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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (62848)	11/13/2019 10:36:35 AM
From: OldAIMGuy	Respond to of 78652

Re: Value Line "Appreciation Potential".................. FYI, the all time high was seen the week of 12/23/1974 and was +234% anticipated median stock appreciation. That was what one friend called a Once In A Lifetime buying opportunity. The AP value from March, 2009 looks rather pale by comparison. Tom

To: OldAIMGuy who wrote (62848)	11/13/2019 4:20:21 PM
From: bruwin	Read Replies (1) \| Respond to of 78652

"It's clear that the late 2008 - early 2009 period was a tremendously bullish time to put new money into the markets. Without looking I think risk had peaked in 2007 along with the general markets' hitting new highs at that time. This seemed to anticipate (of) the terrible sell-off in late 2008." Yeah .... well .... As we all know, in the 2008/2009 period the Western Financial world, to a large extent, was hit by the Sub-Prime Mortgage Crisis. This was when many individuals were persuaded to take out loans at very low rates of interest that they could then afford and through which they decided to speculate in the property selling business because they "believed" that there was virtually "no ceiling" to property prices, as in ..... .................................................... "The United States subprime mortgage crisis was a nationwide financial crisis, occurring between 2007 and 2010, that contributed to the U.S. recession of December 2007 – June 2009. [1] [2] It was triggered by a large decline in home prices after the collapse of a housing bubble, leading to mortgage delinquencies and foreclosures and the devaluation of housing-related securities. Declines in residential investment preceded the recession and were followed by reductions in household spending and then business investment. Spending reductions were more significant in areas with a combination of high household debt and larger housing price declines. [3] The housing bubble preceding the crisis was financed with mortgage-backed securities (MBSes) and collateralized debt obligations (CDOs), which initially offered higher interest rates (i.e. better returns) than government securities, along with attractive risk ratings from rating agencies. While elements of the crisis first became more visible during 2007, several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession" ...................................................... ...... Of course, THE GREED AND "IGNORANCE(?)" of numerous Financial Institutions, quite often gets involved with these situations and "financial, tradable instruments" are created, and "OVER EXTENSIONS" USUALLY RESULT with DEBT AND OBLIGATIONS playing a Major Role IN DOWNFALLS, viz. Lehman Brothers. It's strange how all of those "High Powered', "Over Paid", Finance Executives and "World Renowned(?)" CEO's/Experts, GOT IT SO WRONG. And One Guy, Michael Burry, saw so clearly, through applying simple mathematics of finance, that those "MBSes" and "CDOs" were a "crock of shit". So, ... what actually happened within the stock market environment ? Well, the "Fund Managers", those Investing "Experts(?)", Panicked, to the Nth degree, and offloaded billions of dollars worth of stocks under their "management(?)" and control. And when Fund Managers, as a Group, and in Unison, Panic we Inevitably get ---> And with regard to ... "the general markets' hitting new highs at that time", ..... I'd say that the markets were doing just fine, as in the normal course of events, with maybe the Financial Sector entering "unrealistic territory". The markets were in a steady Uptrend. And as one can see, AFTER the whole "financial sector crisis" blew over, that trend continued. But I have to wonder about these longer term 'forecasts' based on "Price Ranges" 3 to 5 years away. It seems to me that it's fairly difficult to predict 'Price' even 6 MONTHS AHEAD !! But there again, when everyone is FEARFUL, and the share prices of Quality Companies are falling, THROUGH NO FAULT OF THEIR OWN, that's a Good Time to get GREEDY. As that wise ol' "buzzard", Warren Buffett, has said, ... 1) "If history revealed the path to riches, librarians would be rich", and .... 2) "I'd be a bum on the street with a tin cup if the markets were always efficient". I suspect that Buffett's Investing Modus Operandi has probably made investors, who put their money "under his care", a far LARGER RETURN than Value Line's Theories have ......

To: OldAIMGuy who wrote (62848)	11/14/2019 2:51:57 PM
From: Nya_Quy	1 Recommendation Recommended By Lance Bredvold Read Replies (1) \| Respond to of 78652

Thank you for your effort! From what I read it is indeed worthwhile to use the VL survey as a kind of contrarian thermometer measuring valuations of the broader market in comparison to those in the past. The survey does not convey the opinion that expected appreciation is at its zenith whenever equity prices are near all-time highs, which is crucial. Without looking I think risk had peaked in 2007 along with the general markets' hitting new highs at that time. Isn't it better to look at the increase of asset prices (above their fair value) as something that inherently causes an increase in risk? I cannot imagine a scenario in which prices rising above a fair level are not a promotor of increased risk. If you are aware of such a scenario, let me know ;) . Nya