Doom Paul 00

What would a full stocks correction look like?

A true understanding of stock market history shows that Wall Street in the past has moved in long, long swings upwards and downwards, often taking years or even a generation or two. There is a great deal of evidence suggesting that the upward move that began in 1982 is one of them — and that the downward move that first began in 2000 has not ended.

As stock market historian Russell Napier points out in his book “Anatomy of the Bear,” on five occasions in the past 100 years — in 1921, 1932, 1949, 1974 and 1982 — those big downward moves have not ended until share valuations have fallen to just 30% of the replacement cost of company assets. That’s using a powerful, if little-known, economic metric known as Tobin’s q. […] And, to cut to the chase, if Wall Street stocks followed the same path today that would take the Dow down to about 5,000, and the S&P 500 Index all the way down to around 600. (The S&P 500 slumped more than 3% to 1,971 on Friday.) […] Yikes.

The “q” is a valuation that they don’t even mention in the training manuals for the official “financial planner” and financial-analyst exams. Your money manager has probably never heard of it. Or, if he has, he probably ranks it with astrology and the mystic rantings of Nostradamus. […] But the “q” happens to have by far the most successful long-term track record of any stock market indicator. …

August 22, 2015admin 15 Comments »


15 Responses to this entry

  • Hattori Says:

    I should leave the appropriate thread theme just in case.


    Posted on August 22nd, 2015 at 3:07 pm Reply | Quote
  • SVErshov Says:

    little doubts that it will collapse, but what world not seen before is level of markets manipulation we are having today. everything is manipulated, gold, silver, oil, FX, cryptos like BTC, LTC – – – just everything. That is a masterpiece work of our time. When markets manipulated only one indicator you can relay on is PRICE. I do not feel much exited about this “q” indicator. probably we overshot Q long time ago.


    Posted on August 22nd, 2015 at 4:17 pm Reply | Quote
  • Mike Says:

    If the mainstream is paying attention to Tobin’s q, then we can probably guess that it’s going to be a victim of Goodhart’s law (or something analogous).

    See Goodhart’s original formulation in particular.


    Orthodox Reply:

    Usually financial markets do gravitate to some number or story that dominates thinking. Take China right now. One group says China’s reserves are huge and foreign borrowing low compared to the 1997 Asian Tigers. The other camp says look at reserves as a share of M2, it’s way worse than 1997.

    Mainstream isn’t paying attention to Tobin’s Q though, this is one of the stories that always come out after stocks drop 3% to 5%. If the market rallies back next week, this article will be replaced with TSLA price target $500. Media reflects the mood.


    Posted on August 22nd, 2015 at 4:48 pm Reply | Quote
  • michael Says:

    last two lashes were obviously ineffective this one might hurt. since we know whats coming it might come quicker.Im sure my stupid pension managers will do the same stupid things and buy the dips


    Posted on August 22nd, 2015 at 5:51 pm Reply | Quote
  • michael Says:

    now might be a good time to dig up the whitepapers and subsequent legislation on the bank for international settlements plan for bail ins,
    apparently deposits in financial institutions are actually unsecured loans ro said institution exchangeable for worthless stock in those institutions at the institutions discretion and private retirement accounts both cash and defined benefit plans are actually owned by the governments and may be exchanged for increased public social security retirement payments


    Posted on August 22nd, 2015 at 6:00 pm Reply | Quote
  • Grahf Says:

    If you’re looking for something relevant to watch, take a look at the 2014 documentary film The Forecaster. It’s about the uncanny life of Martin Armstrong, his financial predictions based on his computational models centered around market flows and the number π, his trillion dollar investment firm, and his imprisonment by those who attempted to suppress him.

    In addition to predicting the past few market crashes, he has predicted a sovereign debt crisis taking place in September/October 2015, as well as the public emergence of a third political party in US politics in 2016 splitting off of the Republican party, civil unrest and the collapse of the present US federal government by 2022. And he did this back in the late 80s!

    Make of it what you will, but you can’t help but notice the signs already.


    Posted on August 22nd, 2015 at 6:10 pm Reply | Quote
  • Soon | Reaction Times Says:

    […] Source: Outside In […]

    Posted on August 22nd, 2015 at 6:18 pm Reply | Quote
  • bomag Says:

    I always thought the stock market was supposed to reflect the underlying strength of the business economy.

    If your underlying economy shrinks by 70% because you no longer make things while your citizenry is on the dole or in make-work jobs, they your stock market should decline by 70%.


    Posted on August 22nd, 2015 at 6:33 pm Reply | Quote
  • peter connor Says:

    Valuations since 1999 have been at the highest levels in history, and that with bogus accounting. Bob Prechter has long predicted a bottom for the Dow at 400. No, a zero is not missing, lol….


    Posted on August 22nd, 2015 at 10:17 pm Reply | Quote
  • Dark Psy-Ops Says:

    In QLD what to an untrained gut may feel as a downward spiral into recession without end is actually a transition period into a post-recessional growth economy:


    Posted on August 23rd, 2015 at 2:33 am Reply | Quote
  • michael Says:

    cheap oil is another way of saying strong dollar and devaluing your currency is another way of saying go fuck yourself


    Posted on August 23rd, 2015 at 5:24 am Reply | Quote
  • Dark Psy-Ops Says:

    “What would a full stocks correction look like?”

    More importantly, how does one go about bracing for a crash like that? A doomcore apocalypto survivalist approach with a dash of retro steam-punk tech post-millennialism (I guess)? …

    What’s worse is ethological techne has been conceived, with alarming regularity, as an endeavor to relax Malthusian pressures, mainly due to intensive selection dynamics of altruism effectively favoring brain or ‘source’ blindness. Consider S. Alexander’s newly clothed yin-yang dualism between Canc/GOEE, which, it has to be said, is so subtle and devious that it can be fully expected to inspire blood-drenched holy war for the next thousand or so years, and Scott knows it better than anyone. Moral universalists have all the noblest lies, and they spread in an instant from one clear conscience to the next. Metaphysicians of abstract horror, on the other hand, have much cruder moral immune systems and are quickly made ill by the overwhelming shock of beauty embodied in the Goddess Of Everything Else. To be blessed by this Goddess would be a crippling impediment for such foul creatures that live to manipulate and deceive for their own cruel advantage. Those few chance abominations who have glimpsed the rotting, corpse-decorated majesties of Gnon and have, insanely, begun to decode the flows of the integrated human interface, have only this question to ask: will The Goddess Of Everything Else show mercy for those who are not anything else at all?


    Dark Psy-Ops Reply:

    Malthusian evolutionary dynamics are being repeatedly confirmed in simulations with disturbing ramifications. Two examples: life extension is genetically corroding long-term and mass extinction events allow greater variation and eventually improved solutions to basic adaption problems. (i’ll try find the papers)


    Kwisatz Haderach Reply:

    Under three things the earth trembles,
    under four it cannot bear up:
    servant who becomes king,
    a godless fool who gets plenty to eat,
    contemptible woman who gets married,
    and a servant who displaces her mistress.

    Proverbs 30:21


    Posted on August 23rd, 2015 at 7:20 am Reply | Quote

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