Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"Exactly 25 years ago today, I published the first memo that brought a response from readers (after having written for almost ten years without receiving any). The memo was called bubble.com, and the subject was the irrational behavior I thought was taking place with respect to tech, internet, and e-commerce stocks."
One lessen that stuck with me from the 2000 bubble bursting was how ridiculously high the markets felt to me by the end of 1998. And yet we still went on to another positive year before the markets would finally turn south.
“The market can stay irrational longer than you can stay solvent” - economist John Maynard Keynes. Yep, it's tough to bet against US equities.
I've learned never to expect anything. But its ok to hope for better BUY opportunities ahead. There had been much complacency in the markets until recently. Volatility can be a good thing.
It seems like others here are waiting for a drop, too.
It seems like others here are waiting for a drop, too.
Non-U.S. equity + “other” = 30% of my portfolio / U.S. equity = 18% (remainder fixed income) Not necessarily “waiting” for the drop. Just allocating risk as best I can. Certainly might be wrong.
Marks is good. I recall he made a “buy” call pretty close to the bottom in ‘22. Received some discussion here.
The P/E for Mag 7 is even higher. To believe they will have positive return you have to believe there will be “greater fools “ to buy your shares at a higher price, the P/E will go even higher (TSLA is now somewhere north of 70), or earnings will quadruple +
Well Musk just got himself another tax deduction for donating a bunch of fire bombs/trash cans (cyber trucks) for LA fire relief efforts. Maybe his auditors can use that to add to his earnings or bottomline.
I like to look at some of TRP’s funds’ performance for insights because I know several pretty well from once residing there. Not a recommendation - but there might be some opportunity for long term investors in real assets (PRAFX at TRP) and in real estate (TRREX at TRP). I base this solely on the observation that they’ve fallen quite a bit from their 5 year highs. In a bit of a trough currently. No guarantees. I have very limited exposure to those two areas, Own neither of the funds mentioned.
I've reduced equity by a substantial slug. Down to 44% of total. If Giroux is saying it won't probably be a great year, I'm not panicking, but paying attention. Let the monthlies roll in from my junk. Re-investing them. Lucky with my two single stocks. They're divvie payers, too.
I did some dip-buying recently (JQUA, TCAF, SPHQ) and now that I have made a few thou from them I may bail out of everything tomorrow or Fri, meaning that the only equity I will hold will be the accursed CCOR. I am not expecting 800-pt days after Monday, he foolishly predicted.
Also sold out of total loser (years) bond funds; ~4.2% at ML and Fido looks good to me for now.
Mr. Market always overreacts, both to good and bad news. Today it was hyper-goo-goo- lovely. Watch for the day-traders cashing in, in the morning..... Nice to own the "right" kinda single-stocks on a day like Wednesday, today. Really juiced performance. I gotta find a new (additional) drug: those stocks are scraping against a hard limit re: size in the portf. PRWCX did very well today, despite defensive positioning. Its one-day performance represents what happened in the full portf.
Several large banks reported healthy earning on 1/15/25. This helped to move the market upward. Depending on the source, the interpretation of CPI is different ?
Unsure whether bonds are better opportunities than stocks in light of the high valuation? Feel like the time period prior to the 2000’s internet bubble.
Unsure whether bonds are better opportunities than stocks in light of the high valuation? Feel like the time period prior to the 2000’s internet bubble.
My equity exposure only climbed to 41% after last week’s messing around. A bit of a relief. All that I read says the S&P (or portions of it) is way overvalued - but that there are other reasonably valued areas. I don’t know about bonds. A real question mark. Depends of course on inflation along with the possibility of recession. Higher or persistent inflation should drive interest rates up, while a steep recession would likely drive them down.. The only bonds I hold are owned indirectly thru other types of funds. For income I use CVSIX and LPXAX..
Like @Sven I’m seeing / reading a lot of comparisons to 2000. But no two periods are exactly the same. Even the bearish “experts” I read and / or subscribe to are not recommending selling all your equities. I don’t want to post subscription based content. But I’ll say the latest commentary in InvesTech (by James Stack) is unnervingly bearish in tone. I believe Stack allows newbies a free trial copy of the latest (monthly) newsletter if anyone so inclined. The publication takes a thorough look at many economic “bellwether” indicators every month and compares the current environment to past market cycles. All good. I have not found its more specific investment “calls” particularly timely in the roughly 2-3 years I’ve subscribed. But have learned a lot of useful information.
I don't pay attention to any "experts" only to my system. My big picture NOW = risk is "normal" which means I'm invested at 99+% in all accounts including my bank and credit union. When risk is very high I will be mostly in MM very quickly. I don't invest based on predictions or FEELINGS, only current markets. It must be reflected in the price, the speed, the volatility in stocks,bonds (VIX,MOVE), and more.
@hank, thank for sharing. I don’t subscribe or propose to moving to cash. But there are many possible moves one can take to reduce risk in an already rich US stock market.
Bond market was challenging last year. Many investors including myself found that FED rate cut don’t necessary benefits bond funds. Ironically the riskier bond segments, i.e. junk bonds performed much better than those the safer investment grade bonds. Inflation is sticky for sure, and there is a possibility of rates going up instead if inflation moves upward with future trade policies.
@FD1000, why is that you invest only (or primarily) in bond OEFs and not in bond ETFs, which presumably will give you a better opportunity to buy low and sell high than OEFs would?
BB: @FD1000, why is that you invest only (or primarily) in bond OEFs and not in bond ETFs, which presumably will give you a better opportunity to buy low and sell high than OEFs would?
FD: because I found out I can make as much as allocation funds with min losses. Bond ETFs in most cases have simpler portfolios; mutual funds are the ones with a unique approach. ============ davidrmoran, what isn't clear? To see very high risk, it must be reflected in the markets and certain indicators I follow. If it doesn't, I'm invested at 99+%. Nothing is based on predictions. ============ Old_Joe: All my funds must be on an uptrend, or at least not losing. If I find a better fund than what I own, I switch. If risk is very high I'm out. It works mostly with bond funds and why I use them. I'm not about being right; it is part of what I do. It took me many years to master it ============ Observant1, as usual, very limited analytical addition.
Marks reminds me of Bogle. I may be wrong. They both were great; they grew older; they don't participate in the daily management. Marks isn't managing money anymore. But they want to be involved. So, let them have a place to publish their thoughts. Marks continues with his long memos full of generics, which don't tell me specifics.
If I want to get an opinion, I read it from one of the best in business, David R. Giroux, the guy who runs PRWCX, T. Rowe Price Group Chief Investment Officer, + more who publishes his thoughts a couple of times annually. MFO monthly issue is also a good source for information and insight, and the site has meaningful data for investors.
Giroux said this month that the market is most overpriced than at anytime in his career and PRWCX is the most defensively positioned. I may have paraphrased but you can hear it from the horse’s mouth in the WealthTrack thread. To me that both Howard Marks and Giroux are on the same page.
Comments
“The market can stay irrational longer than you can stay solvent” - economist John Maynard Keynes. Yep, it's tough to bet against US equities.
I've learned never to expect anything. But its ok to hope for better BUY opportunities ahead. There had been much complacency in the markets until recently. Volatility can be a good thing.
It seems like others here are waiting for a drop, too.
%TR = %Dividend_yield + %Earnings_growth + %Change_in_P/E.
So, if the starting P/E is high, the 3rd term will likely have a negative contribution.
Not necessarily “waiting” for the drop. Just allocating risk as best I can. Certainly might be wrong.
Marks is good. I recall he made a “buy” call pretty close to the bottom in ‘22. Received some discussion here.
There seems to be some rotation in the markets for now. Slow decline off the highs, nothing violent. Kind of a big yawner.
2024 +25.02%.
2023 +26.29%.
2022 -18.11%. (neg)
2021 +28.71%.
2020 +18.40%.
2019 +31.49%.
2018 -4.38%. (neg)
2017 +21.83%.
2016 +11.96%.
2015 +1.38%.
”If it walks like a duck and quacks like a duck …..”
Source of data
I like to look at some of TRP’s funds’ performance for insights because I know several pretty well from once residing there. Not a recommendation - but there might be some opportunity for long term investors in real assets (PRAFX at TRP) and in real estate (TRREX at TRP). I base this solely on the observation that they’ve fallen quite a bit from their 5 year highs. In a bit of a trough currently. No guarantees. I have very limited exposure to those two areas, Own neither of the funds mentioned.
No bubbles - nothing to see here. The CPI report calmed all nerves.
For those of us with cash, it would have been nice to see stocks (and bonds) "go on sale" a bit. But alas, Mr. Market has other ideas for now.
I am not expecting 800-pt days after Monday, he foolishly predicted.
Also sold out of total loser (years) bond funds; ~4.2% at ML and Fido looks good to me for now.
Looking forward to how the market digests our new economic policies after Jan 20th.
me too
have (barely) enough in retirement (expensive state and town), not all that many years left (mid-70s), concur in all the takes re ultrahigh P/Es, etc.
my greed needs to be strongly managed, though
Pricy up there.
Unsure whether bonds are better opportunities than stocks in light of the high valuation? Feel like the time period prior to the 2000’s internet bubble.
Like @Sven I’m seeing / reading a lot of comparisons to 2000. But no two periods are exactly the same. Even the bearish “experts” I read and / or subscribe to are not recommending selling all your equities. I don’t want to post subscription based content. But I’ll say the latest commentary in InvesTech (by James Stack) is unnervingly bearish in tone. I believe Stack allows newbies a free trial copy of the latest (monthly) newsletter if anyone so inclined. The publication takes a thorough look at many economic “bellwether” indicators every month and compares the current environment to past market cycles. All good. I have not found its more specific investment “calls” particularly timely in the roughly 2-3 years I’ve subscribed. But have learned a lot of useful information.
My big picture NOW = risk is "normal" which means I'm invested at 99+% in all accounts including my bank and credit union.
When risk is very high I will be mostly in MM very quickly.
I don't invest based on predictions or FEELINGS, only current markets. It must be reflected in the price, the speed, the volatility in stocks,bonds (VIX,MOVE), and more.
Bond market was challenging last year. Many investors including myself found that FED rate cut don’t necessary benefits bond funds. Ironically the riskier bond segments, i.e. junk bonds performed much better than those the safer investment grade bonds. Inflation is sticky for sure, and there is a possibility of rates going up instead if inflation moves upward with future trade policies.
Not of woods only and the shade of trees.
(Robert Frost)
>> My big picture NOW = risk is "normal" ... It must be reflected in the price ... in stocks ... (VIX ...)
Huh?
http://www.quickmeme.com/img/3f/3fee1b7081bf80d753ce44b0fc47318a57455a1e2bd9a0877d655a894489e39e.jpg
FD: because I found out I can make as much as allocation funds with min losses. Bond ETFs in most cases have simpler portfolios; mutual funds are the ones with a unique approach.
============
davidrmoran, what isn't clear? To see very high risk, it must be reflected in the markets and certain indicators I follow. If it doesn't, I'm invested at 99+%. Nothing is based on predictions.
============
Old_Joe: All my funds must be on an uptrend, or at least not losing. If I find a better fund than what I own, I switch. If risk is very high I'm out. It works mostly with bond funds and why I use them. I'm not about being right; it is part of what I do. It took me many years to master it
============
Observant1, as usual, very limited analytical addition.
But they want to be involved. So, let them have a place to publish their thoughts.
Marks continues with his long memos full of generics, which don't tell me specifics.
If I want to get an opinion, I read it from one of the best in business, David R. Giroux, the guy who runs PRWCX, T. Rowe Price Group Chief Investment Officer, + more who publishes his thoughts a couple of times annually.
MFO monthly issue is also a good source for information and insight, and the site has meaningful data for investors.
I get that irreverence is in vogue now.