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Worldwide market crash is coming

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  • Aug 13th, 2017 12:33 pm
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Sr. Member
Oct 21, 2014
575 posts
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Burlington, ON
dlhunter wrote:
Aug 4th, 2017 11:25 am
you take peak to trough and not some beneficial time frame like May. Google for explanation



3 to 5% is good, China gets near 7%
US is near 1.6% now eg BELOW 2% and markets rising by 18% since 2009.
US GDP growth
The US GDP is 18.57 Trillion... to grow that at 3-5% sustainably would be impossible. The law of large numbers takes hold at some point, and the world doesn't work like a video game.

Good news is, here is an article from fortune interviewing Warren Buffet explaining why it is not necessary to do so while still maintaining a growing and prospering society.

I'm not going to google your trough to peak theory, but I do believe that using the bottom of that great cataclysm to infer a major market crash is probably not valid. You should have sold everything long since as the market was rising 18% per year.

I remember those days well and equities were really reviled, people literally thought the economic world was coming to an end, people were selling in to that great cataclysm which is what spawned the term "I lost everything in 2008". Psychology was extremely negative, people were really selling everything and losing their homes. That is no longer the case and now sentiment is quite bullish.

While at some point in the future a crash will happen, unless a concrete timeframe is given nothing can be done with the info.

Either way, good luck to you. I'm jaded because I've heard predictions of a major market crash every week for over twenty years. Literally every week. Somehow, the first stock I bought, RY is up over 1000% since then.
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Jul 27, 2017
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dlhunter wrote:
Aug 4th, 2017 11:28 am
something tells me you exist to attack others. Astonished Face
let me repeat once again for you, it's NOT different this time.
I am 70 years old & have seen & remember all that ever was in my time as an adult with regard to the economy.

Anyone can speculate to making a prediction, it's getting it spot on that makes the difference.

Past history is not an indication of future events

- I was around & experienced when Gold was $35/oz, when minimum wage was $1.00/hr in Toronto, houses could be bought for under $15k, before colour TV, when the Canadian dollar was higher than the US green back, before CC became part of daily life, when the interest rates were near 20%, before cell-phones, when unemployment rates were above 12% in Ontario, getting shell shocked on the Black Monday 1987 crash, dot.com, the housing boom, the crash of 2008, super low interest rates, the Dow hitting 22,000...I likely missed some & I can tell you that 'no one can predict the next correction'
My crystal ball is broken
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Jul 11, 2015
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what about the fact we've begun and continue to head into deflation territory, isn't that the most susceptible times to market crashes/corrections? peoples can't borrow money as cheap as they used to so spending and investing drops. and the psychological effect of mob mentality amplifies? Throw in a few logical reasons markets can crash and u have the perfect storm.....

Markets have been strong too long, especially after trump, I feel like the fact new politics in the usa is a big factor/trend historically speaking. same thing happened after obama came into office, markets were strong for a while until was it September?. markets are strong after the election but after about a year the effects of new politics seem to lag into the markets quite nicely/or badly depending on what side your on. probably September-November will be interesting times, plus i feel like winter blues plays a negative factor in investors psychologies.

Wonder what the reason/blame for the crash will be this time though. China real estate market? coupled with a few other vulnerable economies, like ours? the complete crash of oil and the middle east? It will be good for the westernization/capitalism of the rest of the world though, giving a good reason/distraction to finally going into North Korea. Or maybe another middle eastern war can happen? maybe it wont be america starting it this time either.
You're the average of the five people, you most associate with.
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Jul 27, 2017
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@jointedhornet...'what if' nothing happens, the markets just keep on going up & up till the DOW hits 25,000 or 30,000?

Hold whatever you have invested, if it's not making you money then move to something that will. Plus [just in case] make sure that you have minimum three months emergency money, one-year even better. Stay healthy & don't worry about the things that you don't have any control over
My crystal ball is broken
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Jun 27, 2007
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porticoman wrote:
Aug 4th, 2017 12:23 pm
@jointedhornet...'what if' nothing happens, the markets just keep on going up & up till the DOW hits 25,000 or 30,000?
some folks kept saying real estate never goes down and price of average Toronto house went to stupid levels
we also saw gold spiking to 1900 in 2011 followed by silver to 50 - look where they are now
same thing could happen to stock market. All I am saying - shed your debts and prepare for a storm. Better be safe than sorry
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
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Jul 11, 2015
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porticoman wrote:
Aug 4th, 2017 12:23 pm
@jointedhornet...'what if' nothing happens, the markets just keep on going up & up till the DOW hits 25,000 or 30,000?

