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Nigel
Veteran Contributor

Re: Market Scenarios

As long as Oil prices stay stable ( i say between 40-60) the market keeps going.  What reason would anyone sell any security?  There are THOUSANDS of brokers across the globe whose job it is to constantly get people to BUY.  I don't know many..if any brokers who go to work saying that they are "going short" today.  If what you own starts heading south there is enough information out there via proprietary sources (and to a lesser extent free sources but that information is usually lagged and regurgitated)  where investors and their agents will find the next big thing.  Pension funds like funds that are fully invested in the market.  Sitting in cash only shows your lack of market acumen. Smart money just gets moved from one security (or market) to the next.   As long as markets stay stable, people are buying.  Market drop 25%???  Catastrophe needs to strike....my supporting doc...S&P v.s. Oil past 10 years.   

 

Oil-S&P-10yr.png

Hobbyfarmer
Honored Advisor

Re: Market Scenarios

great chart.... even appears to be in 3 D

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Nigel
Veteran Contributor

Re: Market Scenarios

Just to add something, I always feel insider transactions and analyst expectations are good indicator not necessarily of exact pricing but of general market direction.  A few charts....Apple...14 Strong Buy...25 Buy....9 Hold...1 SELL....Apple-Research.png

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Nigel
Veteran Contributor

Re: Market Scenarios

You would expect selling amongst insiders would accelerate...the opposite is happening...slowing down....Apple-InsideT.png

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Nigel
Veteran Contributor

Re: Market Scenarios

And lastly...The most expensive security out there...BRK.A....hardly any turnover from the latest filing....summary of the largest holders...no signs pointing to a change in market direction...Money Managers TODAY are required to be agile in any market environment.  Losses followed by excuses are no longer acceptable (if you have a broker or CTA managing assets, you should hold him to the same scrutiny).  If they are unable to adapt...they get fired, plain and simple.  No one is taking it on the chin like 2008...unless your just the buy and hold and willing to ride the waves.  

 

BRK.A-Ownership.png

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Palouser
Senior Advisor

Market disconnect

The chart also suggests a disconnect from my POV.  The disconnect I'm thinking of is the Japanese economy which I think is a forerunner of our own. They too went through a 'paper' crash based on real estate and everything the BOJ and government has tried for years hasn't enticed the middle class of Japan to return to a healthy consumer economy. The middle class was burned by the corporate financial sector and they don't respond to ANY intervention. They continue to save but not spend more. They no longer trust the corporate/government conglomerates to act in their best interest.

 

I maintain we are headed the same direction if we don't restructure policies and regain the confidence of the middle class. If the financial sector is the only player in the economy it is going nowhere. Every month that goes by we are getting further from the possibility of improvement.

 

Here's the test. The huge decline in energy prices has NOT resulted in a huge improvement in consumer spending - or even a good improvement. If there isn't a big boom soon there isn't going to be one at all. My current belief is that a consumer boom isn't coming. The middle class confidence is weakening. So, what happens as oil prices increase again?

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Hobbyfarmer
Honored Advisor

Re: Market Scenarios

Brk-a is a class all its own

Owned by a different kind of or mindset type of investor

Their annual stockholders meeting is a world class event. People come literally from all over the world to Omaha Ne to the event. Even Bill Gates is there
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Nigel
Veteran Contributor

Re: Market disconnect

@Palouser...I like a good debate...I also like facts or opinions based on some economic reasoning...so with that said...

 

what policies do we need to restructure in America?  

Where is your prove that there isn't any improvement (or minimal) in the economy?  

Nikkei 225 up about 8% for the year...stronger dollar means we can buy more foreign goods...BBY (Best Buy) up 18% since 1/15!  Don't they sell a whole lot of Japanese manufactured goods?  

 

What are you using as a benchmark that middle class confidence is weakening?   

 

 

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BA Deere
Honored Advisor

Re: Market disconnect

I`ll just throw a couple things into the mix.  When gas was $4 and the economy was being "talked up" ahem for some reason, the smartest people in the room told us "aw don`t worry about gas prices, it`s just a small part of their budget these days"...okay fine, shouldn`t the reverse also be true? That if gas prices get cut in half to $2, that also wouldn`t be that great of effect.

 

With Best Buy, they sell Japanese stuff...but so does Amazon and so did "Radio Shack".  Best Buy is under new management and like the story of the 2 hikers facing a grizzly bear, with the fastest hiker only having to outrun the other hiker and not the grizzly bear.  Since they are the last electronic `brick and mortar` standing, the new I-Phone and uber-high def tv`s came out they had an advantage...for now, but what will be their next trick? 

 

Japan didn`t have the "reserve currency" that this country has, and we`re the "cleanest dirty shirt in the hamper" the national debt has went up $8 Trillion in 6 years and the fed has a $4.3 Trillion on their balance sheet.  No one cares no one wants to rock the boat and ignorance probably is bliss, we may last longer if no one thinks about it  🙂

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OKdon
Senior Contributor

Re: Market Scenarios

YOU NEVER CONSIDER RAISING REVENUES AS AN OPTION?  How long are you going to allow the affluent to have a discount rate as opposed to us. Do you really think the speculators are doing a great service to those that work hard and produce things. If Warren sell a few thousand shares to Bill, has that created any jobs. If Rush buy a few thousand shares from Mitt, how many jobs has he created. The point being is that the investor class does not create jobs. Consumers create jobs by creating demand for the business's products.

 

 

When will you ever determine that trickle down does not work. Not for the common man. It was bull scat from the beginning and it has done nothing to convince us otherwise.  Business men do not spend money simply because they have it. Low taxes and low labor cost provides them with bountiful profits. They only hire people when they need someone to get the work done. And enriching them does not give them the urge to hire someone.

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