Stock Market Watch, President-Elect Trump

[Tony T]

It bears pointing out that I don't really 'blame' the fed in the US. That institution has one set of policy levers at its disposal, and in the absence of the fiscal authority doing anything, the Fed has had to do its best with what it has. Congress should be ashamed of itself.

I always thought that the US should have put some of its cash in the Market to fund SS — Not now, but in the 1940's and just a small % (10% or so).

China is going to wake up with a headache Monday after its week-off.
They removed the 7% circuit breakers (http://www.reuters.com/article/us-china-stocks-idUSKBN0UL1RC20160107) that they had when they kept tripping and they got criticized that they made things worse (i.e. everyone selling the following day). Do you know if China has any circuit breakers in place?

[MattTuck]

I always thought that the US should have put some of its cash in the Market to fund SS — Not now, but in the 1940's and just a small % (10% or so).

China is going to wake up with a headache Monday after its week-off.
They removed the 7% circuit breakers (http://www.reuters.com/article/us-china-stocks-idUSKBN0UL1RC20160107) that they had when they kept tripping and they got criticized that they made things worse (i.e. everyone selling the following day). Do you know if China has any circuit breakers in place?

Tony, I don't know. China is learning as it goes, so I really have no idea what the current rules are. Did you see Kyle Bass's prediction on the Chinese banks. If he is even 50% right, that means big trouble.

Also, what happens in the domestic Chinese markets has an indirect linkage to the securities that we, as foreigners, can trade. I was using the FXI etf to buy some puts a while ago, and because of the make up, and the focus on Hong Kong and a couple other things, it was not very good at picking up on the chaos in the actual chinese markets.

[54ny77]

The official #'s coming from China are as reliable as Lance's early statements that he never doped.

[MattTuck]

The official #'s coming from China are as reliable as Lance's early statements that he never doped.

Yes, did you see 2 weeks ago, the director of their statistics bureau was being investigated for fraud and corruption?

[54ny77]

The opaqueness is staggering.

No doubt a powerhouse of an economy, but so much uncertainty as to true figures.

For example, 2 of the top 5 largest (by market cap) insurance co's in world are Chinese. Is the overall book of insured risk real (esp in CRE, in which the insurers are also lenders), or is it fundamentally worse? And how much of it has been pawned off on reinsurance co's, which can have a multiplier effect in other sectors if losses multiply?

Yes, did you see 2 weeks ago, the director of their statistics bureau was being investigated for fraud and corruption?

[Tony T]

Just realized that US Markets are closed Monday. Not sure if that's a good thing or not.

[jlwdm]

..We're at the same median real income from 30 years ago, and more than half the population has less than $1,000 in savings. The median American does not own stocks or bonds. In fact, for most Americans, the largest 'asset' they have is the equity in their house.

...

Personally I get tired of people always blaming the government. I am a big believer in personal responsibility. Most of the US population has little savings because we are a country of spenders. It amazes me to see the things people buy even though they are struggling financially. Most people would not understand all the money members here spend on bikes.

Just like the complaints about the amount of student loans when students have cars, go out for meals and entertainment all of the time and travel as they please.

Everyone has choices to make and in this country saving is not a high enough priority choice. Financial responsibility is key.

I have not always been the best saver and the last downturn hurt me, but I decided to do something about it. I worked more than most people would like to, but I made a commitment to saving money and I did it.

Jeff

[MattTuck]

Jeff,

Good for you to refocus on saving.

I hope my post didn't come across as blaming the 'government'. I try not to anthropomorphize our government into something that is culpable. Government is a complex thing, made up of earnest civil servants and representatives sent to advocate on behalf of the citizenry. My complaint lies mainly with the people's representatives and their inability to forge policy to 1) put the government on a sustainable path and 2) grow the economy broadly in a way that benefits more Americans and not just those at the very top.

As you said, it is all about choices and priorities. And where to allocate the scarce resources we have. Whether that is a decision made at the kitchen table or on the floor of the senate, it seems that people have a hard time making intelligent decisions. Perhaps, in light of the populace's general inability to save, it should come as no surprise that our representatives don't consider planning for the future a priority.

[likebikes]

down another 250+ today- ~2.5 year low if my crude estimations are correct.

yikes, things getting real ugly out there.

[Llewellyn]

down another 250+ today- ~2.5 year low if my crude estimations are correct.

yikes, things getting real ugly out there.

Buy when others are selling and sell when others are buying.

[dancinkozmo]

Buy when others are selling and sell when others are buying.

what if everyone did that ?

[oldpotatoe]

what if everyone did that ?

