Top is in

[Retire-Canada]

I dont get this market at all. S&P up down 20 points, up 21 points next day, down 10 points this morning. So erratic

Those are +/- 0.5% to 1% moves. That's not overly crazy.

[dividendman]

I dont get this market at all. S&P up down 20 points, up 21 points next day, down 10 points this morning. So erratic

Those are +/- 0.5% to 1% moves. That's not overly crazy.

Pretty sure flyersman is being sarcastic.... i hope

[solon]

I was going to try to debate, too. But then I remembered what thread I'm in.

[dividendman]

Looks like we might have another false breakout today.

Every time thorstach calls the top, I make thousands of dollars in the stock market the following day by doing nothing.

Call it again, thorstach!

Alright folks, top is REALLY in after a couple of false breakouts this week.

[thorstach]

http://isthisthetop.com/

[frugledoc]

Thorstach was right after all. Top was in!

[Optimiser]

[sirdoug007]

http://isthisthetop.com/

Someone must have lit the thorstach alert.  VIX up 30%!!!

Great link to refer back to on future days with large moves!

[markbike528CBX]

I dont get this market at all. S&P up down 20 points, up 21 points next day, down 10 points this morning. So erratic

Those are +/- 0.5% to 1% moves. That's not overly crazy.

Histogram of two indexes daily moves indicates  that Retire-Canada is correct.

http://www.etfreplay.com/volatility_histogram.aspx      it is nice to have data even for a thread like this.

[Clean Shaven]

  it is nice to have data even for a thread like this.

[Tyson]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here). 

[Stache-O-Lantern]

Oh.  Hell.  Yes.   Hadn't checked this thread in a few days.

Going camping this weekend.  If I see any bearish divergences, I'm gonna play dead cat.

[Tonyahu]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

[solon]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

Well, we have no idea what's brewing. The S&P 500 could double in value before the next crash, which could be years away. Or it could happen tomorrow.

The ONLY way to consistently make money in the stock market is to buy and hold and hold and hold and hold and hold and hold.

[Tyson]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

What if the market goes up another 20% over the next 2 years?  You'll miss out on all the $$.  People were saying "there has to be a crash, stocks are overpriced" 3 years ago on this very forum.  Go back and look.  And then think about ALL the $$ those people missed out on, between then and now.  Trying to time the market is a fool's errand, as thorstach has so elegantly shown on this very thread.

[Retire-Canada]

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

No. That's crazy talk. It's amazing how every market timing post starts with "I know I shouldn't time the market, but..." and then goes on to explain why this time is different. It's not different.

[Tonyahu]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

Well, we have no idea what's brewing. The S&P 500 could double in value before the next crash, which could be years away. Or it could happen tomorrow.

The ONLY way to consistently make money in the stock market is to buy and hold and hold and hold and hold and hold and hold.

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

What if the market goes up another 20% over the next 2 years?  You'll miss out on all the $$.  People were saying "there has to be a crash, stocks are overpriced" 3 years ago on this very forum.  Go back and look.  And then think about ALL the $$ those people missed out on, between then and now.  Trying to time the market is a fool's errand, as thorstach has so elegantly shown on this very thread.

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

No. That's crazy talk. It's amazing how every market timing post starts with "I know I shouldn't time the market, but..." and then goes on to explain why this time is different. It's not different.

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

[onecoolcat]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

Well, we have no idea what's brewing. The S&P 500 could double in value before the next crash, which could be years away. Or it could happen tomorrow.

The ONLY way to consistently make money in the stock market is to buy and hold and hold and hold and hold and hold and hold.

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

What if the market goes up another 20% over the next 2 years?  You'll miss out on all the $$.  People were saying "there has to be a crash, stocks are overpriced" 3 years ago on this very forum.  Go back and look.  And then think about ALL the $$ those people missed out on, between then and now.  Trying to time the market is a fool's errand, as thorstach has so elegantly shown on this very thread.

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

No. That's crazy talk. It's amazing how every market timing post starts with "I know I shouldn't time the market, but..." and then goes on to explain why this time is different. It's not different.

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

The simple answer is that today's siren is no louder than yesteryear's.

