# Is the sky falling?



## Romy (Jan 14, 2015)

Some people are saying the sky is falling. They're saying that soon we'll miss 2008. Are we in a huge bubble that's about to burst (or already in the early stages of bursting)? Or do I simply know Chicken Littles? :biggrin:


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## Belguy (May 24, 2010)

I'll let you know at the end of the year. Perhaps I will even see you in the soup line. September and October are historically terrible months for stocks.


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## gibor365 (Apr 1, 2011)

> Some people are saying ....


 Who?! lonewolf?!


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## Sampson (Apr 3, 2009)

Housing market? or Credit crisis?

Canadian housing market, probably.
International credit market, no way. Basel III plus the stress testing of the major American banks shows they are no where NEAR the danger levels approached in 2008. I bet equity markets are in for a correction, but not a 666 S&P500 again.


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## Romy (Jan 14, 2015)

Sampson said:


> Housing market? or Credit crisis?.


Dow and S&P. People are saying the Fed has artificially manipulated the prices far, far too much. Over the past few years, the Fed has a) Printed a LOT of cheap stimulus money, and b) kept the interest rate low. People are worried that these actions inflated the stock market into a bubble, and that naturally the markets should be much, much lower. And that sooner or later, this will pop, and we'll crash like in 2008 or even harder. I don't know if this is true, but I hear people saying it. Thoughts? Is 2008 (or even 1929) around the corner? We recently had a 10% correction for the Dow and S&P -- was this a natural correction or the start of a collapse?


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## gibor365 (Apr 1, 2011)

> Perhaps I will even see you in the soup line


 Perhaps we'll see each other "under the bed"


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## james4beach (Nov 15, 2012)

Did lonewolf not predict this carnage? You guys gave him a very hard time and then ... the market tanked.


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## GoldStone (Mar 6, 2011)

11% down from the all time high is a carnage? Please.


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## MoreMiles (Apr 20, 2011)

james4beach said:


> Did lonewolf not predict this carnage? You guys gave him a very hard time and then ... the market tanked.


He did.... always did, for the last few years he has been posting. Since his initial perma-bear predication, the markets have gone up by like 150%... so it's now dropped like 10%... tanked?


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## james4beach (Nov 15, 2012)

OK, good point. We're still virtually at all time market highs. Lots of room below.


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## Sampson (Apr 3, 2009)

Romy said:


> Thoughts? Is 2008 (or even 1929) around the corner?


I presented a few thoughts and no one on this forum has ever quantified what there would be a large magnitude correction. There have been many straw man arguments saying credit is cheap, therefore the crash will be big.

Really look back at 2008, the magnitude of the problem. Remember in 2010 when 'Black swan' was the mode. Everyone could remember recent history and thought these things are happening all the time. The cheap credit inflating housing markets (in Canada), and equity markets across the World are forecastable. They will not trigger another generational event simply due to the fact that people can see it coming.

What I think seems to be more interesting (in the US) is the reliance of growth on extrinsic factors, emerging markets buying goods, commodities, etc. In my view, the consumer engine hasn't been able to bring the US fully out of this mess, and this doesn't bode well in the future. The US is no longer a self-sustaining engine. Speculators now expect unreasonable growth rates, and this probably means lower real returns for many years to come.


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## mf4361 (Apr 11, 2015)

I play this song while reading this post


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## GoldStone (Mar 6, 2011)

S&P 500 trades at 15x earnings. 10 year average is 14x. Let's say that multiples compress from 15x to 14x. That's another 7% down, or 20% drop from the all time high.

Can S&P drop more than that? Anything is possible in a panic... but I doubt that we would stay below 14x for a long time.


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## dogcom (May 23, 2009)

We are in a huge debt and low interest rate, fiat money and bond bubble that requires constant manipulation and propaganda to sustain it.

Does this mean the stock market will tank. Yes it could easily do just that and drop below the 2008-09 lows. On the other hand the Fed could go all in and the Dow could reach 50,000 or more.

To say this is normal is completely idiotic when you think about the ZIRP and QE's that we have seen in the US and around the world.


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## lonewolf (Jun 12, 2012)

MoreMiles said:


> He did.... always did, for the last few years he has been posting. Since his initial perma-bear predication, the markets have gone up by like 150%... so it's now dropped like 10%... tanked?


 Was long from the 09 lows with in a day or 2, Left the party when the multi decade upper jaws of death upper trend line was touched in the DJI. I did a post back in time about a kid with a ruler well DJI was well below the upper trend line under jet powder. Exiting the bull & Looking to go short for a move below the 09 lows once the upper line was touched is going to be very profitable. We are near an historic top being long till the last tick is just Krazzy. In next 10 years DJI could easily see 1000.

Were in a Puetz potential crash cycle window till 6 weeks after the last solar eclipse


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## Sampson (Apr 3, 2009)

dogcom said:


> We are in a huge debt and low interest rate, fiat money and bond bubble that requires constant manipulation and propaganda to sustain it.


