Tech earning bubble

The market did the opposite of what both you and that CEO said today.

The market is right, because it focuses of what people do, and not on what people say.

Take that ass CEO. I would not be surprised if he says an outlook worse than he really thinks, so that next earnings he says I made a surprise and then ask for a bonus for basically saying the opposite of what he said in the past. Now if he indeed does not do well, he will say I already told you so people will not be upset at him.

That is why a CEO could a liar.
 
Next week, there is the jobs report. We know people would not risk too much of their gains. So I will assume that the market would reflect this fact even before the jobs report.

The lesson I get is: a man should always focus on what an people would do, not what someone says he will do.
 
Quote from Trader.Fighter:

Fear of "buying high" is the greatest impediment of easy money during strong uptrends, without disrespecting anyone is a characteristic of amateurs.
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Since the market is rising, people are buying and/or people are not shorting. I look at what the market does, not what people say. And yes, I cannot buy a market at a high after the high. Maybe individual stocks I would buy, but not the market as a whole.
 
i just can't buy at all here. i agree the market is going up but i fear waking up one day with a 10% gap down. i respect anymore smart enough to close there eyes 12 months ago and buy. i am very jealous of the returns they made while i held cash. i can't separate my feelings that the economy / sales growth is terrible and you have to watch the stock market closely daily to be long. i had a few times i just wanted to take a big position for a 5% move up but passed. i learned a lesson though and that is to always take the position of what the fed wants to make happen in the early phases. i never seen anything like this before but lesson learned.

Quote from tradingjournals:

Since the market is rising, people are buying and/or people are not shorting. I look at what the market does, not what people say. And yes, I cannot buy a market at a high after the high. Maybe individual stocks I would buy, but not the market as a whole.
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There is nothing left to buy at reasonable price. That does not mean it cant go higher.

Revenues are constant, labor costs are rising => earnings will decline and PE ratios will compress.

Right now it is a momentum trade and we know how it ends.
 
i did not even noticed labor cost rising much but i have not looked at the data lately. i kind of felt companies are still able to keep cost down because it seems like there is always someone a little older making 90k at least who can be replaced with some young person for half the price. when a company cuts cost for something another company is cutting cost too. i agree earnings will decline because everything got refinanced so either the economy grows with sales growth or companies will continue to find cheaper labor cost to grow earnings. if you notice the new talk is PE's will trade at higher multiples than in the past.

Quote from niting:

There is nothing left to buy at reasonable price. That does not mean it cant go higher.

Revenues are constant, labor costs are rising => earnings will decline and PE ratios will compress.

Right now it is a momentum trade and we know how it ends.
More...
 
Why don't we look at asset classes, and identify where the money could go?

1. Interest on cash
2. Bonds
3. Gold and metals
4. Commodities
5. Stocks
6. Physical world: real-estate
7. Carry trade in currencies
8. Derivatives.

Could we complete the list and analyze which are relatively better?
 
If anyone is looking for a bubble to short, it's probably over at the Russell 2000.

There are some vulnerabilities in the top 10 weighted companies in the QQQ/NQ but they don't have horrendous valuations and do have some dividends now plus, everyone loves and uses their products. AAPL's reliance on the iPhone (and competitive pressures for phones and tablets) for profits does make me nervous.

If I was looking to short, I would use the TF futures contract or TNA ETF but I would be damn sure it had already started the big fall (good luck.)

A better approach for most people is to just go to cash if you are bearish. If you are right, you can profit later by buying after the selling dust settles. If you are wrong, you don't lose anything other than what you would have made being long.

Me, I like scaling in long via index ETF's, after weakness and scaling out into strength. Why? Because that usually works, in the long run. I start to question this strategy when price goes below the 20-day and then 50-day MA's.
 
Quote from heywally:

If anyone is looking for a bubble to short, it's probably over at the Russell 2000.

There are some vulnerabilities in the top 10 weighted companies in the QQQ/NQ but they don't have horrendous valuations and do have some dividends now plus, everyone loves and uses their products. AAPL's reliance on the iPhone (and competitive pressures for phones and tablets) for profits does make me nervous.

If I was looking to short, I would use the TF futures contract or TNA ETF but I would be damn sure it had already started the big fall (good luck.)

A better approach for most people is to just go to cash if you are bearish. If you are right, you can profit later by buying after the selling dust settles. If you are wrong, you don't lose anything other than what you would have made being long.

Me, I like scaling in long via index ETF's, after weakness and scaling out into strength. Why? Because that usually works, in the long run. I start to question this strategy when price goes below the 20-day and then 50-day MA's.
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You can complicate it and over-analyze it all you want but history has shown us that if the market wants to rise, they all will and if they want to tank, same.

Russell just exacerbates the moves in either direction because that is the typical behavior of small-caps.

I would also be very careful about calling a bubble in the most un-loved rally of all time. This uptrend is extremely strong and the real fundamental reason is because 1) There's nowhere else to park your cash and 2) The shorts are providing extra fuel due to their disbelief.

Read the overall sentiment of ET, it's bearish, they are a great indicator, to fade of course.

Bottomline, careful.
 
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