Called the stock market..when a bunch of stocks are sold, somebody buys them. When that stock goes up..somebody sells to make profit, then somebody buys them.

[SoCalSteve]

Called the stock market..when a bunch of stocks are sold, somebody buys them. When that stock goes up..somebody sells to make profit, then somebody buys them.

Always wondered how that worked. Thanks for the explanation!...:beer:

Maybe that's why my investments are in bonds...:confused:

[Tony T]

WTI ⬆ 12%, markets follow, ⬆ 2%

[Tony T]

For anyone interested, a NYT Article on Negative Interest Rates: Negative 0.5% Interest Rate: Why People Are Paying to Save (http://www.nytimes.com/2016/02/13/upshot/negative-interest-rates-are-spreading-across-the-world-heres-what-you-need-to-know.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news)

[likebikes]

Best week of 2016 in the books.

[likebikes]

up nearly 1500 in a month.

[cinema]

anyone here actively trade commodities? what do you think of the current rally in metals and energy i've never seen anything like it. especially in debt ridden companies or ones that had steady declines last year like chk and fcx

[echappist]

so now that the prices have gone back to Fall 2015 levels, this thread is getting a lot less attention. Except the matter being, have thing really improved that much? Really shows you something about human psyche, doesn't it?

[FlashUNC]

so now that the prices have gone back to Fall 2015 levels, this thread is getting a lot less attention. Except the matter being, have thing really improved that much? Really shows you something about human psyche, doesn't it?

The stock market isn't the economy. Its gambling.

[echappist]

The stock market isn't the economy. Its gambling.

of course it is, except it always does get brought back to reality (e.g. the bubble in China in 2015). And while it is getting blown up, most seem exuberant about it and not pay it much mind...

[54ny77]

I hear the frozen concentrated orange juice market is ripe for the pickins.

http://i.imgur.com/mzfe83C.gif

anyone here actively trade commodities?

[echappist]

I hear the frozen concentrated orange juice market is ripe for the pickins.

http://i.imgur.com/mzfe83C.gif

shall we settle that with a wager? say a dollar? ;)

[rounder]

I do not know anymore than anyone else here. But I believe in the efficient market theory. The market knows everything there is to know and all stocks are, accordingly, priced exactly what they are worth.

Not sure that is the right way to go, but it eliminates a lot of self doubt for me.

[cinema]

I do not know anymore than anyone else here. But I believe in the efficient market theory. The market knows everything there is to know and all stocks are, accordingly, priced exactly what they are worth.

Not sure that is the right way to go, but it eliminates a lot of self doubt for me.

technically sure. but I think on the complex end of the spectrum this ignores the prevalence of algorithmic trading. Technicals also ignore socioeconomic factors like access to financial tools and overall investment opportunities related to income.

For example, you hear many people talking about how stocks are 'overpriced' especially in the last couple of years. that's because for the past 20 years the wealthiest Americans saw their incomes double while the middle and bottom saw their incomes actually decline. Yet you see how to dow has tripled since 2009. I'm just rehashing a typical fundamental argument here

[echappist]

technically sure. but I think on the complex end of the spectrum this ignores the prevalence of algorithmic trading. Technicals also ignore socioeconomic factors like access to financial tools and overall investment opportunities related to income.

For example, you hear many people talking about how stocks are 'overpriced' especially in the last couple of years. that's because for the past 20 years the wealthiest Americans saw their incomes double while the middle and bottom saw their incomes actually decline. Yet you see how to dow has tripled since 2009. I'm just rehashing a typical fundamental argument here

agreed. and in this case, price driven artificially high because of low interest rates

the market may eventually sort it out, but it will be helluva destructive sorting

[1centaur]

The stock market is not efficient. As soon as you start working in the market and see how decisions are actually made, and not made, you understand that efficiency does not magically spring from the dollar-weighted aggregate of that randomness.

Efficient market theory is based on two facts: there is no systematic way to beat the market (like, low P/E stocks), and most managers don't beat the market over time. But neither predicate actually speaks to whether the market accurately prices stocks. Maybe all stocks are either under priced or over priced but when put in large baskets those two things cancel each other out. Maybe some managers are good at perceiving mispricing sometimes but not all the time, for all sorts of reasons. And then there are endless questions about correctly priced for whom - long-term vs. short-term investors? Risk takers vs. risk avoiders? And the more investment vehicles that buy regardless of value (index funds and ETFs, for example), perhaps the less likely that the market "knows" what a stock is worth?

Stock prices are like the right saddle for your bike. Your anatomy differs from others'. Your bike might not fit right. Your fitness changes over a season. Your bibs may have different chamois from time to time. You are more and less flexible, more and less fit, more and less motivated to put more weight on the pedals. Pulling good saddle fit out of all that is difficult, and yet most of us get there. I encourage you to think that with some time, experience and effort, you can find some stocks that are mispriced for your time preference and risk affinity.

