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.
Bump for later
It’s a melt-up, a bubble. It’s going to come down hard...
The Federal Government is buying securities of all kinds to prop up the market. I know for a fact that they’re buying corporate bonds.
I believe the DOW is going up because there is so much extra money the FED is bringing in - it’s that “irrational exuberance” all over again ... only now we know what is priming the drive ...
It’s a game. It’s no longer stocks based on real worth, it’s just a game. Eventually it will all come crashing down.
And then come back up. And go back down. And back up...
I think the real question is, WRT to the market is, at what point will it finally be "down"?
Will it ever? If it is, does that mean something "bad"? I think it might.
The government is trying to inflate on purpose. The market reflects inflation, even in advance sometimes.
It’s inflation
Big companies benefit when their small business competitors are driven out of business.
The Dow is an index of the biggest companies in the world. They are doing very well due to these lockdowns.
Wall Street is making a killing and the middle class is being murdered.
Where else you going to put your money? .05 in a bank account, .75% in a 5 year cd?
We have quite a sum sitting on in a stock market money market account making .025 because we are waiting for another correction when ch we believe will happen in a year or two
There is a lot of the U S people making lots of money
I don’t have a degree in finance. And Warren Buffett has never called me for advice. But I believe that the stock market’s rise is mainly due to low interest rates.
Suppose you want to save for a long-term goal. CDs won’t do the trick anymore. Neither will most bonds. So you are pretty much forced into the stock market. And in doing so, you’ll be bidding up prices.
Now, if interest rates started returning to normal, I’d guess that the stock market would start cooling off. If I’m proven right about this, please congratulate me profusely. But if I’m proven wrong, I’ll just claim that the Russians hacked my FR account, and posted this.
I agree with all on inflation and bubble. Also the big business benefit of never ending shutdown.
Also the core fiscal policies on taxes have not changed and are unlikely to with the 50/50 split government.
I agree with you and others that this is artificial and/or irrational.
Any ideas of how to financially position in this wacky era?
Mr. Teadrinker had a recent conversation with the guy who handles our retirement money. He said stock market doesn’t care who is president. It cares about China flu and stimulus money. He thought the market would do great this year.
There is a fierce war ongoing. Many battlefields.
One is the stock market. The bad guys manipulate it, and are propping it up. All (ALL!) the big cap stocks are in cahoots - just dig a bit and discover how much they own of each other - its a fabric mesh of ownership.
Another battleground was/is gamestock... and physical silver. Look at silver in the last few hours?
And, earlier today, the FED completely crashed. Around 11:15 AM, there were 0 (zero!) bank-to-bank transfers. The entire system was down. Some non-internal services that us little guys use was restored by mid-afternoon. All is restored now.
The deep state wants appearances to be normal-looking.
If/when they start losing their grip, dow will crater, fed will collapse for good. Physical silver will.... rise (even more). The DS wants to maintain silver low.
Maybe they are pricing in the post-COVID re-opening.
A lot of earnings may be expected to bounce back.
Earnings are so artificially low due to lockdown restrictions, that they really don’t reflect the normal P/E valuation.
Well, with a PE ratio approaching 40, a 0.75% gain starts looking attractive compared to a potential and sudden loss of 30.00%.
I don’t know. In the past (’70s, ‘80s), an economic environment similar in some ways led to high interest rates, but I’m not sure as to whether or not it will happen this time. It’s something to watch for, though.
I’m out until the crash. This one’s going to be hard too. Probably down to 15,000.
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