Quantify or back this up.


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## Sampson (Apr 3, 2009)

...


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## james4beach (Nov 15, 2012)

The US CAPE (Shiller PE) peaked at 27 this cycle, significantly overvalued. Lots of complacency about over-valued stocks for a long time, with hardly _any_ correction on the S&P 500, was a recipe for disaster.

The Federal Reserve has a lot do with stock direction, so it's hard to tell where things will go. The insane stock rally since 2009 directly follows the size of the Federal Reserve balance sheet. More stimulus = stocks go up. I don't know why CMF members have been so resistant to accepting this. The correlation is blatant. Just look at the FRED graph
http://www.coffeeandcharts.com/wp/2015/09/09/the-end-of-qe3-updated-timeline/

If the Fed does not grow their balance sheet, the market will be volatile and maybe fall further. If the Fed inflates and grows their balance sheet, stocks will likely follow upwards. If the Fed deleverages, then stocks definitely fall.

Free markets my a**. Send Yellen a fruit basket.


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## lonewolf (Jun 12, 2012)

Sampson said:


> Quantify or back this up.


After the crash of 1987 the working group on financial markets was established. After the flash crash there were orders that went through during the crash that were canceled. ( Those orders should have went through by not letting the orders go through is manipulation.)


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## dogcom (May 23, 2009)

There is operation twist which the Fed buys long dated treasuries by selling short dated treasuries.

http://www.investopedia.com/terms/o/operation-twist.asp

Of course there is QE to keep rates low and backstop the US deficit.

Due to rates being pushed to low companies can borrow and buy back stock.

If long rates were allowed to rise to cover the risk of purchasing the deficit out there what would happen? QE is being used by someone to cover and Japan, US, Europe and so on are taking turns to cover so the Fed really hasn't stopped QE.

This is all a great experiment as James has eluded to in other threads and we just have to wait and see what comes next but it will not be free markets.

By the way keeping the bond bubble alive by keeping rate low is job 1 and the stock market would be sacrificed before the bond market because the bond market is much bigger.

Then again we are so far down the rabbit hole now we may not want to see free markets anymore because of all the carnage that will follow.


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## tombiosis (Dec 18, 2010)

Recent drop is attributable to the fact that I recently deployed some $$$ in the markets. Every time I make a purchase, we see a 300+ point drop the very next day. Simple really. 
:hopelessness:


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## mrPPincer (Nov 21, 2011)

lonewolf said:


> In next 10 years DJI could easily see 1000.


Is this a typo? I think you missed a zero.
DJIA is at 16,000 right now.


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## lonewolf (Jun 12, 2012)

Sampson said:


> Quantify or back this up.


 Manipulation has been going on for a long time. When the hunt brothers tried to corner the silver market. Some of the big boys were short on the wrong side of the market (went short a little to soon) So the exchange where silver was traded would only take sell orders.

Another example is White Water with Hilary Clinton.

After 911 the market was shut down which is manipulation intent was on preventing a crash.

Who knows how much manipulation is gong on behind closed doors ?

@ least China has the guts to come out & admit they manipulate their market, Does not matter though the market will have its way.


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## lonewolf (Jun 12, 2012)

mrPPincer said:


> Is this a typo? I think you missed a zero.
> DJIA is at 16,000 right now.


 Thanks MrPPrincer no zero was missed 1000 is the number. The market is always right if any mistake is made it is me not the market. I will not be holding short till 1000 will be playing both sides using numbers, statistics & math to guide me.


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## mrPPincer (Nov 21, 2011)

DJIA @ 1,000 is a 93.75% drop from here.
Scary to imagine a world were that happens, let's hope we never see a collapse of that magnitude.


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## Beaver101 (Nov 14, 2011)

^ Or even half that magnitude ... and imagine what will happen if lonewolf joined the Predictions Contest? :eek2: :biggrin:


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## humble_pie (Jun 7, 2009)

lonewolf said:


> Thanks MrPPrincer no zero was missed 1000 is the number. The market is always right if any mistake is made it is me not the market. I will not be holding short till 1000 will be playing both sides using numbers, statistics & math to guide me.




mark, all. Dow 1000 by 2025.

it's great we have such a lively bunch of commentators. Another was saying this am that bonds outperform stocks.

notice that these folks are never talking through their hats. They always have the most artful numbers & stories.

it's all pretty wonderful if you ask me


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## lonewolf (Jun 12, 2012)

Beaver101 said:


> ^ Or even half that magnitude ... and imagine what will happen if lonewolf joined the Predictions Contest? :eek2: :biggrin:


 years ago I read there was a large prediction contest @ the start of the year amongst brokers for prices in various markets for the close of the end of the next year. The guy that won thought he would try an experiment just put down the current numbers in each market. When averaged out for the different markets the closest prediction was no movement @ all.


