Individually / per transaction sure, perhaps. But I am speaking in the aggregate. It was an over simplification to make a point.

You clearly have no idea how cycles work. The data is fairly obvious in retrospect. The pattern is clear...

Haha, I like that book. Much of the logic in this thread and others comes from a paper Taleb co-authored called The Black Swan of Cario.

I would suggest you check it out as well as another great book of his, Antifragile.

As with most serious discussions you must first define your terms. The "investment community" is a rather broad term. Within that there are (roughly):

1. The too big to fail banks. These banks have FAs and prop desks.

2. Market markers and other traders

3. brokers, dealers, and exchanges

The first two want the public to buy and hold. The third wants everyone to trade like a vacuum tube.



The market is always undoubtably going down. It is just a question of when. A very good analogy IMO is to compare the markets to light. They move like waves while you have exposure. But as soon you make a round trip they behave more like particles.



The longer it goes without going down the more probable it is that it will.

I think commodities have longer to run. Equities will be next, maybe this summer. The thesis of this thread...6 years from the Jan '09 bottom is a handful of weeks from now. The January effect is coming up, I would go flat after the first few months of the year.

Can't really speak to this, you know what they say about opinions... This is just mine. It looks very clear to me that since the 70s there have been consistent cycles.

See my above post. Also, I wouldn't say they are ripping off that particular trade of yours. You have to view it as a repeated game...

They are taking advantage of (and perpetuate) the idea that you cannot "time the market." So you should therefore, but and hold. This is idiocy, I mean just use common sense. You don't think there are good times to buy and bad times to buy?

The repeated game is not just one trade and hold for eternity. It is the idea that every two weeks you get a paycheck and you ship off 10% to your FA to invest in your 401K. Regardless of the price of what you are buying. This is the perpetual bid I refer to.

The wise guys sell to those buyers and leave them holding the bag when another '08 comes around. And believe me, it will come...

When? The thesis of this thread is that it will likely come in the next 2 years. And then last for about 1.5 years (if the pattern continues).

People who are MUCH smarter then you and I, who invest billions, who have teams filled with people with research budgets in the millions, still can't beat the market.

So yeah, I think "timing the market" is impossible for 99% of people on this board.

You also have to remember, even if you "time" the market...you can't just "barely" beat the index, you have to CRUSH it when you factor in fees/taxes/cost of someone's time.

If I had $100K, and I earned 10% instead of 8% by timing the market, EVEN AFTER accounting for the extra taxes/fees/expenses, I'd still only be making $2K a year, I could probably put a tiny fraction of my effort into another endeavor (online poker?) and make considerably more money.

I don't know how smart you are, but they are not smarter than me. And plenty of them do beat the market. A lot of it has to do with size.

Trust me, there are professional traders that trade their own account, that make money every year. Like as in earn 100% P.A.+ on their risk capital for the past decade.

It's time we start a rigtard thread for trading.

edit: Didn't realize this thread was already 2+ pages when I posted. Man this thread is terrible lol

op's prior market is rigged thread in 2011

Sounds like something out of zerohedge.

Hey Rand, I was posting in that "I inherited 200k" thread but I think we should give that guy his thread back. So if this is your current containment thread lol I wanted to touch on a couple things that were going on. First one is related to this thread.

On the cyclical theory you were posting about as far as the stock market goes I don't put much weight on it. I mean yeah to me as a technician using technical analysis it only makes since to be long following a trading range breakout. So when markets are making new highs is the time to be long. The only thing is calling the almost exact top is impossible.

Fundamentals are fuzzy then. I mean the late 90s run into 2000 was nuts valuation wise. That one was possibly timable because of the parabolic run straight up. Anyway, my final thing on looking at the past to make predictions is the future may look totally different. There might be 20 years of a downtrending equity market or 40 years of bull markets. There are to many economic externalities to even think about.

Second thing is the US position that was going on in the 200k thread. I don't think most people understood what you were getting at when you kept mentioning the Vietnam war and history. I don't think they understand how that all ties together with the economics then and now. My understanding on the background on that period is the national debt that was run up from the Vietnam war was really bad. It's not comparable to the level of today obviously but for that time it was significantly bad.

So debt coupled with recession, oil shortages and somewhat of a perfect storm in the 70s put huge strain on the USD. I don't think people realize just how much trouble the USD was in in the late 70s. Paul Volcker averted a semi dollar crisis in 1980 and 1981. The dollar was under so much pressure he had to effectively let the market set rates. He took the fed funds rate to 20% in '81. 20%! Rates like that are unthinkable today. It's different now because the Fed itself is the largest holder of US treasuries not China, Japan but that's what it took 30 years ago with even less debt to GDP.

