Bear Market Indicator at 50-Year High

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  • Norman Bernstein
    Liberaltarian
    • Nov 2004
    • 25217

    Bear Market Indicator at 50-Year High

    Been worrying about a coming recession for a while now.

    Will it be Trump's fault?

    The Goldman Sachs Bull/Bear Index, which was designed to provide a “reasonable signal for future bear-market risk,” has risen to the highest in almost 50 years, Bloomberg reports.
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."






  • George Jung
    Senior Member
    • Jan 2004
    • 31057

    #2
    Re: Bear Market Indicator at 50-Year High

    More importantly, Norman - are you changing your portfolio/getting out of the market?

    Specifics, man! :P
    There's a lot of things they didn't tell me when I signed on with this outfit....

    Comment

    • Norman Bernstein
      Liberaltarian
      • Nov 2004
      • 25217

      #3
      Re: Bear Market Indicator at 50-Year High

      I've been heavily weighted in cash and fixed income securities for about the past 6 months, as a hedge against a downturn... maybe 35% of my portfolio... but I've kept my big large cap, dividend-paying stocks.

      This 10 year bull market cannot go on forever.
      "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."






      Comment

      • George Jung
        Senior Member
        • Jan 2004
        • 31057

        #4
        Re: Bear Market Indicator at 50-Year High

        what're you doing for fixed income? short term bonds or bond fund?
        There's a lot of things they didn't tell me when I signed on with this outfit....

        Comment

        • Norman Bernstein
          Liberaltarian
          • Nov 2004
          • 25217

          #5
          Re: Bear Market Indicator at 50-Year High

          Originally posted by George Jung
          what're you doing for fixed income? short term bonds or bond fund?
          All mutual funds... I don't want the hassle of dealing with individual bonds, and via Schwab, most mutual funds are commission free. Some are high grade corporate bonds, others are municipal bonds... short and medium term. I own about 5 or 6 different ones, and my daughters (whose portfolios I manage) own some different ones.

          These are NOT guaranteed not to drop in the event of recession... but are certainly unlikely to, and they provide a better yield than the national high yield savings accounts, which are currently running about 1.85%.
          "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."






          Comment

          • Norman Bernstein
            Liberaltarian
            • Nov 2004
            • 25217

            #6
            Re: Bear Market Indicator at 50-Year High

            Consider:

            The fastest economic expansion in four years, two consecutive quarters of 24 percent earnings growth and record buybacks are fueling confidence in the bull market, which by some measures has surpassed the dot-com era’s as the longest in history. With too many bulls chasing the rally, Citigroup’s strategists led by Tobias Levkovich are urging investors to cut back risk as Friday’s labor-market report could spark a selloff, just it did in February.

            “The potential for faster wage gains could generate another 5 percent pullback this time, as might Fed policy, geopolitics, trade sanctions, and international economic weakness,” the strategists wrote in a note. “It is always challenging to pinpoint the catalyst, but the vulnerability now exists.”

            Citi’s panic/euphoria model, tracking everything from margin debt to options trading and newsletter bullishness, just showed sentiment climbed to extreme levels for the first time since January. Such readings have preceded equity losses over the following 12 months 70 percent of the time since 1987, more than three times the random probability.
            "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."






            Comment

            • Too Little Time
              Senior Member
              • Feb 2014
              • 12734

              #7
              Re: Bear Market Indicator at 50-Year High

              from the link:

              A Goldman Sachs Group Inc. indicator designed to provide a “reasonable signal for future bear-market risk” has risen to the highest in almost 50 years.

              Goldman strategists including Peter Oppenheimer wrote in a note last week that a long period of relatively low returns from stocks is a more likely alternative.
              It is always confusing to predict both gloom and the opposite.

              Being up 12% in 8 months makes this a pretty good year so far. Given that my investment results over the last 30 years have far exceeded my expectations, I have no reason to worry. Those with no expectations to compare their results to tend to be impulsive.
              Life is complex.

              Comment

              • Gerarddm
                #RESIST
                • Feb 2010
                • 32452

                #8
                Re: Bear Market Indicator at 50-Year High

                Yes, I have been getting nervous.

                BTW, speaking of dividend paying stocks: AT&T is paying a dividend over 6%!
                Gerard>
                Albuquerque, NM

                Next election, vote against EVERY Republican, for EVERY office, at EVERY level. Be patriotic, save the country.

