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I am afraid DOW is gonna hit 30K


dyow
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A value investor should never even attempt to guess where the stock market is headed.  It is stupid and goes against the principle of value of investing. 

 

That said i am "calling" DOW 30K because:

 

- Housing is the economy.  Housing starts have not fully recovered from the severe crash of 2008.  There is pent up demand from household formation.  Housing has several years left to run= economy has several years to run.

 

- Demographics, in the next few years, there will be an influx of prime working age folk entering the US labor force, and this will boost the economy (Bill McBride from calculated risk talks about this, he is the only the economist worth listening to - he actually helped me make quite a bit of money, this guys calls on the economy have been dead on for as long as he has been blogging - he is not a emotional confused economist - he just looks at the right numbers, he is efficient and provides cold hard facts - if he says a recession is coming you should SELL all your stocks, your house...your wife etc.).

 

- Trump, if you listen to what some of his advisors have said and who he has put in power, it is almost like Trump's main goal for his term is to make stocks go much higher (I heard on an interview that Trump let Icahn interview and choose the new EPA boss, Icahn's only goal was to find someone to change regulations so his oil refiner stock (CVI) would go up, and it has). 

 

- The crash of 2000 and 2008 warped people's minds.  You basically have a generation of potential investors thinking these are normal events. They happen, but they happen when you don't expect it.  Our brains seek out patterns.  If we see something happen happen twice our brains are automatically put on alert and we expect to see it again.  We can't help ourselves, i mean at the end of the day we are merely a bunch of hairless baboons, so it is understandable.  A hated market is a good market to buy and i don't see this changing anytime soon, too many people are still scarred from the last 2 crashes. 

 

- If the bond bull market is indeed over, more money will flow into stocks.

 

- Banks have not been leading to consumers and this will change, and this will have a snowball effect.  More lending > more spending > more income and revenue > more borrowing and lending.  If you take a look at the big banks' loan loss provisions in the last several it has been at historical lows bc they are only lending to the most credit worthy, bc of regulation and low interest rates....but the funny thing is the banking business model is not meant to work like this...they are meant to take on risky loans and take losses.  I would expect banks to go back toward a more normalized environment going forward.

 

I don't want stocks to go higher, REAL VALUE INVESTORS make money when stocks go down.  I still get goosebumps from thinking about the energy crash we had in early 2016.  That was a beautiful thing.  That crash changed my life.  I went from ashy to classy.

 

I am going to throw in my obligatory insult (which i do in almost every post, maybe bc i am bad person, or maybe i am honest to a fault, or maybe i got personal problems i should address, who knows that is for y'all to decide)..most of you on this board will probably be happy if stocks go much higher.....bc most of you are

 

Anyhoo, if stocks drop big i will once again become a value investor, but in the meantime I will act like a VALUE PRETENDER and buy EVERY DIP.

 

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A value investor should never even attempt to guess where the stock market is headed.  It is stupid and goes against the principle of value of investing. 

 

That said i am "calling" DOW 30K because:

 

- Housing is the economy.  Housing starts have not fully recovered from the severe crash of 2008.  There is pent up demand from household formation.  Housing has several years left to run= economy has several years to run.

 

- Demographics, in the next few years, there will be an influx of prime working age folk entering the US labor force, and this will boost the economy (Bill McBride from calculated risk talks about this, he is the only the economist worth listening to - he actually helped me make quite a bit of money, this guys calls on the economy have been dead on for as long as he has been blogging - he is not a emotional confused economist - he just looks at the right numbers, he is efficient and provides cold hard facts - if he says a recession is coming you should SELL all your stocks, your house...your wife etc.).

 

- Trump, if you listen to what some of his advisors have said and who he has put in power, it is almost like Trump's main goal for his term is to make stocks go much higher (I heard on an interview that Trump let Icahn interview and choose the new EPA boss, Icahn's only goal was to find someone to change regulations so his oil refiner stock (CVI) would go up, and it has). 

 

- The crash of 2000 and 2008 warped people's minds.  You basically have a generation of potential investors thinking these are normal events. They happen, but they happen when you don't expect it.  Our brains seek out patterns.  If we see something happen happen twice our brains are automatically put on alert and we expect to see it again.  We can't help ourselves, i mean at the end of the day we are merely a bunch of hairless baboons, so it is understandable.  A hated market is a good market to buy and i don't see this changing anytime soon, too many people are still scarred from the last 2 crashes. 

 

- If the bond bull market is indeed over, more money will flow into stocks.

 

- Banks have not been leading to consumers and this will change, and this will have a snowball effect.  More lending > more spending > more income and revenue > more borrowing and lending.  If you take a look at the big banks' loan loss provisions in the last several it has been at historical lows bc they are only lending to the most credit worthy, bc of regulation and low interest rates....but the funny thing is the banking business model is not meant to work like this...they are meant to take on risky loans and take losses.  I would expect banks to go back toward a more normalized environment going forward.

