The road to Hell is paved with good intentions! The road to Financial Ruin is paved with discount brokers trade tickets!

Thank you for this helpful spreadsheet. Will the information continue to update as time goes on or is this a subscription of some sort?

Everything in investing is "it depends." It depends a lot on time frame and expected disbursements versus reserves. Chances are that even a 40% decline in the S&P 500 - if it happens - would be reversed within 10 years. But if you don't have 10 years or need 50% or more of your nest egg to survive the next 5 years, then I'd be no more than 20% in equities. I'm 68 and believe I have a reasonable expectation of living a decent life 15 - 20 years from now. I have what I consider a neutral position for someone my age - about 50% in equities, spread among different indexed ETFs with diverse schemes and objectives and 50% in mostly low-risk short-duration income generating assets. I'm a longtime quantitative analyst. Historically, high multiples do not cause crashes but just measure potential susceptibility to a major correction. Lurking in the geopolitical landscape are many potential "global disasters" - my experience teaches me that these are best ignored when it comes to investing. The market is generally a function of economic productivity in 10-year increments but not necessarily year-by-year.

Do I see the seed of potential scenarios (Tariff wars, WWIII, massive unemployment of government workers in the name of deficit reduction) ? Sure, but betting against the US market is seldom profitable for 10-year periods and predicting the short-term is tough. Remember, for personal wealth, the effects of stock market volatility on your nest egg should never be measured by peak-to-trough which makes for jotting news headlines. And under no circumstances should you pull out when the market is down substantially. Chances are you will get all of it back if you wait long enough.

Predicting short-term movements is a fool's game. I'm neither very bullish or bearish right now, just neutral. My advice - stay the course.

I agree with Plinker above re "when is enough enough?" I like a quote I heard years ago...."When you've won the game, stop playing!"

That may be perfectly sound investment advice. But, beware that SOME "investment guys" get paid based on "churning" clients.

Not even close....................less than 30%

It does unless the stuff is in an IRA, then no impact on taxes.

Plus, he has $Billions in wholly owned subsidiaries with non-traded stock.

They do exist. Ever heard of Michael Bury? Also Joe Kennedy Sr was famous for timing the market before the Great Depression. It usually coincides during peaks of euphoria or pessimism.

But most who attempt it do fail.

Did you put 401K money into an SP500 fund while working?
if so you were a systemic investor, your system consisted of buying the market without regard to price or risk level.

Did you rebalance your IRA with your financial advisor at any time?
You are an infrequent market timer, changing your investment risk profile.

Did you move out of stocks into bonds or cash and then back to stocks at any time?
If so, you are an infrequent market timer.

Should you be in the stock market at all?
Yes, as the overall market has a positive return expectancy, depending upon your personal unique situation

Why?
Because the US labor force contributes a hell of a lot of systemic buying into their 401K monthly, regardless of valuation, causing the market general level of rising valuation. The US based type of public company ownership capitalism has one goal for every company: become a monopoly and have the stock market value your company in the trillions now. .

Will it continue?
Yes, until the RMD outflows exceeds the employment contributions. . ie, technology efficiency from reducing employees continually reduces 401K systemic market buying and Social Security inbound payments, increasing the risk to your retirement income.

Will the market continue to work as it has in the past?
It will work until it doesn't, there will be signs prior to the market stop functioning, but they will be subtle and most will miss the signs.

Will many make money until then?
Yes, because of the above reasons. .

GL2U

Good Luck to Us!

Plutocracy. Kakistocracy.

What could possibly go wrong with the economy.

Guardrails gone. Dereg without regard. Jobs slashed. Bridge projects over before they begin. Food industry with worsening shortages of workers. Healthcare a mess. On and on and through and through the economy — the effects will be felt by all of us.

The markets have always been unpredictable. As Buffett said, “Beware of geeks bearing formulas.” I have never bothered with all that analysis.

