Brexit is a reality

[Legacy User]

Trump's not a fiscal conservative and I think the Fed goes to NIRP within a year.

[Kodiak]

Trump's not a fiscal conservative and I think the Fed goes to NIRP within a year.

The Fed wants to put bullets back in the gun...and has Japan has shown us over 2+ decades, ZIRP is not a good long-run monetary policy.

[Legacy User]

I can't help but think the market tanks next year, the first year of an admin after an 8 year President tends to be a washout and we are eight years into a phony recovery, a recession is due just because of the business cycle.

Presidents get too much blame and credit for the stock market, when in reality it has to do with things beyond their control.

[Kodiak]

I can't help but think the market tanks next year, the first year of an admin after an 8 year President tends to be a washout and we are eight years into a phony recovery, a recession is due just because of the business cycle.

Presidents get too much blame and credit for the stock market, when in reality it has to do with things beyond their control.

I agree with all this.

I don't understand this market. It's been juiced and propped up by historically easy money. People think Trump's economics are going to be inflationary, along with expected rate increases....and the markets rally?

Granted, the markets historically do well in periods of higher inflation. But I'd expect that to be negated with easy money coming to end. And why are small caps rallying so hard?

[Legacy User]

There's things I don't like about Trump's economic plan and yuge infrastructure spending and tariffs are creepily Hooverian. I hope he rethinks some of that. He constantly complained about 20 b in debt and he's going to increase that?? All of that is inflationary especially with tax cuts (which I do like). The decline in PMs makes no sense. So what if they hike rates .25 pts in Dec.?

I think the Trump economic plan working to perfection is already priced into the market. At current prices earnings would have to double in three years to justify current pricing 20x earnings with rising yields. The NASDAQ is looney trading at 90x earnings. With bond rates going up, this market is due for a nice correction and I think a historic shorting opp is coming in the next couple weeks. Yellen hates Trump and won't be inclined to constantly save his ass like she did with Obama. This reminds me of early 2000. 90+ percent of this isnt on Trump but on the Fed and animal spirits.

QQQ puts something soon I think. Maybe Russell puts.

[Kodiak]

I think the only way you can justify this valuation is the markets traded sideways since mid-July....the sell-off before the election wasn't warranted or based off fear of a contested result.

From that perspective, this "rally" based recovered that sell-off plus 3-4%, which works out to about 1% per month since mid-July. So the volatility might be making this run look more vapor than it is. If you look at YTD returns of most US indices, it's a typically solid year and nothing outrageous.

I do agree that Yellen may start sucking the fuel out of the market, though. And yet it rallies. But this is the same market that rallies every time oil prices INCREASE.

The rising valuations are impossible to sustain, especially in a higher rate environment.

[Kodiak]

By the way....you guys are better than 3/4 of the people paid to write about this for a living.

[Legacy User]

The whipsaw the day after the election to me means they have no idea what they are doing and algo-bot is running the show. I see nothing deflationary about Trumponomics. Also I'm not so blindly partisan to know Trump can't deliver what the market is now expecting.

Here's an article about fake earnings that says the actual PE is in the mid 20s, way into nosebleed 4 sigma territory:

https://finance.yahoo.com/news/the-numb ... 33636.html

Basically every stat is now a fudge, inflation, unemployment, earnings...if you do apples to apples comparisons, and think about it, you realize algo-bot is nuts.

I'm debating which is the right move now...April Russell puts or silver coins.

[Kodiak]

Basically every stat is now a fudge, inflation, unemployment, earnings...if you do apples to apples comparisons, and think about it, you realize algo-bot is nuts.

Yeah, the "quality" of that data is not there, thanks to extraordinary fiscal stimulus and anemic recovery (analysts tend to be more focused on labor participation, rather than the unemployment rate, today).

With supposed record levels of cash sitting on the sidelines, I think you might be right about the algo trading driving these markets.

