Right- but the issue is does it matter? I mean if a stock is worth $10 per share according to the fundamentals, but it trades for $20, is that important or not? It's such an interesting question, and now that even the most diehard bull acknowledges this is a bubble, it's one of the few questions we're left with.
What consequences could come from this? Honestly it may not even matter. The market is no longer used primarily as a financing mechanism, so there will still be some concerns about IPOs being overpriced but not as many as back in the day.
Let's call the market what it is- a wealth-creating policy tool.
I am glad I covered when I did, I am shocked how well this is doing. Though I will say a longer term chart makes it look not quite so rosy. Pull up a 5 year compared to S&P 500.
Well, I for one hope he continues to put the comments out. It's quite fascinating to see this. When you see "investment gurus" interviewed they all say "yeah of course stocks are overpriced but there's nowhere else to make a return." Everyone knows we're overvalued! Wow. 3 massive bubbles in under 20 years, remarkable times in financial history.
Ooh, ah, Yellen farted. Hoo-ray, Yellen farted.
Janet Yellen. Remarkable woman to say the least.
No reason to even pretend the economy justifies anywhere near these prices, just hold your nose and buy.
So you're saying you'll buy at 2.65 and it will hit 5.30. Let me tell you there is literally no way Yellen will let TVIX get anywhere close to 5.30. Just no way. Ever look at a long term chart on it? Yellen is going to continue buying SPX futures and shorting VIX futures and TVIX/UVXY/VXX. She does it to the tune of billions of dollars a month.
Yes I am. Actually I'm saying it's "really different." Can't get much more different than the Fed directly buying futures and screaming about ZIRP forever when the market even starts to dip.
What I'm getting at is, why does the market truly need to follow fundamentals? Why can't it just go higher forever? Fed is not interested in drops.
We've gotten to the point where the fundamentals haven't mattered for months, years even. We have the Fed coming out every time there is any kind of drop and saying something to stop it. Why can't we just go up up up regardless of the valuations? Somebody explain it to me please- why can't stocks just trade at huge valuations for the rest of time? Just because it hasn't happened before doesn't mean it can't happen in this Fed age.
Fed will never take its thumb off this market. We truly have gotten to a point where the market and real economy are completely disconnected. Amazing.
Do you ever check Seeking Alpha? There was a guy there who was commenting on some articles about "the economy" getting better. His point was that there's no need to rationalize anything, let's just admit the Fed is going to force stocks higher forever, and that it's rigged. IE there is no connection between the real economy and the stock market. I have to say that makes some sense to me. Otherwise you cannot have this kind of bubble with Shiller p/e of almost 28, Buffett ratio double the normal number, etc. So once we accept this, I think we can pretty much give up on a meaningful drop ever again. Why would a recession even matter? Why would earnings matter? Nobody is saying stocks are a good value, they are just saying it's rigged so you have to get on board.
I just think he's underestimating the lengths they will go to in order to keep this thing inflated. Never saw anything like it. Just remarkable.
Yes it is. I don't believe the Fed is ever going to take its thumb off this market. I don't believe they are going to raise to even 1% by 2020, and not to 2% by 2050. They can't afford to give people any choice other than overpaying for stocks.
Yep, lately this seems to work- with daytrading power and a 100K account you could buy 65K shares at 6, sell at 7.50 and you grow your account from 100K to almost 200K in 2 hours. Of course if it goes the other way- bankruptcy!