I can understand why it might seem irrational to some, but only if you compare it too other times in history. This go around, corporations, the central banks of the industrialized nations, big banks and institutions, and the Buffets of the world are BUYERS, even if they have to borrow or issue notes to do it. This is unprecedented in my experience and I've been doing this since 1980, and what also makes this different from any other time in history. The currencies of the world have been made a depreciating liability with real negative rates for the most part, which is why the above mentioned tend not to hold any more cash than is necessary. Valuation generally speaking, is no longer a concern, it's either there is growth or no growth. As long as those mentioned above are buyers, the market will in all probability to continue to trend up.
Ok you been doing this 20 years longer than me My views are the same. I keep asking what the f is everybody waiting for as the Dow is heading to 40000.
Several reasons: You have two generations who have seen the market crash twice in the last 20 years, and were hurt badly, and the market seems like a bubble to them. You have a lot of baby boomers going into retirement and are selling assets to avoid calamity and going to a conservative or ultra conservative portfolio just to produce a steady retirement income. The cost of living in the US has become expensive enough to the point most young people don't have the ability to invest. Just to name a few.
this does sound like from someone who's been doing this since 1980 lol. my question was semi-rhetorical.. and my explanation would be very similar to yours.... and while the crowd is chasing the 'safe' bond yields to ridiculous levels, the corporations are scooping up shares for free - I have posted about the BEER... either bond yields have to catch up, or the equity earning yields have to catch down... and now with the Fed being hijacked to lower rates and promise 'target rates for the next crisis', the only possible scenario is the latter, which means Dow 40000.... just neutralize the BEER.... then we go from there.
My question is when is a market fully valued? Because it seems to most there is no such thing as a fully valued market anymore ..it's just buy and keep buying. Law of large numbers eventually takes over. No?
Yes, the LOLN takes over. But who can ever know when that time is? We're in a strange time, Mr. S200.
The S&P pe is not currently out of whack so the question is whether there are accounting shenanigans going on or not. I remember all the EBITDA fuckery in the dot bomb.
Oh interesting... The S&P PE has been declining for the last few months... Whenever this has happened in the past against an uptrend the market crashes pretty hard soon after though of course in this case, it could indicate that the market is undervalued. flat PE