Stock Markets flashing WARNING signs , Be prepared, Plan ahead.

[drlowmu]

Divergences such as this, we had today, occur prior to major major tops ( and in the reverse, for major bottoms ) in the stock market.



.........................................................


Here below is an excellent historical valuation perspective, from 1870 to 6-2021. You can readily see, we are well above the market top in 1929, that led to the Great Depression. NOTE: market breadth ( as above) and the Crestmont Valuation below, are NOT to be considered as precise market timing tools, but they are highly useful none the less. We are all set up, for perhaps the largest decline ever on a percentage basis. Estimates we discuss among ourselves are minus 70% to minus 95%.



Jeff

 

[prateekatasniya]

Divergences such as this, we had today, occur prior to major major tops ( and in the reverse, for major bottoms ) in the stock market.

View attachment 59327

.........................................................View attachment 59328


Here below is an excellent historical valuation perspective, from 1870 to 6-2021. You can readily see, we are well above the market top in 1929, that led to the Great Depression. NOTE: market breadth ( as above) and the Crestmont Valuation below, are NOT to be considered as precise market timing tools, but they are highly useful none the less. We are all set up, for perhaps the largest decline ever on a percentage basis. Estimates we discuss among ourselves are minus 70% to minus 95%.

View attachment 59329

Jeff

Is it wise investing when the market crashes?
As I have no investments in it right now.

 

[ssf]

Is it wise investing when the market crashes?
As I have no investments in it right now.

When would you buy an AVR ? When it costs 1,50,000/- or when the same AVR costs 50,000/- ?

 

[Pratyush J]

Is it wise investing when the market crashes?
As I have no investments in it right now.

Follow some basic principles and you will be good:

1) Focus on TIME-IN the market rather TIMMING the market
2) Stick to your asset allocation. (100 - Age) should be equity % and rest debt %. Balanced funds could be a good starting point
3) Balance your portfolio every 6 months or after any big market crash
4) People who stuck to their portfolio allocation during COVID related market crashes, are sitting pretty on the returns
5) If you are new to stock market, start with Mutual funds. Don't jump into direct stocks unless you understand how markets work. Take help of an independent financial consultant, pay an yearly fees and follow his advice. But go via direct investment route. You can invest in many AMCs on the fly. They do all the verification online.
6) Try not to get tempted in following tips by so called market experts, as many times they are motivated. Watch stock market related web series / movies to get a better idea. Although there are lot of checks and balances are in place by SEBI now, but still loopholes exists

Happy Investing!

 

[vishal_k]

When would you buy an AVR ? When it costs 1,50,000/- or when the same AVR costs 50,000/- ?

But there's also a case that, that particular model is the most problematic model and the company just wants to clear up the stock by giving discounts. So before investing have to look at its history also.

 

[alpha1]

Here below is an excellent historical valuation perspective, from 1870 to 6-2021. You can readily see, we are well above the market top in 1929, that led to the Great Depression. NOTE: market breadth ( as above) and the Crestmont Valuation below, are NOT to be considered as precise market timing tools, but they are highly useful none the less. We are all set up, for perhaps the largest decline ever on a percentage basis. Estimates we discuss among ourselves are minus 70% to minus 95%.

View attachment 59329

Jeff

But never before we had business models that currently look bleak in terms of operating cash flows but have potential to capture the market of future leading to high returns.
Most of the money in stock markets is for speculative return only - and as technology picks up we will get more and more into high PE mode with passing decades.

 

[drlowmu]

Follow some basic principles and you will be good:

1) Focus on TIME-IN the market rather TIMMING the market
2) Stick to your asset allocation. (100 - Age) should be equity % and rest debt %. Balanced funds could be a good starting point
3) Balance your portfolio every 6 months or after any big market crash
4) People who stuck to their portfolio allocation during COVID related market crashes, are sitting pretty on the returns
5) If you are new to stock market, start with Mutual funds. Don't jump into direct stocks unless you understand how markets work. Take help of an independent financial consultant, pay an yearly fees and follow his advice. But go via direct investment route. You can invest in many AMCs on the fly. They do all the verification online.
6) Try not to get tempted in following tips by so called market experts, as many times they are motivated. Watch stock market related web series / movies to get a better idea. Although there are lot of checks and balances are in place by SEBI now, but still loopholes exists

Happy Investing!

If stocks are set up to fall by 70% to 95%, your points are not valid at all, in fact, they are absolutely the opposite of what to do, in my opinion.

