Investing strategies and secular bear markets

[Valuegrowth]

Hi Hoop

Thank you so much for your well written post. I really appreciate. This type of writing will help us to take better decisions in the investment world and it will also help us to mange our retirement portfolios prudently. Thank you remembering me some important things in markets. Few years back I heard and read about this secular bull and bear markets and didn’t study much.

[Hoop]

When will the Missionary arrive to the the Island of the Green Eyed Tribe ?



There's been a lot of questions asked about this latest unloved cyclic bull market cycle..Its over 5 years old, some say its overvalued ( +150%) and is defying gravity. Its above its historic average PE ratio range.. Its trading on borrowed money at record levels.. and.. its forward fundamentals are based on the past "unsustainable" (so some say) earning margins, therefore if this is all true the bull in theory should be near death and the investors in an exuberance no worry behavioural state, but presently there is no investor euphoria and it looks like the Bull could last another 5 years with company earnings forecast to continue the rise with the expected USA economic recovery...so...what's happening here..are we missing something???.....No we aren't missing anything..In reality we know all the answers , we have all the common knowledge available...or so says W.Ben Hunt...(see below)

One part of that Common Knowledge is Uncle Ben and now Aunty Yellen from the FED are here to support Wall St and the US economy and they will continue to apply QE until the economy has recovered..and by then the company earnings will be increasingly higher and sustainable thanks to a recovered healthy economy...

OK...so the Market is screwed up, but the FED is doing its part to fix that . ...Ok that's Common Knowledge and us investors know this and supposedly being responsibly cautious and quiet about it all...so, if that is the case.. why is everyone still "in" and freting, not feeling that confident, we sense distrust...There's that feeling we are all playing the game of hush hush wink wink "lets ignore this current problem as the FED will eventually take this problem away" game.

Some of this Common Knowledge stuff has been here for a long time now..especially the FED QE factor situation...

Behavioural-wise, long lasting Common Knowledge can become a part of culture which then gets embedded into the behavioural system ..When this situation happens it becomes a powerful factor entity, which takes an even more powerful entity to question its validity

Ahh HAhh ...maybe this is all just a game then?.....If that is the fact, what happens if we apply W.Ben Hunt's Epsilon Theory article (Gaming Theory) to the test...Well in actual fact Salient has already done that with Ben Hunt's Epsilon Theory on its website with a disclaimer at the end saying that they disavow all content of Hunt's post...nice one Salient!!!.. .


Question: So...when will the Wall St Market crash??? ..or.... for the less dramatic orientated investor..when will this Cyclic Bull Market Cycle end?????
Answer: According to Ben Hunt ..When the Missionary arrives to question the market's validity

[BIRMANBOY]

It doesn't have to make sense when you are essentially a tabloid journalist....they get paid by the word...whether its about the yeti, bigfoot or the market. Sigh.

When will the Missionary arrive to the the Island of the Green Eyed Tribe ?



There's been a lot of questions asked about this latest unloved cyclic bull market cycle..Its over 5 years old, some say its overvalued ( +150%) and is defying gravity. Its above its historic average PE ratio range.. Its trading on borrowed money at record levels.. and.. its forward fundamentals are based on the past "unsustainable" (so some say) earning margins, therefore if this is all true the bull in theory should be near death and the investors in an exuberance no worry behavioural state, but presently there is no investor euphoria and it looks like the Bull could last another 5 years with company earnings forecast to continue the rise with the expected USA economic recovery...so...what's happening here..are we missing something???.....No we aren't missing anything..In reality we know all the answers , we have all the common knowledge available...or so says W.Ben Hunt...(see below)

One part of that Common Knowledge is Uncle Ben and now Aunty Yellen from the FED are here to support Wall St and the US economy and they will continue to apply QE until the economy has recovered..and by then the company earnings will be increasingly higher and sustainable thanks to a recovered healthy economy...

OK...so the Market is screwed up, but the FED is doing its part to fix that . ...Ok that's Common Knowledge and us investors know this and supposedly being responsibly cautious and quiet about it all...so, if that is the case.. why is everyone still "in" and freting, not feeling that confident, we sense distrust...There's that feeling we are all playing the game of hush hush wink wink "lets ignore this current problem as the FED will eventually take this problem away" game.

Some of this Common Knowledge stuff has been here for a long time now..especially the FED QE factor situation...