[Legacy User]

It's increasingly apparent that algo-bot thinks everything that happens in both directions is good news or more specifically algo-bot has been programmed to think this way, I guess good news includes increasing oil prices, but somebody forgot to tell the 1970s this.

This cannot end well.

[Legacy User]

Paul Krugman is the Princeton professor of economics and head of the department of being wrong about everything:

http://dailycaller.com/2016/11/09/paul- ... cord-high/

[Legacy User]

Kodiak I dove into some St. Patrick's day expiring Russell 131 puts.

The same crowd that predicted Brexit and Trump crashes are now predicting market euphoria.

I think a great Black Friday has been priced in and will disappoint.

[Legacy User]

I'm gonna dive into some poon-tang... and also some Tyson Foods stock.

[R_S]

Paul Krugman is the Princeton professor of economics and head of the department of being wrong about everything:

http://dailycaller.com/2016/11/09/paul- ... cord-high/

This reminds of the CNN and HuffPost headlines today about the touted and highly esteemed computer security analyst who says HRC should protest the election because he found that Trump won a lot of areas with computer polling that he "shouldn't have". Though it is noted that there was no evidence whatsover that there was a hack.

Anyway. Credentials don't mean someone can't be a partisan hack.

[Kodiak]

Dow passes 20,000 for first time...S&P about to break 2300.....going to be a BIGLY day in the markets.

If we actually do break resistance at those levels, could see a nice Feb/March. Then it will be time to get very nervous about an overvalued market (there is unprecedented optimism priced in already, on what no one knows and we won't get into that).

[Legacy User]

As Kevin O'Leary pointed out the regional banks are up 40% since the election. There is nothing about Trump that justifies that.

Somebody robo text Paul Krugman every 30 seconds to remind him what an ass he is.

[Legacy User]

Like any stripper worth her salt, it's all about wide spreads, Dan.

[Kodiak]

Like any stripper worth her salt, it's all about wide spreads, Dan.

Yeah, inflation and an improved economy pushing interest rates higher. That's a very, very general thesis but it makes sense.

Still, a shaky thesis (among many) built on top of a market already juiced by historically easy money.

[Legacy User]

Let's say I had the ability to tell you exactly what's going to happen with all of the economic indicators, geopolitical events, every surprise piece of market-moving news and even corporate earnings growth for 2017. Then ask yourself: would it even matter?

Your could have given this information to a panel comprised of the world's greatest investors before 2016 began and there's no way they would have predicted stock markets would have been up double digits. So why waste your time trying to predict these unpredictable events?

[Kodiak]

Your could have given this information to a panel comprised of the world's greatest investors before 2016 began and there's no way they would have predicted stock markets would have been up double digits. So why waste your time trying to predict these unpredictable events?

Because markets DO follow long-run valuation trends. Bubbles and momentum are real, but while predicting corrections may be a fools game that doesn't mean you ignore asset allocation and risk. Implicit in searching out favorable buying opportunities acknowledges that some areas offer better risk-adjusted returns than others.

No one is saying you should short this or that overvalued market, but a savvy investor might look at trimming exposures.

[Legacy User]

Your could have given this information to a panel comprised of the world's greatest investors before 2016 began and there's no way they would have predicted stock markets would have been up double digits. So why waste your time trying to predict these unpredictable events?

Because markets DO follow long-run valuation trends. Bubbles and momentum are real, but while predicting corrections may be a fools game that doesn't mean you ignore asset allocation and risk. Implicit in searching out favorable buying opportunities acknowledges that some areas offer better risk-adjusted returns than others.

No one is saying you should short this or that overvalued market, but a savvy investor might look at trimming exposures.

Agreed

[Legacy User]

We're eight years into a business cycle. A setback is overdue.

[Legacy User]

We're eight years into a business cycle. A setback is overdue.

Hey keep betting against it eventually you'll be right. Just don't do the math on what would have been.