The Economy and Stock Market

[Brentastic]

So, many of you know where I stand on this topic, if not you can see many posts here:

http://forums.thehuddle.com/index.php?s=&a...t&p=3075833

 

Just a few short weeks ago, I forecasted a HUGH market reversal. My forecast received a lot of criticism and few supporters (Avernus is the only huddler who comes to mind). A few days later the market began to drop and it's continued to drop steadily since, dropping 800 points in the last 3 weeks. I forecasted a major drop which could see the DOW below 1,000 in the next several years - that is a worst case scenario. I could easily see the DOW to 6,000 sometime this year, possibly by the end of summer.

 

So huddlers - where do you see the market going from here? It's still not too late to re-allocate your 401ks to cash equivalents during this major down move. Perhaps some of you now realize what kind of drop we could be in for? I think there's gonna be a lot of market discussion in the coming months, so I wanted to start a fresh thread to work from.

 

All thoughts and opinions are welcome. Try to keep the name calling to a minimum and let's get some quality posts in here. I think it's obvious our economy is in bad shape and a lot of crap needs to be filtered out. What say you fellow huddlers? I'm curious on your perspectives.

[Jimmy Neutron]

It's going down significantly sometime - I have no idea when. There is simply too much public, commercial and civic debt out there - it's going to catch up with us and it will make the fall of '08 look like a picnic.

[dmarc117]

this world is toast. so is the market. get into cash. buy some guns too.

[The Irish Doggy]

Well if the trouble I've experienced with shipping out of China before the Chinese New Year is any indication, the economy is back in the black.

[Jackass]

I agree with that assesment. Which is why I said earlier that I think the DOW could go below 1,000 sometime in the next 10 years. I think we are entering a deflationary depression. No one ever points the finger at the Federal Reserve - but I think Greenspan has as much to do with all of this than anybody. You can't continually 'band-aid' the economy by lowering rates and forcing money supply everytime the economy slips. Sometimes you just need to let the free market work itself out. Boom and busts are a direct result of forced demand (by forcing an increase in money supply) and over-valuation of markets. The economy has yet to really collapse and the recent uptrend in the markets the last few months is the calm before the storm. I think the DOW could reach 10,000 and then it will absolutely tank. It might not go all the way down below 1,000 but I bet it gets close.

 

This is your post from 5/15/09. Not sure when you first posted, but S&P 500 from this date until now: it's gone from 880 to 1050 which is about a +20% return. So you're entitled to your opinion but don't pretend you've called it right so far.

[SheikYerbuti]

I agree with that assesment. Which is why I said earlier that I think the DOW could go below 1,000 sometime in the next 10 years. I think we are entering a deflationary depression. No one ever points the finger at the Federal Reserve - but I think Greenspan has as much to do with all of this than anybody. You can't continually 'band-aid' the economy by lowering rates and forcing money supply everytime the economy slips. Sometimes you just need to let the free market work itself out. Boom and busts are a direct result of forced demand (by forcing an increase in money supply) and over-valuation of markets. The economy has yet to really collapse and the recent uptrend in the markets the last few months is the calm before the storm. I think the DOW could reach 10,000 and then it will absolutely tank. It might not go all the way down below 1,000 but I bet it gets close.

 

This is your post from 5/15/09. Not sure when you first posted, but S&P 500 from this date until now: it's gone from 880 to 1050 which is about a +20% return. So you're entitled to your opinion but don't pretend you've called it right so far.

 

He did give himself a 10 year window, so I'm not going to Bren's original post until 2019. Hopefully I won't be picking through rubble for canned food and fuel by then. . .

[yo mama]

He did give himself a 10 year window, so I'm not going to Bren's original post until 2019. Hopefully I won't be picking through rubble for canned food and fuel by then. . .

That'll never happen... we'll have eaten you by then.

[The Holy Roller]

That'll never happen... we'll have eaten you by then.

 

"Sheik's Meats!" Catchy. But still...

[Brentastic]

I agree with that assesment. Which is why I said earlier that I think the DOW could go below 1,000 sometime in the next 10 years. I think we are entering a deflationary depression. No one ever points the finger at the Federal Reserve - but I think Greenspan has as much to do with all of this than anybody. You can't continually 'band-aid' the economy by lowering rates and forcing money supply everytime the economy slips. Sometimes you just need to let the free market work itself out. Boom and busts are a direct result of forced demand (by forcing an increase in money supply) and over-valuation of markets. The economy has yet to really collapse and the recent uptrend in the markets the last few months is the calm before the storm. I think the DOW could reach 10,000 and then it will absolutely tank. It might not go all the way down below 1,000 but I bet it gets close.

