Yeah, don't get me wrong I don't think this is a great time for long term buy and pray investing. For 10+ year timeframes CAPE and the like are good metrics. They just suck for projecting anything less than 10 year returns. Like I said, this feels like 1998. I think 2021 will be a really good year, but it won't be an easy market by any means. 1-2 corrections between now and Jan 1 2022 are likely. But on the whole, I do still think 2021 is a great year and will hit 4k+.mathjak107 wrote: ↑Thu Dec 10, 2020 5:07 pmI liked it better when so many were pessimistic.....bull markets don’t end with the pessimism we had .
Now by just about any measure things are overly bullish again .that scares me
Why I think 2021 will be a blockbuster year for stocks
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Re: Why I think 2021 will be a blockbuster year for stocks
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Re: Why I think 2021 will be a blockbuster year for stocks
But we’ve been saying that since at least 2013.mathjak107 wrote: ↑Thu Dec 10, 2020 5:07 pmI liked it better when so many were pessimistic.....bull markets don’t end with the pessimism we had .
Now by just about any measure things are overly bullish again .that scares me
And at least one boglehead said the covid crash was “obvious” to him. He got out of stocks. I wonder if it was obvious how short-lived that drop was going to be.
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Re: Why I think 2021 will be a blockbuster year for stocks
not really .dualstow wrote: ↑Fri Dec 11, 2020 7:55 amBut we’ve been saying that since at least 2013.mathjak107 wrote: ↑Thu Dec 10, 2020 5:07 pmI liked it better when so many were pessimistic.....bull markets don’t end with the pessimism we had .
Now by just about any measure things are overly bullish again .that scares me
And at least one boglehead said the covid crash was “obvious” to him. He got out of stocks. I wonder if it was obvious how short-lived that drop was going to be.
if you look at many of the indicators for bullishness they are all over the map at times .
In a recent weekly AAII survey of individual investors, bullishness hit 55% (versus the long-term average of 37.9%), the highest reading in nearly
three years.
Evercore ISI surveys 303 large institutional investors weekly,and currently, over 62% believe the next 10% move in stocks will be up (less than 25% felt that way in late April)
The CNN Business Fear & Greed Index, which uses seven measures of investor behavior, is now registering “extreme greed.” For example, one of the
seven factors is the ratio of put volume (a put gives the buyer the right to sell a stock at a set price) to call volume (the right to buy a stock at a set price ..
If put buying is high, investors are expecting stock prices to decline and vice-versa. Recently, volume in put options has lagged volume in call options by 66.50%, among the lowest level of put buying in the last two years.
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Re: Why I think 2021 will be a blockbuster year for stocks
I’m not speaking of the indicators themselves but the fact that people have been giving reasons why the market has been ripe for a crash since at least 2013. Eventually it must come down and there will be a lot of I told you so’s, forgetting that they were wrong every year for going on 7 years now.
All one has to do is maintain a stock to non-stock ratio and ignore all this noise.
All one has to do is maintain a stock to non-stock ratio and ignore all this noise.
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Re: Why I think 2021 will be a blockbuster year for stocks
Or with a long term view just sit in diversified equities and look again in a few decades.dualstow wrote: ↑Fri Dec 11, 2020 8:41 amI’m not speaking of the indicators themselves but the fact that people have been giving reasons why the market has been ripe for a crash since at least 2013. Eventually it must come down and there will be a lot of I told you so’s, forgetting that they were wrong every year for going on 7 years now.
All one has to do is maintain a stock to non-stock ratio and ignore all this noise.
Financially there is no logic to a long term investor mitigating short term dips with other assets that tend to underperform over the longer term and hurting long term returns permanently.....
So either way will work fine .
In fact 50/50 and 100% equities in retirement, have almost no difference in out come success rate wise ...I think over 30 year periods 100% equities failed to last 2 more times .. 50/50 failed 6 of the 120 30 year cycles and 100% equites failed 8...on the other hand going out longer 100% equities had a higher success rate .
