Attractive Stock Valuations – Here Today, Gone Tomorrow [View article]
By the standards of the latest bubble era (1994-2008), stocks are indeed attractively priced. By long-term historic metrics, they are way too expensive, with a paltry dividend yield that does not in any way compensate for the significant risks going forwards.
If you think the attempts to extend the bubble era will succeed, then by all means load up on stocks and enjoy the ride to the next top, just be prepared to get out before the bubble collapses again. If, like me, you think we are returning to more normal valuations based on long-term metrics, then its time to get out of equities.
There is a saying amongst traders and investors that "... you should always leave something on the table for the next guy..", so if you are sitting on profits and cash out, you should not be disappointed if the market climbs another 10% or 20%, as you have already gotten your profit, and the next guy should get some too ! On my part, I have been gratefully cashing out slowly but surely, as I suspect we are near a new top. I am not begrudging any profits I left on the table for others who follow this author's advice and perhaps get further upside.
Preview from Europe: Stocks Almost Back in the Black [View article]
Mole, Thanks again for the informative and entertaining report. "..Barclays (BCS) has finally sold off the family silver to keep it from taking the Queens schilling..". Very nicely said! However, if memory serves me, Austria had schillings, but HM Elizabeth Regina used to have shillings.
Close to the End of the Selling Cycle [View article]
There are some investors who have legitimate concerns that many stocks may not recover for a very long time due to the changes in consumer behavior and global economic balances. For instance, who is to say that AXP card holders, some of whom are being paid to just "go away", will resume spending (and paying their bills!) in anything like the past decades? In the case of BA, who is to say that global travel will return to the overheated excesses of the past decades, in which "Joe Sixpack" hops on coast-to-coast flight for a weekend out? Additionally, both these companies have balooning pension liabilities.
So yes, the stocks are at multi-year lows, but perhaps for good reasons, and perhaps these reasons are not going to disappear soon.
Let's Just Say It: Print More Money [View article]
You state: "..Bankruptcies, defaults, and deleveraging are destroying money at an historic pace..".
True, money has been destroyed, but not wealth.
Wealth was not destroyed. Houses did not burn to the ground. Factories did not turn to rubble. Airplanes did not vanish into thin air. Malls did not vaporize. No real wealth was destroyed. A money illusion of wealth which had been conjured, now turns out to be just what it always was, an illusion. So, time to face reality than to continue attempting to create illusions.
What you advocate is attempting to reflate an illusion that created the overcapacity that you so decry. The money bubble illusion certainly created overcapacity in some areas, at the expense of others. Education, health, environmentally sound energy, all suffer from underinvestment, whereas financial chicanery, shopping, and amusements all have overcapacity. Attempting to perpetuate this warped economy will simply create larger problems down the road.
Attractive Stock Valuations – Here Today, Gone Tomorrow [View article]
If you think the attempts to extend the bubble era will succeed, then by all means load up on stocks and enjoy the ride to the next top, just be prepared to get out before the bubble collapses again. If, like me, you think we are returning to more normal valuations based on long-term metrics, then its time to get out of equities.
There is a saying amongst traders and investors that "... you should always leave something on the table for the next guy..", so if you are sitting on profits and cash out, you should not be disappointed if the market climbs another 10% or 20%, as you have already gotten your profit, and the next guy should get some too ! On my part, I have been gratefully cashing out slowly but surely, as I suspect we are near a new top. I am not begrudging any profits I left on the table for others who follow this author's advice and perhaps get further upside.
Preview from Europe: Stocks Almost Back in the Black [View article]
Close to the End of the Selling Cycle [View article]
So yes, the stocks are at multi-year lows, but perhaps for good reasons, and perhaps these reasons are not going to disappear soon.
Let's Just Say It: Print More Money [View article]
True, money has been destroyed, but not wealth.
Wealth was not destroyed. Houses did not burn to the ground. Factories did not turn to rubble. Airplanes did not vanish into thin air. Malls did not vaporize. No real wealth was destroyed. A money illusion of wealth which had been conjured, now turns out to be just what it always was, an illusion. So, time to face reality than to continue attempting to create illusions.
What you advocate is attempting to reflate an illusion that created the overcapacity that you so decry. The money bubble illusion certainly created overcapacity in some areas, at the expense of others. Education, health, environmentally sound energy, all suffer from underinvestment, whereas financial chicanery, shopping, and amusements all have overcapacity. Attempting to perpetuate this warped economy will simply create larger problems down the road.