 

This is your post from 5/15/09. Not sure when you first posted, but S&P 500 from this date until now: it's gone from 880 to 1050 which is about a +20% return. So you're entitled to your opinion but don't pretend you've called it right so far.

Regarding the post you quoted, if you re-read it, I never said we were getting to tank at that moment. In fact, if you go back and read it again (when the DOW around 8,000 at the time of the post you quoted) - I specifically said the DOW could reach 10,000 and then drop from there. The post you quoted was a generalization on where we were headed - I never predicted the down move would start at that time. So actually, I'd say I've called it pretty right so far.

 

Adding to that, 3 weeks ago, I forecasted the down move had begun and since my post 3 weeks ago, it's dropped about 700 points (including today's up move). Also, since my initial post last May - I have tightened up my window to about 5 years for the absolute bottom. The absolute bottom could be anywhere from below 1,000 in the DOW to 3,000. If you're going to call me out, read my posts more carefully next time

[vt700guy]

I don't know rather you are right or wrong, but I am curious what your qualifications are to be making such statements?

Edited February 9, 2010 by vt700guy

[Piles]

Brent - I read your previous thread a couple of weeks ago very closely. The more I thought about it the more I started to agree with some things you were saying. I ended up going to a 75% cash position in my 401k and Roth IRA. I have to say that at this point in time I am very glad I did. I am nowhere near as bearish as you are though. I could see the down hitting 8000 this year. I honestly can't see the DOW at 1,000 to 3,000 within 5 years though. I feel like I'm in quite the cunundrum . I just don't know what to do with my money. I have thought about buying some of the ETF's that short the market but haven't had the guts to pull the trigger. I've also contemplating buying some stocks with a nice dividend yield in hopes that they will be spared if there is indeed a correction. I'm certainly curious to hear what others think as well.

 

I do want to thank you for your posts

[Jackass]

Regarding the post you quoted, if you re-read it, I never said we were getting to tank at that moment. In fact, if you go back and read it again (when the DOW around 8,000 at the time of the post you quoted) - I specifically said the DOW could reach 10,000 and then drop from there. The post you quoted was a generalization on where we were headed - I never predicted the down move would start at that time. So actually, I'd say I've called it pretty right so far.

 

Adding to that, 3 weeks ago, I forecasted the down move had begun and since my post 3 weeks ago, it's dropped about 700 points (including today's up move). Also, since my initial post last May - I have tightened up my window to about 5 years for the absolute bottom. The absolute bottom could be anywhere from below 1,000 in the DOW to 3,000. If you're going to call me out, read my posts more carefully next time

 

Ok. fair enough. You're right. I didn't read your post carefully. Still, your prediction was that it would hit 10,000 and tank. Today it closed over 10,000, yet you still started a post applauding yourself because the market's gone down over the past few weeks. Maybe you should wait until it's at least, i don't know, maybe at least down a somewhat meaningful % below 10,000 before you start patting yourself on the back.

[CaP'N GRuNGe]

FCNTX Feb 9 55.37 0.71 1.30%

FMAGX Feb 9 61.50 0.92 1.52%

FLPSX Feb 9 31.36 0.41 1.32%

FSPTX Feb 9 69.43 0.84 1.22%

FSDPX Feb 9 51.07 1.28 2.57%

FSAGX Feb 9 39.72 1.47 3.84%

FLATX Feb 9 46.98 1.51 3.32%

FEMEX Feb 9 7.38 0.12 1.65%

 

More please...

[keggerz]

Well if the trouble I've experienced with shipping out of China before the Chinese New Year is any indication, the economy is back in the black.

when isn't there problems with shipping out of China prior to Chinese New Year?

[Brentastic]

FCNTX Feb 9 55.37 0.71 1.30%

FMAGX Feb 9 61.50 0.92 1.52%

FLPSX Feb 9 31.36 0.41 1.32%

FSPTX Feb 9 69.43 0.84 1.22%

FSDPX Feb 9 51.07 1.28 2.57%

FSAGX Feb 9 39.72 1.47 3.84%

FLATX Feb 9 46.98 1.51 3.32%

FEMEX Feb 9 7.38 0.12 1.65%

 

More please...

