Author Topic: The stock market is dirt cheap now  (Read 20666 times)

Linea_Norway

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Re: The stock market is dirt cheap now
« Reply #50 on: May 29, 2017, 02:13:26 AM »

I hear you :)  I too have an expensive house.  Not big, but holy crap expensive.  I relate a LOT to your experience of opening your accounts and "hey, more money!".  Haha, that's such an awesome feeling.  I think the place we differ is comfort with risk.  I look at all the massive horrible crap the stock market has endured (and them came roaring back even stronger) that I never worry about the drops.  Just the nature of the game. 


I too have an expensive house, which is also too big for the two of us living in it. Financial experts usually say that it is quite risky investing your money in 1 big asset. Unfortunately I had just bought the house before finding out about MMM and knowing better. Now we better hope the house will keep it's value. At least it has a view that can't be taken away.

Rightflyer

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Re: The stock market is dirt cheap now
« Reply #51 on: May 29, 2017, 04:12:26 AM »

I hear you :)  I too have an expensive house.  Not big, but holy crap expensive.  I relate a LOT to your experience of opening your accounts and "hey, more money!".  Haha, that's such an awesome feeling.  I think the place we differ is comfort with risk.  I look at all the massive horrible crap the stock market has endured (and them came roaring back even stronger) that I never worry about the drops.  Just the nature of the game. 


I too have an expensive house, which is also too big for the two of us living in it. Financial experts usually say that it is quite risky investing your money in 1 big asset. Unfortunately I had just bought the house before finding out about MMM and knowing better. Now we better hope the house will keep it's value. At least it has a view that can't be taken away.

This means more to some us than you can imagine. A great view is so good for your psyche. I see it as an investment in my well-being.
 

Linea_Norway

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Re: The stock market is dirt cheap now
« Reply #52 on: May 29, 2017, 07:03:22 AM »

I hear you :)  I too have an expensive house.  Not big, but holy crap expensive.  I relate a LOT to your experience of opening your accounts and "hey, more money!".  Haha, that's such an awesome feeling.  I think the place we differ is comfort with risk.  I look at all the massive horrible crap the stock market has endured (and them came roaring back even stronger) that I never worry about the drops.  Just the nature of the game. 


I too have an expensive house, which is also too big for the two of us living in it. Financial experts usually say that it is quite risky investing your money in 1 big asset. Unfortunately I had just bought the house before finding out about MMM and knowing better. Now we better hope the house will keep it's value. At least it has a view that can't be taken away.

This means more to some us than you can imagine. A great view is so good for your psyche. I see it as an investment in my well-being.

I think it is the best view in our community. We can see really far, like 40 kms ahead and see some wellknown landmarks. The view is the main reason why we bought this house.

nereo

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Re: The stock market is dirt cheap now
« Reply #53 on: May 29, 2017, 07:23:33 AM »
A home with a view is among the main requirements of our next home (likely 3-5 years away).
I've asked the same question to multiple people who have incredible views: "do you ever just get used to the view and stop looking"
every one has given the same answer: no, never. It doesn't seem to matter whether it's a view of the mountains, the ocean, or the city.

I don't know of many other things that continue to be appreciated years later. For example artwork seems to fade into the background after a while - the painting is still there but you just stop looking at it every day.

runewell

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Re: The stock market is dirt cheap now
« Reply #54 on: May 30, 2017, 10:59:03 AM »
As stated above:
1) market cycles are unpredictable
2) current market price reflects all known information (so the liklihood of doom and the likelihood of a boom are factored into the price)
3) the best strategy is to ignore the noise, ignore the little worrier in your own head, ignore the greedy goblins. have a plan, and stick with it

None of us know the future, but odds are good that someone will be making a profit in the long run, resulting in some stock gains to spread around.

I wouldn't say that market cycles are unpredictable.  Clear research shows that historically that high CAPE ratios result in lower returns going forward.  While we can't time the market, we can know something of its history to guide us.

Doom and boom events are not known information, therefore they cannot be reflected in the stock price.  They are new information which causes stock prices to change.

