Will the stock market crash (June 24 2016 Update)?

[Tugg Speedman]

George Soros: "Brexit Makes EU Disintegration Irreversible
http://www.zerohedge.com/news/2016-06-25/george-soros-brexit-makes-eu-disintegration-irreversible

Greenspan: "This Is The Worst Period I Recall; There's Nothing Like It"
http://www.zerohedge.com/news/2016-06-24/greenspan-worst-period-i-recall-theres-nothing-it

[rocket surgeon]

people want other people, if they are in charge, to have their interests at heart, not someone who is disconnected both ideologically but geographically as well.  the brits were sick and tired of having some dude in belgium or italy telling them what is best for them across the channel

[Tugg Speedman]

Paul Ingrassia
@IngassiaP
Brexit fails 1st test. Europe Ryder Cup team will keep British golfers and EU flag when it faces the US. in late Sept. Huh?

[rocket surgeon]

now they are talking about a "do-over"??  hmmmm   shoot till ya win 'eyn'a?

[naginiF]

I hate this phrase that the market hates uncertainty. Can you tell me a period in human history when things weren't uncertain?

What is driven the epic bull market this started in 1982 was/is globalization. We are now legitimately talking about ending it. That is one of the biggest things that ever happened.

The reason the market was so bad and Friday is it was so inconceivable leave Would win.    And now that it has we are on the precipice of an epic change which might not be good.

 I hope I'm wrong I really do.

I understand the perspective that the world economy will never be the same/never recover from the threat (or reality) of the EU breaking up.  I don't agree with it as i believe that markets are over reacting to the Brexit vote and that, if they aren't over reacting, the world economy is evolutionary not static in nature and will adapt to a new reality i.e. there will always be opportunity for the opportunistic.

My question is....have you made changes to your portfolio/holdings as a result of the Brexit vote?  If so, what?

We were in a fairly conservative position - partly because of European, and other area, uncertainty and partly because of life situation - and will not be changing our "generally conservative but situationally aggressive" approach. 

[rocket surgeon]

I understand the perspective that the world economy will never be the same/never recover from the threat (or reality) of the EU breaking up.  I don't agree with it as i believe that markets are over reacting to the Brexit vote and that, if they aren't over reacting, the world economy is evolutionary not static in nature and will adapt to a new reality i.e. there will always be opportunity for the opportunistic.

My question is....have you made changes to your portfolio/holdings as a result of the Brexit vote?  If so, what?

We were in a fairly conservative position - partly because of European, and other area, uncertainty and partly because of life situation - and will not be changing our "generally conservative but situationally aggressive" approach.

i have a couple of funds in an advisory fund with eddy jones.  they are constantly evaluated and changed according to percentages and other data i leave up to my money peoples

[GooooMarquette]

Yes all those parties are not in control.  The key word is "yet."  These parties are gaining.  The Right-wing party in Austria barely lost last month with 49.7% of the vote.  Merkel's approval rating is way down, Hollande is unpopular, LePen is gaining, let's see how the Spanish elections goes tomorrow.

By the time they'd ever get anywhere close to exit votes, they'd see how much it will have hurt the UK

[Tugg Speedman]

By the time they'd ever get anywhere close to exit votes, they'd see how much it will have hurt the UK

That the problem.

1. Hammer the UK for BRexit, cause chaos in financial markets.  Buy and hold loses money and time. (US financials down 5% Friday, European Banks were destroyed Friday, down 15% to 25%, worse than any single day in 2008).

2. Markets recovery, no pain in UK and financial markets, everyone sees its ok to leave, mass exodus.  Then see no. 1

No good scenario, losses and pain ensure.  Like I said, I hope I'm wrong, I fear I am not.

[MU82]

Don't worry, Heisy.

You're wrong.

Every time something "disastrous" happens, causing alarmists to say that the markets might "never recover," the markets recover.

9/11 is a perfect example. Not only was America shown to be vulnerable but it took place practically at Wall Street.

You know what? Our economy recovered. It took some time, but it recovered.

Brexit -- if it even stands -- will not break the world's economy forever. As much as you follow the market, economic issues, etc, I frankly am quite surprised you would think it might.

[Tugg Speedman]

I understand the perspective that the world economy will never be the same/never recover from the threat (or reality) of the EU breaking up.  I don't agree with it as i believe that markets are over reacting to the Brexit vote and that, if they aren't over reacting, the world economy is evolutionary not static in nature and will adapt to a new reality i.e. there will always be opportunity for the opportunistic.

My question is....have you made changes to your portfolio/holdings as a result of the Brexit vote?  If so, what?

