Dow 35k! CAPE near 40 forever! It's a new era!

Hi @Mark
This is a reply to Derf from Jan. 18, which includes some info about Fido select trading. A bit of other not related chat, too.
I don't recall the start date for phone trading of select funds, but did use this feature for a pencil performance chart I kept for each week ending pricing. I still have the darn papers.
___@Derf You try'in to overload an oldtimers brain cells....??? :)
I recall reading a few articles in Barron's or WSJ about the Beardstown Ladies investment club.
About the coworker investment club: the life span was a portion of 1985 through a portion of 1991. As most funds required $2,500 to invest (exception was FCNTX); we had to get to that point for a purchase of a fund. The goal was met in short fashion. The initial monies went into a MM Cash Reserves fund that had a 1988, 7 day yield of 7.2%.
Additionally for the funds of this time period, is that many had a 3% (one time) front load and some had redemption fees up 1.5% within the first 12 months of purchase. This was still better than many of the prominent big houses at the time.....a Merrill Lynch, etc. The E.R. range was from .83 through 2%. The Select funds might also have a $75 trading fee. Select funds at the time could be bought and sold on the hour throughout the business day. Transactions were performed through F.A.S.T. (Fidelity Automated Service Telephone) using a touch-tone phone.
All investments were through a Fidelity account and only used their mutual funds.
I can offer a few trinkets about this period (1985-1991) and investing. As noted previous, Fidelity had already established numerous "select" funds; the front runners of sector funds or what are named thematic today.
To the best of my recall, we used the following funds during this period:
---Cash Reserves, MM
---Select American Gold (later merged in Precious Metals)
---Select Computers
---Select Health Care
---Contra... FCNTX
---Captial & Income, (junk bonds and related) FAGIX
We didn't trade often, mostly due to the fees. We also escaped, without harm, during the Oct., 1987 market melt, as we did not sell anything, and our position in American Gold provided a +40 in 1987 to provide a balance.
My recall for the time frame of the club is 10-12% annualized. As members of the club placed different amounts each month, each member had a percentage of ownership when the club was dissolved; and the total profits were dispatched to each member, along with their tax form for the year.
I'm sure I've missed something I thought about previously, but a fun flashback.
Take care,
Catch

@MikeW: when I was teaching I had a friend in Finance and we used to yack it up about equity CEFs. He actually knew something about international finance, while I was an amateur. After I retired I ran into him and I asked if he still was using CEFs; he said no because ETFs gave him all the exposure he wanted to given markets. I found it very hard work to take advantage of spikes or drops in discounts as it entailed frequent trading.
I did maintain a position in HQL, and then in BME, but I now believe that active management in those two healthcare funds added no alpha. I would not discourage an investor from exploring equity CEFs, especially if the goal is equity-income-like returns, especially as many CEFs have had to adopt minimum distribution plans, often in the range of 8% yearly. There is income to be had in those circumstances, but the learning curve could be steep for some. One drawback of equity CEFs is volatility, particularly on the downside. I have gotten more satisfaction and better returns from ETFs like MOAT and CAPE. Recently I added DSTL, DSTX, XBUY, CSB, NUEM, and of course ARKK. Best wishes to you from behind my KN 95.

Yes John certainly how I feel being cooped up in my home! I yearn to escape.

