Stock market is a "fully-fledged epic bubble" and will burst

Stock market is a "fully-fledged epic bubble" and will burst

Author
Discussion

PeteinSQ

Original Poster:

2,162 posts

187 months

Thursday 7th January 2021
quotequote all
Jeremy Grantham warns that the stock market is going to implode and it could be like 1929 all over again.

https://www.bloomberg.com/news/articles/2021-01-05...

Assuming you agree with his assesment, what can you do to mitigate against this risk?


Edited by PeteinSQ on Thursday 7th January 14:45

BoRED S2upid

17,256 posts

217 months

Thursday 7th January 2021
quotequote all
Bitcoin, gold, silver, property, wine...

But no I don’t agree with the article. Until interest rates increase people have no other option but the stock market.

take-good-care-of-the-forest-dewey

2,572 posts

32 months

Thursday 7th January 2021
quotequote all
Arrange to get an advanced copy of the USDA's monthly orange crop report.

Share this report on twitter and Facebook doctoring it to show extensive damage to the Florida orange crop, due to a hard freeze.

Order your agent to buy a ton of orange juice futures right before the data is officially announced, on the premise that the freeze will cause a shortage of oranges and the value of the contracts to surge.

Just need to hit the trading floor for 10 mins... Will finish off later...



dingg

3,294 posts

196 months

Thursday 7th January 2021
quotequote all
BoRED S2upid said:
Bitcoin, gold, silver, property, wine...

But no I don’t agree with the article. Until interest rates increase people have no other option but the stock market.
What he said.

No where else to go with the cash

CzechItOut

2,107 posts

168 months

Thursday 7th January 2021
quotequote all
Does anyone know how much as a percentage QE and deficits are contributing compared to the normal creation of money through loans, mortgages etc.?

As long as that is continuing, it will inevitably inflate asset prices.

Joey Deacon

5,322 posts

153 months

Thursday 7th January 2021
quotequote all
dingg said:
BoRED S2upid said:
Bitcoin, gold, silver, property, wine...

But no I don’t agree with the article. Until interest rates increase people have no other option but the stock market.
What he said.

No where else to go with the cash
Absolutely, but with the crazy rises in Crypto and Tesla over the last month you have to wonder what will happen next. Maybe the government have worked out how to avoid recession forever by just printing money?



bad company

16,132 posts

243 months

Thursday 7th January 2021
quotequote all
It’s like predicting recessions. If you stick to it eventually you’ll be proved right and can say ‘told you so’.

colin79666

1,419 posts

90 months

Thursday 7th January 2021
quotequote all
It is pretty much inevitable it will crash, how soon however is debatable.

Perhaps history is repeating itself. After the Spanish flu we got the roaring 20s. 100 years later with have another pandemic and another stock market rise. People will be desperate to get out of their houses, travel and do cultural things which might well see the economy do well for a bit. After the roaring 20s we got the Great Depression. Usual advice prevails, don’t stick all your eggs in one basket.

millen

662 posts

63 months

Thursday 7th January 2021
quotequote all
Worth reading https://www.amazon.co.uk/Deficit-Myth-Modern-Monet... to get your head round Modern Monetary Theory. Obviously traditional economists are sceptical.

Personally I don't agree with the FOMO/TINA hypothesis. There's always some alternative. There were some investment strategies where people would weight their equity exposure inversely to the PE ratio. Not sure it's worked out for them, but possibly given some peace of mind.

av185

15,851 posts

104 months

Thursday 7th January 2021
quotequote all
'Grantham didn't say when or what factors will end the extraordinary run.'

Wonder why.

85Carrera

3,032 posts

214 months

Thursday 7th January 2021
quotequote all
GMO predicted a crash in January 2019. If they keep saying it, they’ll be right eventually.

av185

15,851 posts

104 months

Thursday 7th January 2021
quotequote all
85Carrera said:
GMO predicted a crash in January 2019. If they keep saying it, they’ll be right eventually.
Quite.

Crash follows a bubble shocker lol.

