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Is the Stockmarket in a bubble?

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Comments

  • gkerr4
    gkerr4 Posts: 495 Forumite
    mentioned earlier - bonds and gilts are paying next to nothing - money is moving out of them and into equities - i think (and this is just my opinion) that things have a little way to go yet.
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    merlingrey wrote: »
    That's because 2007 was not a stock market bubble it was banking/credit bubble.
    Isn't this? The BoE have been printing like lunatics to get interest rates down. All that freshly printed money has to go somewhere.
    Why else are shares rising?
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Glen_Clark wrote: »
    Why else are shares rising?

    Because everyone was sure that the world was ending, capitalism doomed, and Europe about to fly apart. Now they are giving business as usual the benefit of the doubt.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Glen_Clark wrote: »
    Isn't this? The BoE have been printing like lunatics to get interest rates down. All that freshly printed money has to go somewhere.
    Why else are shares rising?

    Impact of QE on stock markets is estimated to be 10% to 15%.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    merlingrey wrote: »
    No it got it absolutely right but in the wrong company.

    Took years for Amazon to make a profit. Was a billion pound turnover business by the time it did. Had some investors with deep pockets whose plan was may have always been to squeeze the traditional bricks and mortar opposition out of business.

    Facebook reminds me of Lastminute.com. No ones figured out how to make the business profitable.
  • deadpeasant
    deadpeasant Posts: 91 Forumite
    Radiantsoul wrote: »
    Presumably higher interest rates would cause the discount rate on future income to decline and so lower share prices.

    Could someone please unpack that for me? What is the discount rate on future income? Thanks
  • cepheus
    cepheus Posts: 20,053 Forumite
    Similar discussion on R4 today programme this morning. Why on earth is the Dow increasing to new highs when the US is supposed to be falling over a fiscal cliff?

    Answer, effects will not be felt until later in the year, and the quantitative easing money has to go somewhere.
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    gadgetmind wrote: »
    Because everyone was sure that the world was ending, capitalism doomed, and Europe about to fly apart. Now they are giving business as usual the benefit of the doubt.

    Good Point - That may be so.
    But the problems that caused the panic are still with us.
    As far as I can see, nothing has been solved.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    deadpeasant wrote: »
    Could someone please unpack that for me? What is the discount rate on future income? Thanks

    That has got me foxed too :o
    I wish people would write like Warren Buffet does. No buzzwords, No fancy jargon, just simple words even I can understand :)
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • purch
    purch Posts: 9,865 Forumite
    If you think that Buffett talks in simple straightforward terms you clearly do not understand what he is saying

    He is a master at hiding his real intentions

    You don't get as rich as he is by telling everyone what you are doing and why you are doing it
    'In nature, there are neither rewards nor punishments - there are Consequences.'
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