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

[Mr Whippy]

bhstewie said:

Mr Whippy said:

bhstewie said:

What bubble

This is what puts me off global trackery type stuff.
Investing in piles of utter rubbish that needs to be “timed” to work out, but which you can’t time because it’s wrapped up.

Depends.

Derek beat me to it (and I don't work in the financial industry) but the stocks in the chart are inconsequential to a world index.

It’s not just those is it though. There are hundreds.
Probably thousands if you take the time to look globally.

If you can’t ‘get it’ in 2 mins then it’s probably rubbish.

Yes yes one in a hundred might become Amazon… sad to miss out on it. Oh well.

Then all the ethically horrible stuff, like Roblox and gambling stuff. Yes you can make a great return, but I like to sleep at night too.

Wow look, if I buy this global tracker I’m giving money to people who make guns to shoot people dead too. Again, not great.


A global tracker with a customisable blacklist would be lovely.

[bmwmike]

Derek Chevalier said:

bmwmike said:

Mr Whippy said:

bhstewie said:

What bubble

This is what puts me off global trackery type stuff.
Investing in piles of utter rubbish that needs to be “timed” to work out, but which you can’t time because it’s wrapped up.

Have to agree, though I think ETFs partially solve that problem or at least don't take 3 dubious days to sell or buy. I dislike regular funds for that reason.

Have to disagree - look at the percentage these stocks make up in a (truly) global equity fund.

To be fair I think i misunderstood the post - I was referring to etf vs regular fund being easier/quicker to sell and thus get an expected price whereas a fund seems to be hope for the best. I didn't look at the image and having now done so agree those are minor slivers of a global fund. Conversely everyone seems to be belittling tech but the major tech are relatively big constituents of a global fund.

[Mr Whippy]

Exactly it’s not like those 6 stocks are it.

There are loads of them.

Pretty much every IPO from the last 18 months can go on there. Day-dreamy bks bought up because ‘hype’

[bitchstewie]

But if you buy a global world tracker you're really not going to be holding that much that's outside of the S&P 500 so far as US super tech.

Haven't looked but I'd be surprised if Peloton and companies like that even figure there.

[Mr Whippy]

bhstewie said:

But if you buy a global world tracker you're really not going to be holding that much that's outside of the S&P 500 so far as US super tech.

Haven't looked but I'd be surprised if Peloton and companies like that even figure there.

I’ll be honest I’ve not looked at constituents etc.

I assume global trackers hold a bit of everything? Or is it just S&P500, FTSE100, Nifty50 and all the big per-country indexes?

If so then that does protect you a bit from rubbish… but then probably not as diversified as one would think (ie, lots of weight in top end of S&P500)

[vulture1]

Mr Whippy said:

Exactly it’s not like those 6 stocks are it.

There are loads of them.

Pretty much every IPO from the last 18 months can go on there. Day-dreamy bks bought up because ‘hype’

Yeah it feels like every stock launches at the "this could be it potential value" price straight away nowadays. Then we are surprised when it crashes to its actual value or less.

[bitchstewie]

Mr Whippy said:

I’ll be honest I’ve not looked at constituents etc.

I assume global trackers hold a bit of everything? Or is it just S&P500, FTSE100, Nifty50 and all the big per-country indexes?

If so then that does protect you a bit from rubbish… but then probably not as diversified as one would think (ie, lots of weight in top end of S&P500)

You can download the constituents of most indexes.

This is an MSCI World Index tracker for example.

https://www.ssga.com/uk/en_gb/institutional/etfs/f...

Peloton and the other stocks on the screenshot will make you poor if you're invested in them but you'll have next to no exposure via broad global indexes.

[Phooey]

Derek Chevalier said:

I think you may have linked to this Youtube channel before - this one is worth a watch.

https://www.youtube.com/watch?v=jjWmaRKmnEA

Thanks. As he hints at the end of the vid - for the amateur investor like myself it's probably best to avoid Factor investing and stick to simple global index investing, unless you know what you're doing. Probably more risk than reward in my case

Latest Vanguard article - https://www.vanguardinvestor.co.uk/articles/latest...

[chip*]

Mr Whippy said:

It’s not just those is it though. There are hundreds.
Probably thousands if you take the time to look globally.

If you can’t ‘get it’ in 2 mins then it’s probably rubbish.

Yes yes one in a hundred might become Amazon… sad to miss out on it. Oh well.

Then all the ethically horrible stuff, like Roblox and gambling stuff. Yes you can make a great return, but I like to sleep at night too.

Wow look, if I buy this global tracker I’m giving money to people who make guns to shoot people dead too. Again, not great.


A global tracker with a customisable blacklist would be lovely.

"There are hundreds" - If you knew these obvious over valued companies, did you short them? If so, you would have made a killing.

Also, why do you need a global tracker with a customisable blacklist if you already know the (above) over valued companies i.e. due to your ability to discount the overvalued companies, I assume you trust your ability to buy the best performing individual stocks, right?

[pquinn]

chip* said:

"There are hundreds" - If you knew these obvious over valued companies, did you short them? If so, you would have made a killing.

It's one thing to spot the obviously overvalued st - especially the fraudy pumps - it's another thing entirely to safely short it.