Mr Whippy

25,469 posts

218 months

Thursday 7th January 2021
quotequote all
Buy anything with real yield in a bullish or bearish environment, real utility, limited supply, and whose value hasn’t correlated with everything else recently (Gold, crypto etc)... and isn’t too heavily controlled by central bank ‘management’ (Gold etc)

Agri land for the win right now.

Duxford

1 posts

55 months

Thursday 7th January 2021
quotequote all
In the case of tesla is it plausable he is now so big he could start gobbling up the existing American car companies thus further legitimatising its future as well as boosting capacity and rationalising existing inefficiencies?

Cheib

21,289 posts

152 months

Thursday 7th January 2021
quotequote all
CzechItOut said:
Does anyone know how much as a percentage QE and deficits are contributing compared to the normal creation of money through loans, mortgages etc.?

As long as that is continuing, it will inevitably inflate asset prices.
Not the answer you asked for but I think the number of $7 trillion as the amount of money was created last year. So money is worth less and assets are worth more because there’s a much bigger supply of money than assets smile

Rojibo

1,555 posts

54 months

Thursday 7th January 2021
quotequote all
This is kind of a concern I have at the moment, I see no point in money sitting in a savings account earning 0.01% APR, so I'm looking to diversify things a bit, I'll happily put money into Crypto (as I feel I understand it better), but I don't have much confidence in the stock market itself, everything looks rather overvalued.

I guess I should just pick a fund and go with it, to start really, rather than sit here and watch my money get eroded by inflation thanks to the colossal amounts of money we've been printing...

mikebradford

1,951 posts

122 months

Thursday 7th January 2021
quotequote all
take-good-care-of-the-forest-dewey said:
Arrange to get an advanced copy of the USDA's monthly orange crop report.

Share this report on twitter and Facebook doctoring it to show extensive damage to the Florida orange crop, due to a hard freeze.

Order your agent to buy a ton of orange juice futures right before the data is officially announced, on the premise that the freeze will cause a shortage of oranges and the value of the contracts to surge.

Just need to hit the trading floor for 10 mins... Will finish off later...
I'm off to eat the remains of my salmon after reading this lol

Scootersp

2,184 posts

165 months

Thursday 7th January 2021
quotequote all
It's all interesting.....I think having some cash is still very important, perhaps more important than ever. Stock market, precious metals and crypto have all done well, I just have a mental block on crypto personally, obviously in hindsight this has cost me, but for years I had cash Isa's which cost me too.

Billions made every year by just having money and shuffling it around occasionally, and it's mainly to the detriment of those not in it. It seems counter intuitive, but in keeping with the times, that low risk savers currently get nothing and almost any portfolio owners get many multiples more interest.

More people than ever moving away from cash holdings to get something, hell you could probably borrow £25k now And whack it in a fund, gold or Bitcoin and 'win'......can that carry on? There is a lot of market optimism in an economy that we should be realistic/pessimistic about? But low interest rates and money printing/social support to stop most defaults just means it marches on.......not sure what happens in the medium/long term.


CzechItOut

2,107 posts

168 months

Friday 8th January 2021
quotequote all
Scootersp said:
not sure what happens in the medium/long term.
Remember, all this started in 2008. Therefore, are we not in the medium term now? Maybe this is the new normal, ultra low interest rates, government deficits, semi-continual QE.

It's funny, I go on a business forum where people routinely ask "What's my business worth?". The answer is always "whatever someone is prepared to pay for it."

Therefore, why doesn't the same logic apply to shares, rather than the old fashioned view of "fair value"?

mikeiow

3,748 posts

107 months

Friday 8th January 2021
quotequote all
PeteinSQ said:
Jeremy Grantham warns that the stock market is going to implode and it could be like 1929 all over again.

https://www.bloomberg.com/news/articles/2021-01-05...

Assuming you agree with his assesment, what can you do to mitigate against this risk?


Edited by PeteinSQ on Thursday 7th January 14:45
What do you believe, Pete?