We were in a fairly conservative position - partly because of European, and other area, uncertainty and partly because of life situation - and will not be changing our "generally conservative but situationally aggressive" approach.

The biggest single driver of growth and higher standards of living has been globalization. 

The problem is it also has caused massive stresses in developed society.  Since the 2008 bailouts, that took care of bankers and screwed everyone else, the elites and politicians have lost credibility.  That's why BRexit passed.  No one listens to considered opinion anymore,  they think it's conflicted telling them what is best for bankers, not them.  See Trump and Sanders, same here too.

Now the the UK has taken the leap into the unknown, it's all changed. New are not going back.  We are moving forward on this path and we are going to tear down all the institutions of Globalization.

So yes, the dynamic and evolutionary economy I'll adjust and adapt .... In 10 years.  In the meantime we are getting tariffs, rules and a reversal of Globalization.  That will leave a big mark on your portfolio. Smoot Hawley 2.0 is my fear (google it).

PS had my worst day since 2008 on Friday.  Too many European financials.  Kicking myself over this ... Saw this coming and did not get out of the way.  Total amateur move that I should know better than to make.

[Tugg Speedman]

Don't worry, Heisy.

You're wrong.

Every time something "disastrous" happens, causing alarmists to say that the markets might "never recover," the markets recover.

9/11 is a perfect example. Not only was America shown to be vulnerable but it took place practically at Wall Street.

You know what? Our economy recovered. It took some time, but it recovered.

Brexit -- if it even stands -- will not break the world's economy forever. As much as you follow the market, economic issues, etc, I frankly am quite surprised you would think it might.

Your correct but you could be one-third poorer in a few years.  And if that happens you realize you made no money in 20 years.

Over the last 15 years the stock markets had its worst run in about 100 years. Everything outperforms it except cash. It's just not been a good investment. Especially if you exclude the highflying tech stocks, the stable businesses that are the foundation of America have been horrible investments. Banking, energy, consumer staples, industrials, etc.

 So I don't fear for the economy of the long run prospects. I fear that in the year 2022 you're going to see that your net worth is exactly the same as today another lost five or six years.

 Regarding all your examples, after 9/11 you didn't make any money in the stock market for two years.  you didn't make any money after 2008 for seven years.  These things add up. If BRexit means you're gonna lose another five years, all of a sudden an entire generation is lost.  We're almost there now.

[MU82]

Regarding all your examples, after 9/11 you didn't make any money in the stock market for two years.  you didn't make any money after 2008 for seven years.  These things add up. If BRexit means you're gonna lose another five years, all of a sudden an entire generation is lost.  We're almost there now.

Well, my biggest investment in 2008 was MMM stock. I bought it at $75 in June of that year. Within 9 months, it was trading well below $50. I wasn't thrilled (obviously) but I didn't panic-sell and, in fact, reinvested dividends, so I was buying more at bargain prices every three months. 

By November 2009, it was trading higher than the price I paid. Another year later, it was up $10/share from what I paid. Plus, I owned dozens of new shares thanks to the reinvested divvies.

In other words, in just a little over 2 years, I had a solid profit in MMM. It's now at $170. You can do the math.

PG, my second biggest investment in 2008, bought at around $60, also turned out pretty well (though not as well as MMM).

GE, another large investment, went from $30 to $6 before starting its climb back up. That one took many years to get back to break-even but it did. I sold at a profit and allocated the money elsewhere.

My main funds back in 2008, Vanguard Wellington and Vanguard Health, also took far fewer than 7 years to get "whole."

Bottom line: I did "make money" in far fewer than 7 years -- as did many others who didn't panic and sell at the bottom.

As for 9/11, I'm not sure what you remember about the feelings of dread caused by the terrorist attack. I will remind you that the average American was FAR more worried about the economy -- among MANY things -- than he/she is about Brexit.

I do not believe I will be one-third poorer because of Brexit. Given that you were wrong about me making no money for 7 years after 2008, I don't know how you could possibly claim to know how my portfolio (or anybody else's) will do over the next several years.

You throw a lot of generalizations out there even though you know strikingly little about my investing.

You also didn't say what any investor (including me) should do now that Brexit has happened. Should we climb under our desks and cover our heads -- as we were instructed to do during atom bomb drills in the '60s? Curl up in the fetal position? Sell everything and use the proceeds to buy gold?

[GooooMarquette]

That the problem.

1. Hammer the UK for BRexit, cause chaos in financial markets.  Buy and hold loses money and time. (US financials down 5% Friday, European Banks were destroyed Friday, down 15% to 25%, worse than any single day in 2008).

