The Dow since 1915

Quote from PuffyGums:

Harry you got busted on this one. And you understand quantum physics. Your chart basically says that unless the US of 2004 has the same economy as that of 1940 or so we are in a bubble. You need a chart that zeros out the normal year-to-year increases due to inflation, productivity growth, population growth and retained profits- hence the use of log chart.

That is why the doomers go for the charts of nominal prices and everyone else uses log prices. With the log chart, that scary, upward swooping shape you get with any normal (non-bubble) compounded growth become a straight, rising line. With the log chart, you can see 'real' bubbles apart from cases of normal growth. The Sornette book (Why Stock Markets Crash) gives valid statistical tests for bubble conditions.

You compatriot Didier Sornette says we are not longer in an anti-bubble regime. We are definitely not in a bubble any more either. The doomer case declines day by day.

"WE FIND FOR THE FIRST TIME A STRONG PROBABILITY THAT THE ANTIBUBBLE DOCUMENTED HERE MAY HAVE ENDED."

http://www.ess.ucla.edu/faculty/sornette/prediction/index.asp#prediction
More...

Puffygums,

I hate Sornette! Lil f*cker! He keeps on changing his predictions. Last spring if you read his webpage, he was predicting a HUGE
drop in the market. So, I was partial bearish. Waiting for the big crash to come.

To make a long story short(no pun intended. hehe), I missed out a lot on the move. Or even lost money listening to his bs! And the funny thing was my technical analysis studies have shown the market has turned from bearish to bullish. But I kept listening to this fucking idiot Sornette guy! I don't care if he has a phd in geophysics or whatever. Simple trend analysis would have shown you to shift from bearish to bullish in March 03.

Of course, that is the LAST damn time I'll pay attention to any guru or anyone except myself. My methods are far superior this his mathematical mumbo jumbo bullshiet!

Harrytrader,

I don't care if you think there will be a big crash. If there will be one, then I'm hella ready to short. Because I've gotten very good at shorting with lots of practice. And if continues to go up then I'm ready to go long. Triumph of the Optimist said this century the return is something like 1 million percent. Show that to the bears!

If you believe the human race is doomed then there's really no point predicting and tell us the doom is near. If it is then oh well. We are all dead. Big deal.

But the human race will continue. There will be setbacks in growth, there will be deficit, wars, famine ,etc. It has always been this for thousands of years. And civilization continue to progress.

But the BIG picture is this. You should give a shiet. Just trade 'em!

It's very liberating to finally see through all this bs!
 
You're right Sornette's model is not really a robust model he admitted himself so don't be too harsh with him; as for me I didn't talk about immediate crash - except perhaps an intermediate "corrective" crash - but about what it could happen a few years ahead 2008/2012 I don't know exactly as I haven't studied my model on upper scale thourougly - because unlike others I don't suppose that market is fractal as long as I don't have proof of it - although I suspect that the behavior that I observed on lower scale is also true on much larger scale I didn't quantify precisely yet as the interaction between lower and upper scale make upper scale very noisy. I only make the supposition that Dow is right as my model is somehow a quantification of Dow theory but on low scales whereas traditional Dow Theory pretends that it is true for Big scale. I suspect that they told semi-truth.

For Puffygums, I would like people to stop using scientists researchs to justify falsely their own beliefs. Scientists are much more prudent than that. They don't make outrageous claims. I already said that for Mandelbrott and the Elliottists who pretend that he cautioned - even that he had stolen - their theory whereas he didn't really (see http://www.elitetrader.com/vb/showthread.php?s=&threadid=26786&perpage=6&pagenumber=4) and it is also true for Sornette.

Quote from misctrader:

Puffygums,

I hate Sornette! Lil f*cker! He keeps on changing his predictions. Last spring if you read his webpage, he was predicting a HUGE
drop in the market. So, I was partial bearish. Waiting for the big crash to come.

To make a long story short(no pun intended. hehe), I missed out a lot on the move. Or even lost money listening to his bs! And the funny thing was my technical analysis studies have shown the market has turned from bearish to bullish. But I kept listening to this fucking idiot Sornette guy! I don't care if he has a phd in geophysics or whatever. Simple trend analysis would have shown you to shift from bearish to bullish in March 03.

Of course, that is the LAST damn time I'll pay attention to any guru or anyone except myself. My methods are far superior this his mathematical mumbo jumbo bullshiet!

