Alarm Bells - What would you do?

Thrugelmir

mrlegend123 said:

Thrugelmir said:

mrlegend123 said:

Thrugelmir said:

mrlegend123 said:

Hoping to bank my recent gains of 30-40% for 2020 and normal annualised gains of 8-9% for the past years. 

If you believe that to be normal then you are in for a shock. 

I just move my money around the different asset sectors using momentum investing. 
What you mean in for a shock?

Well above long term real long term rates of return. Companies need to meet these profit expectations. 

agree, that's why I am thinking about moving into the money markets for the while to see what happens over the next 12 months. I understand markets price in future earning hence the bullish feeling. I am feeling like a bear. 

When sufficient investors feel likewise the market will turn. Nothing wrong in being a contrarian investor. 

Cus

I've heard the angle that if everyone is bullish then they are fully invested, no more buyers, and the market turns..

mrlegend123

The shiller P/E ratio for the S&P 500 has a mean (average) of 16.8 and a median of 15.8. Right now, the Shiller S&P ratio for the S&P 500 is 34.5 -- more than double its historic average.

When it has been over 30, there has been correction or crash. That's why I am feeling like a bear. Also, reports of yields increasing in the news.......

BananaRepublic

mrlegend123 said:

The shiller P/E ratio for the S&P 500 has a mean (average) of 16.8 and a median of 15.8. Right now, the Shiller S&P ratio for the S&P 500 is 34.5 -- more than double its historic average.

When it has been over 30, there has been correction or crash. That's why I am feeling like a bear. Also, reports of yields increasing in the news.......

As I mentioned earlier, the inventor of the CAPE (Schiller) ratio is not alarmed by the current US highs because interest rates are low. Were interest rates to rise, his view would change. 

https://www.marketwatch.com/story/sky-high-stock-prices-make-sense-robert-shiller-says-11606838599

mrlegend123

thanks for the article, interest-rate cuts by central banks may be used to justify higher equity prices and CAPE ratios.

Interest rates will never go down by 2% ever. I've read somewhere that the market would crash 40% at up to 3%. the markets wobbled in 2018 when the fed were jacking them up

mrlegend123

I meant up to 2% sorry 

Username999

Everyone is a genius in a bull market.

Username999

[Deleted User] said: 

I agree with Jeremy Grantham in this recent article calling the bubble: https://www.gmo.com/europe/research-library/waiting-for-the-last-dance/ - he says:

Someone calls a bubble every 5 minutes, for the last 10 years.
Move on.

mrlegend123

Q3 correction? 

Username999

mrlegend123 said:

Q3 correction? 

No, no, no,...
You six months experience in a 10 year+ bull market is pathetic.
IMHO.
You need to be told straight.