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Joseph Meth

 
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  • Are Retail Investors "Totally Wrong?" [View article]
    Actually, I don't try to calculate a "valuation". I really more on assessing the market and individual stock's buyer demand and supplier supply and to time my purchases accordingly. My slogan is that "Valuations are subjective but momentum is fact." Stocks that are "overvalued" can continue to advance to more and more overvaluations and other stocks that are undervalued may never advance to fair value. Over riding it all is that the market cycle drives everything. If the market trend is down, that a stock's low value means nothing and if the market trend is up then high values will go even higher. This philosophy has held me in good stead ever since I became a full-time investor 14 years ago.
    Aug 19 09:23 AM | Likes Like |Link to Comment
  • Are Retail Investors "Totally Wrong?" [View article]
    "investment decisions to be driven by value, not by market movements"

    You say you have "no clue how to time"? But how do you know whether such a subjective matter as valuation is correct? If valuation is so unequivocal then why are there so many contradictory and divergent Wall Street ratings on so many individual stocks?

    I'll rely on market timing before relying on someone's assessment of valuation.
    Aug 18 12:35 PM | Likes Like |Link to Comment
  • Failing To Consider Market First Is Detrimental To Your Portfolio's Health [View article]
    Hardog, my experience goes back 40 years too but, sorry, I'm not familiar with them .... what do the acronyms DD and DGI stand for?
    Aug 10 10:22 AM | Likes Like |Link to Comment
  • Failing To Consider Market First Is Detrimental To Your Portfolio's Health [View article]
    Interesting comment. Sorry you didn't find this satisfying. My stock selection approach is based on a combination of fundamental and technical metrics similar to that of IBD's "Stocks on the Move" screens (generally at variance with the approach SA prefers to publish).
    Aug 9 10:22 AM | 1 Like Like |Link to Comment
  • Who's Afraid Of Shiller's CAPE? [View article]
    Not all of evaluate the purchase of a shares of a company in the same way as if we were buying the whole company as an investment (and we shouldn't). Stocks are highly liquid assets that are easily convertible back into cash (at either a profit or a loss). On the other hand, buying a business is clearly a long-term proposition that is illiquid and not readily convertible back into cash.

    Buffett looks at buying stock as if he were buying the whole business (which he often does); I look at buying shares as a way of putting cash to work for some undefined period of time.

    CAPE is an economist's attempt to determine whether the stock market is overvalued relative to a very long-term (10 years) horizon and defines normatively what the value of stocks should be. It has nothing to do with the short-term supply and demand realities of either individual stocks or the market as a whole and doesn't in any way predict whether the value of stocks will appreciate or decline. Only an understanding of supply and demand tells you that.
    Aug 6 03:42 PM | Likes Like |Link to Comment
  • U.S. Equities Are Already In A Bear Market [View article]
    "....the S&P 500 could set one or more new all-time peaks before collapsing, but if any asset is likely to lose two-thirds of its value [to below its nadir of 666.67], then it is far too dangerous to hold onto it merely to eke out perhaps a few additional percent. The risk-reward ratio for the U.S. stock market has rarely been more unfavorable."

    I've heard this ridiculous prediction from Bob Prechter, Tim Knight and other contrarians throughout this bull market, at least since the S&P 500 recovery first hit 1200 in 2010, and they've been consistently wrong. About the only "human tendency to project the recent past into the indefinite future" that I continually see is contrarians and perma-bears like yourself continually projecting imminent disaster and collapse.