[solon]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

Well, we have no idea what's brewing. The S&P 500 could double in value before the next crash, which could be years away. Or it could happen tomorrow.

The ONLY way to consistently make money in the stock market is to buy and hold and hold and hold and hold and hold and hold.

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

What if the market goes up another 20% over the next 2 years?  You'll miss out on all the $$.  People were saying "there has to be a crash, stocks are overpriced" 3 years ago on this very forum.  Go back and look.  And then think about ALL the $$ those people missed out on, between then and now.  Trying to time the market is a fool's errand, as thorstach has so elegantly shown on this very thread.

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

No. That's crazy talk. It's amazing how every market timing post starts with "I know I shouldn't time the market, but..." and then goes on to explain why this time is different. It's not different.

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

I don't think you understand. We have NO IDEA whether or not we're in a housing bubble, stock bubble, tulip bulb bubble, etc. The only reasonable option is to be all in, all the time.

[Tyson]

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

No, I don't.  But even if I did, the same thing would happen as the last time - it would drop, the market would recover, and then some. 

What if it goes up 20% over the next 2 years, has a 25% drop, and then recovers another 30% over the following decade.  You'd still make a lot of money and virtually zero risk as long as you don't take your money out.  The moment your start trying to time the market (ie, predicting "bubbles") you increase your risk exponentially.  And not only is your risk higher, but your return is not going to be better.  Because you won't be better at it than the pros.  And the pros do worse than indexing over a long time period.  So there you go.

[Radagast]

But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

No

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

No

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

No

[rpr]

Tonyahu, Nobody knows Nothing.

If you are exceedingly loss averse, then  the stock market may not be for you. The consequence of this is the following:

-- You will not be able to use the 4% withdrawal rule.   
-- You will likely need to accumulate a much larger stash in more safer investments (bonds/CDs etc) which have much lower real returns (even negative).
-- You may have to work longer as well.

[solon]

I think Tonyahu is thorstach. Has anyone ever seen them in the same room together? Just sayin.

[Scortius]

This idea that when the next recession hits the market will lose half its value is insanity.  Look at how much value the market lost in most of the major crashes in history.  Greater than 50% is a once-in-a-lifetime event.  Even considering the 2008 crash, if you sold the S&P500 in early 2007, a bit before the crash (value ~1400), and bought in late 2009, a bit after the bottom (value ~1050), you only got a 33% return.  Nothing to sneeze at, but that's taking into consideration that you actually just timed the worst market crash in modern history. 

What's more likely to happen is that you sell (or fail to buy) today at ~2400, the market wiggles around for a while, goes to 2600 or 2800 or 3000, then has a minor correction down to 2500 or 2700 or whatever, and then continues a slow and steady climb.  You just don't know which number will be the top and which will be the bottom, but you do know that the slow and steady climb will resume and continue for decades to come.  In order to 'time the market', you have to guess BOTH the top AND the bottom. And it's very likely that the 'bottom' (assuming you can even time the bottom correctly) will end up being higher than the price you can get today, right now.

Sorry for actual words....

[wenchsenior]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

[/b]

Something is ALWAYS brewing, every damn day.  Good luck figuring out what that is with any consistency.

[WildJager]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

Well, we have no idea what's brewing. The S&P 500 could double in value before the next crash, which could be years away. Or it could happen tomorrow.

The ONLY way to consistently make money in the stock market is to buy and hold and hold and hold and hold and hold and hold.

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

What if the market goes up another 20% over the next 2 years?  You'll miss out on all the $$.  People were saying "there has to be a crash, stocks are overpriced" 3 years ago on this very forum.  Go back and look.  And then think about ALL the $$ those people missed out on, between then and now.  Trying to time the market is a fool's errand, as thorstach has so elegantly shown on this very thread.

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

No. That's crazy talk. It's amazing how every market timing post starts with "I know I shouldn't time the market, but..." and then goes on to explain why this time is different. It's not different.

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

Go watch the movie "The Big Short".  It's about the housing crash.  I recognize that it's Hollywood, but it's close enough to the real story and on point to the message (and fun to watch).  All of the professionals in the industry missed the "signs" of a massive bubble about to burst, except a few really smart experts who took advantage of it. 