The converter tool is a good suggestion. Though it works better for some funds than for others, and PRIDX is not a fund for which it shines.
What the tool is supposed to try to do is find ETFs (and ETNs) tracking the same index as a fund's primary benchmark. If there are none, it broadens its search to ETFs in the same general category as that benchmark.
It reports the primary benchmark of PRIDX as S&P Global ex-US Small Cap Index. While that's the first of three indexes listed in the prospectus, the most appropriate of those in the prospectus IMHO is Lipper International Small/Mid-Cap Growth Funds Average. The others are blend indexes.
Here's where the tool gets weird. It says the S&P Global ex-US Small Cap Index is in the same category as Global Equities ETF. Then it goes completely off the rails by listing securities as diverse as CAPE (a US-only ETN) and some Israeli ETFs (EIS, ISRA) among others.
To get better results out of the site, one can pick the best matching category from ETFdb.com's category page. Closest category is "Foreign Small & Mid Cap Equities".
https://etfdb.com/etfdb-category/foreign-small-mid-cap-equities/
Better, but I don't see anything that looks like a growth-leaning ETF. Though I'm only guessing from their names.
An ETF I ran across that's somewhat similar to PRIDX is ERSX. It invests in the same mid-cap growth space as PRIDX. In fact, it's a bit growthier and a bit more volatile.
PortfolioVisualizer reports its R² with PRIDX is 96%. M*'s factor profile for the two are very similar, though ERSX is not surprisingly a bit more volatile. ERSX performs similarly but not as well as PRIDX, despite the fact that they have nearly no holdings in common.
Here's ETFdb's page on the ETF, which curiously it puts into the small cap blend category. (And people complain about M*'s problems.)
A write up on ETF Trends:
https://www.etftrends.com/entrepreneur-etf-channel/rising-star-international-small-cap-etfs/

I had a financial adviser tell me once that holding gold bars in one's house made no sense as what's to stop someone from coming to the goldbug's house and beating that person to death with their own bars? Banks exist so one doesn't have to deal with those security issues. I guess rubies are easier to conceal. But there is a technological problem in 2021: https://scmp.com/magazines/style/luxury/article/3043892/will-cartier-and-other-luxury-brands-start-using-more-lab Would someone just accept rubies, even fake ones, without being an expert in 2021? Maybe the thing to do is buy fake rubies and pass them off as real when trying to escape.
Still, if you know the history of fascism--which the riot on capitol hill was all about--seeking to overturn a democratic election via pure violence--as opposed to democratic socialism--nowhere even close to that in the U.S.--diamonds and gold sometimes helped people escape and sometimes they didn't. Biden is no socialist. Taxes will go up almost certainly, but given the debt trajectory Trump had the country on previously, taxes were bound to go up anyway. But having any taxation, contrary to popular belief, is not socialism.
As for Hussman, he's a smart guy who's been wrong. He's bound to be right eventually as davfor points out. But in investing if a manager's timing is way off on a macro prediction, he is wrong. One thing I never quite understood regarding HSGFX is it was supposed to use both valuation and technical momentum driven signals to go long or hedge the market exposure. Despite the high valuations we've seen, I would've expected some of the fund to be long--or 50% long-- given the momentum we've also seen. Perhaps the reason it was often fully hedged--and I may be answering my own question here--is that while the market was always rallying, it was a narrow rally of a few giant stocks driving the market's returns. So perhaps Hussman felt that there wasn't enough breadth in the rallies to go partially long.

Good Morning Class,
I'm thinking when we look back at the "markets" (casino?) at the end of the year, we're going to realize that in late January we were facing a very binary outcome...either the majority of us get the jab in the arm (key could be JNJ vaccine (?), there is a antidote by Merck or with the new admin, taxes go up, regulations go up, socialistic spending ramps up and markets (casino?) craters....look at the nonsense with GME Gamestop...you wanna put your life savings into this sheet show?
so...
1) Is it time for Hussman, HSGFX or HSAFX...go ahead and call me crazee but don't call me Shirley but I'm going to step into the Huss with a noticeable investment today.
2) Is it time for high grade rubies? I recall a passionate discussion during the "Financial Crisis" (housing bubble scam) with my CFO and others by the water cooler how you could shove a million dollars of high grade rubies in your sock and no one would know they were there...shared stories from my Grandma how her wealth was confiscated by the democratic socialists under Tito...she was lucky to escape with her life as they usually popped the wealthy
I recall The Gundlach stated he "likes real assets that he can put in the trunk of his car" (paraphrasing)
3) On the other half, I'm thinking the markets might be up 30-40% if the vaccines take effect, we don't have the nutty tweeties anymore and things calm down, economy and jobs pick up etc..so slowly adding to ARTTX on down days
4) I'd rather myself play the "bro-investor" approach by buying stocks like Penn Gaming than Bitcoin...
Like I said, binary, place your bets? Of course, posting for entertainment purposes only, I have no idea what will happen this year, etc.
Best and good health to all,
Baseball Fan

