FYI: Tech companies and home builders figured prominently in the best performing stocks of 2017 on the S&P 500 index, while energy companies and a few retail and consumer stocks figured among the worst performers.
Regards,
Ted
https://www.marketwatch.com/story/biggest-sp-500-winners-and-losers-of-2017-tech-health-care-and-home-builders-lead-2017-12-29/print

Hi Guys,
I suppose a very generic answer to this guesstion has to be a qualified "yes". A reversion to the mean has to happen after a particularly outlander (extremely out of the ordinary average result) outcome. But the real world answer is a definite and firm "No".
The number of proposed methods to forecast market returns are so numerous as to challenge counting. They all work sometimes, but they also fail for other significant timeframes. If it were otherwise we would all be wealthy. Here is a Link that demonstrates the pure randomness of near time future returns following recent recorded returns:
http://static3.businessinsider.com/image/55bf73092acae716008bc67a-1200/past-performance-is-no-predictor-of-future-returns.jpg
If you see a correlation in these data "you're a better man than I am, Gunga Din". A correlation simply does not exist. No surprise here, no Happy New Year insight. Regardless,
Happy New Year to all MFO participants.

FYI: With just a few hours left in the trading day, the S&P 500 is on track to deliver a hefty gain of over 20% to investors for 2017 and the ninth straight year of gains on a total return basis. In the S&P 500’s history, there has only been one other period where the S&P 500 was in the black for nine straight years, and that was from 1991 to 1999. A big difference between that streak and now, though, is the magnitude of the gains. During the 1990s streak, the S&P 500’s total return was 450% compared to a relatively meager gain of 261% in the current period. If the S&P 500 does make further gains next year, it will be the first ten-year winning streak for the index ever. With such a big gain this year, though, can investors really expect to see gains in the year ahead?
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/does-a-reversion-to-the-mean-follow-big-years/

Here is an interesting video from Canada's BNN (Can't ignore the growth):
https://www.bnn.ca/can-t-ignore-the-growth-canopy-forces-bay-street-to-take-notice-1.953896

@DS,
k, point taken, I guess.
I did not read Rice Delman so episodically and implicatively and glossily as you, but maybe that's because for years I have been hearing him whinge on about the long term.
>> From 2000-2010, the market's net return was zero
We have to be careful about, hmm, what's a good word for larger-scale cherrypicking?
For some reason the decade you cite was a decisive argument for active management. SP500 sucked majorly, yes, but when you look at some big favorites sometimes cited here at MFO --- FCNTX, FLPSX, TWEIX, FPACX, PRWCX, VWELX, DODGX, and WEMMX, say --- the total from a $10k investment ranges from just under $14k to more than twice that (the two Fido funds, coincidentally). Those results only improve if you include 2010 rather than ending 1 Jan 2010.
Naturally you had to have held them for the long term. (Many bailed out of FCNTX sometime in 01 or 02, and even more did likewise with all of them save First Pacific in 08-09. )
So sleep through volatility if you have faith. Easy to prescribe. And right, no glossing, no ill prep.

“This chart clearly shows that when stock prices are rising, they rise a lot and for a long time. When prices fall, they fall a little and for a short period.” - Does that guy really believe this? If life were only so simple ...
I’ll grant that stocks rise more years than they fall (over long periods). But downdrafts can be long and painful. Look how long it took the NASDAQ to get back to 5,000. A lot of folks bought in at the highs in ‘98-‘99. And as David explained - A 50% down year followed by a 50% up year leaves you with 75%.
Totally unrelated I guess ... but look at how many years interest rates have been falling. Unless you expect them to go negative in this country, we’ve probably already seen the best days (for rates).

