Wednesday, December 11, 2013

Stock Market Risk

Click to enlarge.

Source Data:
St. Louis Fed: Custom Chart


Stagflationary Mark said...

Don't let it concern you that this would be the first plateau on the chart.

It's different this time! The economy has been so weakened by the dotcom and housing bubbles that permanent prosperity is here to stay!

Too much sarcasm? I always have to ask.

Rob Dawg said...

It is not different this time. I know, that was your point.

The "money" "in" the "markets" is nothing but past promises yet to be redeemed. Surprise. The redemptions are going to be early, front loaded and epic. Is why the 30 largest companies have $1T in cash. Is why guaranteed pensions are being abrogated. Early boomers win big. Late boomers and cuspers get tossed under the bus.

Stagflationary Mark said...

Rob Dawg,

I cannot imagine that the redemptions are going to be early, front loaded and epic.

I don't have to imagine it! That's exactly what I did. I cashed out *all* my stocks in 2004. It was way early, front loaded and epic. With no job to fall back on, I'm permanently done.

It's been 9 years. No complaints. It's not like I've been sitting in cash awaiting future prosperity. Rode gold and silver awhile. Holding long-term TIPS to maturity. No greater fool therefore needed, at least in theory. It also means I don't really care all that much what interest rates do. If anything, I'd like to see them rise as prosperity truly returns. Not holding my breath though!

It's like a long-term game of musical chairs. Each round loses a few more under the bus, as you say. Each round has the potential to be more panicky too as the music speeds up (housing bust was worse than dotcom bust).

If/when we go into the next recession while still in ZIRP iit's going to be a real screamer, not that many seem to look that far ahead. The rear view mirror is just so darned captivating.

Just the opinions of a permabear of course. So few of us left!

Rob Dawg said...

Not to worry. I've bearly started to line my hibernation den. Still a mo-mo player. The music is still playing. I made some really effin stupid investments this year. It looks like I am never going to learn that market manipulation will always negate value as a criteria. Gold miners, silver ETF, DR Horton. Epic fail despite fundamentals.

Joseph Constable said...

I don't know why any fundamentals or valuations matter any longer. I just go with the swings. My system makes an error every so many trades. I actually know when it will be in error. It is the trades with which I use a lot of leverage.

Stagflationary Mark said...

Rob Dawg,

The music is barely stll playing. I don't think we'll make it another year without a recession. Sigh.

Stagflationary Mark said...

Joseph Constable,

If there is one thing the casinos love, it is players with leveraged systems. No offense. Just stating a fact.

Wall Street is a casino in my opinion, now more than ever. I base this on two things.

1. The rise of zero-sum game option trading and its non-stop advertising.
2. Record margin debt.