Time to get real long??

Darkhorse, where did Warren Buffet say this about the market? Do you have a link?
Personally, I wouldn't put much stock in what Buffet says about the market's prospects. His record indicates that he most certainly does know something about markets, but I would question his motivation for forward looking statements.
 
Buffett predicted that the market returns for the next 7 years will be much lower than was seen in the 90's and it is quite possible that stocks as an assett class will do worse than Bonds.
 
My current feeling is that there will continue to be good volatility for the rest of the year and the nasdaq and the s&p 500 will finish negative for the year. What happens more than 6 months out is up to Nostrodomus.
 
Who in 1980 when Gold was trading at $800 per ounce would have believed that not only would Gold break to $240, but languish at that level for years. Or who would have foreseen in the late 1970's when cars were lined up for blocks waiting for gas, that with global consumption rising over the next two decades , crude prices would habitually reside in the teens. Or that with soaring deficits that the long Bond would plummet from yields of 16% to 5%. And of course we all remember that the Nikkei was "fairly priced" in the 30,000's because Japanese accounting methods differ from those in the states, and a P/E of 60 in Asia wasn't the same as those lofty ratios in the States.

The S&P 500 had a 1500% rise from the "dawn of the bull" in Aug. 1982 through the 2000 high. Given the complete sea change over the last two years, i.e. quasi recession, emerging stagflation, war(s), accounting scandals, rising unemployment, record debt from individual to corporate to global governments, I don't believe it is blasemous for one to utter that the cyclical bull is dead. After all the tape does not lie. I will be the first person to get long on certain days (I bought ES on it's lows Fri.,even while thinking it could be a "crash day", but luckily it wasn't!) but I have no illusions that the excesses of valuation have abated, that sentiment has turned bearish enough to form a bottom, or that the market has fully discounted a double dip recession. It takes two to make a market so as long as someone who thinks contrary to me on any given day is involved, I have an opportunity to test the water.
 
The Dow's history shows us that there is almost always lots of price action and the 1929 crash did not reduce trading to a tght range. The notion that we are in an extended trading range (maybe the pundits should mean the travel range is extended and not just the time period) should be examined and more fully described. I list 6 decades of principal Dow movements 1921 - 1982

Low 1921: 65
High 1929: 386
1932 post crash nadir: 40

By 1937 the index climbed to 194, big gains especially for a depression. 1929 high was not broken until the end of 1954. But there were many bulls and bears. The Dow crashed in 1937 and bottomed in 1938 at 97. It bounced to 155 by year's end. By 1942, after lots of chop, it bottomed again at 95. It then trended up until mid 1946 to a peak of 213. The next two years were uneventful - due to the advent of Alien vistors at Roswell :-) but 1949-51 was a real bull, the Dow advanced from 165 to 277. Consolidation followed to late 1953 and a 2-1/2 year bull to 1956. Price went from 272 to a high of 517. A sharp 3 month bear ensued in 1957 with a 25% drop, coinciding with a recession. The Dow underwent a 2 year bull with price extending to 681. 1960 had a 9 month decline of 100 points (roughly 15%) drop. Dow then advanced to 730 by November 1961). In the spring of 1962 the Dow dropped from 724 to 525 in 3 months during recession. A 3-1/4 year bull occurred from the 1962 to January 1966 with price advancing to 1000, followed by a 7 month bear dropping the Dow to 781. By Late 1968 the Dow regained most of the losses in the '66 bear and rose to 977. Then a 14 month bear May 1969 – July 1970 brought the Dow from 965 to 689. By late 1972 to Dow barely broke to a new high to 1020 when it began a 2 year decline which accelerated sharply in 1974 with a double bottom in late ’74 at 570. A 43% drop, thank you OPEC, stagflation and the after effects of the financial cost of Vietnam. Price rebounded in 1975 and 1976 to a barely new high of 1026, almost a 90% hike. The Dow then entered a bear in 1977 that bottomed in early 1978 at 750. Lots of chop through to 1980 – during high inflation (I had a 5 year CD account that paid 15.9% in 1980, now I get 1.7% in a money market) and then a sharp rise occurred in 1980, taking the Dow from 761 to 1009. The Dow then lost 20% in the recession of 1981-82 and double bottomed at 784. the SP 500 PE I think was 7 or 8. My favorite quote was from some old time wall street guy who said: “stocks in 1982 were cheaper than dirt” The rest is, as they say, history.

In hindsight, there were lots of macro trading opportunities long and short.

Here is a link to an interesting study on characteristics of bottoms and turnarounds:

http://www.mta.org/pdf/2002DowAward.pdf

I disagree with comparisons of the Nikkei to the US market as the cultures and economic systems of each country have differences vast enough to produce wholly different post-bubble market behavior.
 
Originally posted by Pabst
Given the complete sea change over the last two years, i.e. quasi recession, emerging stagflation, war(s), accounting scandals, rising unemployment, record debt from individual to corporate to global governments, I don't believe it is blasemous for one to utter that the cyclical bull is dead.
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What is the evidence of stagflation? (not trying to be cute - just hadn't heard anyone else mentioning it).
 
Originally posted by TriPack


What is the evidence of stagflation? (not trying to be cute - just hadn't heard anyone else mentioning it).
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TriPack:

With Gold at $325 and wages still rising despite an upturn in unemployment, I think the consequences of the Fed's easing cycle have manifest in higher prices for just about everything EXCEPT equity prices.
 
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