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Old 10-04-2016, 12:54 PM
 
Location: Texas
2,679 posts, read 1,306,330 times
Reputation: 2458

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Market capitalization ratio to GDP seems really high

The percent of total market cap relative to Gross National Product?

Price to Sales Ratio

S&P 500 Price to Sales Ratio

Price to Earnings Ratio

Shiller PE Ratio

10 year T-Bill rate: lowest in history

10 Year Treasury Rate

I was just wondering with all the evidence how can it not be an economic bubble brewing?
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Old 10-04-2016, 01:05 PM
 
4,229 posts, read 1,904,197 times
Reputation: 3782
Uses of the word "bubble" are extremely common. Actual occurrences of one are extremely rare.
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Old 10-04-2016, 01:53 PM
 
2,135 posts, read 1,149,266 times
Reputation: 4368
Stocks are overvalued and due for a correction. Maybe a little more. Real estate is overvalued in some areas. Otherwise we are in a low growth atmosphere with low inflation.
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Old 10-06-2016, 07:31 AM
 
Location: Denver
2,974 posts, read 2,394,807 times
Reputation: 1814
Quote:
Originally Posted by lovecrowds View Post
Market capitalization ratio to GDP seems really high

The percent of total market cap relative to Gross National Product?

Price to Sales Ratio

S&P 500 Price to Sales Ratio

Price to Earnings Ratio

Shiller PE Ratio

10 year T-Bill rate: lowest in history

10 Year Treasury Rate

I was just wondering with all the evidence how can it not be an economic bubble brewing?
It could just be that historically, the stock market had higher earnings, but now since there are no viable alternatives, people bid up the price which lowers the earnings. You can have higher P/E ratios than in the past and not have a bubble; you'll just have lower annualized returns.
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Old 10-12-2016, 01:01 AM
 
Location: Sector 001
7,128 posts, read 5,942,160 times
Reputation: 8042
quantitative easing has caused interest rates to get so low that the people who would normally invest in bonds are investing in stocks. I don't argue that it's overvalued, but it could get even more overvalued before it corrects, though recent price action suggest a correction may be imminent.
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Old 10-12-2016, 11:11 AM
 
9,041 posts, read 2,713,001 times
Reputation: 6620
Some of these assets absolutely must be bubbles unless we are to believe that 7-12 household income is the new normal for Real Estate.
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Old 10-16-2016, 05:24 PM
 
4,310 posts, read 2,446,977 times
Reputation: 2424
Quote:
Originally Posted by Pub-911 View Post
Uses of the word "bubble" are extremely common. Actual occurrences of one are extremely rare.
Bay Area housing. Not sustainable by income.

Last edited by Perma Bear; 10-16-2016 at 05:33 PM..
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Old 10-16-2016, 05:53 PM
 
Location: Ohio
17,986 posts, read 13,233,625 times
Reputation: 13765
Quote:
Originally Posted by lovecrowds View Post
Market capitalization ratio to GDP seems really high

The percent of total market cap relative to Gross National Product?

Price to Sales Ratio

S&P 500 Price to Sales Ratio

Price to Earnings Ratio

Shiller PE Ratio

10 year T-Bill rate: lowest in history

10 Year Treasury Rate

I was just wondering with all the evidence how can it not be an economic bubble brewing?
Because you're ignoring all foreign US Dollar-denominated transactions, which are in addition to GNP/GDP.
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Old 10-16-2016, 05:56 PM
 
9,080 posts, read 3,692,496 times
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Quote:
Originally Posted by Perma Bear View Post
Bay Area housing. Not sustainable by income.
not sustainable by "YOUR" income. the millionaires and billionaires around the world however can sustain it. Vancouver, NYC, Hong Kong, London would be more examples of it
Just like how I don't have to work at a company to own stock there, I don't have to live in the area or country where I own real estate. Hell, I don't even have to "see" the people on the streets if I treat it like an investment, it can just sit there, empty or not.
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Old 10-16-2016, 06:14 PM
 
4,310 posts, read 2,446,977 times
Reputation: 2424
Quote:
Originally Posted by MLSFan View Post
not sustainable by "YOUR" income. the millionaires and billionaires around the world however can sustain it. Vancouver, NYC, Hong Kong, London would be more examples of it
Just like how I don't have to work at a company to own stock there, I don't have to live in the area or country where I own real estate. Hell, I don't even have to "see" the people on the streets if I treat it like an investment, it can just sit there, empty or not.
It's not sustainable by the median income, or even the average income. When a region fails to rely on internal economic conditions it no longer is attached to reality.
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