Just for moosie - This is an Equity Bubble

[winner69]

Moosie - seeing you into reading bad news you should read this weeks Hussman tirade

http://hussman.net/wmc/wmc140728.htm

A lot of recent stuff regurgitated but he sure getting grumpy now.

Maybe this is why the likes of AIR and RYM are starting to head south?

But then Belg says Hussman is a lad of **** so dont worry too much - Janet still got a bit to do to keeping the bubble inflated.


Summary

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000. The median price/revenue ratio of S&P 500 components is already far above the 2000 level, and the average across S&P 500 components is nearly the same as in 2000. The extent of this bubble is also partially obscured by record high profit margins that make P/E ratios on single-year measures seem less extreme (though the forward operating P/E of the S&P 500 is already beyond its 2007 peak even without accounting for margins).

[winner69]

Bubbles can only be called in hindsight ... maybe true but I feel it a good practice to have a reasonable feel of the situation to assess if the bubble is getting bigger and bigger

Even then it might not POP as you point out but if the market 'just plateaus for awhile' as you put it that awhile needs to be something like 7 years. Nil market returns over 7 years - ouch

You have said your Dad learnt a lot around 2000. Listen to him and learn.

Was he also around in 1987?

I've been through 1987 and 2000/1 and 2007/2008 and for you young ones I'll mention the small correction in 2011. Didn't incur any big losses in any. Might have been lucky in 1987 but learnt from that to avoid the 2000/01 carnage and that experience was good to recognise that something was going to happen in 2007/08. Mainly just major trend following helped avoid the correction in 2011

My posts on SUM and RYM and DLX with their charts make me feel like 2007 again. Might be wrong but I not taking risks. Might be wrong as you say wont know until its over.

One thing post crashes are great times - preserved capital can be put to even greater use than before.

So moosie me old mate .....listen to your Dad. He like me has that experience and sense of reality, unlike you young ones who have only experienced a half cycle

[noodles]

I like to complement my dose of Hussman with Eric Parnell
http://seekingalpha.com/article/2345455-is-a-stock-market-correction-imminent

[nextbigthing]

Bubbles can only be called in hindsight ... probably true but I feel it a good practice to have a reasonable feel of the situation to assess if the bubble is getting bigger and bigger

Even then it might not POP as you point out but if the market 'just plateaus for awhile' as you put it that awhile needs to be something like 7 years. Nil market returns over 7 years - ouch

You have said your Dad learnt a lot around 2000. Listen to him and learn.

Was he also around in 1987?

I've been through 1987 and 2000/1 and 2007/2008 and for you young ones I'll mention the small correction in 2011. Didn't incur any big losses in any. Might have been lucky in 1987 but learnt from that to avoid the 2000/01 carnage and that experience was good to recognise that something was going to happen in 2007/08. Mainly just major trend following helped avoid the correction in 2011

My posts on SUM and RYM and DLX with their charts make me feel like 2007 again. Might be wrong but I not taking risks. Might be wrong as you say wont know until its over.

One thing post crashes are great times - preserved capital can be put to even greater use than before.

So moosie me old mate .....listen to your Dad. He like me has that experience and sense of reality, unlike you young ones who have only experienced a half cycle

So in your opinion Winner, when is it going to burst, and why?

[nextbigthing]

August 22 at exactly 3:17pm EST and shall henceforth be known as "Black Moose Day".

(Refer to biblical quote above for sarcastic perspective) :)

That has only answered half the question.... The other part was, 'and why'

[Mista_Trix]

That has only answered half the question.... The other part was, 'and why'

..... a bunch of bald white men 'gambling' ... !?!

[Whipmoney]

If people are calling it a bubble its not a bubble. Its when people start saying "this is not a bubble its the new reality" and the last of the bears with money sitting on the sidelines finally capitulate and join the crowd, THEN its a bubble.

As for the market going sideways for 7 years - this is fine, so long as it doesnt go down you always have dividends to fall back on. This is why 90% of sharemarket returns over long periods of time derive from dividend income/reinvestment not capital gains.


That's not necessarily true as there have always people who have accurately predicted/foresaw that a given market/asset class is in a bubble.

Obviously these predictions will never be perfect or spot on in terms of both timing or magnitude however this does demonstrate that some people can understand the fundamental dynamics in play that are causing/creating particular bubbles.

For instance the following list of people all foresaw a severe housing related recession coming pre-2007.

Dean Baker
Wynne Godley
Fred Harrison (UK)
Michael Hudson
Eric Janszen
Steve Keen (Australia)
Jakob Madsen & Jens Kjaer Sørensen (Denmark)
Kurt Richebächer
Nouriel Roubini
Peter Schiff
Robert Shiller

[ziggy415]

That's not necessarily true as there have always people who have accurately predicted/foresaw that a given market/asset class is in a bubble.

Obviously these predictions will never be perfect or spot on in terms of both timing or magnitude however this does demonstrate that some people can understand the fundamental dynamics in play that are causing/creating particular bubbles.

For instance the following list of people all foresaw a severe housing related recession coming pre-2007.

