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I'm ready for a huge market correction (October?)
ChrisRx
Posts: 5,619 ✭✭✭✭
How about you? Thoughts?
Edited to add:
Or even the next bear market (would be great for me.) I feel the stock market is way overvalued. Being 30 years out to retirement it would be preferred to be in a bear market again, and I think that can be accomplished in the next 3 years or so...
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So how you gonna cash in on this expected event? Long SPY puts? Going long a leveraged short ETF? Going long a VIX futures ETF? Lol who knows maybe you time it right? If not, well, we've all swung and missed a couple times and lost a little money.
PE ratio on major indices, updated weekly.
online.wsj.com/mdc/public/page/2_3021-peyield.html
Think about the GDP, interest rates, and...other stuff? as well when valuing stocks. PE ratios absolutely matter, so do trends. Stocks aren't cheap, but based on current interest rates, they aren't crazy expensive either. I would say slightly/moderately expensive...lol but I have been wrong about so many things before so who knows.
I thought the market correction and crash already happened last October?
Collecting 1970s Topps baseball wax, rack and cello packs, as well as PCGS graded Half Cents, Large Cents, Two Cent pieces and Three Cent Silver pieces.
Of course no one can accurately predict the future of the market, so obviously this is only my opinion.
Besides the overvalued market, the current lack of order and qualified individuals in the political spectrum does not give me confidence when it goes south. In addition, there will be more "tests" this fall, and I don't think the promises that have been made will be accomplished (from tax reform to health care.) Lack of staffing, low-qualified, firings, resigning, etc. (Don't want to delve more on the politics because I don't want this thread to be poofed.)
That being said, as far as getting ready for the correction, I moved my funds in my 401k to be more "bond heavy" to lessen the losses, got my PM's stacked, and UVXY looks tempting when it all goes down.
Bernanke led the way in using mortgage finance to reflate the financial system after the bursting of the dot.com bubble and did not even see the danger when it became obvious. Yellen has attempted to use asset inflation to reflate the financial system after the bursting of the mortgage (debt) crisis. They both spouted publicly that "all is well" before the SHTF. The FED's boom and bust cycle engineering guarantees financial danger lies directly ahead. FED needs to lead the economy by doing the right things, not saying the right things.
Keep an open mind, or get financially repressed -Zoltan Pozsar
ChrisRx....when im expecting a market correction I go to cash.
Knowledge is the enemy of fear
Rx gonna need a new prescription...
Cash is good, shorting seems tempting (although risky of course.) It's also nice to have some gold and silver on your side as well.
The rx is UVXY
That and and/or some SPX on some positions I may not want to sell just in case I'm wrong
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Harvey is going to leave a mark on the economy.
I knew it would happen.
Can the FED/Wall St. prevent another market plunge?
Keep an open mind, or get financially repressed -Zoltan Pozsar
Gold is correcting upwards.
I knew it would happen.
My solid prediction is - Something will happen!!!
There you have it ... Cheers, RickO
Good Lord ricko you now have over 50 Thousand posts. I know Lord Malcovern has a lot but 50 thousand has to be the record.
Successful card BST transactions with cbcnow, brogurt, gstarling, Bravesfan 007, and rajah 424.
Like novocaine they can postpone the pain. They'll watch the equity markets fall and won't intervene (they can't do a lot at this point) so their cronies can skim off a few trillion more USD over the next few years.
Future generations will pay the price for this generation's greed. The real pain is a couple decades away and there will be no silver bullet.
good or bad
@johnny9434.....Now don't get technical....
Cheers, RickO
I would hunker down in the northern 'ville and sell what's going up and buy what's going down, but only Quality.
In between endless reruns of the program about the bar and Sam and Diane and Norm and Cliff and the rest, that is...
Liberty: Parent of Science & Industry
My friend has been sitting in 80% cash for the last 6+ years, waiting for a large correction. He's missed one of the largest bulls markets in history. He's still waiting. Someday he will be right, of course, but at what cost?
IMO, if you have 30 years to retirement you will be much better off with a large % position in diversified equities. Timing bear/bull markets is impossible.
Dave
Dave, I appreciate the advice and I agree with everything you said. I would not be waiting anywhere near 6 years for the market to change. I 100% believe in investing heavily in stocks long term.
That being said, I still think there will be some bigger tests that are closer to the end of the year that I don't think will be passed. I don't trust this administration to know what to do (and not do) when it comes falling down.
With the market at an all time high I see more of a chance for a downturn than a continued upturn (in the nearer future anyways.) I will wait til at least March 2018 before getting back into the market.
Chris...yiu might want to think more about rotation rather than correction.
Knowledge is the enemy of fear
Good luck, Chris. I share your concerns about the current administration as well. Should be interesting to see how things transpire.
Dave
My two bits. ;-)
Valuations are high but not outrageous. Harvey may give some window for those looking to get in cheaper. Most of my contemporaries are out of the 'market', on the sidelines, waiting, watching it go higher and higher, all the while making excuses not to get in. When they get in, I'll let you know, lol.
The day after the election I went close to all in based on the promises of infrastructure spending, tax cuts, ACA reform, etc... That was 19.5% ago, much better than my 'contest' results as of late. Last week I cut my exposure in half doubting he (and Congress) will accomplish all the promises of last year.... I'm somewhat relieved to see 2Q GDP at 3% though. For now, I'm going to wait and see what 'they' will do. So, if Harvey drags 3Q down and Congress gets its act together on taxes, AND there's no 'fire and fury' in the Koreas, I'll reconsider going back in.
