Next crash?

Baldytyke88

Is the UK stock market under/over valued at the moment?

This website says over valued, never seen this site before, lots of people on here with a lot of knowledge, but someone needs to ask the question.

https://worldperatio.com/area/united-kingdom/

masonic

I've never seen it either. It says P/E, but a better valuation metric is the CAPE (PE10). It just so happens that for the UK the values are about the same at the moment. Whereas CAPE puts the US much more overvalued on this measure than P/E.

There is also this site: https://indices.cib.barclays/IM/21/en/indices/static/historic-cape.app

The UK doesn't look terribly overvalued to me. Especially compared to other markets. Here is a chart of CAPE:

However, the UK is just one small backwater of the global market.

Of course, none of these measures are any use for predicting the date of a stock-market crash. They can be used to estimate approximate 10 year returns with about 50% accuracy at best.

boingy

Next crash is Wednesday, somewhere between 12.30pm and 1.30pm.  

Linton

If there was a widely available accurate predictor of a crash everyone would sell beforehand and so cause the crash earlier than predicted.

Bobziz

Linton said:

If there was a widely available accurate predictor of a crash everyone would sell beforehand and so cause the crash earlier than predicted.

Apart from those that would think it's some big conspiracy. They'd buy more ..

Baldytyke88

boingy said:

Next crash is Wednesday, somewhere between 12.30pm and 1.30pm.  

More borrowing will mean more inflation, so instead of inflation being 1-2% it could be 3-4%, which is ok but a negative for companies with debt

UKX69

Of course if there is a crash, it’s an opportunity to buy stocks at a discount! 😁

masonic

Bobziz said:

Linton said:

If there was a widely available accurate predictor of a crash everyone would sell beforehand and so cause the crash earlier than predicted.

Apart from those that would think it's some big conspiracy. They'd buy more ..

If you actually knew (or were certain in your mind) that a crash was just around the corner, why wouldn't you sell and buy back cheaper after prices fell? You could pick up some bargains AND protect your capital.

InvesterJones

Baldytyke88 said:

boingy said:

Next crash is Wednesday, somewhere between 12.30pm and 1.30pm.  

More borrowing will mean more inflation, so instead of inflation being 1-2% it could be 3-4%, which is ok but a negative for companies with debt

It can be very positive for companies with debt. Depends how they financed it.

LHW99

boingy said:

Next crash is Wednesday, somewhere between 12.30pm and 1.30pm.  

Nah, all sweetness and light then.

Mind you about a week later, when all the pundits have had a weekend to think and a couple of bottles....

slinger2

Personally I can't see a UK-only crash. Much more likely to get a worldwide one. Many asset classes looking expensive/overpriced which increases the chance of that.