2008 again?

[GoSeigen]

Bizarre comments above.

Firstly, that's not "my" chart. I merely found it after a 10s Google search, but it seemed to capture the basic essence of secular cycles so I posted it rather than spend a ton of time typing... Some hope!

Same to you -- bizarre comment. Or perhaps pedantic.

No-one claimed it was "your" chart as in a chart that you invented or produced from your own imagination. The English possessive is far more flexible than that! In my post the words "tikunetih's chart" simply identified the chart as one associated with you (being the individual who posted it) as opposed to any other poster in the thread. [And no, I did not go back and read all the contributions to see if "your" chart was unique.]


The rest of your comments betray a similar level of insecurity which I really think is not warranted... no criticism was directed at you or implied.


GS

[TUK020]

Secondly, it's not "misleading in a very key aspect" by not being adjusted for inflation - give over! Where's anyone claiming it was a real-terms chart? Talk about a straw man.
.

I was NOT intending to imply that anyone was attempting to mislead. Apologies if it came across that way. I meant that it was visually misleading, in that it would be easy to draw erroneous conclusions from a casual glance.

[tikunetih]

No-one claimed it was "your" chart as in a chart that you invented or produced from your own imagination. The English possessive is far more flexible than that! In my post the words "tikunetih's chart" simply identified the chart as one associated with you (being the individual who posted it) as opposed to any other poster in the thread. [And no, I did not go back and read all the contributions to see if "your" chart was unique.]


[DELETED]

Should I speak to my therapist perhaps?

[TUK020]

Should I speak to my therapist perhaps?

He probably wouldn't appreciate a call on New year's Eve.
Take a deep breath, and pour yourself a glass of wine.
Happy New Year

[dspp]

Moderator Message:
Folks, with my mod-hat on: please desist from comments that are easily misunderstood on the internet. If in doubt, chill. I really don't want to be dealing with alerts that are obviously based upon personal mis-readings and mis-writings.

With my personal hat on: I look at the charts, and I look at the reality, and I ask myself are we at a bottom, or is this just the start of a real downer. And I ask that with both a UK perspective, and a global perspective. So it is a very relevant thread and worthy of discussion. Personally I am fully invested as there are opportunities that I want to be participating in. But that doesn't mean I am correct.

regards, dspp

[GoSeigen]

and shows nominal growth, not real, and no adjustment for quadrupling of human population.

"What have the Romans ever done for us?"

That's it: if it hadn't been for massive inflation, massive population growth and massive economic growth over the past century, equity markets would likely still be priced roughly at the level they were a century ago.

But back in the actual world of compounding inflation, (population), and economic growth, they're not. And so that's why we (I) invest in things that ride that wave.

The intent of my comments was not to discount those factors in the past. That they happened in the period of the chart is accepted as a given.

The point was to invite consideration of their relevance to a repeat performance in the future. If relevant, what chance is there of a repeat quadrupling of world population (current population growth rate -- which continues to fall -- would only triple, not quadruple population in the next 100 years)? If relevant, what chance is there of a repeat prolonged period of >10% annual inflation as around the 1970s? If relevant, what chance that the US maintains its position of 20% of world GDP? If relevant, can the S&P500 experience be applied to investment in, say, UK markets? And if we do invest, do we also benefit from the survivorship bias inherent in S&P500 valuations?

The above thoughts were really a response to Dod's "all you need to know..." and I have to say, he seems rather chilled about it!

As for 2008, I don't believe this is a repeat, neither in the particular sense of a debt/banking crisis nor the general economic sense of imminent collapse of equity markets. If anything it's more like 2007 (early cracks, short yields still rising), so maybe a year or two of volatility ahead before a bottom for USA. And UK markets already look decent value to me, but what do I know?? I also still believe markets are not going to correlate like 2008 so the deeply unfashionable asset picking may be important for outperformance.

GS

[TheMotorcycleBoy]

Should I speak to my therapist perhaps?

He probably wouldn't appreciate a call on New year's Eve.
Take a deep breath, and pour yourself a glass of wine.
Happy New Year

Hallejulah!

It seems that earlier, some of the posting in this thread, was taken far too personally. There's no point. It is a shame - I for one, was finding a lot of what was being posted earlier by all of you, quite interesting and informative.

After all it's only an internet forum - use it dispassionately and with grace.

Matt

[johnhemming]

A proper financial crisis normally needs high energy prices. The USA has the trump problem and the UK has the brexit problem. Those are unusual, but don't I think cause as big a problem as an energy price spike.

