[2020] A little stock market sense

[VacationForever]

I sensed we were due a correction, but not so harsh.
We took a $6K haircut... enuff for me to say, "Ouch."
But we're 60%+ in fixed-income assets, so we'll live.
C'est la vie.

Dang, only $6K? We are down more than $200K. What goes up must come down, and what goes down must go back up.

 

[Ralph Sir Edward]

Here is the Buffet long term stock indicator - for the last 80 or so years. Draw your own conclusions.

If you prefer a linear base trend line

 

[Elan]

That's an interesting website. Would be beneficial to see some correlation coefficients to market performance for each of the "indicators" over various timeframes.

 

[WaikikiFirst]

correlation coefficients

???? are you talking about the Buffett stuff? The price bounces around from -1 StDev to +2 StDev, the correlation is minimal. How can it not be?

 

[WaikikiFirst]

We've been laughing in our house since, in about 40 hours, they all went from
"That Powell is a genius. Powell stuck a soft-landing. Way ta go, guy. You a genius fo sho."
to
"OMG! Powell screwed up. He waited too long. Those damn bleeps at The Fed did it again. Danger. Danger."
Fun times. Watch Bloomberg TV on a "Fed Day". Who needs the Comedy Channel?

and back again

 

[Elan]

???? are you talking about the Buffett stuff? The price bounces around from -1 StDev to +2 StDev, the correlation is minimal. How can it not be?

I looked at all the charts. And talking about correlation to future performance.

 

[WaikikiFirst]

correlation to future performance

No such thing. Correlation is a backwards-looking measure of historical data. Correlation even removes "trend", right?

 

[Elan]

No such thing. Correlation is a backwards-looking measure of historical data. Correlation even removes "trend", right?

Of course. I'm talking about what actually happened in the market after the outlier events. Effectively backtesting.

 

[Ralph Sir Edward]

The chart(s) give a feel for when stocks, in general, are cheap and when they are expensive.

 

[Ralph Sir Edward]

Here's another long term chart - this time - gold vs.Dow Jones Industirals

When the ration is low, stocks are cheap, when the ration is high, stocks are expensive.

A different slant on value.

 

[WaikikiFirst]

outlier events

Well, once again, really no such thing. These are TIME SERIES. There is a big difference between TIME SERIES and a bunch of (x,y) data pts.
Looking at the TIME SERIES of 2 different things & thinking of those 2 things as (x,y) pts, gives a great idea that the correlation is minimal, aks meaningless.
The 1st chart shows a "trend" over time, but CC would even ignore that. CC just works on a bunch of (x,y).
You can even change the "order" of the (x,y) pts and it makes no difference to CC, right?

 

[WaikikiFirst]

Outlier:
I got 99 jockeys & 1 NBA center in a room to measure height of human beings.
1 of thsoe is an outlier. (no TIME element involved. It doesn't matter in what order they entered the room, etc)

 

[Elan]

The chart(s) give a feel for when stocks, in general, are cheap and when they are expensive.

Agreed, but what does that mean? As nearly everyone in this thread has pointed out, ad nauseum, the market keeps going up over time. So when a 2 sigma event happened in 1974, was the market really "overvalued"? Presumably, it was on some specific timeframe, and on a longer timeframe, that event became just noise.
So, while an extreme reading in the degree of inversion of the yield curve, for instance, is interesting, I get no feel for what that's inferred, if anything, to the market going forward over various timeframes.

 

[Elan]

Outlier:
I got 99 jockeys & 1 NBA center in a room to measure height of human beings.
1 of thsoe is an outlier. (no TIME element involved. It doesn't matter in what order they entered the room, etc)

Ok, maybe poor choice of words, but I think it's clear what I meant. Call it an extreme or local extreme on the chart.

 

[WaikikiFirst]

current value of HTL is about 120%. at some time in the future, price line will go back to the HTL. If it happens tomorrow, price would have to fall by almost 40% to do that. It will not happen tomorrow. When will it happen? btsom.
Unless you know WHEN price will revert to HTL, you can't know how much price would have to fall to do that.
Unless you know WHEN price will revert to HTL, you can't even know if price will be lower on that day than it is today.

 

[Ralph Sir Edward]

current value of HTL is about 120%. at some time in the future, price line will go back to the HTL. If it happens tomorrow, price would have to fall by almost 40% to do that. It will not happen tomorrow. When will it happen? btsom.
Unless you know WHEN price will revert to HTL, you can't know how much price would have to fall to do that.
Unless you know WHEN price will revert to HTL, you can't even know if price will be lower on that day than it is today.

What is money? This is not a stupid question. The purchasing value of the dollar has been going down over time. So if the "price" of an investment goes up, is it going up in real terms (post dollar devaluation (i.e. inflation)) or not.

All investing is about projecting the future. I posit that it's better to buy value (if I can find it) versus buying one class no matter what the current price. History shows the best way to lose value is to pay too much in the first place.

YMMV

 

[Brett]

Investors ride the "rebound momentum"​

https://www.cnbc.com/video/2024/08/...vestors-ride-this-weeks-rebound-momentum.html
https://www.cnbc.com/2024/08/14/stock-market-today-live-updates.html

 

[RENTER]

There's a REIT for cannabis RE? I mighta heard that at one point, but LOL. You say "Medical". I assume you mean "Healthcare", cuz I can't imagine buying 7 REITs w/o one of them being healthcare. And that seems like a heckuva lot of diversification for a portfolio that is already hugely diverse.
Can you automate buying 7 different REITs in 7 different sectors or do you actually have to think about it each time

There's a REIT for cannabis RE? I mighta heard that at one point, but LOL. You say "Medical". I assume you mean "Healthcare", cuz I can't imagine buying 7 REITs w/o one of them being healthcare. And that seems like a heckuva lot of diversification for a portfolio that is already hugely diverse.
Can you automate buying 7 different REITs in 7 different sectors or do you actually have to think about it each time?

IIPR is the cannabis and MPW is the medical. There may be an automated way but I buy them individually

 

[RENTER]

It’s the five minutes that stumps me

why? If you have an equal amount in each, you log in and then put them in order from largest market value to lowest. See which has profits over 10% and if any do, take the 10% profit and buy those at the bottom or put it in cash or bonds. Takes longer to sign in.

 

[RENTER]

Congratz on timing the stock market yesterday

Here's a tip - consider selling your "system" to mutual fund managers


View attachment 97462

https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html

Bank Financial advisors have looked at my system and have told me, they like it but would not be allowed to do it because they cannot make as much in commissions.

 

[Brett]

Bank Financial advisors have looked at my system and have told me, they like it but would not be allowed to do it because they cannot make as much in commissions.

uh huh .... but instead of banks try selling your "system" to other financial advisers

https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html

 

[letsgobobby]

why? If you have an equal amount in each, you log in and then put them in order from largest market value to lowest. See which has profits over 10% and if any do, take the 10% profit and buy those at the bottom or put it in cash or bonds. Takes longer to sign in.

have you ever read about efficient markets?

what information do you have that the rest of the market does not?

 

[rapmarks]

why? If you have an equal amount in each, you log in and then put them in order from largest market value to lowest. See which has profits over 10% and if any do, take the 10% profit and buy those at the bottom or put it in cash or bonds. Takes longer to sign in.

I think I have a bigger portfolio than you

 

[VacationForever]

@RENTER, if you are making so much money in the stock market, why are you still a renter?

 

[letsgobobby]

this is just too rich

well, some in this thread are anyway