The Dow Jones Industrial Average

[Thailandnotes]

From 6,600 to 23,000 in 8 years...350%

Anyone on this website had the majority of their savings in U.S. stocks during this period?

Especially interested if you went to cash in 2000 or 2007.

P.S.

Anybody get Marc Faber's newsletter or have a link? Would love to read the whole 17 pages.

[touhy]

Re: The Dow Jones Industrial Average

Went to cash 2009 when I felt valuation was getting too high again and I did not want to be last man out. Went to self pity-party some time in 2010 and there I remain. There is not a day I do not ponder the opportunity and fortune lost.

[thriftyandboringinohio]

Re: The Dow Jones Industrial Average

Went to cash 2009 when I felt valuation was getting too high again and I did not want to be last man out. Went to self pity-party some time in 2010 and there I remain. There is not a day I do not ponder the opportunity and fortune lost.

Me too.
A dear friend stayed in and is still in, made a ton, and loves to tease me about it once in a while.
I am comfortable with my choice, and not often disappointed about the gains I could have made but did not.
In exchange I got the assurance of not being caught in a downdraft and maybe taking losses.
Appetite for risk and all that.

[jk]

Re: The Dow Jones Industrial Average

i've been pretty much out of equities for years. currently about 15% in equities. i've always been gun shy after crashes. i was heavily in equities in the early '80s and managed to get completely out in the 2-3 mos before the crash of '87.

i stopped putting any new money into retirement plans or savings around '85, when i noted that my portfolio's weekly volatility was more than the maximum annual contribution i could make.

of course i should have bought back in q4-1987, but it felt like i'd had a near-death experience, and stayed out. i've been wary of equities ever since.

in the late '80s and early '90s i invested long/short, with no net exposure, and did ok with that for a while. then i started experiencing severe volatility and couldn't stomach it.

i made a significant gain in '90s in a piece of land i sold in '00 - it was correlated with equities of course, but i didn't worry about it crashing in value. since then i've made money in gold and bonds, and some in stocks, but only some.

i've been waiting for the next crash with the thought that i'll buy stocks with both hands when the time comes. i have a hunch there are many people thinking similarly. of course i experience some fomo when i see the market climbing, but i'd rather have an opportunity cost than significant capital impairment.

[DSpencer]

Re: The Dow Jones Industrial Average

I have been mostly invested in the stock market for the last 2 or so years. Before that my 401k was in the market but not much else.

At one point I looked at how the "itulip portfolio" (to the extent that one exists) had fared compared to the S&P or similar. It was actually much closer than I expected with the stock market pulling ahead only recently. Of course this was several months ago and it's presumably gotten worse since then.

I continue to feel the anxiety of "there is no alternative". Stocks are very highly valued. Interest rates are still very low; bonds yield little yet still have interest rate risk. Real estate is expensive. It's hard for me to be convinced anything seems like a good value.

[DSpencer]

Re: The Dow Jones Industrial Average

i've been waiting for the next crash with the thought that i'll buy stocks with both hands when the time comes. i have a hunch there are many people thinking similarly. of course i experience some fomo when i see the market climbing, but i'd rather have an opportunity cost than significant capital impairment.

I started reading itulip right around the time of the last crash. My recollection is that after the crash the general sentiment around here was all about dead cat bounces, double dips, poor fundamentals, no solutions to the problems that caused the crash, etc. I don't remember almost anyone saying "Stocks are on sale! Now is the time to buy with both hands!" If they did, they were probably ridiculed. I'm not saying you can't or won't time the next crash perfectly, just that it's easier to imagine yourself buying into a falling market amid global financial chaos than it is to actually follow through.

[dcarrigg]

Re: The Dow Jones Industrial Average

I started reading itulip right around the time of the last crash. My recollection is that after the crash the general sentiment around here was all about dead cat bounces, double dips, poor fundamentals, no solutions to the problems that caused the crash, etc. I don't remember almost anyone saying "Stocks are on sale! Now is the time to buy with both hands!" If they did, they were probably ridiculed. I'm not saying you can't or won't time the next crash perfectly, just that it's easier to imagine yourself buying into a falling market amid global financial chaos than it is to actually follow through.