2. Markets recovery, no pain in UK and financial markets, everyone sees its ok to leave, mass exodus.  Then see no. 1

No good scenario, losses and pain ensure.  Like I said, I hope I'm wrong, I fear I am not.

3.  The UK suffers massively for its incredibly dumb move (we don't need to hammer them - they did that themselves), the rest of the EU suffers some as well, and investors see the US as the best place to invest more than ever before.  People have money they want to invest and they'll put it here.

I've survived many an economic downturn.  This too shall pass.

[Tugg Speedman]

Well, my biggest investment in 2008 was MMM stock. I bought it at $75 in June of that year. Within 9 months, it was trading well below $50. I wasn't thrilled (obviously) but I didn't panic-sell and, in fact, reinvested dividends, so I was buying more at bargain prices every three months. 

By November 2009, it was trading higher than the price I paid. Another year later, it was up $10/share from what I paid. Plus, I owned dozens of new shares thanks to the reinvested divvies.

In other words, in just a little over 2 years, I had a solid profit in MMM. It's now at $170. You can do the math.

PG, my second biggest investment in 2008, bought at around $60, also turned out pretty well (though not as well as MMM).

GE, another large investment, went from $30 to $6 before starting its climb back up. That one took many years to get back to break-even but it did. I sold at a profit and allocated the money elsewhere.

My main funds back in 2008, Vanguard Wellington and Vanguard Health, also took far fewer than 7 years to get "whole."

Bottom line: I did "make money" in far fewer than 7 years -- as did many others who didn't panic and sell at the bottom.

As for 9/11, I'm not sure what you remember about the feelings of dread caused by the terrorist attack. I will remind you that the average American was FAR more worried about the economy -- among MANY things -- than he/she is about Brexit.

I do not believe I will be one-third poorer because of Brexit. Given that you were wrong about me making no money for 7 years after 2008, I don't know how you could possibly claim to know how my portfolio (or anybody else's) will do over the next several years.

You throw a lot of generalizations out there even though you know strikingly little about my investing.

You also didn't say what any investor (including me) should do now that Brexit has happened. Should we climb under our desks and cover our heads -- as we were instructed to do during atom bomb drills in the '60s? Curl up in the fetal position? Sell everything and use the proceeds to buy gold?

You compare you investments to zero return to say the are successful.  I compare mine to government bonds.  If the cannot beat government bonds, their is a problem.  What you described above did not beat government bonds, or gold for that matter.  That is unacceptable.

If we're talking about the end of globalization, P&G, MMM and especially GE are going to suffer badly. Prior to 2008 the long-term return in the stock market was 9%.  Since 2008 it's been more like 5%.   Post BRexit it and what's coming with the end of globalization makes me think it's can be closer to zero.

[Tugg Speedman]

3.  The UK suffers massively for its incredibly dumb move (we don't need to hammer them - they did that themselves), the rest of the EU suffers some as well, and investors see the US as the best place to invest more than ever before.  People have money they want to invest and they'll put it here.

I've survived many an economic downturn.  This too shall pass.

What investors are going to see the US as the best return?   European investors? Their moneys going to money heaven.   This is the biggest mistake people make  when talking about a Investment flows. There is not a fixed sum of money that moves around the world to the best investment. It gets lost it gets destroyed it goes the money heaven.

 And even if you're right and huge sums of money are coming to the US that means the dollars going to soar.  Ask anyone on Wall Street what's the biggest driver earnings is the level of the dollar.   A dollar rising dollar is going to kill stock market earnings because 40% of all revenues comes from overseas.

The Bullish scenario is strong growth oversees the bullish scenarios rising stock markets overseas.

The Bullish scenario is not weak growth, collapsing bank stocks  stock markets and Europe trying to tear itself apart.

Why do you think our stock market is lower now than it was two years ago? Why have government bonds returned your 25% over the last two years when the stock market is returned to zero? Why has Gold had its best year in 35 years you're to date?

Only Bullish story left is naked manipulation by the Federal Reserve printing money and driving interest rates to zero and maybe negative.

[brandx]

The problem is it also has caused massive stresses in developed society.  Since the 2008 bailouts, that took care of bankers and screwed everyone else, the elites and politicians have lost credibility.  That's why BRexit passed. 

Brexit passed for one reason only - Nationalism.

[Tugg Speedman]

Brexit passed for one reason only - Nationalism.

 What does that mean to you?

[Tugg Speedman]

Note that the survey below was taken in March and April. Now that BRexit has actually happened, assume the numbers are higher.

