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"The early 1930 rally came after the market had fallen nearly 50% in the fall of 1929. The spring rally took the market up nearly 50% again, to a level that was only about 20% below the previous peak."

"That rally, of course, was also the biggest sucker's rally in history. After the market peaked in April 1930, it crashed again, eventually ending up down 89% from the 1929 high and more than 80% from the 1930 high. The market did not reach the 1930 high again for another quarter of a century."

YTD 2009
DOW +11.6%
S&P500 +18.4%
S&P/TSX +29.1%
NASDAQ +35.1%

http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=15573280&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0
 

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I think that the HVTP's (High Volume Trading Programs) in the US are accounting for 70% of the trading volume down there. (as per zerohedge.com)

That has to be a factor.

Personally I don't think that current prices are a good reflection of p/e.

Too many things could cause the other shoe to drop....another major bank going under, chinese default of deriviatives, unemployment, US gov't debt burden, basically consumer confidence is the only difference between now and a year ago. IMO.
 

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I'll have almost all of my long positions sold this week and getting short. Everything is trading inversely to the falling USD. Recently USD down, EVERYTHING else up. Certain markets (like oil) should be making higher highs since the USD is still declining but it's not happening... they look "tired". Also, the USD is very close to support levels so if it were to rebound then the next week or so is looking like the time. I don't expect a big crash like in 1930, at least not this time around.

If the USD definitively falls through support here though, I'm long again. The next support is the all-time lows made last year. Of course, long-term I'm USD bearish.

What are you guys doing? All-in, long? Waiting on the sidelines?
 

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Discussion Starter #5 (Edited)
What are you guys doing? All-in, long? Waiting on the sidelines?
Bought thousands of shares in companies that I liked in 2008/2009; 4 stocks, but I have had 3 of them for many years so only 1 new addition. New addition will be released in my 2009 letter.

Experiencing 2009 YTD returns of 25% to 35% in stock accounts (RRSP, TFSA, non-registered, etc);. All aforementioned accounts hold direct investments in stock (no mutual funds, GICs, bonds, or cash).

As prices continue to rise I am less able to find bargains in the stock market. This is not to say that there aren't any bargains, only that at my current level of skill I am unable to find them.

As opportunities diminish for me in the stock market I turned to the RE market, but found it to be similar if not worse. I wasn't able to find anything there either (my ability is significantly lower in RE, so that's not saying much).

Waiting for the next asset price decline. Hoping for real estate to come down; violently if possible. Currently hold 3 properties and have watched their prices climb unabated as mortgage rates are crushed to 40-year lows. RE agents estimating the properties to be worth $1M and giving me "advice"; suggesting I sell everything and pour it all into a "dream" home for my wife. Amusing idea.

Currently de-leveraging mortgages on investment properties. My wife and I have a debt/equity ratio at around 0.1 but recognize that this can change with a rapid swing in "equity" (eg property asset prices being cut in half). Cash currently being hoarded in a "high interest" ING and PC savings account.

Please keep in mind that I have no ability investing in anything other than stock or RE and my RE ability is average at best. Any comments I make about GICs, bonds, currency, options, dividends, commodities, etc will be utterly uneducated and most likely incorrect.
 

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"That rally, of course, was also the biggest sucker's rally in history. After the market peaked in April 1930, it crashed again, eventually ending up down 89% from the 1929 high and more than 80% from the 1930 high. The market did not reach the 1930 high again for another quarter of a century."
Maybe it is. Maybe it isn't. I don't set much store on short-term market forecasts.

Personal opinion: there seems to be widespread skepticism that the market will hold the gains. More likely than not the majority are likely to be wrong.
 

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"The early 1930 rally came after the market had fallen nearly 50% in the fall of 1929. The spring rally took the market up nearly 50% again, to a level that was only about 20% below the previous peak."

"That rally, of course, was also the biggest sucker's rally in history. After the market peaked in April 1930, it crashed again, eventually ending up down 89% from the 1929 high and more than 80% from the 1930 high. The market did not reach the 1930 high again for another quarter of a century."

YTD 2009
DOW +11.6%
S&P500 +18.4%
S&P/TSX +29.1%
NASDAQ +35.1%

http://cosmos.bcst.yahoo.com/up/fop/embedflv/swf/fop_wrapper.swf?id=15573280&autoStart=0&prepanelEnable=1&infopanelEnable=1&carouselEnable=0

1929-1933 had the effect of massive deflation to deal with, which brought the cost of asset values down (opposite to inflation). We didn't have that this time, but hell, anything can happen.