But as far as a feel goes, mine is that the ship is headed into uncharted waters like none we have ever seen before.

Boomer
























.

reads true, and ominous. . well stated
increasing risk to the economy and therefore the market?
reducing equity exposure seems like a prudent step. .

But Buffett is not infallible, and doesn't represent the average investor.
He is driven completely by opportunistic valuation, buying cheaply as possible, and buying when the market is distressed at times. . He also has a legacy and could be feeling his mortality coming soon, or just realizing that his investments are fully valued and have little room for continued growth.. .


Source: S&PGlobal public documents tracking historical quarterly SP500 earnings

Note: Berkshire Hathaway's Q2 2022 $66.9 billion "unrealized investment" loss (mostly non-cash-flow) decreased the S&P 500 EPS by approximately $4.74 per share and the Financial sector by $6.04 per share

Note: Berkshire Hathaway's Q3 2023 $23.5 billion "unrealized investment" loss (mostly non-cash-flow) decreased the S&P 500 EPS by approximately $2.82 per share and the Financial sector by $2.81 per share


hmmm, $90B loss, . . . using his guidance is good if you are at his level of investing, sadly, I am not. . though trying and continuous education / improvement is always good.

Well, a significant portion of my equity portfolio is in BRK as back in the mid 1980s I bought a few shares, set it aside and forgot about it figuring Warren could do better with it than I could. I have not been disappointed. Over the years I also bought some stalwart standards and index funds and have held onto them. I see no reason to sell and pay taxes as most are in taxable accounts. What I have done is retain most of the proceeds received from recent real estate sales in cash, T-bills, money market funds and such. I see BRK taking a bit of a hit when Buffett bows out or checks out, so to speak, but I plan on holding onto it all as if I sold my LTCGs would be enormous.

My greatest concerns are the huge national debt and our disappointing (to say the least) public school systems which have been declining since the SAT scores peaked during the early 1960s. Student scholastic performance has gone downhill ever since. The decline became so blatantly and embarrassingly obvious the SAT was dumbed down in 1994. Today most colleges need to offer remedial English and Math courses to incoming students. The future does look grim.

Of course a large war could erupt or we could be hit with another pandemic. My father got and survived the Spanish Flu in 1918 but it killed more people that did The Great War. One just never knows.

An easy to read classic written about investors' experiences during the Great Depression era is "Where are the Customers' Yachts?" by Fred Schwed Jr. I found it rather chilling.

I don't believe that the 94 year old Buffett is still heavily involved in the decision making process of where to invest. But he did have the wisdom to put together an excellent team to carry on implementing his successful investment strategy.

I do share your concern about the educational achievements for the average student but the top tiers of the younger generations are as brilliant of any that have gone before. I doubt they have relaxed the standards to get into MIT, Caltech or Stanford.

Long term investment in the USA is the best world wide investment choice one can make in today's world. With the SP500, about 60% of the sales are domestic, and 40% international, from memory, rounded and could be precisely wrong at the current moment. But the point of the stat is that embedded within the SP500 are well run international companies, which diversifies the US domestic only view into a global investment.

Buffet / Berkshire Hathaway is no different, offers mostly US domestic growth, is industry diversified, and has excellent management for the last 50 years. . . No different than many of the top 50 US stocks . .

The topic at hand is a market sell off, correction, repricing, call it what you will.
They come along with regular frequency, which is the common, some big 20-50%, some little < 20%
My comment about Buffet is that he is not an individual investor, and all of us here (not guaranteed but ) are also not a Buffet.
Buffet is also human in his investments, my point about his losses. So using Buffetisms as your investment thesis is an easy answer to a cognitive dissonance, and it will work, until it doesn't, like everything else in life, as it did for WB as well.

Some of us will sell high and buy low. .
Others will hold on and wait. .

There are a few sell high and buy low peeps on TOTV,
there are many buy and hold on TOTV, assuming the future will be like the past.
The future seldom repeats but it often rhymes. . .
You pick your choice and live with the outcome. . .

