Is the Stockmarket in a bubble?

veryintrigued

sell, sell, sell!!!;)

JohnRo

and buy what?

monopoly money?

no thanks.

sabretoothtigger

John Kicklighter ‏@JohnKicklighter
Looks like the Dow is going to break a 16-year record and rally for 9 straight days. I like breaking records, it speaks to extremes.

It is a bit like if alchemy had worked and you could convert water to gold. It would be disruptive.

You can make gold from water Takes a heck of alot of energy.

You know they thought of this in the 1920's It was going to be a way to repay the WW1 debt from Germany to USA

Its not impossible but they have yet to find a cheap enough bulk source of energy to convert seawater into gold. There is a strong relation between oil and gold prices, naturally they both adjust vs inflation and each other

They have also invented a machine to produce 1% more energy then it is put into it. I think one of the drawbacks is that it takes the whole USA supply to achieve that task and its not reliable.
All sorts of things are possible in theory, QE is in no way a good way of producing wealth or creating more then is put into it.
Krugman was doing the rounds again yesterday on UK TV and nothing he said justifies that conclusion

cepheus

They have also invented a machine to produce 1% more energy then it is put into it.

You will find that is not correct since it contravenes the 1st law of thermodynamics!

talexuser

Pertinent article on the BBC news site

http://www.bbc.co.uk/news/business-21773337

The interesting thing:

"....fall in the value of the pound. The market might be going up in sterling terms, but if you take a more global perspective, UK shares have not really performed well at all.

Most global investors measure their return in dollars. If you do that, the performance of the UK market since the start of the year ranks 15th out of the 20 largest stock markets, and below all the European markets other than Italy."

So it is all smoke and mirrors due to 'more easily hidden from Joe Public' devaluation?

cepheus

talexuser wrote: »

Pertinent article on the BBC news site

http://www.bbc.co.uk/news/business-21773337

The interesting thing:

"....fall in the value of the pound. The market might be going up in sterling terms, but if you take a more global perspective, UK shares have not really performed well at all.

Most global investors measure their return in dollars. If you do that, the performance of the UK market since the start of the year ranks 15th out of the 20 largest stock markets, and below all the European markets other than Italy."

So it is all smoke and mirrors due to 'more easily hidden from Joe Public' devaluation?

Well, that would make sense if the FTSE250 index which is less international hadn't gone up far more than the FTSE100!

I still think it's more to do with the availability of money, and the least worst place to put it.

talexuser

cepheus wrote: »

I still think it's more to do with the availability of money, and the least worst place to put it.

Certainly, yes, and if the ftse is so low in dollar terms the 250 must still be pretty low in global terms, so it still doesn't give any succour that the fundamentals deserve this level and we could be in for a shock if borrowing figures go upwards and further ratings cuts emerge.

sabretoothtigger

ft250 is just a better index and also gains are more reflected in price then income.

250 sells its most successful stocks and naturally smaller companies will grow faster. ft100 only sells stocks out after they have fallen badly.
Alot of the big firms are doing well just to stay still and churn out same profits as last year, price doesnt move much in that case.
Some grow but most are like the blob just aiming to dominate their fields, more then grow profits exactly

Theres a few foreign investment trusts in 250. Big russian gold mine, all sorts

veryintrigued

So how will the FTSE 100 react to thr Cypriot situation tomorrow?

Will it remain steady as this news was already factored in or because 'its Jonny Foreigners' not FTSE companies.
Will it rise due to less uncertainty now that this is seen as some as a done deal?
Will it fall due to thoughts of runs of banks and further uncertainty?

Answers on a postcard please...

marathonic

veryintrigued wrote: »

So how will the FTSE 100 react to thr Cypriot situation tomorrow?

Will it remain steady as this news was already factored in or because 'its Jonny Foreigners' not FTSE companies.
Will it rise due to less uncertainty now that this is seen as some as a done deal?
Will it fall due to thoughts of runs of banks and further uncertainty?

Answers on a postcard please...

I think the stock markets will rise. There are very little, if any, FTSE companies that deposit a large proportion of their cash in Cypriot banks and, even for those companies that do, I don't think this applies.

The people taking the hit are those with very large savings held in cash. Unless the market had expected this cash to end up invested in shares, thus increasing their value, it shouldn't have any affect.

If anything, it may have a positive affect due to:

• More stability in one of the most unstable regions in the EU;
• More fear in other parts of the EU to hold a large proportion of their assets in cash