I wrote a post but then got permanently (temporarily) banned, I think due to me mentioning a certain asset class that ends in "coin." I think? Apparently if we say that word on here we get banned.
Anyway, what I don't understand is that pretty much everyone recognizes tech and especially AI is a bubble, yet the market continues to go higher and higher. Who is even putting money in the market at this point? Not me. The market is at all time highs and so is gold. Meanwhile even as someone who makes reasonable okay money, I've started going through my grocery list and seeing ways to trim down costs because of how expensive everything has gotten... There are people out there making 18-25 dollars per hour. How are these people even surviving? I can't imagine this can continue a whole lot longer.
“Anyway, what I don't understand is that pretty much everyone recognizes tech and especially AI is a bubble, yet the market continues to go higher and higher. Who is even putting money in the market at this point?”
I believe there are a few genuine skeptics. The general investing public is on autopilot. Sure, they may pay lip service to the bubble narrative, but do nothing to mitigate the risk.
The market tanked 4 or 5 years ago during Covid and look at how quickly it rebounded. I think even if the market dropped 30 to 40% you would have many buying up shares to take advantage of the low prices. The market just seems very resilient these days.
The S&P500 Total Return Index went nowhere for almost 2 years ( 1/03/2022 to mid December 2023) with a greater than 25% draw down. The same for the NASDAQ 100 ( QQQ ) except it had a 35% draw down!
The market tanked 4 or 5 years ago during Covid and look at how quickly it rebounded. I think even if the market dropped 30 to 40% you would have many buying up shares to take advantage of the low prices. The market just seems very resilient these days.
The S&P500 Total Return Index went nowhere for almost 2 years ( 1/03/2022 to mid December 2023) with a greater than 25% draw down. The same for the NASDAQ 100 ( QQQ ) except it had a 35% draw down!
FOMO vs. risk adversity.
I don't really track these things too closely, but is it largely a matter of lack of viable alternative investment vehicles now driving investors to the stock market?
This post was edited 2 minutes after it was posted.
Reason provided:
versus, verses, vs. - who can keep this stuff straight?!
Since we're talking prices and Costco, last June we had friends from the NE visiting and I purchased Prime boneless ribeyes there for $14.99 a lb. That Oct the price went up to $17.99 a lb, but $2 less than HEB. When we were back in NJ, I purchased some for Father's Day and early Aug when my cousin and his wife visited from Nevada. The cost at Costco was $19.99 a lb and the local grocery stores were $25 or higher. This Oct Costco is now $27.99 a lb, $2 more than HEB! I actually bought 2 tomahawks, $23.99 a lb and one boneless at HEB. You only turn 75 once.
Told my wife if beef prices stay elevated, instead of prime rib roast I'll do a pork roast instead for Xmas.
I started seeing the cost to fill up the tank of the rental car with gas in Iceland and I started suspecting some kind of conversion rate rip-off that you hear about, but that wasn't the case. It was just really expensive, like the meals.
A friend is planning to run a half marathon in Iceland next year. When she went to pay her registration fee she saw a number in Kroners and worked it quickly to be about $1000 US. She was shocked at the cost and thought about backing out but her sister reminded her the trip was already paid for, and she’d been making a big deal of this destination race. So she decided damn with the torpedoes she’d pay the damn fee and run the damn race anyway. Then she happened to mention to a Norwegian friend the outrageous cost and politely inquired what kind of Kroners she’d used to convert the cost. It turns out the google default is Norwegian kroners, which are worth more than 10 times an Icelandic kroner. Turns out the race costs less than $100 US. Which is a huge bargain considering she was willing to pay a grand. 😀
“Anyway, what I don't understand is that pretty much everyone recognizes tech and especially AI is a bubble, yet the market continues to go higher and higher. Who is even putting money in the market at this point?”
I believe there are a few genuine skeptics. The general investing public is on autopilot. Sure, they may pay lip service to the bubble narrative, but do nothing to mitigate the risk.
The market tanked 4 or 5 years ago during Covid and look at how quickly it rebounded. I think even if the market dropped 30 to 40% you would have many buying up shares to take advantage of the low prices. The market just seems very resilient these days.
I have noticed and inferred this also. Look at the dip we had this spring from Trump's tariffs. It was a blip for all tents and porpoises. If you weren't paying attention, you missed it. I think we will see a drawdown of 20% or more in the next 9 months, but I don't think it will last. We would have to have some sort of real crisis for true capitulation, something where lots of people are losing their jobs, etc.
