TGIF. So glad it is Friday today. We need a break from the daily gushing losses that we are seeing in the markets lately. Sooner or later the losses will slow to a drip, drip, drip. At that point it will be slow water torture for investors as the bear market and recession drag on and on. That is how these sorts of economic events go. I would consider it a blessing if the markets turn around within 6 months. I believe we are more likely looking at a turn around happening some time over about 8-24 months down the road. I am trying to error on the worst case side of things in my expectations. Not that it matters.....I dont take any action based on this sort of expectation. At this point I am down by about 28% to 29% year to date.
Interesting article. Very true about time and experience. I wonder what percentage of folks get into the market and experience a rough time and get out to never return? I have a friend or two that have never invested in the market and when they see times like what we have now, it confirms their belief that they are right to stay out of it. I have explained a bit how the markets are and its historical average of coming back...but they aren't convinced. Obviously, I don't pressure or try too hard to convince them...it's an individual decision to make and they would probably be too jittery to stay the course anyway.
Here is what is going on today.....at least according to the financial media. Stock market news lives updates: Stocks bounce from 18-month low but still head for steep weekly losses https://finance.yahoo.com/news/stock-market-news-lives-updates-june-17-2022-115405485.html (BOLD is my opinion OR what I consider important content) "U.S. stocks rose Friday morning as equities at least temporarily paused a downward slide, as concerns over the prospects of a recession remained elevated. The S&P 500 rose by about 0.9% just after the opening bell after the index slid to its lowest level since Dec. 2020 a day earlier. The index was still on track for weekly losses of more than 5%. The Dow gained nearly 200 points, or about 0.6%, just after the opening bell. And the Nasdaq rose about 1.4% as the 10-year Treasury yield pulled back to about 3.2%. Even given Friday's gains, the major averages remained on track to post steep weekly losses as traders considered the likelihood and timing of a potential recession. While signals of an economic slowdown have been brewing for months now, heightened fears of a more significant downturn resurged in just the past week alone. That came especially after last Friday's Consumer Price Index showed inflation remained at multi-decade highs even following the Federal Reserve's initial moves earlier this year to raise interest rates and bring down demand and prices. And with the Fed now turning even more aggressive — starting with its first 75 basis point interest rate hike since 1994 on Wednesday — the potential for a slide in economic activity as the central bank trades some growth for lower inflation appears increasingly likely. "The market is reevaluating what the odds of a recession are in the near-term and what the actual downside on earnings and what the recession will really look like," Ross Mayfield, Baird investment strategy analyst, told Yahoo Finance Live on Friday. "But to me, it's a fairly kind of tidy story about higher interest rates, more aggressive Fed, and multiple times in the past that leads to some sort of financial crisis or recession. I think the market's trying to price the odds of that." And that pricing recalibration has so far brought the S&P 500 24% below its Jan. 3 record closing high. But stocks likely still have further to fall if history is any indication, some strategists said. Deutsche Bank, one of the first major banks to call for a 2023 recession earlier this year, pointed out that the S&P 500's current decline from its peak is so far in-line with the median drop seen amid recessions post-World War II. Currently, it's the fourth worst non-recession correction over that period, Deutsche Bank's Jim Reid said in a note Friday morning. But when recessions materialize, bear markets for stocks tend to deepen. "The timing of the recession is a hot topic at the moment. When it hits, both [Binky Chadha, Deutsche Bank chief U.S. equity and global strategist] and I would expect the S&P 500 to be down -35 to -40% from the highs," Reid said. "The rationale from [Chadha] being that the initial overvaluation was more extreme than normal cycles, with my additional comment being that this recession marks a regime shift from decades of declining inflation to higher structural levels. This deserves a bigger de-rating than average."" MY COMMENT Not much in this little daily article. Just some mild comments about the issues we have been facing for the past six months. Seems like even the financial media is being worn out and does not have much to add.
I have shows today and tomorrow....both involve little road trips of about 175 miles. At least I will be making some money. The bad news....both are outside, although in the evening. Temperatures will be about 97 degrees at the start of each show and get down to about 90 degrees by the end. SO.....I doubt that I will be doing much posting at the close today. COURAGE.
Yes...we all took a beating here for awhile. It will make a turnaround at some point...what a difference it will be to string together an upward consistent trend. Gonna be a long haul until then I'm afraid. Water torture...yes good description. TGIF....speaking of breaks...I'm headed out on a little trip. So, I'll get to disconnect from it for a bit. It will be interesting to see how many folks are out and about at some of these vacation spots with the slow down and high prices. Anyway, hang in there everyone. Until then... I'm not telling you it's going to be easy--I'm telling you it's going to be worth it. Art Williams.