Not that I am suggesting retirees should be 100% equities ..but the fact is that it really has not behaved much different than 50/50 has because the higher up years have acted as a cushion in the down years while spending down
Re: Why I think 2021 will be a blockbuster year for stocks
The thing with sentiment indicators like the AAII is they are short term indicators. They are very volatile. I follow the AAII regularly, another favorite of mine is the active fund long/short percentages, which also are in nose bleed territory right now. But here's the thing... all it takes is a 5-10% correction to flip those sentiment indicators back to normal, or even bearish. I totally agree we are overdue for a correction. A correction would be healthy, to get some people to raise cash, so there is more cash to come back in and fuel the next leg higher in Q1. These indicators are not indicative in any way of long term secular trends is what I'm getting at. They really are only relevant for the next few weeks at most, and even then an "overbought" market tends to get more "overbought".mathjak107 wrote: ↑Fri Dec 11, 2020 8:28 amnot really .dualstow wrote: ↑Fri Dec 11, 2020 7:55 amBut we’ve been saying that since at least 2013.mathjak107 wrote: ↑Thu Dec 10, 2020 5:07 pmI liked it better when so many were pessimistic.....bull markets don’t end with the pessimism we had .
Now by just about any measure things are overly bullish again .that scares me
And at least one boglehead said the covid crash was “obvious” to him. He got out of stocks. I wonder if it was obvious how short-lived that drop was going to be.
if you look at many of the indicators for bullishness they are all over the map at times .
In a recent weekly AAII survey of individual investors, bullishness hit 55% (versus the long-term average of 37.9%), the highest reading in nearly
three years.
Evercore ISI surveys 303 large institutional investors weekly,and currently, over 62% believe the next 10% move in stocks will be up (less than 25% felt that way in late April)
The CNN Business Fear & Greed Index, which uses seven measures of investor behavior, is now registering “extreme greed.” For example, one of the
seven factors is the ratio of put volume (a put gives the buyer the right to sell a stock at a set price) to call volume (the right to buy a stock at a set price ..
If put buying is high, investors are expecting stock prices to decline and vice-versa. Recently, volume in put options has lagged volume in call options by 66.50%, among the lowest level of put buying in the last two years.
Last edited by pmward on Fri Dec 11, 2020 10:26 am, edited 1 time in total.
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Re: Why I think 2021 will be a blockbuster year for stocks
You mean like gold, cash and long-term treasurys?mathjak107 wrote: ↑Fri Dec 11, 2020 9:23 amOr with a long term view just sit in diversified equities and look again in a few decades.
Financially there is no logic to a long term investor mitigating short term dips with other assets that tend to underperform over the longer term and hurting long term returns permanently.....
...
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Re: Why I think 2021 will be a blockbuster year for stocks
for a long term investor , odds are 100% diversified equities over decades will give them a much higher balance . by diversified i mean broad based equity funds without individual company risk . sorry , no pp yet .dualstow wrote: ↑Fri Dec 11, 2020 10:25 amYou mean like gold, cash and long-term treasurys?mathjak107 wrote: ↑Fri Dec 11, 2020 9:23 amOr with a long term view just sit in diversified equities and look again in a few decades.
Financially there is no logic to a long term investor mitigating short term dips with other assets that tend to underperform over the longer term and hurting long term returns permanently.....
...
portfolio's with bonds , gold , etc should come later in my opinion when we enter the red zone of retirement .
that is after we grew our savings as much as we could .
that is about 10 years before and 10 years in to retirement as kitces found . that is when our fuel tanks are full and any big hits can be huge dollars .
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Re: Why I think 2021 will be a blockbuster year for stocks
You might be surprised at multi-asset portfolios that are balanced annually, counter intuitive but they often lead to less volatility and higher performance.mathjak107 wrote: ↑Fri Dec 11, 2020 12:58 pmfor a long term investor , odds are 100% diversified equities over decades will give them a much higher balance . by diversified i mean broad based equity funds without individual company risk . sorry , no pp yet .dualstow wrote: ↑Fri Dec 11, 2020 10:25 amYou mean like gold, cash and long-term treasurys?mathjak107 wrote: ↑Fri Dec 11, 2020 9:23 amOr with a long term view just sit in diversified equities and look again in a few decades.
Financially there is no logic to a long term investor mitigating short term dips with other assets that tend to underperform over the longer term and hurting long term returns permanently.....
...
portfolio's with bonds , gold , etc should come later in my opinion when we enter the red zone of retirement .
that is after we grew our savings as much as we could .
that is about 10 years before and 10 years in to retirement as kitces found . that is when our fuel tanks are full and any big hits can be huge dollars .
