Lets just say that previous periods when the markets were similar to today were "memorable"
Examine the points in history that the Shiller P/E has been above 18, the S&P 500 has been within 2% of a 4-year high, 60% above a 4-year low, and more than 8% above its 52-week average, advisory bulls have exceeded 45%, with bears less than 27%, and the 10-year Treasury yield has been above its level of 20-weeks prior. While there are numerous similar ways to define an “overvalued, overbought, overbullish, rising-yields” syndrome, there are five small clusters of this one in the post-war record: November-December 1972, July-August 1987, a cluster between late-1999 and early 2000, early 2007, and today. The first four instances preceded the four most violent market declines in the post-war record, though each permitted a few percent of additional upside progress before those declines began in earnest. We do not know what will happen in the present instance, particularly over the short-run. But on the basis of this and a broad ensemble of additional evidence, we estimate that the likelihood of deep losses overwhelms the likelihood of durable gains.
The fact that you can't quite figure out that a 17% gain is better then a 4% loss sez all anyone needs to know about why I call you warrenBUFFOON!!!!!!!!!!!!!
Per their weekly update of expected market returns, the Sept 17 update reported the worst ever negative reading in a century of data. Beware the fall for it could leave you a shattered wreck.
"As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data."
A bit over a month ago (Aug 26) I advised readers to avoid common stocks like SCHWil and get into gold and silver miners like SLW.
So far the Dow is up about 1.5%, the S&P is up 2%, SCHWil is down almost 4%, SLW is up 17%, Gold is up 6% and silver is up 13%.
An excellent call if I say so myself!
and I DO! HAHAHAHAHAHA!!!!!!!!!!!!!
As of Friday, our estimates of prospective return/risk in the stock market remain in the most negative 0.5% of historical instances. Notably, the S&P 500 is within 1% of its upper Bollinger band (two standard deviations above its 20-period moving average) on daily, weekly and monthly resolutions. According to Investors Intelligence, bullish advisors outnumber bearish advisors by more than two-to-one (51% vs. 24.5% respectively), and corporate insiders are selling stock at a pace of six shares sold for every share purchased.
On the valuation front, profit margins remain elevated and the ratio of corporate profits to GDP is nearly 70% above its historical norm, and as a result, price/earnings multiples that are based on near-term earnings estimates are elevated, but do not seem extreme. ... The Shiller P/E is presently 22.3, which is in the richest 5% of all historical data prior to the late-1990’s bubble. While this multiple may not seem extreme relative to the data of the past 13 years or so, it should be remembered that stocks have lagged Treasury bill yields during this period, and the market has experienced two separate plunges in excess of 50% each, precisely because valuations have been so rich.
Chuck almost always sells near market tops and his selling is a strong sell signal.
If you're looking for leverage on precious metals you could look at AGQ. It is a leveraged silver ETF. I would not recommend a large position as silver is already mucho volatile. Too large a position in AGQ might give you ulcers.
Only makes sense to buy the warrant if you expect the stock to be over $2.00 when the warrant expires. At that price the gains for the stock and warrant are about the same. It would be almost a double for the stock from the current price and also almost a double for the warrant (warrant will be worth about $1 if the stock is worth $2 on the expiration date).
At a stock price of $1.50 on the expiration date you get a nice gain on the stock and a small loss on the warrant (only worth 50 cents with a current price of 56 cents).
A spike to $3 and higher would show a much better return on the warrant then the stock.
Personally I can see the stock easily going to $2 in 2013 with a continuation of the gold bull, but $3 is IMO a stretch for 2013
When did SCHWil trade opposite the DOW?
It is a high beta stock and moves with the DOW, only with higher percentage move. Yahoo has the Beta at 1.6
and 2 year returns Gold up 35% while SCHWil is flat.
and 10 year returns gold is up 500% while SCHWil is still flat.
As I said on this board a decade ago, Gold will be the place to be, while SCHit will stink.
SCH being SCHWil former stock symbol.
Your response is fine fine fine example of why I call you SCHit for Brains.
To put it simply you have SCHit for Brains.
Probably a pump and dump site.
They load up on a low cap stock, pimp it to everyone on their e-mail list, some of who buy driving the stock up (did I mention LOW CAP?), they close out their positions on the rise, cleaning up, while the saps on the e-mail list get to watch it tube it after they have spend their last dime and normal stock action and VALUATION returns.
Back in the day, the pumps were done through fax notifications sent to every fax number the pimps could get their hands on, now its done through e-mails. Send enough faxes and SOMEONE was bound to read them and then act on the pimp. Same with e-mails.
To actually make money on this type of scam you need to buy early and ALSO sell into the rise.
another months long market correction
The VIX indicator has just hit lows that indicate a imminent market top. While not 100% accurate (what is?) the last 4 times the VIX was in this range the market sold off. The smallest correction was 6% while the largest was 20%. Chuck selling another boatload is also a good topping indicator.
Gold and silver on the other hand have finished their consolidation, digesting and getting used to the last $1,00 rise and are now set to start their next bull run up.
Sal advises selling common stocks like SCHWil and buying gold and silver miners like SLW
Translation: Upper management likes to give themselves stock shares at below market prices and uses the extra money to purchase those shares back (after selling them for a nice guaranteed profit) so the float doesn't increase and the stockholders don't notice.
Check the cash flow statement over the years and see how much money SCHWil spends buying back shares.