Are we at the beginning of a market crash?

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Augustus
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Are we at the beginning of a market crash?

Post by Augustus » Mon May 14, 2018 1:05 pm

I've been watching the real estate market like a hawk, and the interest rates rising has caused the markets to noticeably cool off, at least in the areas I've been looking. I hear that lots of industries are in trouble, auto and lending especially. I think all it would take now is for the job market to contract, and we'd be in a full blown market crash.

Granted, I am biased, and this is wishful thinking.

Thoughts? Opinions? Comments?

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Kriegsspiel
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Re: Are we at the beginning of a market crash?

Post by Kriegsspiel » Mon May 14, 2018 6:49 pm

In the words of Jimmy Pop, burn motherfucker, burn.

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BRUTE
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Re: Are we at the beginning of a market crash?

Post by BRUTE » Mon May 14, 2018 11:38 pm

let it burn

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Gilberto de Piento
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Re: Are we at the beginning of a market crash?

Post by Gilberto de Piento » Tue May 15, 2018 9:05 am

let it burn
Why? Hoping for deals? I suppose I should feel the same way since I am buying not selling.

Mister Imperceptible
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Re: Are we at the beginning of a market crash?

Post by Mister Imperceptible » Tue May 15, 2018 9:18 am

@Gilberto

Some men just want to watch the world burn.

https://m.youtube.com/watch?v=6se66gQRJcw

Lucky C
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Re: Are we at the beginning of a market crash?

Post by Lucky C » Tue May 15, 2018 6:46 pm

The job market generally trails the stock market. The market may peak when there are still plenty of jobs and low unemployment, though the rate that unemployment has been falling will probably have slowed down first.

Over the next few months we could have a renewed market melt-up, a crash, or anything in between. Nobody knows. However over the next few years we are more likely to have a crash / bear market or neutral returns than a continued raging bull market. Therefore I am confident enough that there is very limited upside so that I don't want to own any US stocks right now, but I am not so confident in a crash that I would (for example) buy puts several percent below today's prices, especially not with a near term expiration date.

I would look out for the yield curve inverting, the purchasing managers' index, and the market's movement vs. popular technical indicators. To me the leading economic indicators don't show any problems currently, but everyone seems to "know" the bull market is near the end. With every rally that fails to set new highs, investor confidence fades. On the other hand, every selloff that bounces back up over the 200 day moving average is enough to give investors more hope.

Here's my pure speculation - just for fun, don't take it seriously: If we drop below the February low and don't immediately bounce back, that will be such a blow to investor psychology that all hope may be lost - resistance to make new lows will be gone and we will be in a bear market. I think this will take several months to occur. If we end 2018 with a pretty flat performance but lower than the January highs, that will look like a major market top to investors and 2019 will be a much worse year - I think this is more likely than a big crash this year. We could make new highs later in the year, but I bet they will be at most single-digit % above the January highs that quickly fade away.

Augustus
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Re: Are we at the beginning of a market crash?

Post by Augustus » Tue May 15, 2018 10:31 pm

My personal speculation is that lenders and auto companies are in deep shit with interest rates rising. Interest rates rising will put the brakes on many industries, causing layoffs, causing decreased demand, causing vicious cycle. A lender I used to work for just laid off 15% of their staff, they employ 50k people. I imagine many similar companies are doing the same.

Dream of Freedom
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Re: Are we at the beginning of a market crash?

Post by Dream of Freedom » Thu May 17, 2018 10:09 am

Should we pull out the tarot cards maybe read a few bird entrails? It's tough to divine the future.

Augustus
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Re: Are we at the beginning of a market crash?

Post by Augustus » Thu May 17, 2018 1:49 pm

Yeah I'm not calling the top here, I know that's almost as taboo as working during retirement for many people, call the retirement police! I do like to think about things though, and have thoughtful discourse, instead of looking at the patterns of feces in chicken intestines. I am getting the feeling the crash is around the corner. I am also suspecting a crash rather than stagnation because of the massive amount of leverage, I think a good chunk of the population is now over extended. I'm seeing layoffs in my industry, and loss of revenue in my friends industries, which will lead to more layoffs. Consumer debt is at all time highs via auto, mortgage, and credit cards. There was mass hysteria in real estate buying up until about a month ago, multiple sight unseen offers and people ENCOURAGING others to do that. Usually that's the death knell in my opinion. Reason and rationale flew out the window, mistakes have been made because of it, it's just a question of when the shit hits the fan, IMO.

arcyallen
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Re: Are we at the beginning of a market crash?

Post by arcyallen » Sat May 19, 2018 4:13 pm

Gilberto de Piento wrote:
Tue May 15, 2018 9:05 am
let it burn
Why? Hoping for deals? I suppose I should feel the same way since I am buying not selling.
ABSOLUTELY. If you're buying something like a piece of a company and can it for cheaper because of your fellow man freaking out, do it. The steeper, the stupider, the better. Think about the market crash of 1987. It went down 22% in ONE DAY. And yet, the thing no one talks about is that the year actually turned out flat. If you'd bought after that one steep, stupid drop, you'd be doing happy backflips.

jacob
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Re: Are we at the beginning of a market crash?

Post by jacob » Sat May 19, 2018 4:21 pm

It's not because you're buying instead of selling. It's because you're speculating that prices will quickly or at least eventually go up again.

Japanese investors would have a very different narrative/strategy.

RealPerson
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Re: Are we at the beginning of a market crash?

Post by RealPerson » Sat May 19, 2018 4:51 pm

jacob wrote:
Sat May 19, 2018 4:21 pm
Japanese investors would have a very different narrative/strategy.
That is true. But the demographics and strong anti-immigration sentiment in Japan lead to an inevitable economic decline. The US economy, Trump's anti-immigration rhetoric notwithstanding, is much more dynamic and open to immigration. I don't believe this is a comparable situation.

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Seppia
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Re: Are we at the beginning of a market crash?

Post by Seppia » Sat May 19, 2018 5:27 pm

Mostly because of the fact that the Japanese stock market was trading at a PE of 100 at its peak (no, I did not mistakenly add a zero).

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