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## andrewf (Mar 1, 2010)

mrPPincer said:


> DJIA @ 1,000 is a 93.75% drop from here.
> Scary to imagine a world were that happens, let's hope we never see a collapse of that magnitude.


Wouldn't that mean every other company than Apple will fold, and Apple would lose half its value or more?


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## gardner (Feb 13, 2014)

andrewf said:


> Wouldn't that mean every other company than Apple will fold, and Apple would lose half its value or more?


The idea of a world where only the manufacturer of luxury gewgaws survives and businesses that provide core energy, transportation, food and so forth are forced out of business scares me.
I'm not sure what iPods taste like, and I'm not keen to find out.


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## HaroldCrump (Jun 10, 2009)

I can't speak for lonewolf, however, DJIA at 1,000 may not mean the end of civilization - it could mean the end of faith in the "markets".
We could still have a functioning economy and a civilization.

But the vast majority of people can go back to the traditional forms of wealth preservation - land, inter-generational properties (i.e. ancestral homes), gold/silver, fine art, private owner-operated businesses, jewelry, etc.

If the present day stock market phenomenon is one giant, debt & liquidity filled bubble, then it can burst and life as we know it need not end.

If central bank support is gone and public loses faith in the public markets (stocks, bonds, etc.) it is conceivable that markets may fall 90% or more.

It will not be painless, of course, there will be winners & losers.
But I don't think it will be the end of civilization.


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## AMABILE (Apr 3, 2009)

don't worry about the world coming to an end
it's already tomorrow in australia


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## CPA Candidate (Dec 15, 2013)

Have we reach peak stupid on the forum? Quite likely given the most prolific posters are over-weight stupid.


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## GreatLaker (Mar 23, 2014)

CPA Candidate said:


> Have we reach peak stupid on the forum? Quite likely given the most prolific posters are over-weight stupid.


I am waiting for peak fear. That's when we should get greedy (according to Warren Buffett anyway).


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## HaroldCrump (Jun 10, 2009)

CPA Candidate said:


> Have we reach peak stupid on the forum? Quite likely given the most prolific posters are over-weight stupid.


By prolific posters, do you mean those with higher post counts?
Like those that visit & post daily?
If so, thanks for the insult.


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## tygrus (Mar 13, 2012)

The dow should be exactly 6500 points x 7% x 6 years, which equals 9100. That is the level the index reached after the 2008 crisis before artificial stimulation was started times its historical annual gains. 

The fed will never let the stock market or housing crater ever and they will sacrifice everything to make sure. The 99% watch their house prices, the 1% watch the stock market. And to keep both in the game, neither can be allowed to falter.


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## Eder (Feb 16, 2011)

♫♫ You better watch out.....you better not pout....coz Santa Claus is comin to town!!!! ♫♫ (soon) 

Don't wait too long to buy presents for your portfolio.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> DJIA at 1,000 may not mean the end of civilization - it could mean the end of faith in the "markets".
> We could still have a functioning economy and a civilization.
> 
> But the vast majority of people can go back to the traditional forms of wealth preservation - land, inter-generational properties (i.e. ancestral homes), gold/silver, fine art, private owner-operated businesses, jewelry, etc.




hooray it's the 14th century! folks in the late middle ages had a life expectancy of 29 years!

please HC could i be a marchesa or at least a contessa? You know the drill. Ladies in waiting, banquet halls with minstrels & servers bearing roast ducks & geese, palomino ponies covered with ermine robes & side saddles.

not for me would be living as a serf in a one-room sod hut with live chickens at one end so they could keep warm by my miserable peat fire in wintertime.

i'd put bells on candidate's 5-cornered hat so we could hear him coming.


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## Rusty O'Toole (Feb 1, 2012)

"Why The Market Is Poised For A Rebound: Gartman Says "Bear Market" Will Take S&P To 1420-1550"

Gartman turned bearish so it's time to get long.


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## dogcom (May 23, 2009)

humble_pie said:


> mark, all. Dow 1000 by 2025.
> 
> it's great we have such a lively bunch of commentators. Another was saying this am that bonds outperform stocks.
> 
> ...


I think you are talking about my post in bonds outperforming stocks but I said no such thing. I said that the bond market is more important then the stock market. I am not talking returns but the stability of the bond market and keeping rates down across the curve.

I doubt there is a single forum buddy here that thinks that rates rising significantly across the board would not be more important to the Fed. If rates went up enough it would destroy the stock market, housing market, US deficit and everything else. This would be a good thing at some point but not before we go through the ringer first and hopefully survive it.