Behavioural-wise, long lasting Common Knowledge can become a part of culture which then gets embedded into the behavioural system ..When this situation happens it becomes a powerful factor entity, which takes an even more powerful entity to question its validity

Ahh HAhh ...maybe this is all just a game then?.....If that is the fact, what happens if we apply W.Ben Hunt's Epsilon Theory (Gaming Theory) to the test...Well in actual fact Salient has already done that with Ben Hunt's Epsilon Theory on its website with a disclaimer at the end saying that they disavow all content of Hunt's post...nice one Salient!!!.. .


Question: So...when will the Wall St Market crash??? ..or.... for the less dramatic orientated investor..when will this Cyclic Bull Market Cycle end?????
Answer: According to Ben Hunt ..When the Missionary arrives to question the market's validity

[Hoop]

It doesn't have to make sense when you are essentially a tabloid journalist....they get paid by the word...whether its about the yeti, bigfoot or the market. Sigh.

Ben Hunt ..essentially a Tabloid journalist ....You're lucky that he wouldn't stoop to low levels and read our ST posts BB

Ben Hunt PhD


Contact Information
Ben Hunt PhD
Author at Epsilon Theory
ben.hunt@epsilontheory.com
http://epsilontheory.com/follow/

About Ben Hunt PhD

Ben Hunt is the Chief Risk Officer of Salient Partners, an $18 billion asset manager based in Houston, Texas. He is also the author of the popular online publication and newsletter Epsilon Theory, which examines the markets through the lenses of game theory, history, and behavioral analysis.

Archive

05/05/2014	The Risk Trilogy	Article
04/21/2014	The Adaptive Genius of Rigged Markets	Article
04/17/2014	Dr. Ben Hunt: How Sentiment and Narratives Shape the Crowd	Newshour, Guest Expert
04/08/2014	The King Is Dead, Long Live the King	Article
03/24/2014	Two Shifting Narratives	Article
03/17/2014	Panopticon	Article
02/12/2014	Goldilocks and the Dog That Didn’t Bark	Article
12/10/2013	The Stuka	Article
12/02/2013	A Dogmatic Slumber	Article
11/19/2013	When E.F. Hutton Talks	Article

[BIRMANBOY]

Firstly, nothing good ever came out of Houston ...home of dodgy dealings and shady Petro dollar corporations. Secondly, those who can...do.. and those that cant.... write articles with esoteric titles and longwinded and complex theories designed to impress gullible and naïve investors. Thirdly, 18 billion dollar fund is chickenfeed to afore-mentioned oil rich billionaires wanting somewhere to place their money......he probably bored them into investing with him. PHD's are good for that. Lastly, pretentious articles titles such as you have listed just cry out "I'm important, smart as a whip and can invest your money much better than you". Apart from that he's probably a wonderful human being.

Ben Hunt ..essentially a Tabloid journalist ....You're lucky that he wouldn't stoop to low levels and read our ST posts BB

Ben Hunt PhD


Contact Information
Ben Hunt PhD
Author at Epsilon Theory
ben.hunt@epsilontheory.com
http://epsilontheory.com/follow/

About Ben Hunt PhD

Ben Hunt is the Chief Risk Officer of Salient Partners, an $18 billion asset manager based in Houston, Texas. He is also the author of the popular online publication and newsletter Epsilon Theory, which examines the markets through the lenses of game theory, history, and behavioral analysis.

Archive

05/05/2014	The Risk Trilogy	Article
04/21/2014	The Adaptive Genius of Rigged Markets	Article
04/17/2014	Dr. Ben Hunt: How Sentiment and Narratives Shape the Crowd	Newshour, Guest Expert
04/08/2014	The King Is Dead, Long Live the King	Article
03/24/2014	Two Shifting Narratives	Article
03/17/2014	Panopticon	Article
02/12/2014	Goldilocks and the Dog That Didn’t Bark	Article
12/10/2013	The Stuka	Article
12/02/2013	A Dogmatic Slumber	Article
11/19/2013	When E.F. Hutton Talks	Article

[Hoop]

An update chart from "Chart of the Day"




.........


Its a copyright no no to alter the author chart or its assumptions ...Please note the Chart of the Day Chartist has not assumed secular cycles at all with their published chart.....When I personally supply extra information..(the secular Bull and bear cycle periods time bar)... the above chart reveals extra information to the observer..

The coloured time bar underneath the chart... red for bear cycles blue for bull cycles..Notice how inflation adjusted DOW index only gain in secular bull cycles..As the DOW has reached its secular bear resistance area once again, it doesn't look that good for the near future..eh?

