I thought the NYT said the market would crash immediately after a Trump win?
Stock market will rise 50 percent, esteemed economist says
By Jonathon Trugman June 4, 2017 | 2:04am
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It’s not very often that a Nobel Prize-winning economist who is known for his bearish calls turns extremely bullish.
Last week, professor Robert Shiller of Yale, who called the housing collapse 10 years ago, proclaimed that stocks could rise another 50 percent in the next few years based upon his latest research. Meaning Dow 30,000!
That got the attention of many folks, especially the Wall Street analysts, many of whom don’t understand this market.
Shiller accurately saw the housing bubble and predicted that it would end very badly, as it did. He also co-developed the S&P/Case-Shiller index, which is a benchmark to measuring housing prices around major US cities.
What many may not know is that in the 1990s he developed a stock price measurement ratio called the cyclically adjusted price-to-earnings (CAPE) ratio for stock valuations.
The CAPE ratio measures stock prices in relation to long-term earnings and inflation. At current levels, Shiller’s own CAPE ratio is not flashing a buying opportunity, which makes his call even more interesting.
In fact, based on his CAPE ratio, stock prices are actually high right now. However, like many of the other ratios out there in academia and on Wall Street, interest rates are not weighted in it.
In fact, Shiller pointed out that the CAPE ratio he trusts is actually expensive now at 29. Its average is 17.
“I would say, have some stocks in your portfolio. It could go up 50 percent from here. That’s what it did around 2000 — after it reached this level, it went up another 50 percent.”
In 2000 the economy was about 12 months away from the top of the internet bubble, which also ended badly.
The key to Shiller’s call is President Trump’s tax policy. “If factors go right and there are tax cuts for corporations, it’s not that hard to understand.”
So making a great short call followed up a decade later by a great long call would give Shiller an A+ in my book. And make investors a pretty penny along the way.
JAYSUS SAVES!....
But Moses INVESTS..
I wouldn't be buying anything right now. The market has pretty much been going straight up for 7 months and that never lasts. The fact that nearly nobody thinks the market can go down worries me and makes me think we will see some kind of correction that surprises everyone. We're in the normal seasonal top (sell in May and go away) and every article I read tells me why "this time is different..." One thing I've learned is when everyone says this time is different, it usually isn't LOL. I just cashed out of my small position. I had 30k at work and made about 6k profit on it. Probably look to get back in during the normal seasonal low around September October time frame.
It will fall too.
Sooner or later...
No reason to be afraid. I just bought some stuff last week.
I really hope you have the best of luck with that. My problem is when they stop talking about "buy low, sell high" and start rationalizing "buy high, sell higher", it's almost over.
Get in, stay in, keep 15% - 20% in cash. When the market tanks, you use the cash to buy now that things are "on sale" and ride it back up and recoup your losses + some. Works best when you start young.
Well it took me a little time to find the original article because it appeared in the NY Post rather than the times. What Shiller said is that it could go up 50% because that is what the market did in the last 6 months prior to the 2000 peak--which was followed by crash of the DJIA going from 16,700 to 10,300. Shiller's quote is not historically accurate, by the way, based on the DJIA.
If you are buying US equities now, you have got to be thinking market timing, rather than long term investing in an under-priced asset class
Well it took me a little time to find the original article because it appeared in the NY Post rather than the times. What Shiller said is that it could go up 50% because that is what the market did in the last 6 months prior to the 2000 peak--which was followed by crash of the DJIA going from 16,700 to 10,300. Shiller's quote is not historically accurate, by the way, based on the DJIA.
If you are buying US equities now, you have got to be thinking market timing, rather than long term investing in an under-priced asset class
He's basically saying that a market in a bubble CAN go up longer than people expect. But to me, that's playing chicken.
I suspect the only thing less advisable than giving financial advice is taking it.
Particularly from a group of ideologues of any stripe.
I suspect the only thing less advisable than giving financial advice is taking it.
Particularly from a group of ideologues of any stripe.
So, how many times did the fed head say she would raise interest rates in order to crash the Trump economy, and did the author factor that in-yet?
buy, buy, buy. there's always a greater fool out there somewheres..until there's not.
My barber hasn't started talking to me about investing in stocks, so we're not at the top, yet....
Stocks aren't cheap right now, but I don't see a long term pull back yet. Short term, sure, absolutely, but timing those is a fool's errand.
Get in, stay in, keep 15% - 20% in cash. When the market tanks, you use the cash to buy now that things are "on sale" and ride it back up and recoup your losses + some. Works best when you start young.
Bingo.
Well it took me a little time to find the original article because it appeared in the NY Post rather than the times. What Shiller said is that it could go up 50% because that is what the market did in the last 6 months prior to the 2000 peak--which was followed by crash of the DJIA going from 16,700 to 10,300. Shiller's quote is not historically accurate, by the way, based on the DJIA.
If you are buying US equities now, you have got to be thinking market timing, rather than long term investing in an under-priced asset class
He's basically saying that a market in a bubble CAN go up longer than people expect. But to me, that's playing chicken.
That's why you set triggers.
buy high, sell low, lose money on every transaction but make up for it in volume.
