings and CPP/OAS. In other words, no job, no mortgage. Most of income is from dividend paying stocks - banks, pipelines, utilities, telecoms plus reits and some energy. Last time around, we just rode it out. Dividends remained largely intact. Downside somewhat protected by fixed income allocation.


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## Pluto (Sep 12, 2013)

Market is broken (video). 


http://www.cnbc.com/2016/02/08/the-market-is-broken-technician.html


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## Pluto (Sep 12, 2013)

agent99 said:


> Listening to CNBC panel and "experts" while in USA, it seems they don't see much contagion this time between Euro and NA banks. But on the other hand, they have been talking about a major oil related recession looming for some time and commented that major players are now starting to predict same. For example:
> 
> http://www.reuters.com/article/us-global-economy-idUSKBN0TL18F20151202
> 
> So what do 'we' do about it? In this case, the 'we' I am referring to are retirees living off savings and CPP/OAS. In other words, no job, no mortgage. Most of income is from dividend paying stocks - banks, pipelines, utilities, telecoms plus reits and some energy. Last time around, we just rode it out. Dividends remained largely intact. Downside somewhat protected by fixed income allocation.


Can't tell you. Be your own guru. 
If it worked out last time, do the same. Besides a lot of damage is already done. If you try to fix it after a lot of damage is done, it will probably end up being a worse fiasco.

I should add a bit more: if one is going to sell to preserve capital, you have to sell on good news into a rally when your stocks are hitting overvalued territory. If you wait until bad news to sell, its too late. The current circumstances is when you should be planning/considering buying, not selling.


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## lonewolf (Jun 12, 2012)

Back in the early 80s the price pattern in the Dow was calling for a huge rally that would then be retraced. Nothing has changed the market will still retrace the rally from the year 1982


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## agent99 (Sep 11, 2013)

Just looked at a TSX chart for past 16 years or so. If we ignore ups and down, it looks like almost a double. Or 4% pa. Add dividends and we get say 6%? (longrundata says 5.18% Total Return since 2001) Maybe things are not that bad? 

https://www.google.com/finance?chdn...INDEXTSI:OSPTX&ntsp=0&ei=IRK6VpFOipGYAcSDkdAH


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## Pluto (Sep 12, 2013)

agent99 said:


> Just looked at a TSX chart for past 16 years or so. If we ignore ups and down, it looks like almost a double. Or 4% pa. Add dividends and we get say 6%? (longrundata says 5.18% Total Return since 2001) Maybe things are not that bad?
> 
> https://www.google.com/finance?chdn...INDEXTSI:OSPTX&ntsp=0&ei=IRK6VpFOipGYAcSDkdAH


I think, for you, it is not so bad. Just collect your dividends and have fun. If you have any extra, consider buying a bit more of what you already own. Considering the stocks you chose, I don't think you have much to worry about.


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## tygrus (Mar 13, 2012)

Chris L said:


> The world is growing as is consumption.


The price of oil disagrees. Real growth is not happening.


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## Chris L (Nov 16, 2011)

tygrus said:


> The price of oil disagrees. Real growth is not happening.


Separate issue. Consumption of oil is actually increasing (slowly).


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## Pluto (Sep 12, 2013)

margin debt indicator:-

http://www.marketwatch.com/story/th...s-were-in-a-bear-market-for-stocks-2016-01-29


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## Pluto (Sep 12, 2013)

Chris L said:


> It's almost like this 'crash' is being forced...like we need to correct the market, so let's do it. Let's force this to happen. The world is growing as is consumption. The US has a pretty low unemployment rate. But people are just panicking to panic. That's just my sense of things. My guess is that it will just end up being a pretty deep correction once we blow through all these feelings. "We're due for a correction," so one is happening.


Chris, if you look at a long term chart of US unemployment, and compare that to major stock indexes, you will find that low unemployment is coincident with stock market peaks. Markets top out and go into decline when the economy is good. markets tend to bottom out, and start to go up when the economy is bad. 

