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18K+ DOW

Discussion in 'Historic Market Crashes' started by southfork, Dec 23, 2014.



  1. southfork

    southfork Mother Lode Found Mother Lode

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    How dam long can this madness continue, is it only me that thinks the down is 2x over valued or what, its getting insane, Im expecting a major correction in Jan, anyone else and what vehicle are you going to use to short it?
     
  2. Cornelius

    Cornelius Gold Member Gold Chaser

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    It must be only you, Southfork.

    I think the DOW is 12k over valued.
     
    Triunfar, Ahillock and Cigarlover like this.
  3. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    I heard an interesting take on this today. It is a sort of carry trade. Institutions are borrowing money at extremely low interest rates and piling it into stocks. Supposedly this is because their pensions must see an annual return of 6%-8% to fund obligations. The fund manager who was being interviewed said that he expected this to be the norm for the next 2-3 years EVEN THOUGH professional investors see that the fundamentals are not supported.

    I expect this to shift once the Fed begins to systematically raise interest rates incrementally (maybe never).
     
    Thecrensh likes this.
  4. luckabuck

    luckabuck Gold Member Gold Chaser

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    The Dow is doing the same thing that the Fed is doing ..... a huge Ponzi scheme.
     
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  5. Dude

    Dude Midas Member Midas Member

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    Corporate profits are up. Economy is growing. Ya, prices are higher so average Joe is beat down. Salaries are growing ever so slow for the base level employees as well, so that's a killer for a good portion of America. Incidentally, that's why I've always been an advocate of higher education; rise up from the base. I've stay high risk and keep pushing the money in, as I am only 53. Dad moved a lot of money to low risk, but he's got a lot more at stake and doesn't need the risk to fund his retirement when that 75 year old crazy man decides to retire. Wish he would have bought silver at $9 like I told him to, but everybody has to make their own decisions.
     
  6. JayDubya

    JayDubya Platinum Bling Platinum Bling

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    It's all an illusion. Smoke and mirrors.

    mirrors.jpg

    When this thing tumbles, and it WILL tumble, some people are going to get hurt, seriously hurt.
     
  7. Cornelius

    Cornelius Gold Member Gold Chaser

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    I would like to believe that you are right, but it seems most everyone will be hurt.
     
  8. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    Biotechs got beaten down the last two days because ABBV's Hep C drug is less expensive, but not as effective as industry leader Gilead. ABBV negotiated a 40% discount to an insurance company which shook the future pricing power and research capacity of all biotechs.

    The sector will recover, but I believe there is another 10-20% downside until Gilead makes some kind of press announcement.
     
  9. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    Well DOW 18,000 is based off the funny numbers that the U.S. gov't puts out. So DOW 18,000 is saying "Happy Happy Joy Joy". Nothing to worry about here. The economy is fine. Jump right in (into spending on stuff). "Funny numbers" "Funny money" "Funny economy" but "Not so-funny" people who are currently unemployed and under-employed.
     
    Last edited: Dec 24, 2014
  10. platinumdude

    platinumdude Gold Chaser Platinum Bling

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    Just wait a few months for when we hit dow 20k.
     
  11. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    My pre-dick-tion is DJIA 22,000 on or before May, 2015.... Low IR structure has forced institutional investors (mutual funds, money markets, pension, insurance, etc.) that lack yield to seek volume... bond markets are topping and closing in on zero or negative rates, making these markets somewhat risky & more importantly illiquid..... Equities are not subject to zero-bound threshhold as bonds are... Equities can move theoretically to infinity....

    The institutional investors whose profits have been severely injured by the ZIRP & QE policies provide most of the collateral that is employed & used in the credit/repo markets where ultra-low yields are now the new norm, hence profits from lendng collateral into the credit markets have collapsed......

    The institutional investors now require increasing volume to subsidize the loss of yield.... and the increase in volume requires the investment lending to be loaned into a very liquid asset in the event of redemptions and claims... thus equities meet this criteria.... BUT equities carry with them much more volatility, a.k.a. risk... thus institutional investors have been forced in their quest for volume to lower lending standards....

    This volume is being directed directly at the equities markets, as this is the only logical outlet large enuff to absorb the volumes w/o disturbing otjer market sectors.... for instance this volume if directed at commodities would drive prices of basic commodities beyond the ability of average consumers to purchase them.... the bond market is fully levered, possibly zero bound and has a very limited upside potential, thus bonds have become risky business to lend into...

    Thus the equities market is targetted to support the institutional investors who support the credit/repo markets.... and the congress critters, U.S. Treasury & the Fed WILL NOT allow the credit/repo markets OR the institutional investors fail, as these organizations are the basis of "capitalism" & fractional reserve banking....

    IT's a BUBBLE, no doubt..... how in the hell will they deflate this one w/o collapsing the whole enchilatta???
     
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  12. Merlin

    Merlin Gold Member Gold Chaser Site Supporter ++

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    Is it the entire market that's up, or just U.S. equities? My foreign shares aren't approaching any records. Down 37% from their 2007 highs.

    The DOW is kind of a funny beast anyway -- keeps changing. If a company does poorly, they just swap it out for another. With that kind of rigging, it's difficult for the DOW to fail.
     
  13. Silver Art

    Silver Art Silver Art Bar collector Platinum Bling

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    Only the best 30 stocks get a spot in the DOW..........................Only the best.....................
     
  14. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    If your gonna look @ equity performance and/or non-performance, forget the DJIA & SnP 500, take a look at the big picture....

    Wilshire 5000 Index

    What Is It?

    Started in 1974, the Wilshire 5000 is often referred to as the Total Stock Market Index because it seeks to track the returns of practically all publicly traded, U.S.-headquartered stocks that trade on the major exchanges. this index is less well known than the others, it is in fact the largest index by market value in the world.

    http://www.fool.com/school/indices/wilshire5000.htm

    MSCI EAFE Index

    The MSCI EAFE Index is a stock market index that is designed to measure the equity market performance of developed markets outside of the U.S. & Canada. It is maintained by MSCI Barra, [1] a provider of investment decision support tools; the EAFE acronym stands for Europe, Australasia and Far East.

    http://www.msci.com
     
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  15. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    Sinclair suggested "GOTS" (get out of the system) several years back.


    I think I understand what that means now. It's nothing but a game of charades.

    The con of cons.
     

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