The Stock Market Bubble

[auditor0007]

I'd say that I think ALL PRICING is a bubble about to pop if I didn't understand that:

The market can be wrong MUCH longer than I can remain solvent.​

I started thinking that real estate was becoming a BUBBLE back in the late 70s.

It WAS a bubble, too. The price of real estate was already out of line with the incomes people were making.

That BUBBLE lasted roughly 40 years!

To be perefectly honest, I think the RE price corrections we had around 2006 are STILL out of line with incomes.

Now as to the stock market?

What does the PE ratio tell us?

I haven't looked but I SUSPECT that the prices are too high given the potential earnings.

But it looks to me like for those with money to invest, its the only game in town.

Savings pay shit, bonds pay shit, gold and silver are tarnished and commodities are too damned scarey for most investors.

Companies are making money hand over fist and have large amounts of cash available for expansion. While I can understand a certain amount of apprehension, I think it is misplaced. I see the stock market and economy taking off big time very soon. By 2016, things will be picking up, and by 2020 we will be in a huge economic boom period, and none of it has to do with politics. It won't matter what happens politically in 2016.

 

[iamwhatiseem]

I'd say that I think ALL PRICING is a bubble about to pop if I didn't understand that:

The market can be wrong MUCH longer than I can remain solvent.​

I started thinking that real estate was becoming a BUBBLE back in the late 70s.

It WAS a bubble, too. The price of real estate was already out of line with the incomes people were making.

That BUBBLE lasted roughly 40 years!

To be perefectly honest, I think the RE price corrections we had around 2006 are STILL out of line with incomes.

Now as to the stock market?

What does the PE ratio tell us?

I haven't looked but I SUSPECT that the prices are too high given the potential earnings.

But it looks to me like for those with money to invest, its the only game in town.

Savings pay shit, bonds pay shit, gold and silver are tarnished and commodities are too damned scarey for most investors.

Companies are making money hand over fist and have large amounts of cash available for expansion. While I can understand a certain amount of apprehension, I think it is misplaced. I see the stock market and economy taking off big time very soon. By 2016, things will be picking up, and by 2020 we will be in a huge economic boom period, and none of it has to do with politics. It won't matter what happens politically in 2016.

No.
Companies are not making money hands over fist - only large corporations are.
Small businesses are severely suffering - most just getting by.
If there was "hand over fist" money to be made out there - then you wouldn't see the empty storefronts everywhere you go.

 

[editec]

This morning I moved half my IRA holdings from mutuals to cash.
Last time I did this was in '07. Once the market bottomed, I got back in.
No telling what's going to happen but I feel a little more secure now.

Remember one of the axioms of investing

It is far better to be right to soon, than right too late.​

 

[editec]

I'd say that I think ALL PRICING is a bubble about to pop if I didn't understand that:

The market can be wrong MUCH longer than I can remain solvent.​

I started thinking that real estate was becoming a BUBBLE back in the late 70s.

It WAS a bubble, too. The price of real estate was already out of line with the incomes people were making.

That BUBBLE lasted roughly 40 years!

To be perefectly honest, I think the RE price corrections we had around 2006 are STILL out of line with incomes.

Now as to the stock market?

What does the PE ratio tell us?

I haven't looked but I SUSPECT that the prices are too high given the potential earnings.

But it looks to me like for those with money to invest, its the only game in town.

Savings pay shit, bonds pay shit, gold and silver are tarnished and commodities are too damned scarey for most investors.

Companies are making money hand over fist and have large amounts of cash available for expansion. While I can understand a certain amount of apprehension, I think it is misplaced. I see the stock market and economy taking off big time very soon. By 2016, things will be picking up, and by 2020 we will be in a huge economic boom period, and none of it has to do with politics. It won't matter what happens politically in 2016.

First, let me say I hope you are right and I am completely wrong.

Yes the corporations have trillions in the bank, much of it (like Apple) offshored so that there are no tax consequences unless they repatriate it.

So, if you are correct and the economies are on the mend then, the inbternational corporations will start reinvesting this money.

The question is WHERE WILL THEY INVEST IT?

