Stock Market Day-Trading Discussion Thread

NEW -> Contingent Buyer Assistance Program
Hormiguero said:
muzie said:
You're getting ahead of yourself there if you think you got the whole next decade all figured out.
Click to expand...

I'm not claiming to know the particulars, and am very long on stocks at the moment despite my long-term gloom. But the demographics speak for themselves, and it is a very dark picture. How many times a day do I hear mentioned that the Boomers are just starting to retire, and that this bear market has been a great way to scare them out of stocks permanently? Or that rotten demographics were a big part of the deflation Japan experienced a decade ago (along with all of the other moves we've made to emulate that disaster)? About zero - we're a collective ostrich nationally in terms of our reaction to the Boomer retirement wave, and have made what would be a tough predicament into a 100% certain crisis through our mountain of present debt and future entitlements.

US population growth hit a very low nadir in the early 70s - those are the people approaching their peak earning years in the next decade. Do you think they'll have the same positive feedback loop with their investments in the stock market as Boomers enjoyed in the 80s and 90s?

As investment goes, proper use of timing and leverage are almost impossible to get right - but spotting the larger trend is easy. And it ain't pretty until the median Boomer dies, and takes some of those trillions of AARP-mafia entitlements with them. That will be a great day for the country, but it is at least 15-25 years off. Once the stock market starts to look PAST that event, we'll be able to set up a real bull like 1982-2000, with some help from the kids born in the past fifteen years.
Click to expand...

Boomers are only one part of the overall picture. Investing is much more international now, and whereas 20 years ago most people were 100% domestic more and more people from different allocate a weighting to other countries in their investments. Now we have Arabs with huge investment stakes in our banks, which would have been unthinkable just ten years ago, and national investment funds chasing worldwide returns. There's way more pieces on the chessboard than you and I can imagine. Money flows somewhere, it goes somewhere else.

Fact is the boomer theory doesn't hold much water, right now. The boomers are just starting to retire now - just starting. If anything we should have had a roaring bull for the past ten years because that was the peak earnings for most boomers. Yet the return for the last ten years is flat.

Whatever influence the boomer had, other factors had way more importance, and other factors will have more importance in the future.
 
muzie said:
If anything we should have had a roaring bull for the past ten years because that was the peak earnings for most boomers. Yet the return for the last ten years is flat.

Whatever influence the boomer had, other factors had way more importance, and other factors will have more importance in the future.
Click to expand...

I agree somewhat, though I think that "foreign money will rescue the stock market from domestic weakness" has about as much weight as the same concept applied to California real estate. Also, much of that hot foreign money has been directly related to soaring commodity prices and a one-time historical sweet spot for Chinese economic growth. As for that roaring bull -

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

...that's exactly what we DID have, with earnings multiples way above anything previously dreamed of in previous decades. Even now, multiples are fairly rich, and just because the lows we hit last week took us back to 1998, I certainly wouldn't call the last decade "flat".

Time will tell, but I don't plan on being more than 50% long in any account once forward P/Es move back toward the 20 mark.
 
Hormiguero said:
I agree somewhat, though I think that "foreign money will rescue the stock market from domestic weakness" has about as much weight as the same concept applied to California real estate. Also, much of that hot foreign money has been directly related to soaring commodity prices and a one-time historical sweet spot for Chinese economic growth. As for that roaring bull -
Click to expand...

I would agree there the theory we're going to be "rescued" by international forces isn't much better. However you're the own working on the premise we need to be "rescued" :-).

Hormiguero said:
http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

...that's exactly what we DID have, with earnings multiples way above anything previously dreamed of in previous decades. Even now, multiples are fairly rich, and just because the lows we hit last week took us back to 1998, I certainly wouldn't call the last decade "flat".
Click to expand...

P/Es are now at the lowest they've been in twenty years. Yes they could go lower as they were lower in the 60s and 70s. But one can play a very long waiting game waiting for that perfect once-in-fity-years low P/E.

Hormiguero said:
Time will tell, but I don't plan on being more than 50% long in any account once forward P/Es move back toward the 20 mark.
Click to expand...

There's nothing keeping you from investing in individual companies instead of going for the index, so the index P/E is rather irrelevant. The tide rises all ships, but good investors don't just rely on the tide to keep them afloat.
 
So you really don't think that weak demand for stocks both in terms of Boomer disninvestment and weak 1970s birth rates isn't a long-term liability for equities?

I think they will soak up Bernankedollars in due time, but the debt load we're piling on now will also make it hard to pass that through into incomes without taxing the bejeezus out of it to pay interest on all of this debt and FHA liabilities (and the over 2 trillion dollars we'll be spending annually on Boomer entitlements in five years).

It is easy to overlook just how exceptional the supercharged stock bull from 1982 to 2001 was. That kind of explosive growth and innovation is what happens when the biggest 'bulge' in demographics is working and investing in their prime while older, saner people (who had experienced a depression firsthand) are there to foster protections of the currency and social equilibrium.
 
I am done for the day. I was up a small amount -- more a psychological gain than a meaningful one for my account. The market was quite choppy today.
 
IrvineRenter said:
I am done for the day. I was up a small amount -- more a psychological gain than a meaningful one for my account. The market was quite choppy today.
Click to expand...
Market doesn't want to seem to do anything. I think people may be watching to see what happens with the elections. I'm hoping that a clean swap by the Democrats will create a near-term selloff because the market likes a split gov't. It'll be interesting to see what the employment numbers are going to be on Friday (market is expecting 200k job losses).
 
Picked up 5 Dow 90 Nov Calls this morning because it looks like we will rally the Dow to 10,000 in the next few days (I'll probably dump them before the jobs report on Friday).
 
usctrojanman29 said:
Picked up 5 Dow 90 Nov Calls this morning because it looks like we will rally the Dow to 10,000 in the next few days (I'll probably dump them before the jobs report on Friday).
Click to expand...

Picked up more puts. Good Luck!
 
blackvault_cm said:
usctrojanman29 said:
Picked up 5 Dow 90 Nov Calls this morning because it looks like we will rally the Dow to 10,000 in the next few days (I'll probably dump them before the jobs report on Friday).
Click to expand...

Picked up more puts. Good Luck!
Click to expand...
Sold the calls earlier as it looks like things are breaking down. I made a tiny profit enough to pay for lunch, LITERALLY. haha
 
blackvault_cm said:
usctrojanman29 said:
Picked up 5 Dow 90 Nov Calls this morning because it looks like we will rally the Dow to 10,000 in the next few days (I'll probably dump them before the jobs report on Friday).
Click to expand...

Picked up more puts. Good Luck!
Click to expand...
Talk about a head fake...if I could have held on to those calls until the end of the day I'd have enough for 50 lunches (sigh). Oh well, at least I made enough for lunch.
 
blackvault_cm said:
Saying that it's painful to watch the market go up when you want it to go down, but I have plenty of bandaids to weather me through it. Eventually I believe things will go back south and I'll be ready for it. If they don't...I'm semi-F*****! Thats life.
Click to expand...

I think your longer-term evaluation of the market direction is correct. However, the market can stay irrational longer than you can stay solvent. This rally has legs, and I would not be surprised to see a test of the 50-day SMA before it turns and goes south again. There is a lot of air up there right now.
 
I lost money today. I was down a little bit during the chop midday, and I actually entered a "get it back" trade. Very, very stupid. Impulsive, poorly thought out, etc. Of course, I sold just before the market reversed and had a nice end-of-day rally.
 
You must log in or register to reply here.
Back
Top