Markets are supposed to be "forward looking"

V

vanzandt

Healthcare is a ticking time-bomb.
It is going to affect everything. Regardless of what goes on in DC and who's controlling Congress, who's President, etc. It doesn't matter.

Disposable income is going get hammered.
The markets are at all time highs, forward earnings on the S&P seem "reasonable"....but the markets are not looking far enough forward.

Bears love the phrase "the next shoe to drop". This is that shoe, but it's not going to happen in that context.

Without going into a lot of detail.... a series of events and conversations with people very well versed on the subject has enabled me to understand that this is problem that can not be fixed. Its a tsunami masquerading as a slow rising tide.

Its pretty obvious when you think about it. Wage growth is and will continue to be stagnant for the majority of Americans. Boomers with pensions are retiring on what was good money in 1980, ....but not today. Drugs alone can easily be well over $1000/month out of pocket for an individual... let alone a married couple.

As disposable income shrinks, I have to think the S&P will follow.
But hey... I'm sure we'll see at least three days of record highs this week.
NFLX to $200. TSLA... $400 here we come!
Markets NEVER go down.

Hell I'm gonna go order some Dominoes to celebrate. (We unfortunately don't have Overnight's NY pies here). But DPZ Large 2 items are only $5.99 this week. Hey the more you give away at a lower price... the higher the PE should go. 46 Forward is nothing! Thats called synergy. And I can pay with my phone... on credit. Thats worth a few points right there. :D

I'm getting mine with anchovies and satoshis. Yum.
 
I am pretty sure 50% of the S&P 500 revenues come from overseas so as important as health care and such issues are, the markets will continue their march higher despite what happens in the U.S. Tech bubble in 2001 and housing bubble in 2009 did not stop the march from continuing.
 
It's been getting worse in the same way for a few years in the UK, health care is kinda fine, although the service is under funded and at breaking point but hey!!

Banks push interest rates up 1% and that'll add £300 to the average mortgage and push a lot of people over the edge, then there will be no spare income to spend on anything.

Atleast we'll all be billionaires from trading soon!!
 
El OchoCinco said:
I am pretty sure 50% of the S&P 500 revenues come from overseas so as important as health care and such issues are, the markets will continue their march higher despite what happens in the U.S. Tech bubble in 2001 and housing bubble in 2009 did not stop the march from continuing.
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Ya know I actually thought about that too. And you are right. But is it also not true that when America coughs, the world gets a cold?
Or something like that? Old adage I think.
 
I'm never forward looking...that's a fancy way to say missing opportunities. I stay hedged to weather the big one (I hope), but until I've been beaten down for a few weeks, I'll keep my bullish posture.

My investment account is a little more in line with your reasoning, but not much. Mostly just heavy in consumer defensive right now.
 
vanzandt said:
Ya know I actually thought about that too. And you are right. But is it also not true that when America coughs, the world gets a cold?
Or something like that? Old adage I think.
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Yes the world gets a cold as in how the housing crisis spread around the world but after a year the markets tend to snap back to equilibrium. But I think the markets are getting much better immune systems and simply shrug off the issue and have quite short term memories.
 
El OchoCinco said:
I am pretty sure 50% of the S&P 500 revenues come from overseas so as important as health care and such issues are, the markets will continue their march higher despite what happens in the U.S. Tech bubble in 2001 and housing bubble in 2009 did not stop the march from continuing.
More...
%%
As you implied, ElOchoCo,cant really blame the bear market of 2000,2001, 2003 on so called ''health care . '' And ''ACA is TRAINWRECK'' but NOT likely one big stupid train WRECK,could wreck US, it did not in UK[yet]. Another fatal flaw is calling insurance ''health care''' That is like calling tow truck / auto liability insurance ''care car'' LOL
People get amazing discounts for cash medicine[eliminate insurance co] in US; many people learn how to receive Word miracles, organic food is a growing trend, medical books are cheap.
DR Reginald Cherry ''The Doctor + The Word ' book is helpful, all his books are; his wife Linda is a RN========================================================================================
 
I also think the "health care as a ticking time bomb" is more a political narrative than a financial one to drum up support for new GOP plans. I think if you look deeply ACA and AHCA both have benefits and drawbacks, just depends from where you are sitting whether it positively affects you are not. But in the long run the markets will not be dragged into it.

The question you need to ask yourself is what is the next bubble? We had the tech bubble and the markets collapsed and ran up again but on the backs of the housing bubble and consumer spending fueled by home wealth/lines of credit etc. That imploded and took a lot with it (foreclosed homes, investment banks disappearing).

What is the next "crisis"? Terrorism attacks are shrugged off as are most political risks so it has to be some sector that could affect all of us. It could be simply another tech bubble but the market has done a good job of weeding out the bullshit pops like Twitter and Instagram.

One theory of mine is the next bubble to come is in the brick and mortar sectors of the consumer economy. All the department store chains getting killed by Amazon, Walmart and Target (plus their online sales) and being forced to move to more online sales means large scale closing of physical properties and layoffs of in store workers.

Imagine when Macys, Kmart, Sears, JC Penny, etc. all have to close stores. Not only people laid off but many serve as anchor tennants in malls and could affect real estate. Granted most people want to buy clothes in person but this will not be consumer driven but stores will have no choice in order to stay alive. E commerce is not a bubble but will cause a painful death in brick and mortar and the job loss/real estate effect could cause regional pains (will not hurt our GDP or overall markets but some pain).

Just a theory of course but even Bed Bath and Beyond, Crate and Barrel and Best Buy will have to push ecommerce to keep up with Amazon, Walmart and Target selling the same online.
 
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