Stocks and Trading Thread - Channeling your inner Mono

[Admiral Yi]

Thanks for talking me out of it DGuller. 

Anyone else getting leery about the frothiness of the market?  Anyone doing anything about it, or already cashed out?  I remember someone, I think it was the Flipican, did early in the Trump admin.

[DGuller]

I'm very leery.  I think we're living in the new age of economics, where instead of having inflation we have asset bubbles.  This probably has to do with increasing wealth inequality, where all the extra money from overheating economy winds up in the pockets of people who already have more than enough for spending.

I have no idea what to do about it, though.  It's one thing to know that something is a bubble, it's another thing to make a correct financial decision with that knowledge.

[Tonitrus]

I dunno...that's a fair point, but the recent announcement from Apple is also encouraging...if other companies follow a similar path.

[Admiral Yi]

I dunno...that's a fair point, but the recent announcement from Apple is also encouraging...if other companies follow a similar path.

What did they say?

[Tonitrus]

I dunno...that's a fair point, but the recent announcement from Apple is also encouraging...if other companies follow a similar path.

What did they say?

https://www.washingtonpost.com/news/the-switch/wp/2018/01/17/apple-to-open-new-u-s-campus-pledges-to-bring-350-billion-and-20000-jobs-to-the-u-s-within-next-five-years/?utm_term=.445914fe5f63

[Admiral Yi]

Pay walled!

[Tonitrus]

Eh?  Opening sites in your "incognito window" defeat most of those.

Though TWP doesn't even hit me up for that in regular Chrome.

[Camerus]

I look at it as follows... Yes, there are many indicators the market is overvalued.  But even so, there are encouraging signs suggestive of continued good performance into the near future. Thus, as always, there is simply no way to know how the market is going to perform this year. One might as well read sheep entrails to predict the events of the coming lunar year.

Personally, I am reducing my exposure to equities moderately, but not by very much... and also making sure I'm globally diversified for whatever that's worth. After all, the historic odds still are in favour of a positive year.

[Admiral Yi]

I look at it as follows... Yes, there are many indicators the market is overvalued.  But even so, there are encouraging signs suggestive of continued good performance into the near future. Thus, as always, there is simply no way to know how the market is going to perform this year. One might as well read sheep entrails to predict the events of the coming lunar year.

Personally, I am reducing my exposure to equities moderately, but not by very much... and also making sure I'm globally diversified for whatever that's worth. After all, the historic odds still are in favour of a positive year.

A counterargument to this line of reasoning is that even though if you cash out you lose X amount of possible future upside, that is all upside that only further increases the irrational valuations.  *IF* a future correction reverts the market to historical PE, you're still better off cashing out now.

A counterargument to that counterargument is that (at least IMO) a large part of that valuation is coming from low profit or loss-making startup or semistartup companies.  Has it been usual in the past for loss making startups to go public?  If anyone knows of an article directly addressing this point I would be appreciative.

[Camerus]

Once again though, you're still left with trying to figure out to what extent the valuations are "irrational", when the market correction will occur, and how significantly.  IMO this is for all intents and purposes impossible to do with much reliability.

After all, you can go back at any point over the past few years of this bull for example and find intelligent and convincing warnings of impending corrections that never materialized, beyond at worst a few blips. You would have lost out on significant growth had you pulled out then, irrational or no.

The picture is further complicated by strong global stock performance and thus the immense number of variables.

[Ed Anger]

I made a move into gold when it was in the 1200's/oz. I can now buy off small barbarian tribes.

[Alcibiades]

I made a move into gold when it was in the 1200's/oz. I can now buy off small barbarian tribes.

[Tamas]

To be fair even a shop clerk in the western world could probably buy himself an African village with his savings, if he really wanted to.

[mongers]

To be fair even a shop clerk in the western world could probably buy himself an African village with his savings, if he really wanted to.

"You can take the Hungarian out of the village, but you can't take the village out of the him".

[Tamas]

To be fair even a shop clerk in the western world could probably buy himself an African village with his savings, if he really wanted to.

"You can take the Hungarian out of the village, but you can't take the village out of the him".

What? Now I can't even point out that there are deprived areas in Africa? You might be willing to ignore their plight in your stronghold of privilege, but I won't.