Have a good trip Smokie. Enjoy your vacation. Come back ready to ENERGIZE the markets for the rest of us.
I am finally reaching the end of my construction projects. Many months ago i decided to knock off my entire five year list of projects in one year. It has been a long slog with back-orders of various materials, prices, and trying to find various people that are available to work. My handyman will be here in a week to do the final door levers and dead-blots in the primary areas of the house. I am changing out all the door hinges at the moment in preparation. It is so nice to be done. It was a grind of scheduling and lining up subs to do the work....but nice to get all of our five year list out of the way in one year. In that time we completed: New door levers and locks around the house. New laundry room floor and quartzite countertops. Powder room remodel with new vanity, lights, hardware and plumbing fixtures. Master bath remodel with new plumbing fixtures, new lights, new hardware, new quartzite counter tops, etc. New counter tops and new backsplash in the kitchen with quartzite slabs used for both areas. New crown molding in all areas of the house that did not already have it. Trim out of eight windows, that were bull-nose. All in, I am estimating that the cost of everything was about $67,000. Done at last......done at last.
I just looked for the first time today. I am moderately Up and well into the green. Every stock except for Costco is Up today. Although many of them the gains are very moderate. So....it is not a run-away day by any means. AND......the fact that most of the gains are moderate tells me that the day is far from set in stone. As a whole the individual gains in each stock add up to a nice day so far......but.....I am not counting my chickens. Speaking of chickens.....I hate chickens. Anyone else worked on a chicken farm? After I finished college I worked on a chicken farm for the summer. Backbreaking work back than. Much of the work involved wheelbarrows and shovels to move "material" that piled up 2-3 feet high under the long rows of cages. The dust and smell was outrageous. We wore paper masks all day long in the heat. The chicken houses were long and old....so they did not have the modern ventilation and other systems that you see today. And...the roosters....you did not dare turn your back on them....they were mean and nasty. Thank goodness there were not too many of them.....they were not relevant....much. Excess roosters were sold for a dime to anyone that wanted them. Most were euthanized.
A quick post before I take off for my show. I was GREEN today to end the week. Honeywell and Home Depot were my only down stocks today. PLUS.......I beat the SP500 today by 0.45%. A good way to end a bad week for the markets. Every little bit helps. We start fresh on Monday.
Now for the.....PAIN. DOW year to date (-17.75%) DOW for the week (-4.79%) SP500 year to date (-22.90%) SP500 for the week (-5.79%) NASDAQ 100 year to date (-30.97%) NASDAQ 100 for the week (-4.79%) NASDAQ year to date (-30.98%) NASDAQ for the week (-4.78%) RUSSELL year to date (-25.81%) RUSSELL for the week (-7.47%) A new beginning next week......LETS MAKE SOME MONEY.
You are done, and we are just beginning. Wrapped up the contract with our architect to get the rezoning process going in our residential property here in Ohio. Estimated to cost approximately 16-20k just to get the whole rezoning done and likely about 6-8 months. Hopefully sooner. and then, and only then, we will start with the construction part. boy oh boy… fun! Well at least I hope that by the time we finish with the construction part at least we will be back to Green Days.. who the heck knows anymore. Hey where the heck is OM Ram??
As a....local....weekend real estate update.....my little area of 4200 homes now has 47 active listings for sale. this is the most we have had in a couple of years now. What does this mean? I dont know. It is a good number of homes.....but....still below the 150 homes that we used to normally have this time of the year. There is a good mix of homes with 19 of the listings priced between $650,000 and $1MILLLION. And....28 homes priced between $1MILLION and $3.5MILLION. The market here has definately slowed some, but prices seem to be holding firm at the moment. I am sure mortgage rates will impact the market....but.....here in this area over 50% of all home sales are CASH buyers.
Ok guys I’m calling it. And please do not take it personal. This is just me sharing my thoughts here… I’m calling the bottom of the OVERALL MARKET when Bitcoin hits anywhere between 12-10k. And no, I’m NOT hoping for it to get there, nor am I saying it’s worthless, just calling it as I see it…. I see now a very clear connection between Bitcoin and the current inflation when it comes to people spending during pandemic/stimulus peaks. And I will feel very confident when it hits pre covid levels as an indication of NORMAL investment pricing all across the board. And I will put my money where my mouth is IF it gets there… I’m going in 25k on my top nasdaq stocks when Bitcoin hits 12 and an additional 25k if it gets to 10k I will also add that I think this will happen in matter of short weeks. And if it does indeed happen, that will actually be a good sign that all we are actually experiencing now is mainly a backlash reaction to the RECKLESS spending during covid and not so much an indication of a recession. I know, trying to be optimistic these days, in my own special kinda way.