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## Belguy (May 24, 2010)

This is the kind of comparison that drives me crazy. Ten years ago, you could have purchased a 2 acre piece of land outside of the Ottawa suburb of Kanata for 50K that is currently going for $250K. Or, you could have put the $50K in the XIC Canadian Composite ETF which has had a 10 year cumulative gain of 33% and have $66,500 today. Or, you could have invested the $50K in the XSP U.S. ETF which has had a 10 year cumulative return of 105% and be sitting on some $103K today.

Hindsight is 50/50 but dang I wish that I had purchased that piece of property instead of investing in a Couch Potato Portfolio. 

Live and learn.


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## gibor365 (Apr 1, 2011)

> Or, you could have invested the $50K in the XSP U.S. ETF


 or you could've buy APPL


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## GoldStone (Mar 6, 2011)

CPA Candidate said:


> Have we reach peak stupid on the forum?


Yup. People talk, with a straight face, about DJIA 1000.

Maybe I should switch to Stockhouse. That would be an upgrade in content quality.


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## Belguy (May 24, 2010)

Not too many investors are sinking their life's savings in a single stock but plenty of investors are betting the quality of their retirement on long term holdings of a Couch Potato Portfolio.


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## mrPPincer (Nov 21, 2011)

imho it's not stupid to consider wildly unlikely scenarios, at the very least it's simply a somewhat amusing thought exercise for those of us with a lot of time on our hands, no need to contibute nothing but insults
So we're all a bunch of morons now and it's time to run off to Stockhouse?
all I can say is you'd be missed


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## humble_pie (Jun 7, 2009)

dogcom said:


> I think you are talking about my post in bonds outperforming stocks but I said no such thing. I said that the bond market is more important then the stock market. I am not talking returns but the stability of the bond market and keeping rates down across the curve.



no dogcom it was somebody else writing about bonds, not yourself.


this am i did thank you for the trans-pacific partnership headsup, though.




humble_pie said:


> ... i'm happy to see the trans-pacific partnership coming out into the open & would like to thank dogcom for raising this issue in cmf forum. Hey dog, if you happen to pass by here, thankx!


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## GoldStone (Mar 6, 2011)

mrPPincer said:


> imho it's not stupid to consider wildly unlikely scenarios, at the very least it's simply a somewhat amusing thought exercise for those of us with a lot of time on our hands, no need to contibute nothing but insults


I don't see any insults in my last post.

DJIA 1000 would be trading at one times earnings. Think about that for a sec.

I literally can't even.


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## mrPPincer (Nov 21, 2011)

I imagine earnings would have to have changed somewhat in the incredibly unlikely scenario of a DJIA 1000 
The insults comment was referring to 'peak stupid'


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## zylon (Oct 27, 2010)

*What was the plan again?*


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## sags (May 15, 2010)

Interesting chart.

It took about 14 months to rise 33%, which was impressive..........almost straight up on the chart.

It took 4 months to drop 18%.............almost straight down on the chart.

To get back to the April level it would require 36% gains. 

If it matched previous stellar bull market performance, it will take 18 months to reach the April level again.


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## sags (May 15, 2010)

Carl Icahn isn't very optimistic these days.

He joins Bill Gross, Alan Greenspan and others on the bond bubble thesis, and thinks investors don't understand the risks in EFTs.

He has posted a video on his website and CNBC.

http://carlicahn.com/


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## dogcom (May 23, 2009)

Thanks for clearing up the bond thing Humble and your welcome and thanks for the praise on the TPP thing.


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## lonewolf (Jun 12, 2012)

Emotions come before actions. Fear of default would push interest rates higher in this part of the cycle not the usual higher interest rates because the economy is strong this time around. Fear causes risk off trade will push interest rates higher & stocks lower. The mood of the masses vibrates @ various degrees of optimism & pessimism causing the masses to act a certain way. The global warming is a result of the sun pulsating like a heart beat on its hotter burning beat. Vibration/cycles can be found it seams everywhere.


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## Belguy (May 24, 2010)

It seems like the older that you get as an investor, the harder the stock market cycles are to handle. Perhaps for those with ever shortening time horizons, 'under the mattress' becomes the most attractive alternative for one's money while the investor himself hides under the bed.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> hooray it's the 14th century! folks in the late middle ages had a life expectancy of 29 years!


That was due to bubonic plague & a multitude of childhood illnesses.
But having reached the ripe old age of 21, life expectancy among the petite bourgeoisie and the nobility was well into the 60s throughout the 1300s - 1500s.

Anyhow, did I ever tell you I love the middle ages?
Read & dreamt about it since my childhood days.

During my grad degree I studied the slow (and violent) rise of capitalism from the Black Death to the end of Charles I.
Also studied the industrialization of Japan during Meiji Restoration, rise of American capitalism, and Soviet Communism.

Join stock companies have existed since the 1600s (the Dutch & East India company), but this current stock market euphoria is a relatively new phenomenon post WW-II.
But it has primarily taken off since the late 1990s due to the Internet & media revolution.

