Forbes Article

[Cooperstown]

http://www.forbes.com/sites/jessecolombo/2014/07/01/these-23-charts-prove-that-stocks-are-heading-for-a-devastating-crash/

After reading this and many other similar articles I'm wondering if it's time to pull out a bit?  I know the general rule is ride it out for the long term, but wouldn't you be better served to avoid the large drops if possible?

[hexdexorex]

To start I am not the normal mustachian. I buy indiviudal stocks and usually stay out of index. I recommend my friends/family do all index funds because they have no interest in reading balance sheets etc. It has worked really well for me and overall I am having a harder time finding as many deals as I did in prior years...with that said...

#1 isnt really taking into account valuations or the edge of the cliff we stood on in 2008....its basically says "because its higher than ever it must be overpriced!"

#2 while low bond yields do push many people into higher yielding investments...it also pushes people into housing...so you can argue that housing is overvalued with that graph as well

#3 see #2

#4 people thought when the fed even announced a small cut back in QE the world would collapse...this has not happened. While I do believe it is going to be hard for the fed to unwind its large bond positions...I think the major consequence will be lower bond prices and higher yield...which would be a great time to switch over to bonds...

#5 I agree...margin is bad...hopefully someone is keeping a eye on how much traders are going into borrowing to invest in stocks...also I remember a similar fear in 2011-2012 ...and it worked out great for investors and nothing happened...

#6 is a repeat...its also looking at PE which I agree is higher than normal but not bubble high as of yet..

Ok i'm not going to keep going. I guess Its for each individual person to try to predict this stuff and jump in and our of the market...but I think even the best are pretty bad at this. Personally I just look for good companies at cheap prices....much like I do when I shop for anything.

[rpr]

If this guy is so all knowing, he could make a lot more money himself rather than telling us. At the end, I see that there is a pitch for a newsletter.

[Nords]

I know the general rule is ride it out for the long term, but wouldn't you be better served to avoid the large drops if possible?

Yes, you're absolutely right.

Could you let us all know when just before the next large drop happens?  And after that, could you let us know when the next recovery begins?  I don't think we need to hear about the head fakes of 5%-10%... only the real recession drops of 20% or more.

Because otherwise investors would be forced to just pick an asset allocation, invest regularly through dollar-cost averaging (or value averaging), and rebalance occasionally.  That would be extremely boring and would suck all of the thrills & suspense out of reading Forbes magazine.

[kyleaaa]

There's certainly nothing about any of those charts that "proves" the market is due for a crash. Unless they've changed the meaning of the word "prove" without telling me, at least.

[Rebecca Stapler]

I know the general rule is ride it out for the long term, but wouldn't you be better served to avoid the large drops if possible?

Yes, you're absolutely right.

Could you let us all know when just before the next large drop happens?  And after that, could you let us know when the next recovery begins?  I don't think we need to hear about the head fakes of 5%-10%... only the real recession drops of 20% or more.

Because otherwise investors would be forced to just pick an asset allocation, invest regularly through dollar-cost averaging (or value averaging), and rebalance occasionally.  That would be extremely boring and would suck all of the thrills & suspense out of reading Forbes magazine.

Exactly!

Just keep doing what you're doing, as long as it's an asset balance you made a conscious decision to stick with in the first place. The market will do what it's going to do, and isn't going to give us a heads-up.

[Cressida]

I know the general rule is ride it out for the long term, but wouldn't you be better served to avoid the large drops if possible?

Yes, you're absolutely right.

Could you let us all know when just before the next large drop happens?  And after that, could you let us know when the next recovery begins?  I don't think we need to hear about the head fakes of 5%-10%... only the real recession drops of 20% or more.

Because otherwise investors would be forced to just pick an asset allocation, invest regularly through dollar-cost averaging (or value averaging), and rebalance occasionally.  That would be extremely boring and would suck all of the thrills & suspense out of reading Forbes magazine.

hahahahahaha this is awesome. Way to save the funniest joke for the end, too.

[pachnik]

I know the general rule is ride it out for the long term, but wouldn't you be better served to avoid the large drops if possible?

Yes, you're absolutely right.

Could you let us all know when just before the next large drop happens?  And after that, could you let us know when the next recovery begins?  I don't think we need to hear about the head fakes of 5%-10%... only the real recession drops of 20% or more.

Because otherwise investors would be forced to just pick an asset allocation, invest regularly through dollar-cost averaging (or value averaging), and rebalance occasionally.  That would be extremely boring and would suck all of the thrills & suspense out of reading Forbes magazine.

hahahahahaha this is awesome. Way to save the funniest joke for the end, too.

+1   I really enjoyed that last paragraph too.   I think it would make me crazy trying to predict the market and I am sure I would be a stressed-out failure trying to do so.   Thank God I can avoid this part of it.

[matchewed]

Yep we're screwed.

[soccerluvof4]

I have heard this argument since the market was 12k on the Dow. Now it was Just at 17k.  There is still a ton of money on the sidelines because people keep waiting for this drop. Market could go to 20 just as easily as it could go to 12k.

[Nords]

I know the general rule is ride it out for the long term, but wouldn't you be better served to avoid the large drops if possible?

Yes, you're absolutely right.

Could you let us all know when just before the next large drop happens?  And after that, could you let us know when the next recovery begins?  I don't think we need to hear about the head fakes of 5%-10%... only the real recession drops of 20% or more.

Because otherwise investors would be forced to just pick an asset allocation, invest regularly through dollar-cost averaging (or value averaging), and rebalance occasionally.  That would be extremely boring and would suck all of the thrills & suspense out of reading Forbes magazine.

hahahahahaha this is awesome. Way to save the funniest joke for the end, too.

+1   I really enjoyed that last paragraph too.   I think it would make me crazy trying to predict the market and I am sure I would be a stressed-out failure trying to do so.   Thank God I can avoid this part of it.

Thanks! 

All of this angst and drama comes from not having confidence in one's asset allocation, and Forbes only sells magazines by making up enough headlines to fill the pages.

[DK]

Once everyone thinks the market is unstoppable and won't go down, that's when it will crash.

Once everyone thinks the market will never recover, that's when it will go on a winning streak.

I've been wanting to pull money out for quite some time now, but keep reminding myself of that. Be a contrarian. Markets overvalued, but not at bubble levels.

[hodedofome]

If you want to make your argument sound intelligent, just throw up a bunch of FRED charts. Then everyone will assume you know what you're talking about.

The fact that his bio says "I'm an economic analyst who is warning of dangerous post-2009 bubbles" should tell you all you need to know. He's a subjective guy always looking for a bubble, instead of just flowing with the markets.

[hodedofome]

Good response to this article http://traderfeed.blogspot.com/2014/07/when-bubbles-become-manias-psychology.html?m=1