Stocks to crash next like oil?

Ryan_Futuristics

black_taxi wrote: »

even hedge funds cant call the the market
many burnt this year

I don't think that's quite true - the Harvard and Yale endowment funds have both consistently doubled market returns over many decades by calling the market pretty well

It's the price, laziness and required conservatism of many hedge funds which drags the average down

lalman

I agree with everything Bowlhead99 said as always... Peter Schiff is a permo bear - and has been bearish for years now about the US economy, debt levels etc.


Although I semi agree that QE does prop up assets... I believe QE creates additional animal spirits in the market and a potential virtus circle.


I have listened to a lot of Peter Schiff over the years and I feel he has an agenda to sell gold and silver in his fund...


Oil price net effect will be positive for western economies...


I have to say my firm belief is that we have too much capacity and too much debt in the world.... so I am expecting deflation... this could cause markets to tank but I would expect central banks to print even more money before that would happen...

gkerr4

agree on the perms-bear sentiment. I suppose if you are a perma-bear, then every now and then you look like a genius, but i don't think its this time.

I'm going to shift more stocks to US exposure i the new year - i think their economy is in a very good place and as noted, the current low barrel price helps. I think in Q1/Q2 US stocks will be a good place to be.

Ryan_Futuristics

The US should have another 12 months growth in it - but a metric I follow which tracks institutional investor/analyst forecasts (CurrY and NextY - which has proven quite good at getting you out of the market at the right time) has recently turned bearish

Another worry is that at this valuation level, the US usually returns 0.5%/annum over the following 10 years

Another might be that people still seem quite bullish on US stocks - when people say "Buy when everyone is selling and sell when everyone is buying" it's usually from long-term experience ... or in the words of Buffett: "Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance"

steampowered

Single commodities like oil are much more vulnerable to big swings than stocks. Oil is just one commodity whereas stocks cover every business sector.

For the same reason, the FTSE index is much less volatile than any single stock.

Personally I think stocks are currently undervalued (although not enormously so). We are still underneath the pre-recession highs 6 years ago with plenty of bearish sentiment priced into the market.

Ryan_Futuristics

Commodities generally have a rather poor risk/reward profile

I think global markets are overvalued by about 25-35% - most of that concentrated in the US and down to uncharted levels of QE propping up asset prices

When you think clearly about how few people can afford to buy houses, how many are in zero hour contracts, how many are reliant on food banks, what the drop in oil prices suggests about industry, etc. I think you've got to consider that asset prices (even in the UK, where they look reasonable value) are masking a period of real economic stagnation where we perhaps *should* be picking things up a lot cheaper

kidmugsy

steampowered wrote: »

Oil is just one commodity whereas stocks cover every business sector..

The price of oil influences large chunks of every economy on earth.

Thrugelmir

steampowered wrote: »

Personally I think stocks are currently undervalued (although not enormously so). We are still underneath the pre-recession highs 6 years ago with plenty of bearish sentiment priced into the market.

On the basis of current corporate profitability there's far more negative news than positive. Would you seriously buy a share on the basis of previous price alone? Do you take any account of issued paper that in effect dilutes existing shareholders?