Stock market prices

[Wilber]

I am going to be a taxpayer for many decades yet, if I'm lucky.

---SNIP---

We get everything that has come before us, including a load of debt incurred by someone else for things we had no say in. Edited October 23, 2015 by Charles Anthony
[---SNIP---]

[Wilber]

I mean, is it really appropriate for any government to make such a decision that houses only ever go up and taxpayers will never get caught holding the bag?

That's exactly what they are doing when they pile up debt assuming increases in GDP will cover their butts regardless of what the cost of borrowing might be in the future.

[dialamah]

I am going to be a taxpayer for many decades yet, if I'm lucky.

Future generations will also get the good fortune of being taxpayers for many many decades.

We all get to pay (some of us more than others) and we all get to benefit from what has come before us.

I can't explain opportunity cost better than what I have already stated so meh.....

I've been wondering something the last few days, hope its ok to ask here. Assuming my income was high and ever growing, say I took out a 20 year mortgage in year one for a house, and then purchased another house every year till I died, wouldn't the first house mortgage be retired in year 20, then the second house in year 21, the next in year 22, etc? Wouldn't that mean the my kids/grandkids would inherit a bunch of debt-free houses, as well as the debt for any houses I purchased later in my spending spree - although never more than 20 still mortgaged houses? If this is true, wouldn't it also be true for government spending on infrastructure? Even if the government debt is still here decades down the road, it's surely not for the 'same' things that are purchased today?

Or am I simplifying it way too much?

[Wilber]

I think you have the idea. Nothing wrong with simple.

[Bonam]

Back on the topic of stock market prices... the S&P500 is almost back to the pre-August dip levels and just ~3% off the all time high. Bets on if we are gonna have another year or two of bull run?

[bush_cheney2004]

Back on the topic of stock market prices... the S&P500 is almost back to the pre-August dip levels and just ~3% off the all time high. Bets on if we are gonna have another year or two of bull run?

I think not....just more sideways movement with some sectors under-performing as long as China stagnates. Plus we have interest rate head fakes coming from the U.S. Fed while the EU extends QE.

[Bonam]

I think not....just more sideways movement with some sectors under-performing as long as China stagnates. Plus we have interest rate head fakes coming from the U.S. Fed while the EU extends QE.

I think that contrary to pundit opinion, once the fed actually does start raising rates, it will lead to further increases in the markets as people decide that if the rates are finally going back up, things are returning to normal.

[bush_cheney2004]

I think that contrary to pundit opinion, once the fed actually does start raising rates, it will lead to further increases in the markets as people decide that if the rates are finally going back up, things are returning to normal.

That's the thing....the run-up that we have seen is "abnormal". Once the air comes out it will be back to a ho-hum market. Commodities are already dragging.

[Bonam]

That's the thing....the run-up that we have seen is "abnormal". Once the air comes out it will be back to a ho-hum market. Commodities are already dragging.

It's not really abnormal, though. P/Es are only slightly above the historical mean. The run up wasn't abnormal but was the inevitable result of the fact that the market declined by ~50% in the recession. The S&P500 is still only up ~35% in ~15 years, far slower than its historic average growth rate.

[bush_cheney2004]

It's not really abnormal, though. P/Es are only slightly above the historical mean. The run up wasn't abnormal but was the inevitable result of the fact that the market declined by ~50% in the recession. The S&P500 is still only up ~35% in ~15 years, far slower than its historic average growth rate.

The S&P500 peaked a little over 1500 in July '07 before the recession hit, matching the same peak in 2000 before the .com / 9-11 crash. Growth would have been slower without gobs of cheap money being pumped into the market.

Edited October 24, 2015 by bush_cheney2004

[andromeda]

for anyone interested.... here is a link for one of the best free of charge market commentaries out there. new newsletters are posted every Monday.

hussman is calling for an approximate 50% retreat in the S&P once current market cycle ends. be warned though... hussman is a bit of a bear. i'm mostly in cash doing some very selective investing buying good companies on dips and selling when they come back up again. volatility becomes your friend. no buy and hold for me. all I can say is good luck and don't get too greedy.

website (look for weekly market commentary)..... http://www.hussmanfunds.com/