That's the truth right there. At the bottom of the hole, the question is always, "What's the 'new normal?'" At the time, people were talking second stimulus, etc. And it may have happened if Ted Kennedy hadn't died and had Martha Coakley bothered to watch the '04 World Series highlight reel before running to replace him. The bifucate and burn-the-bottom plan was not as clear to me then as it is now. Next time I'll be more eager, with a healthy percentage dedicated to the most frivolous trends I can find and ultra-high-end goods and services.

[jk]

Re: The Dow Jones Industrial Average

That's the truth right there. At the bottom of the hole, the question is always, "What's the 'new normal?'" At the time, people were talking second stimulus, etc. And it may have happened if Ted Kennedy hadn't died and had Martha Coakley bothered to watch the '04 World Series highlight reel before running to replace him. The bifucate and burn-the-bottom plan was not as clear to me then as it is now. Next time I'll be more eager, with a healthy percentage dedicated to the most frivolous trends I can find and ultra-high-end goods and services.

you're absolutely right. it's easy to have hindsight. it's hard to buy when the bottom has fallen out of the market and your stomach.

[Southernguy]

Re: The Dow Jones Industrial Average

At times I have the feeling here in Itulip we are the most intelligent bunch of idiots on earth
Not about me the "intelligent" part of the sentence
At some point, however, we may be right...as the proverbial clock.
As always there is the old question: have new times arrived? Does CB active intervention cancel economic and market cycles?
China, through it's particular brand of state managed brand of capitalism set a path which, to some extent seems to be followed by most major economies (US, EU, Japan). The latter with a massive role from CBs. They attained which seemed otherwise impossible: 30 plus years without a capitalist crisis
This paper published in ZH runs to the same narrative: the situation of stocks has become unsustainable.
http://www.zerohedge.com/news/2017-1...d-major-bubble
But then the question.....what if CBs. materialize their all out intervention?
If you think that at some point a crash is coming my bet is: cash

[dcarrigg]

Re: The Dow Jones Industrial Average

you're absolutely right. it's easy to have hindsight. it's hard to buy when the bottom has fallen out of the market and your stomach.

Yeah, I mean, I think it was pretty clear at the time--from EJ's comments and his book and all--that one prevailing idea was a new green tech bubble. The first stimulus was smaller than I recall most thinking, and even though there were billions for green tech, half was just tax credits and not direct infrastructure spending. It turned out being quite a bit more pigovian and market-incentive-based than old fashioned Keynesian fiscal stimulus. But while the thought was that there might be a second stimulus more focused on completely revamping us energy systems (I'm thinking an impact closer to the impact the natural gas boom actually had), it didn't come to fruition, and the conversation swiftly turned to cutting social security and other austerity measures with Simpson-Bowels etc. It wasn't until 2010 that it became clear to me that the ship had more or less sailed...that just like space, the Obama administration would rather privatize everything than make public investments for public good. I'm largely convinced we're over the hump now. It's more instructive from a major investment perspective to think of the US like Brazil or Russia or some similar developing nation than to compare it to Europe or other Commonwealth countries. Top notch private infrastructure in Moscow and New York, St. Petersburg, and Chicago. Crumbling desolation, grinding decline, rapid depopulation and hopelessness on the roads in between.

[vt]

Re: The Dow Jones Industrial Average

We had terrific growth after each recession since the 1950's except the 2008 crash. This has been the most anemic recovery from a recession in our lifetimes.

What's missing? Fiscal responsibility. Government spending only goes so far; we needed to get more spending power to our citizens through tax cuts for the middle class.

The numbers don't lie. Look at the GDP growth rates after Kennedy's, Reagan's, and Bush's tax cuts. Obama and the Democrats failed to cut taxes and the Fed had to use three quantitative stimulus measures to keep the economy from falling to negative growth. Monetary policy can only go so far.

I don't like either party, but corporate and middle class tax cuts and spending reductions via reasonable federal regulation will once again ignite the growth engine of the American economy.

Fair regulation makes sense. Why didn't the Fed use their power to raise margin requirements to prevent the internet bubble of the late 1990's? Why didn't the Fed and banking regulators stop the insane mortgage practices that led the housing crash of 2007 and after?

