Stock market is a "fully-fledged epic bubble" and will burst
Discussion
jakesmith said:
NRS said:
It’s hardly guaranteed that the market is going to go up. My guess is the exact opposite is about to happen. Lots of overvalued companies, consumer spending and therefore revenues about to drop etc
If she’s speaking about say AIM or some crappy company in particular then it’s for sure bad advice!
NRS said:
Maybe I’m giving her the benefit of the doubt based on one picture, but long term it (historically) makes sense to just continue with your strategy if you have a long term plan and aren’t trying to time the market. The market may well fall but that just gives you a lower buy price.
If she’s speaking about say AIM or some crappy company in particular then it’s for sure bad advice!
The key is to know when you're investing or when you're gambling. To continue placing bets on a horse when the race is over and the vet has been summoned isn't generally something a gambler who realises their a gambler would do. If she’s speaking about say AIM or some crappy company in particular then it’s for sure bad advice!
DonkeyApple said:
NRS said:
Maybe I’m giving her the benefit of the doubt based on one picture, but long term it (historically) makes sense to just continue with your strategy if you have a long term plan and aren’t trying to time the market. The market may well fall but that just gives you a lower buy price.
If she’s speaking about say AIM or some crappy company in particular then it’s for sure bad advice!
The key is to know when you're investing or when you're gambling. To continue placing bets on a horse when the race is over and the vet has been summoned isn't generally something a gambler who realises their a gambler would do. If she’s speaking about say AIM or some crappy company in particular then it’s for sure bad advice!
Continuing your routine and not panic selling is good advice if you are investing, hence my comment about it not being as bad as I’d expect. (I’d have expected more along the line of those other pictures posted with the graph girls). Of course it’s less good advice to continue as before if you are gambling on a polished turd covered in glitter like many do! DonkeyApple said:
Similar to the stuff the penny punters have been posting since the late 90s on bulletin boards everytime one of their stocks sell off. They tell everyone else to not sell, hold the line and buy more. Back then the readership of things like 'Red Hot Penny Shares' was about 10-20,000 at its peak whereas today you've got millions of people punting. I guess it's part of human nature but is currently an epidemic.
I think there is also another cultural shift at play from the U.K. perspective in that we never used to devoutly follow US behaviour but instead had our own culture and trends but today it does seem like many Britons see themselves as Americans in the way that developing nations would once latch dominantly onto US culture?
I think there is also another cultural shift at play from the U.K. perspective in that we never used to devoutly follow US behaviour but instead had our own culture and trends but today it does seem like many Britons see themselves as Americans in the way that developing nations would once latch dominantly onto US culture?
How his boss laughed, when an employee handed in his resignation letter, saying he was going to be a Cryptocurrency trader.
Two years later, his ex-boss laughed yet again, when the indebted ex-trader asked for his old job back.
DonkeyApple said:
The key is to know when you're investing or when you're gambling. To continue placing bets on a horse when the race is over and the vet has been summoned isn't generally something a gambler who realises their a gambler would do.
You remind me of a wonderful opportunity, when you can actually do a stock market bet when the race is over.
Employee share option schemes.
Fill your boots you lucky people.
At the end of each scheme, you know the result before you have to commit to the transaction.
With the monthly savings scheme option type, you can probably still do the following, if such circumstances occur.
Say you start at the maximum contribution level and the option price is 300p.
One year later the share price is say 200p and another round of share options are available.
Stop your first savings scheme and then start again at the lower option price.
Obviously you have lost a year, but the arithmetic is on your side.
Jon39 said:
DonkeyApple said:
The key is to know when you're investing or when you're gambling. To continue placing bets on a horse when the race is over and the vet has been summoned isn't generally something a gambler who realises their a gambler would do.
You remind me of a wonderful opportunity, when you can actually do a stock market bet when the race is over.
Employee share option schemes.
Fill your boots you lucky people.
At the end of each scheme, you know the result before you have to commit to the transaction.
With the monthly savings scheme option type, you can probably still do the following, if such circumstances occur.
Say you start at the maximum contribution level and the option price is 300p.
One year later the share price is say 200p and another round of share options are available.
Stop your first savings scheme and then start again at the lower option price.
Obviously you have lost a year, but the arithmetic is on your side.
Sadly I buy in at whatever the price is now, and then get a bonus share 2 years later (although it occurs in January of the 3rd year, so it can be almost 3 years for the earlier shares). I actually just cancelled my share savings for the rest of the year. We have to sign up for up to 5% of salary in December for the next year - if we cancel we have to wait for the next year before getting it again. Being oil and gas the share price is doing very well, and is around double the normal value. Once you add tax it could well actually lose money, compared to a normal easy win. It might be a mistake if oil and gas drop lots, but between the risk discount that should be applied when having savings and salary in the same company, the year delay in increasing production after covid + Russian sanction uncertainties then it seems worth it to put the same money into mortgage repayments or other shares instead.
