Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:
Quote: (12-31-2013 03:56 PM)JayJuanGee Wrote:
I still cannot understand how, even you, Jay_Dub, are suggesting that the stock market in itself is currently in some kind of bubble. When we look at the stock market as a whole since 2007 (let's just say the Dow Jones Industrial Average), the totality of that index is only up 18% from October 2007 (from 14,000 to 16,550). I understand that all of the gain from the October 2007 price only came during 2013; however, if you annualized the gain for those 6 years, then there is about a 3% per year return - hardly a bubble in my thinking... and ultimately is much below the average return rate over the past 100 years (like 10%) but WTF do I know? Are you asserting a stock market bubble based on what? that it went up 18% in 2013?
First off I did not say it was a bubble, My exact words were "I'm not saying its a bubble now but we might be in the beginning stages of a major stock market bubble." You need to stop putting words in peoples mouths as you are really bad about that. I've had to call you out on it a couple times and I've noticed a couple other people have to bring it up as well.
Jay_Dub:
You seem to have this tendency to attempt create issues out of NON-issues, and I do NOT know if you are just trying to deviate from the topic of this thread or what? NO ONE is purposefully attempting to blemish your name, your character or even to put words in your mouth (at least I am NOT) and you seem to be draggin politics into this thread. If there is some kind of nuance that is missing in my post that are framing the issue(s) from my perspective, then please and by all means feel free to correct it or to reframe it with your own words without trying to stop discussion with your personal attacks towards me.
Further, I do NOT claim to speak for you, and by NO means am I ACTING in bad faith in my description / framing of issues that I deem relevant to make my points. In this regard, you seem to be perfectly capable of speaking for yourself, and I have NO problem with that and I feel no need to attempt to speak for you. In other words, I had NO intention to misquote you in the event that misquoting you had ACTUALLY taken place as you seem to suggest. And, even if I had misquoted you in some material way, I did NOT carry out such misquoting on purpose or as a means to put words in your mouth. You are free and seem capable to accomplish that yourself.
Lastly, your reference to supposed other instance in which either you or some other RVF member has corrected me seems only to serve as a form of unnecessary personal attack, because readers of this thread may NOT know what the heck you are referring to. I barely recognize your reference, except for the fact that publicly you had made a similar accusation to me in order to seemingly personally attack and distract in some other thread(s) and I had to write a response(s) similar to this one. Personally, I have better things to do than to attempt to keep some kind of tally about this kind of history, so it seems quite the distraction for you to drag in some kind of history that is NOT even relevant to the topic of THIS THREAD.
Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:
Now to the point. We need to ask why 2007 is our reference point? You make it sound as if we are sure it was fair value then. Why cherry pick that date and what makes us think 14k DJIA in 2007 is a good reference point? That was the peak right before one of the biggest recessions/crashes in 100 years. Or we could spin it the other way cherry pick the S&P from spring 2009? It has tripled since that period.
Think of how crazy it is to have 2 dates roughly 15 months apart. If we use 1 then the S&P would be up ~15-20% in 6 years... choose the other and it is up nearly 200% in under 5 years. How can we pick one of those dates and say it is or isn't a bubble based on that? Seems ridiculous to me. You see when you cherry pick dates you can spin economic data pretty much anyway that you want, never forget that.
Again, why does it seem as if YOU are trying to make my point(s) into an argument about some policy direction. I am NOT arguing about anything. I am NOT proposing a policy or complaining. I am attempting to be descriptive rather than prescriptive in my presentation. Additionally, If you may recall, I was attempting to get some kind of answers to my question about why other RVF members, specifically Flavius Aetius, considered the current state of affairs to be an economic expansion .
As you seem to recognize, I picked October 2007 as a recent high point of the stock market to show how far the stock market has come up from that point. October 2007 is NOT random or cherry picked because I could care less about the politics, I was merely attempting to get a better understanding of the concept of economic expansion.
Surely, you make a good point to suggest that in October 2007, the stock market may have been artificially inflated already, and that is NOT an explanation for which I had accounted in my earlier framing of the question. So that’s a good point.
On the other hand, your point about the possibility of choosing spring of 2009 as a reference point for the economy seems ridiculously artificial to me and out of line and out of context because it was more or less the down point of that particular crash period – which in my thinking seems to be an illogical reference point that you are using only for the purpose of arguing and distracting from any kind of meaningful discussion. You are trying to make my point seem illogical by bringing up some other even more ridiculous logic, which seems to be merely for the purpose of arguing.
Again, I do concede that you make a good point about potentially that October 2007 was artificially inflated.
Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:
Its hard to go off any of these prices anyway because the government became so involved, nothing was able to really correct itself. We don't know that the DJIA wouldn't have fallen to 3-5k without them, or that it would even be above 10k today without all the stimulus. We really do not know the answers to any of this. All we really know is that their policies and printing of money has had a major affect on the stock market in recent years and less affect on main street.
O.K. For the purposes of this thread, it seems that we sufficiently agree here that there is some artificial pumping of the market that may be going on and that groups of people are affected in different ways by that pumping.
Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:
Quote: (12-31-2013 03:56 PM)JayJuanGee Wrote:
Based on my observations (which may or may NOT be accurate), I am just questioning the concept that we have been through some kind of meaningful expansion that signifies that another recession is coming.
Who really says we ever recovered from the last recession? Because we printed up trillions of dollars and tossed it at the economy? Which gave us enough GDP "growth" to be out of recession by definition I guess. But are we really out? IMO No! And that is why on main street life is not any better, as you pointed out earlier in this thread. The average guy is still struggling.
You seem to be arguing about something upon which we agree, that in essence, we may NOT be completely out of a recession, and I share that viewpoint. And, even if we do NOT agree exactly, I do NOT see a purpose in making these points into an argument because here, for the purposes of this thread it seems that we are merely trying to predict which way aspects of the stock market is going to go.
Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:
Also, I'm not sure how we can assume we came out of the recession with more problems than we went in with. This is all nonsense. You don't come out of recession with 50% more debt than you went in with. The next recession(or continuation of this recession IMO) will be for the same reasons we went into recession last time. We don't need an economic expansion because we already had it and it has not been corrected. The only reason we are even holding on is because of the money printing/interest rate suppression. Tell me how we are out of it when the entire economy is on life support(QE). Let those interest rates hit 5%+ and we will all see just how rosy things are.
Again, you seem to be arguing about something upon which we sufficiently agree, for the most part, that we may NOT completely be out of this particular recession – though of course, others may have a different opinions about whether we are out of a recession or in a recession.
Also, you seem to be getting into the territory of propagating future policy which seems to be much beyond this thread. Aren’t we here, in this thread, just trying to figure out where to invest in 2014 rather than propagating govt or financial policy in one direction or another? So, in that regard, I am still thinking that generally the stock market is going to be bullish in the next couple of years, in spite of these potential major instabilities that seem to underly the whole house of cards.