We can blame the tech crash on Clinton, Rubin, and Greenspan. The housing crash on Fannie, Freddie, Dodd, and Frank. sure the GOP was bit players but both parties have their fingerprints all over this travesty.

https://www.theatlantic.com/business...crisis/249903/

[jk]

Re: The Dow Jones Industrial Average

the anemic recovery owes a good part of its anemia to the fact that a lot of the bailout money went into the pockets of the banksters.

[dcarrigg]

Re: The Dow Jones Industrial Average

We had terrific growth after each recession since the 1950's except the 2008 crash. This has been the most anemic recovery from a recession in our lifetimes.What's missing? Fiscal responsibility. Government spending only goes so far; we needed to get more spending power to our citizens through tax cuts for the middle class. The numbers don't lie. Look at the GDP growth rates after Kennedy's, Reagan's, and Bush's tax cuts. Obama and the Democrats failed to cut taxes and the Fed had to use three quantitative stimulus measures to keep the economy from falling to negative growth. Monetary policy can only go so far.I don't like either party, but corporate and middle class tax cuts and spending reductions via reasonable federal regulation will once again ignite the growth engine of the American economy. Fair regulation makes sense. Why didn't the Fed use their power to raise margin requirements to prevent the internet bubble of the late 1990's? Why didn't the Fed and banking regulators stop the insane mortgage practices that led the housing crash of 2007 and after?We can blame the tech crash on Clinton, Rubin, and Greenspan. The housing crash on Fannie, Freddie, Dodd, and Frank. sure the GOP was bit players but both parties have their fingerprints all over this travesty.https://www.theatlantic.com/business...crisis/249903/

Was Clinton as guilty as W? Sure.But you can only cut taxes so far, VT. It's one thing to cut the top marginal rate from Roosevelt's 91% down to Kennedy's 65% when it only affects a few hundred millionaires. It's another to cut the the top marginal rate from Obama's 39% to Trump's 35% for the top 3 million earners. That's not to mention that Trump's plan is to raise the bottom bracket from 10% to 12%, which is just simply regressive. More than that, the corporate tax cut is going to lead to $5 trillion in additional debt by 2030. Where are we going to cut it from? We already pay 7% in debt service. And then cutting the estate tax for billionaires? It doesn't even affect the first $11 million you leave your kids. That has zero to do with the middle class and everything to do with a give-away to our masters...every cent the estate tax is cut is a direct wealth transfer from the middle class to the rich. The funny thing is, VT, I don't doubt that tax cuts can stimulate the economy in the short term. Even these ones probably will. But I 100% doubt that they will pay for themselves. If Laffer's Curve exists, we're way on the other side of it now. It might pay for itself dropping from 90% to 70%. It won't pay for itself dropping from 40% to 30%.https://upload.wikimedia.org/wikiped...rCurve.svg.png That's a whole lot of debt with zero plan to pay for it in a country that desperately needs a public (not private) infrastructure overhaul. Is it really worth it to blow up the debt just to make sure Ivanka Trump and Chelsea Clinton can buy an extra few yachts and private jets with their tax-free inheritance they did nothing to earn?

[vt]

Re: The Dow Jones Industrial Average

If it had gone to the middle class for tax cuts, the banksters would have nothing.

[vt]

Re: The Dow Jones Industrial Average

I said tax cuts for the middle class and below only. The taking away of most deductions will mean at a 35% rate the top 3 million earners will see no tax cut.

As for raising the rate at the lower level from 10% to 12%, the standard deduction will be doubled which means these individuals will likely get a small tax cut overall.

As for the estate tax most of the real rich are giving most away. I could see a limit of $20 million but no more. How would you avoid the forced sale of small businesses?

The federal budget is way too high. We need real pension reform at the federal and state levels and raising the retirement age gradually to 70 for younger generations. Longevity is increasing and new technologies may allow us to see much more of our citizens reach 100 with a high quality of life well into the 90s. No pension system can pay for more than 25 years and remain solvent, especially overly generous federal and some state pensions. Many of these also have 401K type programs.