Anybody have any numbers or graphs of US stock market performance from 1929-onwards that adjusts for inflation and deflation?
That would be neat to see.
 

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I'll have almost all of my long positions sold this week and getting short. Everything is trading inversely to the falling USD. Recently USD down, EVERYTHING else up. Certain markets (like oil) should be making higher highs since the USD is still declining but it's not happening... they look "tired". Also, the USD is very close to support levels so if it were to rebound then the next week or so is looking like the time. I don't expect a big crash like in 1930, at least not this time around.

If the USD definitively falls through support here though, I'm long again. The next support is the all-time lows made last year. Of course, long-term I'm USD bearish.

What are you guys doing? All-in, long? Waiting on the sidelines?
I'm still buying blue-chips, spending all my cash, earnings yields on some blue chips are still double to what a 10-year US treasury is offering.

example:
recent 10-year US treasury: 3.47% earnings yield.
recent JNJ: 7.5% earnings yield based on 1 year trailing EPS ($4.55 selling at $60.49/share)
Hell, averaging JNJ's EPS over three years still gives an earnings yield 6.8%, large margin of safety relative to the 3.47% on 10-year US treasuries IMO)

Still a lot of good buys out there.
 

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Interesting video. Coincidentally, I've been thinking a lot about the comparison to the 1930s rebound lately.

What's been worrying me is, "What is significantly better about the economy than a year ago?" Granted, there are a few things. As mentioned in the video, lending requirements have tightened. I guess one of the biggest things would be that stock valuations are still significantly lower and savings rates have increased.

However, are the tighter lending requirements "smoke and mirrors"? Didn't we just shift much of the obligation from the banks to the government? Are we relying too heavily on the consumer, in particular American consumers to get us out of this? Aren't American consumers still pretty maxed out?

Despite my worries, I still have a fair chunk of money in equities. But I'm putting any new money in cash and gradually re balancing equities into fixed income every time the market ratchets upward. I don't think its time to be overly pessimistic but I do think its time to tread cautiously.
 

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In the short term the market is a voting machine, long term it is a weighing machine.

Words of wisdom.

Personally I invest in quality non cyclical companies that produce real products and services for real people, that also have a strong history of dividend increases.

I try to buy them for what I believe is a reasonable price. So long as the dividend remains, and grows then price doesn't matter.

On the other hand lower prices are a good thing. Hopefully prices will be lower when I can put another 5K in my TFSA.

I am with CC, the majority is usually wrong, and trying to predict the short term movements is futile.
 

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I belive this is a suckers rally. Just look at the global fundamentals....

I have no money in the market at this time; looking for the right time to load up on solid firms at a steal... I think those days are going to be back...
 

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As with several folks here I'm in for the long term. If you buy good quality companies at a good price you'll win in the long term. Could there be a dip....Absolutely. Will I care... No. Because I'm comfortable with what I own and what I paid. Of course it doesn't hurt that I don't need the money for several (10+) years. The bargains are fewer at the moment however so I am cautious on any new buys.

What have I learned in the last year?

-Analysts know very little but can influence the market or individual stocks a lot!
-Bubbles burst
-Canadian banks are crooks, they make lots of money, but they are smart! (note that I sold my bank stocks several weeks ago)

I was lucky that I was 75% cash when the crash hit, can't guarantee I'll be as lucky next time, but it put me in a great position this year. Good luck to us all!
 

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$1600Goldby2011 said.

"I'll have almost all of my long positions sold this week and getting short. Everything is trading inversely to the falling USD. Recently USD down, EVERYTHING else up. Certain markets (like oil) should be making higher highs since the USD is still declining but it's not happening... they look "tired". Also, the USD is very close to support levels so if it were to rebound then the next week or so is looking like the time. I don't expect a big crash like in 1930, at least not this time around.

If the USD definitively falls through support here though, I'm long again. The next support is the all-time lows made last year. Of course, long-term I'm USD bearish."

I have to agree with this that if the US dollar turns around it could be big trouble. Right now it looks like gold could spike up and the US dollar goes the opposite way as they both near breakout or breakdown points. I would also hold cash here as these things play out in the near future.
 

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I've sold Onex and a mutual and I might sell Suncor. I'm expecting some correction in the next months and if it test new lows will be on a buy binge again.
 

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Perhaps this rally has come to an end.

Not enough stimulus money to keep it going (look what happened to GM stock after the $4clunkers ended). Not enough confidence. Deflation worries. Jobless recovery...
 
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