Investing in a singular company well is extremely difficult and time intensive.  Warren Buffet is world renowned for a reason.  Understanding the economy as a whole is infinitely harder. 

Index funds were designed so people could invest for the long term and not have to be experts.  Appreciate Bogle's gift and take heart the lesson he advocates.

[thorstach]

[MrDelane]

[TomTX]

thorstach is back!!! the top must really be in!!

He's back! With false breakdancing!

Someone's gonna be SERVED!

[TomTX]

Daily volatility is simply a non-issue for buy and hold investors (which should be everyone here).

True. But my concern is more that, I am only 25 so it may be wise to horde cash over the next year or two (as opposed to putting it in the market), to get that inevitable 50% off deal within the next 1-3 years. Thoughts?

I know "time in the market is better than timing the market" but can't we all agree something is brewing?

What if the market goes up another 20% over the next 2 years?  You'll miss out on all the $$.  People were saying "there has to be a crash, stocks are overpriced" 3 years ago on this very forum.  Go back and look.  And then think about ALL the $$ those people missed out on, between then and now.  Trying to time the market is a fool's errand, as thorstach has so elegantly shown on this very thread.

He truly is an unintentional hero, debunking market guessing by being so confidently wrong.

[itchyfeet]

Given that in 2009-10 the S&P500 rebounded super fast from the March 2009 low, a less pessimistic bear might conclude that the March 2009 low was in hindsight a market over reaction, and a bit of an anomaly.

Personally, I like to consider this bull run starting at an S&P500 index of around 1,060, after it corrected in 2010 after the initial bounce back.

This being the case the size of this bull run is only 129%. Sure, still a big bull run, but far less dramatic than the chart illustrates.

... but I am a hopeless optimist

[Paul der Krake]

But the jargon was so convincing!

For anyone who's thinking of calling the top this week, consider whether or not that's even possible while so many subprime GSEs in counterparty sectors are so obviously over-diversified into hedged high-yield bonds.  As long as you don't over-leverage high-maturity currencies in covered credit-linked long positions, you can always collateralize low-IRR credit exposures in revolving sectors.  How could the market possibly top out now?  While capital adequacy requirements are so well insulated?  Don't be ridiculous.

[DavidAnnArbor]

Ha is that Sol's picture on the right side?  LOL

[sol]

Ha is that Sol's picture on the right side?  LOL

Amazingly, this is not the first time the internet has photoshopped my avatar picture in response to something I've said.

Cheers, Paul.  Keep up the good work.

[Livewell]

Had to add this fun and sarcastic op-ed from Bloomberg on how to create your own market top call (since everyone's doing it this season!)

An Expert's Guide to Calling a Market Top
https://www.bloomberg.com/view/articles/2017-07-07/an-expert-s-guide-to-calling-a-market-top

[dividendman]

Had to add this fun and sarcastic op-ed from Bloomberg on how to create your own market top call (since everyone's doing it this season!)

An Expert's Guide to Calling a Market Top
https://www.bloomberg.com/view/articles/2017-07-07/an-expert-s-guide-to-calling-a-market-top

I think that article covers it!

[ender]

I understand that logic. Do you guys feel we have approached a housing bubble / highly over-inflated prices?

No, I don't.  But even if I did, the same thing would happen as the last time - it would drop, the market would recover, and then some. 

What if it goes up 20% over the next 2 years, has a 25% drop, and then recovers another 30% over the following decade.  You'd still make a lot of money and virtually zero risk as long as you don't take your money out.  The moment your start trying to time the market (ie, predicting "bubbles") you increase your risk exponentially.  And not only is your risk higher, but your return is not going to be better.  Because you won't be better at it than the pros.  And the pros do worse than indexing over a long time period.  So there you go.

It's worth pointing out that with these incredibly scientific arbitrary numbers, your combined return would end up only being about 1.3%/year -- likely less than inflation (though who knows).

One thing I think that gets missed and is relevant to point out is that a 25% drop followed by a 25% recovery does not fully restore your portfolio to its original value. Not that it's really actionable as the best strategy is still buy/hold since you don't have a unique crystal ball, but it is worth noting. I you do have one, then other people do too, and the market is priced accordingly, based on the risk/valuation to date. Unless your crystal ball is unique it doesn't even matter.

