Is the Stockmarket in a bubble?

Chickereeeee

We are actually about 15% off an (inflation adjusted) peak, and the 2007 peak did not seem 'bubbly' then. More nearly getting back to where it should have been if no .com bust.

merlingrey

Chickereeeee wrote: »

We are actually about 15% off an (inflation adjusted) peak, and the 2007 peak did not seem 'bubbly' then. More nearly getting back to where it should have been if no .com bust.

That's because 2007 was not a stock market bubble it was banking/credit bubble.

But since many companies over leveraged they went bust.

The dot com bubble was an early indicator the world was about to change with e-commerce the likes of napster and Amazon was an early indicator to get out of old style high street businesses HMV or Game group (the earliest indicators).

In Dot.com days people was essentially right in their view of how things would change, they just over-estimated and jumped onto anything with .com in it's name.

An example was in the tech sector in the UK you had a small computer firm called PSION who made pocket computers and even invented the term "netbook" thier stock went up 5000% before crashing, but did the market get the thinking wrong?

No it got it absolutely right but in the wrong company.

JoeCrystal

Which raises a fun question... Will there be another bubble coming soon? Sadly, no one knows the answer!

Cheers,
Joe

merlingrey

JoeCrystal wrote: »

Which raises a fun question... Will there be another bubble coming soon? Sadly, no one knows the answer!

Cheers,
Joe

Alternative energy

Oil and gas exploration

potash

And mining might get carried with it.

The trend of oil usage and cost of energy will likely get to the point where investment would have to go that way to get every drop of oil out.

Enviromental pressure and costs will probably press investment in alternative energy.

When? don't know there could be other bubbles before it.

Thrugelmir

cepheus wrote: »

It's almost as if the rich don't know what to do with their money due to low rates.

Stock market has been out of favour. As people choose "property" to fund their pensions instead.

Less companies to invest in. As private equity groups have bought listed companies and made them private.

Glen_Clark

merlingrey wrote: »

In Dot.com days people was essentially right in their view of how things would change, they just over-estimated and jumped onto anything with .com in it's name.

I think they always have, when anything game changing comes out.
It happened with the Canals, then the Railways. People threw money at all the companies involved in the new technology. Most went bust.

merlingrey

Oh i might add that i think the casino sector might bubble, online and off.

Obviously secular and specific but the early clues is in two things:

1. america starting to change its mind on its anti-gambling laws

2. the amount of advertising on tv, it's prolific and it is making money

So mini bubble there i think is very possible and imminent.

cepheus

Let's put the question a different way, what's changed from 2011 or 2012? The only difference I can see if that the UKs credit rating has been reduced. If your bank just reduced your credit worthiness what would your manager think of you going on a spending spree?

It seems to me, in the absence of some shock, the market is like a house of cards, and when you think it's due to crash, it can keep on growing and growing, until the shock comes. The fall depends on how high the pile has grown as much as the size of the shock. There is no objective fair value of the market, it just depends how much money is sloshing around

gadgetmind

JoeCrystal wrote: »

Will there be another bubble coming soon? Sadly, no one knows the answer!

Bubbles (hate the word!) are different to temporary tops, particularly cautious/fearful ones. During bubbles, everyone has throw off their fear, embraced the new paradigm, and is convinced that everything they touch is a "ten bagger".

I currently see most valuations as being fair to mildly toppy, yields as middle of the road, and still plenty enough fear around.

I'm sure we've all lived through equity and property bubbles to remember they way that everyone and his dog (and the newspapers they both read) were shrieking "buy!" to recognise them when they happen again.

Don't we? Don't we?

benalder284

If you are a long-term investor who drip feeds monthly into S&S ISA and the funds are hopefully not needed until around 2032 then does it really matter (there'll be at least another couple of peaks and troughs before then anyway)!

Or to put it another way - is there anyone in the active fund management business who regularly calls the peaks correctly - I doubt it.