Harrytrader,

I don't care if you think there will be a big crash. If there will be one, then I'm hella ready to short. Because I've gotten very good at shorting with lots of practice. And if continues to go up then I'm ready to go long. Triumph of the Optimist said this century the return is something like 1 million percent. Show that to the bears!

If you believe the human race is doomed then there's really no point predicting and tell us the doom is near. If it is then oh well. We are all dead. Big deal.

But the human race will continue. There will be setbacks in growth, there will be deficit, wars, famine ,etc. It has always been this for thousands of years. And civilization continue to progress.

But the BIG picture is this. You should give a shiet. Just trade 'em!

It's very liberating to finally see through all this bs!
More...
 
http://www.chuckmorse.com/crash_of_1929.html


"Understanding the crash and depression requires a study in the nature of money, circulation, and credit. Understanding money is key to understanding the essence of private ownership and freedom. The manipulation of currencies by governments, usually working in tandem with central bankers, has been the primary cause of war, systemic poverty and social dislocation. "

[...]

"The underlying principal of the American monetary system is a series of laws meant to protect property, including money itself, which is the abstract expression of property. The importance of maintaining a stable measure of value, which encourages saving and investment, was understood by our founding fathers when they wrote Article I, sec.8, clause 3 in the Constitution which reads: "The Congress shall have the power to coin Money, regulate the Value thereof, and of foreign coin, and fix the standard of Weights and Measures." Congress was explicitly granted the prerogative of setting the value of gold and silver, which means that Congress, regulating the value of money, is supposed to decide how much money would circulate in the economy at a given time.

The value, or "coining" of money is directly connected with the quantity of money issued into the economy, which is determined by interest rates. When money is valued at a high rate, interests rates rise due to the relative scarcity of money and vice versa. This determination was supposed to be made by elected representatives, in the open, and based on such indices as the "gross national product." Money was supposed to serve as an expression of both tangible created capital and as fuel for legitimate creative ideas deemed worthy of investment and backed by a tangible asset. Congress would make the determination and than order the treasury to issue the currency debt free.

Instead, money has become an expression of debt. In the Fed system, the Federal Reserve loans the money to the government at interest to be paid by the taxpayer. Along with bonds and other credits, this is what makes up the federal deficit. The taxpayer pays the interest. Congress prefers the Fed system because, with the constitutional system Congress would either have to raise taxes or print inflationary paper to raise money which would be immediately felt by the electorate and be unpopular. The constitutional system forced government to live within its means. The Fed system, on the other hand, allows Congress to pass the buck, so to speak, by creating debt that would be paid off gradually by future generations. That way, Congress was able to mortgage our future without taking direct responsibility in the present. "
 
On a very basic level, I would propose that the rise in the stock market might be somewhat correlated to both the rise of population (more workers) and also an increase in technology that boosts each worker's efficiency.

The market most likely resembles a logistic growth model. At some point all of these models reach an inflection point and eventually level out.

Although we only have a constant supply of natural resources, we can continue to increase efficiency through technology.

I don't really see a huge crash in your chart. If broad sector growth diminishes, then one can always take advantage of the transfer and allocation of money between different sectors and individual interests (specific stocks).

 
Harry Trader is getting warm...

This is not very complicated...For example..when you look at a country's government...its debts...its production mix...the money it prints annually...Imports...The money tends to be priced high when productivity is increasing..confidence is high..and the tax take relieves the debt..money printing rates...

But for the trader..the more volatile countries offer the best opportunities to make money...The country will not go broke because it has the right to print money...

One example of a smaller third world country opportunity compared to the US opportunity is....

1.20 x 1.28 x 1.50 x 1.30 / 30 x 14600000= $1,714,898 is based
on a initial $ 1,000,000......This is the the combined interest paid by the central bank with currency devaluation...

The same $1,000,000 in the US made:

1.01 x 1.008 x 1.008 x 1.008 = $1,034,434

I know this will be vague to most readers but represents the opportunity in what most would read in newspapers as dire circumstances for the country in upheaval...Because of the countries sovereign right to print money...it will not go broke ..as will a company...

What I am suggesting is that opportunity is found in calamity.."volatility"...opportunity is not found in the lack of volatility.."calamity"...

Let calamity come...more money for the astute trader...who is praying for volatility.."calamity"...
 
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