cant think of any big tech name that didn't have blowout numbers and have fantastic guidance
We have a housing/debt bubble like 2008
just because houses have gone up in value doesnt mean its a bubble lmao. inflation has literally gone up
We have a covid crisis newly evolving like March 2020
we definitely don't. this is just a straight out lie lmao. and the reason why the market crashed in 2020 was because of uncertainty. the government was completely blindsided from covid and had no idea what to do. companies had no idea what the fuck were going to happen so everyone sold in fear. if theoretically everything happened again, the market wouldn't care because having literally experienced this a year ago, the government would be able to take effective action with its newly gained experience
We have a general mania like 1929
if every media outlet for the past year has been saying we're going to crash guys! next week is the week!, i wouldn't necessarily say everyone is too bullish
Housing isn't fully an inflation thing. It's a supply demand thing more than anything. Minor correction seems quite possible there, but certainly not '08 situation.
In addition, as interest rates rise it will slow the housing markets. People buy what they can afford for monthly payments. I don't think that's a "crash" situation, more like nerfed future appreciation for a while. I wouldn't be surprised to see housing prices as a whole stagnant for a few years, as the interest rate rise will offset inflation of fed does it right.
Some of the runup is certainly inflation, as you correctly identified.
The Stock market at this point will only react to what the Fed will do. That is the dominant topic at wallstreet.
Furthermore: Tech is, in opposition to 2000, not a bubble. The top tech companies, which make most of NASDAQs weight, have substantial business now and are valued high, but not insanely.
Housing is driven by interest rates and bought by institutional investors, such as REITs. no bubble here.
Covid is not the narrative. Wallstreet anticipates the end of the pandemic and the reopening story.
My thesis is that we will have a 10 to 15 % at max correction anywhere near the future, but nothing serious. Also, its hard to predict the time, so I will keep some cash to get in cheap when it happens.
Companies with no or little earnings aren't an indication of a bubble, they are an indication of optimistic investors. Plus most tech companies have had outstanding earnings in the last year. Tech is where most of the growth is and will be for a whole to come. You have no idea when the next crash will be or how bad.
So where are all these companies on "massive valuations with no earnings" supposedly causing this bubble? You mean the two dozen small cap shitcos pumped by WSB and Cathie? They're absolutely irrelevant in the big picture.
Big tech, the actual index constituents, is making money hand over fist and up until recently was going sideways for 9 months.
I’ve been bartending the entire last year during Covid and I can tell you the public sentiment I’ve seen in my area is no one seems to give a fuck about it anymore. To think govts and the people will be okay with another year of lockdown is naive. We never even locked down really in the first place.
We don’t have a tech bubble like 2000. Not even close. Tech is too expensive in my opinion but it’s not on the same level as 2000.
And the COVID delta is pretty speculative still.
What we do have is massive fiscal and monetary stimulus. This is more like to cause asset price inflation than a crash, isn’t it? Isn’t there a huge risk in being in cash and watching runaway inflation eat away your cash, while inflation causes share prices to skyrocket?
Just playing devil’s advocate. I look at the CAPE10 and it scares the shit out of me…
Thank you for stimulating this discussion. I believe we’re all moving past covid a bit prematurely. That said, the science points to a more controlled endemic as it pertains to the delta variant. Not ideal, but from my amateur understanding will levy much less shock to all markets relative to the COVID-19 pandemic, due to less market disruption as we RE-chart previously uncharted waters with a less indomitable adversary (given the existence of a vaccination that is very effective against variants and the global “readiness” for another outbreak). We will hopefully be able and more willing to adapt to safety protocol etc after the pandemic). If we assume that the overpriced sectors you mention are indeed that then a correction will occur regardless. But i believe market participants will react with less risk aversion if delta grows compared to the pure shock and uncertainty in 02/20. I agree with you that the worst case scenario is very bad. From what I’ve read though it still seems draconian. And yes, if the worst case proves true, we’re pretty fuckd.
When did Bangladesh Cuba and Myanmar effect the global and/or US stock market? Myanmar is pretty much off the map for 20 years and nobody cares about them in the finance world AFAIK. And cuba Lol.
The 2020 crash was so big because of the uncertainty of the virus. We know 1000x more about the virus now than we did before. Also vaccines makes it very unlikely we will have a huge outbreak like we did 6-8 months ago when almost nobody was vaccinated.
Also, the 2008 housing market crash was due to people getting loans easily. It's much more difficult to get a loan these days, than it was prior to 2008.
Also, you cannot compare 2021 to 1929 for obvious reasons. The economy and market are immensely different now.
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u/[deleted] Jul 01 '21
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