Buffett has given up ...

ET180 said:
The problem with low yields is that it *forces* institutions / people to end up in the wrong asset class based on their risk tolerance. Retirees and pension funds have already been forced to buy equities / long-term treasuries and take on more risk than they should given their situation because they simply cannot get a good yield safely. That will work fine until rates go higher. When that happens, you'll see another December 2018. The Fed was not even able to take Fed Funds to 3%, far below where they were in 2007 (5.25%) before the market forced them to capitulate on their desire for normalization. If they actually followed through and kept going all the way to 5%, the S&P would be around half the value it is today. There is an argument to be made that because inflation is low, interest rates can stay low too. The problem is that corporations have been piling on debt to buy back stock at record high prices and the US govt is running $1T deficits during good times. So everything is dependent on low interest rates today and in the future. Weak GDP and earnings growth + record high valuations justified by low interest rates sounds like a very fragile investment thesis.

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this is conventional wisdom

what is actually gonna happen is that AI and robots will produce unlimited abundance. So deficits won’t matter. The future is very bright.

but before we get there. During the transition period. You will have an upper class who own mega techs. And an underclass who get $1000 a month.

call the bank today. Get into the upper class.

I am a rare visionary. Look at my past calls that we were running out of shares.

with this type of vision you can’t avoid getting very rich.
 
dozu888 said:
what is actually gonna happen is that AI and robots will produce unlimited abundance. So deficits won’t matter. The future is very bright.
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Do you remember the TV show the Jetsons? The idea that robots will drastically reduce work and we will soon only be working a few hours per week has been around for a long, long time.

https://www.inverse.com/article/4218-did-the-jetsons-lie-about-the-post-work-world

The problem is that really smart AI is a very hard problem to solve.
 
ironchef said:
You must be very very rich. :thumbsup:

I gave you a hard time once in a while but I do agree with your general thesis. This bull market probably still has legs, I hope. o_O

Best wishes to you.
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I'm won over as well to be honest. But it's not even so much that the bull has legs, its that everything is so distorted, then is nothing left but the market.

The way I see it is that everyone has been calling for a drop for very long, and it was all based on either historical principles, or PE ratios, or interest rates having to normalize, or debt too big, or etc. Everyone one of these factors hasn't done anything to bring about this drop,even though most of these factors have shown to be important in the past. But since none of these have been a catalyst, its important to take a long hard look at throwing out whatever economic model you used to follow in the past and assume that it really is different this time.

Its not even so much that someone is holding the market up. If the market is going up like this, there clearly have to be many, many buyers. Not just HFTs or retail, but real institutional buyers. I have mentioned before about how I learned that most buying in the past 10 years has been because of stock buybacks, and this very likely means that others have been sitting on the sidelines. Dozu, as crazy as it sounds, many very well be right about his thesis of "are we running out of shares".

The FED has created an environment where the only yield left will be in stocks, and they have also signaled that they will accommodate any downturn. So the market will no longer be about the value of any one company, but more about the financial stability of the country. US stocks will be like US treasuries in that neither will be allowed to fail. There is no risk of deflation, its all about inflation going forward, and stocks will run the inflation bubble just like other hard assets.

When Volcker jacked up rates to bring inflation down, the rate hike was something that could be absorbed. We all know now that this isn't possible now given the size of the debt bubble. If we get an inflation scare, the FED will just paper over it, even if it means helicopter money. Instead of raising rates to get a hold on inflation, the government will just go the UBI route. Here's an extra $200 a month to counter your increases bills.

The market really is the "too big to fail" entity now.
 
Seaweed said:
I'm won over as well to be honest. But it's not even so much that the bull has legs, its that everything is so distorted, then is nothing left but the market.

The way I see it is that everyone has been calling for a drop for very long, and it was all based on either historical principles, or PE ratios, or interest rates having to normalize, or debt too big, or etc. Everyone one of these factors hasn't done anything to bring about this drop,even though most of these factors have shown to be important in the past. But since none of these have been a catalyst, its important to take a long hard look at throwing out whatever economic model you used to follow in the past and assume that it really is different this time.

Its not even so much that someone is holding the market up. If the market is going up like this, there clearly have to be many, many buyers. Not just HFTs or retail, but real institutional buyers. I have mentioned before about how I learned that most buying in the past 10 years has been because of stock buybacks, and this very likely means that others have been sitting on the sidelines. Dozu, as crazy as it sounds, many very well be right about his thesis of "are we running out of shares".

The FED has created an environment where the only yield left will be in stocks, and they have also signaled that they will accommodate any downturn. So the market will no longer be about the value of any one company, but more about the financial stability of the country. US stocks will be like US treasuries in that neither will be allowed to fail. There is no risk of deflation, its all about inflation going forward, and stocks will run the inflation bubble just like other hard assets.

When Volcker jacked up rates to bring inflation down, the rate hike was something that could be absorbed. We all know now that this isn't possible now given the size of the debt bubble. If we get an inflation scare, the FED will just paper over it, even if it means helicopter money. Instead of raising rates to get a hold on inflation, the government will just go the UBI route. Here's an extra $200 a month to counter your increases bills.

The market really is the "too big to fail" entity now.
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we ARE running out of shares...

forexIG long/short;
household participation;
AAII bull%
equity fund OUTflow in past years while market going up;
market going up with diminishing trading volume.
and despite my free virgin offers nobody aint mortgage no houses.

this rally is not driven by demand; the public hating it... doom videos on youtube all getting 100:1 like dislikes.

this rally is driven by supply - the lack of it.

the smart money has all been scooping up everyshare.... you think corporations and central banks know more than them dumb ass zerohedge doomers trying to grab eyeballs.

call your f'cking bank TODAY !
 
1999 was driven by demand... public couldn't get enough of it while IPOs came left and right;
today the IPOs are nothing.... weWork and shit, people no longer interested - it's actually a side angle why the public hating the stock market.... they have to put money somewhere so they go into shit like cryptos and PEs and the PEs are now obvious flops everyone can see.

so at the end of the day - there is only 1 game in town... equities.

US equities;

then the cream of the crop the mega techs.

call your bank..... for the grace of god.
 
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