I don’t know W, there are a few indications that suggest that this market meltdown may not affect the real estate market as we traditionally expect it to during such tough economic times. A. The housing market had seen a MAJOR boost during the time where literally every sector in the market experienced it to such a large degree. Yet it seems that it’s not affected by it in the same declining levels as the rest of the market does so far. It’s also easier to sell a portfolio than it is a house, and, well, you’ll also have to look for another house, and I don’t think people are looking to do that now. B. Much like the Great Resignation, there has been a major shift in relocation across the country, and much like the folks who quit their jobs and aren’t coming back, many folks have now found a better life in a more affordable state. Me included. And I don’t think any of us are moving back. Period. so the value of the property that we all paid for was SUPER CHEAP in comparison to what we would’ve paid in big cities, in other words, we already got a deal even though we paid a little higher during covid peak prices. And couple that with the cheap fixed mortgage rates at the time - no one is actually feeling those payments. I know that even if the value of our new property will drop by as much as 50% we ain’t moving back! We’re happy here regardless of how much we paid. And I’m sure that many others who bought at similar prices (300-400k) won’t be disappointed either if they moved to quality neighborhoods and paid (at least) 75% less than what they would’ve paid in a big city for the same house. C. Most prices of homes in areas that became very sought after during the pandemic (Tennessee, Georgia, Carolina’s, Alabama) have actually not moved much higher if at all since peak prices of 2007 prior to the crash. So in a sense, they’re actually where they are supposed to be for the duration of over 13 years. My gut tells me that people who spent money on a house during covid have actually gotten a super sweetheart of a deal coupled with low mortgage rates, and likely, they had plenty of money to begin with. These weren’t your struggling families who live paycheck to paycheck since mortgage companies wouldn’t have accepted their application. Sad but true. And again, this is further proof that the whole pandemic episode coupled with stupid stimulus money giveaways has primarily helped the wealthy more than it did the poor
We get an extra day off today. The markets are closed for the new Juneteenth Federal holiday. It i so nice to have an extra day with no markets.
I am going to use myself as a contrary indicator. Lately I have been....CLINICALLY.....on the negative side of the markets and the economy. My posted view has been for another 6-24 months of bear market and another 10-25% drop left in the markets. SO......perhaps I am being too pessimistic. Perhaps my view represents a near bottom. Perhaps when long term investors such as my are all coming in on the negative side.....we are near a bottom. I have no idea if this is true.....but lest hope so. Lets hope that we are looking at the bear market lasting for the rest of the summer and a few more FED hikes.....and than....the markets will simply be tired of it all and move on. History of bear markets points to an October 2022 bottom https://jeffhirsch.tumblr.com/post/...ory-of-bear-markets-points-to-an-october-2022 (BOLD is my opinion OR what I consider important content) "On Monday of this week DJIA fell into an official Ned Davis Research (NDR) bear market. This raises the question, “Where can we go from here?” In the table above we examine all the 13% DJIA declines after 145 days since 1948 and the subsequent action after. The four 30% Value Line Geometric reversal bear markets in 1987, 1990, 1998 and 2020 are included for reference. Of the eighteen others only the two reached bottom at the 13%, 145-day decline, 1953 and 2016. Eight were followed by further declines of less than 10% and eight greater. Twelve bottomed out less than three months later and six dragged on for 6 months or more. The average additional decline was 12.4% over an average of 139 calendar days. Based upon DJIA’s close on June 13 and these averages, DJIA could ultimately find bottom around October 31, 2022, at 26732.13. This would represent a total bear market decline of 27.4% in 298 calendar days." MY COMMENT I dont believe in the slightest that looking at a chart like the one above has any validity at all in predicting the time period that the current bear market will last. EVERY bear market and economic time period is different. The current bear market is extremely different than any that we have had in a long, long, time. BUT......who knows.....lets pull for an end to the current bear market in the early Fall......September/October......you never know.