I always think of this thread when the volatility increases in the markets (US in particular)
It was there before but It feels like more than ever the wake up call in the big growth / tech stocks is firmly here with a few saying they've further to fall. The US last week reported GDP was negative for the first quarter of 2022. The Independent reporting a record number of UK-companies warning profits could be lower than anticipated. Not opened it but CNN on Apple News headlining "Much of Europe is facing stagflation".
If I can find anymore doom and gloom I'll let y'all know
Growth stock stars of pandemic tumble into bear market
https://www.ft.com/content/6211eadb-c101-46d1-98b2...
It was there before but It feels like more than ever the wake up call in the big growth / tech stocks is firmly here with a few saying they've further to fall. The US last week reported GDP was negative for the first quarter of 2022. The Independent reporting a record number of UK-companies warning profits could be lower than anticipated. Not opened it but CNN on Apple News headlining "Much of Europe is facing stagflation".
If I can find anymore doom and gloom I'll let y'all know
Growth stock stars of pandemic tumble into bear market
https://www.ft.com/content/6211eadb-c101-46d1-98b2...
Phooey said:
I always think of this thread when the volatility increases in the markets (US in particular)
It was there before but It feels like more than ever the wake up call in the big growth / tech stocks is firmly here with a few saying they've further to fall. The US last week reported GDP was negative for the first quarter of 2022. The Independent reporting a record number of UK-companies warning profits could be lower than anticipated. Not opened it but CNN on Apple News headlining "Much of Europe is facing stagflation".
If I can find anymore doom and gloom I'll let y'all know
Growth stock stars of pandemic tumble into bear market
https://www.ft.com/content/6211eadb-c101-46d1-98b2...
Yep, large cap growth coming more into line with long term valuations, and now down to around 40% over long term P/E (at the end of March, so likely a fair bit lower now)It was there before but It feels like more than ever the wake up call in the big growth / tech stocks is firmly here with a few saying they've further to fall. The US last week reported GDP was negative for the first quarter of 2022. The Independent reporting a record number of UK-companies warning profits could be lower than anticipated. Not opened it but CNN on Apple News headlining "Much of Europe is facing stagflation".
If I can find anymore doom and gloom I'll let y'all know
Growth stock stars of pandemic tumble into bear market
https://www.ft.com/content/6211eadb-c101-46d1-98b2...
see page 13
https://am.jpmorgan.com/us/en/asset-management/adv...
Stagflation.
That’s what they said in 2008. Then it went pop.
And that was inflation driven by an overheating economy.
Todays inflation has been caused by a supply shock combined with a free money surplus, in the absence of which we had a near zero growth environment despite low interest rates… which when raised a few years earlier was quickly lowered again!
To expect stagflation is like expecting our economy in early 2020, sans covid19, to just fire up into an overheating roaring inflationary economy… if anything it was expected to do the opposite.
All this mess has been driven directly by government policy, for some reason they want high inflation and shortages… they also seemingly want to raise interest rates to control it and cause a big financial mess.
But they can always blame it on covid and putin, even though all the harm will have been done by their policy response to those things.
That’s what they said in 2008. Then it went pop.
And that was inflation driven by an overheating economy.
Todays inflation has been caused by a supply shock combined with a free money surplus, in the absence of which we had a near zero growth environment despite low interest rates… which when raised a few years earlier was quickly lowered again!
To expect stagflation is like expecting our economy in early 2020, sans covid19, to just fire up into an overheating roaring inflationary economy… if anything it was expected to do the opposite.
All this mess has been driven directly by government policy, for some reason they want high inflation and shortages… they also seemingly want to raise interest rates to control it and cause a big financial mess.
But they can always blame it on covid and putin, even though all the harm will have been done by their policy response to those things.
So for a 5-10 horizon whats the preference - cash or equities? Personally am stayin in equities and still buying large cap tech funds monthly into sipp.
edit to add - maybe i've a screw loose, interested to hear what others are doing. No doubt there is uncertainty at the moment.
edit again to add obviously its not an absolute binary decision.
edit to add - maybe i've a screw loose, interested to hear what others are doing. No doubt there is uncertainty at the moment.
edit again to add obviously its not an absolute binary decision.