You can not use a good economy to predict a good stock market. It is the opposite. A good economy is bad for stocks.


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## Chris L (Nov 16, 2011)

Interesting Pluto.


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## tygrus (Mar 13, 2012)

IMO all that fake QE and stimulus is now being blown out of the system and no real demand was created in its place. 

The real value on the DJIA is somewhere in the 12-14k range. In 2009 the market was trying to find its new natural level but central banks wouldnt wait for it. Now we will get that correction and some more now unless they QE it all up again.


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## agent99 (Sep 11, 2013)

Pluto said:


> I think, for you, it is not so bad. Just collect your dividends and have fun. If you have any extra, consider buying a bit more of what you already own. Considering the stocks you chose, I don't think you have much to worry about.


Glad to hear it 

I moved to BMOIL and started DIY investing in Oct 2003. Longrundata says that XIC would have had a Total Return of 6.95% if I had put all our equity into XIC back then. I should check and see how my DIY investing did!

PS: Re the stocks I choose. I have some very bad resources stocks in registered accounts. Not worth much (any more!)


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## Zoombie (Jan 10, 2012)

James, 
You may already be aware but for the other readers here, a big factor in the Euro bank CDS blowout is the increased counterparty risk recently uncovered (by the masses) on contingent capital bonds. The subordinated debt in question would be forced to convert to equity if bank capital ratios hit a specific threshold, and would allow the issuer to default (orderly). So far, Deutsche Bank has been hit the worst with the speculation to the downside. 

Z


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## CPA Candidate (Dec 15, 2013)

The whole problem with this crystal ball glazing is seeing the market action as some kind of rational, reliable signal of events to happen. It isn't and never has been. The market has predicted 27 of 11 recessions. Look at these daily swings, the market doesn't know how to value anything. It is quite obvious that the market is emotionally driven with fear dominating. Yes, there's a flight to safety, but so what? Does that mean I should follow? Should I do what everyone else does always? And how would I ever have the slightest chance of outperforming by doing that?

The same market you look to for signals of the future is the one that thought Linked shares were worth $200 one day, and $100 the next. It's the same one that thought Amazon was worth nearly $700 in December and less than $500 now.

Remember when all knowing market saw interest rates going much higher. And remember when the all knowing market starting selling and positioning for these higher rates?
Canadian bond yield are at their lowest levels since basically ever. How did that market crystal balling go?

And how come this all knowing market didn't have the slightest clue that oil was overpriced until it came pouring out of every orifice in the earth?

When the market was in the deepest despair following the financial crisis, when nobody would bid on anything, was one of the best times ever to put money into the market. It was only brave contrarians that made money.


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## Pluto (Sep 12, 2013)

CPA Candidate said:


> When the market was in the deepest despair following the financial crisis, when nobody would bid on anything, was one of the best times ever to put money into the market. It was only brave contrarians that made money.


Yep. And I think maybe the point of this thread is to toss around ideas on when that despair is evident. I'm not convinced we are there yet. But, who knows. Market action will tell me.


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## Chris L (Nov 16, 2011)

Well, what are you going to buy when the market bottoms out?


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## Twixer (Nov 25, 2015)

Stock market can't be a good predictor of economy if interest rates are very low. Other asset classes are even riskier or yield nothing.


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## Janus (Oct 23, 2013)

James, I'm largely in agreement. The HY concern is very legit, and I agree that prices have a lot of catching up to do.

In addition to all this, everyone seems to forget that the Euro crisis has just been kicked down the road since 2011. Debt to GDP has not improved at all in greece. It's the same situation, without resolution.