[JasonF]

The stock market is not efficient.

Having spent a career managing portfolios (both active and passive) I would not be so absolute. Rather, I assert that the market is mostly efficient. If the market were completely inefficient then most active managers would outperform, as they would be able to exploit mispricings that continually appear in an inefficient market. But what we find is that inefficiencies and mispricings are very quickly arbitraged away so the vast majority of investors (professional or not) don't benefit from pockets of inefficiencies. And by mostly efficient I also mean that there are certain investors (Buffett, Simons) who appear to consistently beat the market. I could go on for hours why they're able to do so and no one else can, but suffice to say that their track record is so remarkable and so envious that they're among the richest people on the planet and have a legion of followers (who by the way, can't replicate their returns no matter how hard they try).

In countless studies, researchers, academics, investors, etc...have proven that active managers as a whole MUST underperform the market and they usually due to the extent of the fees they charge for trying to beat the market.

One of my favorite studies tracked 2,862 active managers that were in existence in the 12 months prior to 2010. They then looked at the top 25% of these funds with the best returns and tracked them over the next 4 years. How many continued to outperform? Only 2. The kicker is the studied then tracked the two "winners" over the next year and they too underperformed. So a study of 2,862 professional managers found that none were able to consistently beat the market. Similar studies over different time periods provide the same conclusions.

So while some pockets of inefficiency will always appear, and while a very select few will be able to identify and exploit these inefficiencies, it's likely not going to be us. And the final kicker is good luck trying to identify these managers with skill ahead of time as it's been conclusively proven that managers who have outperformed in the past usually underperform in the future as attention and assets are thrown at them.

[OtayBW]

Having spent a career managing portfolios (both active and passive) I would not be so absolute. Rather, I assert that the market is mostly efficient. If the market were completely inefficient then most active managers would outperform, as they would be able to exploit mispricings that continually appear in an inefficient market. ...You've heard this all before, I'm sure, but the efficiency or inefficiency of the market - as defined (by me...) based on what is supposed to be accurate pricing, valuation, etc. - seems to be based as much on sentiment and as it is on fundamentals, if not moreso. It's just willy-nilly half the time. This is what drives a lot of people nuts.

[JasonF]

You've heard this all before, I'm sure, but the efficiency or inefficiency of the market - as defined (by me...) based on what is supposed to be accurate pricing, valuation, etc. - seems to be based as much on sentiment and as it is on fundamentals, if not moreso. It's just willy-nilly half the time. This is what drives a lot of people nuts.

I agree...if the market were perfectly efficient we wouldn't have crashes, panics and the occasional nuttiness. The crash of '08 would have been avoided as the market would have priced in failing banks and leveraged investment products over time rather than September/October 2008. So it's the unknown which spooks markets. However, I stand by my assertion that it is impossible for the vast majority to predict these things in advance. Very few made money off the housing crisis and those guys were the subject of a major novel and film and guys like Paulson became billionaires in the process. Paulson's returns have been pretty disappointing since then.

[Jeff N.]

DOW CLOSED +230 pts today!:beer:

[seanile]

DOW CLOSED +230 pts today!:beer:

curious whatll happen if the uk leaves eu. it staying in is already priced in id say.

[akelman]

It'll drop like a rock. On the other hand, based on what the pound is doing at the moment, it'll be a great time to visit the Scottish seaside.

[Jeff N.]

I've gotta believe that Wall Street knows the UK is NOT leaving.

[notsew]

I've gotta believe that Wall Street knows the UK is NOT leaving.

Not looking great right now...

[Mr. Pink]

Oh boy. That whole "efficient market theory" was used to justify 2007, before, you know, 2008. Greenspan was quite the advocate. Probably still is, and he'll take it to his grave. Thanks, Al.

[makoti]

I've gotta believe that Wall Street knows the UK is NOT leaving.

It's looking like Wall Street don't know (union) Jack. Sorry, that was bad...
Leave is ahead almost a million, right now.

[Miller76]

GBP down almost 10%


Sent from my iPhone using Tapatalk

[Jeff N.]

Not looking great right now...Nope. I'm wrong, as usual with these kind of things. Wishful thinking.

[lovebird]

Dow down almost 1000 points in the futures!

[verticaldoug]

buy UK stocks and sell EU Continental stocks. seems obvious to me

[Tony T]

Nope. I'm wrong, as usual with these kind of things. Wishful thinking.

