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Folks, it's 2000 (or 2008) all over again.

Anything related to investing, including crypto

Ezio

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How it was in 2000.

"But it was a short and unpleasant ride. By September of 2002, the combined market cap of the Four Horseman had crashed to just $450 billion. Exactly $1.0 trillion of bottled air had come rushing out of the casino.

Since it had earned $2.6 billion in the most recent 12 month period, its lofty market cap represented a valuation multiple of 210X. And Cisco was no rocket ship start-up at the point, either, having been public for a decade and posting $15 billion of revenue during the prior year.

Nevertheless, the bullish chorus at the time claimed that Cisco was the monster of the midway when it came to networking gear for the explosively growing internet, and that no one should be troubled by its absurdly high PE multiple.

The same story was told about the other three members of the group. During the previous 24 months, Microsoft’s market cap had exploded from $200 billion to $550 billion, where it traded at 62X reported earnings. In even less time, Intel’s market cap had soared from $200 billion to $440 billion, where it traded at 76X. Dell’s market cap had nearly tripled during this period, and it was trading at 70X."

How it will be in 2015 (probably) or 2016.*
Needless to say, the absurdly inflated values of the Four Horseman in the spring of 2000 looked exactly like the FANG quartet today. Thus, Facebook reported $2.8 billion of net income in the most recent period, thereby weighing in with a 107X PE multiple.

Likewise, Netflix currently trades at 307X its LTM earnings and Amazon at 950X. Even Google, which has now smacked into the law of large numbers with revenue growth of just 13% in the last year, is valued at 32X.

Moreover, despite its overflowing creativity and competitive prowess, GOOG is not a technology company which has invented a rocket ship product with years yet to run. Nearly 90% of its $72 billion in LTM revenues came from advertising."

These companies probably will be still strong but their stocks will plunge.
"In this regard, Cisco is the poster child for this disconnect. During the last 15 years its revenues have grown from $15 billion to nearly $50 billion, and its net income has more than tripled to nearly $10 billion per year.

Yet it’s market cap today at $140 billion is just 25% of its dotcom bubble peak. In short, its market cap was driven to the absurd height recorded in March 2000 by the final spasm of a bull market, when the punters jumped on the last momo trains out of the station.

This time is surely no different. The FANG quartet may live on to dominate their respective spheres for years or even decades to come. But their absurdly inflated valuations will soon be deFANGed."

*The Japanese economy is already rolling over. I doubt this ZIRP-fueled casino can continue to 2017.
Read more here:
http://davidstockmanscontracorner.com/when-wall-street-gets-defanged-look-out-below/
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MJ DeMarco

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I tend to agree... and the leading indicators in 2000 were subtle job layoffs in the tech sector, which we are just starting to see now.

So for those who operate on Slowlane principles and hold big stock positions, you can prepare and be wrong, hence losing out on a 3-6% gain.

Or not prepare and be wrong and lose 50%.

The choice is yours.
 

MJ DeMarco

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MJ DeMarco

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hellolin

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Yup, Japan just entered a recession, third world countries are struggling like its 2007, Lots of middle class Brazilians rolling back to poverty as I type, the ISIS rising corresponds to this at the perfect time, so in case that first world countries that do roll into a recession they can start another full blown war in hopes of rising GDP values of their respective countries (And reduce unemployment here of course). I caught this last wave and joined the military to serve the country, and that netted me a free college education afterwards. I am thinking what should I roll into this time, in recession there are tons of people looking lost and need things in their life to make them feel better, shouldn't be very hard to look for problems to solve at a scale of population.
 

MJ DeMarco

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Ezio

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Well, if gamblers and hm.. "investors" will hear more bad news from China and other Emerging Markets (for example - Brazil which is already in bad condition) they will probably dump their stocks earlier. This can be reason why this buble won't last till 2017.
 

Mineralogic

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I mean, when Pfizer payed 160 billion for a botox maker /Allergan, for crow's feet, that says it all

don't even need to bring up amazon, uber, and other market caps of 100s of billions of paper wealth

can't believe it, the banksters did it again
 

Trivium iz rC

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I still have some positions in the market. But i'm mostly in cash & hard assets.
I rather loose 5% to inflation then 60% in the market. It's going to be interesting what the new president will do when the recession hits in there first term. Will they do the right thing or will the let Janet Yellen start QE4. Opportunity will be among us very soon =-)
 
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Guest3722A

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US dollar is at around a double top right now at just over 100. As many know, the move started when Yellen threatened rate hikes July '14. She's been putting it off and putting it off for almost a year now from the date she initially indicated was on her radar.

The date she indicated is where the first top formed (April) and when she didn't come through, the dollar pulled back around 8-9% putting a base in -- as her fed minutes language kept the markets in anticipation. Now Yellen said December is the date, so here we are again at 100ish. The second top.