[odysseus2000]

A proper financial crisis normally needs high energy prices. The USA has the trump problem and the UK has the brexit problem. Those are unusual, but don't I think cause as big a problem as an energy price spike.

We have a negative energy price spike:

https://twitter.com/0_ody/status/1079809837192617986

Regards,

[TheMotorcycleBoy]

A proper financial crisis normally needs high energy prices. The USA has the trump problem and the UK has the brexit problem. Those are unusual, but don't I think cause as big a problem as an energy price spike.

We have a negative energy price spike:

https://twitter.com/0_ody/status/1079809837192617986

Regards,

But continuing from johnhemming why does the negative spike promote the likelihood of another "proper financial crisis" ?

[johnhemming]

https://twitter.com/0_ody/status/1079809837192617986

Regards,

But continuing from johnhemming why does the negative spike promote the likelihood of another "proper financial crisis" ?

I don't think it does. It causes difficulties for countries like Venezuela and Saudi Arabia, but the general world economy finds lower energy prices a stimulus to growth.

[odysseus2000]

A proper financial crisis normally needs high energy prices. The USA has the trump problem and the UK has the brexit problem. Those are unusual, but don't I think cause as big a problem as an energy price spike.

We have a negative energy price spike:

https://twitter.com/0_ody/status/1079809837192617986

Regards,

But continuing from johnhemming why does the negative spike promote the likelihood of another "proper financial crisis" ?

The negative spike doesn't promote anything.

It is just one observation in many that I consider when trying to work out what is going on in the short term.

Someone investing for decades would not worry about such things but if you are investing/trading to make money as frequently as possible then it is an entirely different game and one has to develop an ear for the whispers of the market.

Oil's weakness may imply that the market is expecting a slow down and this thesis fits with the rate increases of the Fed, but that is by no means certain as there is also a secular move from hydrocarbons to renewables and electric traction and many other possible connections.

What interests me the most at the moment is that after four market up days following the heavy selling on Christmas Eve the major US index have paused. If this pause breaks to the upside I would worry less about the short term outlook. If however, it breaks down I would likely short the index and maybe add to my gold long. These would all be very short term things and I could reverse in a heartbeat if something doesn't feel right.

Trading the markets is about reacting to changes and being able to admit that you have made a mistake and change very rapidly. Anyone trained in the hard sciences, engineering, medicine etc will have severe troubles trying to trade the markets due to the absence of well defined and inviolate rules that characterise these other disciplines. I hold a PhD in Nuclear Physics making me acutely aware of the differences and how the wrong thought pattern will get you killed in the markets.

Regards,

[TheMotorcycleBoy]

Trading the markets is about reacting to changes and being able to admit that you have made a mistake and change very rapidly. Anyone trained in the hard sciences, engineering, medicine etc will have severe troubles trying to trade the markets due to the absence of well defined and inviolate rules that characterise these other disciplines. I hold a PhD in Nuclear Physics making me acutely aware of the differences and how the wrong thought pattern will get you killed in the markets.

Nuclear Physics is a "hard science", right? In your book? It most certainly is mine.

[odysseus2000]

Trading the markets is about reacting to changes and being able to admit that you have made a mistake and change very rapidly. Anyone trained in the hard sciences, engineering, medicine etc will have severe troubles trying to trade the markets due to the absence of well defined and inviolate rules that characterise these other disciplines. I hold a PhD in Nuclear Physics making me acutely aware of the differences and how the wrong thought pattern will get you killed in the markets.

Nuclear Physics is a "hard science", right? In your book? It most certainly is mine.

It's like everything.

People have remarkable aptitudes & abilities & although most of the population find some things extremely difficult, a small part of the population find them relatively easy. Often such folk don't realise what gifts they have & assume that anyone could do what they do & that they can likely do any thing.

In practice, at least in my experience, people who are super skilled at one thing often can do well in related disciplines, so e.g. physicists can do things that use the same skill set, but when they move from logic based things into emotional based things they struggle.

They always want to e.g. apply physics based methods to things that are all about emotion & crowd behaviour. If you look at most technical analysis it is all physics techniques & mostly of limited applicability to markets.

If you look at traders who make very large amounts of money they often do poorly at logic type disciplines but are often sports fans seeing what are the strength, weakness & turning points very easily in emotional endeavours & combine this with very strong risk management.

It is quite humbling to see how useless logic skills are for the vast majority of human endeavours. God or nature, depending upon your beliefs, knows this and makes very few people skilled in logical thought as these small numbers can easily do the complicated stuff that the vast majority of the population needs.