You realize those are daily returns only, right? Obviously with the market rebounding today, most stock heavy mutual funds are going to be up. However, the YTD returns on the first two (I wasn't going to look them all up) are -4.58% and -4.37%.

Edited February 10, 2010 by Brentastic

[Brentastic]

Ok. fair enough. You're right. I didn't read your post carefully. Still, your prediction was that it would hit 10,000 and tank. Today it closed over 10,000, yet you still started a post applauding yourself because the market's gone down over the past few weeks. Maybe you should wait until it's at least, i don't know, maybe at least down a somewhat meaningful % below 10,000 before you start patting yourself on the back.

My intention wasn't really to pat myself on the back. Surely I'm happy with what I've seen and acted on though, so that aspect may have shown through, but my intention was to promote some market discussion (still waiting for Wiege to chime in with some actual analysis). I realize I'm a long way off from my forecast. But I'm not sure what you're looking for? I thought the market could reach 10,000 ish and then tank. It reached 10,800 and tanked - predicting the actual price turnaround would be nothing short of amazing. The bottom line is I love to talk about the market, analyze the market and speculate about the market and I'm hoping to get more discussion going on our current economy. There's a lot of crazy poopy going on and I want to talk about it

[gbpfan1231]

My intention wasn't really to pat myself on the back. Surely I'm happy with what I've seen and acted on though, so that aspect may have shown through, but my intention was to promote some market discussion (still waiting for Wiege to chime in with some actual analysis). I realize I'm a long way off from my forecast. But I'm not sure what you're looking for? I thought the market could reach 10,000 ish and then tank. It reached 10,800 and tanked - predicting the actual price turnaround would be nothing short of amazing. The bottom line is I love to talk about the market, analyze the market and speculate about the market and I'm hoping to get more discussion going on our current economy. There's a lot of crazy poopy going on and I want to talk about it

You are happy that it hit 10,800 and then tanked? Will you be happy if the market crashes down to 1,000 because you would then be right?

 

I for one hope the market does not crash but hey that's just me spouting off.

[Ursa Majoris]

I guess Wiegie would have to weigh in on this but on the extremely remote chance the stock market did hit 1,000, wouldn't that effectively render us all broke, corporations, banks and real people? Seems to me that before we reached that mark, we'd have slid into near anarchy and would have a crapload more to worry about than our 401k.

[Brentastic]

You are happy that it hit 10,800 and then tanked? Will you be happy if the market crashes down to 1,000 because you would then be right?

 

I for one hope the market does not crash but hey that's just me spouting off.

You misunderstood what I was saying. I've been happy with what I've seen (from a technical analysis point of view) and acted on (got out of stocks and shorted the indecies). In other words, it gives me confidence moving forward that I was able to spot a major reversal in the market (hence, happy with what I've seen and acted on). Other than having a 25% return since the drop, I am not happy about the economy doing bad - however, until the Fed steps out of the way and allows some corporate and bank failures, they are only delaying the inevitible.

[Brentastic]

I guess Wiegie would have to weigh in on this but on the extremely remote chance the stock market did hit 1,000, wouldn't that effectively render us all broke, corporations, banks and real people? Seems to me that before we reached that mark, we'd have slid into near anarchy and would have a crapload more to worry about than our 401k.

I don't think it would be that bad. It wouldn't be great either and again, that is the worst case scenario. A more likely price point is 3,000

[The Irish Doggy]

when isn't there problems with shipping out of China prior to Chinese New Year?

 

Yes, its always a bit rough, but its not been this bad in the 7 years I've been doing it.

[dmarc117]

I don't think it would be that bad. It wouldn't be great either and again, that is the worst case scenario. A more likely price point is 3,000

 

 

i think dow below 5k is very bad. people are broke, companies are broke, govt pension funds are broke. strikes and civil unrest would be rampant.

[Yukon Cornelius]

i think dow below 5k is very bad. people are broke, companies are broke, govt pension funds are broke. strikes and civil unrest would be rampant.

if it gets under five i would bet this experiment called the U.S.A. will be over.

[CaP'N GRuNGe]

You realize those are daily returns only, right? Obviously with the market rebounding today, most stock heavy mutual funds are going to be up. However, the YTD returns on the first two (I wasn't going to look them all up) are -4.58% and -4.37%.

 

Wow, really? You mean i can't retire?

[Brentastic]

Wow, really? You mean i can't retire?

Maybe next year.