I personally don't think the DJIA can go to 1,000 pts.
If I did, I wouldn't be here, and wouldn't be participating in stock discussions.

However, I don't think it will be the end of civilization (i.e. guns & cans of tuna days), although it will be painful times for everyone.

If the Fed, ECB, PBOC and other major NCBs had not stepped in during 2008/9, we could very well have come close to that level.
Note that during the spring 2009 lows, the DJIA dropped to around 6,500, down from 14,000+.
It was central bank & US Treasury intervention alone that prevented further drops.

It's getting pretty late & it's the middle of the week so I will pen off now, lest I be labeled an over-weight king of Stupids.


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## godblsmnymkr (Jul 15, 2015)

james4beach said:


> The US CAPE (Shiller PE) peaked at 27 this cycle, significantly overvalued. Lots of complacency about over-valued stocks for a long time, with hardly _any_ correction on the S&P 500, was a recipe for disaster.


james
i've replied in threads before to you when you bring up shiller PE. if you had used CAPE as your guide to value the stock market, it would have kept you out of most of the bull markets in history. it is useless. please do some googling.


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## gibor365 (Apr 1, 2011)

> However, I don't think it will be the end of civilization (i.e. guns & cans of tuna days), although it will be painful times for everyone.


 Than what it gonna be?! How majority of seniors and welfare people gonna survive? Won't CPP/OAS gonna be also bankrupt in such scenario?


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## james4beach (Nov 15, 2012)

godblsmnymkr said:


> james
> i've replied in threads before to you when you bring up shiller PE. if you had used CAPE as your guide to value the stock market, it would have kept you out of most of the bull markets in history. it is useless. please do some googling.


That's such nonsense
http://www.multpl.com/shiller-pe/

Over-valued markets, near their peaks, clearly show up on CAPE. For instance a CAPE above 25 has always shown a run-away market that has very poor returns going forward. People have also done studies that show good predictive value between CAPE and forward ten year returns.

When the CAPE is as high as it was earlier this year (peak of 27), you get very poor forward returns.


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## andrewf (Mar 1, 2010)

To say CAPE is useless is a bit too strong. It is not useful for short-term market timing. It is useful for gauging long term expected returns.

http://jarrodwilcox.com/column/making-better-use-of-shillers-cape/


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## zylon (Oct 27, 2010)

*A look into the immediate future from one "cycles" guy*

*I don't know his track record;
use salt liberally.*










Source: http://blog.smartmoneytrackerpremium.com/


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## My Own Advisor (Sep 24, 2012)

I am happy to say about inflation, interest rates, the stock market and many other money matters - I have absolutely no idea exactly what's going to happen in the future. 

Predict and guess all you wish but you'll likely be wrong. Sorry to be the downer... !


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## zylon (Oct 27, 2010)

My Own Advisor said:


> Predict and guess all you wish but you'll likely be wrong. Sorry to be the downer... !


Don't be sorry - you are what you are.

So you're saying there's no bounce coming?


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## HaroldCrump (Jun 10, 2009)

gibor said:


> Won't CPP/OAS gonna be also bankrupt in such scenario?


OAS is funded from general tax revenues, so it cannot be bankrupt unless the govt. of Canada runs out of CAD$, which by definition it cannot.
OAS is a domestic obligation, not an international one, so GOC can print CAD$ and hand them to the retirees.

As for CPP, the fund didn't exist until the mid 1990s.
Secondly, CPP holds a lot of private assets as well, incl. real estate.
I believe public investments are less than 50% at this time.

Anyhow, if such situation does come to pass, I don't think CPP entitlement will be top of most people's minds :biggrin:


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## sags (May 15, 2010)

My Own Advisor said:


> I am happy to say about inflation, interest rates, the stock market and many other money matters - I have absolutely no idea exactly what's going to happen in the future.
> 
> Predict and guess all you wish but you'll likely be wrong. Sorry to be the downer... !


I agree with you.

And so I rely on the commentary of people who are intricately involved and fully understand the complexities of the situation.

People like Carl Icahn, who has made billions of dollars understanding corporate balance sheets, and Bill Gross who fully understands the bond markets.

At the end of the day though, it is nothing more than a hobby interest to watch the markets and listen to the commentary.

I can't do anything about it all..............and wouldn't know what to do if I could.

I find it of interest that as some of these well known investors/billionaires/gurus..............get older, they are saying things publicly they likely wouldn't have said 20 years ago.

Carl Icahn for example, sat on a panel of experts and told the CEO of Blackrock that their EFT was total crap............LOL.

As people get older...........they get more cantankerous and Icahn has said he is old enough he doesn't care anymore.

Carl Icahn, Warren Buffet, and even Donald Trump have all pointed out various ways the ultra wealthy are avoiding taxes and not paying a fair share.

Maybe as very successful business people they simply understand that hollowing out the middle class isn't good for business in the future.


