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Old 12-19-2018, 04:37 PM   #126
BoredSocial
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Re: S&P should crash to 1900 or so within the next month

We're not getting to 1900 lol.

Sorry to everyone who wants to cry about the Fed not caring about the SPX. That's absolutely not part of their mandate. If you want to blame someone for this blame Trump for replacing Yellen with Powell.

The SP 500's PE ratio is still 19.22... Which is absurd. We are so far from fair valuations on equities right now that freaking out about it falling a little bit by the Fed would be INCREDIBLY foolish. If anything we need this correction to return to some semblance of sanity... It could drop to 2000 and it still wouldn't be a good reason for the Fed to even pump the brakes. The median historical PE of 14.73 would value the S&P 500 at 1925.

Last edited by BoredSocial; 12-19-2018 at 04:43 PM.
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Old 12-19-2018, 04:38 PM   #127
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Re: S&P should crash to 1900 or so within the next month

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This will actually happen now. Think Fed has not only told the markets they don't care if price declines, even they want asset prices lower, but they have probably lost the credibility of the markets now. Can probably induce short covering rallies but doubtful the market will ever get behind them again.

Watershed moment in financial history today as Congress and the white house will come calling after the Fed induced crash. Ron Paul may finally get his wish.
This seems umm, a bit over dramatic.
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Old 12-19-2018, 04:45 PM   #128
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Re: S&P should crash to 1900 or so within the next month

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This seems umm, a bit over dramatic.
It's shuffle, go back and reread what he was posting in 2015. I don't want to dismiss the action just the source of the content. Better discussion would be a thread like this on what to do if it happens: https://forumserver.twoplustwo.com/3...ategy-1720479/
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Old 12-19-2018, 04:58 PM   #129
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Re: S&P should crash to 1900 or so within the next month

I think 1900 is improbable this month but not impossible. 2300 by EOY is not an unreasonable forecast.

The fed is being blamed for this, but in reality it's a combination of a global slowdown, lack of shorty to hold up the market due to QE and Trump pumps, market being held up by garbage stocks while everything else is making lows, foreign banks imploding, etc.

I think we flush here then bounce all the way back to 2600-2700 starting sometime around end of Jan/start of Feb, and then we flush again to 1900 sometime next year.
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Old 12-19-2018, 05:14 PM   #130
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Re: S&P should crash to 1900 or so within the next month

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Originally Posted by BoredSocial View Post
We're not getting to 1900 lol.

Sorry to everyone who wants to cry about the Fed not caring about the SPX. That's absolutely not part of their mandate. If you want to blame someone for this blame Trump for replacing Yellen with Powell.

The SP 500's PE ratio is still 19.22... Which is absurd. We are so far from fair valuations on equities right now that freaking out about it falling a little bit by the Fed would be INCREDIBLY foolish. If anything we need this correction to return to some semblance of sanity... It could drop to 2000 and it still wouldn't be a good reason for the Fed to even pump the brakes. The median historical PE of 14.73 would value the S&P 500 at 1925.
19.2 doesn't look too bad historically. Don't compare it to an average going back 120 years though.
http://www.multpl.com/

More importantly, if you look at individual companies, you see outliers like Amazon taking the ratio higher.
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Old 12-19-2018, 06:13 PM   #131
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Re: S&P should crash to 1900 or so within the next month

Wait until tomorrow when the aftershocks finish, then back up the truck. 1900 Lol.
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Old 12-19-2018, 10:51 PM   #132
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Re: S&P should crash to 1900 or so within the next month

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19.2 doesn't look too bad historically. Don't compare it to an average going back 120 years though.
http://www.multpl.com/

More importantly, if you look at individual companies, you see outliers like Amazon taking the ratio higher.
You're talking to a value guy in the transportation industry who considers a PE of 12 to be pretty fair for the average S&P 500 component. 15-18 for the really top shelf companies.

You might have a point about the outliers though. I hadn't really thought about the ramifications of Amazon not actually taking profits.
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Old 12-20-2018, 04:58 AM   #133
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Re: S&P should crash to 1900 or so within the next month

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You're talking to a value guy in the transportation industry who considers a PE of 12 to be pretty fair for the average S&P 500 component. 15-18 for the really top shelf companies.

