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The Rubicon joke was based on a number pulled directly out of thin air. I aim to rectify that situation today by offering a solid objective estimate of the true Rubicon level using daily S&P 500 data from 1998 to present.
Click to enlarge.
Will wonders ever cease?
Hindsight shows that the Rubcion was 1197.8 on January 3, 1998. It is currently 1186.7. That's roughly a 1 point decline per year. It is also 1% less than the 1200 level I have been actively heckling. Shame on me! I clearly did not factor in its degradation over time.
When one is using 20x to 30x leverage in order to make easy money, a 1% discrepancy could mean billions of dollars in lost profit potential. I apologize for any inconvenience that my earlier ballpark Rubicon estimate may have caused.
In my defense, how could I have possibly known that the S&P 500 wouldn't return to 1500 and therefore pull the trend line up again? All we'd need is another bubble to replace the recent housing bubble and the earlier dotcom bubble. How hard could that be?
Sarcasm!
See Also:
Crossing the S&P 500's Rubicon v.30 (Musical Tribute)
Source Data:
Yahoo: S&P 500 Historical Prices
9 comments:
What? The RubinCON is a moving target?
Isn't there anything that ordinary investors can rely on?
Word Verification: "rewse"
mab,
The only constant would seem to be the word verification system.
rewse = ruse + ew
Mark -
How did you calculate your objective values on the given dates?
Or is that another part of the joke?
Cheers!
JzB
Jazzbumpa,
On the one hand, 1998 was the first year that the S&P 500 crossed over 1200.
On the other hand, the Rubicon joke centers on 1200. It is therefore the ongoing joke that determined the starting year. :)
Jazzbumpa,
I think I misunderstood your question.
The Rubicon values on the given dates are simply the points on the linear trend line. (I did the math myself so that I could determine the exact values of the linear trend.)
There may be actual anti-bubbles coming, too.
$500 oil is not an impossibility in the medium term.
People think this will result in $50/hr jobs at Walmart ("whee! inflation!"), but I don't see that a given.
I'd pay $20 for a gallon of gas. I wouldn't buy as much, but I'd pay.
Troy,
I'd pay $20 for a gallon of gas. I wouldn't buy as much, but I'd pay.
I would too. Sigh.
What's the alternative? Walking 20 miles round trip to Costco? Hauling 45 rolls of toilet paper on a bicycle?
As a side note, this non-impossible scenario is why I made sure my car was filled each trip to Costco. It is better to transport the heavy and/or bulky stuff with relatively cheap gasoline than expensive gasoline. That's especially true if my next car is a sub-sub-compact.
Mark -
OK. Got it. Thnx.
JzB
Jazzbumpa,
I really should have been more clear here when I first posted this.
The red line is NOT the Rubicon joke. The red line is simply a linear trend through the data points.
It cracked me up when I created the chart. It is sort of hard to tell the difference between the 1200 level joke and the linear trend line. They are SO close!
Will wonders ever cease?
That's why I said that. :)
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