Regards,

[TheMotorcycleBoy]

Trading the markets is about reacting to changes and being able to admit that you have made a mistake and change very rapidly. Anyone trained in the hard sciences, engineering, medicine etc will have severe troubles trying to trade the markets due to the absence of well defined and inviolate rules that characterise these other disciplines. I hold a PhD in Nuclear Physics making me acutely aware of the differences and how the wrong thought pattern will get you killed in the markets.

Nuclear Physics is a "hard science", right? In your book? It most certainly is mine.

It's like everything.

People have remarkable aptitudes & abilities & although most of the population find some things extremely difficult, a small part of the population find them relatively easy. Often such folk don't realise what gifts they have & assume that anyone could do what they do & that they can likely do any thing.

In practice, at least in my experience, people who are super skilled at one thing often can do well in related disciplines, so e.g. physicists can do things that use the same skill set, but when they move from logic based things into emotional based things they struggle.

They always want to e.g. apply physics based methods to things that are all about emotion & crowd behaviour. If you look at most technical analysis it is all physics techniques & mostly of limited applicability to markets.

If you look at traders who make very large amounts of money they often do poorly at logic type disciplines but are often sports fans seeing what are the strength, weakness & turning points very easily in emotional endeavours & combine this with very strong risk management.

It is quite humbling to see how useless logic skills are for the vast majority of human endeavours. God or nature, depending upon your beliefs, knows this and makes very few people skilled in logical thought as these small numbers can easily do the complicated stuff that the vast majority of the population needs.

Regards,

Thanks - but you didn't really answer my question.

[odysseus2000]

motorcycleboy
Thanks - but you didn't really answer my question.

Not sure what your question was.

Was it that Nuclear Physics is a hard science?

If so then my answer was that for a small section of the population it isn't, but for most it is.

That is true for all the hard things in all disciplines, whether it be nuclear physics or football or ... Some individuals
have the required skills, most don't or can only do what is needed after intense work & most people will not focus at the level needed to accomplish something they feel is difficult.

If this wasn't your question, please ask again.

Regards,

[TheMotorcycleBoy]

motorcycleboy
Thanks - but you didn't really answer my question.

Not sure what your question was.

Was it that Nuclear Physics is a hard science?

If so then my answer was that for a small section of the population it isn't, but for most it is.

That is true for all the hard things in all disciplines, whether it be nuclear physics or football or ... Some individuals
have the required skills, most don't or can only do what is needed after intense work & most people will not focus at the level needed to accomplish something they feel is difficult.

If this wasn't your question, please ask again.

Regards,

Yes, it was. Thank you.

But regardless we seem to have meandered wildly off-topic.

The most germane recent comment, IIRC, had to do with energy price spikes VS proper financial crisises and the current season being similar to 2008.

[TUK020]

But regardless we seem to have meandered wildly off-topic.

The most germane recent comment, IIRC, had to do with energy price spikes VS proper financial crisises and the current season being similar to 2008.

While we have been meandering, another year has gone past. Shouldn't the title of the thread now be "Isn't 2008 so last year?"

[odysseus2000]

Yes, it was. Thank you.

But regardless we seem to have meandered wildly off-topic.

Yes and no.

How people view the markets is what determines whether they go up or not.

For example you argued that lower energy prices are bad for Saudi, good for consumers.

This is potentially right after a period of slow down, but wrong at the beginning.

At the beginning folk cancel buildings & stop buying stuff, so there is less need for transport fuels etc & the price falls, not good for producers or consumers. At the end of a slowdown folk start to build & order stuff & energy prices tend to lag which is then good for consumers.

How one views the market & the parameters of the market have to vary over time & with how the individual hears the whispers of the market. You can be sure that experts have predict 50 of the last 5 recessions and proclaimed 50 of the last five recoveries. They will cite facts like lower energy etc & mostly be wrong in their interpretation.

Imho to time swings in the market you have to watch price which is why the selling on Christmas Eve so troubled me & why I now want to know where the market goes next after its 4 day rally. This will determine my short term outlook, not all the folk who have thesis based on their listening to the market.

Regards,

[TheMotorcycleBoy]

While we have been meandering, another year has gone past. Shouldn't the title of the thread now be "Isn't 2008 so last year?"

Ha!
Or continuing from johnhemming:

https://twitter.com/0_ody/status/1079809837192617986

Regards,

But continuing from johnhemming why does the negative spike promote the likelihood of another "proper financial crisis" ?

I don't think it does. It causes difficulties for countries like Venezuela and Saudi Arabia, but the general world economy finds lower energy prices a stimulus to growth.

"Is 2019 going to be a boom bull year, because we've got lower energy prices, and hence a growth stimulus?"