    Keep up the good work. Fortunately, you don't manage my money.
    Aug 4 10:40 AM | 6 Likes Like |Link to Comment
  • 5-Year Projection: S&P 500 Price, Earnings And Dividends Using Mean Reversion Growth [View article]
    I hope I'm not offending but I have to object. A projection to some point far in the future when no one will remember your having ever made it today is purely a cerebral exercise. The analysis is interesting, perhaps, but I have a hard time understanding why any of it is relevant to making investment decisions (buy or sell) today. If you can demonstrate how someone using the exact same approach in 2000, 2005 or 2010 (or any other random years of your choosing) would have generated a larger portfolio value today than a simple buy-and-hold approach with the S&P 500 Index then you will have made a valid contribution.
    Jul 31 09:54 AM | 1 Like Like |Link to Comment
  • Is Recent Volatility Cause For Concern? [View article]
    I'm sorry, I just tune out from all the talk about "volatility". Recently, the question was "Is low volatility of concern?"; today the question is "Is higher volatility of concern?". Should it really matter at all if you're not a short-term speculator but either a longer-term investor seeking alpha or a trend trader seeking beta.
    Jul 22 09:30 AM | Likes Like |Link to Comment
  • Market Direction When QE Ends [View article]
    Agreed, there won't be a complete unwinding. Importantly, however, there could be a change in investor expectations. It's well known that declining interest rates drove stock prices higher; it should be just as obvious that rising interest rates will drive .... in the short run and for a whole ...... lower.
    Jul 8 07:11 PM | 1 Like Like |Link to Comment
  • Estimating Stock Market Returns To 2020 And Beyond: Update [View article]
    Tell me where the S&P 500 will be next month, 6 months or a year from today and it will be worthwhile. But an estimate of "1,430,000, while the lowest and highest values shown by the prediction band are 740,000 and 2,770,000, respectively" is totally worthless. I'm sorry I clicked to read this article.
    Jul 7 10:30 AM | Likes Like |Link to Comment
  • What To Do When You Can't Find Anything To Buy [View article]
    What are your goals when buying stocks. Generating income from your portfolio or having it growth from both appreciation and dividends.

    Does anyone look at long-term charts anymore? GSK has been trapped in a 30-60 trading range since 1997! That's seventeen years! Over the same period, the S&P 500 has grown 165%. Likewise, you could have owned UVV at 47 in 1997, today it's 56!

    If you're always looking for safety you should be in fixed income. You have to think of stock investing as running a business and in business you have to take risks to grow. Only stick to the Buffett and Graham intrinsic value approach and your portfolio's value will fall so far behind you'll never be able to catch up.
    Jul 4 11:49 AM | 4 Likes Like |Link to Comment
  • Double Tops Not Conclusive But Raise Caution Flags [View article]
    How can one write an technical article using descriptive words only? Where's your visual proof!
    Jul 2 10:02 AM | Likes Like |Link to Comment
  • How Random Is The Market, And What Does That Mean? [View article]
    I think I've found the formula and spelled it out in my book, Run with the Herd, available on Amazon.

    I back tested signal to 1939 and followed it in 2007. Because of the signal, We got completely out of the market early in 2008. While we were as anxious as everyone else, our retirement assets were safe in money market funds (although even those were considered risky then).

    Granted, the signals are lagging but that's better than having no indicators at all. Should the market crash 50%, you can prevent the middle 35-40% (or 70-80% of the total decline).
    Jun 28 10:39 AM | Likes Like |Link to Comment
  • How Random Is The Market, And What Does That Mean? [View article]
    The original EMH work sponsored by Merrill Lynch and Vanguard Funds when they were about to launch S&P 500 Index funds. The purpose was to convince people that a buy-and-hold portfolio that mimicked the S&P 500 was a better strategy than actively managed portfolios of individual securities. I've concluded after managing my portfolio for over 20 years that

    1) consistently out-performing the S&P 500 Index during bull markets by more than a few percentage points is truly difficult (unless you keep unbalanced, narrow focused, highly concentrated but more risky portfolios) but
    2) market timing (sidestepping the market into cash during major corrections and crashes) significantly increases your performance relative to the S&P 500 Index benchmark.

    Perhaps the best and easiest strategy is Index funds during bull markets (70% of the time) and cash during bear markets (30% of the time). And timing the market isn't as difficult as Wall Street wants you to believe.
    Jun 27 12:08 PM | 1 Like Like |Link to Comment
  • Stock-Bull Topping Underway Looks Just Like 2007's Last One [View article]
    I'm afraid that in the 70's bear market, that high you refer to (1980) was actually 35% above the previous peak and the correction brought it back down 25% to the previous high when the secular bull market began in 1982. Using this as an analog for the current situation means that the market would peak at around 2100-2150 (+35% above the 1575 previous peak in 2007) and correct back to 1550-1575 (75% of the 2150 high). This is exactly how I arrived at the numbers in my earlier comment.
    Jun 15 09:07 AM | 1 Like Like |Link to Comment
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