I started seeing the cost to fill up the tank of the rental car with gas in Iceland and I started suspecting some kind of conversion rate rip-off that you hear about, but that wasn't the case. It was just really expensive, like the meals.
A friend is planning to run a half marathon in Iceland next year. When she went to pay her registration fee she saw a number in Kroners and worked it quickly to be about $1000 US. She was shocked at the cost and thought about backing out but her sister reminded her the trip was already paid for, and she’d been making a big deal of this destination race. So she decided damn with the torpedoes she’d pay the damn fee and run the damn race anyway. Then she happened to mention to a Norwegian friend the outrageous cost and politely inquired what kind of Kroners she’d used to convert the cost. It turns out the google default is Norwegian kroners, which are worth more than 10 times an Icelandic kroner. Turns out the race costs less than $100 US. Which is a huge bargain considering she was willing to pay a grand. 😀
Nice story. A member of my running club ran a marathon last year, and she said it was in the upper NE section somewhere, if I recollect correctly.
She said it was good.
What i mostly remember, though, was how nice the people were. The airlines lost her luggage including race attire and running shoes, but people there lent her stuff in order to do the race. Unbelievable!
The people we met were really nice, but I never got a sense there were a whole lot of people, besides all the tourists.
A couple of week ago I paid $23.99 a pound for Prime cut filet mignon at Costco. The packages are so large, more than we can eat, and we don’t freeze. Routinely see packages of steaks at more than $100. As a result I shop Albertsons specials. Today I bought t-bones marked down from $17.99 to $12.99 a pound. Local branded Double R Ranch.
A couple of week ago I paid $23.99 a pound for Prime cut filet mignon at Costco. The packages are so large, more than we can eat, and we don’t freeze. Routinely see packages of steaks at more than $100. As a result I shop Albertsons specials. Today I bought t-bones marked down from $17.99 to $12.99 a pound. Local branded Double R Ranch.
Beef here has almost doubled in price over the last five years. I eat a high protein diet, so I've noticed these things and have decided to try to incorporate more eggs and beans, which is probably healthier anyway, but my point is that it's crazy to me that I don't feel like I'm much better off now than I was 8 years ago despite the fact I make like 30% more than I did then. I'll emphasize again I do not know how people are surviving on $25/hr or less. I know people here making $19/hr. That's essentially poverty in 2025. I made $16/hr in 2013 and had $700 left over each month. Wages have absolutely not kept up with inflation.
Sally likes to harass me about John Hussman, and I have posted about my fondness for his writing, and his openness on his mistakes as well as access to his views
In today’s piece Hussman delivers a valuation update, both from a historical and current basis, showing why the math does not add up. He also reminds one how the current environment for policy and fruits of labor are unfair to most Americans. On balance, something here for everyone, if you are willing to be open minded.
The S&P 500 stands at the most extreme level of valuations in history. This record aligns precisely with the happiest and most satisfying moment of a speculative bubble: the point where wildly misaligned expectations for mark...
Sally likes to harass me about John Hussman, and I have posted about my fondness for his writing, and his openness on his mistakes as well as access to his views
I like to harass you because you're a racist boomer.
In today’s piece Hussman delivers a valuation update, both from a historical and current basis, showing why the math does not add up. He also reminds one how the current environment for policy and fruits of labor are unfair to most Americans. On balance, something here for everyone, if you are willing to be open minded.
He has been saying this for a decade and a half - meanwhile his flagship fund is down 40% over the last 25 years while NVDA is up 425,000% during the same time frame. Maybe we should not be listening to John Hussman anymore and start listening to others who have been making money in the market? He has been wrong for 15 years - maybe go with someone else? If I have a chauffer who crashes my car every year for 15 years, I am probably going to go with another chauffer - yes?
Well, since I am hardly one to avoid a good 'pile on', I like to harass Igy because he has been so consistently wrong in his forecasts and yet still rises to take the bait and double, triple, quadruple down for yet more.
Like this one, from 12/28/28 in which I said I was shocked at a downturn that just transpired, and was buying TQQQ, TNA, and AMZN as good buys at the time.
Igy: "Better keep a short leash." Seattle prattle: "Those aren't the kind of stocks that work on a short leash, esp. in this kind of volatility." Igy: "Then you will lose money over the next year on that trade."
So, who was right?
For the period in question (12 months)
TQQQ; +58%
AMZN: +21%
TNA: +11%
So, on average, that makes a handsome 30% overall.
Not bad, no?
And many other exchanges along the way about the likes of Microsoft, Nvidia, etc.
