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muck

Muck's Model

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:wacko: never gets old

So just to be clear, you believe this stock market rally is sustainable and you also believe the US economy is on solid ground?

 

I just want to make sure you're being open about your beliefs because being coy now is a cheap way to avoid eating crow when my predictions prove correct. So, please set the record straight with what you think the future holds for the stock market.

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Gold and silver are getting ready to tank too - so don't jump on that train now that it's too late.

 

 

My post is correct in that I've never had a strong opinion on gold/silver

 

 

I just want to make sure you're being open about your beliefs because being coy now is a cheap way to avoid eating crow when my predictions prove correct.

 

 

You seem to either have a serious denial problem or a serious comprehension problem when it comes to yer own predictions.

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Using selective quoting is weak sauce dude. I don't care as much as you to go back and find my posts but essentially, I used the term 'strong opinion' for a reason. Casually mentioning my belief on gold and silver a few times in passing is hardly having a strong opinion on the matter. And I even admitted as much in the post you partially quoted.

 

Having thread titles on the stock market and talking at length about the stock market is having a strong opinion. Even the worst readers on here should be able to deduce that. And since when did Azz need an internet bodyguard. You're a pesky little gnat.... shoooo.

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. You're a pesky little gnat.... shoooo.

 

The market is 12K plus, you were calling 5K at this time. At what point to you figure you don't know what you are talking about.

 

 

Yer slow.

Edited by bushwacked

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I just want to make sure you're being open about your beliefs because being coy now is a cheap way to avoid eating crow when my predictions prove correct

 

:lol::tup:

 

I'm smart enough to know that I'm not smarter than the market. unlike some people...

 

So to sum up - the market is waaaaayyyyyy over-valued. I think the market is going to tank big time over the next 5 years or so (I see it dropping 5,000 points this year alone) and it won't be over until GS and the Fed get exposed for what they are.

 

:wacko:

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:lol::tup:

 

I'm smart enough to know that I'm not smarter than the market. unlike some people...

 

 

 

:wacko:

I think Brent might be missing an important point in that the number of people heavily reliant on the market inching upwards far outnumbers those relying on it going down, therefore there are a hugh number of agencies / businesses / governments / people working to foil his forecasts.

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I think Brent might be missing an important point in that the number of people heavily reliant on the market inching upwards far outnumbers those relying on it going down, therefore there are a hugh number of agencies / businesses / governments / people working to foil his forecasts.

You're absolutely right and I don't think anyone in their right mind should 'want' the market to go down necessarily. However, it's extremely over-valued right now which means when it does reach equilibrium, it will be at a much lower price and it will happen in a blink. That's why I am no longer trying to pick a top because right now the market is extremely irrational and the Fed is pumping money into the market to create the perception of wealth. BUT, the manipulation cannont last forever and eventually, when people realize we are far from recovering, the market will 'correct' quickly and the Fed will not be able to stop it.

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You're absolutely right and I don't think anyone in their right mind should 'want' the market to go down necessarily. However, it's extremely over-valued right now which means when it does reach equilibrium, it will be at a much lower price and it will happen in a blink. That's why I am no longer trying to pick a top because right now the market is extremely irrational and the Fed is pumping money into the market to create the perception of wealth. BUT, the manipulation cannont last forever and eventually, when people realize we are far from recovering, the market will 'correct' quickly and the Fed will not be able to stop it.

I have read in numerous places that it is undervalued AND overvalued. I think that means parts of it are one or the other. For example, based on traditional measures, large cap companies are undervalued right now.

 

As for recovery, all the signs currently point to a slow(ish) but steady and sustainable recovery.

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I have read in numerous places that it is undervalued AND overvalued. I think that means parts of it are one or the other. For example, based on traditional measures, large cap companies are undervalued right now.

 

As for recovery, all the signs currently point to a slow(ish) but steady and sustainable recovery.

 

Well, are we talking about an economic recovery or stock market recovery? If we're talking a stock market recovery, well yeah that has been happening since Mar 09 - still doesn't mean it's validated or that the value is justified. Afterall, the market can remain irrational much longer than investors can remain solvent.

 

As far as an economic recovery - what signs support that claim? I would strongly disagree that we are seeing any type of economic recovery. I think the Fed and US government have done a good job at masking the continuing crisis. I don't think any critical thinking person that can read and interepret all the data would come to that conclusion (recovery) either. Unfortunately, most people get their data regurgitated from the media or the Fed's spin on the situation. Keep in mind, the Fed makes money from consumer borrowing/spending regardless of what else is going on. They are going to do everything they can to keep people borrowing and spending, regardless of whether or not it's in the best interest of the consumer.

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:tup::wacko:

 

I'm smart enough to know that I'm not smarter than the market. unlike some people...

 

I'm assuming you're adressing Brent, not me.

 

But, in case you're getting at us both, I don't think I'm smarter than the market or anyone else who trades. :lol:

 

PS - Brent, I've been making money the last few weeks. You?

PPS - Everyone else, I too think that there will be some "other shoe to drop" that will cause some version of mayhem (i.e., drop of 30% or more from whatever the peak is before the drop) sometime in the next year or two. In the interim, I'm long.

Edited by muck

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I'm assuming you're adressing Brent, not me.

 

But, in case you're getting at us both, I don't think I'm smarter than the market or anyone else who trades. :wacko:

 

PS - Brent, I've been making money the last few weeks. You?

PPS - Everyone else, I too think that there will be some "other shoe to drop" that will cause some version of mayhem (i.e., drop of 30% or more from whatever the peak is before the drop) sometime in the next year or two. In the interim, I'm long.