FYI: On this week’s Animal Spirits with Michael & Ben we discuss:
.How the new tax reform impacts your paycheck with a helpful summary from tax expert Bill Sweet.
.The biggest winners from the new tax bill.
.Why happiness declines for most people until their 50s and then improves.
. Why investors in 401ks are better behaved than most assume.
. Why charlatans & hucksters are sure to flock to cryptocurrencies.
.Our favorite books, movies, TV shows and podcasts from 2017.
.Why life was so terrible pre-1900s and more.
Regards,
Ted
http://awealthofcommonsense.com/2017/12/animal-spirits-episode-10-the-happiness-smile/

>> down 30% then up 50% gives you (a) an ulcer, (b) vertigo, and (c) a net gain of 5% over the complete cycle
Hmm, not sure his way of looking at it is not more useful, maybe even more accurate. Yo-yoing while walking up a hill seems to capture it. You may be inadvertently sounding here like a non-longterm investor. One response to your description is 'So what? Don't watch it, don't track it.'

"Most important," "most misleading," it's a hard call.
You'll notice that all of Mr. Edelman's up periods begin at zero, they don't begin at the negative point where the "little itty bitty down" finished. Somehow he assumes that if you rise 50% after a 30% decline, you're up 50%.
Uhhh ... down 30% then up 50% gives you (a) an ulcer, (b) vertigo, and (c) a net gain of 5% over the complete cycle.
David

FYI: Writing checks to charity from your taxable account isn’t always the best giving strategy.
Merry Christmas,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=841455

FTVNX is a new mid-cap value option that won't immediately suffer from some of the potential pitfalls @expatsp mentioned above....how well the strategy translates into more widely followed stocks is another question. David Potter from UBVSX is one of the two managers...
https://www.mutualfundobserver.com/discuss/discussion/37577/fuller-thaler-behavioral-mid-cap-value-fund-ftvnx

I only hold 5 funds but MAPIX is one of them and has been for a long time. Others that I know of have been adding to it lately. I can't tell you if it's right for you or not.

@MikeM
Maybe rebranded beverage companies are the way to go!
This week, two beverage companies—Long Island Ice Tea Corp and SkyPeople Fruit Juice—saw huge stock gains after renaming their companies with cryptocurrency terminology.
https://qz.com/1163073/beverage-companies-are-juicing-their-stocks-by-rebranding-with-cryptocurrency-jargon/?mc_cid=8b7d0c9026&mc_eid=858fcae90a

Circa 2000: "But it's different this time!"

FYI: Bitcoin’s plunge extended to almost 30 percent Friday as the frenzy surrounding digital currencies faced one of its biggest tests yet.
The world’s largest cryptocurrency approached $10,000 as this week’s selloff entered a fourth day with increasing momentum. It touched a record high $19,511 on Monday. Other cryptocurrencies also tumbled, ethereum dropped as much as 36 percent and litecoin slumped as much as 43 percent, according to composite prices on Bloomberg.
Regards,
Ted
https://www.fa-mag.com/news/bitcoin-plunges-as--sharks--circle-in-key-test-of-cryptocurrency-36334.html?print

Old_Skeet's barometer report week ending 12/22/2017
This week Old_Skeet's market barometer finished the week with a reading of 136 (the same as last week) indicating that the S&P 500 Index remains overbought. Generally, a higher reading on the barometer's scale indicates there is more investment value in the 500 Index over a lower reading.
In review of my sector compass, even with the recent pullback in utilities (XLU), I am finding there are currently no sectors (from a technical basis) that have undervalued or oversold readings. The three best performing sectors for the week were energy (XLE), financials (XLF) and materials (XLB). For the quarter the three best performers are consumer discretionary (XLY), financials (XLF), and technology (XLK). Year-to-date the three best performing sectors have been technology (XLK), consumer discretionay (XLY), and industrials (XLI).
In review of my global compass the three best performers for the week were Asia ex Japan (AXJL), emerging markets (EEM) and metals (CEF). For the quarter the three best performers were Japan (EWJ), S&P Mid Caps (MDY), and S&P 500 (SPY). Year-to-date the three best performing have been emerging markets (EEM), Asia ex Japan (AXJL), and Japan (EWJ).
A good number of my mutual funds have now paid their year end capital gains ... and, with this, I am sitting on some excess cash as I take most fund distributions in cash. My worst performing equity sleeve thus far this year has been my small/mid cap sleeve with a year-to-date return of 12.8%. With this, I did some equity buying in this sleeve, this week, and raised it's weighting in the growth area of my portfolio. I'm thinking the smids should have a better year in 2018.
Currently, year-to-date my portfolio's investment returns have been 13.9% and in comparison the Lipper Balance Index is up the same (13.9%) while a static 50/50 Index allocation that I track is up 11.8% and a professional run 50/50 adjustable mix Index fund is up 12.4%. My portfolio's allocation mix is 50/50 +/- 5% and gets tweaked form time-to-time. According to my equity weighting matrix I am overweight equity by 5% over what the matrix is currently calling for due to a seasonal investment strategy.
With most assets currently being richly valued I remain in my cash build mode; but, doing a little buying around the edges. Thus far in December I have bought some muni's and smids. Looking at putting some money to work in a hybrid fund before year end.
And, so-it-goes ...
Thanks for stopping by and reading.