I will say for anyone new reading this thread.......there is a ton of content if you start at page1. Even though I and others tend to discuss the daily market events......there are hundreds if not thousands of posts on here that discuss long term investing, long term market theory and research, methods of long term investing, etc, etc, etc. There is tons of great.....never out of date....content throughout this entire thread posted my myself and other posters. If you have not done so already I invite you to explore ALL the pages of this thread. I believe that after this many posts.....this thread contains nearly......but not quite....... EVERYTHING that any new or experienced investor needs to know about success investing. It certainly contains the simple truths that every successful investor needs to know. I dont take any particular credit since much of the content is from articles......but....here it is.....all in one place. I am also going to encourage anyone on this thread to explore the ENTIRE STOCKAHOLICS site. This is one of the best....if not the best.....investing sites on the internet. There is content on nearly any topic you can imagine and many, many, threads that cover every sort of investing. There are some really smart people on this site. CHECK IT OUT.....you will be glad you did.
Cathie Wood is an important voice in the modern investing world for the past couple of years. the jury is still out on whether she is an investing genius.....or a dud. Here is some of her current view. Cathie Wood warns the Fed are ignoring dangerous signals as it plows ahead with draconian rate hikes https://finance.yahoo.com/news/cathie-wood-warns-fed-ignoring-162034665.html (BOLD is my opinion OR what I consider important content) "The U.S. Federal Reserve risks weak economic growth throughout this year due to its backward-looking, “draconian” rate hikes, warned Wall Street’s best-known tech sector bull. ARK Invest founder Cathie Wood, who became famous for her prescient bets on disruptive technologies led by companies such as Tesla, argued the Fed must temper its policy given leading economic indicators were flashing red. These included speculative bets indicating an expectation for rising bankruptcies via securities called credit default swaps (CDS) and a flattening of the yield curve — the premium investors demand for holding benchmark 10-year bonds over short-dated two-year bonds. “It is ignoring deflationary and dangerous signals,” she posted to Twitter on Sunday, arguing the consumer price index lagged real-time developments. Some economists say setting policy using this type of data is equivalent to driving by looking through the rearview mirror. “Consumer sentiment is lower today than levels reached during the Global Financial Crisis in 2008-09 and the two recessions in 1980-82, when Fed Chairman [Paul]Volcker was choking 15%-plus inflation with 20% interest rates,” she added. Volcker is best known for taming double-digit inflation with his hawkish policies during the early 1980s. This came at the cost of losing his job to Alan Greenspan, now famous for backstopping Wall Street’s risky bets through the so-called “Greenspan Put”. Wood and many of her peers benefited from the legacy of the latter’s accommodative rate policies that inflated asset prices, especially for high-growth stocks favored by ARK Invest. Subsequent Fed chairs, including Ben Bernanke and Janet Yellen, have all preferred to maintain low rates ever since as inflation remained relatively tepid. Current chair Jay Powell even said in March 2021 that he anticipated rates would not rise “at least until 2024”. That prediction had a very short shelf life. Instead he began in March of this year with a 25 basis point hike and has since raised them to 1.75% as of last week in an aim to cut off inflation. For Wood, this pace was more severe even if the absolute number remains small and real rates after accounting for inflation remain deeply negative and thus stimulative for the economy. “Volcker doubled the Fed funds from 10% to 20% in less than a year. Powell’s Fed has increased the funds rate 7-fold in the last year and is pointing to another double from here,” she wrote. “Its moves already are more draconian than Volcker’s.” Plunging value of ARK Innovation Wood said CDS prices were hitting levels not seen since COVID first escaped its confines of China, while a flattening of the yield curve, and even more so an inversion of the curve, typically presages recessions in the market. This is because the Fed can typically anchor expectations on the short end of the curve through its control of the Fed funds rate. By comparison, longer duration maturities in the bond market reflect the broader market’s inflation expectations. If 10-year yields fall, it suggests investors are pricing in an economic slowdown. “In our view, the U.S. fell into recession during the first quarter. If massive inventors bloat real GDP in the second quarter, they will unwind and hurt growth for the rest of the year.” A recession is defined as two consecutive quarters of shrinking economic output. Officially it is declared by the National Bureau of Economic Research (NBER). Inventories are considered cyclical white noise that can contribute or detract from growth in any given quarter but typically net themselves out on an annual basis. Any second-quarter GDP data driven by rising inventories would be considered weak on a qualitative basis. Wood may be urging the Fed to reduce its pace out of her own interest, since many of the stocks in her funds have fallen from their highs in November 2021 after Fed signalled it was no longer convinced inflation was transitory. ARK Innovation, her flagship exchange-traded fund, has seen a drop of over 23% last year and has plunged 60% so far in 2022. “The Fed seems to be worried more about its legacy than the economy,” she wrote." MY COMMENT She is always entertaining......but....it is yet to be seen how she is viewed in the context of longer history. As usual......I do continue to agree with her about the deflationary environment that we and the world continue to be stuck in.