                Comment

                • BillP
                  Senior Member
                  • Mar 2001
                  • 338

                  #9
                  Re: Bear Market Indicator at 50-Year High

                  Originally posted by Too Little Time
                  from the link:


                  It is always confusing to predict both gloom and the opposite.

                  Being up 12% in 8 months makes this a pretty good year so far. Given that my investment results over the last 30 years have far exceeded my expectations, I have no reason to worry. Those with no expectations to compare their results to tend to be impulsive.
                  Same here.

                  Comment

                  • Too Little Time
                    Senior Member
                    • Feb 2014
                    • 12734

                    #10
                    Re: Bear Market Indicator at 50-Year High

                    Originally posted by George Jung
                    More importantly, Norman - are you changing your portfolio/getting out of the market?
                    You might remember a year or so ago the discussion Norman started about the 4% rule and what he could actually take out of his investments. He appears to be doing what most people do when they "follow" the 4% rule: ignore it.

                    Despite all the bad press about market timing. It seems the prefered method of investing. Norman seems to follow the crowd in that respect.

                    It is good to see he is not alone in his investment strategies (tactics).
                    Last edited by Too Little Time; 09-10-2018, 07:50 PM.
                    Life is complex.

                    Comment

                    • Norman Bernstein
                      Liberaltarian
                      • Nov 2004
                      • 25217

                      #11
                      Re: Bear Market Indicator at 50-Year High

                      Originally posted by Gerarddm
                      Yes, I have been getting nervous.

                      BTW, speaking of dividend paying stocks: AT&T is paying a dividend over 6%!
                      It's yet another stock I've owned for decades... but the dividend rate is at least partially due to the sagging stock price, so it may not be such great news for new investors... but long term stockholders have been rewarded.

                      If you're chasing dividends, you might want to look at real estate investment trusts, which trade on the big exchanges just like stocks, and throw off a LOT of cash, resulting in big dividends. Another place with big dividends would be energy ETF's.... but forewarned is forearmed: these kinds of investments can be volatile.
                      "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."






                      Comment

                      • George Jung
                        Senior Member
                        • Jan 2004
                        • 31057

                        #12
                        Re: Bear Market Indicator at 50-Year High

                        Ya mean... explosive? Combustible?
                        There's a lot of things they didn't tell me when I signed on with this outfit....

                        Comment

                        • David G
                          Senior Member
                          • Dec 2003
                          • 89686

                          #13
                          Re: Bear Market Indicator at 50-Year High

                          Investing in real estate for appreciation is usually a good idea.

                          Investing in real estate for short term gain is a high risk/high reward deal, and requires more research, savvy, and/or luck.
                          David G
                          Harbor Woodworks
                          https://www.facebook.com/HarborWoodworks/

                          "It was a Sunday morning and Goddard gave thanks that there were still places where one could worship in temples not made by human hands." -- L. F. Herreshoff (The Compleat Cruiser)

                          Comment

                          • rbgarr
                            43.50.918 N, 69.38.583 W
                            • Apr 1999
                            • 25479

                            #14
                            Re: Bear Market Indicator at 50-Year High

                            With a two year horizon for the debt ceiling in consideration I've bet now's the time to boost an investment in equities. We'll see how it works out!
                            For the most part experience is making the same mistakes over and over again, only with greater confidence.

                            Comment

                            • David G
                              Senior Member
                              • Dec 2003
                              • 89686

                              #15
                              Re: Bear Market Indicator at 50-Year High

                              Originally posted by rbgarr
                              With a two year horizon for the debt ceiling in consideration I've bet now's the time to boost an investment in equities. We'll see how it works out!
                              So 5 years down the road, and Norman's feared recession has yet to materialize.

                              It could come in a rush if the debt ceiling issue isn't resolved. But I find it hard to believe it won't be. I think there are enough R's who recognize the consequences to themselves and their parties (to h with the voters) if there's a crash.

                              And I think Biden has successfully created a sufficiently credible 'natural consequences' boogeyman (via the 14th Amendment) to convince R's that resistance will be futile anyway. And who recognize that, upon further examination, the position they've staked out is indefensible anyway.

                              But... I've been wrong before.
                              David G
                              Harbor Woodworks
                              https://www.facebook.com/HarborWoodworks/

                              "It was a Sunday morning and Goddard gave thanks that there were still places where one could worship in temples not made by human hands." -- L. F. Herreshoff (The Compleat Cruiser)

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