I’m going to clue you in on something that can change your pathetic lives forever.
Ready?
The voices in your head are probably wrong. The ideas you have are, more or less, the sum total of the nonsense you’ve been ingesting for information. Ergo, you’re most likely absorbing nonsense, especially if you’re unhappy. Since most people these days are malcontents, odds are you’re a bearshitting fool reading Zerohedge and negative fuckers all day on Twitter.
I am guilty as charged for being lured into the rhetoric, but I like to stir the pot and often ham it up for the sake of dramatic candor.
I’m in touch with reality enough to know the voices in my head and merely reflections of my insecurities, wishes and desires, not even remotely close to reality. What is real is what you can see and touch.
Is there a bear market out there now?
No.
Was there one in late December?
Yes.
I suppose you could’ve just bought and bought and bought, mindlessly drolling on throughout life without a care in the world — but what fun is that? We like to at least believe there is a modicum of control or variability in all this, no? Perhaps we can apply our artistic design into the investing process and come out the other end splendidly rich? It’s an awfully nice thought and it makes me feel good just writing it. But it’s probably a waste of time.
My quantitative methods, up 4% MTD, are way more efficient and conducive with building wealth, truly, than playing whack-a-mole with the market.
Markets go up 76% of the time, based on a 125 year history. The odds of your 20-30 year investment horizon going wrong are infinitesimal. Remember that the next time you find yourself thinking end of days is upon you. That’s hubris and golden aged thinking perverting itself into a form of cognitive dissonance that is secretly and quietly trying to kill you.
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Yeah. Imposing one’s own preferences and logic on the market leads to losses and missed opportunities. My big day trade winner today was in an $18 billion company that provides “hair, skin and eyebrow” products and services. $18 billion! Hair, skin and brow. Women are different.
It pays if you don’t get shook out the next time the SP loses about half. If the long termers aren’t starting to overweight long term Government bonds they’re asking for it.
Japan’s Nikkei index peaked near 39,000 in the late 1980s.
30 years later, it is still down more than 50%. Thats is in nominal terms, without adjusting for inflation.
However, the US stocks are quite differnt than Japanese stocks, so the US market will always go up in the long term.
Hopefully.
Here’s something else to think about:
– Long-term Treasuries are paying 3%. If the market drops 10% during a 12-month period during the next three years, the market would have to average +10% the other two years to make up for that.
– It would take four +10% years to make up for one -20% year (vs Treasuries).
In other words, if anybody thinks we will hit a recession in the next three years, then you should either invest in Treasuries now or admit to yourself that you are trying to time the market.
Yep. Completely avoiding “market timing” is a really bad idea.
Why think, predict, have an opinion about the future at all? Just pick a target allocation and continuously rebalance with new cash flow. This would likely have had you buying stocks in December and January and bonds since. Devote that mental energy to something productive/valuable.
Adjusting from 60/40 to 55/45 right now wouldn’t be productive? Seriously? How much thought does that take?
Depends on your time horizon and where the money is parked. That’s a 50k move on a 1MM portfolio, likely with real tax consequences. If we are talking a $5000 trading account, none of this really matters
The Financial world loves to say that the past perfromnce don’t preidict future performance – right before making investement decisions that assume the opposite.
I think continuous rebalancing has a huge benefit compared to blind buy-and-hold, but it still makes the implict assumption (ie, a predcition) that the future perromance of assets classes will be statistically simialr to the past performance.
Considering that the US is comign off a 40 year down trend in interest rates, the baby boomers are retiring, and wealth concentaraion in the US is near pre-Great Depression levels, it seems reckless not ot at least take those things into consideration.
This is every life insurance and annuity salesman’s shtick…..
An annuity is nothing more than a more expensive Treasury bond ladder.
Also, life isnurance and an annuity tie up you money for a very long time (decades). I am talking about the next 2-5 years.
“However, the US stocks are quite differnt than Japanese stocks, so the US market will always go up in the long term.”
Bah.
In the very long term, the companies in the country which has the smartest people and which is most free/most meritocratic wins. The Chicoms, Japanese, and Koreans are smarter then we are; and we are losing the most meritocratic edge that we once had. Further, we’re committing all the classic end-of-empire mistakes. So one must ask: “How will we fare when people stop giving us things of value for the fiat we print?
That was sarcasm. However, the US has two big advantages vs Chian and Japan: a population that is aging much slower and a population that is much more risk oriented and less conservative. Over the next 30 years, the US economy will continue to outperform Japan and China (I don’t know as much about South Korea’s economy).
This isn’t fucking Japan. Duh.
You totally missed the point. Do you think Japanese investors in the 1980s woudl have predecited this for their stock market?
Personally, I think China *will* go the way of Japan, but I also think that US stock market performance over then next 10-15 years will be underwhelming to say the least.
Markets look like they want higher to me. As unlikely as it may seem.
This bounce off and blast up from the 200 day for US and emerging seems legit. Even foreign developed trying to join the fun for once.
Yeah. I’ve never seen a global dead-cat bounce.
No harm in making the next bear market more fun and profitable.
Default is higher, paticularly now that AAPL has strengthened
You all miss the point. Adjust to market in front of you not the one you think it will be.
Japanese investors from the 80s had plenty of chances to get out.
Yes. Trade the tape. I like to try to understand the current dynamics but following price action is the key.
Current mechanics in the market help me spot trends and help with R/W.
Never fall in love with your theories.
Nice post Fly. It was an actual discussion, and nobody got real shitty.
Buy more SOXS. Bahahahahahaha….
Fives Eyes Op? https://www.youtube.com/watch?v=ATVL7JlBlR4