Shiller and others just provide a valuation point of view of the current market,
doesn't mean it can't go higher, just means that any error in judgement (federal reserve)
or unforeseen negative event (domestic or geo-political or mother nature (meteor impact) ) may incur a price adjustment, when and for how long is always the uncertainty.

It's never black and white, and it's never the same. .

YMMV

One cannot spend the present worrying about the future.

In my grandparent's time (born 1901), it was WWI. The world was not going to survive a massive all-in global war! Then the stock market collapsed when they were 28 years old.

In my parent's time (born 1928/1929), it was WWII. The world could not survive the great European war as it spread across Asia and dragged in all of America as well.

In my brother's time, the fear was we would all die because of the Cuban missile crisis. The world was doomed.

In my time, the Cold War promised mutual nuclear annihilation coupled with the AIDS crisis sweeping the globe.

In my children's time it was the housing bubble bursting and dragging the new information frontier tech stocks with it. Then the Covid pandemic came and threatened to wipe everyone off the face of the earth.

There will always be something that some will say, "Why bother, it's not worth the effort, we are all going to die soon anyway."

In twenty years there will be something else. And that too will likely pass.

:thumbup:

There are indications that the market overall is very overvalued - but some stocks are overvalued and some are not. One way to gauge if a stock is overvalued is to take a look at the forward PE and PE/Growth. These are based on analysts' estimates and yes sometimes they are wrong to the downside. If you set up a portfolio on yahoo finance you can add those parameters and more looking for stocks that meet your criteria. There are value investors and growth investors, and a few more. I am a growth investor and the best advice I ever received was to look at trends of the future, and invest in large cap stocks which will dominate that future growth. I have made a lot of money off of NVDA and plan to make a lot more. But there are other stocks which are involved in AI which have much better valuation metrics. Regardless of what type of investor you are set up a portfolio to look at forward PE and PE/G. If there is a downturn then stocks with lower PE will not be hurt as much and if not, are more likely to rise to the average of their peers. Also, the long-term value of companies is ~ zero - no such thing as buy and hold forever. Look at GE and now Boeing. Don't become emotionally attached to a stock. Sell the poor performers at a loss and invest in those companies winning the future.

For the Buffet followers as well:

Warren Buffet is sitting on $320B in cash...Just burning away toxic fiat.

I ordered the book. It just arrived. Interesting copyright dates: 1940; 1955; 1995; 2006. The author died in 1966, but it looks like his book has lived on. I looked at the CIP (Cataloging-in-Publication) and saw that Humor is among the subject headings.

Humor sounds good to me right now. I see nothing amusing about these uncharted economic waters though.

The last investment book I read(ish) was the latest edition of A Random Walk Down Wall Street. It was far more entertaining than I thought it would be. I skimmed some of the chapters, but the ones about the behavior of humans when it comes to investing were fascinating, although not surprising. (The guy who ate the “precious” tulip bulb because he thought it was an onion had certainly horrified the other guy who had invested in the bulb. But we all now know which one was stupid.)

About your little seque into schools — your concerns have more complex answers than what I am willing to sit here and type. For years I have said that someday we could come under a regime that would decide kids should just be at home staring at screens with talking heads giving instruction according to said regime. Just think of the money that would save. No buildings. No buses. A handful of puppet teachers. Yeah, just think and think again. No more of those pesky critical thinking skills to worry about. (shudder) Fahrenheit 451 the classic about book burnings and every home with screens everywhere was considered to be fiction when it was written. Now it could be a concept of a plan.

Re. Concerns about the deficit: It looks like we are in for slash and burn because that does not require an actual plan with a well thought-out approach to government spending, a plan by people who actually know what they are doing and do not have tunnel vision — but I don’t see good sense coming. The effects of what it looks like is actually coming will be seismic throughout the entire economy.

