Maybe off-topic, but it applies to share valuations in general… Interesting Bloomberg article:
https://www.bloomberg.com/gadfly/articles/2016-09-09/this-bu…
“The dot-com bubble burst when it became clear many tech startups would never break even. The U.S. housing market popped after home prices detached so far from income it became obvious further rises weren’t sustainable. How can a central-bank-led cash bubble burst when there’s an ever flowing money hose?”
There’s some weird language in that article. Cash bubble? Bursting? There is no such thing - too much cash simply causes inflation. Too much cash in flowing into the stock market may trigger a correction.
He also talks about central banks printing too much money. This is not what central banks do - they don’t pump money into the system this way anymore. They regulate the money supply by adjusting the interest rates of the treasuries. But since he didn’t bring the interest rates up, I’m not sure what he’s referring to
"printing money"os probably not correct terminology. But whatever central banks are doing , the experience in Japan shows it can continue longer than anybody would have expected. Little to no growth, economic stagnation but not outright collapse.
The eventual bust will be a big one but it is impossible to have any real idea when it will come. Meanwhile you have to put your money somewhere.
Though I find few stocks I want to buy at today’s prices I am hanging on to modest holdings of a few Saul type stocks. Not that they have been all that successful so far this year.
Let me know when the world is not ending, or even just gonna crash, and then wait a while longer…and then get out of the market.
It is when there is no fear and doubt and all is well that you need to be concerned.
Tinker
hi Tinker
re recent complacency see
http://www.zerohedge.com/news/2016-09-09/complacency-has-nev…
and obligingly to the theory the market took a short term tumble
Though other than a prolonged narrow range sideways movement (meaning participants are in consensus) I see no sure way to look into the minds of millions of market participants. Especially since many of them are moved by gut emotions they are not even aware of.
Even when the narrow trading range is present (applies to both indices and Saul type stocks) there is usually no way to know whether the coming news that jars the equity price out of balance will be good or bad news. If it was easy everybody would be rich…