What’s the “Stock market” going to do

[dennis thompson]

When I eat lunch I’ll often watch CNBC where there will be four or five professional money managers in discussion. I find that their commentary when discussing individual stocks to be interesting and informative.
But discussions of what the “ market” is going to do, over the short term are, in my opinion,( for what it’s worth) not helpful. You will often hear one of the participants give a perfectly logical explanation of why the “ market” is going up, while another will give a perfectly logical explanation of why the “market” is going down.
As Michael Price, a very successful money manager, when asked what the “market” was going to do, said “ I have no idea, all I can do is try to pick out good stocks” amen to that.

[Ron Citerone]

IMO the stock market is at the whim of geopolitical events, changes in technologies, and consumer preferences that no one can predict. Diversification in low cost funds and a long term outlook is the only approach that makes sense to me.

I love it when they roll out an "Expert" who predicted the last crash or bull market and ask him what will happen next year. How about bringing out all the experts who got it wrong and grilling their bacon!? :eek::D

[Alan Lightstone]

I used to love John Stossel, who would every year throw darts at a board with stocks on them and they would beat the "expert money managers" in performance over the next year. Burton Malkiel did it once with a blindfolded monkey.

Warren Buffet did it with a $1,000,000 bet that money managers could beat the S&P500. No one has taken his money. All the "professionals" did worse.

This is why Jack Bogle is probably the single person who made people the most money in the history of the stock market by inventing Index Funds for Vanguard.

[Andrew More]

Warren Buffet did it with a $1,000,000 bet that money managers could beat the S&P500. No one has taken his money. All the "professionals" did worse.
*After fees and costs. Also past performance is no indication of future performance. What happens when everybody is in passive index funds? Not throwing shade, I've got a lot of money in index funds, but I think it's going to be interesting to see what happens in the next 10 years. We can't all be passively trading stocks, because you can't have the tail (passive) wag the dog (active). If you do, then there is no price discovery.

[Jim Koepke]

Some blasts from the past on "how the markets will perform."

Pierpont Morgan, when asked by a brash young investor for a forecast about how the market would go, Morgan glared down his generously endowed nose, bristled his mustache, and replied: “It will fluctuate, young man. It will fluctuate.”

George Bernard Shaw, "If all the economists were laid end to end, they'd never reach a conclusion."

If all the economists were laid end to end they would still all be pointing in different directions. -Anon

jtk

[Patty Hann]

And then there was the [Reddit group] WallStreetBets and the GameStop short squeeze ......:eek: :D

[roger wiegand]

It will probably go up over the next 10-20 years, it will fluctuate a lot in the meantime.

[Ken Fitzgerald]

I don't think anybody can tell someone accurately how the market is going to react. A lot of the ups and downs are due to the lack of confidence by people invested in the market, IMO. I think that having the market accessible online by people who consider themselves day traders adds to the volatility. I have stocks and bonds that I have faith in and just let them ride. In the long run, years ago I got more out of my investments than I ever invested. I am not an expert, and I don't spend a lot of time worrying about the market either.

[Tom M King]

I knew when they passed laws allowing people to invest their own money with supposed tax advantages that the stock market would be a sure thing. MANY people want to put money n every paycheck. It has been for those of us who get in and out as we see fit, and don't try to "save" money. I'm not in to make an investment. I'm in and out to make money. I pay absolutely no attention to whatever any "expert" says, and don't even know what the titles are that some of those "experts" go by.

That's all I'm going to say about it. I play my own game.

[Kris Cook]

I dabble a little in day trading and do OK with some help. The current market seems to be all about what the "experts" think the Fed will do or won't do.

I read a recent article about the Fed policy and interest rates. I am no economist but this article made some sense to me. The gist of it was; notwithstanding all the angst about the recession threat the Fed has been keeping interest rates at an artificial and unrealistic (near zero) low for a long time. People have come to accept these low rates as the norm. We don't want to see the double-digit rates we saw in the 80s but we may see a shift in monetary policy that will have rates that are more in line with where they should be. Until the market comes to terms with that reality we will continue to see a lot of volatility.

[Stan Calow]

I think it's a well known truism that economists are better at explaining what happened, than they are at predicting the future. The economist I listen to regularly scrupulously stays away from investment advice

[Keegan Shields]

The reason the stock market is so hard to predict? As soon as a discernible pattern emerges, someone (a hedge fund, a professional investor, etc.) moves to exploit it, obliterating the pattern.

I forget where I heard that but it makes sense to me. And if you believe that, then it also calls into question anyone who wants your money to share their “stock market secrets” including fund managers as noted earlier.

Want a better way to make money? Don’t bet on the stock market - bet on yourself. Develop an angle, then start or buy a business, grow it, sell it. That way you can load the deck in your favor.

Don’t know how? Go work for someone who does and learn from them. As a bonus, that mentor can become your first investor.

[Bill Dufour]

I have read that. 2% interest rate is the minimum for a bank to break even on a loan. Cost of doing business, paperwork, bad loans etc. So bank rates of under 2% were never sustainable.
BilL D

[Bruce Wrenn]

I have read that. 2% interest rate is the minimum for a bank to break even on a loan. Cost of doing business, paperwork, bad loans etc. So bank rates of under 2% were never sustainable.
BilL DI don't remember any banks making 2% loans. Feds were lending them money for FREE, as in 0% overnight, and they are lending it out at up to 36%. Currently there is no reason to save, spend it while it's worth more. Savings are paying less than 1%, and inflation is a heck of a lot more, plus you get to pay income tax on that 1%. At the end of a year, you savings are worth less than when you put them in.

[Clifford McGuire]

This is why Jack Bogle is probably the single person who made people the most money in the history of the stock market by inventing Index Funds for Vanguard.

I've tried to spend the time to get educated enough to pick stocks. But it just doesn't interest me. I'd rather spend it doimng other things.

So, I just do the Bogle three fund method and pretty much forget about it.

[Ron Selzer]

I don't remember any banks making 2% loans. Feds were lending them money for FREE, as in 0% overnight, and they are lending it out at up to 36%. Currently there is no reason to save, spend it while it's worth more. Savings are paying less than 1%, and inflation is a heck of a lot more, plus you get to pay income tax on that 1%. At the end of a year, you savings are worth less than when you put them in.

Just sold a van that had a loan with the rate of 2.25%. Got the loan 12-2020. Hated to part with it but things changed and did not use it enough to keep. Carvanna did give me $8000 more than I paid for it. had it two years and put 18k miles on it.

[Lawrence Duckworth]

Just sold a van that had a loan with the rate of 2.25%. Got the loan 12-2020. Hated to part with it but things changed and did not use it enough to keep. Carvanna did give me $8000 more than I paid for it. had it two years and put 18k miles on it.

Good job Ron!.....Where does carvana stock go from here??? :D ^ ^ ^

[Ron Selzer]

Should go up. Their price on lot for comparable vans was 10+k more than they paid me, and they did not last long on the lot. Never even saw mine advertised online, it did get sold in Michigan according to CarFax, fast.
Ford Transit vans are in high demand now, were not wanted when I bought it in 2020.

[dennis thompson]

Good job Ron!.....Where does carvana stock go from here??? :D ^ ^ ^

Well Carvana stock had gone from $360 to $7 over the last few years, while they have had negative cash flow of $5 billion, yes billion, over the last three years. Currently they have about $5 billion in debt. Last year they had a loss of $870 million. Not a stock I’m ready to buy.

[julian abram]

My unprofessional opinion is the stock market has more "pain" coming this year. Why? I take Jay Powell and the Fed at their word that the inflation goal is 2%. The Fed's 2022 interest rates hikes have been moving inflation down (from 8 to 6ish %) but that's a long way from the 2% target. They must "hurt" the economy much more to hit that target if they don't change their minds. A hurt economy= higher unemployment, reduced consumer spending, reduced corporate earnings, etc. results in lower stock prices. At the end of 2023, hope I can look back at this post and see I was totally wrong.

[Patty Hann]

Well, the [sort of] bright side to a down market is that at the end of the year you can write off your losses (provided they aren't sheltered... which most of mine are :-p...)

[Maurice Mcmurry]

I have always been too much of a simpleton to understand investing but I am thinking about spending all of my Menard's funny money on 2X4's. I think I have enough disguises to make it through the check out line ten times. (It would be a good way to get the price to go down to .99 cents) Two years ago 2X4's were $10.

494830

[Terry Wawro]

Two of my favorite quotes about investing are.....
“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” Peter Lynch

"I do not know of anybody who has done market timing successfully. I don't even know anybody who knows anybody who has done it successfully and consistently." (Jack Bogle (https://www.bogleheads.org/wiki/John_Bogle))

[Perry Hilbert Jr]

My mortgage is through a co-op. I am both a stock holder and a customer. The interest rate is slightly higher, but at the end of the year, if they make money, 16 months later, normally April, they send out a refund of interest paid. Last April, we got a refund of $4,400, approximately half the interest we paid in during the year 2020. I have been with these folks for almost 20 years. When I needed a loan to buy farm equipment, I called and spoke to the loan officer for about 2 minutes. The next day in the mail I had a check for the amount. When interest rates were up sort of high, ten years ago, I called and asked about refinancing. No need, she said, For payment equal to a half a percent of your loan balance, you can "buy down" the interest to the current market rate. She sent the papers, which I signed and returned with the check. In addition to the refund of interest, a small percentage of profit goes into a fund to increase the assets, the fund from which loans are made. So that percentage increases the value of my stock. In 20 years, they made a profit every year. I don't know what the operating costs may be, but they do not have checking accounts, etc to lose money on or to pay for electronic processing of checks. Nor do they have 20 branches. There is one..