@Derf You try'in to overload an oldtimers brain cells....??? :)
I recall reading a few articles in Barron's or WSJ about the Beardstown Ladies investment club.
About the coworker investment club: the life span was a portion of 1985 through a portion of 1991. As most funds required $2,500 to invest (exception was FCNTX); we had to get to that point for a purchase of a fund. The goal was met in short fashion. The initial monies went into a MM Cash Reserves fund that had a 1988, 7 day yield of 7.2%.
Additionally for the funds of this time period, is that many had a 3% (one time) front load and some had redemption fees up 1.5% within the first 12 months of purchase. This was still better than many of the prominent big houses at the time.....a Merrill Lynch, etc. The E.R. range was from .83 through 2%. The Select funds might also have a $75 trading fee. Select funds at the time could be bought and sold on the hour throughout the business day. Transactions were performed through F.A.S.T. (Fidelity Automated Service Telephone) using a touch-tone phone.
All investments were through a Fidelity account and only used their mutual funds.
I can offer a few trinkets about this period (1985-1991) and investing. As noted previous, Fidelity had already established numerous "select" funds; the front runners of sector funds or what are named thematic today.
To the best of my recall, we used the following funds during this period:
---Cash Reserves, MM
---Select American Gold (later merged in Precious Metals)
---Select Computers
---Select Health Care
---Contra... FCNTX
---Captial & Income, (junk bonds and related) FAGIX
We didn't trade often, mostly due to the fees. We also escaped, without harm, during the Oct., 1987 market melt, as we did not sell anything, and our position in American Gold provided a +40 in 1987 to provide a balance.
My recall for the time frame of the club is 10-12% annualized. As members of the club placed different amounts each month, each member had a percentage of ownership when the club was dissolved; and the total profits were dispatched to each member, along with their tax form for the year.
I'm sure I've missed something I thought about previously, but a fun flashback.
Take care,
Catch

@MikeW: I tried to get a discussion going a couple of weeks ago about Distillate Capital, the company running DSTL and DSTX. Kiplinger's put me onto checking out this manager in its listing of the best ETFs for 2021. DSTL figures in the list and it had been a previous recommendation. You know I've been a fan of MOAT and CAPE (or the OEF strategy DSENX) for some time. I like relatively concentrated funds with a comprehensible (to me) strategies; the Distillate theory of free cash flow and how a security's value should be determined as well as the fact that DSTL has outperformed MOAT and CAPE since its inception pushed me to read the DC white papers on their website and to dip my toe in DSTL. DSTX uses the same value strategy as applied to international stocks and I am willing to put some bucks into it as a vehicle for testing my belief that international and value will do well in this climate. On the domestic SC side, I bought CSB to play the rise in SCV and that is working out. Check out Distillate Capital; their stuff is readable.

I am happy with my investment in MGGPX, but I am now debating whether to add "one" foreign LG to my mix. The only international exposure I have is through MGGPX (for the most part).
My current allocation to MGGPX is 12% of my PV. I'm not sure i want to up it.
I am looking for an average or lower "risk" FLG fund. I've come across a few, but one that continues to interest me is MFAPX (Morgan Stanley Inter. Adv). It is managed by the same manager as MGGPX, with what appears to be, not too much overlap in top ten holdings.
Does investing in MFAPX and MGGPX make any sense?
Are there better/other alternatives you can suggest i look into?
I've been badly burned in the past, investing in "foreign" and/or EM, so i have stayed away, except for MGGPX. Is it time to dip back into the foreign landscape? Am i too late?
Any thoughts, suggestions or opinions VERY welcome!
Thx,
Matt