Hold whatever you have invested, if it's not making you money then move to something that will. Plus [just in case] make sure that you have minimum three months emergency money, one-year even better. Stay healthy & don't worry about the things that you don't have any control over
Yeah for sure it will get to those levels one day. and even higher obviosuly i wouldnt be suprised that in 20 years its at 50,000. But maybe u might wanna take your investments to a slightly higher proportion of bonds or cash in. obviously no one can predict anything. But historically speaking this time is definitely a good time to be wise and look at another strategy. No markets stay bull forever. And the longer the bull runs the bigger the crash. The more money people make the more greedy they get and the less cautious they become than when sh!t hits the fan the more they panic and the more the markets crash.....

But your right obviously long term everything will recover. and yes 3 months is the recommended way to keep ur savings at. but hopefully u don't have a house/condo that takes most of your income, and hopefully you dont loose your job. but wouldn't it make sense to keep like 20% of your investments in something safe and less susceptible to economic collapse? its not like capitalism is going to collapse and the worlds is going to go socialist or communist any time soon. but still this is historically how markets have worked especially post world war 2. every 8-10 years there has been a major correction.

look at what legit posters like dl hunter are saying. its not like people just make this stuff up because they are purely trying to feed their ego. also what do you think happens to the future generation if real estate/living costs keep going up. yet the salaries remain fairly stagnate... thus disposable income drastically drops, reducing money businesses can expect to make. reducing their market sizes. the only people buying or having a house will be the ones inheriting realestate. last time i checked that's one of the ends of capitalism, which clearly the west doesn't want. People wont keep working hard if they realize there is no benefit long term, especially the ones who are considered smart/hard working(fueling the major growth of our societies) and have generally speaking progressed the most in their life.. this will be the beginning of slavery.... so what do you think the government/world powers will do to keep the system alive, and the motivating factors of mankind?
dlhunter wrote:
Aug 4th, 2017 12:34 pm
some folks kept saying real estate never goes down and price of average Toronto house went to stupid levels
we also saw gold spiking to 1900 in 2011 followed by silver to 50 - look where they are now
same thing could happen to stock market. All I am saying - shed your debts and prepare for a storm. Better be safe than sorry
yeah looking at the real estate in Toronto and in Vancouver its looking pretty good for a collapse, especially considering how many people are invested due to greed in the past few years..... especially once the rates start going up to like 3%, whats your predictions on rates going up? 1% every year for the next three years, i guess if a collapse happens these will go up faster?
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jointedhornet wrote:
Aug 4th, 2017 2:55 pm
yeah looking at the real estate in Toronto and in Vancouver its looking pretty good for a collapse, especially considering how many people are invested due to greed in the past few years..... especially once the rates start going up to like 3%, whats your predictions on rates going up? 1% every year for the next three years, i guess if a collapse happens these will go up faster?
I would be extremely cautious on rates. My guess is as good as yours, but probably one more hike and then Poloz will take a pause.
Ultimately, BOC will follow US FED (correlation near 90%). And the chart of TLT has H&S forming on a weekly (left shoulder @129.47, head @139.85, right should in progress). This could result in higher yields in US and Canada.
Last edited by dlhunter on Aug 4th, 2017 6:09 pm, edited 1 time in total.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
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Jul 27, 2017
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dlhunter wrote:
Aug 4th, 2017 6:09 pm
I would be extremely caution on rates. My guess is as good as yours, but probably one more hike and then Poloz will take a pause.
Ultimately, BOC will follow US FED (correlation near 90%). And the chart of TLT has H&S forming on a weekly (left shoulder @129.47, head @139.85, right should in progress). This could result in higher yields in US and Canada.
If you wouldn't mind further clarification for the old guy here ... are you saying there is a potential weaker Cdn dollar that could see the exchange rate to the $US in the 1.40 region?

With a flush out 12 months from now, where do you see the BOC rate being?
My crystal ball is broken
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porticoman wrote:
Aug 4th, 2017 7:18 pm
If you wouldn't mind further clarification for the old guy here ... are you saying there is a potential weaker Cdn dollar that could see the exchange rate to the $US in the 1.40 region?

With a flush out 12 months from now, where do you see the BOC rate being?
i feel like the biggest factor for the CAD is oil, and our gdp as a result of oil being so weak so i feel like its bottomed already, and unless oil goes down any further it shouldn't drop our dollar. i feel like our interest rate shouldn't effect our dollar much cause we basically just copy the usd which you would think would cancle itself out. but than again i literally know nothing other than stuff i read on here about how our dollar swings. and even that i don't catch everything.
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Jun 27, 2007
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porticoman wrote:
Aug 4th, 2017 7:18 pm
If you wouldn't mind further clarification for the old guy here ... are you saying there is a potential weaker Cdn dollar that could see the exchange rate to the $US in the 1.40 region?

