Dejavu 2007?

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Farm_or
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Re: Dejavu 2007?

Post by Farm_or » Tue Feb 14, 2017 1:19 pm

I'm 90% as hedged as I was in 2007. I was more than happy to sit that one out, watching and listening to my friends suffering the devaluation. Even my financial advisor singing the blues at 40% loss after nudging me to stay the course with him.

Got to temper my pessimism. It is basically a question of upside vs. downside. It's comical some of the spins I've seen regarding p/e valuations. Compensation rating from 16.5 all the way to 37? Depends on your bias, I reckon?

Hankaroundtheworld
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Re: Dejavu 2007?

Post by Hankaroundtheworld » Wed Feb 15, 2017 4:43 pm

Hedging is indeed one of the strategies. According the analysis on : http://www.gurufocus.com/shiller-PE.php
we can be lucky if in the next 8 years, the return is 1% ....

George the original one
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Re: Dejavu 2007?

Post by George the original one » Wed Feb 15, 2017 7:52 pm

As long as the dividends keep rolling in and increasing, I don't care all that much. Endanger the dividends and I'm alert!

Hankaroundtheworld
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Re: Dejavu 2007?

Post by Hankaroundtheworld » Thu Feb 16, 2017 1:51 am

George the original one wrote:As long as the dividends keep rolling in and increasing, I don't care all that much. Endanger the dividends and I'm alert!
Dividend is part of this 1% calculation (see the link that I included), but you're right, if you do not sell your shares (and only use dividends), it is only on paper.

Of course, if I gambled right, I might buy those "Dividend" stocks for a lower amount in a years' time :-)

Hankaroundtheworld
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Re: Dejavu 2007?

Post by Hankaroundtheworld » Sun Feb 26, 2017 10:38 am

Hankaroundtheworld wrote:As of now (Shiller P/E 10 at 29) I went more into Cash. I was already 20% in cash in 2016, now moved it to 50% (waiting mode for correction). May be a big mistake, future will tell.
So far I have been wrong. Shiller P/E is now at 29.5, and Buffet Indicator is now at 130% (http://finance.yahoo.com/news/warren-bu ... 44895.html)

Let's see, some tense elections in Europe coming our way, especially in France. It might not be a surprise (with a lot of good economic news and the so-called Trump rally) that we will see first higher values for Shiller P/E and Buffett indicator, but how long will that overshoot last? I cannot time it, and being in ER, I do not want to gamble too much. I remain high in Cash for now.

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Seppia
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Re: Dejavu 2007?

Post by Seppia » Tue Feb 28, 2017 4:55 am

I personally almost never sell but i also create a (to me) significant cash surplus every month with savings.
I usually have 1/2 of my monthly savings in auto pilot and the other 1/2 I invest opportunistically.
I have left the auto pilot alone, but I'm keeping all the extra cash and the dividends uninvested, went from 12% to 20% cash (thanks to a fairly big yearly bonus hitting in late January)

Hankaroundtheworld
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Re: Dejavu 2007?

Post by Hankaroundtheworld » Thu Mar 02, 2017 2:23 am

It looks like that it is more going to be Dejavu 1997-2000. The Shiller P/E is now almost 30 (29.9), last time it broke 30 was in 1997, and it went on till 2000, so 3 years of craziness on the Stock-market. May be this will happen again? All because of Trump stimulation package? Situation is not comparable with 1997, however psychologically it could be that everyone wants to believe "it is going to be great again", and even Buffett is saying that because of low interest-rates, the current valuation is not exaggerated. If all true, I will miss for 50% a nice ride the coming years.

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