Stock market bubble.....again

MrMatisse

Judging by the front page of todays ft another bubble is starting to inflate in the stock market.

Judging by the threads in the investment and markets forum it looks the height of the .com era again with lots of tiny micro cap stocks being sure things etc......

The forum also has a couple of threads with people giving blow by blow accounts of the 1/2k trades there putting through, then selling, then putting through in Irish banks. Seems like the property bubble all over again. Critical voices just dont get it that the rise in bank shares which will continue is driven by the FUNDAMENTALS. The whole thread has the feeling of a casino and looks like a bulgarian property thread from bygone days.

Any one else got any views?

MrMatisse

Heres the type of thing being fed into the threads.

Hi there ive been watching this board for 5 months now, and what with the excitement of this share kicking off

i thought i would sign up.

I can tell something is going to kick off with this bad boy! Can someone let me in on possibility of some news.

Its just like christmas and im at the stage where i cant wait any longer and im off to look in mother and fathers wardrobe!

Pretty worrying in my view.

Économiste Monétaire

This?

Stock market trading by small investors has surged to levels last seen during the “dotcom” boom, with many thousands of people buying into the strong recovery in shares that on Friday sent the FTSE 100 to its highest this year.

I don't really follow equities, but are P/E ratios way out of line and in bubble territory? Are much of the recent recent earnings reports attributable to extreme cost cutting? U.S. Treasuries seem way overpriced to me.

People tend to overshoot/undershoot on market optimism/pessimism, c'est la vie. Those bank threads on the I&M forum are a bit nuts .

MrMatisse

I think the average p/e ratio for a european bank is now about 60.

SLUSK

Really-Stressed wrote: »

Judging by the front page of todays ft another bubble is starting to inflate in the stock market.

Judging by the threads in the investment and markets forum it looks the height of the .com era again with lots of tiny micro cap stocks being sure things etc......

The forum also has a couple of threads with people giving blow by blow accounts of the 1/2k trades there putting through, then selling, then putting through in Irish banks. Seems like the property bubble all over again. Critical voices just dont get it that the rise in bank shares which will continue is driven by the FUNDAMENTALS. The whole thread has the feeling of a casino and looks like a bulgarian property thread from bygone days.

Any one else got any views?

I hope they scrap NAMA, that should return the stock prices of irish banks to more reasonable levels.

gerry87

How do you we know that the level stocks were at previously wasn't a downward bubble and the chatter now is the bubble bursting bringing prices back to where they should be?

But yea, reading through investment forums smacks of people standing around a roulette table discussing how there have been 3 reds then 3 blacks then 3 reds then 2 blacks...

Basic finance is too important and dangerous not to be thought in schools, geography gets in on it's sheer pub table quiz/who wants to be a millionaire merits, but finance - whose ever going to need to know about money?? Maybe thats a change this whole mess could bring about.

edit: not saying the people in the investments forum don't know what they're talking about, but anybody drawing their main investment advice from boards should realise what they're doing is closer to gambling than investing.

Flamed Diving

SLUSK wrote: »

I hope they scrap NAMA, that should return the stock prices of irish banks to more reasonable levels.

Zero, then.

Hasschu

Hope springs eternal in the human breast. Casino capitalists live in a world suspended between euphoria and abject fear. They look high and low for something that causes them to move from the point of rest to either sell or buy. Unfortunately they all move together like brown's cows either bubbling or bursting. All this goes on daily like an irregular tide relentless in its need to move.

MrMatisse

Interesting article

http://www.ft.com/cms/s/0/defff18e-aa07-11de-a3ce-00144feabdc0.html?nclick_check=1

gdael

Really-Stressed wrote: »

Interesting article

http://www.ft.com/cms/s/0/defff18e-aa07-11de-a3ce-00144feabdc0.html?nclick_check=1

You'll probably find that Odey is able to move the markets himself at this stage. Be mindful of what hes about. Making money. I bet hes making a big move, based on the activity that statement generates.
Others will follow him making it even bigger.
There will be a flight out (which hes already moved on) and then a flight back in. Led by Odey again.
I must check it out on Monday.

Économiste Monétaire

Economist article on the same topic:
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14513918