You were right at the time.
Before the market closed (when the DOW surged 150 pts in the last 15 min to reach the magic 18,000) "not leaving" was ahead by 51-49, but as the vote tally continued and BREXIT took the lead, the futures went negative.

The market is always right.

BTW, the UK was never really behind the EU, they never converted to the Euro.
France will be next (FREXIT)

[Climb01742]

I've gotta believe that Wall Street knows the UK is NOT leaving.

If so, another example of Wall Street knowing nothing...:eek::rolleyes::beer:

Buckle up, kids. Gonna be a ride.

[oldpotatoe]

If so, another example of Wall Street knowing nothing...:eek::rolleyes::beer:

Buckle up, kids. Gonna be a ride.

UK votes to leave..dum..I'd hate to be a NON natural born Brit in the UK.

No kidding..UK stock market down 10%, UK Pound falling to lowest point in 31 years...I hope the Brits have their seat belt fastened..us too...maybe wrapped in bubble wrap..

[93legendti]

You were right at the time.
Before the market closed (when the DOW surged 150 pts in the last 15 min to reach the magic 18,000) "not leaving" was ahead by 51-49, but as the vote tally continued and BREXIT took the lead, the futures went negative.

The market is always right.

BTW, the UK was never really behind the EU, they never converted to the Euro.
France will be next (FREXIT)

Then Aussies...or Germany.

[Llewellyn]

Then Aussies


Huh, we're not in the EU :crap:

[oldpotatoe]

Huh, we're not in the EU :crap:

He meant Austria I think..or maybe he thinks 'Europe' is bigger than it is??

Austria and Germany with right wing nationalist movements..imagine that. :eek:

[goonster]

He meant Austria I think..

https://pbs.twimg.com/media/BqexM56IAAAumB2.jpg:large

[Llewellyn]

He meant Austria I think..or maybe he thinks 'Europe' is bigger than it is??

Austria and Germany with right wing nationalist movements..imagine that. :eek:


They might kick us out of Eurovision though :banana:

[DHallerman]

So this Brexit disaster makes me think that Herr Grump has a better chance to be erected (it's a wall thing or perhaps a finger-length thing) president.

So my main concern, Llewellyn, is this: How is the cycling in Perth Australia?

[Llewellyn]

So my main concern, Llewellyn, is this: How is the cycling in Perth Australia?

Not too bad as it goes, bit cold at the moment though.

[Tony T]

Then Aussies...or Germany.

Germany won't leave.
Italy will.

[Tony T]

So this Brexit disaster makes me think that Herr Grump has a better chance to be erected (it's a wall thing or perhaps a finger-length thing) president.


Yep

"Republican presumptive presidential nominee Donald Trump, in Scotland for a two-day business trip, called the United Kingdom's vote to leave the European Union “purely historic," saying Brexit supporters "took their country back."

[DHallerman]

Yep

"Republican presumptive presidential nominee Donald Trump, in Scotland for a two-day business trip, called the United Kingdom's vote to leave the European Union “purely historic," saying Brexit supporters "took their country back."

Yes, the parallel trends today among peoples in various nations reminds me of a mix of 1968 and the late 1930s.

[Mr. Pink]

Yep

"Republican presumptive presidential nominee Donald Trump, in Scotland for a two-day business trip, called the United Kingdom's vote to leave the European Union “purely historic," saying Brexit supporters "took their country back."

I would think that the owners of homes and lands neighboring Trumps golf properties in The United Kingdom would have a few juicy comebacks for that one.

[93legendti]

Huh, we're not in the EU :crap:

Sorry, meant Austria...austies...tee hee

[93legendti]

Germany won't leave.
Italy will.

We will see. Germany would be smart to leave...

[oldpotatoe]

Yep

"Republican presumptive presidential nominee Donald Trump, in Scotland for a two-day business trip, called the United Kingdom's vote to leave the European Union “purely historic," saying Brexit supporters "took their country back."

I wonder if he'll call it a 'campaign trip' and have the campaign pay for the aircraft to get him there..more $ into his pocket.

[Tony T]

We will see. Germany would be smart to leave...

Merkel is the only one left to hold the EU together.
If Germany leaves the EU will collapse.

[PQJ]

I wonder if he'll call it a 'campaign trip' and have the campaign pay for the aircraft to get him there..more $ into his pocket.

I think he likes to get Mexicans to pay for stuff! :eek:

[54ny77]

The scary trend here is the volatility in populist uprising, swinging farther to either side of the pendulum.

The world needs a certain measure of stability and certainty.

Yep

"Republican presumptive presidential nominee Donald Trump, in Scotland for a two-day business trip, called the United Kingdom's vote to leave the European Union “purely historic," saying Brexit supporters "took their country back."

