Down goes the Dow

...but the Shiller PE would have had us out or underweight since oh 2005.

When 'rational' measures don't work like we think they should, maybe those measurements are the wrong ones.

You can't say it's a bubble destined to pop on one hand and then claim it's all indestructibly rigged and a huge setup on the other.

It's like if someone told you the World Series was rigged for the Yankees.

"Oh well the players would never allow that" - they're in on it.

"But the umpires!" - they've all been paid off.

"The MLB will put a stop to this!" - it was their idea and they arranged the scoreboard to keep the Yankees ahead no matter what even if a fluke scenario happens.

"Well, the courts and the government!" - have decided that the Yankees winning is best for public moral and are more than happy letting it happen.

Igy - "Well I'm still gonna bet on the other team"

OK, but......

“I can show, really precisely, that there are two warranted prices for a share. The one I prefer is based on such fundamentals as earnings and growth rates, but the bubble is rational in a certain sense. The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.”

– Nobel Laureate Franco Modigliani, New York Times, March 30, 2000

I'm literally wiping coffee off the 'puter screen. Heh.

Not laughing at Igy of course - just the way Racketsohn laid out that simile.

Ghost of Igloi wrote:

OK, but......

“I can show, really precisely, that there are two warranted prices for a share. The one I prefer is based on such fundamentals as earnings and growth rates, but the bubble is rational in a certain sense. The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.”

– Nobel Laureate Franco Modigliani, New York Times, March 30, 2000

“The word “bubble” is tossed around quite a bit in the financial markets, but it’s rarely used correctly. See, the thing that defines a bubble isn’t that valuations are extremely high, or that expected returns are extremely low. Instead, what defines a bubble is that investors drive valuations higher without simultaneously adjusting expectations for returns lower. That is, investors extrapolate past returns based on price behavior, even though those expectations are inconsistent with the returns that would equate price with discounted cash flows.

In March 2000, at the height of the technology bubble, I noted: “Over time, price/revenue ratios come back in line. Currently, that would imply an 83% plunge in tech stocks. If you understand values and market history, you know we’re not joking.” The following month, I discussed Modigliani’s quote above, and detailed the dynamics he was describing. The collapse of the 2000 bubble would ultimately erase half the value of the S&P 500, and would take the tech-heavy Nasdaq 100 down an implausibly precise 83%.”

John Hussman, Market Commentary March 2021

Here's a relevant rorscharch test.

Is this chart bullish or bearish?

Bears would say 'of course it's bearish - trends will revert and money will flood out of the market'

Bulls would say 'of course it's bullish - there is increasing mass acceptance of stocks, it's easier than ever to invest well (401ks and target date funds etc) so this trend will increase. More money is coming in, which will be a rising tide for stonks.'

https://twitter.com/daniburgz/status/1371389456553369609?s=20

Airline stocks have pretty much made their way back to pre-pandemic levels.

Within a few percent anyway.

Despite losing all those billions.

Measured by ticker JETS

agip wrote:

Airline stocks have pretty much made their way back to pre-pandemic levels.

Within a few percent anyway.

Despite losing all those billions.

Measured by ticker JETS

Problem is that record amounts of travel over the summer and fall is being priced in right now. I don't it see though. I think we'll see another year of alternative vacationing. More spending on toys like jetskis and motorcycles than air travel imo

“How little, it will perhaps be agreed, was either original or otherwise remarkable about this history. Prices driven up on the expectation that they would go up, the expectation realized by the resulting purchases. Then the inevitable reversal of these expectations because of some seemingly damaging event or development or perhaps merely because the supply of intellectually vulnerable buyers was exhausted. Whatever the reason (and it is unimportant), the absolute certainty is that this world ends not with a whimper but with a bang. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out.”

– John Kenneth Galbraith on the 1929 collapse

Well done.

Dr. Racket wrote:

agip wrote:

Airline stocks have pretty much made their way back to pre-pandemic levels.

Within a few percent anyway.

Despite losing all those billions.

Measured by ticker JETS

Problem is that record amounts of travel over the summer and fall is being priced in right now. I don't it see though. I think we'll see another year of alternative vacationing. More spending on toys like jetskis and motorcycles than air travel imo

the same problem exists everywhere in the market...the market's surge up to now predicted the 8% GDP growth we're about to get.

Now the market is trying to figure out if the 2H 21 is just a sugar spike or if the growth spurt will continue into 2022. Hence weird noncommittal value/growth rotations and money flooding into and out of short term trades.

All time high SP500

Stanley Morgan wrote:

Dr. Racket wrote:

You can't say it's a bubble destined to pop on one hand and then claim it's all indestructibly rigged and a huge setup on the other.

It's like if someone told you the World Series was rigged for the Yankees.

"Oh well the players would never allow that" - they're in on it.

"But the umpires!" - they've all been paid off.

"The MLB will put a stop to this!" - it was their idea and they arranged the scoreboard to keep the Yankees ahead no matter what even if a fluke scenario happens.

"Well, the courts and the government!" - have decided that the Yankees winning is best for public moral and are more than happy letting it happen.

Igy - "Well I'm still gonna bet on the other team"

Well done.

Can’t wait tell I can sell some more MS stock. Payoff that house and car that is owned by the bank.?

‘till

Ghost of Igloi wrote:

Stanley Morgan wrote:

Well done.

Can’t wait tell I can sell some more MS stock. Payoff that house and car that is owned by the bank.?

That’s a great idea. Not surprisingly, the company has done very well since you left.

Oh, snap!

Financial Advisor wrote:

Ghost of Igloi wrote:

Can’t wait tell I can sell some more MS stock. Payoff that house and car that is owned by the bank.?

That’s a great idea. Not surprisingly, the company has done very well since you left.

Said by a failed MS advisor. The stock has been up, up since your termination.?

Ghost of Igloi wrote:

Financial Advisor wrote:

That’s a great idea. Not surprisingly, the company has done very well since you left.

Said by a failed MS advisor. The stock has been up, up since your termination.?

LOL

Seven of eight indexes on our world watch list posted gains through March 15, 2021. The top performer is France's CAC 40 with a gain of 8.73%, Tokyo's Nikkei 225 is in second is with a gain of 8.46%, and Hong Kong's Hang Seng is in third with a gain of 5.89%. Coming in last is China's Shanghai with a loss of 1.53%.

https://www.advisorperspectives.com/dshort/updates/2021/03/15/world-markets-update-march-15-2021?utm_source=boomtrain&utm_medium=email&utm_campaign&utm_content&utm_term&bt_ee=vteoHkxujqAyE%2B955ScaMJ5blY3nwOV8u42mvTBMunGzofzn9AbfTI%2BGPMMHF%2Fk%2F&bt_ts=1615899078971