FYI: Short-term TIPS offer an explicit, direct hedge against inflation, as measured by the U.S. Consumer Price Index.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=841712
Lipper Snapshot STPZ:
https://www.marketwatch.com/investing/fund/stpz
STPZ Is Ranked #9 In The (IPB) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/etfs/inflation-protected-bond/pimco-1-5-year-us-tips-etf/stpz

@MikeM
Maybe rebranded beverage companies are the way to go!
This week, two beverage companies—Long Island Ice Tea Corp and SkyPeople Fruit Juice—saw huge stock gains after renaming their companies with cryptocurrency terminology.
https://qz.com/1163073/beverage-companies-are-juicing-their-stocks-by-rebranding-with-cryptocurrency-jargon/?mc_cid=8b7d0c9026&mc_eid=858fcae90a

I am bullish for the upcoming year, but have just sold a patch of DSENX (post-runup) in a Roth just to be able to think clearly about cash needs (dau wedding) next fall and possible dip buying prior (CAPE vs NOBL vs QUAL vs DGRO).
Also about $200k <4% heloc with interesting nondeductibility looming. Do I care whether it is 3.75% deductible, or a bit higher?
Am tracking SOI to buy in Jan, maybe.
Will be running ORP several times w new tax situations to see about where to fund non-SS cashflow for the year too.

Hi guys!
I have a few ponderings...
I see that imports for the LA ports are at record highs for 5 months straight. Is it Christmas? Or jobs, maybe? Weather related? I wonder what they're importing.....fridges, washers, dryers, microwaves, toasters, etc. Now I'm waiting for Santa to come because I believe after that I'm going to sell some things.
What do I worry about in 2018? Healthcare: it's an election thing. Bitcoin: I heard enough already. Please do me a favor and crash next year.....like January 2nd, please. I also saw that the Japanese under own their own market. It seems to have a lot of foreign money driving it. I was surprised about that. In Europe, they don't have enough bonds to buy....yet it doesn't seem to stop them. Amazing! Only in the EU. I also worry about China and its debt. I get The Economist. They have been writing about it. Also, just saw something on CNBC: 40k pay half the taxes in New York City. Say, WHAT?! Half, and there are how many people that live there.
Now, sold FSRFX. Bought it in September on the weather thing. Also added to PONDX. Have a short buy list for January if things go well: BTBFX, DSENX, FJSCX, and FTIPX. I'm still bullish for 2018. It's all good 'til the flags fly, i.e., Memorial Day.
God bless
the Pudd

"For those who believe that cryptocurrencies could be the next big thing, buying bitcoin is like an option contract: it might just pay off. For everyone else, the wise course is to watch. Investors have had a lot of fun piling into bitcoin; the real test will come when they suddenly need to get out again."
https://www.economist.com/news/leaders/21732526-there-investment-case-cryptocurrency-bitcoin-speculative-asset-not-yet