In America?

One can only hope.

 

[Mr. H.]

This morning I moved half my IRA holdings from mutuals to cash.
Last time I did this was in '07. Once the market bottomed, I got back in.
No telling what's going to happen but I feel a little more secure now.

Remember one of the axioms of investing

It is far better to be right to soon, than right too late.​

I know I'm missing out on the positive movements, and I knew this could happen. But I'm more comfortable with this position right now.

Plus, the rises in the crude markets ain't hurting.

 

[TakeAStepBack]

editec is right...identifying the bubble is obvious. Saying when it will pop is a whooooole other issue.
Are we currently in a bubble? Yes, the mother of all bubbles. Propped up by your tax dollars.
Is this bubble about to pop? No. I have little doubt we will see 16000 before it does.
Will there be hell to pay when it does pop? Yes, enough so that it will change this country for many years to come.

It will pop once the federal reserve increases interest rates. They will likely attempt to incrementally do that to slide us easily into a pop, rather than a fast jump off the cliff like 2007.

 

[auditor0007]

I'd say that I think ALL PRICING is a bubble about to pop if I didn't understand that:

The market can be wrong MUCH longer than I can remain solvent.​

I started thinking that real estate was becoming a BUBBLE back in the late 70s.

It WAS a bubble, too. The price of real estate was already out of line with the incomes people were making.

That BUBBLE lasted roughly 40 years!

To be perefectly honest, I think the RE price corrections we had around 2006 are STILL out of line with incomes.

Now as to the stock market?

What does the PE ratio tell us?

I haven't looked but I SUSPECT that the prices are too high given the potential earnings.

But it looks to me like for those with money to invest, its the only game in town.

Savings pay shit, bonds pay shit, gold and silver are tarnished and commodities are too damned scarey for most investors.

Companies are making money hand over fist and have large amounts of cash available for expansion. While I can understand a certain amount of apprehension, I think it is misplaced. I see the stock market and economy taking off big time very soon. By 2016, things will be picking up, and by 2020 we will be in a huge economic boom period, and none of it has to do with politics. It won't matter what happens politically in 2016.

No.
Companies are not making money hands over fist - only large corporations are.
Small businesses are severely suffering - most just getting by.
If there was "hand over fist" money to be made out there - then you wouldn't see the empty storefronts everywhere you go.

I drove by the local Mr. Freeze last night. At 9:00 PM there were over 100 people standing in line for ice cream. Everyone I'm talking to is telling me their businesses are starting to pick up. It's slow and it doesn't include every single business, but we are on the cusp of something pretty big.

 

[auditor0007]

I'd say that I think ALL PRICING is a bubble about to pop if I didn't understand that:

The market can be wrong MUCH longer than I can remain solvent.​

I started thinking that real estate was becoming a BUBBLE back in the late 70s.

It WAS a bubble, too. The price of real estate was already out of line with the incomes people were making.

That BUBBLE lasted roughly 40 years!

To be perefectly honest, I think the RE price corrections we had around 2006 are STILL out of line with incomes.

Now as to the stock market?

What does the PE ratio tell us?

I haven't looked but I SUSPECT that the prices are too high given the potential earnings.

But it looks to me like for those with money to invest, its the only game in town.

Savings pay shit, bonds pay shit, gold and silver are tarnished and commodities are too damned scarey for most investors.

Companies are making money hand over fist and have large amounts of cash available for expansion. While I can understand a certain amount of apprehension, I think it is misplaced. I see the stock market and economy taking off big time very soon. By 2016, things will be picking up, and by 2020 we will be in a huge economic boom period, and none of it has to do with politics. It won't matter what happens politically in 2016.

First, let me say I hope you are right and I am completely wrong.

Yes the corporations have trillions in the bank, much of it (like Apple) offshored so that there are no tax consequences unless they repatriate it.

So, if you are correct and the economies are on the mend then, the inbternational corporations will start reinvesting this money.

The question is WHERE WILL THEY INVEST IT?

In America?

One can only hope.