 

I don't want stocks to go higher, REAL VALUE INVESTORS make money when stocks go down.  I still get goosebumps from thinking about the energy crash we had in early 2016.  That was a beautiful thing.  That crash changed my life.  I went from ashy to classy.

 

I am going to throw in my obligatory insult (which i do in almost every post, maybe bc i am bad person, or maybe i am honest to a fault, or maybe i got personal problems i should address, who knows that is for y'all to decide)..most of you on this board will probably be happy if stocks go much higher.....bc most of you are

 

Anyhoo, if stocks drop big i will once again become a value investor, but in the meantime I will act like a VALUE PRETENDER and buy EVERY DIP.

 

What does Bill McBride say about the demographic shift from the first of the baby boomers turning 70 this year? That means the first of the RMDs coming from IRAs in the first quarter of every year for the next few years (structural selling pressure) and that the wave of boomers retiring is growing suggesting there may downsizing and additional housing capacity that we don't yet see. I thought it wasn't until 2020ish the next gen was expected to be hitting their stride at peak earnings and millennials hitting mid 30s to offset that?

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You didn't give the most important part of your prediction.  When?  If you are going to make a prediction you can't leave out the most important part of it.  Short of a global catastrophe that permanently damages our civilization the DOW WILL hit 30K someday. Certainly before 2030. Are you saying 30K in 2017-2018?

 

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You didn't give the most important part of your prediction.  When?  If you are going to make a prediction you can't leave out the most important part of it.  Short of a global catastrophe that permanently damages our civilization the DOW WILL hit 30K someday. Certainly before 2030. Are you saying 30K in 2017-2018?

 

I think he's just saying the path of least resistance is up, Dow 30k is meant more as a jokey price target to illustrate the point.

 

Plus the best experts never give both time and price. Remember that poor lady by the name of Meredith Whitney?

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What does Bill McBride say about the demographic shift from the first of the baby boomers turning 70 this year? That means the first of the RMDs coming from IRAs in the first quarter of every year for the next few years (structural selling pressure) and that the wave of boomers retiring is growing suggesting there may downsizing and additional housing capacity that we don't yet see. I thought it wasn't until 2020ish the next gen was expected to be hitting their stride at peak earnings and millennials hitting mid 30s to offset that?

 

Uh oh! I got myself into a sticky situation with this post, i usually don't like discussing economics, i am pretty bad at it.  Here is how i look at it...every point above will have a counter argument, and a counter counter argument.  I try to step back and look at it from a big picture perspective.  And from a big picture perspective the economy should keep improving, and stocks should continue to do well.

 

If there is structural selling, and i am not so sure there will be anything more significant than we have seen in the past, it should not derail stocks from going higher........Selling by retail investors is historically a contrarian indicator.  Housing will continue to roll on bc of pop growth and pent up demand, you can bet your bottom dollar that.... 

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lol u baited into giving a year...which i shouldn't do bc that takes away from my point..like picasso said.....all i am saying is there are strong forces behind the economy and the market that could push it much higher/quicker than people expect.

 

I could be very wrong....if i am i will personally bump this thread. 

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You didn't give the most important part of your prediction.  When?  If you are going to make a prediction you can't leave out the most important part of it.  Short of a global catastrophe that permanently damages our civilization the DOW WILL hit 30K someday. Certainly before 2030. Are you saying 30K in 2017-2018?

 

Even more useful, please also tell what will be the LOWEST point the DOW will reach before starting its final ascent towards that inevitable 30K. I will be buying then.    :P

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So if bidders/buyers push the Dow up to 30,000 in 'short order' (that's a highly scientific unit of time), then where is that money going to come from? If they are abandoning another asset class to do so, that may be the place to look for opportunity. If it's coming out of cash, then what are the consequences of draining cheap liquidity from the system? (...and the 2nd and 3rd order consequences?)  Also, where are the sellers putting their money? Into other DOW stocks or somewhere else like cash?

 

 

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You didn't give the most important part of your prediction.  When?  If you are going to make a prediction you can't leave out the most important part of it.  Short of a global catastrophe that permanently damages our civilization the DOW WILL hit 30K someday. Certainly before 2030. Are you saying 30K in 2017-2018?

 

Even more useful, please also tell what will be the LOWEST point the DOW will reach before starting its final ascent towards that inevitable 30K. I will be buying then.    :P

 

lol.  This is my worst post ever.  I apologize, i drank last night, didn't sleep well.

 

Ill downgrade my call to Dow 20K.  Hold cash don't trust the dips.

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I'm surprised that past generations couldn't have picked presidents that would make the stock market go up and up and up with no recessions. It's so easy. Pick a president that is a business man. Boom - problem solved.

 

Paul its obvious. Americans have evolved alot...... 

 

So, the consensus might be that markets will go up, or they could be cut in half, or something else.