All we can do now is hope for the best and plan for the worst. But the American people have no frame of reference for what could come, the effects of which will be felt by all of us, no matter what we wished for.

Yep. Pogo sure was right.

Boomer

Yes, the book is humorous yet is based on actual personal financial experiences, some of which were devastating. It is an easy read, full of lessons to be learned and thought provoking, a welcome combination.

Back in 1962 Warren Buffett decorated his office wall with headlines from market crashes and panics as reminders to be prepared for anything. Warren Buffett hung newspapers from 7 market catastrophes on an office wall to remind him '''anything can happen''' | Business Insider India

I try to be prepared as I was taught in the Boy Scout program which led to me posting this thread about how high the market is at present.

Yet I still feel quite optimistic and positive about the future of our country, as Buffett always has. I am now quite happy, relaxed and breathing easy but remain alert for short term movements. Buffett is sitting on over $300B in cash, the largest amount and portion of his portfolio ever. I am keeping a large percentage of my portfolio in cash at this time. Historically great opportunities that I was able to recognize as such have presented themselves only a handful of times in my life. Perhaps another shall come along before too long. Who knows?

For now, today, "All Eyes on NVDA".

The cool thing is.................Keep predicting a crash / sell-off, eventually it will come true......it always does.

:faint:

NVDA earnings are out. Revenues doubled but shares are down a little. They will probably be up tomorrow unless a macro event occurs such as Russia launching a Nuke:laugh:

Snowflake had awesome results.

NVDA has become the most glamorous stock ever.
"Dean of valuation on Nvidia"
Access Denied
Aswath Damodaran, NYU Stern School of Business professor of finance, joins ‘Closing Bell Overtime’ to talk Nvidia earnings and valuation.

Well,


As Americans bargain shop, six-figure earners flock to Walmart | CNN Business
Target shares plunge 21% after discounter cuts forecast, posts biggest earnings miss in two years
Access Denied

My prediction is there might be a temporary dislocation in our economy once the new administration implements the plan to drastically reduce the size of the Federal Government and steps up enforcement of residency laws.

After that I believe the new economic policies will result in several years of a significant expansion of our GDP.

Protectionism worked for Japan. We'll see if the US can pull it off.

Target is still down from the whole tuck-underwear issue.
:undecided:

Good point. Forgot all about that.

ICBM Missle
 

I am pretty sure this news story is incorrect, but PBS has been reporting in their hourly news broadcast since 4:00 AM this morning (Nov 21) That Russia has launched an ICBM Missile at the Ukraine.

It was an RS-26. reuters.com

For my fellow Buffett watchers...Warren Buffett Just Shunned His Favorite Stock for the First Time Since 2018, and It Could Spell Trouble for the S&P 500

Just this morning I read an article in Marketwatch that the S&P500 is over valued by 25% and investors just don't care about fundamentals. How in the world can something like bitcoin, that never sold for more than 40 cents a coin in 2010 now be approaching $100K per coin? How is that even possible for something that has no "real value" (at least according to my most respected expert, Warren Buffet)? Bottom line: the markets are insane right now.

This is from the article I just referenced which was released today, 11/22/24.

"As of this writing, the S&P 500 trades at a price-to-earnings (P/E) ratio of 25.6. That's a 41% premium to its long-term average of 18.1, dating back to when the index was established in the 1950s."

In my opinion, except for a few short time periods the market is normally "overvalued". That is why I don't "market time" but invest based on my age.

We do know that the next administration will increase tariffs on countries that have we a big trade deficit with. China alone accounts for 20% of iPhone sales. Also its China competitors are producing much better phones and have increased their market share. In the last 5 years, iphone shares have gone up 250% while QQQ have gone up 150%.

Trees don't grow to the sky. But congratulations on your savvy investment decisions.

Bitcoin is just like the American dollar, the value is only in one's belief... nothing beyond that.:shocked: