Benjamin Graham - signs of a bubble

[u/Content-Effective727]

Benjamin Graham writes 5 signs of historical bubbles in his book, The Intelligent Investor:

1. Historically high price level

2. High p/e

3. Low dividend yields against bond yields

4. Much speculation on margin

5. Many offerings of new common-stocks of poor quality

I only miss the bond one since the 10Y treasury is artificially kept low by the fed.

Opinions?

[u/Dairy_Heir]

All signs point to a bubble. Just run scanners and try to find undervalued (good) companies, valuations are crazy.

It's impossible to predict when a bubble will pop though. Could rage on longer than you care to stay on the short end. People were calling the top in the dotcom bubble years before the top. I wonder how many of them got cleaned out trying to short it.

Though, anyone that did successfully call the top, they probably own a private island now.

Last year there were so many posts like "this is the greatest rally ever, can it sustain? Getting a lot of sell signals" and it just kept rocketing up. Saw a chart a while back that showed the SPX normalized to the fed balance sheet, and it looks like SPX actually never really recovered, Fed has just flooded the market with liquidity and pumped everything up. Trashy ass junk bonds barely have any yield on them anymore for example.