What's gonna pop this bubble ?
- Thread starter trade2live
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Mav, long stocks? Really? Being flat for 15 years is hardly an assurance that we aren't headed much much lower just like being flat for 10 years didn't prove to be any support in 2008. It's hard for me to believe that you seem so convinced the next crisis will not bring down stocks along with our standard of living.
In nature..., it is instinctual to survive⦠more so to reproduce
So too is it the nature of money
A âbubbleâ is simply the manifestation of moneyâs nature
This one will cease when money no longer feels safeâ¦, and/or no longer desires to reproduce in this setting
Then - On the the next one
The axiom; Follow the money - tis a fact
RN
So too is it the nature of money
A âbubbleâ is simply the manifestation of moneyâs nature
This one will cease when money no longer feels safeâ¦, and/or no longer desires to reproduce in this setting
Then - On the the next one
The axiom; Follow the money - tis a fact
RN
I never said stocks are not going lower. I said stocks are not in a bubble and stocks are NOT in a bubble. Just because someone's RSI reading is high doesn't mean we have a bubble. I'm growing tired of every little rally we get in stocks and all of a sudden it's a bubble. Tech stocks in 1999 were a bubble. Credit in 2007 was a bubble. Bonds in 2013 was a bubble. Junk Bonds in the 80's was a bubble. I'm sure the next crisis will take stocks lower. But that does not mean stocks are in a bubble.
I DO happen to think over the very long term our standard of living will be lower and that will be result of inflation. Whether it's hyper inflation or simply moderate inflation, who knows. But of all the asset classes one could own to protect themselves, stocks will probably fair the best over Bonds, Gold, Real Estate, etc. That does not mean I'm giving out a call on a 5 min candlestick chart to get long stocks.
We are still well off the highs we made in 2000 in the Nasdaq. Hell Japan is still 24,000 pts off the highs it made 20 years ago! Even more so when you factor in their currency which was trading twice what is now.
Stocks are, expensive? Yes. Bubbles close but not quite. From 1980 to 2000 the Dow goes from 1k to 11k. From 2000 to 2013 the Dow goes from 11k to 15.6k. Inflation from 2000 to 2013 is around 35% from CPI (probably north of 60% unofficially). Granted that some stocks from 2000 might not exist in 2013 so current value of the indices could be inflated somewhat.
It's about a perception about the store of value and right now it's the best of the bunch when compared to bonds, cash, real estates, and gold when risk/reward is taken into consideration. Who would want to hold bonds at this rates especially when the perception is that these debts could either be defaulted on or vastly devalued via inflation at the whims of the goobermint. Cash in the banks is yielding zero interest with the risk of bail-ins much higher after Cyprus? Or real estate knowing that the job market is not what is used to be and mobility for new jobs is more important than ever? Gold or PMs in general is a fear trade and has been vastly under performed stocks in the last few decades (800 in 1980 and 1340 today) also with some risk of confiscations. Stocks represent ownership of businesses, while subjected to policies and business conditions, will retain some values even in bad conditions if well diversified while still paying dividends (yes, even during depressions if the company is profitable).
I could even argue that due to various problem (most are new) with the other asset classes, stocks is certainly looking not so bad risk wise. Unless we have a catastrophic event than everything will tank maybe with the exception of cold hard cash. The market is a voting place for relative value and right now the jury is still out on if the current market is a bubble or not. Though there are signs that some sectors (not all) are over heating relative to the over all stock market.
It's about a perception about the store of value and right now it's the best of the bunch when compared to bonds, cash, real estates, and gold when risk/reward is taken into consideration. Who would want to hold bonds at this rates especially when the perception is that these debts could either be defaulted on or vastly devalued via inflation at the whims of the goobermint. Cash in the banks is yielding zero interest with the risk of bail-ins much higher after Cyprus? Or real estate knowing that the job market is not what is used to be and mobility for new jobs is more important than ever? Gold or PMs in general is a fear trade and has been vastly under performed stocks in the last few decades (800 in 1980 and 1340 today) also with some risk of confiscations. Stocks represent ownership of businesses, while subjected to policies and business conditions, will retain some values even in bad conditions if well diversified while still paying dividends (yes, even during depressions if the company is profitable).
I could even argue that due to various problem (most are new) with the other asset classes, stocks is certainly looking not so bad risk wise. Unless we have a catastrophic event than everything will tank maybe with the exception of cold hard cash. The market is a voting place for relative value and right now the jury is still out on if the current market is a bubble or not. Though there are signs that some sectors (not all) are over heating relative to the over all stock market.