Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (18870)	12/30/2024 11:01:39 AM
From: Zen Dollar Round	1 Recommendation Recommended By OldAIMGuy Read Replies (1) \| Respond to of 18927

Thanks once again, Tom. Maybe a lot of folks lurk this thread and don't post. They just take the value of what you do here and invest in private. I wish I'd had that restraint decades ago when I first got on the internet, but oh well... Since Robert Lichello's AIM program was the first thing I saw on a late night infomercial in the mid 1980's that truly looked like a great system, I bought his book back then but I didn't buy the program he created for the infomercial at the time, I wanted to research his system first to see how it worked. As you know Tom, It works very well over the long term. A proven way to capture market gains through its inherent volatility while managing the risk, and continuously. > Have investors become conditioned to this high level of market stress and are ignoring the risks? I don't know how people ignore indicators like AIM and the ones you've developed to keep pushing the market higher. I guess the hedge funds don't care because, well, the answer is it their collective name, they "hedge" against the market with derivatives of all kinds, and they have very deep pockets. Mr. Market and his wrist rubber-band snap is going to be a painful one soon, no doubt about that. Aversion therapy at its finest for a new bevy of newer and inexperienced investors. The stock market always reverts back to historical PE Ratios, or PERs. Like you, I thought the dot-com bubble might be a new paradigm too back around, eh, 1994 through 1999 when I worked in IT and as a consultant for a couple of failed dot-coms, but NOPE. What did I know on March 1 of 2000, right before the crash? Not enough, obviously. Looking back at the chart, the tech heavy Nasdaq was near a parabolic blow-off top, and that's exactly what happened starting on March 13, 2000. The low didn't come until over 2-1/2 years later in late October of 2002. The Nasdaq lost 78% of its value in that time and all of the gains it had made in the bubble. Do I think we're in a speculative bubble of dot-com size right now? No, not even close. The dot-com bubble was propelled by hundreds of companies with no profits whatsoever and no hope of ever having any. That isn't the case today. The very largest companies in all three major indices are highly profitable, so as many of the technical analysts have been saying, keep your money in those and use Dollar-Cost Averaging (DCA) to average down on large pullbacks unless you're a day trader. Sell the speculative ones that have run up on too much hype alone, far beyond real value as measure by their PERs. TSLA anyone? Check how much TSLA has run up just since October this year vs. the chances their profits will justify a PER of... 113+ as I write this. That's just one glaring example. If historical patterns play out again, we're in the 3rd year of a speculative 5-year bull market where the first two years of the S&P 500 had over 25% returns in each. That's only happened 4 times in history. Only one time did the 3rd year have over a 25% gain. Yep, it was in 1998 during the dot-com bubble. In the others, the 3rd year of the speculative bull was the toughest of them. For those Mr. Market's history shows overall performance for 2025 will be single digit gains at best to a boring 0% return for the S&P500. Could the S&P 500 run up another 20% or more in 2025? Sure, but it isn't likely. I do expect January to be a wild ride, with high volatility and sharp market index spikes. For Bitcoin and Nasdaq's unprofitable tech stocks most of all, but also with the Dow (DJI) and its near worthless short-term measure of stock market performance will be wild too because of its goofball price-weighting. I'm introducing the MANANAM, a relevant index and acronym for the AI, tech and media (several are all three) stocks in it. It is also a palindrome as well because what goes forward reverses quickly and goes backward even faster on occasion. Why? Because Mr. Market is bipolar –– as you'll see if you're still currently unacquainted and haven't had time to read his Wikipedia entry yet. The names should be obvious here, so in no particular order they're Microsoft, Apple, Netflix, Alphabet, Nvidia, Amazon, and Meta. MSFT, AAPL, NFLX, GOOG/GOOGL ( D'OH!), NVDA, AMZN, and META., respectively. Only three letters are used in its seven characters and they're essentially interchangeable. All of them together are driving our current market and responsible for most of the stock market gain for 2024, fueled by AI and Bitcoin mania along with the significant geopolitical risks of the very different planned economic policies of the incoming U.S. President. ------------- So....in conclusion, just replace the word night with January in the following video clip and it'll be a funny reminder and way to think about what probably isn't going to be funny at all for many U.S. investors soon. We always need to hang on to our humor and sarcasm when dealing with Mr. Market, otherwise it's too painful to watch him do this again. :-) Bette Davis did have some amazing eyes, didn't she?