Posted on 08/07/2017 10:44:59 AM PDT by BenLurkin
Full Headline: There’s a 'supervolcano' waiting to erupt beneath a seemingly 'beautiful' market, according to a portfolio manager
"We went back to 1994 and researched team data that said [that if we look at cyclically adjusted P/E, one out of two times] the market was down in the next 12 months, and about one out of three times it was down more than 10 percent," he said.
James' observations seem to mirror a note released more than a week ago by Goldman Sachs, which found that when valuations have been this high, 10-year returns on the S&P 500 have been either in the single digits or negative 99 percent of the time.
In other words, the market could be in oversold territory, which James does believe.
"It doesn't mean that we'll see a volcanic eruption in the immediate future, and these market peaks take a long time, but we're definitely in the latter stages of this market advance," he said. "We're going to see the inevitable correction, I just wish I could say I knew when."
(Excerpt) Read more at cnbc.com ...
Couple of years ago.
Much better ROI dealing cocaine.
Jk
You’re a Genius!
What investors are doing is anticipating the growth in earnings that will be forthcoming from the changes in regulations and from the much anticipated reform of the tax code. Additionally, investors know that there is a huge pent-up demand that was stifled for fear during the Obama administration.
Investors are saying (by voting with their capital) that they see very positive things coming down the pike.
Alan Greenspan can stick his concern of "irrational exuberance" where the sun don't shine.
Econo-misseds...................
November will be ‘Tis the Season’ for MSM talking down the market and the economy.
The talking points start now.
So true.
Everything that goes up can go down ... either slowly or all at once. Has zero to do with how is in the White House at any particular time.
Market crash predictors have a slightly better track record than do predictors of End Times. Just slightly better.
I tend to want to sell property when guys on the radio are selling house flipping seminars and stock market tips and tricks. But do not take my advice because I have $35 silver coins sitting in desk drawer.
Run in circles! Scream and shout!
And the actual PE ratio is somewhat high, but not crazy. The ratio this guy is referring to is the “cycle adjusted index” but that assumes a recession every 7 years. If this one doesn’t come for 12-14, then the model is bunk.
This morning, I read a stock advisor newsletter, listing many stocks with recommendations to buy or sell. I noticed that all the buy recommendation stocks were at their 52 week highs. So much for buy low, sell high.
Here we go again... between this and the noise from the NY Slimes, the “media” are recruiting self-styled experts to talk down the economy. They know the strengthening economy is a strong point for Trump and they want to knock a hole in it in short order.
The market goes up, and the market goes down. On average and as a whole over the long term.... it goes up.
When I was travelling for work, I used to read "USA Today". Was a great barometer for the market.
"Things are Great! Nowhere to go but up! To the moon! Mortgage your house, invest the money!!", meant "Sell! Sell! Sell!"
"Worst economy in World History! Only a fool would buy into this market! Panic! Run around in the streets!", meant "Buy Everything!"
Worked great, I did pretty well for a number of years.
I don't read it anymore, I'm not all that interested in changing investments that I currently have.
There’s the economy and there’s the stock market.
They are two different things.
Is this same genius who keeps telling us silver is going to take off?
My first thought was that volcanos explode upward. And a volcano underneath the market would be AWESOME for anyone long the market.
I think sink hole instead of volcano would match the author’s sentiment better.
I understand that; however, the trend in the stock market is a reflection of investor confidence in the economy.
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