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Re: Why I think 2021 will be a blockbuster year for stocks
There are no portfolios I can think of that have a high rate of success beating 100% equities over typical accumulation stages that span 25-40 years....
We had some exceptions over 20 years but they are very few and highly unlikely to have bonds perform like they did with a 40 year rate slide
Sorry , but I don’t see it happening over accumulation periods going forward ..it was hard enough to do prior if it all..even for 20 years you would need to cherry pick an exact year like 2000 or one of them in some terrible time frame to come out ahead ...if you move a year or so away things will go back to normal and it won’t likely beat 100% equities .
It is tough to beat 100% over long periods of time
We had some exceptions over 20 years but they are very few and highly unlikely to have bonds perform like they did with a 40 year rate slide
Sorry , but I don’t see it happening over accumulation periods going forward ..it was hard enough to do prior if it all..even for 20 years you would need to cherry pick an exact year like 2000 or one of them in some terrible time frame to come out ahead ...if you move a year or so away things will go back to normal and it won’t likely beat 100% equities .
It is tough to beat 100% over long periods of time
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Re: Why I think 2021 will be a blockbuster year for stocks
Your mind is already made up. Cheers.mathjak107 wrote: ↑Sat Dec 12, 2020 10:58 amThere are no portfolios I can think of that have a high rate of success beating 100% equities over typical accumulation stages that span 25-40 years....
We had some exceptions over 20 years but they are very few and highly unlikely to have bonds perform like they did with a 40 year rate slide
Sorry , but I don’t see it happening over accumulation periods going forward ..it was hard enough to do prior if it all..even for 20 years you would need to cherry pick an exact year like 2000 or one of them in some terrible time frame to come out ahead ...if you move a year or so away things will go back to normal and it won’t likely beat 100% equities .
It is tough to beat 100% over long periods of time
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Re: Why I think 2021 will be a blockbuster year for stocks
so show me a portfolio that beats 100% equities over our typical accumulation periods .. there are none. in fact you can see it on Tyler's site .StrategyDriven wrote: ↑Sat Dec 12, 2020 8:42 pmYour mind is already made up. Cheers.mathjak107 wrote: ↑Sat Dec 12, 2020 10:58 amThere are no portfolios I can think of that have a high rate of success beating 100% equities over typical accumulation stages that span 25-40 years....
We had some exceptions over 20 years but they are very few and highly unlikely to have bonds perform like they did with a 40 year rate slide
Sorry , but I don’t see it happening over accumulation periods going forward ..it was hard enough to do prior if it all..even for 20 years you would need to cherry pick an exact year like 2000 or one of them in some terrible time frame to come out ahead ...if you move a year or so away things will go back to normal and it won’t likely beat 100% equities .
It is tough to beat 100% over long periods of time
there are only a handful of exceptions out to about 20 years . but nothing has done better for those with the typical 25-40 year spans we are working and saving..
that is with 40 years of a bull market in bonds too . even out to 20 years it would take finding the outliers and exceptions . so much so that move one year before or after the exception and it goes right back again to 100% equities being the top performer
Re: Why I think 2021 will be a blockbuster year for stocks
All I know is that classic trend following guys will suffer a lot ;-) Joke apart, the common belief is that volatility is here to stay, concur with that as well. Whether it would be nasty blood-draining trendless volatility or still with bullish bias - does it really matter if one is not able to digest it anyway...
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Re: Why I think 2021 will be a blockbuster year for stocks
actually study after study shows that those who lack pucker factor with 100% equities over the long haul , just have lower poor investor behavior points and balanced portfolios show the same poor behavior .
very few with low pucker factor look at losses in balanced portfolios as anything but losses and it effects their behavior .
the truth is those that are in their early accumulation stages should be 100% equities for best results with NO MITIGATING OF TEMPORARY DIPS NEEDED .
they would be far better served having a 3rd party manage their money even with a small fee .
vanguard , the grand pappy of do it yourself investing found the typical small investor gets 2-3% less than the portfolio or funds they were in got just because of their own bad behavior , not markets
very few with low pucker factor look at losses in balanced portfolios as anything but losses and it effects their behavior .
the truth is those that are in their early accumulation stages should be 100% equities for best results with NO MITIGATING OF TEMPORARY DIPS NEEDED .
they would be far better served having a 3rd party manage their money even with a small fee .