Americans have been paying down debt, even in the bad economy. Some of that payment has actually been absorbed by banks as homes were foreclosed on. Either way, personal debt is falling, and it is falling most among young people. We have over 75 million people between the age of 20 and 35, most of whom have not yet married or started their own families. Even with a bad economy, at some point, all those kids who have held off moving on with their lives will do so, and it's already starting to happen.

My girlfriend's oldest son is getting married this year. He is 27. Her oldest daughter has one year left in college. She is in nursing. Her youngest daughter is finishing her first year and is going into elementary education. Both girls will have little problem finding employment. Positions in education have been hard to come by the last few years because school districts have been forced to cut funding, but that will change as older teacher's retire and young people start having more kids. Education is a great field to think about going into if you are just starting college right now.

Young people are going to drive the boom. It's just a matter of time.

 

[auditor0007]

editec is right...identifying the bubble is obvious. Saying when it will pop is a whooooole other issue.
Are we currently in a bubble? Yes, the mother of all bubbles. Propped up by your tax dollars.
Is this bubble about to pop? No. I have little doubt we will see 16000 before it does.
Will there be hell to pay when it does pop? Yes, enough so that it will change this country for many years to come.

It will pop once the federal reserve increases interest rates. They will likely attempt to incrementally do that to slide us easily into a pop, rather than a fast jump off the cliff like 2007.

There is going to be too much real growth in the actual economy for that to happen. There is no bubble, and there won't be one, at least not for a very long time. We will see who is right in the long run. I tend to side with Warren Buffet's optimism for the future.

 

[KissMy]

editec is right...identifying the bubble is obvious. Saying when it will pop is a whooooole other issue.
Are we currently in a bubble? Yes, the mother of all bubbles. Propped up by your tax dollars.
Is this bubble about to pop? No. I have little doubt we will see 16000 before it does.
Will there be hell to pay when it does pop? Yes, enough so that it will change this country for many years to come.

It will pop once the federal reserve increases interest rates. They will likely attempt to incrementally do that to slide us easily into a pop, rather than a fast jump off the cliff like 2007.

Exactly - The bubble can't pop because the Fed will continue printing $85 billion a month for the Big Banks to continue to buy up stocks.

I have been thinking a China Housing Crash could force a stock market correction. But now I am wondering if hot money will start flowing out of China & into the US for a while.

 

[TakeAStepBack]

editec is right...identifying the bubble is obvious. Saying when it will pop is a whooooole other issue.
Are we currently in a bubble? Yes, the mother of all bubbles. Propped up by your tax dollars.
Is this bubble about to pop? No. I have little doubt we will see 16000 before it does.
Will there be hell to pay when it does pop? Yes, enough so that it will change this country for many years to come.

It will pop once the federal reserve increases interest rates. They will likely attempt to incrementally do that to slide us easily into a pop, rather than a fast jump off the cliff like 2007.

There is going to be too much real growth in the actual economy for that to happen. There is no bubble, and there won't be one, at least not for a very long time. We will see who is right in the long run. I tend to side with Warren Buffet's optimism for the future.

This is the same cognition failure that had people laughing people like peter schiff and ron paul off the stage in 2003.

 

[iamwhatiseem]

Companies are making money hand over fist and have large amounts of cash available for expansion. While I can understand a certain amount of apprehension, I think it is misplaced. I see the stock market and economy taking off big time very soon. By 2016, things will be picking up, and by 2020 we will be in a huge economic boom period, and none of it has to do with politics. It won't matter what happens politically in 2016.

No.
Companies are not making money hands over fist - only large corporations are.
Small businesses are severely suffering - most just getting by.
If there was "hand over fist" money to be made out there - then you wouldn't see the empty storefronts everywhere you go.

I drove by the local Mr. Freeze last night. At 9:00 PM there were over 100 people standing in line for ice cream. Everyone I'm talking to is telling me their businesses are starting to pick up. It's slow and it doesn't include every single business, but we are on the cusp of something pretty big.

