Longest Bull Market in History

[Brendan Burgess]

European stoxx 600 is below where it was nearly four years ago , savings were a far better return than equities ( u.s excluded )

Stocks have been dreadful in Europe bar the period 2012-2015

Or to put it another way...

When you look back, during certain specific periods, in certain specific markets, deposits have performed better than equities in those markets during those periods.

Or to put it another yet another way...

During most periods, most equity markets have outperformed deposits.

Unfortunately, while we can see what happened in the past, we can't predict the future, other than to say that markets will go up and markets will go down.



Brendan

 

[galway_blow_in]

Or to put it another way...

When you look back, during certain specific periods, in certain specific markets, deposits have performed better than equities in those markets during those periods.

Or to put it another yet another way...

During most periods, most equity markets have outperformed deposits.

Unfortunately, while we can see what happened in the past, we can't predict the future, other than to say that markets will go up and markets will go down.



Brendan

Agree fully with that general philosophy but the poster I was replying to and who is taking his lead from Peter browne? , is both lamenting the caution of irish investors and advancing the case for European equities over U. S stocks.

That has been a very poor strategy for a long time now,Europe is a shaky place.

 

[cremeegg]

I am not blowing my own trumpet - but back in August, in the first response to the OP, i.e. post 2, I predicted what we have actually seen in markets since then. It's there in black and white. I said it.

Sorry Elacsaplau what you said was

With market valuations at such elevated positions, there is a chance that the market could witness a correction, bringing it more in line with historic norms.

And the S&P, which was the subject of post 1 is today down 7.4% since August 22nd. That does not qualify as a correction.

 

[joe sod]

European stoxx 600 is below where it was nearly four years ago , savings were a far better return than equities ( u.s excluded )

Stocks have been dreadful in Europe bar the period 2012-2015

Irish people are not at all the exception when it comes to aversion to equity investing the germans are no different and they keep away from property too.

Stock investment for individuals is far bigger in America.

I read a very good comment on seekingalpha (mainly US based) under an article promoting investing in european equities due to the value available in late 2017, it basically answered in a succinct way why the european markets have done so badly.

"There are powerful social forces in Europe which treat notionally "private" businesses as a species of social property. Whatever the pretexts, compelling corporations to accept workers on boards must necessarily involve their pursuing their interests, which are maximizing employment levels and wages, not maximizing profitability. Just look at Macron's, and formerly even Hollande's, challenges in seeking to liberalize constricting employment law. Look at what happens when European companies attempt to move production out of high-cost countries.

In other words, investing in Europe involves real and ,long-term headwinds. If I buy shares in a corporation, I want an interest in a business which is pro-rata my own, not one which is, even in a significantly undefined manner, held or managed on behalf on society at large."

 

[galway_blow_in]

I read a very good comment on seekingalpha (mainly US based) under an article promoting investing in european equities due to the value available in late 2017, it basically answered in a succinct way why the european markets have done so badly.

"There are powerful social forces in Europe which treat notionally "private" businesses as a species of social property. Whatever the pretexts, compelling corporations to accept workers on boards must necessarily involve their pursuing their interests, which are maximizing employment levels and wages, not maximizing profitability. Just look at Macron's, and formerly even Hollande's, challenges in seeking to liberalize constricting employment law. Look at what happens when European companies attempt to move production out of high-cost countries.

In other words, investing in Europe involves real and ,long-term headwinds. If I buy shares in a corporation, I want an interest in a business which is pro-rata my own, not one which is, even in a significantly undefined manner, held or managed on behalf on society at large."

Good analysis.

Bar thee odd period, on a risk reward basis, you might as well just buy the S+P if passive investing long term.you would not have lost yet up against someone who bought the stoxx 600.

 

[Gordon Gekko]

There’s also less innovation going on in Europe. Where’s the tech? Other than SAP, I’m struggling to think of a large European tech company. Europe seems to be too laden down with struggling banks and old school companies.

 

[galway_blow_in]

There’s also less innovation going on in Europe. Where’s the tech? Other than SAP, I’m struggling to think of a large European tech company. Europe seems to be too laden down with struggling banks and old school companies.

Banks and energy and auto, all low growth.

 

[joe sod]

There’s also less innovation going on in Europe. Where’s the tech? Other than SAP, I’m struggling to think of a large European tech company. Europe seems to be too laden down with struggling banks and old school companies.

well if you are to believe government propaganda its in "silicon docks", obviously i dont buy that for 1 second. But I think the socialism argument that was commented on in the other post is bang on.I know this is a political area now but is europe a slow burn version of the soviet union? Its pretty stark to see the euro stoxx 600 back where it was in 1998 along with the ftse. Even when this subject was brought up in another post, we were "corrected" because the original poster was referring to the S&P 500 not the european index which is a bit strange since we are actually living in europe not the US, its automatically assumed that the "market" is the US one. Its also amazing that even on a dedicated financial information site like this one, nobody is really that interested except for the few posters on this thread.