If people were 100% confident that on January 2nd, 2018 there would be a major market correction, that would be reflected in the price of the affected indices today.

[sol]

If people were 100% confident that on January 2nd, 2018 there would be a major market correction, that would be reflected in the price of the affected indices today.

If I were 100% confident of a major market correction on Jan 2 2018, I would be fully invested until Jan 1, 2018.

[LAGuy]

If people were 100% confident that on January 2nd, 2018 there would be a major market correction, that would be reflected in the price of the affected indices today.

If I were 100% confident of a major market correction on Jan 2 2018, I would be fully invested until Jan 1, 2018.

I think the point was that if it was common knowledge that a major correction was coming on a certain date, it would somewhat paradoxically not actually occur and would instead be reflected in current market prices.

One thing I like to think about is as of today (or as of a week ago or whenever the most recent market high was), in the ENTIRE history of the stock market there has NEVER been a bad time to buy. Pick your top from any historical date, and today you look like a genius for buying and holding it until now.

[Cache_Stash]

If people were 100% confident that on January 2nd, 2018 there would be a major market correction, that would be reflected in the price of the affected indices today.

If I were 100% confident of a major market correction on Jan 2 2018, I would be fully invested until Jan 1, 2018.

I think the point was that if it was common knowledge that a major correction was coming on a certain date, it would somewhat paradoxically not actually occur and would instead be reflected in current market prices.

One thing I like to think about is as of today (or as of a week ago or whenever the most recent market high was), in the ENTIRE history of the stock market there has NEVER been a bad time to buy. Pick your top from any historical date, and today you look like a genius for buying and holding it until now.

Maybe that's the new sell signal.  If it is, it isn't anymore. Efficient market theory?

[Clean Shaven]

Might need thorstach's help on this one --

Is the top in when it's the Dow, or are we using the S&P 500, or some other measure?

If it's the Dow, it's party time!

http://www.cnbc.com/quotes/?symbol=.DJI

[dividendman]

I think I know when top is really in now.

When thorstach starts posting about how the market is going to go up, then we know top is in.

[Clean Shaven]

Don't call it a comeback!

https://www.youtube.com/watch?v=vimZj8HW0Kg


(How do you embed video on this forum?)

[sol]

Don't call it a comeback!

https://www.youtube.com/watch?v=vimZj8HW0Kg


(How do you embed video on this forum?)

The forum needs to have flash embeds enabled, which I don't think it does.  Then you do it like this:

https://www.youtube.com/watch?v=vimZj8HW0Kg

Some forums also let you use [youtube]vimZj8HW0Kg[/youtube].

Looks like we can do neither.

[frugledoc]

I think I know when top is really in now.

When thorstach starts posting about how the market is going to go up, then we know top is in.

no, it's when mrpercentage comes back saying green dow ahead!

Seriously though, I hope that guy is alright, he just disappeared.

[Clean Shaven]

Oh well.

Sol, been meaning to ask you:  did you pick your avatar as one of "the three guys" from the RevCo album covers? 

[dividendman]

I think I know when top is really in now.

When thorstach starts posting about how the market is going to go up, then we know top is in.

no, it's when mrpercentage comes back saying green dow ahead!

Seriously though, I hope that guy is alright, he just disappeared.

I miss mrpercentage too. But thorstach helps.

[frugalnacho]

Go watch the movie "The Big Short".  It's about the housing crash.  I recognize that it's Hollywood, but it's close enough to the real story and on point to the message (and fun to watch).  All of the professionals in the industry missed the "signs" of a massive bubble about to burst, except a few really smart experts who took advantage of it.

Investing in a singular company well is extremely difficult and time intensive.  Warren Buffet is world renowned for a reason.  Understanding the economy as a whole is infinitely harder. 

Index funds were designed so people could invest for the long term and not have to be experts.  Appreciate Bogle's gift and take heart the lesson he advocates.

Isn't that just survivorship bias?  What about all those people that lost a lot money due to bad timing? They were too early, or too late in calling the bubble and got left holding the bag.  If somebody is always crying wolf eventually someone will be right by pure luck.

[DarkandStormy]

Wait, is today the new top?

[marielle]

Wait, is today the new top?

Yes