Jim Rickards has a couple of reasonably good interviews about gold on Kitco right now that sound coherent to me.
I knew it would happen.
The market is over-valued. But the question is ...where does the money go? The money has no where to go so it will continue to chase overvalued stock plays.
Loves me some shiny!
comrade, have you read his latest book?
Why October is probably a good guess
Keep an open mind, or get financially repressed -Zoltan Pozsar
unprecedented currency, equity and bond market chaos
Wow!!!! Unprecedented. Golly gee willikers
Knowledge is the enemy of fear
Exactly why I was worried enough to put my 401k on the sidelines for the time being.
By the end if the year I expect metals up and stocks down. The fact that metals have recently had somewhat of a "stealth rally" tells me I am not the only one getting ready for it.
I heard all these dire predictions leading up to October...of 2016...which came and went with another 25% run up in stocks since then.
Bottom line is no one knows what is going to happen. It's all sheer speculation but even a broken clock is correct twice a day.
If you can't afford the risk, or your temperament is such that risk makes you queasy, then by all means, reallocate. But you also risk missing the curve.
Collecting 1970s Topps baseball wax, rack and cello packs, as well as PCGS graded Half Cents, Large Cents, Two Cent pieces and Three Cent Silver pieces.
Yes, but this time it's my prediction
You know what they say about predictions.
Collecting 1970s Topps baseball wax, rack and cello packs, as well as PCGS graded Half Cents, Large Cents, Two Cent pieces and Three Cent Silver pieces.
It's like counting cards, and right now the deck is not in our favor.
Problem is that LOT's of folks are predicting a market correction. The market has been climbing the wall of worry on their backs for years . Personally I wouldn't try to time the market with a 401K. It's counter intuitive over your lifetime
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I agree, but putting my 401k on a short term hold won't kill me. If the market has a huge correction like I think it will, then I will just buy back the stock at a better price. If I am wrong, I will put it back in regardless. Again, I am 30 years out to retirement so now is the time to try to get a leg up.
Since you don't know for sure this will happen I might be satisfied just by buying stocks cheaper during this possibly downturn. If the market runs to 25K when do you plan on getting back in? What happens if the market goes up in Oct, Nov and Dec? When will you get back in?
On the flip side what if your right? When do you get back in? How will you know? What if the market pulls back and storms back with you on the sidelines or just getting back to making your regular contributions and keeping funds in .001 Money Market. You will be no better off even with you timing the pull back. By all means if you think the market is going to crash and it keeps you up at night then go to cash. You will have lots of company and that is generally problematic.
401K are typically poor market timing vehicles. But it's your money and your instincts. Heck I have the same worries from time to time. I'm just playing devils advocate. All this coming from a person who timed markets for a living.
I have a self directed 401K. I just will put on some put protection via cheap options when I feel the market is hinky.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Mark,
I appreciate your advice. Luckily for me it won't be the end of the world whether it be an up or down market. If the market doesn't have a huge correction in the time span of say 3-6 months, then I will have no problem admitting defeat.
All i know is that the market is so overpriced I feel like I am not getting much for my $ (in addition to the lack of political knowhow at play makes me concerned.) I sleep better at night knowing that I won't have to deal with the biggest part of the correction (at least that's the plan.)
Knowing I nor anyone else can accurately know when a market correction hits it's lowest point, I will just restructure when I feel the worst of the storm is over.
In the end i will move $ back in either way.
I wouldn't mind you being right. Just wanted to throw some things out there. May the force be with you
m
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
People have always tried to analyze, that market, time the market, outguess the market, and yes, manipulate the market. I decided to ignore the market and to focus on money management. There's a difference.
Wow, I never noticed this before, but my tablet is trying to guess what each of the next few words that I am going to type is going to be. How long before It won't let me choose my own words?
I knew it would happen.
Comrade Renski, what's in his book? I have not read it.
I knew it would happen.
Good thing trucks have forward and reverse gears. It sucks being parked in neutral with the motor running. Like all those evacuees in an emergency.
Author Jim Rickards, Currency Wars, has an interesting approach. He's been the fly on the wall in some timely instances, a consultant to the gov't regarding 9/11 using new mathematical models, worked at Long Term Capital when it went bust in 1998,...
Whereas some authors predict this and that and regurgitate history, he has some interesting first hand insight. He's a big believer that we'll enter into a cashless society and it's not in our interest. He mentions Crete's 'buy in' as a template for the next financial crisis when it hits in 2018(?) He thinks the next one, 2018 or whenever, will be worse than the 2008 'crisis' because most of the problems were never fully solved....
I found it entertaining, taken with a few grains of salt on the rim of my margie. ;-)
In what capacity did he work at LTCM? That's not much of an endorsement, lol. I also take him with some NaCL.
I knew it would happen.
my bad
Keep an open mind, or get financially repressed -Zoltan Pozsar
I thought we were talking about Richards? Edit - Rickards
(I do like to read Armstrong's blog, but I'm a little too chintzy to actually pay for one of his pricey subscriptions.)
I knew it would happen.
I am %90 cash since last June. Captured a nice 5 year run. Feeling very good.
Loves me some shiny!
----> carew4me: It's good to be King!
I knew it would happen.