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## gibor365 (Apr 1, 2011)

> Anyhow, if such situation does come to pass, I don't think CPP entitlement will be top of most people's minds


 if such situation does come to pass, definitely you will need guns  and yes, it will be end of "civilized" world....
It can be similar situation to Russia's 1917 

btw, Now it's difficult to find any working person who doesn't have exposure to the market


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> OAS is funded from general tax revenues, so it cannot be bankrupt unless the govt. of Canada runs out of CAD$, which by definition it cannot.
> OAS is a domestic obligation, not an international one, so GOC can print CAD$ and hand them to the retirees.
> 
> As for CPP, the fund didn't exist until the mid 1990s.
> ...




gosh i read that in a dire scenario, they'd pay out CPP & other old age benefits on a FIFA basis, that is, according to date of arrival in canada.

in other words, native born canadians & immigrants who arrived in very early childhood will have the best chances of getting paid.

later immigrant arrivals will have to wait to see if there's anything left in the pot for them.

i'm pretty sure that's what i read.


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## gibor365 (Apr 1, 2011)

> FIFA basis


 on FIFA basis Canada sux :biggrin:
https://en.wikipedia.org/wiki/FIFA_World_Rankings



> immigrant arrivals will have to wait to see if there's anything left in the pot for them.


 than what?! Revolution?!


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## humble_pie (Jun 7, 2009)

they said same drill for the food banks. Food bank patrons will need ID cards with DOAs on em.

it was all kind of hush hush but i'm pretty sure i also read they're planning to set up posses of vigilante groups everywhere.


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## gibor365 (Apr 1, 2011)

> they said same drill for the food banks. Food bank patrons will need ID cards with DOAs on em.


 we have here a lot of "food" that running , flying and swimming around :biggrin: like canadian goose, rabbits, fish etc. that's why I said we'll need guns


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## andrewf (Mar 1, 2010)

CPP contribution rates and benefits would be adjusted to keep the plan solvent over its planning horizon (75 years). Because it is such a long horizon, relatively small tweaks can be made to keep the plan solvent.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> gosh i read that in a dire scenario, they'd pay out CPP & other old age benefits on a FIFA basis, that is, according to date of arrival in canada.
> in other words, native born canadians & immigrants who arrived in very early childhood will have the best chances of getting paid.
> later immigrant arrivals will have to wait to see if there's anything left in the pot for them.
> i'm pretty sure that's what i read.


There is a difference between OAS & CPP in the sense that there is no "pot" for OAS.
OAS is paid out of general govt. revenues.
CPP does have a "pot" and I believe is currently fully-funded for up to 75 yrs.

Regarding OAS, this is a domestic govt. liability.
So, the federal govt. can essentially print as many CAD$ as they want and simply pay out to the recipients.
There is no need to have a FIFO / LIFO queue.

OAS is CPI-adjusted.
Govt. will make whatever changes are needed to the calculation formulas such that CPI is reported as 1% - 2% perpetually.
Then print & give out OAS to as many people as needed to keep social unrest down.

CPP is another matter.
They will have to make assumption changes to reduce entitlement.
Secondly, just under 50% of portfolio is publicly traded.
Rest is real estate and private equity investments.
The valuation of that part can be whatever they say it is.


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## sags (May 15, 2010)

The government could just print money, but it would be worthless to a vendor as payment.

Why would someone who has chickens..........give them away for worthless paper money ?

In Germany people worked until lunch, got paid a wheel barrel full of paper money, and went out to buy a loaf of bread.

In a total economic crisis...........money loses all it's value.


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## HaroldCrump (Jun 10, 2009)

Worthless relative to _what_?
Domestic obligations are payable in domestic currency.
It will become worthless only if we are printing CAD$ to settle foreign obligations.

That is exactly what happened to Weimar Germany - they were printing DMs to settle WW-I reparations.
The allied powers began demanding payment in gold, further exacerbating the problem.
They kept printing more & more DMs to convert into USD and gold and within a matter of months, the currency became worthless.

That is why the composition of govt debt matters - foreign obligations vs. domestic ones.


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## Pluto (Sep 12, 2013)

Is the sky falling? Well pieces of it have fallen: tsx down about 13% since April. S&P down about 12% peak to trough. 
I suppose you are asking if it will fall further before it goes to new highs. I suspect so for reasons given in another thread. Stocks are still over valued by CAPE measures. But such valuation methods don't tell use if or when stocks go into a bear market. It's not a timing device. The market action itself, tells us when it is sick. It looks sick to me, but no proof of how sick it will get. see chart in another thread:
http://canadianmoneyforum.com/showthread.php/52593-How-TA-can-help-long-term-investors

The chart tells me money has been leaving the market, and the upward momentum is broken. We have to think about what is the essential thing that makes a company more valuable and therefore its stock price to go up. The answer is increasing earnings makes companies more valuable. Are earnings increasing at a rate that justifies increased stock prices? It doesn't look like it to me. Apparently S&P 500 companies have had decreasing revenues for 2 quarters. So what would be a justification for increasing stock prices? If they don't get stellar earnings and revenues this quarter, I don't see much hope for new highs on the S&P. If earnings are mediocre, I don't see the slow flow of money out of stocks stopping. And any unforeseen black swan type event would turn the slow, quiet outflow of money into a river. 

