Well of course they "could"
Doesn't mean they will... That being said, there has to be a correction at some point... Right
Marc Faber: Why US stocks could drop up to 40%
Well of course they "could"
Doesn't mean they will... That being said, there has to be a correction at some point... Right
Marc Faber: Why US stocks could drop up to 40%
CNBC brings him out every few months to talk about a stock collapse. He's been saying the same thing for a few years now. I would imagine, he will eventually be correct. He is correct about the technicals. Our recent climb was due to very few stocks. What will cause a crash? I don't know. China could do it, if they go into a recession. They will eventually. But it may not happen for many years.
A collapse is going to be hard pressed to gain momentum. There just aren't any investments(non stock market) out there that people are getting into and they just keep putting money into stocks. Every new pay period, how much money gets invested into the market? It would take a major move by IRAs, 401ks, etc into cash, bonds, or gold. I personally think that the majority will keep their mix the same and that is mainly into stocks, thus lessening any downward pressure.
Originally Posted by bassnpro1
Good point. We have been conditioned to BTD. Buy The Dip. For many years, and for the foreseeable future, we believe the Federal Reserve will be there to protect our downside. It used to be called the "Bernanke Put". Now we have grandma Yellen telling us they will be there for us. My concern is that we are too complacent.
Dr. Doom has been talking about another crash for years. Say it long enough and he will be right, but it sounds like crying wolf to me.
I am holding cash for the crash. That's when opportunity will be knocking
I think a raise in interest rates would cause some problems they have been talking about it for awhile now maybe in the fall.
But it might take a long time to get that crash. In the mean time I'm trading the ranges of the SPY and I picked up some AAPL on that selloff on good earnings.
I remember Jim Cramer, at the low point of the 2008 crash, making a statement that people should stay out of stocks for 5 years. Anyone that listened to him would have missed the rally. They had another guy on CNBC that came on every day after the rally started that kept saying no way it would continue, can't remember the guys name. Every day they've got people saying the market is going up, and others predicting a crash. They've all got good arguments, but it's always the stuff that nobody sees coming that craters the market.
You are mistaken Cramer was the one who was warning in the summer of 2007:
He told us what the problems were.
And Oct. 6, 2008:
He said take your money out of the market, IF you would need it in the next 5 years. If you could wait, then wait. He specifically says to wait it out if you can. But he saw a 20% decline coming. The market went down almost 40% from when he made those statements.
And it was sometime in 2009 or 2010, I think, is when he said to start back in. I remember that being the time when I started the wifes 401K account and it did very well between then and December of 2014.
Here's a quote from him, so you're saying it would have been smart to pull you money out of the market and keep it out for 5 years? But apparently you did not follow his advice, which is good. But I am far from being "wrong".
In what Curry called a “dramatic statement,” Cramer emphatically urged any investor who has money they may need in the next five years tied to stocks to pull their dough out.
“I thought about this all weekend,” Cramer told Curry. “I do not want to say these things on TV.
“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”
Why You Shouldn
The guy doesn't have a crystal ball.And he was specifically talking about those who need income from the market. I think he saved alot of people considerable downside. But, there are those who believe that Cramer helped cause the selloff by creating the panic from his comments. Nobody can accurately predict the market from one year to the next. If they did, they would own the world. A five year prediction is foolish for anyone. But I think he was trying to help the avg investor.
Of course he doesn't have a crystal ball, but he's on daily giving advice. So let's see, he told people to sell any stock market assets they might need in the next five years, in October 2008. S&P was down to about 800-900 at that time. Presumable anyone selling then would have sold at a loss. So then 5 years later you take that money and reinvest it when the S&P is trading around 1700.
This kind of advice didn't save anyone from "downside", it saved them from making upside.
I agree no one can accurately predict the market long-term, and that being so, how is he "helping" the average investor? Selling low and buying high is not good advice for anyone.
The morning he said that the S&P opened at 1097+-. about 5 months later it was below 700. Remember, he specifically singled out those who may need money from their investments. Not long term investors. There were companies that went bankrupt. Many investors had money that vanished and never came back. And depending on where one was invested they may not have gotten back to even years later. If someone was collecting income, from stocks, and was retired or near retirement, it may have been prudent to sell, depending on where their assets were. And if you hadn't sold, the psychology of the average guy would have sold months later. The bottom in the markets happened because we ran out of sellers. So there were many who sold in panic and lost most everything. He get's things wrong, but who doesn't.
I worked with a group of guys at the powerplants in MD. In the 80's or 90's to 2008 they had retirement plans with the powerplant company. They would buy company stock and the company would match some. Of course because it was a powerplant, everyone thought it was a safe investment. These guys had million dollar nest eggs. What they didn't realize or understand was that the company also had financial holdings of some sort. When the market turned, the value of the stock plummeted. Not because of the powerplant but because of the exposure to the financial system. The company sold out to an investment firm for pennies on the dollar. I don't recall all the details, but the workers lost 90% of investments. Of course upper management was just fine. It was the worker who suffered.
I think his call was good for some and bad for others. Possibly bad for most. But thats why we should always take someone elses investment advice with a grain of salt. Especially those who are calling for a market crash.
No they wouldn't reinvest it in 5 years at 1700 because they needed the money and spent it. It was never advice for long term investors, his words were geared towards people in the short term.
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