Author Topic: New Paradigm?  (Read 33762 times)

Admin

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New Paradigm?
« on: January 01, 2014, 09:22:46 AM »
"The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades."

VS

"the jobless rate (is at) a five-year low of 7 percent, but some 11 million Americans are still unemployed, and many are earning less than before the recession. When adjusted for inflation, average weekly wages have barely budged since late 2008"

Where do you see us on the chart?  Is the "Smart Money" already out?


headmount

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Re: New Paradigm?
« Reply #1 on: January 01, 2014, 10:04:19 AM »
Not going to fly hang gliders anymore and not going to try to figure out the market.  One could blow their brains out doing it.  It's like listening to a woman.

Weasels wake

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Re: New Paradigm?
« Reply #2 on: January 01, 2014, 10:07:03 AM »
If the smart money is already out, then there is very little smart money, considering how high the market is.
It takes a quiver to do that.

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Re: New Paradigm?
« Reply #3 on: January 01, 2014, 11:06:20 AM »
If the smart money is already out, then there is very little smart money, considering how high the market is.

If you buy into the cycle that powers this graph then that would be correct.  The 1st Smart Money/Stealth phase barely bumps the valuation over the mean and would show as little or less impact on the way out, especially when masked by Manic public buying.
« Last Edit: January 01, 2014, 11:08:00 AM by Admin »

PonoBill

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Re: New Paradigm?
« Reply #4 on: January 01, 2014, 12:17:08 PM »
I think a fundamental question for people with capital to invest is "where else are you going to put it"? There aren't a lot of great choices. Most mechanism that are not the stock market are influenced by the stock market. Including stuffing it in a mattress or buying gold. Personally, I'm buying rice--all I can. All those Chinese and Indians--there will always be a market. And I'm backing my play with soy sauce and curry. I think I have the perfect hedge.

Usually the term "New Paradigm" has me digging for my bullshit bingo card. But the world is changing very fast, in ways that make most science fiction stories seem quaint. Smartphones make the communicator in Star Trek look like a freebie phone from a cheapo mall kiosk--and an old one at that--way too big. And all it does is let you talk. Space-X builds rockets that they test by flying to a precise height and then land by backing down onto the launch pad. I have no problem remembering when NASA used to flip the GO switch and pray. Amazon is a retailer on a scale that even they can't fully comprehend. It's as easy to sell a product to someone in whatever-stan as it is in Peoria. And the whateverstani will get it delivered quicker because of the local fulfillment warehouse. I could go on and on, and on.

Everything is new, and it's all weird. So I haven't a clue what drives that graph. Insufficient data....  Beep... hiss... end of transmission.
« Last Edit: January 01, 2014, 12:53:30 PM by PonoBill »
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SuppaTime

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Re: New Paradigm?
« Reply #5 on: January 01, 2014, 01:59:34 PM »
There is a great book called "A Random Walk Down Wall Street" by Burton Malkiel who is an economist from Princeton. In it, he analyzes various investment strategies including one in which you try to anticipate market movement by buying-low-selling-high. Getting out of the market now with the idea of getting back in on the next upswing is essentially the "buy-low-sell-high" strategy. In his book, Malkiel shows that it is almost impossible to do any better over the long term with this strategy than it is to simply keep your money invested in a broad portfolio.

The problem is, it is very difficult to know when the market has peaked, and equally hard to know when it has bottomed out. Most people end up missing those events badly and it costs them.

Of course the key here is whether you are in the market for long term (e.g., saving for retirement) or short term (e.g., you are saving to buy a new car). Long term, you might want to rebalance but otherwise, the common wisdom is to stay put.
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Admin

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Re: New Paradigm?
« Reply #6 on: January 01, 2014, 04:03:10 PM »
Even with the bright lights (Amazon, Apple, etc) the overall US economy grew in the high 3 to low 4 percent range in 2013 (depending on which early report you trust) while the World Economy grew only 2.9% (somewhat short of expectations).  On their lonesome, neither of those are likely overly concerning or confidence inspiring percentages.

The wild part is that in the same period US stocks gained over 33%.  Since the low in 2009, U.S. stocks have gained almost 214%.

What gets me the most is the notion that the market is no longer cyclical (yup, the new paradigm).  
« Last Edit: January 01, 2014, 04:04:56 PM by Admin »

Puamana4me

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Re: New Paradigm?
« Reply #7 on: January 01, 2014, 05:09:34 PM »
" (6/20/13)Wall Street suffered its worst day of the year Thursday, one day after Federal Reserve chairman Ben Bernanke raised fears the central bank may be preparing to wind down its stimulus policies this year.
The Dow Jones industrial average tumbled 353 points, or 2.3%. That marked the biggest one-day point drop since November 2011. Including Wednesday's losses, the Dow has erased more than 550 points in two days"

What if QE ended (75 billion$/month)?
What if the REAL unemployment  13.5%( underemployed included) numbers were reported and accepted? (50 million+ Americans receiving "food stamps")

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LaPerouseBay

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Re: New Paradigm?
« Reply #8 on: January 01, 2014, 06:14:13 PM »
I'm hoping against hope that the internet will 'fix' the 'education system.' 

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stoneaxe

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Re: New Paradigm?
« Reply #9 on: January 01, 2014, 07:28:31 PM »
Talking about just this last night with friends. What happens when the QE bubble breaks....all the house of cards needs is a little knudge. Did it just feed coal into the engine...everyone jumping on loving how fast the train is going.....uh oh, bridge out ahead. Big investors got off at the last station. There was talk of a lot of the very big guys moving to cash 3 months ago. The Mr Potters of the world do exist.
« Last Edit: January 01, 2014, 07:30:12 PM by stoneaxe »
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Zooport

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Re: New Paradigm?
« Reply #10 on: January 05, 2014, 08:41:31 AM »
I agree.  Our economy is just a house of cards that is going to fall soon.  The only reason for the gains is the QE stimulus that is putting our government more and more in debt.  We are living off of our credit cards, figuratively speaking, and it will stop sometime.  When it does, look for massive inflation.  The problem is knowing when to jump out.  If one could time it correctly, he could jump from the markets to precious metals at just the right time and make a killing.  Timing it poorly, especially being too late, could lead to financial ruin.
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Re: New Paradigm?
« Reply #11 on: February 03, 2014, 04:27:59 PM »
Hello, Fear.

lucabrasi

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Re: New Paradigm?
« Reply #12 on: February 03, 2014, 04:43:39 PM »

Supmmm

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Re: New Paradigm?
« Reply #13 on: February 03, 2014, 07:30:58 PM »
Goldman Sachs putting out analysis citing a 67 percent probability to the chance that the market would fall by 10 percent. If these guys are worried....I'm calling my guy.

http://www.cnbc.com/id/101331228

Weasels wake

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Re: New Paradigm?
« Reply #14 on: February 03, 2014, 07:37:24 PM »
If you feel like you still have got a fair amount of years left, stick with it.
I'm just hoping I'm young enough for the theory to be true.  :-\
It takes a quiver to do that.

 


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