Are equities a good risk/reward at this point?

[failed_trad3r]

You gotta love those bears

12 months ago is was too dangerous to go long because the market was too low.

Now is is also to dangerous to go long, but because the market is too high.

Make up your mind!!!

 

[Debaser82]

I've been thinking how unimaginable it must have been for each previous generation to see the stockmarket go parabolic over the time of a few decades, as it did certainly the last 100 years.

People like to point out the huge challenges our societies face today but at the same time forget times were not all that great in the past as well.

I mean, buying stocks during WWII was a great idea, and here we are worrying about comercial real estate as the next shoe to drop.

Seems surreal.

 

[stock piker]

Quote from SCI new york:

Sounds like another bear who missed the boat and hoping for a drop off. Stocks may be up 80%, but thats still below break even. stocks are finally starting to go back to a stage of "narmalcy" and theres still tons of money on the sidelines and in bonds/fixed income. once interest rates start to increase (inevitably soon) you will see that money move into equities providing another boost to the market.

and just because the vix is at these levels doesn't predict a market going down. its showing volatility, and right now there isn't much, so the markets have made a move and now in a slower state of likely consolidation before the volatility increases again and we move to new levels.

You're a real grammatical whiz. wtf is "narmalcy" and why would equities rally with competition from rates (rally in rates)? Other than your standard line of illiterate BS. Volatility isn't going to increase if we rally.

 

[piggie2000]

overall earnings have been very medicore. every single regional bank had a loss this qtr yet there stocks are up 3-10 times off the bottom. even today wfc had crap earnings down yr over yr. we must remember the fox in the hen house(wall street) is providing super low ball est so every co can crush them. yes techs are doing well but i can make a case this is as good as there earnings get and will disappoint in the next 6-12 months.were being seduced by earnings gains over a terrible 1q 2009. many stks are within spitting distance of all time highs like cat yet there earnings are down 60 % from there all time highs. play the game daily and let the mkt tell you were its going.

 

[MarketOwl]

Quote from Ghost of Cutten:


As for money on the sidelines, that could be a bull point - do you have any data to suggest that cash on the sidelines is higher than normal?

Just by the Fed massively increasing M2 money supply, that in itself tells you that there is more cash on the sidelines. Sure, its at the banks and not in retail investor accounts. But banks can buy stocks too!

 

[ScalperJoe]

Perhaps it's a matter of the Fibonacci numbers:

S&P 500:

October 2007 high: 1,576
March 2009 low: 666

.618 retracement: 1,228

In 2004, the S&P consolidated in a tight range for most of the year before breaking out.

Also, the 200 per weekly moving average is just above, and you can confirm it going back 10 years.

Very tough resistance ahead. Whether we stay tight, break out above or crash down below is anyone's guess. I'd say if you have big gains, cash in the chips before summer.

 

[financialmarket]

if you are short term daytrader or swing trader who cares about bull or bear market top or bottom or fundamentals.




[

QUOTE]Quote from failed_trad3r:

You gotta love those bears

12 months ago is was too dangerous to go long because the market was too low.

Now is is also to dangerous to go long, but because the market is too high.

Make up your mind!!! [/QUOTE]

 

[Specterx]

Quote from Debaser82:

I've been thinking how unimaginable it must have been for each previous generation to see the stockmarket go parabolic over the time of a few decades, as it did certainly the last 100 years.

People like to point out the huge challenges our societies face today but at the same time forget times were not all that great in the past as well.

I mean, buying stocks during WWII was a great idea, and here we are worrying about comercial real estate as the next shoe to drop.

Seems surreal.

It has nothing to do with fundamental challenges to our society, but everything to do with the outlook for business earnings growth.

The facts are that businesses have cut to the bone, growth in earnings must now come from higher sales. What will be the engine for higher sales? In the past, the engine was debt accumulation - but that era has ended (despite the frantic attempts to restart the party 2007-style). At the very least we need a period of rebalancing, and at the worst we're headed for some kind of systemic implosion. In either case I expect we'll see much lower valuations sometime in the next few years, and that will be the time to buy (note that a number of stocks were quite attractively valued back in early 09).

There's not a shot I'm going to buy stocks at PEs of 15+ given the current fundamental backdrop.

 

[Debaser82]

Quote from Specterx:

It has nothing to do with fundamental challenges to our society, but everything to do with the outlook for business earnings growth.

The facts are that businesses have cut to the bone, growth in earnings must now come from higher sales. What will be the engine for higher sales? In the past, the engine was debt accumulation - but that era has ended (despite the frantic attempts to restart the party 2007-style). At the very least we need a period of rebalancing, and at the worst we're headed for some kind of systemic implosion. In either case I expect we'll see much lower valuations sometime in the next few years, and that will be the time to buy (note that a number of stocks were quite attractively valued back in early 09).

There's not a shot I'm going to buy stocks at PEs of 15+ given the current fundamental backdrop.

I think subscribing stock market performance solely to future earnings growth is a bit short sided.


Plenty of other factors in play I would think such as momentum and liquidity, just to name a few.

As far as your outlook goes I'd probably agree but would like to add a systemic breakdown troughout history has just as often resulted in a crash of risk assets as in a crash of the currency with risk assets being the prefered safety route to take.

So to each his own but the idea of having no equity exposure whatsoever is the ultimate safety play I would say seems just as dubious as having all your money in the stockmarket today.