Another crucial point, the 1 trillion new euros from ECB quantative easing did not end up in the european stock markets because the market is lower than it was in 2015 when the easing really started, the question is where did these euros end up?

Having said all that I still think europe will come good from an investment point of view in the short term. Im certainly not an investor in the S&P with the valuations where they are and especially because of the exchange rate with the dollar now.

 

[galway_blow_in]

well if you are to believe government propaganda its in "silicon docks", obviously i dont buy that for 1 second. But I think the socialism argument that was commented on in the other post is bang on.I know this is a political area now but is europe a slow burn version of the soviet union? Its pretty stark to see the euro stoxx 600 back where it was in 1998 along with the ftse. Even when this subject was brought up in another post, we were "corrected" because the original poster was referring to the S&P 500 not the european index which is a bit strange since we are actually living in europe not the US, its automatically assumed that the "market" is the US one. Its also amazing that even on a dedicated financial information site like this one, nobody is really that interested except for the few posters on this thread.

Another crucial point, the 1 trillion new euros from ECB quantative easing did not end up in the european stock markets because the market is lower than it was in 2015 when the easing really started, the question is where did these euros end up?

Having said all that I still think europe will come good from an investment point of view in the short term. Im certainly not an investor in the S&P with the valuations where they are and especially because of the exchange rate with the dollar now.

Imagine if property prices were @1998 levels ?

Even at the lows in 2012, they were never close to 1998 levels.

 

[joe sod]

Imagine if property prices were @1998 levels ?

Even at the lows in 2012, they were never close to 1998 levels.

the issue of the quantitative easing euros not ending up in the stock markets is important, there doesn't seem be much research well not widely available to the public of where it went. Obviously in increased government debt and spending , you only have to look at Ireland continuing to borrow money because of the artificially low interest rates even with a booming economy now. It's probably the case that the huge social budgets throughout Europe have been propped up by the ecb quantitative easing. If quantitative easing did not happen maybe the whole system would have crashed, maybe they have just bought more time. Going back to the Soviet union comparisons, did the Soviets not do something similar in the 1980s massive spending to keep the populations in the union compliant and quite. Is Europe on the same path ?

 

[galway_blow_in]

the issue of the quantitative easing euros not ending up in the stock markets is important, there doesn't seem be much research well not widely available to the public of where it went. Obviously in increased government debt and spending , you only have to look at Ireland continuing to borrow money because of the artificially low interest rates even with a booming economy now. It's probably the case that the huge social budgets throughout Europe have been propped up by the ecb quantitative easing. If quantitative easing did not happen maybe the whole system would have crashed, maybe they have just bought more time. Going back to the Soviet union comparisons, did the Soviets not do something similar in the 1980s massive spending to keep the populations in the union compliant and quite. Is Europe on the same path ?

I'm too young to remember those days, was twelve when the wall came down, I do try and read up on the final days of the Soviet union and have watched docus on the subject.

 

[joe sod]

I'm too young to remember those days, was twelve when the wall came down, I do try and read up on the final days of the Soviet union and have watched docus on the subject.

I'm not an expert on it myself, I was 17 when wall came down. I remember there was alot of stuff on Poland in the 1980s on the news and its resistance to the Soviet system. That's when the Soviets increased spending dramatically to keep the populations happy, originally they did it through brutality in the early years. When the Soviet union collapsed Poland ended up with the debts on its own books and the currency crashed, there was hyperinflation with the zlotty worthless. It's funny that nobody talks about the hyperinflation in Poland in the 90s, it's always Germany 1920s that's referred to. It's interesting that Poland is now putting up.a lot of resistance to increased European control in Poland. Obviously it's no where near the control of the Soviets but there are creeping similarities.

 

[cremeegg]

It's funny that nobody talks about the hyperinflation in Poland in the 90s, it's always Germany 1920s that's referred to.

Hyper inflation in Poland didn't last as long, months rather than years. Also before the hyperinflation took effect there was very little available to buy. For example if a new car cost Zl 1,000 in August 1989 it cost Zl 2,500 in Dec 1989, but you couldn't buy a car anyway. All major items were bought by putting your name down and waiting your turn until something became available, maybe 20 years to buy a house.

