Friend's business sold and netted $3m

[valhalla360]

Originally Posted by Paul L

The graph was a trailing 15 year average market return, inflation adjusted. 15 years is a pretty useful timeframe for someone just retiring and starting cruising.
Came from herehttps://www.brookings.edu/testimonie...ment-accounts/

OK, then add back the inflation and you are right back in the range I mentioned.

Of course, I've seen graphs that are all over the board taken from the same data so take everything with a grain of salt but almost always are in the 8-12% range long term.

As far as the posters suggesting to time the market because they know the cycles, that is a proven money loser. It's far from a steady 7 on, 3 off schedule and if you guess wrong, you can lose all your returns and then some. Guess what, the experts can't guess right so there is no reason to expect you will do better.

[kmacdonald]

Originally Posted by Island Time O25

Unless the bubble bursts first.

What bubble?

[kmacdonald]

Originally Posted by daletournier

You could be right, dosent mean it's good value and ultimately everything returns to fair market value after it dips well below it, soon or later.

If I tried to sell you my business (previous) for 20+ times net profit would you buy it? Once markets reach these nose bleed valuations they are driven by speculation not value. The herd can change direction at anytime. Personally I'd rather buy when something is undervalued.

But good luck to you... Genuinely.

Actually a multiple of 20 is good value for a growth company. You are right that the market is driven by investor sentiment more than value. Given the new US corporate tax structure, the market could be way undervalued.

[Island Time O25]

I have seen the signs of a 2008 crash in 2004-2005, one had to be blind or a RE agent not to see them. Thinking that this will be a great opportunity to pick up some cheap bank repos I lined up all my ducks in a row waiting to scoop up post foreclosure stuff. Then what happened was that the gov't decided to play it safe and incentivized banks' holding on to repos or selling them in large chunks to the insiders. All to keep the non-foreclosed properties in shallower underwater. This went on for quite a few years until it was safe to sell the majority of the repos, drip by drip but still in big packages, too large for small guys like me.

Such a policy never cleansed the market back to its fundamentals as both the bailed out banks and the forgiven debtors never learned their lessons. And this is clearly reflected in the current price run up of the housing market fueled by artificially cheap Fed Reserve money.

[Island Time O25]

Originally Posted by kmacdonald

What bubble?

Hope its sarcasm.

[kmacdonald]

Originally Posted by Island Time O25

I have seen the signs of a 2008 crash in 2004-2005, one had to be blind or a RE agent not to see them. Thinking that this will be a great opportunity to pick up some cheap bank repos I lined up all my ducks in a row waiting to scoop up post foreclosure stuff. Then what happened was that the gov't decided to play it safe and incentivized banks' holding on to repos or selling them in large chunks to the insiders. All to keep the non-foreclosed properties in shallower underwater. This went on for quite a few years until it was safe to sell the majority of the repos, drip by drip but still in big packages, too large for small guys like me.

Such a policy never cleansed the market back to its fundamentals as both the bailed out banks and the forgiven debtors never learned their lessons. And this is clearly reflected in the current price run up of the housing market fueled by artificially cheap Fed Reserve money.

Back in 2006, 2007 we would lounge around the pool laughing at loans being made for houses costing $600K to families making $50K a year. They qualified for interest only loans that the builder bought down the rate to 0% for two years. Loan payment was zero. Those loans were packaged and sold to Fannie and Freddie. Those were the days and they are coming back.

[daletournier]

Originally Posted by kmacdonald

Actually a multiple of 20 is good value for a growth company. You are right that the market is driven by investor sentiment more than value. Given the new US corporate tax structure, the market could be way undervalued.

Undervalued based on what metrics? I think you'd have to be very creative to show the Dow is undervalued.

[daletournier]

Does this sound sustainable or like it's undervalued?

• The Dow hit a record high 71 times last year. On average, a new high was hit more frequently than once a week.

• For the first time ever in its almost 90-year history, the S&P 500 rose every month in 2017. And historically there have only been four years with gains in 11 months of the year.

• The S&P’s largest pullback in 2017 was 2.8%, the smallest since 1995.

• To start 2018, the S&P 500 has risen in each of the five trading sessions, hitting a new record high every day. The last time the index opened the year with at least five straight record highs was 1964.

[daletournier]

One more:


the CAPE (Cyclically Adjusted Price-Earnings) ratio has now matched its 1999 level, the second highest reading in over 100 years of data. The CAPE now has a higher reading only in 1929.

[john61ct]

So how does one go about shorting the US stock indices, with lots of leverage?

[john61ct]

Even better, shorting Bitcoin?

[daletournier]

Originally Posted by john61ct

So how does one go about shorting the US stock indices, with lots of leverage?

Google Cfd's. I don't know very much about it as it's not something I will be doing.

[daletournier]

Originally Posted by john61ct

Even better, shorting Bitcoin?

I'm not sure about that one. I see it's a bad day for cryptos today. The volatility amazes me, I sit there staring at the the screen.
What surprises me is the rate they are going down considering the Usd is going down, I expected them to behave like Gold. It's a very emotional market.

[valhalla360]

Originally Posted by john61ct

Even better, shorting Bitcoin?

I'd drop a few grand on that in a heart beat.

[kmacdonald]

Originally Posted by daletournier

Does this sound sustainable or like it's undervalued?

• The Dow hit a record high 71 times last year. On average, a new high was hit more frequently than once a week.

• For the first time ever in its almost 90-year history, the S&P 500 rose every month in 2017. And historically there have only been four years with gains in 11 months of the year.

• The S&P’s largest pullback in 2017 was 2.8%, the smallest since 1995.

• To start 2018, the S&P 500 has risen in each of the five trading sessions, hitting a new record high every day. The last time the index opened the year with at least five straight record highs was 1964.

There is a reason for that. The future of the US market looks that good to the rest of the world. Take advantage of it.