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THE Price of Crude pt 14

General discussions of the systemic, societal and civilisational effects of depletion.

Re: THE Price of Crude pt 14

Unread postby Pops » Thu 27 Dec 2018, 12:54:10

Yeah, end of the world, lowest price since...
Last year.

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The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Thu 27 Dec 2018, 19:28:04

dolanbaker wrote:It's going south again, looks like the correction isn't complete yet.
Will be interesting to see where it levels out, will it remain above the lows of the last GFC for example.
Will there be another round of QE to save the day.

Aside from the panickers who like to run around and proclaim the world is ending with every economic blip, where are there any signs there are any days that need saving, much less any significant problem?

News flash. Stock markets are volatile -- that means they go up, AND DOWN. Same as it ever was.

The great recession mess got to be a significant problem in the fall of 2008, because it looked like various large institutions failing could cause a cascade effect, so there was a confidence problem.

Why does the market falling a percent or three on a given day in a nice orderly process come remotely close to that.

As of 12/20/18, the forward S&P 500 ratio had fallen to a relatively moderate 14.5.

https://www.yardeni.com/pub/mktbriefsppesecind.pdf

Don't like forward estimates? The S&P 500 ratio (based on the past year's earnings) has fallen from over 24 at the highs in '17 and '18 to a little over 19 now. Still higher than average, but much more reasonable.

https://www.macrotrends.net/2577/sp-500 ... ings-chart

http://www.multpl.com/

Only in the land of nearly constant spreading of false economic doom would that constitute the need to panic or save the day.

At some point, if prices go low enough, this will represent a good buying opportunity.

Looking at a 5 year chart and a 10 year chart for the major US indexes, I'm inclined to be patient, but definitely feel better about the relative value of the stock market than I have in years.
Last edited by Outcast_Searcher on Thu 27 Dec 2018, 19:39:03, edited 1 time in total.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price of Crude pt 14

Unread postby Cog » Thu 27 Dec 2018, 19:38:28

If the economy is in serious trouble you would have seen it in unemployment numbers by now. Unemployment is stable. This correction is fear based on what might happen, not what has happened. We do not know about China and how that trade negotiation will work out or what this new Democrat House has in mind. We will have some 4th quarter GDP numbers in a month, so we will see if there is anything untoward happening with the real economy.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Thu 27 Dec 2018, 19:46:23

Cog wrote:If the economy is in serious trouble you would have seen it in unemployment numbers by now. Unemployment is stable. This correction is fear based on what might happen, not what has happened. We do not know about China and how that trade negotiation will work out or what this new Democrat House has in mind. We will have some 4th quarter GDP numbers in a month, so we will see if there is anything untoward happening with the real economy.

Sounds perfectly reasonable, and I agree completely re the fear aspect. The good news there is that if actual bad things don't materialize, historically such pullbacks have been relatively brief.

The other good news is if this pullback turns out to be long and deep, then eventually I should be able to buy some good stock indexes relatively cheaply. I was buying QQQ (proxy for NASDAQ 100) hand over fist in the low 20's when it bottomed in 2002, by ramping my monthly DCA amount way up. My rationale was that computers and related tech were NOT going away, no matter how much investors panicked so the question was how long a recovery in the stocks as a group would take -- not whether it would happen.

But then, I don't get up each day believing "this is the end of the financial world", so I guess I'm biased. :roll:
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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