None, none, none.
This perplexing scenario to witness I have discussed in the briefest of ways w the august LBraham and JWaggoner, meaning exchanging a few rueful wtf words, and they list the usual suspects, chiefly fomo w tina (per the ongoing likely course of interest rates, mentioned above, plus new and ongoing disaster relief payments).
Plus a certain amount of rich-millennial behaviors (robinhood etc.).
But these ain't insights, really, nor is saying that this time some of it 'really is different' (permanent shift in p/e).
Also, these handful of factors many people have been pointing out for a long time.
I have been out of equities 100% since May 11, when nobody saw a 30% rise still ahead, of course.
Now. A real and significant dip takes us back to only say 28k Dow, a defined bear market back to only ~25k. It was not long ago at all that more than one big investment house were saying Well, okay, when we slump into the 26k area or whatever, it will be time to buy aggressively.
Anyway, greed stamina, and fundamentals, being what they are, that ain't happening. There has been a lasting shift upward, and no 2000 or 2009 ahead. CWood at Ark and others like her have started to write about the chronic underestimation of technology.
So ... upon dips I intend (he said) to put lots into VONV (p/e ~27) and CAPE and then sit tight (he said) for a few years. At ages 72 and 74 soon, we have enough years of cash for us to manage, looks like.
All very vexing, and if I had stayed the course in May we could be sending out so many more donations!

Warning: Investors need to understand their individual circumstances and their volatility and risk tolerances.....
FWIW....Most of the time I just observe. Market timing is left to others. (2019 to 2020 were exceptions to this observer mind set while a new secondary investment portfolio was being established.)
These are just a few somewhat random thoughts and opinions as 2021 begins from a generalist investor who typically acts with multi-year investment time frames:
***Its important to acknowledge the stock market is very expensive by historical measures -- particularly on the growth side. The articles linked above make that clear.
But...
***The Fed is now part of the investment landscape in ways it was not in the past. That hit home to me in early 2019 when the Fed abandoned its rate tightening efforts ( Powell Put ).
***The Fed further clarified the breadth of the Powell Put by acting very aggressively last winter when the markets were in turmoil. It has also suggested it will intervene aggressively if market turmoil erupts again in the near term.
***Having Janet Yellen as Treasury Secretary will probably increase coordination between the Fed and Treasury.
***Having the Democrats in charge probably means additional fiscal stimulus will occur this year.
***The pandemic will probably have a significant ongoing disruptive economic impact for much/most of this year. The probable shape of the post-pandemic investment landscape may not come into focus until late this year or next year.
My investment portfolio thinking:
The combination of near zero interest rates, the Feds aggressive stance, and substantial fiscal stimulus helped me to decide to leave my allocation to stocks somewhat elevated by my standards when the annual review was completed in December (strong stock market performance and a shift of about 5% of the portfolio from ZEOIX to utility stocks in August had bumped it up during 2020). But, a nod to uncertainty resulted in the purchase of GBLMX, CRAAX, and SVARX as well as some trimming of growth stock holdings during the transition from 2020 to 2021.
Now I am just watching while keeping my eye on VIX out of curiosity. My crystal ball is still quite unclear about how long the Fed/fiscal stimulus part of the equation will succeed in keeping the bulls mostly in charge of the stock market. Maybe for multiple years if the Fed and fiscal policy makers navigate well??? But, maybe Grantham will prove to have been correct and the profitably investable top occurred last summer!!!
Other portfolio notes:
***There is adequate cash in reserve (SPAXX, JPST, and RPHYX) and enough investments in bond funds to enable an investment portfolio reallocation into stocks if a significant (20%+) market decline occurs.
***I am a 70 year old retiree. The dividends, distributions, and any capital gains received during the year are invested separately in the "Cash Pot" for release to a non-investment account at the end of the year. So, the set-aside beginning this month is for probable release at the end of 2021. But, there are adequate reserves outside the investment accounts to ride out an investment apocalypse event if that occurs during the year.

