Why Do People Buy At A Top?
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Why doesnât everybody trade the way they know best?
IMO those who donât walk with their own legs will never learn â¦
(learn and improve from you own mistakes)
Example; (so you will understand better)
We have to drive (TRADE) from A to B (Target) even if we got the same car (cash) doesn't mean we get there at the same timeâ¦.why? one can change gear more than the other, might break more, even use more petrol etcâ¦. etc⦠etcâ¦
So IMO the parable is â¦.. we canât all trade the same, we have different approach, (psychology very important) but we all reach our target (green) so where is the problem?
I havenât been here long but I am sure you all are good/profitable traders â¦
Instead of âI am better than you etcâ¦â why not get together and join forces (why not a daily thread?) to fight the system (MM + moneymen) because they are our enemies not us poor mortals who are trying to earn a living or improve our life with few extra centsâ¦.
Who care who buy at the top or bottom, provide whoever does it make green?
IMO those who donât walk with their own legs will never learn â¦
(learn and improve from you own mistakes)
Example; (so you will understand better)
We have to drive (TRADE) from A to B (Target) even if we got the same car (cash) doesn't mean we get there at the same timeâ¦.why? one can change gear more than the other, might break more, even use more petrol etcâ¦. etc⦠etcâ¦
So IMO the parable is â¦.. we canât all trade the same, we have different approach, (psychology very important) but we all reach our target (green) so where is the problem?
I havenât been here long but I am sure you all are good/profitable traders â¦
Instead of âI am better than you etcâ¦â why not get together and join forces (why not a daily thread?) to fight the system (MM + moneymen) because they are our enemies not us poor mortals who are trying to earn a living or improve our life with few extra centsâ¦.
Who care who buy at the top or bottom, provide whoever does it make green?
its obvious that his returns were outsized due to the extreme debt expansion by the socialist Reagan. We wont have that opportunity as the debt will be repudiated in our lifetime.
you say counting dividends doesn't say much, and then you show this....
You do realize the DOW, adjusted for dividends, since 1884, would sit at 652,000 today? That's right I didn't do a typo, had you reinvested dividends in the DOW since 1884 starting at 62.76 the DOW would read north of 652,000. People think some DOW 30,000 calls are ludicrous in 5 years from now. forget dow 30,000, try dow 652,000 right NOW
Where do you find 3% a year?
Statistics say for example something like 2,3% for SP500 and 1,4% for NASDAQ, but we don't have the average for ALL stocks (I think the average could be less).
Then there is taxation, and this varies among countries.
Then it depends if you reinvest them or not.
In the end,we don't have enough data to say something.
Supposing about 1.5% reinvested, we have a total return of 5.5%-6% which is comparable to bonds as I said.
Quote from Took2Summit:
you say counting dividends doesn't say much, and then you show this....
You do realize the DOW, adjusted for dividends, since 1884, would sit at 652,000 today? That's right I didn't do a typo, had you reinvested dividends in the DOW since 1884 starting at 62.76 the DOW would read north of 652,000. People think some DOW 30,000 calls are ludicrous in 5 years from now. forget dow 30,000, try dow 652,000 right NOW
I took the Dow quotes as an example for all most important stocks, but dividends is another matter: they vary too much.
And where did you find dividend yield for years 1890-1950? Because if you are serious (are you?), you surely have compounded the dividend yield year after year,or a reliable average of many years.
We don't have an average of net(after taxes) dividend yield of world stocks.
"dividends don't change much" in percentage returns, CAGR 4,3% is not very different from 5.5%-6% for me.
But yes, the current DOW value would be very different.
You made excellent posts. I would like to add that the numbers could be worse as the analysis did not take into account the survivor bias in the dow. I would not be surprised (in fact that is what I would expect) if the compounded return turned out to negative (or less than one for geometric returns) if one were to include all stocks that were ever listed in the markets.
Those who make the money in the markets are the IPO owners, and someone has to pay for that.
It is clear that bond holders win. A sign that they win is that they have been lending at decreasing interest rate. If they were doing less, they would have demanded a higher return for their bonds. In addition to interest, a bond holder has implicit put options.