Stock Market at it's highest level in over 6 years

[BaliBabyDoc]

Originally posted by: dullard

Originally posted by: dmcowen674
Could you explain any possible reason of way other than brainwashing???

Blindfolds. I suspect you will do the same thing, dmcowen674. I bet you'll say the economy is horrible until a Democrat is in office.

Alas, Dave won't have to rely on political partisanship for his future view of the economy. I expect things to sux pretty badly for quite a while regardless of the occupant at 1600PA.

You cannot lose millions of jobs in semi-skilled and otherwise well-paid labor and replace it with service jobs without serious consequences.

You cannot borrow (and consume) against your home without serious consequences.

You definitely cannot fail to PROPERLY invest in long-term infrastructure (education, roads, rail, natural resource stewardship, environment).

Oh and don't forget the "debt-driven" economy at the federal level as well and entitlements (including Bush's Great Unfunded Mandate of 2003).

 

[dmcowen674]

Originally posted by: dullard

Originally posted by: dmcowen674
Could you explain any possible reason of way other than brainwashing???

Blindfolds. I suspect you will do the same thing, dmcowen674. I bet you'll say the economy is horrible until a Democrat is in office.

If a Democrat gets in and does not do anything positive for the Economy they would get equal wrath.

 

[dmcowen674]

5-17-2006 Dow Plunges Over 200 Points, Nasdaq Now Negative For The Year

:thumbsup: :laugh:

 

[Engineer]

Originally posted by: dmcowen674
5-17-2006 Dow Plunges Over 200 Points, Nasdaq Now Negative For The Year

:thumbsup: :laugh:

for losing money over the week. I gues a semi hearted to buy more of the stuff since it's cheaper. S&P 500 P/E ratio is now below 17.

 

[zephyrprime]

Originally posted by: Engineer for losing money over the week. I gues a semi hearted to buy more of the stuff since it's cheaper. S&P 500 P/E ratio is now below 17.

Yeah but the average pe for the sp over the last 75 years is about 14.

 

[Engineer]

Originally posted by: zephyrprime

Originally posted by: Engineer for losing money over the week. I gues a semi hearted to buy more of the stuff since it's cheaper. S&P 500 P/E ratio is now below 17.

Yeah but the average pe for the sp over the last 75 years is about 14.

That's true, and at some point, the S&P will turn and grow more in line with profits as it has in the past. 21% profit growth last year and with the P/E ratios returning to a "norm", stock prices would most likely emulate profit returns (assuming they stay high). Large companies have been beaten by small caps for the last 7 years (IIRC). Time for the big boys to step up!

 

[dullard]

Originally posted by: Engineer
Large companies have been beaten by small caps for the last 7 years (IIRC). Time for the big boys to step up!

My next prediction: the next local minimum for the DJIA is 10,700 (give or take 100). Buy anytime it is below 10,900.

 

[Engineer]

Originally posted by: dullard

Originally posted by: Engineer
Large companies have been beaten by small caps for the last 7 years (IIRC). Time for the big boys to step up!

My next prediction: the next local minimum for the DJIA is 10,700 (give or take 100). Buy anytime it is below 10,900.

I'm not currently actively investing in the market. I have automatic investments each month (Every two weeks in 401k and once a month for my/wife's Roth's). After I shore up my liquid savings (emergency funds, etc), I'll look more into equities. Even at today's prices, the S&P 500 is looking better as long as those companies can continue their growth.

 

[Engineer]

Dow down another 77 or so today (Nasdaq and Dow down .7%). Can't complain too much today as today is 401k buy day!


Edit: Reason per CNBC was rumor that FED is now looking at raising interest rates by 50 basis points (.5%) instead of the perceved pause. This is because of the new inflation data showing runaway inflation in the economy. Energy is biting us on the ass!

 

[Jadow]

I've lost several thousand in the last 2 weeks, but I'm still up about 6% for the year. It is nice to know I'm going to work to earn money and on those big down days, I'm losing a lot more money than I'm making in a day! LOL

 

[IHateMyJob2004]

Originally posted by: Jadow
I've lost several thousand in the last 2 weeks, but I'm still up about 6% for the year. It is nice to know I'm going to work to earn money and on those big down days, I'm losing a lot more money than I'm making in a day! LOL

I'm in the same boat. But even in the recent down turn, I'm not doing as badly as the markets in general.

I'll be fine though. 3.3% yield And I only buy high qualtiy stocks!

 

[BucsMAN3K]

Looking at the replies, I must say, people are too extreme on their outlook on the economy. With paper money, the economy will naturally flux in relation to thousands of factors, the more prominant being inflation and how much annual wages keep up with it.

So every few quarters it hits a high point and people rejoice, it hits a low point and people freak out. It's a perpetual roller coaster ride people, and as long as millions of people in this country love to buy things, we'll be fine.

 

[Deleted member 4644]

Originally posted by: BucsMAN3K
Looking at the replies, I must say, people are too extreme on their outlook on the economy. With paper money, the economy will naturally flux in relation to thousands of factors, the more prominant being inflation and how much annual wages keep up with it.

So every few quarters it hits a high point and people rejoice, it hits a low point and people freak out. It's a perpetual roller coaster ride people, and as long as millions of people in this country love to buy things, we'll be fine.

But someday, those millions of people might maxxx their credit, and in that case, we will ALL suffer.

 

[Engineer]

Another market slaughtering today. Down down 1.5% and the Nasdaq down 2.1%. All on inflation fears from HIGH ENERGY/OIL prices along with a suddenly dropped consumer confidence.

Anyone remember the posting that stated that if you invested your money in the markets during the last two years of a Presidential term and then pulled it out during the first two years of the term over the last 100 years, you could have made a killing? Makes one wonder, doesn't it.

 

[zendari]

Originally posted by: Engineer
Another market slaughtering today. Down down 1.5% and the Nasdaq down 2.1%. All on inflation fears from HIGH ENERGY/OIL prices along with a suddenly dropped consumer confidence.

Anyone remember the posting that stated that if you invested your money in the markets during the last two years of a Presidential term and then pulled it out during the first two years of the term over the last 100 years, you could have made a killing? Makes one wonder, doesn't it.

Interesting idea. Does an 8 year presidency count as 1 or 2 terms?

 

[Engineer]

Originally posted by: zendari

Originally posted by: Engineer
Another market slaughtering today. Down down 1.5% and the Nasdaq down 2.1%. All on inflation fears from HIGH ENERGY/OIL prices along with a suddenly dropped consumer confidence.

Anyone remember the posting that stated that if you invested your money in the markets during the last two years of a Presidential term and then pulled it out during the first two years of the term over the last 100 years, you could have made a killing? Makes one wonder, doesn't it.

Interesting idea. Does an 8 year presidency count as 1 or 2 terms?

Two. The posting showed that there was a negative average in the first two years of a term of the presidency over the last 100 years while the gains during the last two years of the terms were staggering. I guess I would look at a few charts. Bush's pattern so far fits this right on the money. Not sure about Clinton's as his was somewhat skewed by the Dot.com boom/bubble.

 

[Engineer]

Interesting article on what's driving the US and emerging markets down. Expect a sharp fall before a rise? Maybe...

 

[raildogg]

Doesn't matter, it may go down without the "experts" forecasting it.

 

[Engineer]

Originally posted by: raildogg
Doesn't matter, it may go down without the "experts" forecasting it.

While true, there are many "fundamental" reasons that markets decline or rise. Sure, there is speculation to both the upside and downside, but with real economic indicators showing a decline or upside, it does indeed "matter".

 

[alent1234]

Originally posted by: Engineer
Interesting article on what's driving the US and emerging markets down. Expect a sharp fall before a rise? Maybe...

short answer is increasing rates are taking money out of the system. fed raises rates by selling bonds and taking money out of circulation. this also increases borrowing costs since the big boys trade on margin. and with the weaker dollar you can't borrow overseas with low rates. all of my investments including retirement has been in cash before this thing began. took my wife's stuff into cash last week before it got really bad. i'll be watching tomorrow, but i don't have a lot of hope for a rally.