Remember: the fundamentals are always good at the top of the bull market, so the fundamentals can not tell you in advance when the market has peaked. Usually the market indexes start a down trend when the economic fundamentals are good to fabulous. So the fundamentals should be used in a contrary way. A good economy, with low unemployment, best car sales since just before the last bear market, house prices the best since the last economic crisis, are all approximations of a matured economic and stock cycle. When all this good stuff is happening, it is the time to be wary, and watch the indexes carefully. 

Never, ever buy into some prediction that says we don't see proof of a recession therefore stocks will go up. It's baloney. 

The essence is, however: - own quality stocks bought at good prices. If one figures out for themselves realistic good to excellent prices for quality stocks, and buys in that range, a bear market can give you a temporary drubbing to your net worth, but it will not wipe you out. For me, the stocks I want aren't at good enough prices yet, so I'm happy with short term bonds for now. I'm just going to wait for the wailing, the gnashing of teeth, and other manifestations of anguish of the kids. then I'll buy some of their stock they are unloading at bargain prices. Precisely when that happens is anybody guess, but approximately, we are pretty close.


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## Pluto (Sep 12, 2013)

HaroldCrump said:


> So, the federal govt. can essentially print as many CAD$ as they want and simply pay out to the recipients....
> Then print & give out OAS to as many people as needed to keep social unrest down.


Just to clarify: when you say print money to pay liabilities I get this image of the government ordering currency from the printers, and then having it delivered to the governments bank and deposited in their account. But I assume you don't mean it that literally. Don't you really mean that if they are not paying liabilities from tax revenue, they borrow money, in the bond market perhaps, to pay?


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> There is a difference between OAS & CPP in the sense that there is no "pot" for OAS.
> OAS is paid out of general govt. revenues.
> CPP does have a "pot" and I believe is currently fully-funded for up to 75 yrs.
> 
> ...



:biggrin:

don't u think my version is resplendent with poetic justice, though. They start by giving benefits to the first inhabitants, the first nations, the native canadians. Probably enough $$ to move on to the early settlers of new france. Maybe the british & scots settlers of upper canada. A few irish. After that the money would start running out.


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## HaroldCrump (Jun 10, 2009)

Shouldn't it be the other way around from a political perspective?
Win more votes that way.


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## humble_pie (Jun 7, 2009)

votes schmotes. anything looks good when legs are being pulled.



Postscript: it didn't take the intended one too long to catch on, though :biggrin:


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## HaroldCrump (Jun 10, 2009)

Oh I get it :mad2: :biggrin:


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## 1980z28 (Mar 4, 2010)

Romy said:


> Some people are saying the sky is falling. They're saying that soon we'll miss 2008. Are we in a huge bubble that's about to burst (or already in the early stages of bursting)? Or do I simply know Chicken Littles? :biggrin:


I have leverage from 80`s,so not my money:hopelessness:


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## dogcom (May 23, 2009)

I don't know if it is the stock market we should be most worried about. The sky is falling seems to imply a stock market disaster to most.

I would be more worried about wars and such with the middle east in turmoil and Russia, China and the US staring at each other. 

The world is at one of those risky points in time like the 30's.


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## humble_pie (Jun 7, 2009)

yes, wise insight


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## 1980z28 (Mar 4, 2010)

dogcom said:


> I don't know if it is the stock market we should be most worried about. The sky is falling seems to imply a stock market disaster to most.
> 
> I would be more worried about wars and such with the middle east in turmoil and Russia, China and the US staring at each other.
> 
> The world is at one of those risky points in time like the 30's.


Possible opportunity to add to ???


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## gibor365 (Apr 1, 2011)

Oh Oh ... when I was driving to work in the late morning Dow was down 260 points (weak economical data and weak jobs report), now i see it ended plus 200...., SPY had swing more than 3%... What happened?!


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## willow1044 (Jan 30, 2012)

@James 
"The insane stock rally since 2009 directly follows the size of the Federal Reserve balance sheet. More stimulus = stocks go up. I don't know why CMF members have been so resistant to accepting this. The correlation is blatant. "

Correlation isn't causation. 

The S&P rose for almost a year after QE ended and only in the last month have we seen a significant correction.


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## CPA Candidate (Dec 15, 2013)

Suddenly, the financial world isn't falling apart at the seams. The SP500 has made up most of the losses since August. China? Greece? Yesterday's news. Even the pitiful TSX is up nearly 1000 pts since the lows.