If Italy and France leave the rest irrelevant, EU won't survive.

[brandx]

What does that mean to you?

In its best form, nationalism is a simply pride in one's country.

That is not what I am referring to. Now is is more a negative feeling - against internationalism, other countries, and globalism. It is driven as much or more by some sort of racial pride than just patriotism. Like almost all else, it is now simply a political tool.

[MU82]

You compare you investments to zero return to say the are successful.  I compare mine to government bonds.  If the cannot beat government bonds, their is a problem.  What you described above did not beat government bonds, or gold for that matter.  That is unacceptable.

If we're talking about the end of globalization, P&G, MMM and especially GE are going to suffer badly. Prior to 2008 the long-term return in the stock market was 9%.  Since 2008 it's been more like 5%.   Post BRexit it and what's coming with the end of globalization makes me think it's can be closer to zero.

No, I compared my results to your claim that I "didn't make any money after 2008 for seven years" -- as if you could possibly know.

So you were wrong. But because you're not very good at admitting when you are wrong, you opted to project your goals onto the performance of my portfolio even though you don't know what is in my portfolio.

That was an example of classic goalpost shifting. It's nice to see that again with the master -- Chicos -- on "leave."

As for GE ... as I said in my previous post, I sold GE some time ago. I guess you were so excited to establish your superiority that you overlooked that little fact.

Not that it should matter to you, but I am well ahead of all of my investing goals, thank you. If you are, too, I congratulate you.

I have been an adult (and an investor) through three recessions, including the worst financial crisis since the Great Depression, as well as the worst terrorist attack on U.S. soil.

Brexit will be just another challenge that patient, determined investors will overcome.

[ChitownSpaceForRent]

Life is easy when you don't have any major investments.

[brandx]

Life is easy when you don't have any major investments.

That's a good attitude. Try to keep it as you get older and start accumulating things, including whatever wealth you are able to attain.

If you keep the attitude, life will continue to be easy.

[rocket surgeon]

the majority of my assets are in land/my bldg, and the businesses(dental and an indoor self-storage facility)  that i own.  i'd say 1/3 in retirement plans, invested in the market, 2/3 businesses and bldg.  i realize the businesses and bldg are hooked at the hip with the overall economy, but i believe it may be a better set-up than the reversal.

[Tugg Speedman]

Spanish Elections today, and the non-Establishment party, Podemos, is expect to do well.

Podemos was created in 2014 by self-described communist and Hugo Chavez admirer Pablo Igelsis.  He is calling for the modification of the Lisbon Treaty (what they perfer), or evoking it.  That's code for radical change of the EU or Spain could leave

So we might be a few hours away from Spain ideologically aligning with BRexit, although doing it with a radical left government.  So MAJOR change might be coming to a second EU country.


Quick history lesson, as late as the 1970s Spain was governed by a Military dictatorship (Chevy Chase famous line, General Francisimo Franco is still dead)

[Tugg Speedman]

The New York Times lead on Sunday (today) gets it right.  The institutions and structure put in place after WW2 are at real risk of collapsing.  A realignment of the world like nothing seen since 1945.


Britain Rattles Postwar Order and Its Place as Pillar of Stability
http://www.nytimes.com/2016/06/26/world/europe/britain-rattles-postwar-order-and-its-place-as-pillar-of-stability.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=span-ab-top-region&region=top-news&WT.nav=top-news&_r=0

Britain’s historic vote to leave the European Union is already threatening to unravel a democratic bloc of nations that has coexisted peacefully together for decades. But it is also generating uncertainty about an even bigger issue: Is the post-1945 order imposed on the world by the United States and its allies unraveling, too?

Now Britain symbolizes the cracks in that postwar foundation. Its leaving the European Union weakens a bloc that is the world’s biggest single market, as well as an anchor of global democracy. It also undermines the postwar consensus that alliances among nations are essential in maintaining stability and in diluting the nationalism that once plunged Europe into bloody conflict — even as nationalism is surging again.


There, the breakdown of the postwar political order has been more fundamental and violent than in Europe. The uprisings of the Arab Spring erupted from widespread frustrations with stagnant, autocratic politics and economic lethargy. But these rebellions failed to yield stable governments, and the borders drawn by Europeans a century ago in Syria, Lebanon and Iraq have been rendered largely irrelevant.

The nationalism surging in Europe is not the problem in the Arab world; rather, populations have retreated into greater reliance on sects, ethnic groups and militias. Jihadist groups like Al Qaeda and the Islamic State have fought national armies and won, providing a religious alternative to the nation-state that has been embraced by some.