[rnhood]

The scary trend here is the volatility in populist uprising, swinging farther to either side of the pendulum.

The world needs a certain measure of stability and certainty.

No it doesn't. Change offers new challenges and opportunities, and frowns on complacency.

[Elefantino]

My Eurosport subscription just got cheaper!

All politics is local.

[echappist]

No it doesn't. Change offers new challenges and opportunities, and frowns on complacency.

Change for change's sake, per se, is nihilistic. Just because you could, doesn't mean you should. The same goes for doing things the same just because it has been so for decades (or centuries/millennia).

Which brings us to the underlying forces leading to Brexit and the ensuing results. It's still too early to tell just what the ensuing results will be, but this change was brought upon by a fringe element of the Conservative Party, which elicited a heavy-handed political ploy by Cameron. The forces (viz. populist sentiments in the GB) that led to Brexit then stoked the flames along nationalistic lines, and none epitomizes this more than the propaganda put on by the Independence Party. Most (as evidenced by their own representation in the Parliament, even according to the most recent election earlier this year) would hesitate to think that the intentions of this element would actually be conducive, yet it nevertheless managed to have enough resonance to have led to the election results of yesterday.

[echappist]

My Eurosport subscription just got cheaper!

All politics is local.

mine always had been cheaper as i subscribed using the Irish Eurosport site :)
4.99 eur is still less than 4.99 gbp

[echappist]

Yep

"Republican presumptive presidential nominee Donald Trump, in Scotland for a two-day business trip, called the United Kingdom's vote to leave the European Union “purely historic," saying Brexit supporters "took their country back."

And therein lies the irony, on so many different levels: a) Scotland voted to stay in the EU, and b) one wonders if Scotland were to hold another referendum on leaving the GB, whether the results would be different as England has voted to leave the EU

[Mr. Pink]

My Eurosport subscription just got cheaper!

All politics is local.

Think much bigger. Like a nice bike trip in Italy.

[goonster]

Conquering hero emerges to bask in the adulation of his people. (http://www.cnn.com/videos/world/2016/06/24/boris-johnson-crowd-sot.cnn)

[54ny77]

I should have been more clear--I'm only speaking to business, when it comes to committing massive amounts of capital.

Any decision making calculus in that arena requires some measure of stability, even more so if the venture involves lots of zeroes. Inputs into that decision include political leadership, economic policies, taxes, operational logistics, currency risk, applicable markets, etc. etc.

A friend just spent a couple years setting up a corporation in U.K. Was a long time in the making, massive amounts of capital, lots of zeros. I'm sure the past month has been just plain bonkers. Four or five years ago when the plans were put in place to move forward, a U.K. exiting the EU was not on the realistically-happening radar.

No it doesn't. Change offers new challenges and opportunities, and frowns on complacency.

[Jeff N.]

Hopefully, as some suggest, this'll only be a one day, over-reactive event on Wall Street. Let's hope so.

[berserk87]

Freakin' uppity Limies are killing my 401k.

[biker72]

Time to put in a couple of buy orders.

[Jeff N.]

Freakin' uppity Limies are killing my 401k.

Yep. Thanks a bunch, guys.

[jlwdm]

S+P is still above the mid May lows.

Jeff

[Tony T]

Hopefully, as some suggest, this'll only be a one day, over-reactive event on Wall Street. Let's hope so.

If other countries don't think about leaving the EU

[slidey]

Hopefully, as some suggest, this'll only be a one day, over-reactive event on Wall Street. Let's hope so.

The one thing I can state with a probability of 1, is that this is not going to be a one-day thing, so prepare/adjust accordingly.

Just one viewpoint: https://personal.vanguard.com/us/insights/article/Brexit-l-062016?cid=sf29498592+sf29498592

[cnighbor1]

MY investment advisor
http://www.merriman.com/
Dear Charlie and Carolyn,

Yesterday, citizens of the United Kingdom unexpectedly voted to leave the European Union in a historic referendum. The U.K. bookies had it dead wrong, giving the “Leave” vote only 3/1 odds of succeeding when official polling began. Stock traders around the world, who also sided with the bookies, were obviously caught flat-footed by the unexpected success of the “Leave” vote, which has led to large declines in the stock markets today.

Naturally, all branches of the media will leap opportunistically to cover this Brexit story and will likely lean toward scary and provocative stories to maximize viewership. That is their formula. Unfortunately, these stories will stir up investor angst as the doomsayers are afforded maximum airtime.

