Everyone already knows. Tell me one single person in the entire world who thinks valuations are even remotely justified.
That's the simple truth. We go up forever until interest rates rise. I don't care that the Shiller p/e is an outrageous 27. Everyone knows stocks are no longer priced on fundamentals. Once you accept that, why not 30 Shiller p/e? Or 50, 100, 1000, or even a million? There need not be any link to fundamentals in the underlying companies. That's what bears don't get and it's why we could print 1 million on SPY before this is over. That's right, 10 million on S&P.
This surely is the greatest magic bubble of all time. Hussman is really going out on a limb calling for S&P to retreat to 1000.
This is quite an equities bubble. Spectacular! Probably going to hit Grantham's 2350 before a remarkable 50% decline.
There will absolutely be a crash at some point. Jeremy Grantham says it'll happen in 2016, the S&P will hit 2300 first and then lose 50%. Seems about right to me.
They are open and already sporting a healthy gain of 3.5 points. 2100 next week if not tomorrow. 2200 soon after.
Didn't see GS put out any targets for VXX. Usually it's good to do the opposite of what they claim to be doing. If you get a chance to sell UVXY at 30, good on you. I don't see it.
I'm in the same mindset. Jeremy Grantham thinks we go up another 10% or so before a massive 50% crash. So I am reluctantly staying long even though anyone can see that US stocks are wildly overpriced. FWIW Grantham sees 2015 being a strong year and the crash beginning in 2016.
I think we're in for around 2-2.5% growth on average. Market seems to be priced for much more than that already? I agree though, I am at a loss, hard to figure out what the story is. Hussman's comments could make a bear out of Clarabelle Cow. It's true p/e ratios are very high.
I do think it's a conspiracy to recapitalize large banks but we can't know for sure. We're also long overdue for a recession not having had an official one in almost 6 years. One way or another I suspect the S&P will be around today's levels in a decade.
I guess the question is, hasn't that and more been priced in? I mean, trailing p/e as reported S&P is just over 20 with record profit margins, Shiller p/e is over 27 now, Tobin's Q/Buffett ratio are both showing 1150 fair value. Are we just going up until the next recession, whenever that is, regardless of valuation? Just wondering how you guys are playing this. Personally I am back as a cautious long, and if we get to Grantham's 2250 I am long gone and going to start shorting the market. Might even do that at 2200. So even Grantham's bubble scenario leaves less than 10% room to run.
65 next month! You nail that prediction and you will be the best of all time.
And if she does, why won't people just say it means the economy is stronger? Sure, stocks are overvalued. That's a given, could not be more obvious. But Jeremy Grantham who is a golden God as far as I am concerned says we are going to 2250-2350 area on S&P by end of 2015 or mid 2016, then dropping to 1150. So my game plan is be long until at least 2200, then start scaling into short positions on Russell 2000.
A ha ha ha my friend! Wow what a prediction! What month does your crystal ball call for this? You must be loaded up huge on VXX calls since they are so cheap right now with low IV.
Oh I see what the confusion was- I was talking about VXX, you were talking about UVXY. UVXY 65 would require VXX $45+ which I do not see either.
$65!!!! WHAT?! When, how, and why? Are you kidding me? You think this is going to erase 2 years worth of losses? Has it ever done that?
That's my best guess now. Cannot see how it would happen.
Well, if we take the numbers at face value, I just can't see how desperation "kitchen sink" monetary policy can be justified. Either the Fed knows something bad we don't know yet, or they truly are conspiring to enrich large banks at taxpayer expense. I can't come up with another explanation. Would be interesting to sit down with Hussman and talk about this. Why doesn't anyone in the main stream media say "Hey, we've got 5% growth, maybe we can ease up on the desperate measures and let seniors make a little return now?"
I am not questioning the numbers. I admit I am shocked we printed 5%. What I want to know is who on earth can come up with a reasonable explanation for Depression-era desperation monetary stimulus when the economy is better than it has ever been?
It was a rhetorical/hyperbolic statement. I'm just trying to wrap my head around that 5%. I really do want things to be going great in the economy, I know Hussman does too. I just can't understand either (1) how that number of 5% is possible or (2) how the Fed can still be in depression-era stimulus when the economy is so hot?!
Any thoughts on this, anyone? How can we be asking seniors to accept 0% return and continuing to recapitalize big banks for free when the economy is this hot?!?!