With a flush out 12 months from now, where do you see the BOC rate being?
* I am not an expert on monetary policy
CAD strongly correlates to the price of crude. As Mr Poloz signalled in the last meeting, the worst for the oil sector is behind us. At the same time, CAD gets stronger as USD hits lows. Technically, USD at support and a bunch of other currencies, namely CAD and EUR at resistance.
Personally, I converted CAD to USD near 1.25 last year and again in July (@1.2485).
12 months from now, in my opinion, we could have 1.3 CAD
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
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Jun 27, 2007
3036 posts
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Btw, BOA ML says we are near tipping point. They project meaningful correction to start near Oct/Nov. Yes, they look for higher prices before correction starts - kinda makes sense. SPX nearly unchanged for awhile, and as the saying goes, never short dull market.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
Deal Addict
Jun 27, 2007
3036 posts
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Gungnir wrote:
Aug 4th, 2017 11:52 am
The US GDP is 18.57 Trillion... to grow that at 3-5% sustainably would be impossible. The law of large numbers takes hold at some point, and the world doesn't work like a video game
Btw, I remember someone mentioned historically GDP tends to correlate to the price of Dow.
Eg. 18.5T GDP ~ 18500 on the Dow
Which means market is overvalued right now
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
Sr. Member
Oct 21, 2014
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Burlington, ON
dlhunter wrote:
Aug 4th, 2017 11:15 pm
Btw, I remember someone mentioned historically GDP tends to correlate to the price of Dow.
Eg. 18.5T GDP ~ 18500 on the Dow
Which means market is overvalued right now
Well, by that measure it is, not sure how valid that concept is though. Remember that the stock market is a forward looking indicator, so it's trying to price in the effects of anticipated growth, whereas the GDP measures economic activity that has already happened.

You have a point about Amazon's valuation though, the market seems to be trying to price in Amazon dominating nearly every aspect of retail... and I don't see it happening. For example look what happened to the stock of Best Buy when they said they were launching a service like Geek squad. When their growth begins to falter, look out below. Most of the people I know buy stuff on Amazon only when the price is ridiculously low. When I had to replace the pot lights in my basement I needed a bunch of MR16 led bulbs, and price on Amazon was like half of that on Home Depot, and there was free shipping. I don't know how they're making any money doing that.
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Jun 28, 2016
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Gungnir wrote:
Aug 5th, 2017 6:56 am
Well, by that measure it is, not sure how valid that concept is though. Remember that the stock market is a forward looking indicator, so it's trying to price in the effects of anticipated growth, whereas the GDP measures economic activity that has already happened.
I've never heard of relating the market cap of the Dow to GDP, but relating the Market Cap of the Total Market Index (all US exchanges) to US GDP is a well-known indicator of Warren Buffett.

Buffett famously claimed in 2001 that it's "probably the best single measure of where valuations stand at any given moment." He suggested that any time the ratio is over 100%, it's time to be wary of common stock valuations. Currently, the ratio is at 134%.

Now, Buffett himself noted earlier this year that, if we assume the current super low interest rates continue for the next decade, then it's possible to still view the stock market as fairly valued in historical terms. The risk is that these rates rise back to normal levels, in which case the market would be more overvalued in historical terms than in any period other than the peak of the tech bubble.

I will note that, as US GDP growth is projected to underperform historical US GDP growth for the forseeable future (~2% vs >3% historically) a forward-looking Buffet indicator would actually make the valuation look more overvalued, not less.
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dlhunter wrote:
Aug 4th, 2017 11:02 pm
* I am not an expert on monetary policy
CAD strongly correlates to the price of crude. As Mr Poloz signalled in the last meeting, the worst for the oil sector is behind us.
if it's all tied to oil & I honestly don't understand that, you'll have investors looking at how they can speculate (gamble) their hard earned dollars in major oil companies such as Suncor' in Canada or Exxon in the US.

I cannot remember if I have ever been in oil. I have over the years followed the CBOE futures, then stock wise symbol 'USO' ETF trying to figure out where oil is headed or whether USO would be the better investment over one of the major oil companies including RDS.A

If oil is at it's low heading back up, then USO would be my pick

Precious metals or commodities & their correlation to the dollar
My crystal ball is broken

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