I use it (not nearly enough!) because it very slightly outperforms SP500 over 10-5-3-1y etc. (Same w/ CAPE, again not nearly enough, so faithless was I this last year.)

RConnor delves a bit:
https://humbledollar.com/2020/11/rate-debate/
cape ratio this weekend just under 34

I certainly hope you’re right. Yes - my argument above is rambling and unfocused as I’m trying to look at the arguments in the thread (in their entirety) from an entirely different perspective. Tired of the brickbats that have been flying back and forth here and elsewhere for two years or more. Yeah - the personal attacks and antics in Parliament are something. But, to an extent, the selection of head of state isn’t tanamount to an audition for lead role in a Hollywood remake of Top Gun as it often seems here. Transition is quick too. No two-months waiting “in limbo” for the previous guy (or woman) to pack up and leave town. Gone the next day.
-
PBS historian and documentary filmmaker Ken Burns seems to think that neither TR or FDR could get elected today. Albeit, his rationale is somewhat different from mine.
Burns: “[Franklin Roosevelt] has the same enthusiasm and confidence he had when he was a little boy. Theodore Roosevelt is trying to escape the demons. He’s always running faster than those demons. And Eleanor is very much like that, but she’s also saying, get up every day and do something that you don’t want to do. It’s facing your fears. And what’s what all of them did in a way, and they did it in an active way that they instilled confidence in others.”
Moderator: “But would these historical characters succeed if they were in today’s hot political climate? Burns doesn’t think so.”
Burns: “Theodore is very hot for this cool medium of television. He’d have lots of Howard Dean moments,” he said. “And Franklin Roosevelt, you know, in a wheelchair, we’d be vying, all the networks, for the most, you know, the stressed-out look, as he unlocks and stands up. … I think if we saw it we’d be saying, he couldn’t possibly lead us through a crisis.”
Source

Hi Guys,
These data are a great set that demonstrates randomness. If a pattern does exist it completely escapes me.
Does anyone see some semblance of a pattern here? If you do, your’e far more insightful than me Gunga Din. But that is too easy a challenge.
The references all provide terrific ways to present complex data in a meaningful and understandable way. Hooray for them all. Hooray for us potential users.
Best Wishes

Is there no ETF that does this? (some wack combo of SDOG, RSP, CAPE, and others, all under FD1k's magic touch ....)

Dr. Fauci said several months ago there is likely vaccine for COVID19 by end of 2020. Moderna, Pfizer, AstaZecca and several others are at Phase III testing. The more important question is the scale up (billions dosage) and distribution of them to people. Dr. Redfield said spring 2021 vaccines will likely be ready. I tend to agree with that timeframe. Remember Pfizer and Moderna vaccines require to keep frozen at least -2 C (dry ice temp) while flu vaccine is kept at refrigerator temp. Logistics on distribution will be a challenge but it can done provide the have a plan.
Watch for health care sector if the market is response to it. Otherwise it may signal that the election is done and everything is moving forward.
@davidmoran should be happy that CAPE is up 12%. IAU is down 4%. So are the bonds. Risk offnow?

One of the worst performing merger arbitrage funds around. Made a few coins before exiting. Escaped SPABX with a small profit as well.

I thought we had found the elusive MFOer who throws millions around at a time...
@davidmoran: Buying and selling CAPE requires a lot of attention as I have found a wide disparity between what the current price is and what the bid/ask prices are. I've only done this trading on Schwab, so your platform may be better suited to your needs. The often very low trading volumes also make your task trickier. FWIIW, the horror stories I've read about the risks in using ETNs give as examples pretty crazy strategies that wise old men would avoid anyway. (Some of us are old, some are wise, but do the twain meet?)