It took about thirty years to " get even " if you were a buyer near the top in 1929.

Stocks are now, ..................about twice valued over 1929 - today.

Stocks are more over-valued - than any time since 1870, when the tabulation begins!!

How old will we all be in 30 years, assuming it "only" takes 30 years to get even. Why go through that torment, " just to get even " after suffering a loss in your stock holdings of 70% to 95% ??????

Any Independent Financial Consultant who does not anticipate this decline, and align asset allocations in advance of it, will likely not maintain a client base, and not survive the decline as a viable business.

Jeff

But never before we had business models that currently look bleak in terms of operating cash flows but have potential to capture the market of future leading to high returns.
Most of the money in stock markets is for speculative return only - and as technology picks up we will get more and more into high PE mode with passing decades.

You are only expressing a human rationalization. As we see from 1870, the markets are cyclical, always have been, and always will be.

The Crestmont chart does not reflect your rationalization. 2021 is no different than before !! We are any wheres from two days to two years, for the major crash to be in effect, in my humble opinion.

The first set of numbers I posted, with breadth indicators, is showing you, on 7-7-21, more people are selling as the market makes new highs. This precedes a TOP. The same, in reverse, occurs at major bottoms.

It amazes me, that the general public, does not have a clue !! Like a lamb being led to slaughter.

Jeff

 

[Pratyush J]

If stocks are set up to fall by 70% to 95%, your points are not valid at all, in fact, they are absolutely the opposite of what to do, in my opinion.

It took about thirty years to " get even " if you were a buyer near the top in 1929.

Stocks are now, ..................about twice valued over 1929 - today.

Stocks are more over-valued - than any time since 1870, when the tabulation begins!!

How old will we all be in 30 years, assuming it "only" takes 30 years to get even. Why go through that torment, " just to get even " after suffering a loss in your stock holdings of 70% to 95% ??????

Any Independent Financial Consultant who does not anticipate this decline, and align asset allocations in advance of it, will likely not maintain a client base, and not survive the decline as a viable business.

Jeff

Stock falling by 70 - 95% will it happen? If we keep going back so long and trying to extrapolating it to the current time, not sure will it help. Take example of Covid crash, 50% from the current BSE level and about 25% at that level, but see how soon it recovered. If you would have exited the market at that time waiting for the markets to tank further to invest further, you would have booked the entire loss. Rather following a disciplined approach of investing would have helped you recover the entire loss and reap benefits.

Portfolio alignment majority of the time happens after an event, but if someone anticipates that, I would put my entire money on him. There are multiple approaches that take various indicators into account including PE ratio.

I rest my case and let's focus on AV here and meet on a dedicated investing forum like Jago Investor.

 

[drlowmu]

Stock falling by 70 - 95% will it happen? If we keep going back so long and trying to extrapolating it to the current time, not sure will it help. Take example of Covid crash, 50% from the current BSE level and about 25% at that level, but see how soon it recovered. If you would have exited the market at that time waiting for the markets to tank further to invest further, you would have booked the entire loss. Rather following a disciplined approach of investing would have helped you recover the entire loss and reap benefits.

Portfolio alignment majority of the time happens after an event, but if someone anticipates that, I would put my entire money on him. There are multiple approaches that take various indicators into account including PE ratio.

I rest my case and let's focus on AV here and meet on a dedicated investing forum like Jago Investor.

Well personally, I was actually 100% short ( February 2020 ) , at the start of the Covid Crash. I am positioned that same way, 100% short, right now. Willing to hold for 2 days to 2 years, until it unfolds.



................................................................................................

This below, is an interesting article, by an analyst I like, which was published today 7-9-21, just two days after I started this thread.

Allsopp is very low key in his writing. He is offering long term advice here. A question for you : Do you understand what he means by " long, long-only, and short " ??? He assumes you do.

How To Navigate A Potential Market Crash

The strong returns on U.S. stocks seen over recent years have been pulled from the future, with forward return prospects now the worst on record. Read to know more...

seekingalpha.com

NOTE:

Today, there are two investment commentators I particularly pay attention to.

For timing, a person named Avi Gilburt, who does excellent interpretations of the Elliott Wave Theory. He sold the top of the COVID drop, and bought the bottom of it. He is short term bullish, contends we are in the final WAVE FIVE up. ( After which, a substantial bear market ).

The second market commentator, Stuart Allsopp, is featured above, and I respect his work and analysis, as being well thought out.

My own markets background : I have been employed as a stockbroker, in 1968 - 1984, and a past Member ( owned a seat in my name ) on the Kansas City Board of Trade ( 1984-1988 ) . Still like to follow markets.

Jeff

 

[OM_2K19]

If you wanna go 'Broke', either invest in Stock or become an AV Enthusiast. Both will drain your Bank balance... (Just kidding, don't take this seriously)

 

[Ashenden]

Stuart Allsopp has been saying the same thing since last April. The crash may be a few years away, a few months away, no one knows. The fun with forecasting is that if you keep doing it over a long period of time, one day you will be proven right

 

[drlowmu]

View attachment 59389
Stuart Allsopp has been saying the same thing since last April. The crash may be a few years away, a few months away, no one knows. The fun with forecasting is that if you keep doing it over a long period of time, one day you will be proven right

I had not followed Allsopp prior to 2021, nor Avi Gilburt.

With Allsopp - if he was bearish since last April , ( if this really is the case ), is not such a long time . Considering that the best people I am aware of, expect between -70% and -90% decline in stock prices, I personally would not be too critical of Allsopp, and I do like his analysis style.

If you want to do market timing Ashenden, clearly, Avi Gilburt is THE great person to follow, along with his Elliott Wave Theory analysis.

The last few months, I have been trying to shape my Inverse ETF portfolio to his market timing calls, and it has been difficult for me to effect , on terms suitable to my taste !! My fault, not his. I am very pleased to have found Avi Gilburt on line, and his diligent Elliott Wave Analysis in 2021.

Avi's precise market timing calls complement, and make-up for Stuart Allsopp's lack of same !!

The main take-away, of all of this, is that we are all set up in Elliott Wave #5, and we will get murdered, afterwards, in the stock market.

We will also possibly have ( review the Crestmont PE Chart above ) a superb short sale opportunity, perhaps the best in the stock market's past 150 year history. And following Avi, subsequently - we have the potential of a new fabulous buying opportunity, especially if you get short and / or into cash prior to any large decline.

With an leveraged Inverse Exchange Traded Fund ( eg : TZA, SQQQ, SPXU, etc. ) one only needs to use 10% of their own total assets, the rest can remain safely in cash. This approach can very possibly double total equity - in any large decline.

Again, do use Avi Gilburt's Elliott Wave Analysis to execute this with a method, and in a disciplined manner. Avi considers, the COVID March 2020 crash was large Elliott WAVE four down, and this is large WAVE five, up ( the fifth and final Elliott wave ). This is a very exciting opportunity to act upon, IMHO.

Jeff

 

[drlowmu]

RE: AVI GILBURT : 7-11-2021

Here is today's, the very latest - from my favorite, Avi Gilburt. You can log onto " Seeking Alpha " and sign up for free, to have each and every " for the public " future article ( as opposed to the more comprehensive, for-fee, subscriber market notices ) he writes, emailed to you.

Sentiment Speaks: Market Has More Surprises To Come

My outlook for the stock market in the coming months is still quite bullish, especially after we see a 200-300 point pullback begin later this summer. Here are my updated support levels.

seekingalpha.com

Jeff

 

[drkrack]

RE: AVI GILBURT : 7-11-2021

Here is today's, the very latest - from my favorite, Avi Gilburt. You can log onto " Seeking Alpha " and sign up for free, to have each and every " for the public " future article ( as opposed to the more comprehensive, for-fee, subscriber market notices ) he writes, emailed to you.

Sentiment Speaks: Market Has More Surprises To Come

My outlook for the stock market in the coming months is still quite bullish, especially after we see a 200-300 point pullback begin later this summer. Here are my updated support levels.

seekingalpha.com

Jeff

Thanks for Sharing the insights, With Nifty attempting 16k mark sooner, such concerns are not unfounded. Even RBI gov had warned on similar lines. As a long-term investor I'm not bothered much about market corrections, Still SIP in the fundamentally strong stocks makes a good bet for the long-term wealth creation.

If stocks are set up to fall by 70% to 95%, your points are not valid at all, in fact, they are absolutely th

I sincerely doubt that kind of correction is possible, If you see quarterly results of the Companies in Majority Sectors, most of the times they're ending with a Profitability Note. Many have crossed the pre Covid19 numbers by a good margin consistently. Yes, certain sectors seem to be lagging due to Covid19 effects mainly the Tourism and Hospitality industry, but that's on the expected lines.

I personally think that Indian Companies are undervalued and there's a lots of Growth potential in the coming years. Only 5% of individuals in India invest in Stocks directly or indirectly according to recent estimates, with more numbers of new investors (thanks to Lockdown), I suppose the Boom is yet to come. Correction is a sign of healthy markets and reasonable valuation so, one should not be too much concerned about it, especially if you are a long-term investor. This is what the experts predicted when the Covid19 Pandemic Related Crash was Occurring. But as we know, there was a good bounce back.

 

[drlowmu]

Very nice presentation, but what you post above, does not impress me very much. You are only showing us an 18 month period. I started this thread by looking back, data-wise, 151 years. Truly long term.

Yes, many miscalled the aftermath of the March 2020 lows,........ I did. As I reread those statements from 2020 you posted today, I feel every single statement, can be correct, given some additional time. In fact, IMHO, there is an extremely high probability of this occurring. The house is built on a sand foundation, and it has not changed its underpinnings.

As far as I know, only ONE person I am aware of called it right, Avi Gilburt. He ( correctly ) saw March 2020 as the Elliott Wave's, Wave FOUR correction, and as the S&P 500 approached 2,000, he went all in, for his subscribers, and for his family ( kids) account, saying his goal was 4,000. The FIFTH wave up. That 4,000 goal ..... has been reached.

He still feels we will have possibly two more years up, in a bull market, as part of this FIFTH Elliott Wave up. He is hoping to see 6,000 ( S&P 500 ).

After that, he sees a huge bear market cycle.

Avi has written recently of a minus 70 percent potential decline in stock prices.

( My highly experienced friends are looking for minus 90 to 95%. ) Avi Gilburt, while now looking for 6,000, says, anyone who plans to hold stocks after the fifth Elliott Wave is completed, so called " long term " investors, he has no hope for them.

From what I see you are writing above, respectfully,....... that would be you - as you now think.

I have no vested interest or association with Gilburt. I just simply like his analysis., share it with others.......people like you.

I suggest you spend time and study his already-published works. He has provided wonderful tutorials teaching Elliott Wave Theory. Learn his analysis methodology. Good luck to you sir. Time will tell.

 

[drlowmu]

I just watched a presentation, that seems to point out we are early in a new recovery. If so, this would be in synchronization with Avi Gilburt, and his view of S&P 500 at 6,000 by 2023. This presentation, give Avi's technical ( Elliott Wave Theory, fifth wave up,) an economic reason, not just a pure technical basis........ to my way of thinking.

Take a look, tell me how it strikes you :

.

Avi has been discussing a 200 to 300 point decline in the S&P 500, and Friday may have possibly been the start of it. Will know better Monday and Tuesday 7-19/20. I own nothing but inverse ETFs, so a continued short term market decline here will be very helpful to me.

I REALLY liked the above URL's presentation, and wanted to share it with anyone - who holds an interest in such matters. Best wishes.

Jeff

 

[Beast_of_burden]

The most likely scenario is high inflation fairly soon, a good deal of it will be imported from the USA. The US is printing so much it's a matter time, something has to give. Beggar thy neighbour. Assuming inflation is around the corner, will it not lead to asset price inflation first? I am already seeing wages going up in the IT sector, the high attrition being seen is a symptom. Prices of all commodities - metals, oil, cement, et al seeing increases.

Given the above scenario how will it play out in the stock market? Is it better to invest in export oriented stocks? Commodities? Metal stocks are already over-valued, cement stocks have zoomed. Sugar recently. Which sectors to exit? What's a good strategy guys?

 

[prem]

Invest in lps I have only seen prices go up

 

[msankadi]

Why is everyone posting charts and news of the US market and then they keep writing 'we' etc. in their posts?

Is it just for illustration or this discussion is for NRIs/US citizens or something else entirely that I am missing?

We definitely cannot assume blindly that what holds true for the US market holds true for the Indian market? At a minimum there might be a huge timing lag or both curves might just be out of phase.

 

[Nikhili]

Metal stocks are already over-valued, cement stocks have zoomed. Sugar recently. Which sectors to exit? What's a good strategy guys?

Leave either part profit or full in the same stock and withdraw your principal amount.
Sugars due to ethanol, textiles run has started.
Make hay while the sun shines and play it safe without getting too greedy!