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^^^ I was hoping everyone would jump on this thread and be like yeah dyow great points there i agree with you.

 

I didn't get that so, again, i am downgrading my call to DOW 20K instead by 2017-2018.  I change my calls based on the mood of my fellow investors (like wall street analysts who downgrade a stock after a 50% drop or upgrade after a 50% run up).

 

 

But i do wonder if all this is actually a contrarian indicator (COBF high post count means the opposite is gonna happen).  This thread would only be 1 page if it wasn't for my half assed posts, which is half the thread.  I do wonder........ 

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So if bidders/buyers push the Dow up to 30,000 in 'short order' (that's a highly scientific unit of time), then where is that money going to come from? If they are abandoning another asset class to do so, that may be the place to look for opportunity. If it's coming out of cash, then what are the consequences of draining cheap liquidity from the system? (...and the 2nd and 3rd order consequences?)  Also, where are the sellers putting their money? Into other DOW stocks or somewhere else like cash?

 

The stock market can  up without any change in other assets.

 

Let’s call the cash in all other assets cash on the sidelines.

 

If I take some of my cash from the sidelines and buy a stock from you, I now have the stock and you have cash on the sidelines. The cash on the sidelines has not changed even if the price of the stock has increased.

 

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So if bidders/buyers push the Dow up to 30,000 in 'short order' (that's a highly scientific unit of time), then where is that money going to come from? If they are abandoning another asset class to do so, that may be the place to look for opportunity. If it's coming out of cash, then what are the consequences of draining cheap liquidity from the system? (...and the 2nd and 3rd order consequences?)  Also, where are the sellers putting their money? Into other DOW stocks or somewhere else like cash?

 

The stock market can  up without any change in other assets.

 

Let’s call the cash in all other assets cash on the sidelines.

 

If I take some of my cash from the sidelines and buy a stock from you, I now have the stock and you have cash on the sidelines. The cash on the sidelines has not changed even if the price of the stock has increased.

Absolutely spot on! A lot of people have trouble comprehending circular money flows. I keep hearing things like people are moving into stocks. No. Unless they're buying public offerings then if someone is moving into stocks then someone is moving out of stocks.

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http://www.cnbc.com/2016/12/21/trump-to-name-icahn-as-special-adviser-on-regulatory-overhaul-report.html

 

Trump should just make Icahn "secretary of making stocks go higher". 

 

I am optimistic about my DOW 20K call.....crossing my fingers.

 

Icahn's post will be the newly created SecTweet (I tawt I taw a Democrat) will be his firtht Tweet.

 

Heyyyyyy wait just a minute; you said Dow 30,000!?!

 

I don't forecast very well & my odds don't improve with frequency (maybe I should try using an extremely high pitched voice...) (nahhhh doesn't work on CNBC, won't work for me either...)

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So if bidders/buyers push the Dow up to 30,000 in 'short order' (that's a highly scientific unit of time), then where is that money going to come from? If they are abandoning another asset class to do so, that may be the place to look for opportunity. If it's coming out of cash, then what are the consequences of draining cheap liquidity from the system? (...and the 2nd and 3rd order consequences?)  Also, where are the sellers putting their money? Into other DOW stocks or somewhere else like cash?

 

The stock market can  up without any change in other assets.

 

Let’s call the cash in all other assets cash on the sidelines.

 

If I take some of my cash from the sidelines and buy a stock from you, I now have the stock and you have cash on the sidelines. The cash on the sidelines has not changed even if the price of the stock has increased.

Absolutely spot on! A lot of people have trouble comprehending circular money flows. I keep hearing things like people are moving into stocks. No. Unless they're buying public offerings then if someone is moving into stocks then someone is moving out of stocks.

 

The guvmint should come up with a form for sellers to disclose what they spend the money on (reinvested or bought some stuff!!!)

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I am optimistic about my DOW 20K call.....crossing my fingers.

Heyyyyyy wait just a minute; you said Dow 30,000!?!

 

He's trying to build-in plausible deniability.  If it reaches 30K, he was right, but if it doesn't then the "3" was clearly a typo.

 

Nah.  I really don't care much if i am right or wrong on this call.       

 

i have no ego, here is proof: i gambled on zinc and semi and lost some money in 2015.  It was speculation and i was very wrong.  Sometimes you are wrong.  Life goes on.   

 

 

 

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I am optimistic about my DOW 20K call.....crossing my fingers.

Heyyyyyy wait just a minute; you said Dow 30,000!?!

 

He's trying to build-in plausible deniability.  If it reaches 30K, he was right, but if it doesn't then the "3" was clearly a typo.

 

Nah.  I really don't care much if i am right or wrong on this call.       

 

i have no ego, here is proof: i gambled on zinc and semi and lost some money in 2015.  It was speculation and i was very wrong.  Sometimes you are wrong.  Life goes on. 

 

My ego keeps my id in check...

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