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  1. #461
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    https://hotcopper.com.au/threads/neg...814963&embed=1
    $10Triilion in bonds paying negative int rates,will keep the Equity markets going.

  2. #462
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Joshuatree View Post
    https://hotcopper.com.au/threads/neg...814963&embed=1
    $10Triilion in bonds paying negative int rates,will keep the Equity markets going.
    Obviously - this argument only holds until the capital markets crash. Sure - increasing inflation will rapidly remove buying power from the holders of low or negative interest bonds. However - as soon as they have nothing (material) to buy anymore for their bonds (look at historical examples for hyperinflation), stock prices will normalize as well ... which brings us back to the theme of this thread.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  3. #463
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    This could be quite nasty for these investors & the rest of the listed markets
    "Billions in Capital Calls Threaten to Wreak Havoc on Global Stocks, Bonds"
    https://finance.yahoo.com/news/billi...010512447.html

    A bit like having a leaky apartment & getting a call for a $1m to fix?

  4. #464
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    "The top 1% invest 61% of their wealth in one asset"
    https://www.livewiremarkets.com/wire...h-in-one-asset

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  6. #466

  7. #467
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    The writer seems to be using the "now" experience to attempt to value 10years into the future...When one starts using secular charting it shows the metrics haven't changed over the last 1000 years or more..Yes they oscillate within differing degrees of efficiency and shows up using shorter long term charts. But this writer is using today's experiences to deduce that some valuation metrics (not operating efficiently now) will become obsolete in 10 years time..This is a dangerous assumption..Looking ahead in say 10 years time that same writer might an article saying that those old metrics are back in vogue..Nearly every reader will not remember what he wrote 10 years ago.. There are many writers out there doing this stuff and fall in the same trap that this time is different..It is amazing the amount of economic data that has been produced over the years..In the UK there is valid economic date (e.g inflation rate) stretching back to the Magna Carta in 1215 which by law demanded Authorities to keep data records. Before that some data records were kept going back to 1066..Some metrics used then are still valid today such as inflation and various assert valuations.. Record of markets were sketchy but I remember seeing a PE ratio assessment chart dating back to those days..the data is probably dodgy but the metrics used were very basic but still in use today...especially used in long term comparisons.

    Anyway each to their own..If it works for him so be it.

    Have a look at my post below. It contains a 150 yr chart.. You will see how people get the notion that something doesn't work when in fact it is operating just fine.. The PE ratio is running very high at the moment and yet the market doesn't care..Some people may think the PE model is broken and needs to be thrown away..in reality those people do not understand how complex PE values and other metrics are.

  8. #468
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    The optimists who think the bear market is ending and there is great times ahead with the next Bull Market cycle in sight will not like to see my chart below.

    The scary thing about this chart is the Annualised PE Ratio value currently sitting at 30.64 and rising. It is easy to see inflation rate being the main driver of Annualised PE (PE10). High inflation or deflation = bad (lower than PE(10) average). Low inflation = good (higher than PE(10) average) Our recent low inflation Era is the reason why the market is "happy" (sentiment) with PE(10) operating at a much higher value than the average 15 -17 area.

    However there are moments when the Market goes insane as seen on the charts with the extreme peaks and nadirs..At the moment Wall St market is living off the fumes of the low inflation era and it seems the present market (Wall St) is expecting the recent higher inflation rate to be short lived (in a secular sense)...If the higher inflation rate becomes sustainable and entrenched then expect the PE(10) to fall accordingly.

    The PE(10) rule of thumb is anything above 20 is considered overvalued with the red line at >25 considered high risk of a major correction. The blue line< 10 is considered extremely undervalued. However these over and under valued figures depend on the inflation rate of the day of valuation..

    For example the 30.4 value from an overall perspective is considered extremely overvalued and the market operating at high risk. Comparing that 30.4 figure two years ago when inflation was near zero % an analyst would have seen that 30.4 figure as being less over valued and a lesser risk than seeing that same figure today with inflation running at around 5%.

    The charting of Annualised (inflation adjusted) PE Ratio shows the secular behaviour of the stockmarket (Wall St) which highlights ingrained (generational) investor trading behaviour sentiments which causes the market to be either undervalued or overvalued for very long periods of time.
    The chart also highlights the wasted time in trying to determine what is a fair valuation of a market. The chart shows that history seldom sees the market at fair valuation (equilibrium). The Long term PE(10) chart shows the Wall St market is oscillating either between a secular Bull or Secular Bear Market Cycle.


    Attachment 14643
    Last edited by Hoop; 21-06-2023 at 01:27 PM.

  9. #469
    Advanced Member Valuegrowth's Avatar
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    Thanks Hoop. Your’re absoultely right. Financial ratios are helping me to compare companies and then take better decisions. I prefer five-year average. I also found information overload can lead to poor decisions.

    I am really fearful to touch overvalued assets. Intelligent market participants can separate individual attractive companies from the broader market. In other words time to look for hidden gems and out of favour stocks. Of course they should pass my financial ratio test if I decide to buy part of any company(stocks).

    The most important information is financial ratios. We can get them from financial statements. For other information we have to do some research. There will be demand for basic necessities or things we use everyday through out the year. People used to drink coffee but they didn’t buy coffee stocks those days. Instead they bought gold stocks and some other stocks. Coffee stocks ended up with muti-baggers.

    https://www.bankrate.com/investing/i...ancial-ratios/


    Quote Originally Posted by Hoop View Post
    The writer seems to be using the "now" experience to attempt to value 10years into the future...When one starts using secular charting it shows the metrics haven't changed over the last 1000 years or more..Yes they oscillate within differing degrees of efficiency and shows up using shorter long term charts. But this writer is using today's experiences to deduce that some valuation metrics (not operating efficiently now) will become obsolete in 10 years time..This is a dangerous assumption..Looking ahead in say 10 years time that same writer might an article saying that those old metrics are back in vogue..Nearly every reader will not remember what he wrote 10 years ago.. There are many writers out there doing this stuff and fall in the same trap that this time is different..It is amazing the amount of economic data that has been produced over the years..In the UK there is valid economic date (e.g inflation rate) stretching back to the Magna Carta in 1215 which by law demanded Authorities to keep data records. Before that some data records were kept going back to 1066..Some metrics used then are still valid today such as inflation and various assert valuations.. Record of markets were sketchy but I remember seeing a PE ratio assessment chart dating back to those days..the data is probably dodgy but the metrics used were very basic but still in use today...especially used in long term comparisons.

    Anyway each to their own..If it works for him so be it.

    Have a look at my post below. It contains a 150 yr chart.. You will see how people get the notion that something doesn't work when in fact it is operating just fine.. The PE ratio is running very high at the moment and yet the market doesn't care..Some people may think the PE model is broken and needs to be thrown away..in reality those people do not understand how complex PE values and other metrics are.
    Last edited by Valuegrowth; 21-06-2023 at 07:07 PM.

  10. #470
    Advanced Member Valuegrowth's Avatar
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    https://time.com/personal-finance/article/bear-vs-bull-market/

    Bear Market vs. Bull Market


    In either type of market, not all stocks move in the general direction of the market. Some stocks by nature move in a contrary direction to the general market. While the terms bull or bear market might be sweeping generalizations, individual stocks may be affected by factors not directly related to the overall movement of the markets.

    Long-term investors generally should not change their investing style to accommodate either a bull or bear market. Rather, many experts recommend that they have an asset allocation that reflects their risk tolerance, their investing time horizon, and their long-term goals. Investors should periodically rebalance their portfolio.

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