Plunging stock markets also don’t help in the angst department, so it’s important to remember that we are long-term investors at Merriman. While we don’t know how this event will unfold over the short-term, we do know the upcoming market gyrations will ultimately be just a small bump in the long journey of achieving our financial goals.

We don’t see Brexit as a major long-term turning point in the markets. Companies around the world are incredibly efficient at adapting to the new bureaucratic rules in the game, and growing profits over time. This view definitely includes companies domiciled in Europe. Following common sense is the best course of action – take market volatility in stride, stay diversified among stocks, bonds and specialty asset classes, periodically rebalance, and be thankful for all the wonderful moments each day provides.

Sincerely,
The Merriman Investment Team

[Seramount]

Time to put in a couple of buy orders.

I did.

stuff is on sale...

[shovelhd]

My take is that it drops another 2-5% next week then rallies. We won't see 18K again until September. Of course I hope that I am wrong.

[Joxster]

MY investment advisor
http://www.merriman.com/
Dear Charlie and Carolyn,

Yesterday, citizens of the United Kingdom unexpectedly voted to leave the European Union in a historic referendum. The U.K. bookies had it dead wrong, giving the “Leave” vote only 3/1 odds of succeeding when official polling began. Stock traders around the world, who also sided with the bookies, were obviously caught flat-footed by the unexpected success of the “Leave” vote, which has led to large declines in the stock markets today.

Naturally, all branches of the media will leap opportunistically to cover this Brexit story and will likely lean toward scary and provocative stories to maximize viewership. That is their formula. Unfortunately, these stories will stir up investor angst as the doomsayers are afforded maximum airtime.

Plunging stock markets also don’t help in the angst department, so it’s important to remember that we are long-term investors at Merriman. While we don’t know how this event will unfold over the short-term, we do know the upcoming market gyrations will ultimately be just a small bump in the long journey of achieving our financial goals.

We don’t see Brexit as a major long-term turning point in the markets. Companies around the world are incredibly efficient at adapting to the new bureaucratic rules in the game, and growing profits over time. This view definitely includes companies domiciled in Europe. Following common sense is the best course of action – take market volatility in stride, stay diversified among stocks, bonds and specialty asset classes, periodically rebalance, and be thankful for all the wonderful moments each day provides.

Sincerely,
The Merriman Investment Team


Or We bought long and we're trying to maximise our money by using yours so don't ask for it back too soon. Next we'll be buying Mexican ;)

[93legendti]

MY investment advisor
http://www.merriman.com/
Dear Charlie and Carolyn,

Yesterday, citizens of the United Kingdom unexpectedly voted to leave the European Union in a historic referendum. The U.K. bookies had it dead wrong, giving the “Leave” vote only 3/1 odds of succeeding when official polling began. Stock traders around the world, who also sided with the bookies, were obviously caught flat-footed by the unexpected success of the “Leave” vote, which has led to large declines in the stock markets today.

Naturally, all branches of the media will leap opportunistically to cover this Brexit story and will likely lean toward scary and provocative stories to maximize viewership. That is their formula. Unfortunately, these stories will stir up investor angst as the doomsayers are afforded maximum airtime.

Plunging stock markets also don’t help in the angst department, so it’s important to remember that we are long-term investors at Merriman. While we don’t know how this event will unfold over the short-term, we do know the upcoming market gyrations will ultimately be just a small bump in the long journey of achieving our financial goals.

We don’t see Brexit as a major long-term turning point in the markets. Companies around the world are incredibly efficient at adapting to the new bureaucratic rules in the game, and growing profits over time. This view definitely includes companies domiciled in Europe. Following common sense is the best course of action – take market volatility in stride, stay diversified among stocks, bonds and specialty asset classes, periodically rebalance, and be thankful for all the wonderful moments each day provides.

Sincerely,
The Merriman Investment Team

"Unexpectedly". Sheryl Atkinson recently covered this phenomenon. Like every month's jobs report - "disappointing". A whole generation of young Israelis went to the polls last year believing change was coming, because that's what Haaretz told them would happen. :D
If reporters actually reported facts not their feelings...

[Neil]

https://pbs.twimg.com/media/Cl8nFisWEAAhg29.jpg

[Neil]

http://www.bloomberg.com/news/articles/2016-06-26/brexit-may-be-scotland-s-chance-to-steal-london-finance-crown

[Miller76]

Nice bounce back in the last two days!!


Sent from my iPhone using Tapatalk

[saab2000]

Nice bounce back in the last two days!!


Sent from my iPhone using Tapatalk

Keep on keeping on.

Most people say the long term implications are negligible. It was probably a good buying opportunity on Friday though.

[Louis]

Most people say the long term implications are negligible. It was probably a good buying opportunity on Friday though.