 

[Engineer]

New FED chairman Bernanke spooked the markets yesterday with viligent talk on inflation. The DOW just broke below the psychological barrier of 11,000. It could be in for a somewhat persistant fall!

 

[Engineer]

Originally posted by: Genx87

Originally posted by: conjur
And this stock market rise is all artificial. The underlying fundamentals just aren't there.

The correction is going to hurt.

Why don't you do us a favor and in all of your wisdom tell us when we can expect this correction, and how bad will it hurt?

Well, wasn't too far from the date you posted and many expect a 10% drop or more. Makes me wonder if Bush will leave office after 8 years with a positive market or not? At this pace, who knows.

 

[dullard]

Originally posted by: Engineer
Makes me wonder if Bush will leave office after 8 years with a positive market or not? At this pace, who knows.

The stock market historically goes through a ~15 year pause every other generation. One generation spends too much, the next generation learns and saves/invests. Thus the market booms on one generation and basically stays flat the next generation. It is a societial pattern that I see no reason to expect a change. Thus, I expect Bush to leave office at about the same value that he entered.

The S&P was close to 1300 when he entered. I expect it to be close to 1300 when he leaves. It is falling again today, 1259 as I type this, down 0.5%. So, as it is, he needs a little bump to break even.

It isn't Bush's fault though. The next president will also inherit the 15 year pause problem. Presidents have immense short term impacts on the stock market. Heck, they can impact a market even before entering office solely on speculation. But they have little to no long term impact.

 

[Engineer]

Originally posted by: dullard

Originally posted by: Engineer
Makes me wonder if Bush will leave office after 8 years with a positive market or not? At this pace, who knows.

The stock market historically goes through a ~15 year pause every other generation. One generation spends too much, the next generation learns and saves/invests. Thus the market booms on one generation and basically stays flat the next generation. It is a societial pattern that I see no reason to expect a change. Thus, I expect Bush to leave office at about the same value that he entered.

The S&P was close to 1300 when he entered. I expect it to be close to 1300 when he leaves. It is falling again today, 1259 as I type this, down 0.5%. So, as it is, he needs a little bump to break even.

It isn't Bush's fault though. The next president will also inherit the 15 year pause problem. Presidents have immense short term impacts on the stock market. Heck, they can impact a market even before entering office solely on speculation. But they have little to no long term impact.

I'm not necessarily disagreeing with you but when you see all of the people giving credit (or discredit for that matter) to Bush for a booming economy, makes one wonder "what exactly is booming"? A booming economy will drive a market (and visa versa at times).

 

[BaliBabyDoc]

Originally posted by: dullard

Originally posted by: Engineer
Makes me wonder if Bush will leave office after 8 years with a positive market or not? At this pace, who knows.

The stock market historically goes through a ~15 year pause every other generation. One generation spends too much, the next generation learns and saves/invests. Thus the market booms on one generation and basically stays flat the next generation. It is a societial pattern that I see no reason to expect a change. Thus, I expect Bush to leave office at about the same value that he entered.

The S&P was close to 1300 when he entered. I expect it to be close to 1300 when he leaves. It is falling again today, 1259 as I type this, down 0.5%. So, as it is, he needs a little bump to break even.

It isn't Bush's fault though. The next president will also inherit the 15 year pause problem. Presidents have immense short term impacts on the stock market. Heck, they can impact a market even before entering office solely on speculation. But they have little to no long term impact.

You should always be wary of such "patterns" and thinking of them as predictive. The next President will inherit a record federal debt, huge structural deficits, a bloated entitlement system, record personal debt, low personal home equity, struggling domestic manufacturing, continued healthcare cost inflation, and high energy costs. Some of those are Bush debacles, while others are quite independent. But assuming we don't FIX some of his worst offenses (fiscal mismanagement, expansion of Medicare, poor investment in productive infrastructure, and contrary policies for energy conservation and efficiency) . . . it is quite likely there will be a long-term impact from the Bush Years.