Vote: Crash, Consolidation or Bounce coming?
- Thread starter KCalhoun
- Start date
I have no idea...
Crashes are by definition unpredictable as far as I can tell, so I won't even go there. Statistically, September is one of the weakest month of the year, so that went as expected. Compared with last year, though, this September closed at the very low.
It should be interesting to see if we get follow through lower. Way too many smug bulls with fat pockets, so I wouldn't mind a decent correction or even sell-off from here, but I'm not really convinced we will get that yet.
Crashes are by definition unpredictable as far as I can tell, so I won't even go there. Statistically, September is one of the weakest month of the year, so that went as expected. Compared with last year, though, this September closed at the very low.
It should be interesting to see if we get follow through lower. Way too many smug bulls with fat pockets, so I wouldn't mind a decent correction or even sell-off from here, but I'm not really convinced we will get that yet.
Regarding smug bulls with fat pockets who believe the market only have one direction - I actually warned someone I know who was asking for advice about going all in with a lump sum a month back.
I told him that I won't attempt to predict the market, but that statistically, September is the weakest month of the year and that personally, I would at least wait until the end of September. Also, consider that few people seem to disagree that stocks are highly priced right now by most historical measures.
He didn't listen to that and was cheered on by a few other guys who belong to the zero-risk long only crowd who have less than 10 years of market experience. So, he pretty much bought the top.
I told him that I won't attempt to predict the market, but that statistically, September is the weakest month of the year and that personally, I would at least wait until the end of September. Also, consider that few people seem to disagree that stocks are highly priced right now by most historical measures.
He didn't listen to that and was cheered on by a few other guys who belong to the zero-risk long only crowd who have less than 10 years of market experience. So, he pretty much bought the top.
US indexes on a trailing P/E basis are expensive. On a forward P/E basis they are upper range normal. However, some segments of the market are cheap now. International markets like Europe are cheap. TSX has hit new highs but on a book value basis it's less then half the price of the SPX. Value trap or opportunity it's to be decided but if one doesn't like US indexes because of valuations then there are value areas to participate in. A lot of small caps have corrected huge this year.
Best one can claim given all the uncertainty on how strong the recovery will be is that the IT industry has a lot of excessive stock valuations ( not every company but most of them ). Value areas lagged badly for several years before Covid; some like energy and mining got crushed. US indexes are heavily weighted by big tech.
Last edited:
