Are Stocks 80% Overvalued?

That's why most people talk about diversification and portfolio planning. Few will go all in on only one thing.
Wealth preservation, investing and speculating are different strategies depending on your wants and needs.
We're seeing some serious market volatility atm. No point in going on a big rant about what is happening around the globe.
Let's just say I wouldn't trust mainstream media to be my only source of information.
I guess time will tell...

 

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What if is a game that goes both ways. What if it's 10 years from now, or 2 or 20 or whenever?

You keep stating that you believe some are all in and preppers are nuts and whatever else. You don't know that they are for sure, nor can you state with certainty that preppers are way off in their thinking. Why do you believe their strategies are an all or none proposition? For most it's probably not, more like just in case planning. The psychotic extreme some of you paint is ridiculous.

Being prepared is a good thing, and diversity is also a positive.

 

For me, it is strictly and odds thing. I am well aware things could go different than I am thinking, but I am certainly on the correct side of history. You just can't control everything. All you can do is take your best shot.

As far as the all-in crowd, yes, I think they are the most reckless, and most likely to have an unhappy outcome. Those folks were telling me they were all in, so I was not assuming anything. It really did end badly for them. We have a large stacker crowd where I work, so I know a lot of those folks who got clobbered personally.

For the preppers, I really never had much negative to say to the ones that were diversified and covering all the bases. I mean you really can't argue with that. For me however, I just never thought is was worth the effort since you just can't plan for everything. Plus, I never felt it was worth planning to be the King of the disaster, it is still a disaster. I would rather focus on positioning myself for the good times. Makes sense to me.

As far as being diversified, I have always been all about that and agree it is positive. I am against adding what I believed was overpriced commodities (and was correct) to the mix just for the sake of diversification. I have always believed the time to add commodities was when they are trading very cheap (below the cost of production). That will give you the best chance for success.


BTW, I think I told you before, I still have a small amount of Gold left over, when I sold my holdings. I also picked up $100 face since they price is getting down there, and I really like coins.

 

I will add something else to this. There is not a large percentage of the populace that has the ability to prep, stack, invest or do anything else other than survive paycheck to paycheck. Many of them are happy to survive, others miserable and hope to win the lottery with the belief that money will solve their problems. It won't, and in the end being happy is where it's at.

You brought up those that were fleeced from all in stacking, they could be happy that they had the ability to go for it, mostly because it could be worse and they could live paycheck to paycheck or worse. Worse as in not have a job or source of income, be living off govt subsidies and most likely hate themselves and loathe their situation.

It's all relative...

 

You want to be a successful investor? Quit pursuing market timing. Proper asset allocation will crush all other models in the long run. It's a principled approach to always be buying opportunities and selling winners. As long as there is pin action in investments, asset allocators will always win.

I can't say I've done a good job of it. I got swept up in the silver-$1000 mania of the last bull run. I've succumbed to selling at the worst time to shield myself from any further downfall. I've learned to take the drama in stride and laugh when I get absolutely crushed like the last month.

Focus one is to not react, but rather prepare. As the markets have been melting the last few days, I've been on the phone with my broker setting up limit buy orders for high quality stocks for when they fall further.

You've likely seen me moaning on here days earlier about dumping all my gold stocks at the absolute bottom on August 6th. Instead of chase it and jump back in at an extra 15% loss due to appreciation while I was out, I set limit orders far below market price that day and I've already gotten much of it back and at much lower prices than the day I set it. I've got more orders in for even lower prices. When we find a bottom, I plan to start selling call options on the GDX for added income and a guaranteed profit if I lose it.

 

We are the lucky ones. We have extra income to get involved in a hobby. Whether or not you make money at it is superficial. We should have the savvy to at least get our money back at a break even factor. Collector coins or bullion, makes very little difference. 98% of us won't make a killing with either one. We shouldn't be in over our heads, so if things get ugly we should still be able to survive. That's why I save classic and have some proof commemoratives. (Also one each of Pr and Ms strike American Eagles). They all become bullion if necessary. If the world turns the lights out, no sanctuary will provide the life we are used to. There is the possibility that the new life isn't worth anything anyway. It could take it's toll on humanity, and no matter what we do to prepare, we will still be among the casualties.

 

Look at stacking like having a piggybank.
You're saving money for a rainy day, the most classic methods of wealth preservation. And hey, it's always fun playing with money. Who doesn't like playing with gold and silver coins...
Fiat currencies come and go while gold and silver have always been left standing regardless of market crashes and civil disorder.