Dean Baker
Wynne Godley
Fred Harrison (UK)
Michael Hudson
Eric Janszen
Steve Keen (Australia)
Jakob Madsen & Jens Kjaer Sørensen (Denmark)
Kurt Richebächer
Nouriel Roubini
Peter Schiff
Robert Shiller
not sure its part of a bubble but i see china govt has allowed 5 local govt to set up company to buy bad debts.....sounds like early stage of prime mortgage to me

[Hoop]

Lol, Roubini and Schiff, really? They are the perpetual "as long as I keep calling it I will eventually be right" kind of guys you DONT listen to!

Very true...but lately Roubini has changed species..our ex-permabear friend is now an Equity Bull ..he reckons Wall St isn't in a bubble........now that's scary stuff

[Bobcat.]

When taxi drivers and barmen are telling their customers to get into the stock market 'cause "everybody is making money doing it"...then it's a bubble.

Mainstream media analyst optimists by the plenty, increasing numbers of retail investors, and mums and dad returning to the stock market to invest in equities as a 'get-rich-quick' retirement plan....then it's a bubble.

Bears having gotten tired swimming against the tide for so long, starting to capitulate in numbers...meaning there's less and less people arguing...then it's a bubble.

Buying on the smallest dips, with the dips getting smaller, with no decent correction for months...for years...then it's a bubble.

Are we there yet?

Now where did I put that Bubble Telescope....

October's always a nice time of the year for a crash. Why should this year be any different? Because it didn't happen last year...or the year before.. or the year before that? That's all the more reason why it's more likely to happen this year.

[skid]

So in your opinion Winner, when is it going to burst, and why?

Why?---The debt bubble IMO

When--thats the gazillion dollar question

[skid]

This was an intriguing watch
http://tvnz.co.nz/nigel-latta/s1-ep4-video-6025283

[penn]

Hi Guys'n'Galls, First time poster here, long time reader/learner, I thought I would post on this thread, as it was nearly the last one on the forum. (I like to think of myself as a bit of a contrarian)
Well "Black Moose Day". has not come yet, and only 'chrystal-ball" knows if it is just around the corner. But I am very gratefull for all of the wide range of views that I read here, yes all of you!
I got a bit nervous about a large holding I had built up at the begining of the year, and I sold out on the 19th of march at $3.58. That companies shares are around $2.74 today and although I still have a strong belief in their business and future prospects I feel there is a lot to be said for taking some modest gains off the table and being patient for a while. I am no Warren B, but glad not to have all that red ink on my portfolio. We are entering yet another round of 'the cycle' but this time it's different.;)
DYOR!

[BFG]

Hahaha Black Moose Day. Only day it's going to be black for is gold and silver holders. Implosion time is nigh! :D

[penn]

Not only contrarian, but I love to fish! ....Think I just hooked a 600 pounder. :t_up:

[BFG]

Not only contrarian, but I love to fish! ....Think I just hooked a 600 pounder. :t_up:
Moose weigh much more than this. Sounds like you caught a few old tyres and a Big F***en Goof ;)

I think the moose man called it when it first hit $17
Maybe...

Incorrect. I emphatically called bubble on xero when it was $45 earlier this year. Emphatically.
Indeed you did.

WTF? He was telling people to BUY when it was $45. Are you drinking?
Just because it's a bubble doesn't mean ya can't ride it a bit.

[penn]

"Moose weigh much more than this. Sounds like you caught a few old tyres and an ugly angler fish!"


I was being kind,- presuming I was sparring with a young moose. A full-grown male should be @370kg! you ride that bubble. very smiley face

[BFG]

"Moose weigh much more than this. Sounds like you caught a few old tyres and an ugly angler fish!"


I was being kind,- presuming I was sparring with a young moose. A full-grown male should be @370kg! you ride that bubble. very smiley face

Nikkei up 5%.

http://money.cnn.com/2014/10/31/news/economy/bank-of-japan-stimulus/index.html

We're in the wrong bubble.

[Arbroath]

I think the moose man called it when it first hit $17
I called Xero to many colleagues and friends when it went through 20 after the capital raising. Easy to see the frenzy going on that saw it rocket to 45-46 and also easy to see the deflate begin. Once it was back under 35 the idiots started jumping ship as they'd joined too late. I enjoyed the mockery I recieved from a few and now they are 16 I just say very little to them as no one likes a smart arse.

This is notion you can't spot bubbles in progress is the biggest crock ever spoken. I've lived through 87/00/07, Japan 89-90 etc. always obvious when they're in progress. The only variable is how long once in progress until the balloons pop.

Now turning to the current situation. Japanese valuations are not high but the whole macro picture in Japan is horrible and the BOJ desperate to try whatever tricks are left in the tool kit. The global reaction since Bullard said the Fed might extend QE if needed shows you that the markets are falsely inflated. We are definitely in a bubble situation but this situation is a little more unique. It's a liquidity bubble effectively driven by CBs who quite frankly have no idea how this will end. Much smart money has gone into real assets not to make gains but to try to protect the value of their $$ in real terms. That is why the increased nominal wealth is not really helping GDP growth. The wealth created is not being spent in general as it is people protecting what they have in the face of crazy central banks. We have not seen price inflation yet which has surprised many and who knows if we will but what is happening is a very dangerous game.

[couta1]

Not all the idiots jumped ship Arbroath many of us are still onboard and on course for our destination even though the seas have been very rough for a while but storms don't last forever and patience is much lacking in many of the seafarers on this forum:cool: