Posted on 02/24/2021 6:27:57 PM PST by Barnacle
The Dow hit 31,961 today, up 424 points. During the Trump era, I attributed this trend in part to his policies and recovery from the COVID economic impact. But, Biden's election and his undoing of Trump's policies don't appear to have a cooling effect. As Larry Kudlow said recently, the economy is "red hot". But, why is that, and what's driving the market even higher? The Current S&P 500 PE Ratio is 39.97, hardily a bargain.
One possibility is that it is a reflection of the real impact of the stimulus bills of trillions of dollars, whereby a tax payer is happy to get a check for $1,600 at the cost of about $20,000 per tax payer.
In any case, please share your thoughts on what is happening and ideas of how to best position ourselves in preparation for what might be a near term correction.
Yep .. I imagine about 70% is now owned by us or the ccp . https://www.zerohedge.com/markets/silversqueeze-hits-london-slv-warns-limited-40 hunt brothers high for silver would be $160 today silver kills 600 human pathogens without toxicity...makes electric car batteries 500% more efficient..needed for solar panels it’s short 184-1 https://www.globenewswire.com/news-release/2021/02/09/2172210/0/en/THC-Therapeutics-Has-Begun-the-Process-of-Acquiring-A-Significant-Amount-of-Physical-Silver-Bullion.html ..
Where else can you put your money? Interest rates on bonds are non existent and the govt. is spending money like water. Plenty of dollars looking to be spent and businesses benefit in the short term.
Rational irrationality comes to mind.
Is it really inflation if interest rates remain this low? Genuine question(not snarky).
Find a financial advisor you trust and get their opinion. There are sound arguments for both sides of the coin. It really depends on your personal situation and can be quite impactful. Congrats on having options!
Just look at what has happened with Bitcoin. Unbelievable. Makes no sense except for the fact that folks that invested thousands of dollars a few years ago now have millions.
Nuts!
Bizarro World becomes reality.
LOL
Yes...large deficit spending always leads to inflation because central banks print money to pay off the debt. Interest rates are the tool used to get inflation under control.
10-4. And, good luck to you too.
Perhaps not you or I. But, sadly many of our fellow citizens' eyes glaze over when they are expected to discern between a million, billion or trillion. All they hear is "illion". And, an illion is a lot of money. Too much to really think about. So, they go their merry way.
I made several thousand scalping the SQQQ (QQQ 3x short ETF) on Friday through Tuesday. The Nasdaq dropped hard before reversing mid-morning Tuesday. It was just a preview of the mayhem that lies ahead. Take some cream off the top when it’s frothy, folks. I didn’t know this in 2000 and got burned.
It's fed by something... And, I think were being fed a load of something too.
On this occasion, I am changing my tag line. Hope you like it.
Cheers,
Barnacle
You are correct. It is also why big business loves the Rats. Increased regulation and paperwork stymie’s the average small businessman.
Printing money. It is nearly worthless. You would need a wheelbarrow to go to the grocery store if not for debit, credit and ebt cards.
Interest rates are in the doldrums. They need to be higher by a few points. Spending is run amok. Not only are they too low we may be headed where Europe is already, negative interest rates.
Trump’s economy was stimulated by tax and trade relief and prices went up no doubt. Biden’s is stimulated by printing money and giving it away.
Some say two years before inflation hits like a tidal wave. Time for Europe to catch up. I doubt this. The price of everything is rising now and just like the 70s and 80s, everybody is in on the grab not wanting to be left behind or look like a chump. 20% of cost goes up 10%? Raise prices 10% instead of covering costs at an increase of 2%, get all you can when the gettin’ is good. Pretty soon it turns into a snowball because it can until it burns out like a virus after it has consumed the host, the consumer. Nobody wins.
Five years of it then? 1987 marked the end of inflation and a crash in the market. The clintoon years were OK until the dot com crash and the peace dividend was squandered.
Equities are the only way you can hope to keep whole but it is always a wild ride.
High interest rates? Not going to happen to plugs any more than it happened to oblunder.
The fed has moved into a new dimension. 2 and 3% money is stupid. I wouldn’t even get out the application forms to loan money at those rates to anyone. NO matter how stupid we now have two generations who think this is “normal” and anything but their version of “normal” would send them into tailspin panic. Imagine what would happen to home affordability if interest rates went to a more rational 6%? Just about everybody would have to take a step backward in purchased house price or the sellers would have to take a bath. Real estate is a house of cards again.
Buy a house to live in. Buy land and stock to invest. Houses are generally a dumb investment unless you buy a junker in a good area and put a lot of you into it.
Stocks are going up because of “TINA” - There Is No Alternative. Bonds are yielding less than inflation. Cash even less.
This is what I tell my wife who is a farm girl and whose father just put money in the bank. Can’t do that.
Unless you put in stop loss orders on everything you probably can’t get out of he market fast enough either. Is 10% your number? 20%? Probably not higher than that? I have never gotten out, sold some junk at a small down with the covid panic and bought some more of good performers but nothing dramatic, 15 to 18% of the portfolio out in cash for a couple of months. Never bought into the world is going to end panic.
Stocks are no longer a value proposition unless you accumulate divided aristocrats. Outside of that it is just a game, a gamble of emotions mostly. I watch things by the year, not the hour or the day. I have survived inflation of the 70s and 80s.
I hope that as long as I don’t spend more than growth - inflation and a little bit more I’ll be OK. If I ever see 20% bonds again I’ll even sell the mare and buy all I can get for the longest term possible.
13% interest rates in 1979 were a response to inflation. It got better again in ‘81 but still pretty high. Can’t recall what that era house cost me, 9% maybe? I was lucky to get 13% in ‘79.
I keep talking and dreaming of the 20% bonds I got in like ‘83. Crazy. My broker then was at Smith Barney. Thank you Steve!
Completely most people are a blend of terrible ignorance and crushing stupidity.
Remember, half the people in your classes were below average. A lot of them haven’t learned a thing or even tried since then bringing new and more profound meaning to, “Stuck on stupid.”
The voted for Jo and the Ho.
I am out. I’m in a guaranteed 2.5% return with no risk until this resolves. That is the best thin for me here and now. Is it the smartest - no. But ar the same rime 2.5 = 40 PE ratio. Have Ben since they killed the economy. Did I miss out in a 30% rally - yes but it’s paper profits.
Modern Monetary Theory. Money printer go BRRRRRR.
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