Edited by bmwmike on Sunday 1st May 14:48
I don't think the supply shock had much to do with it. I think that's an excuse government want us to believe. The fact is they printed more money than ever and gave it directly to people. That's caused the spike in demand. Yes supply was hit a bit due to coming out of Covid but let's face it, if everyone didn't have lots of free helicopter money then demand wouldn't have gone through the roof.
They have to start talking about rate rises now because inflation has gone crazy. If it had not they would not have to. With all this free money floating around paying these higher prices the only chance they have to control this is tightening. A lot of people are talking about 10% interest rates to control 10% inflation. Personally I think that just a couple of percent interest will be enough to cool the increasing prices and reduce disposable incomes. The helicopter money has now also stopped. It might not take 10% interest rates to rain in spending.
They have to start talking about rate rises now because inflation has gone crazy. If it had not they would not have to. With all this free money floating around paying these higher prices the only chance they have to control this is tightening. A lot of people are talking about 10% interest rates to control 10% inflation. Personally I think that just a couple of percent interest will be enough to cool the increasing prices and reduce disposable incomes. The helicopter money has now also stopped. It might not take 10% interest rates to rain in spending.
bmwmike said:
interested to hear what others are doing.
IMO the most successful outcomes are achieved by those that pick an investing strategy and stick with it. There shouldn't be a need to tinker dependent on what the economy/markets are doing. bmwmike said:
No doubt there is uncertainty at the moment.
There's always uncertainty. But over the long term, this is why the patient are typically rewarded with returns in excess of cash/inflation etc.ATM said:
I don't think the supply shock had much to do with it. I think that's an excuse government want us to believe. The fact is they printed more money than ever and gave it directly to people. That's caused the spike in demand. Yes supply was hit a bit due to coming out of Covid but let's face it, if everyone didn't have lots of free helicopter money then demand wouldn't have gone through the roof.
They have to start talking about rate rises now because inflation has gone crazy. If it had not they would not have to. With all this free money floating around paying these higher prices the only chance they have to control this is tightening. A lot of people are talking about 10% interest rates to control 10% inflation. Personally I think that just a couple of percent interest will be enough to cool the increasing prices and reduce disposable incomes. The helicopter money has now also stopped. It might not take 10% interest rates to rain in spending.
Good points.They have to start talking about rate rises now because inflation has gone crazy. If it had not they would not have to. With all this free money floating around paying these higher prices the only chance they have to control this is tightening. A lot of people are talking about 10% interest rates to control 10% inflation. Personally I think that just a couple of percent interest will be enough to cool the increasing prices and reduce disposable incomes. The helicopter money has now also stopped. It might not take 10% interest rates to rain in spending.
I’m expecting this inflation is indeed transitory, artificial supply limitations are now triggering its persistence… it is after all mainly in food and energy, two things otherwise in abundance sans anti-Russia policy.
I think rates will peak, recessions will be called, markets will have dipped, easing in Q3/4, and then Russia does a ‘covid’ and is suddenly forgotten, prices suddenly all down before they have a material effect through winter and cripple economies across the EU and European area.
My gut is saying just average in as always.
Into what, rather than if at all, is probably more important right now.
Possibly best to aim to stand still in bear markets, rather than make money against inflation.
I don't think food is going to resolve quickly. High price of fertiliser is going to mean much less used. World stocks of wheat were on a knife edge pre war.
You can't just turn up the factory with food. It takes time and growing seasons. It is going to get much worse before it gets better.
You can't just turn up the factory with food. It takes time and growing seasons. It is going to get much worse before it gets better.
stichill99 said:
I don't think food is going to resolve quickly. High price of fertiliser is going to mean much less used. World stocks of wheat were on a knife edge pre war.
You can't just turn up the factory with food. It takes time and growing seasons. It is going to get much worse before it gets better.
I agree with Mr Whippys conclusion that the strategy is probably still to average in (although perhaps exercise caution in what exactly is being averaged in to), however I think the reasoning is off and think you have it with food being a big problem in the near future.You can't just turn up the factory with food. It takes time and growing seasons. It is going to get much worse before it gets better.
You have multiple factors at play. An initial problem with supply of fertiliser etc, combined with a real risk that Ukraine isn't able to plant let alone harvest its next crop resulting in pressure on both supply and yields. I'm sure we'll be fine in the UK and West in general as we'll just pay what is needed for the supply, but it's worth remembering that one of the triggers for the Arab spring was grain shortages. Things could get ugly over the next 12 months...
Jon39 said:
egomeister said:
I agree with Mr Whippy's conclusion, that the strategy is probably still to average in ....
Did you try the 'average in' strategy (red trace), before the 2008 financial crash ?
Gassing Station | Finance | Top of Page | What's New | My Stuff