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Key Points
- Global Trade and global currency demand can id stronger markets long-term
- Inverted yield curve signals market peaks normally
- Debt to GDP growth ratios at high levels ( eg > 1.0 ) signal high default risk if economy turnsat high levels ( eg > 1.0 ) signal high default risk if economy turns
- Buffett >> "“In the short run, the market is a voting machine but in the long run it is a weighing machine.”
Current Markets
JTimmer on US markets - 221222 - Based on DCF historical PE multiples, SPX may be 15% over valued - bottom as low as 3200 in 2023
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https://www.fidelity.com/viewpoints/market-and-economic-insights/Q3-outlook?ccsource=email_weekly
Bear Market Patterns
since World War II, bear markets on average have taken 13 months to go from peak to trough and 27 months to get back to breakeven. The S&P 500 index has fallen an average of 33% during bear markets over that time frame. The biggest market value decline since 1945 occurred in the 2007-2009 bear market, when the S&P 500 sank 57%.
References
| Reference_description_with_linked_URLs____________________ | Notes__________________________________________________________ |
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| Invest Tools | |
| i Invest Strategies | |
| m Fundamental Analysis | |
| Market Factors Analysis | |
| https://www.investopedia.com/slide-show/tools-of-the-trade/ | Indicators for Trade Plans |
| https://www.marketwatch.com/story/why-this-time-is-different-rings-true-in- todays-stock-market-2019-08-13?siteid=yhoof2&yptr=yahoo | Key Indicators for a down market - marketwatch |
| https://theweek.com/articles/901853/feds-15-trillion-intervention-explained fed-sales-purchases-to-banks-to-manage-rates-2020-theweek.com- The Feds 15 trillion intervention explained.pdf | Fed's role in supporting bank liquidity, rates during a crisis |
Key ConceptsConcepts
Buffett >> "“In the short run, the market is a voting machine but in the long run it is a weighing machine.”
I want to go from the smartest dumb investor to the dumbest smart investor <<jim
Markets Short-Term
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• Corporate and sovereign debt is a bigger danger.
How to Invest a risky market
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How to Invest a risky market
- get vix premiums in hedges
- setup adaptive trades
- use long-short market options - SSO, SDS etc as relative balance when trends are established - use SMA, Bollinger bands etc
- cut or hedge weak equity positions which will typically have higher beta in down markets
2024 Market Outlook
240216
i>> as usual, any change in the foreign demand for US debt is one of the major drivers of our deficits and our economy - Fed influences but does not control that demand
i>> 2024 election year Democrats promise ANYTHING to buy votes - want your medical debt cancelled, want your credit debt cancelled?? Biden will drive up deficit over 2 Trillion in 2024
i>> want to fix budget and deficit problems from illegal migration ?
2023 Market Outlook
The interplay between Fed policy, inflation, economic growth and earnings will drive the market in 2023, analysts say.
But inflation could fall far enough (3%-4%) for the Fed to essentially think it has accomplished its mission (although it won’t say it directly as the target is still 2%), but for all intents and purposes, we could exit 2023 without a material inflation problem,”
A resilient job market so far has optimists — and Fed officials — arguing that the economy could avoid a so-called hard landing as monetary policy continues to tighten.
anticipating an economic recession to materialize early in 2023, as evidenced by the three quarters of projected S&P 500 index earnings declines and continued defensive sector leanings,” said Sam Stovall, chief investment strategist at CFRA, in a Wednesday note. “The severity of the recession remains in question. We expect it to be mild.”
Markets Long-Term
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Energy - US Oil production to continue and grow thru 2050 - Federal report - 2023
the 2023 Annual Energy Outlook from the Energy Information Administration (EIA) finds that U.S. oil production may even increase between now and 2050 even as clean energy sources like wind and solar power increase dramatically as well.
Market Valuation Indicators
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The CAPE Ratio (also known as the Schiller P/E or PE 10 Ratio) is an acronym for the Cyclically-Adjusted Price-to-Earnings Ratio. The ratio is calculated by dividing a company’s stock price by the average of the company’s earnings for the last ten years, adjusted for inflation.
The CAPE ratio allows the assessment of a company’s profitability over different periods of an economic cycle. The ratio also considers economic fluctuations, including the economy’s expansion and recession. Essentially, it provides a broader view of a company’s profitability by smoothing out the cyclical effects of the economy
In the past, the CAPE ratio has proved its importance in identifying potential bubbles and market crashes. The historical average of the ratio for the S&P 500 Index is between 15-16, while the highest levels of the ratio have exceeded 30. The record-high levels occurred three times in the history of the U.S. financial markets. The first was in 1929 before the Wall Street crash that signaled the start of the Great Depression. The second was in the late 1990s before the Dotcom Crash, and the third came in 2007 before the 2007-2008 Financial Crisis.
recent changes in the calculation of earnings under the GAAP distort the ratio and provide an overly pessimistic view of future earnings.
- Financial Ratios
- Guide to Financial Modeling
- Projecting Balance Sheet Line Items
- Financial Analysis Ratios Glossary
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Buffett Indicator - Wiltshire 5000 / US GDP
The “Buffett Indicator” as it’s called in Wall Street circles — which takes the Wilshire 5000 Index (viewed as the total stock market) and divides it by the annual U.S. GDP
"Dry Powder" Concept - prepare to have cash for down markets - lower loss, reinvest at bottom
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Where to store crypto: exchange or wallets?
it is a lot safer to leave your coins with the exchange or brokerage where you bought them. The best app for cryptocurrency will have excellent security and store your assets offline in cold storage. Several companies also insure the crypto assets they hold.
Exchange fees
Here are some fees to watch out for:
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https://finance.yahoo.com/news/energy-transfer-could-getting-close-114400180.html
Big Tech vs SPX, ET - Forward PE & PEG rations - 240208 - what does growth cost and return?
You can see Big Tech can have big years in growth ( Meta 2023 and YTD ) vs MSFT ( 2022 and 2023 ) etc. On the other, ignoring price ET retuns a steady 9+ % cash flow with an intent to grow that annually 3 to 5%. As a midstream carrier of multiple energy types ET has a predictable business volume, pricing and cash flow compared to most businesses so lower overall risk going forward
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