I operate a medium sized B2B operation ($12m sales) that deals with all kinds of businesses. The services we provide are a necessary part of any business no matter what it is. We also do a lot of work for the government.
We have over 2400 active "Mr Freeze's" we deal with everyday.
And here is what I hear every single day...multiple times a day:
"How can we cut costs..."
"What if I cut the qty to X,XXX..."
"Are there cheaper alternatives to..."
"What if we take out this part and just stick with...."
"We are only going to include three parts this year, we have to cut cost...."
"It's not about making a profit anymore, we are just trying to stay alive..."
"I won't retire here...we won't last that long..."
"Cost keep going up but we can't raise prices..."

I could go on for paragraphs.
Small businesses are reeling...they are sick. Many are only making enough money to last for a few years....they are not making enough to re-invest.
Our business began to suffer in the spring of 2007.
The 4th quarter of 2012 looked hopeful.
The 1st quarter of 2013 is worse even than 2009.
Keep in mind...what we do is an essential part of every business. And we are hearing the suffering LOUD AND CLEAR.

 

[OohPooPahDoo]

I operate a medium sized B2B operation ($12m sales) that deals with all kinds of businesses.

Oh really Ricky? Is that what you and Julian are calling your little dope growing business these days, a "B2B operation" ? What does that stand for "Bumbling idiot to bumbling idiot"? Well I've got some news for you boys! There's going to be some changes in this park. I want you and your dope plants outta here, you've got 24 hours to vacate the premises, or I'm gonna make a little call to my friend George Green!

 

[iamwhatiseem]

I operate a medium sized B2B operation ($12m sales) that deals with all kinds of businesses.

Oh really Ricky? Is that what you and Julian are calling your little dope growing business these days, a "B2B operation" ? What does that stand for "Bumbling idiot to bumbling idiot"? Well I've got some news for you boys! There's going to be some changes in this park. I want you and your dope plants outta here, you've got 24 hours to vacate the premises, or I'm gonna make a little call to my friend George Green!

If you don't know what B2B is...perhaps the economic threads is not the place for you.

 

[OohPooPahDoo]

I operate a medium sized B2B operation ($12m sales) that deals with all kinds of businesses.

Oh really Ricky? Is that what you and Julian are calling your little dope growing business these days, a "B2B operation" ? What does that stand for "Bumbling idiot to bumbling idiot"? Well I've got some news for you boys! There's going to be some changes in this park. I want you and your dope plants outta here, you've got 24 hours to vacate the premises, or I'm gonna make a little call to my friend George Green!

If you don't know what B2B is...perhaps the economic threads is not the place for you.

Wow. You actually watch the trailer park boys?

 

[iamwhatiseem]

Oh really Ricky? Is that what you and Julian are calling your little dope growing business these days, a "B2B operation" ? What does that stand for "Bumbling idiot to bumbling idiot"? Well I've got some news for you boys! There's going to be some changes in this park. I want you and your dope plants outta here, you've got 24 hours to vacate the premises, or I'm gonna make a little call to my friend George Green!

If you don't know what B2B is...perhaps the economic threads is not the place for you.

Wow. You actually watch the trailer park boys?

I have met Mike (Bubbles) and Robb (Ricky) personally in Chicago.
I really wanted to meet John Dunsworth (Leahy) but didn't get the chance.
Sorry for the retort, I thought you were being a smart ass.

 

[Toro]

It's not a bubble. It might be on it's way to one but it isn't one yet.

1999 was a bubble.

 

[iamwhatiseem]

It's not a bubble. It might be on it's way to one but it isn't one yet.

1999 was a bubble.

Yeah...it is more like the shape of a condom.

 

[B. Kidd]

. Sell high, buy low my mantra.

Wow. What an innovative investment strategy.

You forgot my 'cash-out' is related to putting a significant down on a new house AT a 3.6%interest rate.
So if the market goes above 15.5 K, just look at the money I'll be saving over 30 years on THAT interest rate (will offset it, fer' sure!).
Wow , what an investment strategy.
To quote James Brown, "I feel good....".

 

[AmazonTania]

It's not a bubble. It might be on it's way to one but it isn't one yet.

1999 was a bubble.

So no similarities you recognize between 1999 and today? That's rather bizarre.