You might have a point about the outliers though. I hadn't really thought about the ramifications of Amazon not actually taking profits.
On the other hand, PE is skewed by the unnecessary tax cuts so looking at other metrics is very important.
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Old 12-20-2018, 05:18 AM   #134
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Re: S&P should crash to 1900 or so within the next month

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Wait until tomorrow when the aftershocks finish, then back up the truck. 1900 Lol.
What's the catalyst?
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Old 12-20-2018, 09:28 AM   #135
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Re: S&P should crash to 1900 or so within the next month

companies are expensing all capex in-year with new tax rules + they are still expensing old depreciation...this makes pe's look higher than they otherwise would..

also we have 1 quarter using old tax rules which means profits for that quarter are 15% less.

the p/e cant be compared to historical so easily. It is lower than it looks right now
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Old 12-20-2018, 10:07 AM   #136
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Re: S&P should crash to 1900 or so within the next month

David Tepper said move to cash.
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Old 12-20-2018, 10:16 AM   #137
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Re: S&P should crash to 1900 or so within the next month

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David Tepper said move to cash.
Ray Dalio said anyone holding cash would feel like an idiot at the beginning of this year and now it turns out Bridgewater was short for the majority of 2018. Tepper is a smart guy, and maybe, just maybe, he is saying what benefits him and not the audience he is speaking to.
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Old 12-20-2018, 11:19 AM   #138
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Red face Re: S&P should crash to 1900 or so within the next month

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David Tepper said move to cash.
And that's probably not self serving at all
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Old 12-20-2018, 11:52 AM   #139
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Re: S&P should crash to 1900 or so within the next month

going from yellen pressers to powell pressers is like going from drinking gravel to drinking the finest red wine. dude is so velvety smooth.
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Old 12-20-2018, 01:42 PM   #140
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Re: S&P should crash to 1900 or so within the next month

It would be hilarious if he's actually right. The laughter would take the pain off of millions of people losing billions of dollars.
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Old 12-20-2018, 02:07 PM   #141
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Re: S&P should crash to 1900 or so within the next month

1900 would be trillions. We're already a few trillion off highs.
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Old 12-20-2018, 04:25 PM   #142
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Exclamation Re: S&P should crash to 1900 or so within the next month

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It would be hilarious if he's actually right. The laughter would take the pain off of millions of people losing billions of dollars.
The FED is stuck between a rock and a hard place. If they don't stop hiking, the economy will take a dive. If they stop, the debt will keep rising and assets will keep inflating. Add to that the moronic actions of the government (trade war, corporate tax cuts, record deficit..), and they have to deliver a perfect balancing act.
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Old 12-20-2018, 04:36 PM   #143
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Re: S&P should crash to 1900 or so within the next month

Got out of my indexes today. Probably a little late. Changed my contributions to a conservative set and am basically checking out for a while.
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Old 12-20-2018, 05:01 PM   #144
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Re: S&P should crash to 1900 or so within the next month

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Got out of my indexes today. Probably a little late. Changed my contributions to a conservative set and am basically checking out for a while.
uh, horrible timing.
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Old 12-20-2018, 05:07 PM   #145
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Re: S&P should crash to 1900 or so within the next month

Tepper was always bullish the whole way up.

Think this has to do with the Fed telling the markets to **** off. Not even any pretense of trying to engineer a soft landing. They were really spooked by the bond market action this year and looks like they are intentionally trying to crater the long end.
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Old 12-20-2018, 05:12 PM   #146
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Re: S&P should crash to 1900 or so within the next month

holy **** , nice call so far,, im the biggest of perma bears usually (ask around ), but obviously its a little overboard your statement, but good call so far.
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Old 12-20-2018, 05:47 PM   #147
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Re: S&P should crash to 1900 or so within the next month

Tell me if I'm wrong but I think Powell/Fed wanted to establish independence from WH and knew how important that was with this rate hike. My guess is it gets hashed out behind the scenes and the fed turns dovish in 2019. They're not gonna gut asset prices with 2020 elections coming up.
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Old 12-20-2018, 06:01 PM   #148
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Re: S&P should crash to 1900 or so within the next month

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Got out of my indexes today. Probably a little late. Changed my contributions to a conservative set and am basically checking out for a while.
So you sold low and will buy back high. If you were going to sell that time had already passed.
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Old 12-20-2018, 06:08 PM   #149
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Re: S&P should crash to 1900 or so within the next month

If you think this is the bottom then sure. If you think there will be a big rally then sure.
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Old 12-20-2018, 08:11 PM   #150
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Re: S&P should crash to 1900 or so within the next month

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The FED is stuck between a rock and a hard place. If they don't stop hiking, the economy will take a dive. If they stop, the debt will keep rising and assets will keep inflating. Add to that the moronic actions of the government (trade war, corporate tax cuts, record deficit..), and they have to deliver a perfect balancing act.
its not so bad the impact of the hikes isn't fully felt until debt is rolled over / reissued, which takes time so the past hikes alone will mean more tightening in the coming months even without a rate increase. they could decrease rates and the net effect would still be tightening for the next few months because most debt rolling over is still going to a much higher rate.

they dont have the tools for the job tho imo. interest rates are too blunt and delayed. I imagine they will be adding more tools eventually...like china does. Why clobber consumers that arent in debt, and the housing market which isnt in a bubble just to moderate a bubble in corporate debt? There are ways to go after corporate debt directly and spare the rest. They need to have the right pimple popping tools and not steamroll the whole economy just to address one potential problem
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