Now you tell me.

[saab2000]

Now you tell me.

Buy low. Sell high.

Not my advice. This belongs to someone else.

[Tony T]

Buy high, sell higher.

[Jeff N.]

With todays horrible terrorist attacks in Turkey, I expect another nose-dive.

[adub]

With todays horrible terrorist attacks in Turkey, I expect another nose-dive.

Futures are up and crude is up. Sadly as these incidents have become commonplace they are barely white noise to the markets.

[Jeff N.]

Yes. Sad indeed. Looks like it's just being shrugged off.

[verticaldoug]

Futures are up and crude is up. Sadly as these incidents have become commonplace they are barely white noise to the markets.

The question is why do you think it should cause a sell-off in developed markets? Terrorist attacks are to some degree priced in.

If you look at TAVHL in Turkey (TAV Havalimanlari Holdings) which is the airport operator in the region, the stock has already sold off from 25 to 13 since 4Q2015 when terrorist activities with PKK started to escalate. International and local markets have been leaving Turkey's tourism sectors for 6 mo already. Instead of PKK, this one appears to be ISIS.

You can see with the influx of refugees into Turkey and then into Europe, why the British are uneasy with open borders.

Another way to look at Thursday Vote is a partial reflection of fear of acts of violence like this.

[Miller76]

The question is why do you think it should cause a sell-off in developed markets? Terrorist attacks are to some degree priced in.



If you look at TAVHL in Turkey (TAV Havalimanlari Holdings) which is the airport operator in the region, the stock has already sold off from 25 to 13 since 4Q2015 when terrorist activities with PKK started to escalate. International and local markets have been leaving Turkey's tourism sectors for 6 mo already. Instead of PKK, this one appears to be ISIS.



You can see with the influx of refugees into Turkey and then into Europe, why the British are uneasy with open borders.



Another way to look at Thursday Vote is a partial reflection of fear of acts of violence like this.




Just look at Turkish Government bonds - the 10yr branch mark has rallied around 140bps YTD.... In price terms that's 10%


Sent from my iPhone using Tapatalk

[oldpotatoe]

Nice bounce back in the last two days!!


Sent from my iPhone using Tapatalk

17,585 right now, 8:50 MTN time, Wednesday.

[54ny77]

https://www.youtube.com/watch?v=8Oeb8nhNJOU



Just look at Turkish Government bonds - the 10yr branch mark has rallied around 140bps YTD.... In price terms that's 10%


Sent from my iPhone using Tapatalk

[likebikes]

bump 4 trump.

down more or less than 500 today?

[false_Aest]

GF got out this week.
Good move.

I bought today.
Bad move.

[Llewellyn]

The Aussie market opened higher first thing this morning obviously expecting a Clinton victory but headed south after that and closed 2% lower (even before the result was finally known). Tomorrow will be worse, a lot worse.

[alancw3]

it's a buying opportunity! :d

+1

[weisan]

https://t.co/qYPzDjCgp2

[unterhausen]

a lot of my money was in cash until recently. I'm thinking there might be some reallocation in my future

[mg2ride]

I don't follow any regular news, I don't follow any market news and I don't follow any political news.

I was 100% sure that Clinton would win and when she did the market would plummet.


Based on that pearl of wisdom, I pulled 100% of my Retirement fund out of the market Monday night.

It has never felt so good to be so wrong!:banana: :banana:

I stand to make a 75-100K profit if I time my return correctly.

[ultraman6970]

This crashing all over the place is because basically trump doesnt have an "agenda?"... or is all based in speculations because nobody knows what he is going to do???

[93legendti]

Dow is up 60.

[oldpotatoe]

Dow is up 60.

And a minute later down 6(total of 66)...expected to be down in the 400 range.
Nasdaq down 16...

[kppolich]

All 3 major indexes are up as of now. Feel free to step out so the rest of us can get a deal

[unterhausen]

I expect volatility for some time into the future with a general downwards trend. It might recover today, wouldn't want to guess. Some people think that republican governments are good for business, and will see a dip as a buying opportunity.

This crashing all over the place is because basically trump doesnt have an "agenda?"... or is all based in speculations because nobody knows what he is going to do???The U.S. has been one of the few bright spots in the world, with a reasonable recovery. The assumption is that an all-Republican government will repudiate this approach, with potentially dire consequences. Markets don't like uncertainty. And they assume large deficits without corresponding government spending, which is not good for markets.

[echappist]

All 3 major indexes are up as of now. Feel free to step out so the rest of us can get a deal

while this is what i plan on doing, i can't help thinking that the extra that we do make when the market (hopefully) recovers is a) barely the table scraps from the main course and b) somehow has "blood" on it. Those of us in our 30s and 40s have the luxury of waiting things out, but for those closer to retirement or are forced to withdraw 5% a year, well, you get the idea...

