According to Bank Of America, more public money has been invested into the stock market, in the last five months, 569 Billion $, than had been invested previously (452 Billion) in the last 11 years ! since the start of the bull market in 2009.
That is an extraordinary vote of confidence of public dollars into the stock market, as investors seek "yield " participation,at all cost.
Long gone are the days when investors could sit back park their money in liquid full faith and credit instruments like CD's, and money market funds and receive the Fed magic number of 2 % "risk free" return.
Rather. an extraordinary amount of that money has now sought refuge in the stock market.
That amount of inflow inevitably will continue to build "complacency". as the market rewards new money by rising higher and higher, all time record after record.
The contrarian investor in me says this extraordinary public buying spree into the stock market market is really a ticking time bomb, waiting for the right moment to explode.
I caution you about following the public crowd here, and pouring your money into the stock market.
So true. So true. I am well out. But how far will it go? Very few people on TradingView ever talk about valuations. Perhaps because most are traders, taking shorter term views and looking for short term patterns and opportunities. The S&P 500 bow trades on a P/E of 42, roughly double the historical average. Just to return to the long term average would imply a 50pc fall.
Yet the Japanese market went to a P/E of around 65x (I think) at it’s late 80’s peak, so there is precedent for the madness to run much higher.
I fear we have crossed the rubicon. There was a time several months ago where people still feared the downside. But the central banks have done everything to extinguish that concern. Now everybody only looks upwards, every tiny dip is to be bought. Common sense says that this is a market not to buy, but not can it be shorted. We may well get closer to the Japanese multiple before we stump back to the long term average. At some point we will be gifted the best shorting opportunity in history. I hope I am brave enough to take it when it comes.
Good luck
With the way it's goin, it'll be pretty clear and you'll have plenty of time to jump on the ride.
Awareness puts you ahead of most the crowd already.
YouCannotBeSerious
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@ProfitHarvest, have been meaning to ask you... I know you follow the weed stocks closely. What is your current view?
ProfitHarvest
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@YouCannotBeSerious, We're in the Value Buy zone for all of them for sure, maybe they could go down another 30% but mostly it's only up from here. APHA/TLRY, CGC, ACB, OGI in that order. GRWG and IIPR are great side plays. Plenty of great little ones to play with Aleafia, Wildflower, CanB, CURLF, AYR Wellness, GTBIF.
4,600 when we finish wave 3 we will see a nice pull back in the 20-30% range. Then Wave 5 will take us to 6,000 where we will start to desend in the epic 100 year cycle down to SPX 900.
Yet the Japanese market went to a P/E of around 65x (I think) at it’s late 80’s peak, so there is precedent for the madness to run much higher.
I fear we have crossed the rubicon. There was a time several months ago where people still feared the downside. But the central banks have done everything to extinguish that concern. Now everybody only looks upwards, every tiny dip is to be bought. Common sense says that this is a market not to buy, but not can it be shorted. We may well get closer to the Japanese multiple before we stump back to the long term average. At some point we will be gifted the best shorting opportunity in history. I hope I am brave enough to take it when it comes.
Good luck