Are we in a stock market bubble?

[Trade Prophet]

Stock market bubbles are created when assets are overpriced, way and beyond their fair value. Examining equity prices under the economic conditions we might say that last week's move inflated prices way over their fair value.
Current indices are now less then 20% down from the all time high, that's out of bearish territory that was declared only two weeks ago.
So which prices are fair value? The - 35% bottom made three weeks ago?
Or the current prices which are only 20% off the all time high?
We are in a fed created bubble.. again..
As the fed was trying to stabilize the economy they threw money at the problem which ultimately finds its way to equities and bond markets,
Trade smartly,
Alon, AlphaOverBeta
AlphaOverBeta.net

 

[NY_HOOD]

i think many stocks are over valued since earnings for most companies will be almost cut in half.

 

[Genevian Speculator]

they have not yet begun to buy stocks directly which they could

 

[Scataphagos]

Have read that with the market decline but with earnings expectations, the markets are once again at "all time highs" of P/E.

With earnings expected to PLUNGE... and for how long nobody knows... I wonder if the market players will ignore earnings and keep supporting the price with their total conviction and belief in Fed stimulus??

 

[murray t turtle]

Stock market bubbles are created when assets are overpriced, way and beyond their fair value. Examining equity prices under the economic conditions we might say that last week's move inflated prices way over their fair value.
Current indices are now less then 20% down from the all time high, that's out of bearish territory that was declared only two weeks ago.
So which prices are fair value? The - 35% bottom made three weeks ago?
Or the current prices which are only 20% off the all time high?
We are in a fed created bubble.. again..
As the fed was trying to stabilize the economy they threw money at the problem which ultimately finds its way to equities and bond markets,
Trade smartly,
Alon, AlphaOverBeta
AlphaOverBeta.net

%%
SPY is below 200dma = bearish.
But since my SPY related longs are making money/uptrends+ paying dividends=fine with me.
Sorry, subjective stuff like ''bubble, undervalued'' means little to me.
Trend study may help =its helped me.
Growth stocks so often out perform value stocks, so often, i usually do growth Except ERX has plenty of value stocks/dividend payers- but that was a trade...........................................

 

[trdes]

Have read that with the market decline but with earnings expectations, the markets are once again at "all time highs" of P/E.

With earnings expected to PLUNGE... and for how long nobody knows... I wonder if the market players will ignore earnings and keep supporting the price with their total conviction and belief in Fed stimulus??

What would you do if you were managing a lot of funds for people and they were essentially putting a floor in the markets and than you saw prices going up day after day? Most people will than also put there clients money back in the markets.

What's the downside? It's not your money, if everything collapses you're in the same boat as most other fund managers and you can claim "extraordinary times".

Not to mention if we get inflation and/or hyperinflation which is plausible, putting your clients money back in the markets, may actually end up being the right move anyways.


When you think about it that way, the market movements make a lot more sense.


EDIT: I am not saying it's the right or wrong move or will end up bad or not, I intra-day trade so I am not making those type of decisions. I am simply saying look at it from someone managing large portfolios perspective.

 

[Trade Prophet]

What would you do if you were managing a lot of funds for people and they were essentially putting a floor in the markets and than you saw prices going up day after day? Most people will than also put there clients money back in the markets.

What's the downside? It's not your money, if everything collapses you're in the same boat as most other fund managers and you can claim "extraordinary times".

Not to mention if we get inflation and/or hyperinflation which is plausible, putting your clients money back in the markets, may actually end up being the right move anyways.


When you think about it that way, the market movements make a lot more sense.


EDIT: I am not saying it's the right or wrong move or will end up bad or not, I intra-day trade so I am not making those type of decisions. I am simply saying look at it from someone managing large portfolios perspective.

I agree, trading without biases is very hard but is the right way to trade, are you a pro?
Anyway, the purpose of this thread is to get everyone thinking where we are and trade accordingly, although sometimes, accordingly means going against the economy logic

 

[Trade Prophet]

%%
SPY is below 200dma = bearish.
But since my SPY related longs are making money/uptrends+ paying dividends=fine with me.
Sorry, subjective stuff like ''bubble, undervalued'' means little to me.
Trend study may help =its helped me.
Growth stocks so often out perform value stocks, so often, i usually do growth Except ERX has plenty of value stocks/dividend payers- but that was a trade...........................................

Non judgemental works best, I'm glad it's working for you, though, I think the market can only go that far without sound economic support, IMHO

 

[Trade Prophet]

i think many stocks are over valued since earnings for most companies will be almost cut in half.

That's for sure, Q1 and Q2 are probably in recession territory, question is what will the market reaction be? Is Q3 buried as well? Does it matter to the traders?

 

[murray t turtle]

Non judgemental works best, I'm glad it's working for you, though, I think the market can only go that far without sound economic support, IMHO

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I guess you are referring to markets closer to home than the chicoms- they are back to work now??[The chicoms are back to work far as I know but they are not known for truth...………………………………………………………………………………………………………………………………….]