vanguard , the grand pappy of do it yourself investing found the typical small investor gets 2-3% less than the portfolio or funds they were in got just because of their own bad behavior , not markets
Re: Why I think 2021 will be a blockbuster year for stocks
Very good point. This is where tools like diversification and "trend following" come in handy. I know I don't have the stomach for a 50% drawdown. So I use both diversification and quant strategies in a way that allow me to achieve 100% stock market like returns without the large nasty drawdowns.Vil wrote: ↑Sun Dec 13, 2020 4:25 amAll I know is that classic trend following guys will suffer a lot ;-) Joke apart, the common belief is that volatility is here to stay, concur with that as well. Whether it would be nasty blood-draining trendless volatility or still with bullish bias - does it really matter if one is not able to digest it anyway...
Re: Why I think 2021 will be a blockbuster year for stocks
If you actually looked at TAA strategies, you would see you don't need the "pucker factor" and that you can mitigate dips, all while returning similar returns to 100% equities. There are tradeoffs of course, but your opinion here is plain false. I've researched enough tactical strategies to see this clear as day. They don't always out perform, sometimes they do get whipsawed, but over the course of a full market cycle any intelligent tactical strategy will perform at least in line with the S&P without all the massive drawdowns. Not to mention that eliminating the need for "pucker factor" can allow someone to actually lever up a bit, which only improves returns.mathjak107 wrote: ↑Sun Dec 13, 2020 5:27 amactually study after study shows that those who lack pucker factor with 100% equities over the long haul , just have lower poor investor behavior points and balanced portfolios show the same poor behavior .
very few with low pucker factor look at losses in balanced portfolios as anything but losses and it effects their behavior .
the truth is those that are in their early accumulation stages should be 100% equities for best results with NO MITIGATING OF TEMPORARY DIPS NEEDED .
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Re: Why I think 2021 will be a blockbuster year for stocks
give me an example of onepmward wrote: ↑Sun Dec 13, 2020 10:44 amIf you actually looked at TAA strategies, you would see you don't need the "pucker factor" and that you can mitigate dips, all while returning similar returns to 100% equities. There are tradeoffs of course, but your opinion here is plain false. I've researched enough tactical strategies to see this clear as day. They don't always out perform, sometimes they do get whipsawed, but over the course of a full market cycle any intelligent tactical strategy will perform at least in line with the S&P without all the massive drawdowns. Not to mention that eliminating the need for "pucker factor" can allow someone to actually lever up a bit, which only improves returns.mathjak107 wrote: ↑Sun Dec 13, 2020 5:27 amactually study after study shows that those who lack pucker factor with 100% equities over the long haul , just have lower poor investor behavior points and balanced portfolios show the same poor behavior .
very few with low pucker factor look at losses in balanced portfolios as anything but losses and it effects their behavior .
the truth is those that are in their early accumulation stages should be 100% equities for best results with NO MITIGATING OF TEMPORARY DIPS NEEDED .
Re: Why I think 2021 will be a blockbuster year for stocks
There are plenty of threads in this very forum with examples. You can take my recent post here as one, I am currently running this strategy with 2x leverage: https://www.gyroscopicinvesting.com/for ... 10&t=11557mathjak107 wrote: ↑Sun Dec 13, 2020 1:21 pmgive me an example of onepmward wrote: ↑Sun Dec 13, 2020 10:44 amIf you actually looked at TAA strategies, you would see you don't need the "pucker factor" and that you can mitigate dips, all while returning similar returns to 100% equities. There are tradeoffs of course, but your opinion here is plain false. I've researched enough tactical strategies to see this clear as day. They don't always out perform, sometimes they do get whipsawed, but over the course of a full market cycle any intelligent tactical strategy will perform at least in line with the S&P without all the massive drawdowns. Not to mention that eliminating the need for "pucker factor" can allow someone to actually lever up a bit, which only improves returns.mathjak107 wrote: ↑Sun Dec 13, 2020 5:27 amactually study after study shows that those who lack pucker factor with 100% equities over the long haul , just have lower poor investor behavior points and balanced portfolios show the same poor behavior .
very few with low pucker factor look at losses in balanced portfolios as anything but losses and it effects their behavior .
the truth is those that are in their early accumulation stages should be 100% equities for best results with NO MITIGATING OF TEMPORARY DIPS NEEDED .