I'd just go long on pork bellies, you never loose on those. Everyone loves bacon!
I'd just go long on pork bellies, you never loose on those. Everyone loves bacon!
Now THERE'S an investment I can't endorse.
If you don't know what you are doing, let me recommend someone who has really helped me and my investing strategy. When the student is ready, the teacher will come.
Rida Morwa
If he knew the future he'd be out making tons of money and having a blast spending it instead of writing BS articles.
Investing is not as hard as some folks want to make it out to be. You find quality companies that you understand, you buy them and hold them. Is it really any harder than that ?
. . . You find quality companies that you understand, . . .
Some people need help with this important part, like me.
What goes up will come down. Case in point, DJI closed at 14,164 on Oct 9th 2007, 18 months later on March 9th, 2009 it closed at 6547.
History will repeat itself. Market is overpriced. .
Where's Billy Ray Valentine? I wanna go deep into OJ concentrate
Investing is not as hard as some folks want to make it out to be. You find quality companies that you understand, you buy them and hold them. Is it really any harder than that ?
Like GM, huh?
Broad based selection, dollar cost average over years, don't jump in and out - you will never "time" the market, get more conservative after 60 and enjoy life.
GM will be a winner. I am long GM and it is one of my largest investments.
When I first started in the market amongst the most sage advice was to " Listen to the leading economists, then do exactly the opposite..." It seems true more often than not, so this impending 50% rise worries me....
Broad based selection, dollar cost average over years, don't jump in and out - you will never "time" the market, get more conservative after 60 and enjoy life.
Yep. It's worked for me for the last 30 years. I've got a a half dozen years until 60 but I've ridden the ups and downs and dollar cost averaged across a broad range of low-cost mutual funds and it's worked. I've had friends who have tried other methods and some have done well and some have done poorly so figure out what works for you and do something because sitting on the sidelines of planning for your future is no plan at all.
Broad based selection, dollar cost average over years, don't jump in and out - you will never "time" the market, get more conservative after 60 and enjoy life.
Yep. It's worked for me for the last 30 years. I've got a a half dozen years until 60 but I've ridden the ups and downs and dollar cost averaged across a broad range of low-cost mutual funds and it's worked. I've had friends who have tried other methods and some have done well and some have done poorly so figure out what works for you and do something because sitting on the sidelines of planning for your future is no plan at all.
Spot on. Started when I was 23 and retired well set at 53.
Broad based selection, dollar cost average over years, don't jump in and out - you will never "time" the market, get more conservative after 60 and enjoy life.
This!
Broad based selection, dollar cost average over years, don't jump in and out - you will never "time" the market, get more conservative after 60 and enjoy life.
"Timing the market" is an undefined term. Taking profit is a good a strategy, as is bargain hunting. Both are, at the core, market timing strategies. Take profit when PE's get high, go bargain hunting when they are low.
Let me get this thread back on point, which has evidently eluded you Warren Buffets.
The key to Shiller’s call is President Trump’s tax policy. “If factors go right and there are tax cuts for corporations, it’s not that hard to understand.”
One of Trumps big goals is to reduce Corp Tax rates to spur reinvestment and to bring back billions in revenue currently sitting offshore. Trump may not know dick about the Sultan of Brunei's politics, but he damn sure knows how to make a buck. (That is not bogus book deals you Leftists lurking)
This is a well respected economist telling you that even pea brains should understand that if and when he gets the tax cuts, America will prosper and businesses flourish and the market will be primed for an extended run.
That also means more people employed, less on the dole, better opportunity for all and a robust economy. Big win!
One more time for reading comprehension impaired.
The key to Shiller’s call is President Trump’s tax policy. “If factors go right and there are tax cuts for corporations, it’s not that hard to understand.”
When I first started in the market amongst the most sage advice was to " Listen to the leading economists, then do exactly the opposite..." It seems true more often than not, so this impending 50% rise worries me....
See above. Means more cat food and bullets for Nyalubwe!
Stock Market Forecasting – The “Zero Validity Zone”This page provides a running tally of stock market forecast accuracy. If other, larger studies are any indication, it will eventually settle on a 50% accuracy rate, same as a coin toss.
It’s important to understand that stock market forecasters cannot add value to your investing performance. Acting on their hunches will reduce your profit. It’s best to call them something that reminds you to ignore them: Z-vals.
The term z-val (“zee val”) is a shorthand introduced in The 3% Signal for
“zero-validity forecasters” and
“zero-validity environment.” The latter phrase was coined by Nobel Prize winner Daniel Kahneman in his book
Thinking, Fast and Slow, where he wrote that “stock pickers and political scientists who make long-term forecasts operate in a zero-validity environment. Their failures reflect the basic unpredictability of the events that they try to forecast.”
This page is the Z-val Zone of Stock Market Forecasts.
http://jasonkelly.com/z-vals/
We understand that you can't foresee every possibility. The point here is not your portfolio. The point remains that if/when Trump gets his Corp Tax cut, the business climate will be much healthier than without it. I don't think you can rationally debate that.
Ditto. FIL lost $50,000 in GM warrants or preferred shares or some such whem zero "saved" them.