Posted on 11/03/2013 10:28:47 AM PST by Brad from Tennessee
For some investors, it feels a lot more like 1999 than 2013.
Third-quarter earnings have not been spectacular. The U.S. isn't expected to grow at anything close to breakneck speed next year. And there are few industries experiencing huge profit expansions.
Despite all that, a number of high-profile—mostly technology—stocks are soaring. The heady advances are making shareholders of these companies big money, but they're also raising serious questions among some analysts about whether the unusual trading is a troublesome sign for the overall market.
Last week, the Dow Jones Industrial Average set a record on Tuesday, but closed up just 0.29% for the week. The Standard & Poor's 500 stock index also set a record and rose 0.11%.
So far this year, the Dow has climbed 19%, the S&P 500 24% and the Nasdaq 30%.
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. . .the recent gains in tech shares are reminiscent of the Internet-led bull market that created huge fortunes but ended in 2000 when the small group of expensive technology stocks that had powered the market higher suddenly collapsed, pulling the entire market down with it.
(Excerpt) Read more at online.wsj.com ...
bump
When your currency is debasing, stocks will be expressed in terms of ‘more dollars’.
Money taken out of the market will go where, real estate? Commodities? Mattresses?
China.
And so will taxes. But pensions will be paid in fewer dollars. Problems are being solved without anyone being the wiser.
What problems are being “solved”?
Unfunded liabilities will draw less because of a devalued dollar.
“The U.S. isn’t expected to grow at anything close to breakneck speed next year.”
How can you do that if your population is at minimum or slightly below replacement levels in its fertility rate?
We don’t manufacture our citizenry like we used to and we sent most of our manufacturing of goods overseas. Only 12% of the economy is manufacturing-based.
You didn't mention precious metals but you didn't have to. In comparing 5-year charts for Gold and the DOW, stocks win.
Money will not be taken out of the stock market, some will leave the bond market which is for suckers. Stocks around the world will likely keep their inflated value while other things like bonds will be locked into current values. Commodities will be limited by word GNP. Some other things will go up, like stuff for the very wealthy.
Keep you expenses low and keep your stocks.
government debt.
“When your currency is debasing, stocks will be expressed in terms of ‘more dollars’.”
Exactly - the difference between now and 1999 is that in 1999 the Fed was not pumping in $85 billion of new base money every month. When I sell my bond to the Fed, I immediately have to start looking for something to do with that money - some other investment - and stocks are definitely at or near the top of that list. Does it create a bubble? Yes. And when will that bubble pop? When the Fed starts cutting back. And when will that be? Who knows... but what has become clear is that investing is no longer about studying the financials of a company, but studying the politicians and bureaucrats in DC.
We enter the time of year where shorts find themselves curled in a fetal position on the floor while everyone else is having a good holiday time. Ask me how I know.
The market has retail investors exactly where it wants them: The market seems very toppy and there isn’t exactly any kind of Macy’s 20% off sale going on. No. You have to rush down to Macy’s at a 1/37th of 1% off sale. The only thing to do is to “already be long”. The number of traders who have beat simply buying and holding SPY (the SP500 index etf) or equivalent with ZERO trades all year is so close to zero it’s not even worth talking about.
The market has withstood each and every glitch thrown at it. End of the world, end of Italy, crappy (un)employment numbers, stagnant GDP numbers, the prospect of consumers getting smoked on their healthcare premia and thus not being to splurge on Chinese crap over Xmas. Instinctively, the dollar should be weakening on QE-forever, but the ten year is back to the 2.5-2.6% area (down from threatening 3% mere weeks ago) and oil is literally crashing.
Very little makes sense, but “making sense” is not “making money”.
Personally...I believe (and...”belief” is not a fundamental) that the market is actually applauding the intensified fascist/corporatist state.
I really have no specific reco. Buying on dips has worked EVERY TIME over the past 4 years. That’s an observation, not a reco.
I can’t see any good reason NOT to buy SPYders and leave it alone. “Reason” is not operative. The Fed cannot abandon its stance. The mere threat of such drove the DJ down over 1000 points about a month ago. I think we are living in a synthetic environment and it kind of reminds me of the period right after 9/11/2001. The US kind of shut down. Gradually, folks poked their heads out from under their rocks. The ones who did so first, benefitted most. In a far more slo-motion way, I think we are in roughly the same position, though later in the scenario. Like it or not, we have 3 more years of 0bama, and his best advertisement is the relentless rise of the stock market despite truly lackluster economic performance. I acknowledge that unlike that point in time, the market is not now depressed. Indeed it’s at AT highs.
The only thing I can not seem to convince myself of is that there is a reason for this to stop. I don’t see it. I don’t see the preference for the cash that would result from selling stocks. I sure don’t feel it, the charts don’t say it. But bull, bear, skeptic or fanatic, you can never, ever be short during T-giving > Xmas. Never.
When the stock market collapses and the fiat currency is worthless, you will wish you had gold.
All that “Quantitative Easing” is going into inflating stocks...nothing else.
Even back then, the whole "buy gold" argument puzzled me. If the U.S. dollar was really so worthless, then why were all these traders so willing to accept these "soon to be worthless" dollars in exchange for their precious gold bars?
Furthermore, if the doomsday predictions ever came true and the U.S. economy suffered a total collapse, then how would I go about using all those gold bars that I stored up? Would I take a gold bar down to the corner store to buy milk and bread? How would I get my change?
Lastly, if I ever showed up at the corner store with a bar of gold, how likely would it be that somebody would follow me home? I would say very likely.
I guess someday the gloom and doomers will be correct but in the meantime, I've been doubling my net worth on average about every 6-7 years with the stock market (rule of 72 principle combined with dollar cost averaging).
I’m sick of this “DOW’s up, DOW’s down” crap. Fluctuation is normal.
Amounts that are not adjusted for the loss of purchasing power of money are meaningless.
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