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Re: Why I think 2021 will be a blockbuster year for stocks
Way way way to short a time frame so far to be a typical accumulation period which runs 25-40 years .....remember we are talking those with decades to go .
I know of no portfolio to date that has beaten 100% equities without it being an outlier if at all over an accumulation stage
I know of no portfolio to date that has beaten 100% equities without it being an outlier if at all over an accumulation stage
Re: Why I think 2021 will be a blockbuster year for stocks
Did you actually look at the strategy? There is more than enough data there for accumulation period approximation. Especially if you look at the SpyComp component which has data as far back as we have PP data.mathjak107 wrote: ↑Sun Dec 13, 2020 3:55 pmWay way way to short a time frame so far to be a typical accumulation period which runs 25-40 years .....remember we are talking those with decades to go .
I know of no portfolio to date that has beaten 100% equities without it being an outlier if at all over an accumulation stage
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Re: Why I think 2021 will be a blockbuster year for stocks
once you get in to leveraged funds one can do it . but that is not the normal portfolio .... you cant even find those choices in 401k's .
that is where most workers do their investing and growing their money.
there are ways of doing it with futures and options too but those are going to be the outliers . typically we are talking conventional investing through the vehicles most people have ..
that is where most workers do their investing and growing their money.
there are ways of doing it with futures and options too but those are going to be the outliers . typically we are talking conventional investing through the vehicles most people have ..
Re: Why I think 2021 will be a blockbuster year for stocks
1) One finds a portfolio that performs well without leverage first, and only then chooses to apply leverage after if they want. Leverage is always optional. I cannot use leverage in my 401k, but I can still follow the strategy.mathjak107 wrote: ↑Mon Dec 14, 2020 3:52 amonce you get in to leveraged funds one can do it . but that is not the normal portfolio .... you cant even find those choices in 401k's .
that is where most workers do their investing and growing their money.
there are ways of doing it with futures and options too but those are going to be the outliers . typically we are talking conventional investing through the vehicles most people have ..
2) The PP itself does not have all assets available in most people's 401k's but people find ways to make due.
3) This is a post worth looking at https://investingforaliving.us/2020/01/ ... 3-to-2019/ It was from back in January. None of the portfolios and strategies listed are levered, they are all base unlevered. These are returns back to 1973, and include a wide range of both tactical and buy and hold strategies (including buy and hold S&P 500, 60/40, and even the PP). The average tactical portfolio smokes the average buy and hold portfolio, with much less drawdown. Coming from that base, one can apply as much leverage as they want to achieve the risk/reward characteristics they want. But even without leverage, over the course of a full accumulations period which is composed of multiple full market cycles, it will out perform. So these out perform without leverage, and really out perform with leverage, so leverage is always optional. But, I know I would never lever up 100% buy and hold stocks due to the drawdown characteristics (with leverage you could go to 0). So, having a strategy with better drawdown characteristics allows someone to use leverage without having to worry about going to 0.
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Re: Why I think 2021 will be a blockbuster year for stocks
I have a downloadable excel file in this post to two of my TAA strategies, I don't know how a person could compare them with an indexed market fund and choose that option.mathjak107 wrote: ↑Sun Dec 13, 2020 1:21 pmgive me an example of onepmward wrote: ↑Sun Dec 13, 2020 10:44 amIf you actually looked at TAA strategies, you would see you don't need the "pucker factor" and that you can mitigate dips, all while returning similar returns to 100% equities. There are tradeoffs of course, but your opinion here is plain false. I've researched enough tactical strategies to see this clear as day. They don't always out perform, sometimes they do get whipsawed, but over the course of a full market cycle any intelligent tactical strategy will perform at least in line with the S&P without all the massive drawdowns. Not to mention that eliminating the need for "pucker factor" can allow someone to actually lever up a bit, which only improves returns.mathjak107 wrote: ↑Sun Dec 13, 2020 5:27 amactually study after study shows that those who lack pucker factor with 100% equities over the long haul , just have lower poor investor behavior points and balanced portfolios show the same poor behavior .
very few with low pucker factor look at losses in balanced portfolios as anything but losses and it effects their behavior .
the truth is those that are in their early accumulation stages should be 100% equities for best results with NO MITIGATING OF TEMPORARY DIPS NEEDED .
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Re: Why I think 2021 will be a blockbuster year for stocks
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Re: Why I think 2021 will be a blockbuster year for stocks
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