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## james4beach (Nov 15, 2012)

agent99 said:


> Just looked at a TSX chart for past 16 years or so. If we ignore ups and down, it looks like almost a double. Or 4% pa. Add dividends and we get say 6%? (longrundata says 5.18% Total Return since 2001) Maybe things are not that bad?


iShares says XIU return since inception is 6.2% (total return). That return is pretty good but let's keep it in context, total returns annualized:

Gold 1999-09-28 to 2016-01-31: *8.4%* (in CAD, see chart)
XIU 1999-09-28 to 2016-01-31: *6.2% *
XBB 2000-11-20 to 2016-01-31: *5.7%* (almost same period)

Here's what I see from the data. All of these are excellent long term holdings. Stocks performed mildly better than bonds (+0.5%/year) but with far more volatility and risk than bonds. And let's be clear, gold has by far given the best returns. TSX stocks have done _worse_ than an inert metal over a very long period.

I'm not sure how compelling a story that is for stocks. TSX has been a good long term holding, but so has gold (with much higher returns) and bonds (with nearly the same return and far less volatility).


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## Pluto (Sep 12, 2013)

And all of a sudden banks are under scrutiny: Citi, B of A, Deutsche Bank, all apparently selling at deep discounts to book value because investors don't trust them. 

http://finance.yahoo.com/news/really-scare-investors-bank-stocks-103032369.html


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## lonewolf (Jun 12, 2012)

Just read an article the other day regarding a lot of people have stopped making payments on their loans in Europe.


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## hboy43 (May 10, 2009)

james4beach said:


> iShares says XIU return since inception is 6.2% (total return). That return is pretty good but let's keep it in context, total returns annualized:
> 
> Gold 1999-09-28 to 2016-01-31: *8.4%* (in CAD, see chart)
> XIU 1999-09-28 to 2016-01-31: *6.2% *
> ...


Hands up the individuals that had 100% of their money in gold since 1999 and harvested that 8.4%? Anyone, anyone, Bueller?

Well, about 18% gold and 82% XBB over the above period would give the same 6.2% return as XIU. James will likely argue that that is lower risk than an all stocks situation, though I think that reasonable people could argue the opposite seeing as 18% of the portfolio is in one entity.

A more reasonable scenario is 10% gold, 45% XIU and 45% XBB which just happens to hit the same 6.2 number again. So here, I can agree with James that "I'm not sure how compelling a story that is for stocks". I also don't think it is an argument to shoot and piss on stocks either. 

The number I keep prime in my head as I go about my investing business is the century plus average returns of the various asset classes. This number shows that stocks are the highest returning asset class .. on average .. over decades -> century. It is always possible to find some other interval that will show one or another asset class in a bad light, and I have no doubt James will be back soon with another episode of "Stocks are Bad". Stay tuned.

Keep grinding that axe!

hboy43


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## agent99 (Sep 11, 2013)

hboy43 said:


> It is always possible to find some other interval that will show one or another asset class in a bad light, and I have no doubt James will be back soon with another episode of "Stocks are Bad". Stay tuned.


I am sure gold could be shown to be a poor investment over certain time periods. Other than a couple of relatively short periods, holding gold would be about same as stashing dollar bills under the mattress. For example 20 years from 1984 to 2004. We could very well be heading for a similar flat period, but who knows.

http://goldprice.org/gold-price-chart.html C$


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## humble_pie (Jun 7, 2009)

james4beach said:


> iShares says XIU return since inception is 6.2% (total return). That return is pretty good but let's keep it in context, total returns annualized:
> 
> Gold 1999-09-28 to 2016-01-31: *8.4%* (in CAD, see chart)
> XIU 1999-09-28 to 2016-01-31: *6.2% *
> ...



but the above trio - gold, XIU, XBB - are all priced here in CAD.

for XIU & XBB, no problem.

but i have a real problem believing that gold outperformed, when all that happened is that CAD declined compared to USD, which is the standard price unit for gold.

one might as well say that SPY or any other major USD stock index outperformed, when the happy story is that it was the currency that largely outperformed ...


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## peterk (May 16, 2010)

hboy43 said:


> The number I keep prime in my head as I go about my investing business is the century plus average returns of the various asset classes. This number shows that stocks are the highest returning asset class .. on average .. over decades -> century.


Sure, for some stock markets, in some countries, during some centuries. :biggrin:

The backbone of excellent stock market returns over many decades and centuries rests squarely on just a couple things though, namely, increasing productivity through technological innovation, increasing human population, and the spirit/willingness of enough of the populace to carry out those two things.

That willingness must be nourished and fostered by a government that rules with just and fair laws and ingrained human rights that are favorable to free thinking and capitalistic endeavors. Institutions, both academic and religious, that successfully balance and foster both a sense of scientific discovery, and a sense of moral absolutism, which instills curiosity, trust and cooperation among the peoples of a nation.

England pulled this off effectively several hundred years ago for quite some time, and its colony, America, extended the good times for another 200 years with youthful exuberance.

Will the good times continue for another 100 years? Western governments are growing larger and more anti-capitalistic each year, academic institutions no longer revere the scientific method and are a farce of what they once were, religious institutions are in shambles, and as a result western citizens are lacking in community, moral guidance, and are becoming increasingly hedonistic. Trust in our neighbors, our government and our leaders is at all time lows. Families on average struggle to remain whole and growing.

In the 20th century the USA went through a population increase from 100M to 300M, as well as the invention and implementation of: the automobile, telephone, assembly line, airplane, penicillin, refrigerator, TV, modern banking farming and medicine, two world wars, computers and micro processors, modern manufacturing and supply management systems, satellites, cellphones, and the internet!

And all of that returned what? ~8%/yr over 100 years I believe is roughly the number that is out there?

I hope and dream of another century of 8% growth in our great western nations for myself and my future children to thrive in. But how can we hope to achieve the same amazing things as the 20th century for the next 100 year? Especially when the foundation on which that immense period of discovery and prosperity was achieved is being actively battled and turned to rubble by our governments and the ruling class?

I have serious doubts..


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## hboy43 (May 10, 2009)

peterk said:


> And all of that returned what? ~8%/yr over 100 years I believe is roughly the number that is out there?
> 
> I hope and dream of another century of 8% growth in our great western nations for myself and my future children to thrive in. But how can we hope to achieve the same amazing things as the 20th century for the next 100 year? Especially when the foundation on which that immense period of discovery and prosperity was achieved is being actively battled and turned to rubble by our governments and the ruling class?
> 
> I have serious doubts..


All reasonable concerns, but saying stocks had the highest average return for a century is not the same thing as saying 8% is going to happen going forward. An entirely reasonable scenario is that each asset class returns say 2 percentage points lower than the century figures, leaving obviously at the same time the same ranking order. Clearly fixed income has troubles going forward after a 30 year period of dropping interest rates to approximately zero. Real estate also has problems going forward as it now often costs (Toronto, Vancouver) 7 to 10 times annual income instead of the 3 to 5 range it used to be.

hboy43


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## agent99 (Sep 11, 2013)

Given the advances in communication, technology, transportation, education etc that are still occurring at a rapid pace, I don't see why growth should decline. 

In just the way Britain benefited from it's colonies, America, Europe (and hopefully Canada) should be able to benefit from growth in Asia, South America, Africa and elsewhere. I don't think we are coming to a crashing halt any time soon.


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## james4beach (Nov 15, 2012)

humble_pie said:


> but the above trio - gold, XIU, XBB - are all priced here in CAD.
> 
> for XIU & XBB, no problem.
> 
> but i have a real problem believing that gold outperformed, when all that happened is that CAD declined compared to USD


Actually no. USD/CAD was flat over that period. In Sept 1999 the dollar was around $0.68 and in Jan 2016 it's around $0.70 so the foreign exchange is a total non-issue in that period.


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## lonewolf (Jun 12, 2012)

Commodity prices are @ prices seen 40 years ago, The Baltic dry index has fallen off a cliff as has the velocity of money. The entire rally from the 09 low has been on diminishing volume, Mutual fund cash levels have set all time lows during the rally during the rally from the 09 lows as NYSE margin debt has set all time highs during the rally off the 09 lows. Price pattern largest jaws of death pattern in the DJI ever. From 1966 - 1982 was a 4th wave correction, rally into 2016 was a 5th wave in the DJI which should retrace to the area of the 4th wave. Long the DJI is more dangerous then any time since inception. To Elliott wavers A series of ones & 2s to the down side is where to go short then cover @ the Prechtor point (3rd of 3rd )


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## dogcom (May 23, 2009)

The current fiat currency system is about to reset again and with it all the extreme manipulations we have seen in all markets. Lonewolf this fits in well with your dire scenario. The only thing that could change this is an all out money print that brings in near hyper-inflation. The stock market then will go to 100,000 or higher in toilet paper dollars, so we will have to see how the paper system ends up coming apart.


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## lonewolf (Jun 12, 2012)

The Fed does not want to destroy their money that they enjoy. Though the fed is no match for the markets.


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## james4beach (Nov 15, 2012)

But can't the central banks print just enough to fight the deflationary force, but not too much that causes run-away inflation?

Sure, they screwed up and created extreme boom/bust cycles in 2000 and 2008, but maybe *this time* they will get the balance just right?


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## dogcom (May 23, 2009)

The only problem james is they will have to have China, Russia and every country on board to do it and allow the US dollar to keep its reserve status. The west is running out of gold to game the precious metals market and all things that are real, so how long can they hold it together. If gold and silver didn't matter then why all the huge attention to keep it down at all costs?


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## lonewolf (Jun 12, 2012)

james4beach said:


> But can't the central banks print just enough to fight the deflationary force, but not too much that causes run-away inflation?
> 
> Sure, they screwed up and created extreme boom/bust cycles in 2000 and 2008, but maybe *this time* they will get the balance just right?


 It would be like sticking a cork in some ones butt to make some green not going to be good results. The market is more power full then the powers that be it is natural to vibrate vibration can not be stopped .maybe someday we can stop vibration of the universe not even sure if we want to even go there but we are not even close to doing it


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## dogcom (May 23, 2009)

Lonewolf can you say Deutche Bank and European contagion. The forum buddies are in for a very rude awakening in all paper markets that are now coming apart. It took complete manipulation and not investing that has given the stock return for everyone and now it is ending. As you say Lonewolf something in nature is going to end this mirage.

The problem now is what are they going to blame it on and to distract us. Look for false flags and war as the go to. Right now Saudi Arabia is looking at getting more involved in Syria and that could go very badly.


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## lonewolf (Jun 12, 2012)

mood causes action the type of mood that causes selling of stocks & confidence to bring down the system will lead to war


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## tygrus (Mar 13, 2012)

james4beach said:


> But can't the central banks print just enough to fight the deflationary force, but not too much that causes run-away inflation?


Printing money is only one part of the equation, somebody has to take on the debt on the other end. Either companies to do share biy backs because they dont invest in capital and plant any more, or consumers to buy more junk. I don't see an appetite for ether out there especially in Canada and the eastern EMs.


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## Pluto (Sep 12, 2013)

Chris L said:


> Well, what are you going to buy when the market bottoms out?


Boring Banks, piplines, telecom. I'm seeking large cap dividend payers with a history of surviving. I have bought the last two days when the market has been taking a drubbing. I can't know how far the market will drop, so I start early and buy on the way down. These stocks don't give as much pop when the market turns up into a new bull as some others will, but I'm not trying to hit a grand slam. 

If the market goes a whole lot lower, and it looks reasonable, I'll buy more of the same on margin to give me a little more pop when a new bull market begins. 

It can't be known far in advance when a market bottoms. It is wise just to use value indicators, and buy good value. In 2008 I bought on a value basis, not knowing where the bottom was. I felt OK about that because I only buy survivors. By Feb-march I was in the red, but bought more of what I had on margin. If you look at a chart of the index of those times, the sharp drop made it obvious that buying large cap survivors on margin was safe. But not all bottoms can be read as clearly as that one. 

I started buying now because the TSX is well into bear territory. 
One conundrum for me recently is the US market hasn't clearly bottomed out. And when it does, it could drag the TSX lower. 
Too, it looks like there is way more pain in the oil patch coming. CDN oil companies are bleeding bad. More bad news could (irrationally) drag my stocks lower. this is where the use of margin comes in. If executed well, it mitigates and enhances the ultimate pop when the new bull market begins.


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## peterk (May 16, 2010)

hboy43 said:


> All reasonable concerns, but saying stocks had the highest average return for a century is not the same thing as saying 8% is going to happen going forward. An entirely reasonable scenario is that each asset class returns say 2 percentage points lower than the century figures, leaving obviously at the same time the same ranking order. Clearly fixed income has troubles going forward after a 30 year period of dropping interest rates to approximately zero. Real estate also has problems going forward as it now often costs (Toronto, Vancouver) 7 to 10 times annual income instead of the 3 to 5 range it used to be.
> 
> hboy43


Good point. I don't think it's unreasonable to see lower stock growth, lower interest rates, and stagnating property values going forward for decades.



agent99 said:


> Given the *advances in communication, technology, transportation, education etc that are still occurring at a rapid pace*, I don't see why growth should decline.
> 
> In just the way Britain benefited from it's colonies, America, Europe (and hopefully Canada) should be able to benefit from growth in Asia, South America, Africa and elsewhere. I don't think we are coming to a crashing halt any time soon.


I'm not really seeing all that much growth in these areas. We already have near instant communications on computer based and cell-phone based audio and video platforms, what more is there to improve that will discernibly increase productivity?

Same for transportation... Other than a gradual increase in fuel efficiency, where is the improvement in transportation? Cars and truck aren't going to be going any faster in 50 years than they do now, if anything they will be slower. Maintaining roads and highways has been neglected by governments, and increasingly cautious safety and insurance advocates won't be allowing increases to roadway speeds anytime soon. Transportation capacity is growing much slower than population growth. Trains just don't seem to be happening in the west to any significant degree. Too many land use, funding, environmental, bureaucratic, and NIMBY hurdles to be overcome...

Education is going downhill in a major way, not improving. Not only are high school students graduating without any practical or critical thinking skills, so now are most university and college students. The American ivy league is nearly in shambles, succumbed to government, administrative and economic interference in the educational process. The rest of the teaching institutions from the bottom to the top suffer similar fates. STEM, law, medicine programs are somewhat resistant, but are still succumbing just slower. A 2015 science graduate is not the same as a 1965 science graduate by a long shot.

Technology and computing I don't know much about, but it seems this is the area where any significant growth remains. Certainly there are advances and major efficiencies still waiting to be discovered and improve on processes. Will those actually lead to major productivity increases though, given the limited growth and restrictions put in place by our infrastructure, social, and educational components? Maybe not as much as one would like to think...

Where are the advancements in human health like we had in the 20th century? Sure some new surgical techniques are developed here and there, and new drugs to manage symptoms, but these are getting vastly overwhelmed by the general poor health of western populaces due to poor personal choices regarding food and exercise and stress. I see this only worsening as life becomes more complex and less ideal for the human body and mind in future generations. 

Certainly it's apparent that much of the 3rd world is slowly being lifted out of poverty and into a higher and more modern standard of living (thanks to Capitalism and technology), but how much can the west expect to piggyback on that growth? Definitely somewhat, but enough to make up for our own lack of meaningful advancement? I doubt it.

The way things are going, I have a hard time believing the S&P 500 will be 2,000,000 in the year 2100.


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## james4beach (Nov 15, 2012)

Stock investment requires some amount of faith / belief / hope that ultimately, stocks will go higher.

This is not a law of physics or anything. It may go higher eventually, or not. For example Japan's Nikkei is unchanged over 30 YEARS. And they're not the only stock market in world history that failed to go up... it's happened before and it will happen again.

So there's a certain element of "faith in stocks". My faith in stocks is low. To each, his/her own.


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## peterk (May 16, 2010)

I suppose I'm not all as pessimistic as I appear above, although sometimes I am. I'm fickle.

I'm very interested in the multi-century phases of transition and maturation that societies and nations goes though. Which is why I think it's perhaps naïve to look at merely 100 years of data and extrapolate out going forward. America and the western world has no doubt gone through a major stage of growth and aging for the past 100-200 years. Hopefully it continues at this rate for another 100 years until I'm long dead, but it appears there are an increasing number of signs that indicate otherwise...


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## dogcom (May 23, 2009)

We all seem to point to the stock market as being the end of everything or something that never goes down for very long or something. Really the problem is debt, government spending, fiat money, jobs, consumer spending, health care, over indebted companies, banks and derivative risk, war and on and on.

Stock market seems to give everyone the feeling that all is well and all we should worry about, when it really is just one part of everything else.

So your right peterk it really is about the phases, maturation that society goes through and transitions.


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## CPA Candidate (Dec 15, 2013)

So the TSX is up for the year now, it must be much, much worse than the market lets on! It isn't even going in the right direction anymore.

Congrats to all the smart people who didn't sell during January's conniption fit. You passed the test.


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## The_Tosser (Oct 20, 2015)

CPA Candidate said:


> So the TSX is up for the year now,......
> Congrats to all the smart people who didn't sell during January's conniption fit. You passed the test.


LMAO yes congratulations you're up to -15% in 10 months and with all of that risk to boot, roflmfao..

Brilliant work there, sitting on your *** going nowhere. Just Brilliant!

Or should i say back to even in 2 years,.. but yeah it sounds better just talking about the TSX in the last 60 days while ignoring reality entirely... rofl. 

Just as clowny as the OP in any case.


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## jargey3000 (Jan 25, 2011)

I've come to a new revelation: "Market timing is EVERYTHING". The ONLY way to invest in the stock market.
My advice: put EVERYTHING into the market NOW. We're on an upward march til at least this summer! Then pull out & take your profits!


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## atrp2biz (Sep 22, 2010)

The less decisions one makes, the less ways there are to mess up. Market timing if flipping a coin. We will make new highs in the market. Whether it's in one year of five years, I have the comfort of knowing that I will be fully invested when it does.


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## james4beach (Nov 15, 2012)

I don't think anything has changed versus what I described in my initial post, by the way.

A stock market rally does not suddenly "solve" a deteriorating credit situation, or balance sheets of European banks.

The sharp rally in junk bonds is also pretty normal to see in a crashing sector. It gets oversold, has sharp rallies back (running in short sellers), then continues its decline.


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## hboy43 (May 10, 2009)

The_Tosser said:


> Just as clowny as the OP in any case.


Commentary from a tosser pretty much all by himself in the virtual room "What are you buying? Volatility ..." Too funny, you can't make up this stuff. I have to ask, rude or stupid?

I don't agree with hardly a word that the OP says, but I think at the end of the day he is a guy I could have a beer with.

hboy43


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## vi123 (Oct 29, 2015)

This thread is fairly typical of the mentality that appears every time the market dips. Everything suddenly seems worse than it is, all the talking heads start predicting imminent doom, and people dig up all kinds of valuation methodologies and charts that show how stocks could go to zero.

Well, guess what.. 90% of the time all these people are wrong. For any newbie investors on here, when you start seeing the 'sky is falling' threads its generally a great time to buy.


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## CPA Candidate (Dec 15, 2013)

The_Tosser said:


> LMAO yes congratulations you're up to -15% in 10 months and with all of that risk to boot, roflmfao..
> 
> Brilliant work there, sitting on your *** going nowhere. Just Brilliant!
> 
> ...


Since Jan 1 2015 my portfolio is up. I was flat last year when the TSX was down. I've beaten the TSX since I started investing.


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