 

Well the Dow crashed a little , but I really don't see any reason for panic . One the economy is in a lot better shape , better than most will give it credit for . There's no housing bubble that is ready to burst like in '08 . Actually houses are rising in value more to their true worth . Also the Banks are all in great shape thanks to the steps taken after "08 . Though I did move a few of my most risky stocks into safer ones I'm still letting the majority of what I have ride . Also this may be a good time to pick up some under priced stocks . I'm no Stock Broker so this is all my opinion based on reading a lot on investments and the markets .

 

1. A massive global credit collapse is inevitable because of the insolvency of nearly every country on Earth. We are all Greece. I agree with kema. The "when" may be soon. The bubble is mostly patches on patches right now.

 

How about some facts ? Or at least your reasoning ?

 

Those are facts

 

Do the math, what happens to the debts around the globe if interest is raised even by a hair. Look at how leveraged everyone is. Look at derivatives and what will happen once interest start to move. And this is just the tip of the iceberg.

 

I couldn't agree more

 

According to who, zerohedge.com???????

 

We will see in a very short time, and my guess at for what happens???? Not very much....

 

I'm not saying that something SHOULDN'T happen or may not ever happen based on the financials, but I thought things would go to hell in a handbasket when QE3 was backed out and finally eliminated. During that same time, companies began to recover some and financials got somewhat better and the market continued to grow like gangbusters....likely TOO much. I think a rate hike will initially hurt the markets, but with this current 'correction' in place, I don't think a targeted, graduated hike will hurt too bad. And I think any hike will no longer be 2015Q4 but more likely 2016Q1-2. There's a lot of commitments hanging on the balance sheet that aren't accounted for and I think that'll eventually have to come to some type of reckoning. It's just the 'when' question...............

 

I'd like to learn and understand a bit more about how you did this, how it works and how you will use the calls to manage the risk.

There's a free beer in it for the explanation, and there's a cheap lunch in it if I am able to leverage the knowledge.

On or offline, I've never used puts/calls because I haven't clearly understood the mechanics of them or the risks. And I promise not to sue you when I don't get any guaranteed profit (because if I do get it, I certainly won't want to share it!)

 

A couple interesting points here. There were a lot of folks that though QE would "break" the system and there would be no way the FED could end QE. Most of this stuff, really didn't have facts behind it, just wild specualtion. Many of these "theories" came from folks like zerohedge, where their only interest was selling bullion, so not very reliable in my opinion. And the other side of the coin, Ben B. said it would work and he could end it. The zerohedge crowd laughed at him and called him an idiot.

Let me do a quick post from WIKI, about this "idiot's" education and credentails

Education[edit]
Bernanke was educated at East Elementary, J. V. Martin Junior High, and Dillon High School, where he was class valedictorian and played saxophone in the marching band.[16] Since Dillon High School did not offer calculus at the time, Bernanke taught it to himself.[17][18] Bernanke scored 1590 out of 1600 on the SAT[17][19] and was a National Merit Scholar.[20] He also was a contestant in the 1965 National Spelling Bee.[21]
Bernanke attended Harvard University, where he lived in Winthrop House, as did the future CEO of Goldman Sachs, Lloyd Blankfein, and graduated with an A.B. degree, and later with an A.M. in economics summa cum laude in 1975. He received a Ph.D. degree in Economics from the Massachusetts Institute of Technology in 1979 after completing and defending his dissertation, Long-Term Commitments, Dynamic Optimization, and the Business Cycle. Bernanke's thesis adviser was the future governor of the Bank of Israel, Stanley Fischer, and his readers included Irwin S. Bernstein, Rüdiger Dornbusch, Robert Solow, and Peter Diamond of MIT and Dale Jorgenson of Harvard.[22]

Call me silly, but I put my money on the summa cum laude grad from Harvard, and not a "salesman" from zerohedge. Sometimes it is about picking the correct horse.

As far as the debt coming to some type of reckoning, well that is true, the debt must be paid, but that "reckoning day" does not need to be some sort of cataclysmic event. It could just be economic headwinds that slow our growth, but DO NOT stop it for some time. Also, even if a severe downturn does occur, there is really no reason to think that "this time is different" and we will not recover. There have been 11 bear markets (-20% or more) in US history and 27 corrections ( -10% - 20%). We have recovered from ALL of them wiht NO exceptions. I just really like those odds.

Mike

 

History students know that virtually all debased and fiat currencies have eventually failed. NO exceptions.

 

Ok History student, then Which PM based currency is still in existence and functioning in the world today among all the fiat currencies ??