Also the Vietnam war contributed to Nixon having to close the US dollar to gold window in the early 70s. I think actually that was more significant to causing the dollar inflation in the late 70s that Volcker fixed. So you have evidence that the breakup of Brenton Woods was definitely a timely factor in the problems post pure fiat. Just look at the chain of events after the dollar was freed from gold.

Of course closing the gold window lead to USD inflation.
I agree taht most people dont understand.

The best way to time the market for long term investing IMO is to track case shiller P/E on SPX. When case shiller P/E on the S&P gets down back to the mean of 15-16 (now we are way high at 25-26) time to buy.

Fund managers look at historical P/E's to try and time investments as well. Technical analysis should also be used.

I think 2016 is our first down yr since 2008. If oil stays down here well into 2016, the highly levered shale oil producing companies will go bankrupt. I think oil bottoms once some oil companies in the US start going under.

Check out Carl Icahn's website. He's one of the best fund managers out there and he's predicting bad things in 2016 as well. Has a lot to do with high yield debt funds.

I think you are correct in your analysis that this bull market is very long in the tooth.

By far the best way to make money in the market is on the way down (shorting / exposure through put options). Put options can make you serious coin in bear markets and the gains pile up fast even in pullbacks like the one we had in AUG.

I almost started creating training material online to help teach people how to capitalize, but then I got a job at a new bank. Will have to re-visit those ideas sometime.

My favorite investing idea for 2016 is GDX.

GL GDX.

It seems rather obvious that, having boldly gone where no one has gone before Janet Yellen (and the Fed) will raise in 1/4 pt increments or hold steady going forward.

She is has got to be the most conservative Chairwoman (pawn / fall gal) ever.

So you like a rally in gold in a rising interest rate environment?

I don't think the real silver market can go below $10. And I don't think futures can get a monthly close below it. They would stop mining it, and it would be hoarded.

Once the gold and silver bears run their course you know the bulls have got a bid.

This seems like a harmless enough thread to ask this question in.

Buffett famously said "be fearful when others are greedy, and greedy when others are fearful"

To me, it seems like almost everyone is fearful right now and have been for the past year or so.

Literally everyone i talk to about the market says the same thing. "Stocks are inflated". "Sitting on cash". Etc etc. and these are just average joes.

As far as the major stock market goes that quote applies more for when prices are hammered far below intrinsic value. Like after a 40% stock market crash. Late 2008 early 09 was the time to be greedy. It's that kind of "fear" panic. Not the uncertainty like in todays market.

That quote as far as individual stocks go is for big contrarian plays when Mr. Market punishes a stock. Like when Buffett bought Coke. Remember the price you pay determines return. The best prices are often during a fearful market "correction" be it overall stock market or individual company.

Buffett is a hybrid of Ben Graham and Fisher. He became more Fisher but that quote is basically contrarian investing in itself. Buffett sticks to the wide moat names though. He would rather wait 10 years for a market correction and buy the S&P at a PE of 6 than buy today.

Interesting, I'd actually claim the opposite.

So many people I talk to are borrowing on their homes and investing in the market because interest rates are so low. And when they find out I'm almost done paying off my house (paying extra each month, done in 1-3 years) they think I'm an idiot for not investing that money instead and making the "spread."

(I personally believe there's a lot of borrowed money in the market right now)

As entertaining as your personal finance stories are, capital flows show how money is moving far better than whatever this story is suppose to show.

Just looking at the markets, the S&P500 looks very weak.

If it kinda falters today I will seriously consider shorting the ES

I'm sorry, did someone say the investment community promotes buy and hold?

Don't be sorry, just read on. But yes, for the most part both academia and the investment community promote buy and hold.

Rates will be held down to marginally flat if we get a sell-off, as the flight to safety will help drive bond prices higher (yields lower). In general, I think it's always best to see what the herd thinks and take a hard look at the opposite direction....

How you doing on your cycle thesis? Seems like 6 years is not the answer?

decent bump

I know one dude who's a classic herd type of person who's the best investment advisor I've ever met because if I shorted everything he did--I'd be the best investor of all time. Sadly for me, he mostly gave up on his investing ideas after the last one got trading frozen 3 months later b/c it was a total fraud.

Man am I glad I kept picking up pennies in front of that bulldozer.