The market just needs to find a reason to justify a correction, to sell, then the perceived issue that caused it all doesn't matter anymore


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## The_Tosser (Oct 20, 2015)

zylon said:


> *I don't know his track record;
> use salt liberally.*
> 
> 
> ...


lol wow!

I tripped across this post but I do know this guys track record. A total chump. A Lying piece of crap, Mr Revisionist, a NET LOSER and it did not seem to matter WHICH of his 3 paper-accounts (read: No skin in the game) that he used as proof of success. He always netted out well underwater and then just pressed the reset button and started over. lol.

I recall reading him way way back when GDX was $50 and SLV was $30. He was all in on the doomer trade...you were going to be a kazillionaire being long GDX and SLV. lol.

His name as you can see is Gary Savage. He posted other trade schemes at the time under the name "Toby" which was his dogs name, lol.

He used to post the returns of his many 'paper' accounts but as I've said he got them so underwater that he knew he'd be the better part of the rest of his life getting back to even....much easier to press that button his suckers..errr...subs don't have access to in real life.

Just brutal! He gave me many hours of laughs.


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## dogcom (May 23, 2009)

Where is all the negative news gone on this site? I had to go down aways to find this. Stocks are lower right now but the doom and gloom is nowhere to be seen here. I remember there always seems to be posts about a collapse here but not lately.


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## gibor365 (Apr 1, 2011)

dogcom said:


> Where is all the negative news gone on this site? I had to go down aways to find this. Stocks are lower right now but the doom and gloom is nowhere to be seen here. I remember there always seems to be posts about a collapse here but not lately.


Maybe people used to bumpy rides  ...btw, looks like TSX is down for 8 or 9 trading days in a row ..is it record?!


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## dubmac (Jan 9, 2011)

I think it hit a 2 month low - but not a record.
I'm wondering whether the market is responding to tax-loss selling. 
Also - some companies (like MFC for example) are absorbing some of the ripple effects of the drop in oil prices and it's knock-on effects on their asset prices and earnings ...maybe? thoughts?


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## fatcat (Nov 11, 2009)

i think we are all pricing in the fed raise in december ...
time to buy material and energy stocks


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## godblsmnymkr (Jul 15, 2015)

fatcat said:


> i think we are all pricing in the fed raise in december ...
> time to buy material and energy stocks


my understanding is if fed raises, dollar goes up which makes commodities more expensive in other countries thus lowering demand. why do you think a fed raise would be bullish for commodities?


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## dogcom (May 23, 2009)

The thought is the Fed raises rates and then everything starts dropping, causing them to reverse and then even bring in a new QE.


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## DollaWine (Aug 4, 2015)

Is this a good time to buy more?


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## avrex (Nov 14, 2010)

*Technology Darling stocks*

The broad market S&P500 was down only 1% today.

But have a look at today's returns, for what I call the 'Technology Darling' stocks. 
(Why darling? Because everybody seems to love them.)



Well nobody loved these stocks today.


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## Taraz (Nov 24, 2013)

Is there a stock market bubble? Probably not a big one. Is there a tech bubble? Judging from some of the PE ratios (Windows, Google, Intel, etc.), my guess would be yes. (Although Apple's PE ratio is quite reasonable.)




avrex said:


> The broad market S&P500 was down only 1% today.
> 
> But have a look at today's returns, for what I call the 'Technology Darling' stocks.
> (Why darling? Because everybody seems to love them.)
> ...


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## gibor365 (Apr 1, 2011)

INTC?! What bubble?! P/E is 13.8 



> The thought is the Fed raises rates and then everything starts dropping, causing them to reverse and then even bring in a new QE.


 This is why I doubt that Fed gonna raise rates this December...

btw, after hours trading, SPY and QQQ down about 0.7%


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## The_Tosser (Oct 20, 2015)

gibor said:


> This is why I doubt that Fed gonna raise rates this December...


From your lips to gods ears, brother.


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## gibor365 (Apr 1, 2011)

TSX 8 straight down days ... longest strike in 13 years...(as per 680News)


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## HaroldCrump (Jun 10, 2009)

Taraz said:


> Is there a stock market bubble? Probably not a big one. Is there a tech bubble? Judging from some of the PE ratios (Windows, Google, Intel, etc.), my guess would be yes. (Although Apple's PE ratio is quite reasonable.)





gibor said:


> INTC?! What bubble?! P/E is 13.8


The so-called "darling" tech stocks are the ones being bought up by _very large_ foreign institutions - as in _central bank_ style large.
The Swiss Central Bank as well as Norway's formidable sovereign wealth fund have been buying up Apple, Google, and Microsoft.
Recently they have been focusing on Microsoft and Facebook, mostly, having already built up a large share in APPL.

The reason Intel, Oracle, and couple of other "old world" tech stocks are not getting any love is because no central bank/SWF is buying them.


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