Seeking Alpha

Tales From The ...'s  Instablog

Tales From The Future
Send Message
I look at value and contrarian ideas as well as emerging technologies/growth stocks worldwide, both on the long and short side. I also like to discuss the influence of monetary policy on stock markets. I usually do not engage in short-term trading and myopic analysis (quarter by quarter,... More
My blog:
Tales From The Future (Raw Feed)
  • A Sober Quote For All These Recent Market Highs: The 3 Stages Of A Bull Market 1 comment
    Jul 3, 2014 2:14 PM | about stocks: SPY

    It's worth repeating. Stock prices won't rise forever:

    Very early in my career, a veteran investor told me about the three stages of a bull market.

    Now I'll share them with you.

    • The first, when a few forward-looking people begin to believe things will get better

    • The second, when most investors realize improvement is actually taking place

    • The third, when everyone concludes things will get better forever

    (Book Source for the Quote: The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor, Howard Marks)

    I think we are past stage 2 and headed towards stage 3. But it's difficult to estimate the stage 3 timeframe even for the most experienced investors and traders.

    Be cautious and use trailing stop losses for long positions at these levels remains my personal advice.

    A good gauge when stage 3 is near: Rising interest rates mixed with higher volatility (absent any catastrophic, high-impact event that could turn the markets to the downside faster of course).

    Stocks: SPY
Back To Tales From The Future's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • Tales From The Future
    , contributor
    Comments (4125) | Send Message
     
    Author’s reply » More evidence that the five-year rally could be over or at least flattening out:

     

    " Individuals Pile Into Stocks as Pros Say Bull Is Spent "

     

    " Individual investors are plowing money back into the U.S. stock market just as professional strategists say gains for this year are over. About $100 billion has been added to equity mutual funds and exchange-traded funds in the past year, 10 times more than the previous 12 months, according to data compiled by Bloomberg and the Investment Company Institute. "

     

    http://bloom.bg/1mZTvuR

     

    An interesting take from B. Ritholtz on the above stats:

     

    "Be forewarned: It takes more than a few months of stock buying for that full-on exuberance to make an appearance. When former Federal Reserve Chairman Alan Greenspan described the “irrational exuberance” of stocks investors in 1996, it took almost four more years until that climax was reached. If we even go half as long, we might see another year or two before small investors become too bullish. "

     

    http://bv.ms/1zBMjJw

     

    Timing in bubbles is always hard...
    14 Jul, 12:55 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.