Additionally, suddenly out of no where gas prices miraculously now match where oil is trading at. Which to me looks like a hail mary for the current admin to attempt to inject disposable income into other industries in hopes of taking in some of that valuation.

My thought is watch this last quarter to see how it plays out this year. If it closes strong to average, my suspicion is the market will be 'held' up trending sideways or better next year.

Technically to me at least, it does look a bit toppy, but this huge drop in gas is a new and imo very powerful variable.

Not sure where gas is for anyone else around the world, but here in Michigan it's getting in the 1.50's
 
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hellolin

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It's gonna be tough for the next president since so many Americans never recovered from the last recession, will be interesting in terms of politics for sure. There is no safe bet from here on now, i think that's why so many company is holding on their cash reserves, everyone like to lose to inflation than the market.
 
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MyronGainz

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I mean, when Pfizer payed 160 billion for a botox maker /Allergan, for crow's feet, that says it all

don't even need to bring up amazon, uber, and other market caps of 100s of billions of paper wealth

can't believe it, the banksters did it again

Facebook buying Whatsapp for $16b
 

Piranha22

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Sorry, I'm a complete layman in terms of the stock market, also I was still shitting my pants in 2000.

Will this mainly effect the tech companies like the FANG, or does this kind of collapse tend to spread across all markets.

For example: I have some stocks in a mining company in Chile my dad gave me in a time I just cared about video games. Will these tend to go down along with FANG companies, or are they less prone because they don't just hold 'paper value' ?
 
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Tweeve11

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So how does a Joe Shmo like me with no stock experience capitalize on this market shift? There is quite obviously a lot of sentiment that the market is going to go down. And I watched a commercial for the upcoming movie "The Big Short" which is all about 2008. Its got me thinking, "Hey, I could do that too!".

But with only a few thousand dollars (<10k) and little experience it feels like i would be doing more gambling then educated trading... I'm okay with a certain amount of gambling, but I would like to feel like I was making informed gambles otherwise i might as well just go to the casino....

Any advice on how to take advantage of the current climate? Id hate to look back in a year or two and know i missed out on a good opportunity.
 

blackhat

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So how does a Joe Shmo like me with no stock experience capitalize on this market shift? There is quite obviously a lot of sentiment that the market is going to go down. And I watched a commercial for the upcoming movie "The Big Short" which is all about 2008. Its got me thinking, "Hey, I could do that too!".

But with only a few thousand dollars (<10k) and little experience it feels like i would be doing more gambling then educated trading... I'm okay with a certain amount of gambling, but I would like to feel like I was making informed gambles otherwise i might as well just go to the casino....

Any advice on how to take advantage of the current climate? Id hate to look back in a year or two and know i missed out on a good opportunity.
Whatever you do, be careful. Don't become this guy: http://www.marketwatch.com/story/he...-10644556-2015-11-19?mod=MW_story_latest_news

With shorts there is no maximum loss. If you buy a stock the absolute worst case would be you loose everything you spent, but it can be far worse with a short. All I'm saying is that as a Joe Schmo with no stock experience don't jump into something chasing money.
 

JustinBoshans

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I tend to agree... and the leading indicators in 2000 were subtle job layoffs in the tech sector, which we are just starting to see now.

So for those who operate on Slowlane principles and hold big stock positions, you can prepare and be wrong, hence losing out on a 3-6% gain.

Or not prepare and be wrong and lose 50%.

The choice is yours.

I've been saving up cash just waiting for a crash to happen.

What are you looking for, or what are the indicators that a crash is about to happen soon?
 
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Tweeve11

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Well i had read somewhat about options and i thought that there was a strategy of buying a put that would allow me to make money off of falling stock without actually buying the stock and risking unlimited loss...

Please correct me if im wrong. I feel very cautious about trading and options in general, but just because i feel cautious doesnt mean that it is IMPOSSIBLE for me to make money.. But possibly its close enough to impossible not to pursue?
 

MyronGainz

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So how does a Joe Shmo like me with no stock experience capitalize on this market shift? There is quite obviously a lot of sentiment that the market is going to go down. And I watched a commercial for the upcoming movie "The Big Short" which is all about 2008. Its got me thinking, "Hey, I could do that too!".

But with only a few thousand dollars (<10k) and little experience it feels like i would be doing more gambling then educated trading... I'm okay with a certain amount of gambling, but I would like to feel like I was making informed gambles otherwise i might as well just go to the casino....

Any advice on how to take advantage of the current climate? Id hate to look back in a year or two and know i missed out on a good opportunity.

Just don't. Trying to time the market is just ignorant. As stocks fall, you are able to buy to same great companies...but at a discount. Look at buying opportunities in stead of trying to time the market.
 

Envision

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Maxjohan

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Whatever. Post deleted.
 
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LouieLouie

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One of the greatest pieces of economic wisdom is to know what you do not know. -- John Kenneth Gilbraith
 

Ezio

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MJ DeMarco

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