Slight bubble in mid-2000's but then profits collapsed during financial crisis.
Now the S&P trails corporate profits.
Posted on 02/24/2014 1:25:25 PM PST by SeekAndFind
Getting close to the top before the correction. I expect at least a 10% and as much as a 25% correction. I’m on the sidelines sitting in cash ... waiting.
There is going to be a heck of a hole in the ground when this insanity comes to a sudden stop.
And the as long as it goes on we are going to be strangled by Inflation and zero interest on savings.
Excellent observation. Stocks are nothing more than trading baseball cards. Popularity wins, not technical financials.
No longer can the health and wealth of a company be observed through its stock price.
Here we go again. Numbers that are not adjusted for inflation are meaningless.
Same with the DOW and other market indexes.
Cavuto asked “Are these people not paying attention or do they just figure the politicians are all lying.”
Facebook isn’t paying for anything. The government is simply taking over Whatsapp so they can track more people.
I pulled some good earnings out last year. Part goes to taxes & part I threw in a hole in the water.
I have the same creepy feeling. That’s why I went from an investor to a careful trader.
(Thanks!!)
The Fed has encouraged stock market investing by keeping interest rates artificially low, which helps companies' balance sheets; makes fixed-income investments unattractive relative to stocks; and frees up investing capital (if your mortgage payments are reduced, you can buy more stock). This sounds great, and in a way it is, so long as the Fed can maintain control. But long-term, they can't. Sooner or later, and I believe sooner, an exogenous event will take place -- a major war, civil unrest on a large scale in a country which is a major trading partner (or in our own country), or a major national disaster. Whether said event triggers hyperinflation or a deflationary depression, I don't know (if I did know, I'd be better able to prepare, by accumulating gold in the first case, or cash in the second). But whichever, events may overwhelm the Fed's ability to control interest rates.
In addition, companies have been improving their balance sheets not by producing better products or raising prices, but by cutting expenses -- not only taking advantage of low financing rates, but also by being slow to restore their payrolls to pre-2009 levels, and cutting research and development. This, too, is not sustainable long-term.
But as long as the bubble is inflated, I remain long. Cautiously so, however. No margin investing, even though low margin interest rates make it tempting. And, generally speaking, more conservative investing -- large-cap, dividend-paying stocks as opposed to small-cap speculations. Some precious metal exposure (mining stocks and gold and silver ETFs), and a corporate bond fund. My portfolio is full of dull plodders, but likely survivors in the case of a severe economic dislocation.
I admit to being baffled at the continued advance of the stock market, but I'm along for the ride. It's risky, but staying on the sideline is a risk, too.
Thank you, Ghost. lol
Slight bubble in mid-2000's but then profits collapsed during financial crisis.
Now the S&P trails corporate profits.
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