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Is the stock market over heating?
Comments
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Yes, excellent thanks.
Expressed in an interesting way;
Money printing has turned conventional economic indicators upside down.
People buying physical gold because they don't trust paper gold.
And finally the biggest scam of all - Osborne's Help To Buy (Votes) Scheme. They all seem to agree that is going to cause big problems at some point.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
21st May 2013 - from zero hedgeUp until today, the narrative was one trying to explain how a soaring dollar was bullish for stocks. Until moments ago, when Bill Dudley spoke and managed to send not only the dollar lower, but the Dow Jones to a new high of 15,400 with the following soundbites.
DUDLEY: FED MAY NEED TO RETHINK BALANCE SHEET PATH, COMPOSITION
DUDLEY SAYS FISCAL DRAG TO U.S. ECONOMY IS `SIGNIFICANT'
DUDLEY: FED MAY AVOID SELLING MBS IN EARLY STAGE OF EXIT
DUDLEY: IMPORTANT TO SEE HOW WELL ECONOMY WEATHERS FISCAL DRAG
Here is a funny one:
DUDLEY SAYS HE CAN'T BE SURE IF NEXT QE MOVE WILL BE UP OR DOWN
Read "up." And the punchline:
DUDLEY SEES RISK INVESTORS COULD OVER-REACT TO 'NORMALIZATION'
Translated: the Fed will never do anything that could send stocks lower - like end QE - ever again, but for those confused here is a simpler translation: Moar.
I'm still not prepared to go all in though
'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
annual growth rate from age 10 to age x = (x/10)^(1/(x-10))=1.05grey_gym_sock wrote: »a good puzzle there ... couldn't remember the maths to solve it, but could by writing a 1-line script.
annual growth rate from age 10 to age y = (y/10)^(1/(y-10))=1.043
and y = x + 10
You could mash it all together and flip the parts around (or use trial and error) to find my current age x.
Can't say I'd recommend it as something to pass the time unless you're really bored with the same old "are we in a bubble" discussions!0 -
So why do they keep buying at these prices?gadgetmind wrote: »Equity investors do not expect prices to keep rising“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »So why do they keep buying at these prices?
Probably advocates of the 'Greater Fool' theory0 -
Glen_Clark wrote: »So why do they keep buying at these prices?
Because while they don't expect price to keep rising (they expect volatility, which means they could drop hard and long at any time) they do know that market timing is a fool's game.
Equity investors who understand inflation and p/e ratios also don't regard current prices as being as over-stretched as those who do nothing more then look at the absolute value of the FTSE 100.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.0 -
Such is life. When you were 20 it was 7%, and by the time you're 80 you'll need a magnifying glass.bowlhead99 wrote: »I just did the maths - my age has put on a respectable compound annual 5% since the age of 10.
However projecting out another decade from here I will be down to 4.3%."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Old_Slaphead wrote: »Probably advocates of the 'Greater Fool' theory
http://www.youtube.com/watch?v=N0-aQPbzCZE
Plenty of stuff is still cheap with low PE. The fool part comes in if those companies wont make their earnings forecast
Somebody point a wildly over bought stock, theres no chance they'll make earnings.
I sold a company at 100 PE and its going up almost 50% since then. Someone thinks they'll double their business in a year or something
Most of what I buy is single digit PE. Its the traders who buy only to sell on, I think we do have 5 year investors buying now though, partly after selling 30 year bonds yielding 3%.
Bonds = trillions & Shares = billions, doesnt take much for QE to make a big wave down stream0 -
PE is a dangerous variable to use when "investing" imho....
As you point out, there are are massive growth companies on hundreds of PE ratios, and then there are others who have billions in real assets and turnover and trade on a single-digit PE. On its own, PE is pretty useless.
imho
J0 -
More explanation of why looking at non-inflation-adjusted figures means little.
http://www.investmentweek.co.uk/investment-week/news/2253535/inflation-impact-shows-uk-equities-still-20-off-recent-peakI 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.0
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