Dejavu 2007?

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Hankaroundtheworld
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Dejavu 2007?

Post by Hankaroundtheworld »

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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Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: Dejavu 2007?

Post by George the original one »

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
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Dejavu 2007?

Post by Hankaroundtheworld »

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
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Dejavu 2007?

Post by Hankaroundtheworld »

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
Posts: 2009
Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Dejavu 2007?

Post by Seppia »

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
Posts: 470
Joined: Mon Feb 24, 2014 4:50 am

Re: Dejavu 2007?

Post by Hankaroundtheworld »

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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