PizzaSteve

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Re: The stock market is dirt cheap now
« Reply #55 on: May 31, 2017, 08:29:14 AM »
As stated above:
1) market cycles are unpredictable
2) current market price reflects all known information (so the liklihood of doom and the likelihood of a boom are factored into the price)
3) the best strategy is to ignore the noise, ignore the little worrier in your own head, ignore the greedy goblins. have a plan, and stick with it

None of us know the future, but odds are good that someone will be making a profit in the long run, resulting in some stock gains to spread around.

I wouldn't say that market cycles are unpredictable.  Clear research shows that historically that high CAPE ratios result in lower returns going forward, which may or may not have predictive value...CAPE ratios are an reporting figure driven by accounting rules that have been subject to all sorts of changes over time, including permanent rule changes.  While we can't time the market, we can know something of its history to guide us. True, but is the future going to mirror the past...i personally greatly doubt it...to much disruptive change has occured to global markets

Doom and boom events are not known information, therefore they cannot be reflected in the stock price.  They are new information which causes stock prices to change.agreed
Just had a few comments.  Largely, while i am hugely optimistic about stocks, i worry a bit when i read posts by others (not you) that seem to imply the only possible scenario is that stocks rise in the long term.  It is the likely scenario, but we should also be prepared for a possible (unlikely) scenario where stocks do not rise over a long period.
« Last Edit: May 31, 2017, 08:32:00 AM by PizzaSteve »

Tyson

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Re: The stock market is dirt cheap now
« Reply #56 on: May 31, 2017, 11:56:27 AM »
As stated above:
1) market cycles are unpredictable
2) current market price reflects all known information (so the liklihood of doom and the likelihood of a boom are factored into the price)
3) the best strategy is to ignore the noise, ignore the little worrier in your own head, ignore the greedy goblins. have a plan, and stick with it

None of us know the future, but odds are good that someone will be making a profit in the long run, resulting in some stock gains to spread around.

I wouldn't say that market cycles are unpredictable.  Clear research shows that historically that high CAPE ratios result in lower returns going forward, which may or may not have predictive value...CAPE ratios are an reporting figure driven by accounting rules that have been subject to all sorts of changes over time, including permanent rule changes.  While we can't time the market, we can know something of its history to guide us. True, but is the future going to mirror the past...i personally greatly doubt it...to much disruptive change has occured to global markets

Doom and boom events are not known information, therefore they cannot be reflected in the stock price.  They are new information which causes stock prices to change.agreed
Just had a few comments.  Largely, while i am hugely optimistic about stocks, i worry a bit when i read posts by others (not you) that seem to imply the only possible scenario is that stocks rise in the long term.  It is the likely scenario, but we should also be prepared for a possible (unlikely) scenario where stocks do not rise over a long period.

How do we do that?

runewell

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Re: The stock market is dirt cheap now
« Reply #57 on: June 02, 2017, 09:23:09 AM »
Buffett said that if these rates were guaranteed to stay low for 10, 15 or 20 years, then “the stock market is dirt cheap now".

But the rates aren't guaranteed to stay low, so why even bother quoting the guy. 

talltexan

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Re: The stock market is dirt cheap now
« Reply #58 on: June 02, 2017, 11:32:51 AM »
30-year treasury yield is 2.87%.

What would cause people to sell those bonds in sufficient quantities for that to increase in the near term?

ChpBstrd

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Re: The stock market is dirt cheap now
« Reply #59 on: June 02, 2017, 01:30:38 PM »
30-year treasury yield is 2.87%.

What would cause people to sell those bonds in sufficient quantities for that to increase in the near term?

The 10-year yield rose six and a half percent between '78 and '84. The same answers that were true then would probably apply today: an aggressively inflation-phobic Fed paired with skyrocketing national debt.

http://www.multpl.com/10-year-treasury-rate/table/by-year

They wouldn't sell those 30y bonds either. They just roll over their existing, expiring bonds at the current interest rate. So it's a willingness to buy, not to sell, that partially determines future rates.

 

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