[unterhausen]

I wouldn't worry about making money at other people's expense. Most of the froth is people being stupid with their money out of emotion. I know I've done some stupid things in the past. I guess I need to get a better job, because I doubt this election is going to do good things to my retirement. I like the optimism here though, amazing that it's still around after the 2000-2008 markets

[RFC]

I don't know whether to pack my run and gun kit and join the underground or move to Australia.

[93legendti]

Dow up 169

[echappist]

As s&p hasn't yet to take a dive (the way Hangseng and Nikkei did), i wonder if I should to do an interfund transfer right about now (to sell high) so that I would have a greater opportunity to buy low whenwe start seeing long term consequences.

FWIW, my 401k (or rather TSP) isn't as crucial to my retirement as i also have a pension and SS. I'm just wondering if it'd be wise to try to squeeze an extra 3% or so vs sitting tight and buy shares of S&P index fund should that one take a dive.

[kppolich]

Thinking about going 50% liquid after today for a while, any thoughts?

[Tony T]

Thinking about going 50% liquid after today for a while, any thoughts?

Well, I don't like giving financial advice, however my thoughts are…









































…that you should not be asking for financial advise from internet message boards.

[makoti]

Thinking about going 50% liquid after today for a while, any thoughts?

So am I. Thinking Scotch. You?

[echappist]

10% ABV Blonde Ale by Ommegang. By all means should be hoppy, but really smooth

[mg2ride]

Dow up 169

Up over 200 at this point.

Yea! What TF. So much for me making a quick buck at the expense of others.

I will have to go back to just cheating on my taxes.

[93legendti]

210 now.

[rnhood]

Now that the market has had time to mostly digest Trump's victory, it's gone way up. It's a great day to be an American.

[93legendti]

Yup.
Up 240 now

[Jeff N.]

...and climbing...just the opposite of what I expected...just like Trump winning! Oh, and I can light up a fatty in CA now without getting arrested. Crazy times we live in.

[berserk87]

I don't know whether to pack my run and gun kit and join the underground or move to Australia.

You are not alone, brother.

[fa63]

My health/biotech mutual funds, which have taken a beating for the last few months, are going nuts (XLV is up 3.6% at the moment). However, I feel conflicted about this because I actually support ACA, even though it is far from perfect.

[shovelhd]

10% ABV Blonde Ale by Ommegang. By all means should be hoppy, but really smooth

Outstanding choice.

[shovelhd]

+312

[echappist]

Outstanding choice.

thanks. and here i thought you were an IPA-drinker.

[shovelhd]

thanks. and here i thought you were an IPA-drinker.

I am. I am not a beer elitist.

[cash05458]

stuff like this is why I ride alone...:)

[kppolich]

So am I. Thinking Scotch. You?

I have a bottle of The Macallan 18, 1978 unopened at home but the occasion doesn't call for it.

[93legendti]

"In the final hour of trading, the Dow Jones Industrial Average crossed its prior record high on a closing basis of 18,613.52."

Up 261

[93legendti]

Apparently, Obamacare related stocks were all down significantly today

[Ken Robb]

I have a bottle of The Macallan 18, 1978 unopened at home but the occasion doesn't call for it.

You do know that whisky doesn't improve with time in the bottle and that there may be some loss to evaporation, right? If you need help preventing any further deterioration just let me know. Thompson might be willing to help out as well. :-)

[William]

Thank you to many of the members for keeping the political discussion on this post election day mostly on a civil level. As you know political discussions are generally not allowed on the Paceline, but we decided to make an exception (as long as it remained civil) to allow folks to discuss the very interesting turn of events that has just occurred here in America.

That said, we will be closing down the political threads tonight at 9 p.m. EST and resuming the regularly scheduled program here at the Paceline.

Thank you for your participation and support!





William

[Llewellyn]

Aussie market up 3% in early trade :eek:

[unterhausen]

My health/biotech mutual funds, which have taken a beating for the last few months, are going nuts (XLV is up 3.6% at the moment).

so the theory is that they will be able to charge more and have higher profits without ACA. Who would have thought?

[sg8357]

"In the final hour of trading, the Dow Jones Industrial Average crossed its prior record high on a closing basis of 18,613.52."

Up 261

So Trump is really a Republican after all, a lot of people are going to
be real disappointed. LMT is up 5.97%

[William]

Thank you for your participation and for the most part keeping it civil. The Paceline forum is full of a great bunch of people! Now, back to your bikes!




William