Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You might as well turn the TV off. You waste electricity.
Not for me. There is too much porn for me to watch.
During the day, I watch financial porn on CNBC.
In the evening, I watch science porn on PBS, Science, Discovery and such. I love Outrageous Acts of Science - always a DVR event. So is NOVA.
There is also history porn also on PBS and biography.
Animal porn on the Animal Planet. My Cat From Hell and Bad Dog! are always on DVR.
PBS is going to air another Ken Burns special on the Vietnam War ( History porn again ).
Sometimes, I watch porn on youtube. I can get gold porn there. Right now, I'm doing some puzzle porn on solving the Rubic's Cube. I think I'll have it in a week. youtube also has computer geek porn.
Why would I watch stuff like America's Got Talent or Dancing With The Stars with all that porn to watch?
( I consider the c-d investment forum to be financial porn. )
There's been a blowoff in the S&P 500 in 2013-2015 comparable to 1998-2000. Both rallied 60% in the two years. If you go back to four years from 2012-2016, it's been a double.
The only difference so far has been that the market hasn't corrected the bull market. Typically, one-third to one-half the gains are given back.
I've already provided the market average P/Es which are comparable to past bull market and bubble tops.
Please stop posting blatantly wrong information.
The market from 2013 to 2015 went up 33% not 60%.
The low in 2012 was 1300 on the S & P Its now up 60% NOT a double
and finally a PE of 17 when bond yields are extremely low is certainly not a "bubble"
I took the approximate increase eyeballing the charts. I have 56% for 2013 to the present, and 59% for 1998 to 2000 top.
The low was 1265. The increase was 73%. If you go back about 2 months, the increase since then is over 100 percent.
The point is that the increases are very comparable.
Bonds are in a bubble as well. Just because one asset is in a bubble doesn't make that exculpatory for the other being in a bubble. They both are.
Your original post was incorrect. How are you defining "bubble"?
PE ratios in the late 90's were much higher than now and rates were much higher.
We have an economy that is growing, albeit not too robustly, and tons of cash on the sidelines. As long as most advisors stay skittish on the market this thing should def go higher.
There's been a blowoff in the S&P 500 in 2013-2015 comparable to 1998-2000. Both rallied 60% in the two years. If you go back to four years from 2012-2016, it's been a double.
The only difference so far has been that the market hasn't corrected the bull market. Typically, one-third to one-half the gains are given back.
I've already provided the market average P/Es which are comparable to past bull market and bubble tops.
The trailing p/e is not as high as it was in 2000. And we need to look at more than that, quite honestly.
Where are we in the earnings cycle? Earnings for the dot-com bubble peaked in mid-2000, so those high p/e numbers were based on peak earnings. Today we are nearly two years into an earnings recession so an elevated p/e is not as scary as if it were based on peak earnings. I made this mistake in 1992, believing the market was overheated after a strong 1991 and a trailing p/e north of 25. Oops.
Where are interest rates? In early 2000 one could get around 6% from the 10-year T-note, and 7%-8% from long-term investment-grade debt. Rates are far lower today, which makes stocks more valuable.
I also like to look at the p/e for some high profile stocks. Take a look at J&J, Coke, GE, JP Morgan, etc. Today's p/e ratios are about half of the 1999-2000 levels. This is a considerable difference.
Of course we can have a correction at any time, 10%, 20%, whatever. I don't have any reason to believe I can guess when the next one will happen nor how severe it will be. But taking a long-term perspective, say 10 years, I don't believe stocks are scary expensive today.
This time is different..somewhat... Demographics are older but less so for the USA. Job count is up and trending up. Consumer sentiment also is heading up. Stock prices are ahead of earnings, but a lot of money is sitting on the sidelines. Bearish sentiment and fear keeps the market out of bubble territory. Interest rates are low, showing bearish sentiment already withholding from equity markets. Companies are buying back stock. Borrowing money for future investment and growth is cheap. We can and will have some corrections but as the economy stands now, I cannot believe it will either be deep or long lasting.
My personal hope is for a chance to convert over some IRA over to a Roth ladder at cheaper prices.
My favorite was "Billionaires Dumping Stocks, Economists Know Why" from as early as 2012. They keep moving the date up. I'm sure they're making the same prediction and still trying to sell the same ole' alarmist literature for $49.99.
That's an excellent question. There are, in my opinion, substantive and thoughtful reasons for this. And then there's shrill peevishness and envy.
In the latter category, we have people who don't have much money, who rely on wages as their primary source of income, for whom investment is a side-show. They resent the structural changes in the global economy in the past 20 years, favoring (according to some opinions!) Capital over Labor. Envy and peevishness implies that the fatcat capitalists should suffer, and for that reason, surely there's higher moral rectitude in a world where stock markets stay flat or decline.
In the former category, there is the assertion that we have a triple confluence of deleterious factors. One is an aging world, where more people are elderly (and depend on public funds) and fewer people are young-adults (capable of carrying the tax-base). This old/young imbalance also means less consumption and less demand; thus, lower corporate profits. The second factor is declining innovation. This comes from both an older workforce and a sense that the truly pivotal discoveries have already been made. Once we have computers and airplanes and laser microsurgery, we can't invent those things all over again. The opportunity-space for additional innovation has shrunk. Third, we sense a declining rate of productivity increase – both from an aging population, and stunted innovation. It is productivity-increase that ultimately drives increased prosperity, and without it, markets can't really rise faster than inflation.
Some people posit a fourth factor: debt, both public and private. The narrative says that in recent decades, lifestyle has risen in sumptuousness, and public-sector largess has also risen, but incomes have not. The difference was made up by debt. This debt is becoming caustic and unstable. Money will be spent on debt-servicing, rather than on R&D or infrastructure or other productive ends. This portends ill for corporate profits and therefore for stocks.
I personally take a different view. I find the 1980s and 1990s to be an inimitable golden-age of growth and profit. It's not that now and forever we're moribund and unable to grow. It's not that wise men have been supplanted by morons. Rather, the 80s and 90s were anomalous, and now we're merely returning to the pattern before the 1980s. So many of our assumptions about pension-plans and university endowments and 401Ks are rooted in those halcyon days. These assumptions are belied by the record, if the 1980s and 1990s are excepted. Take a look at a chart of the DOW, from the 19th century and the 20th, up to 1980. What is the cumulative annual growth rate? That, I think is our future. Will it be sufficiently lucrative?
Thanks for taking the time for this well thought out post. However the Bears aren't saying this, they keep saying the market is overvalued and I just don't see it that way given the last two years results.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
