Posted on 02/01/2015 10:49:28 AM PST by expat_panama
On the left is the excerpt --from the expert linked in Real Clear Markets: A Darkening Market Sky - Anthony Mirhaydari, The Fiscal Times
* * * * * * * * * * * * * * * * * * This piece originally caught my eye because it made some sense: seems to me like the investment markets are not going anywhere. While metals are failing to climb from their bases the major stock indexes sank below their 50-day moving averages and IBD keeps calling it 'market under pressure' as the distribution days pile up. So Mirhaydari's take satisfied my need for a daily dose of doom'n'gloom. OK, lets think about this. Maybe someone can help me but what I'm getting here is that that the world's in turmoil, the economy's underachieving, and stock valuations are bearish. At first glance it's convincing and then I try and think of when was the last time the world was not in turmoil or when was the economy ever overachieving? We're down to stock valuations. The writer hangs his hat on "S&P 500 earnings per share growth expectations" and in this wonderful info-age we can check it out for ourselves. This site has the historical numbers and a look at the past and yeah, EPS's are in fact stalling like they did back in the dot.com days and in mid '08. Looking harder I'm also seeing that failing 'growth expectations' really don't help much as a predictor of worse investment returns in the future. I'm looking all the way back to 1870 and instead of seeing a harbinger of destruction, I'm seeing business as usual. Got to love how we got all the facts here and the facts on stock valuations usually go to both earnings and dividends, and the way they relate to over all market stock prices. Our friends at NYU got a site where we can download S&P500 earnings'n'dividend stats back to 1960 and imho there's food for thought. Then again, I would have proffered some magic indicator proving with all certainty that the market's going up or the market's going down. It don't work that way. Maybe we're back to seeing Mirhaydari as being right after all. Maybe not w/ the doom'n'gloom shtick, but with the idea that it's good advice to "embrace a more defensive posture including long bets on volatility". Or as IBD calls it, we got a yellow light that means 'proceed with caution'. Then again, I can't remember ever wanting to invest in any other manner...
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Perhaps the most famous “last words” in all of financial history: “But it’s DIFFERENT this time!!!”
NFP +257KK
U3 5.7%
Boom. Huge report.
January payrolls +257k
December revised from +252k to +329k
November revised from +353k to +423k
Wage growth +0.5%
[adding to 'headlines we'll never see' list...]
We hear that because things are different, and changes are about the only things we can really depend on. Thing is that what ends up being different us more often than not something that we thought would stay the same. Like, the city of New York's birth certificate questionaire asking "What is the sex of the person who gave birth to the child?"
Moving the right direction given demographics.
We've heard the extreme left say that the huge change in '09 into years of low % employed was demographic. The idea being right with the '09 tax hikes millions of old people suddenly retired and thereafter few of the young wanted to grow up to enter the workforce. We know demographic trends don't do that; they usually tend to emerge over decades. In contrast the economic impact of fiscal policy shifts can show up from quarter to quarter.
Turbo Tax has halted filling amidst security concerns
TurboTax Temporarily Halts E-Filing In All States Amid Fraud Concerns
good grief! I’m using H&R but so far they’ve no concerns; same situation as with TurboTax right before today’s announcement...
This market is crazy. Up one day, down the next, repeat & rinse... If you watch you basket of stocks daily, you get the jitters.
Today, the reaction to the increased job numbers took stocks and precious metals down because the smart guys think the fed will raise interest rates sooner. That’s silly as the fed, just like the banks in Europe, needs to goose the economy by printing easy money way into 2016.
I say if you have a selection of good big cap dividend paying stocks, keep them and don’t sell just because of what you read in the finance pages.
The reason central banks don't raise rates is not for the economy, they may let folks think that they make economies grow but they know better. All they're good for is for avoiding inflation and they've done such a good job that now they're having to work to avoid deflation. We're not the only ones w/ sideways bad signal markets I guess.
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