Making America Great again

[OriZ 3,165]

7 hours ago, ccneat said:

I have looked back at some of your posts and determined that had I followed your advice, I would have missed out on some awesome upside market activity.  Not sure how history is on your side. 

 

LOL, alright game on, you are either being very selective about what you read or choose to share that you read, or you misread, or misunderstood what you read, in either case it doesn't represent the bulk of what I've written. Are you talking about the ~15% gain in the S&P500(much less in the broad market)? Is that the "upside" you would have missed? Paper gains that will be completely wiped out and beyond in the coming years? Mind you that gain came on the heels of a 200% gain that I was entirely bullishthroughout(from 2009 through 2014). Mind you that gain was not ruled out by me even during the last couple of years when I repeatedly stated that as long as S&P500 is above 1,800 it is good to go. And guess where it found support in late 2015/early 2016? 1810. You are neglecting the fact that in fact, right at that bottom, I called the declines at that time a trap in my thread, stating I expected higher prices. Mind you, you're completely neglecting to mention the fact that every single call I made on the Dollar, Gold, Silver, Oil, Bonds and Interest Rates has been spot on. I urge you to find something I said that was wrong on these and paste it here. Stock markets due to the nature of the beast are a little more tricky than those, but only in the short term, in the long term they are still very predictable. You are completely neglecting the fact that I've made it abundantly clear that I am not trying to time the market at precisely the point in time or price that it will top, but that I was and still am fully expecting a decline of around 40% from the time I became more bearish, and as I said at the time, regardless of whether or not further gains were ahead(which I allowed for further upside). The levels were around 2,100 so I still fully expect a decline towards the 1200-1300 level, the higher it falls from, the more points it will just have to give back. You are completely ignoring the fact I also called the decline, the support, and the bottom right before the elections before markets took off. And you are completely ignoring the fact I repeatedly stated one should not confuse my longer term view on markets with my shorter term trading. I've been well positioned to make the best of the recent advance, just as I will be well positioned to make the best of the declines. and when everybody is reeling in pain I won't even feel bad for them not even for a second, because it is self inflicted by their unwilingness to learn.

 

So yeah maybe if you did the opposite of what I said you would have missed out,on many different gains, but "missing out" on a 10-20% market rally is not really where the real danger lies these days. The real danger lies in remaining all in for a 50% decline. Also while everybody expected a landslide in the elections in that thread I wrote it will be mixed. I did get it backwards thinking Trump might get the majority vote but Clinton the electoral votes, but I did know something was up. However again I don't want to brag or make this thread about me, but you were practically forcing me to. I'm not trying to argue here today about what I said or didn't say as that's not the point, the point is Obama didn't save the economy, really no president saves the economy and contrary to popular belief, even Reagan didn't. The market at the time was historically very undervalued, even moreso than the one Obama got. All it took was knowledge of valuations to know a boom was coming. All it takes now is knowledge of valuations to know a crash is coming. And I am quoting my own quote from my post to you earlier:

 

Quote

Unfortunately, having pushed the system to a speculative extreme, a collapse is baked in the cake. The problem with speculative bubbles is that until the consequences arrive, idiocy can masquerade as genius, and vice versa. Those two have a remarkable way of reversing over the completion of a market cycle.

 

The image that comes to mind today is that of speculators scrounging around on their hands and knees to pull a few pennies from the catch of a mousetrap whose hammer is tied to the lid of a box of angry bees and a switch that drops an anvil. Even if there are rewards in the short-run, the situation isn’t likely to end well.

 

Now just take a look at this next chart -

 

 

Very self explanatory. When Reagan got in, historically low valuations already implied an average annual return over the following 12 years in the high teens. And that's exactly what happened. Under Clinton valuations became historically way overvalued(dot com bubble) and the consequences of that(and not Bush) were two crises over the next decade and a market that was still lower than it was in 2000, 12 years later. As you can see valuations in early 09 implied a return of just over 12% a year, so really you didn't need Obama to know the market was going to rise and that the economy would recover. And today, you don't need a crystal ball to know that valuations, again, are obscene, and to expect a decade very similar to the 2000-2012 time period.

 

The same thing is true no matter how far back you go, so you wanna talk about people not learning from history well there ya go. I see the market being lower than it is today not only 3 years from now, but even 5 and 10 years. And ya wanna know what the fun part about it is? I don't even need to know who the president is going to be. And ya wanna know what's even more fun? That with a simple test you can know if I'm right or wrong. It's called wait and see. If within that time frame at least 2 of the 3 happen, then I was right(although I believe in all 3). If not, I was absolutely wrong and will admit to it. Until then, all we're doing is speculating. 

 

I laugh when I hear people saying Obama saved economy but I also laugh just as hard when people like Hannity call him out for not ever having a 3% GDP growth year...well GDP growth has been trending lower for decades.

 

 

 

Easy to see there that for better or worse, the recovery was pretty much where it was supposed to be. This would have happened with Obama or without him. Again, the market topped in 1929 because valuations were obscene, it topped in 2000 for the same reason(they were actually more obscene then), and in 2007(the least obscene of the 4 bubbles I'm talking about and still look what happened), and now they are tied with 2000(and some measures even worse) which means they are actually worse than they were before 1929. However, I'm not saying we are going to have another 80%+ decline or another depression(although I can't completely rule that out either at this point) but a 50% decline would be pretty predictable imo. Again, valuations are much more informative about future returns(and I'm not talking about PEs...I'm talking about actual reliable measures with a 93% correlation with actual subsequent 10-12 year annual returns across all recorded market history) than knowing who the president is or what they are doing or are going to do. The market was overvalued long before Trump came into office and the consequences are already baked in the cake. Here is another look, one that is the most extreme in history:

 

 

Now, what I'm saying might sound quite controversial to most people, but I assure you in the world that I come from it is not. The herd will always make fun of people as long as they are making money, even if they are doing so without knowing what they are actually doing, but then they get destroyed because they don't want to be open to accepting a different theory, and would rather believe everything they have been told and fed. We know how this works, we've seen it many times before.

 

If you wanna tell somebody that has spent a huge portion of their adult life living, eating, breathing, sleeping the market what they are saying is nonsense you go right ahead, it doesn't bother me, quite the contrary actually. I find it humorous. Because most people in my position don't bother trying to show people how things really work, they would rather they all stay in the dark, you know why? Because there's more money for us to make that way. But then you have someone like me who is nice enough to share what he knows, sometimes I don't even know why I do it to be honest with you, maybe so I can sleep better at night knowing at least I tried....that and I love slaughtering sacred cows. But most people refuse to learn. Honestly I wouldn't care if every single person in this forum told me the same thing, I would actually feel quite comfortable with that, because the consensus is always wrong when it comes to markets and that's why most people end up on the losing end. I am much more comfortable being in a minority opinion than a majority one. 

 

I'm just about done because I am trying to keep this reply shorter than the last one lol. As I said before the main reason I wrote a reply to you as long as I did is because I am always forward looking and plan ahead, and I saw it as an opportunity to get that post out of the way now, so I can point to it(instead of having to repeat myself) when the time comes later, because I already know what's coming and who or what is responsible for it. You're going to still disagree with it then I have no illusions, but I will not allow a revision of history without at least commenting on it. Just like my other post I will also be saving this one for future reference, because that is how confident I am in my expectations of what is to happen. It's kind of like watching an amateur high-wire act over the Grand Canyon. It won't end well, but you kind of have to admire the audacity. So print this out, frame it and hang in on the wall for the grandkids, because it's going to be epic.