Is the Global Markets over heating

TalleyRand83

Seems to be word now from everywhere that we are at the top end of things and a correction of some sorts is coming?

Are we close to a significant dip on global markets? I have no idea myself!

edit: should really read "Are the global markets......" but you know what I mean

Chuckie_Egg

Who's word?
Nobody knows when or if,
I've yet to meet anyone who can tell me what the stock market is going to be in the next half an hour never mind any further in the future.
As long as interest rates are at zero then I believe the stock market is cheap, but as soon as rates start rising then things will change.

HillCloudHop

I pray for an epic 1929 style crash every day. Buy when there's blood in the streets.

HillCloudHop

Chuckie_Egg wrote: »

Who's word?
Nobody knows when or if,
I've yet to meet anyone who can tell me what the stock market is going to be in the next half an hour never mind any further in the future.
As long as interest rates are at zero then I believe the stock market is cheap, but as soon as rates start rising then things will change.

TalleyRand83

HillCloudHop wrote: »

I pray for an epic 1929 style crash every day. Buy when there's blood in the streets.

Funny you say that. I have a few quid about 20k that’ll have available to throw into a few blue chips and I’m not sure whether to plough ahead in next few weeks when I have it or hold off in case this cold wind comes......what do they say about luck and timing!

Fred Cryton

We might be in a bubble but here's two reasons the bubble will continue for the moment:

1) There's a massive excess of savings in the world that can't find a good home. Yields on bonds are so low. That leaves equities

2) The rise of the retail investor via internet - whole new world of retail investors working from home throwing their savings into it.

It will all come falling down when interest rates rise substantially. Don't see that happening soon.

Chuckie_Egg

Worth a read in preparation for this "crash"
Worlds worst market timer

The J Stands for Jay

Fred Cryton wrote: »

2) The rise of the retail investor via internet - whole new world of retail investors working from home throwing their savings into it.

At some point, probably soon (or it's already happened), this will just be the normal way of things. After that, it won't be any sort of brake on a correction.

daheff

Absolutely agree it's bubble territory.

Ive had so many friends & colleagues tell me recently they just started share trading (shoeshine boys).

Plus we have FED,ECB &BOE pumping money into bonds to bring yields down. That pushes money seeking return into equity...and now crypto markets.

I can see another huge burst coming. It's just a case of when. Could be today, could be in a years time.

It's musical chairs, stay close to a chair as the music is close to stopping.

Shedite27

Nobody can tell. The same talking heads that will tell you were in bubble territory also have everything invested.

All the economic indicators at present (low interest rates, governments printing money, historically high savings rates, companies slimmed down) are drivers of stock prices increasing.

There’ll be a crash someday but you’ll lose more money waiting for that crash than you would in the actual crash.

cronos

Economy could not take a bubble bursting at the moment. For that reason it will be at least a couple of years I'd say. When things are back to normal. I also don't picture a crash, more like a correction like last March. More people are talking about stock trading now simply because the technology to do and the fees associated with it have dropped. The question of how easily that money get spooked remains though, but I for one am happy to trade through it. I spent most of the 2010's thinking there would be a crash, last March was it. If a global pandemic and every business having to close does not crash things I don't know what you expect will.

pioneerpro

daheff wrote: »

Ive had so many friends & colleagues tell me recently they just started share trading (shoeshine boys).

WFH savings, Credit union account caps and incoming negative interest has a lot to do with it. Correlate that with the fact that you're probably skewing younger and involved in tech, and most of your social circle probably have Gamestop fresh in their minds to boot. With nearly 2 trillion stimulus going to hit the US in March, and the biggest consumer retail resurgence in history as restrictions ease, this bull run is continuing for a while yet.

As for the person who posted the 2 year old Warren Buffet video (a guy who doesn't do IPOs commenting pre-covid on what is now the biggest IPO run in history due to the prevalence of SPACS) I'd say that Cathie Wood's negative commentary is far more relevant if you want to propose a bear thesis. Although Cathie is just looking for a firesale, lets be honest.

https://seekingalpha.com/news/3664166-ark-invests-cathy-woods-expects-a-stock-market-correction-there-will-be-a-valuation-reset-there-will-be-fear

the butcher

Back in 2004 you had a very small select few complaining about the housing market overheating...this became more apparent in 2005 as more and more data came on stream. By 2006 a lot of people could see it but took until 2008 for it to finally implode. We had a global pandemic and a big quick shock hit to stocks last year with a just as huge rebound despite the pandemic situation worsening. I do believe we will have a roaring 20s as more and more news of vaccine rollouts, reduced deaths,hospitalisations in 2022, then we will see millennials starting to become the main players over the next decade, grew up in the internet era from the start, more inclined to invest, seek out new online opportunities with a few clicks..but with pension timebombs and demographics not looking too favorably beyond them, I can see big 1929 type trouble down the line...unless robots/AI are literally doing everything by 2035/2040. But at the moment we have QE and no signs of central banks turning off that tap (or know how/when to) along with the prospects of negative interest rates. I can see a situation where equities go the way of the housing market (from 1970s to now), with the big-medium sized players stocks becoming unaffordable to the average joe. There will be dips along the way no doubt about it, spooks and world wide events but the market will continue on for the foreseeable. Keep looking out for the signs of distress, be wary of jumping onto stocks that have already ballooned and diversify as much as possible, take profit and hold a % of cash and don't feel tempted to immediately throw it into another stock just because it's there.

TalleyRand83

It’s the likes of this https://youtu.be/RYfmRTyl56w
and just my general feeling of so many all time high stocks that it’ll be obvious in hindsight with longest bull run ever, delayed covid impact etc

Jim2007

TalleyRand83 wrote: »

It’s the likes of this https://youtu.be/RYfmRTyl56w
and just my general feeling of so many all time high stocks that it’ll be obvious in hindsight with longest bull run ever, delayed covid impact etc

It should not really matter to you, if you are investing in individual stocks, providing of course you're doing your homework and no just speculating. In fact you should relish the opportunities it will send your way.

growleaves

TalleyRand83 wrote: »

It’s the likes of this https://youtu.be/RYfmRTyl56w
and just my general feeling of so many all time high stocks that it’ll be obvious in hindsight with longest bull run ever, delayed covid impact etc

Be very wary of Bloomberg propaganda.

Grantham has been saying the same thing year on year, including invoking the 1929 and 2000 crashes. In 2014 he said the bubble would burst in 2016. In 2017 he said it would burst in 2018-19. Now says we are a few months away from a >50% crash.

Guess what? If it doesn't happen he will be saying the same thing in 2022, 2023 etc.

Another big thing he promotes is trying to get people to divert their money into emerging markets. Is he unaware that these markets are correlated with US markets? They went down with US markets in 2008 and they will go down again accompanying any US crash.

All these stock-pick advisors have their own agenda, usually they are selling something.

If the stock market was tied to the economy it would have come tumbling down in March 2020. It is detached from normal business cycles because of the global monetary system we have in place now.

US growth was down 3.4% this year while the NASDAQ doubled from mid-March to mid-January.

Bond yields are rising right now but there's already a plan in motion to reinflate assets:

One possible move would the third iteration of Operation Twist, a move the Fed last made nearly a decade ago during market tumult around the time of the European debt crisis. Another could see an increase in the rate paid on reserves to address issues in the money markets, while the Fed also might adjust the rate on overnight repo operations in the bond market.

The mechanics of Operation Twist involve selling shorter-dated government notes and buying about the same dollar amount in longer-duration securities. The objective is to nudge up shorter-term rates and drive down those at the longer end, thus flattening the yield curve.

Link

growleaves

Here is Jeremy Grantham talking about the "top end of the market" in 2013:

In the same letter, Jeremy Grantham, co-founder and chief investment strategist of the firm, who is well-known for his prediction of asset bubbles, said prudent investors should already be reducing their equity bets and their risk level in general.

“One of the more painful lessons in investing is that the prudent investor or ‘value investor’ if you prefer almost invariably must forego plenty of fun at the top end of markets,” he said.