Maybe the Secular Bear Cycle has ended and its different this time and the DOW will keep rising?
Its Odds on that the secular bear is still operating..It may sound paradoxical to the few of the readers but history tells us the ending signature of a secular bear cycle is a prolonged period of either double digit inflation (+10+%) or high deflation (-5-%) As the DOW has had very low constant inflation these last 5 years (+1% in 2013) it seems safe to say there's been no inflationary/deflationary evidence to suggest a secular reversal has occurred

Therefore according to Secular Theory..The secular cycles are driven by the PE Ratio trends and the inflation rate is the primary driver of secular stock market cycles.... The inflation adjust DOW index with the secular bear cycle operating is indicating that the DOW has now reached the top area of its cyclic bull cycle.

The 2000 - 20?? secular bear cycle pattern type is looking very similar to the 1901 - 1921 secular bear cycle pattern type ...eh? ...

[Hoop]

How to spot a bull market top

by The Investor on June 20, 2013

• 
  
• 

Veteran UK investor Jim Slater is known for his penchant for high-flying growth shares. But that doesn’t mean he’s always optimistic.
Slater has lived through many market cycles in his five decades of investing, and like any great investor he knows that shares go down as well as up.
Back in 2008 I found his signs of a bear market bottom a useful waypoint in navigating the slump.
But Slater has also shared some tips on how to spot a bull market top.
Signs of a bull market top

Most of us will do better not to try, but for those who want to have a stab at stock market prognostication, here are Jim Slater’s signs of the top of a bull market.



Cash is trash

The ‘rubbishing’ of cash and the consequent low institutional holdings are an obvious danger, signalling that most funds will be fully invested.
Value is hard to find

The average P/E ratio of the market as a whole will be near to historically high levels. The average dividend yield will be low and shares will be standing at a high premium to book value.
Interest rates

Interest rates are usually about to rise or have started to do so. In mid-1995, interest rates in both the USA and UK had been rising from historically low levels. Investors were wondering how much further they would rise before topping out.
Money supply

Broad money supply tends to be contracting at the turn of bull markets.
Investment advisers

The consensus view of investment advisers will be bullish.
Reaction to news

An early sign of a bull market topping out is the failure of shares to respond to good news. The directors of a company might report excellent results only to see the price of their shares fall. The market is becoming exhausted, good news is already discounted, and there’s very little buying power left.
New issues

Offers for sale, rights issues, and new issues are usually in abundance, with quality beginning to suffer and low-grade issues being chased to ridiculous levels.
Media comment

The press and TV tend to give more prominence to the stock market and to be optimistic near the top. If prices appear high in relation to value, the argument is that ‘it will be different this time’. The few bearish articles that warn of dangers to come are ignored by investors.
Party talk

At the peak of a bull market, shares tend to be the main topic of conversation at cocktail and dinner parties.
Changes in market leadership

A major change in leadership is often a prelude to a change in market direction. Near the top of a bull market, investors often move from safe growth stocks into cyclicals, which they buy heavily.
Unemployment

An interest study by Matheson Securities of ten stock market turning points demonstrated the stock market turned downwards on average about ten months after the unemployment figures began to fall.This is wrong (see ahead of the curve book)
Remember that unemployment is a lagging indicator.
Want to learn more from Jim Slater? Check out his superb guide for small cap stock pickers, The Zulu Principle.

[Hoop]

An Article from The Short Side of Long

Another Look At Margin Debt

June 22, 2014

Chart 1: Margin debt peaked in Feb while the market continues higher…

Source: dShort.com

As we all should be well aware by now, NYSE Margin Debt peaked in February of this year even though the stock market continues to rise ever so vertically. If we look at the last two decades by observing both Chart 1 and Chart 2, we should be able to notice that a peak in margin debt is usually a warning signal that the broad market is also close to a top as well. Furthermore, Chart 2 shows that a leverage peak correlates closely to a top in a investor darling sector of the time. In 2000, it was the Internet bubble, in 2007 it was the Financials bubble and 2014 it is Biotech. So far, S&P 500 has ignored all of these warning signs. Nevertheless, volatility continues to remain extremely low for both the index itself as well as in other asset classes, while the technical perspective is showing the US index at a very much overbought level right now. It will be interesting to see how the market behaves in coming weeks. Chart 2: Previous margin debt peaks were early warnings of a major top!

Source: J Lyons FMI

[winner69]

Not saying its a predictor or anything, but I have been doing a fair bit of selling recently due to TA sell signals firing - stocks in previously strong uptrends are dying, even though the index remains at a high. In particular the small financials, could be a insight into the state of health of the financial sector.

Just like me KW .... down to a few left and nothing really saying buy me ..... speculation aside

Was like this pre the last few big market corrections

[BIRMANBOY]

You guys should be putting your recently arrived cash in the BIRMAN DIVIDEND YIELD FUND