"The market can stay irrational longer than you can stay solvent."

[LeoSayer]

Mr Whippy said:

A global tracker with a customisable blacklist would be lovely.

Why does it have to be customisable?

There are plenty of 'ethical' index funds.

[ooid]

There used to be “frost fairs” in Thames I think up to 18th century? It is a good notion for “Time Horizon”, imho.

[speedy_thrills]

ooid said:

There used to be “frost fairs” in Thames I think up to 18th century? It is a good notion for “Time Horizon”, imho.

Wasn't that due to a volcano eruption in Indonesia or something like that?

[Derek Chevalier]

Mr Whippy said:

A global tracker with a customisable blacklist would be lovely.

Direct indexing

https://www.morningstar.com/articles/1052221/what-...

I hear occasional chat from the U.S. but haven't really seen it on the radar in the UK yet.

[Derek Chevalier]

bhstewie said:

Mr Whippy said:

I’ll be honest I’ve not looked at constituents etc.

I assume global trackers hold a bit of everything? Or is it just S&P500, FTSE100, Nifty50 and all the big per-country indexes?

If so then that does protect you a bit from rubbish… but then probably not as diversified as one would think (ie, lots of weight in top end of S&P500)

You can download the constituents of most indexes.

This is an MSCI World Index tracker for example.

https://www.ssga.com/uk/en_gb/institutional/etfs/f...

Peloton and the other stocks on the screenshot will make you poor if you're invested in them but you'll have next to no exposure via broad global indexes.

Worth bearing in mind that MSCI world excludes developed small cap and all of EM, so will be slightly more concentrated than true global.

Slighly on topic - found this interesting re how index funds may be creating more volatility - buying the winners, therefore pushing up prices (iteratively).

https://www.youtube.com/watch?v=xyzoCJY7BPU&fe...

[Derek Chevalier]

speedy_thrills said:

ooid said:

There used to be “frost fairs” in Thames I think up to 18th century? It is a good notion for “Time Horizon”, imho.

Wasn't that due to a volcano eruption in Indonesia or something like that?

I'm not sure if they ever got to the bottom of why it occurred.

https://en.wikipedia.org/wiki/River_Thames_frost_f...

https://en.wikipedia.org/wiki/Little_Ice_Age

"Several causes have been proposed: cyclical lows in solar radiation, heightened volcanic activity, changes in the ocean circulation, variations in Earth's orbit and axial tilt (orbital forcing), inherent variability in global climate, and decreases in the human population (such as from the Black Death... "

[egomeister]

Derek Chevalier said:

Slighly on topic - found this interesting re how index funds may be creating more volatility - buying the winners, therefore pushing up prices (iteratively).

https://www.youtube.com/watch?v=xyzoCJY7BPU&fe...

Mike Green is great on this topic. I've not seen this specific video but I suspect it's well worth a watch.

[Phooey]

Derek Chevalier said:

Slighly on topic - found this interesting re how index funds may be creating more volatility - buying the winners, therefore pushing up prices (iteratively).

https://www.youtube.com/watch?v=xyzoCJY7BPU&fe...

Are we saying global passives are bad now? (I’ve not watched the vid)

[rdjohn]

Jon39 said:

rdjohn said:

I was in my 30s when I was speaking with an experienced fund manager in 1986 just after Big-Bang. He went on-and-on about how the 1970s were so very difficult. The only thing they had in the office were basic adding machines, or, if lucky a Sinclair calculator. They simply read the FT and thought “ Oh st” In 1986, he had a flashy computer (no Windows) and thought he knew everything.

Of course in October 1987, Black Friday happened and he still thought “Oh” we did not see that coming. ....

I was a novice in 1987, so did not see that coming either, but it did not matter because I did not panic.

Looking back though, it was unprofessional for 'an experienced fund manager', to make that comment (leaving aside his main job of increasing fee income).
The market rise during 1987, prior to that crash, was enormous. That was one obvious clue he overlooked.
There was a week of panic, but followed promptly by a strong recovery.

By the end of 1987, for anyone who held throughout that year;
FTSE 100 ... = +2.0% (Total Return = +6.2%)
All-Share .... = +4.5% (Total Return = +8.44%)

Enormous panic, but turned out out to be no big deal, for those who stayed in the market continually.
That (very serious at the time) crash, only shows as a tiny blip on charts now.

I think that the key point was that during the 1970s they thought things were completely out of control. In the 1980s, they thought that they had control, but in reality, they did not.

40-years later, I actually believe that fund managers do have a good array of tools to better understand the consequences of their decisions.

Inevitably, events like Ukraine create great uncertainty, but within a few days the market has a pretty good understanding of how things lie and so reflect a fair current valuation.

Consequently, it is a much safer place to put your cash. You can be certain that if you put it in a Building Society, after 3-years, it is most unlikely to have offset inflation.

The guy in the 1920s who invested heavily in one company and lost the lot was just plain dumb - with 20/20 hindsight. No one really knew the true value of what he was buying.

[loafer123]

Phooey said:

Are we saying global passives are bad now? (I’ve not watched the vid)

Anecdotally I have two investment managers - one for my pension, one for investments.

The investment one has done much better in the last year, albeit still losing money, and they are the active rather than passive manager.