Earlier quoted context omitted.
Cash?
Bitcoin?
It's also bubbling up nicely, and one good crash deserves another.
U.S. stock valuations haven’t been this extreme since 1929 and 2000
41–50 of 83 posts
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#42Some dude with a blog predicts an impending stock-market crash. Well, Robert Shiller, the Nobel Prize laureate, has been predicting a stock-market crash since what, 2016? And the market kept on rising. This is not to imply that a crash or a long period of low returns is not coming, just that the opinions of financial pundits are just that.
It's the same news cycle over and over: https://trends.google.com/trends/explore?date=today%205-y&q=... Doomsday predctions have always been good at generating ad revenue for publishers.
Sure, but recessions and depressions are not something that is really all that rare. Unlike doomsday predictions, if you predict a crash you'll probably be right within a decade at least by pure chance alone.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#43This article felt more like an ad for active money management (and ignoring index funds) than anything else. Which makes sense. It's driving active managers nuts the techtonic shift to passive investing. This was a good podcast on active vs passive investing: http://freakonomics.com/podcast/stupidest-money/
Yep, the opening claiming leaving your money in an index fund amounts to "speculation" seemed bizarrely backwards to me. So trying to pick winners and losers isn't speculation, it's investing, but investing in a balanced portfolio spreading risk over the long term is? The latter is only speculating that over the long term, there'll be more winners than losers in your portfolio. The former relies on making individualized bets correctly.
How many portfolio managers beat long term returns to the S&P 500? Not many that I've seen.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#44Even if there is a global downturn, the US economy will remain strong. Where else is capital going to go? If developing economies go bust, developed nations like the US will buy up their assets in a fire-sale.
Developing countries are the least hurt by global recessions. And the point isn't that the capital has to go somewhere, it's that it's not actually there to begin with. Besides, the article says it's the US specifically that looks like it's in trouble and that foreign stocks looks much better.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#45Some dude with a blog predicts an impending stock-market crash. Well, Robert Shiller, the Nobel Prize laureate, has been predicting a stock-market crash since what, 2016? And the market kept on rising. This is not to imply that a crash or a long period of low returns is not coming, just that the opinions of financial pundits are just that.
Has he? I've always read him as being quite measured, saying that his index (10 year average) was not good at predicting near term returns.
There are plenty of perma-bears, though. Although, in my opinion, being wrong on timing by years is still being wrong.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#46Even if there is a global downturn, the US economy will remain strong. Where else is capital going to go? If developing economies go bust, developed nations like the US will buy up their assets in a fire-sale.
Developing countries are the least hurt by global recessions. And the point isn't that the capital has to go somewhere, it's that it's not actually there to begin with. Besides, the article says it's the US specifically that looks like it's in trouble and that foreign stocks looks much better.
Investment in developing countries is considered to be more risky. In a recession people move their money into less risky assets. I believe a major recession is coming, but I think the US will be the least hurt.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#47Earlier quoted context omitted.
I'm sorry but that's just awful advice. Just because you don't have control over something doesn't mean you can't foresee it and take appropriate action to protect yourself in advance.
You cannot time the stock market. Trying to predict a crash and taking money out in an attempt to avoid losses is a recipe for disaster. For individual investors who use the stock market for their retirement funds, the appropriate action to protect oneself from the fluctuations of the market, including crashes, is to have the appropriate retirement target set, along with the proper level of acceptable risk (which aut…
The reality is a little more nuanced, as the discussion was about the effects of stock market crashes on the real world: It's possible identify periods of high risk for stock market crashes. It's hard to make money on the stock market using this information, but you can apply it to decisions in areas of life you think would be affected by a stock market crash.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#48So don't try to time the market. Except this time.
1. sell
2. wait 2 years (or less)
3. profit (buy back)
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#49Even if there is a global downturn, the US economy will remain strong. Where else is capital going to go? If developing economies go bust, developed nations like the US will buy up their assets in a fire-sale.
China just opened up outside investment this week. Chinese capital already owns way more of America through various investment vehicles than we are willing to admit. We abdicated our global leadership to China the day Trump was elected. Our economic leadership will likely follow in the next decade.
Nixon's visit to china was motivated by a need to finance the war machine. Reagan didnt do anything to prevent waves of economic refugees from coming to the US after the economic hitmen took out Mexico's economy. Clinton picked up the free trade baton from Bush 41, passed it off to Bush 43, who passed it off to Obama.
Hopefully el presidente can find a way to stop the bleeding of thousands of economic paper cuts.
Re: U.S. stock valuations haven’t been this extreme since 1929 and 2000
#50Assuming the market keep on growing over time as it has done for a very long time, all time highs aren't something spectacular or unusual in the stock market, in fact it occurs almost on a daily basis. As an analogy; if you go to a grocery store, all the items on the shelves are at an all time high price, but no one is expecting the price of milk to drop drastically just because it's at an all time high.
That's not a good analogy. When they say S&P 500 stocks are "expensive" than before, that doesn't mean (just) expensive in absolute terms. It's expensive in terms of price/earnings ratio and such metrics.
The story is still suspicious for other reasons: what jedberg said.