I have made a little money the last few weeks shorting (trying to pick the top). In fact I sold at a temporary top when we had that 2% correction 2 weeks ago. But for the most part, I have been holding all cash since November. I'm going to wait for a confirming signal that the top is in because trying to pick a top in this heavily manipulated market is a death sentence. The signal I will be waiting for is a bearish engulfing candlestick on the weekly chart.

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Well, are we talking about an economic recovery or stock market recovery? If we're talking a stock market recovery, well yeah that has been happening since Mar 09 - still doesn't mean it's validated or that the value is justified. Afterall, the market can remain irrational much longer than investors can remain solvent.

 

 

Earnings above expected? :wacko:

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I'm assuming you're adressing Brent, not me.

 

But, in case you're getting at us both, I don't think I'm smarter than the market or anyone else who trades. :wacko:

 

I assume that the market more or less sets prices appropriately and efficiently based on the info available at any particular time. but there cyclical aspects that come into play, and analyses like yours can and probably do pick up signals before the market moves. that's what I see you trying to do here, and I see no foolish hubris in it at all. I don't see you making assertions that things are fundamentally over- or under-valued.

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Explain why last quarter's earnings has any bearing on today's stock prices or how those figures can be used to accurately forecast next quarter's earnings. I'm also curious to know why lay investors use earnings, no matter how good they were (again, prior quarter), to justify P/E ratios in the high double digits (NFLX for instance has a P/E ratio of 74x).

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I have a friend of mine who argued today that record earnings are a f(x) of record profit margins and record earnings are being used to justify higher P/E ratios ... and by definition, record profit margins are unlikely to remain at record levels ... etc. etc. etc. I think he has a point. I'm still long.

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I have a friend of mine who argued today that record earnings are a f(x) of record profit margins and record earnings are being used to justify higher P/E ratios ... and by definition, record profit margins are unlikely to remain at record levels ... etc. etc. etc. I think he has a point. I'm still long.

Exactly. But regardless if such figures are record numbers or not, speculating on today's stock prices based on the prior quarter earnings is an incorrect valuation method. However, most lay investors use this method - but it's also why the average investor is the last one holding the bag when the rug gets pulled.

 

I am fully prepared for the market to continue climbing, especially with POMO still in effect. But I think going long has way too much risk attached to it. I think the downside potential far out-weighs the upside of going long right now. That's why I'm sitting on cash until a top is confirmed. I will still try to pick tops with tight stops though - I just can't help myself :wacko:

 

FWIW, I'm a big fan of your model :tup:

 

E2A: I have a friend who just dumped $20K into NFLX. I tried to stop him - or rather I told him to invest an amount he was comfortable losing. Not that it can't keep climbing because it surely could, but it's like having a low pair in poker - you could win but it's not a high probability bet. Well he didn't listen and I think he will be burned sooner than later. Not that it's any big secret on where I think the market is headed.

Edited by Brentastic

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Exactly. But regardless if such figures are record numbers or not, speculating on today's stock prices based on the prior quarter earnings is an incorrect valuation method. However, most lay investors use this method - but it's also why the average investor is the last one holding the bag when the rug gets pulled.

 

E2A: I have a friend who just dumped $20K into NFLX. I tried to stop him - or rather I told him to invest an amount he was comfortable losing. Not that it can't keep climbing because it surely could, but it's like having a low pair in poker - you could win but it's not a high probability bet. Well he didn't listen and I think he will be burned sooner than later. Not that it's any big secret on where I think the market is headed.

 

I would say that looking solely at a P/E ratio is a bad valuation method. However, I sure want to know if the company in which I'm investing has a decent management team. I'd say high earnings are a good sign of that (or that they went to the Enron school of MBAs). One can make a general assumption that companies with a good track record for meeting or beating expectations know their market pretty well and are a lower risk bet than other companies. But its just one tool in the box.

 

As for the NFLX example, unfortunately that recognition bias is all over the stock market. Lay investors are more likely to invest in companies with name recognition. That's just the way it goes. I won't loose sleep over these people.

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Looks like it'll be another +2 week.

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thanks muck :wacko:

I need to reduce my involvement in a foreign markets fund that is part of my 401k. Bastard thing acts like an anchor too many times (yesterday for instance). It does sometimes act as a flotation buoy too, though not often enough.

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FYI, I've been approached by someone about possibly running this as a dedicated fund for them (and others) to invest in. I'm not sure that it'll actually go anywhere, but I'm giving you guys a heads up of this fact ... so, if I do run actual money with this model, I'm not sure I'll be able to continue giving the signals here for free.

 

Until I know more, I will keep shooting out the signals, though.

 

:wacko:

 

Good luck to you.

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Yeah, it's really looking the ES is going to run up to the 1360 range. I tried picking a top again this week, sold at 1319.75 on the ES (top until today was 1322) with a stop at 1324. Low risk trade, got stopped out obviously.

 

Thanks for the head's up, Muck :wacko:

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I need to reduce my involvement in a foreign markets fund that is part of my 401k. Bastard thing acts like an anchor too many times (yesterday for instance). It does sometimes act as a flotation buoy too, though not often enough.

 

 

Set your asset allocation and let it go, rebalance when neccessary.

 

Dropping things here and adding things there without taking into consideration your desired asset allocation to make sure you are properly diversified will kill your long term returns and increase your fluctuations greatly.

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Set your asset allocation and let it go, rebalance when neccessary.

 

Dropping things here and adding things there without taking into consideration your desired asset allocation to make sure you are properly diversified will kill your long term returns and increase your fluctuations greatly.

I don't fiddle with it hardly at all but this particular amount is fairly large as a proportion of the overall cake and it needs reducing.

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That's why I'm sitting on cash until a top is confirmed.

How will you confirm a top?

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