How high can it go? Is this time different? Have “they” figured out how to make the stock market invulnerable to collapse? I guess we’ll find out in due time. Meanwhile, party on Garth.
Authored by Jesse Felder via The Felder Report,
Three aspects of the stock market that I follow closely are fundamentals, sentiment and technicals. According the measures below, all three now show the stock market has entered uncharted territory.
The first chart comes from my friend, John Hussman, and shows his margin-adjusted version of the cyclically-adjusted price-to-earnings ratio. This improved version of the CAPE ratio (improved because it has a greater negative correlation with future 12-year returns) shows equity valuations have now surpassed both the dotcom mania peak in 2000 and the 1929 mania peak.
This next chart, from Doug Short, shows that investors today are employing more leverage than ever before. Even when you adjust margin debt for the overall size of the economy it’s at a new record high and, to my knowledge, this doesn’t include the asset-backed loans at major financial firms which have become so popular in recent years.
Finally, from a technical standpoint, the monthly RSI reading of the Dow Jones Industrial Average shows the stock market is now more overbought than at any other time during the entire history of this index which was created way back in 1896 (chart via Nasdaq.com).
Thus it is fair to say that this is now the most overvalued, overbullish and overbought stock market of all time.
https://www.youtube.com/watch?time_continue=6&v=2n5pd9eKapY
Is there still time for me to get in?
No. This Market has nothing to do with individual investors. The fed and the other central banks printing all that money around the world have given people with access to that money an extraordinary opportunity. Buy up all the world’s productive assets. Cost doesn’t matter. At the end of the day you still own all of the world’s productive assets. There is no reason the stock market is going to crash. All the world’s cash flows have been centralized and cartelized and monopolized. If these markets have been built with our money, yeah, there would be some problems. But they’ve been bought with counterfeit money, so it doesn’t matter.
Okay, let me rephrase the last line. Instead of, “so it doesn’t matter”, let me replace that with, “as long as all that counterfeit money is sloshing around, it will remain liquid, and that’s why it doesn’t go boom and collapse.”
Where have I seen gloom and doom like this before? Oh yeah, here. People who have listened to the doom and gloom have missed the greatest bull market in history. Futures are up 100 as I write this.
Thanks for confirming that facts are considered doom during a blow-off top. You should double down, borrow against your house and existing portfolio and invest it in Amazon, Facebook and Twitter. Show some balls big guy.
Well Said !!!!!!!!!
I’ve been invested the whole way up. How about you? Reality is a bitch.
Oh by the way, the Dow is up 186 today.
My biggest problem with these continued rising valuations is that they are based on nothing.
No improved strategies. No stellar performances. No innovation or new manufacturing/services. Nothing new.
The only thing new is the amount of money The Federal Reserve has injected into our economy….which was also based on nothing.
Its a circle of nothingness, and when a large enough shock hits the system it will cause a devaluation that hasn’t been seen since the 20s.
Regale us with how you got out of the market in January 2000 and January 2008 and then went back in at the March 2009 lows. I love those stories from anonymous commenters on blogs.
Dow 26,000!!!!! Yes! Up 320 points today. I am so glad that I am 100% invested. Money Money Money! The stock market is just too easy. How could anybody be so dumb as to be out of this market?
Ooops – didn’t mean to insult any of the gloom and doomers around here. Maybe the world will come to an end tomorrow.
Thanks for the update troll. Can I hear how you went all in at the March 2009 low and never lost a penny during the 50% crash? I love those stories from self proclaimed investing geniuses.
Another stick your head in the toilet and keep lapping like a bad dog. If you can’t see the forest for the trees stop peeing on them.
Said bankster 1 to bankster 3, I’ll jerk you and you jerk me.
Meanwhile, cryptos are crashing.
Who gives a flying fuck about cryptos. No offense Zara.
When John Husseman says it’s time to buy . It will be time to sell. I’d say 40,000.
Hussman’s 25 year MO is to be a bear until whatever current bubble we’re in pops and everyone else thinks the world is ending. He then turns bullish a little too early and loses another 10%-15% before things turn again to the upside. His flagship fund has had disastrous returns over every time frame that’s reportable (1 yr, 3yr, 5yr, 10yr, and since inception). He’s the smartest guy in the room just about everywhere he goes, but you will be a poor person over the longterm following his investment advice.
The Truth About the Economy and Bubbles