Before hyperinflation everyday items were very cheap in terms of wages, but difficult to obtain. People queued for hours to buy sausage, when they finally got their allocation, the actual price was a pittance. If you wanted shoes you went to the shoe shop, they would tell you when there would be a delivery, maybe next week, you came back then and maybe they had received something in your size or maybe not.

After hyperinflation, everything was available, but it was expensive by western standards and hugely expensive in terms of Polish wages.

Poland economic transformation in the early 1990s was a huge achievement, though certain sectors paid a high price.

The present anti-EU sentiment is not as widespread as might appear, it is motivated by the worst type of nationalist paranoia and lack of self confidence.

 

[joe sod]

Before hyperinflation everyday items were very cheap in terms of wages, but difficult to obtain. People queued for hours to buy sausage, when they finally got their allocation, the actual price was a pittance. If you wanted shoes you went to the shoe shop, they would tell you when there would be a delivery, maybe next week, you came back then and maybe they had received something in your size or maybe not

But is there something in this in relation to the housing crisis and what's really happening, there is a lot of demand even more so now because of the expectation that everybody should be housed.
In the Soviet times most production was very Labour intensive, so common goods required a lot more man hours to produce than in today's largely automated production systems. In the communist system there was no incentive to work hard or to work in dirty industries because everyone was paid the same therefore productivity was low.
There is one big exception to this today and that is in housing and construction, it takes an awful lot of man hours to construct a house and it still does today, automation has no real effect in construction. Of course there is the issue of land, but getting workers into this labour intensive and fairly dirty industry is a big issue. Just like in the Soviet times nobody wanted to work on the collective farms or down the mines because there was no reward unless you were forced into like earlier during Stalinism.

 

[galway_blow_in]

Hyper inflation in Poland didn't last as long, months rather than years. Also before the hyperinflation took effect there was very little available to buy. For example if a new car cost Zl 1,000 in August 1989 it cost Zl 2,500 in Dec 1989, but you couldn't buy a car anyway. All major items were bought by putting your name down and waiting your turn until something became available, maybe 20 years to buy a house.

Before hyperinflation everyday items were very cheap in terms of wages, but difficult to obtain. People queued for hours to buy sausage, when they finally got their allocation, the actual price was a pittance. If you wanted shoes you went to the shoe shop, they would tell you when there would be a delivery, maybe next week, you came back then and maybe they had received something in your size or maybe not.

After hyperinflation, everything was available, but it was expensive by western standards and hugely expensive in terms of Polish wages.

Poland economic transformation in the early 1990s was a huge achievement, though certain sectors paid a high price.

The present anti-EU sentiment is not as widespread as might appear, it is motivated by the worst type of nationalist paranoia and lack of self confidence.

Polish guy I know tells me that while not Spanish levels, regional division is an issue.

Where he is from, people are viewed as German by many including the current government.

 

[opexlong]

S&P 500 now down 17.54% from its September 20th peak. Nasdaq and Russell 2000 in a bear.

Worst December for stocks since 1931(so far). Worst quarter since Q4 2008.

 

[galway_blow_in]

S&P 500 now down 17.54% from its September 20th peak. Nasdaq and Russell 2000 in a bear.

Worst December for stocks since 1931(so far). Worst quarter since Q4 2008.

Yet ( unlike Europe) still way above where they were in 2015

 

[joe sod]

The total market capitalisation of s&p500

In 1957 it was 0.17 trillion
1980 1 trillion
Today 20 trillion

The question is: is it justified?

year 2000 16 trillion

this is from another thread but maybe it is more relative to this thread, The above increase in capitalisation of the S&P 500 looks dramatic, yet when you include the figure for year 2000 capitalisation of 16 trillion almost 20 years ago it takes the drama out of the statistic. Almost all of the charts showing the dramatic rise of the S&P 500 always use 2009 as the starting point. If they used year 2000 or even 1990 a completely different picture is shown. Then it is obvious that the big inflation happened in the 1990s, the last 20 years has basically been a rollercoaster with the S&P 500 and the current big sell off approaching year 2000 peak yet again.

 

[joe sod]

update with the recent big sell off last few days S&P index was at 2214 points in august 2000, now its at 2351 points Dec 24 2018 almost 20 years later. So even the S&P 500 now back at year 2000 levels almost. Does this thread really stand up as the "longest bull market in history" when the best performing market in the world namely the US market is back where it was almost 20 years ago.

 

[1dave123]

?

As per yahoo Finance ....... S&P 500

01/08/2000 was 1438. On 31/8/2000 it was 1517. On 24/12/2018 it was 2351.