Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Why The Stock Market Isn't In A Bubble In Three Charts
Being smart or lucky enough to have bought a thirty year treasury or a 10 year CD (@ 14%) in the mid-eighties...wow. From your chart it is pretty clear that buying equities in 1938,1943, 1975, 2008 would have provided similar outsized returns, but who had the conviction?
To invest wisely through these gyrations is what we can only strive for.
I personally have a difficult time with comparing what may have happened before or after World War II and its meaning today based upon a chart view and all of the many other complex factors of today, versus then.
A simple example exists in the state of Michigan. From about 1982 the manufacturing complex had already started to decline. This was evident to those working and watching. There just we're many folks who really wanted to except the reality. But, the signs were showing in many areas. Many small industries were supported by the auto industry for much work that was outsourced to local vendors.....small machine tooling shops, welding, etc. As the auto industry began to fade more, these small operations began to close. In turn, the restaurants and other retail businesses then lost business. Well, you understand and known how this cycle works. Of course, other factors were in play as the years moved along; but the large and small businesses disappeared. And these will not return in any great amount going forward; as foreign business and competition; as well as technology advances will continue to hold a lid of growth in these areas for employment.
While this example may seem out of place with the original linked article; the point is that regardless of charts from prior years indicating various aspects of a technical nature, the circumstances have a wide variety of inputs affecting everything that was taking place at a given time.
Heck, many things that were in place for a chart pattern from 1981; have little to do with today's charts and patterns. A lot has changed in this short time span; from accounting methods to everything global.
I have read a few articles by the lady in the original link and she seems to be fairly level headed. But, I am not convinced that what she noted is valid for making an investment decision.
Anyone know of her writings/comments between the period of June, 2007 and June, 2008?
Tired here from a long day at the work machine. Pillow time.
HEY, if you feel I am blowing out of my fannie with my comments......please, respond.
Waaal, podner, if we're lightin' flatus, all Ah gotta say is that the S&P PE at http://www.multpl.com/ is 19.59, above the average PE, forward or trailing, from her table in the linked article. Not sure who's blowing hot air, if anyone. Maybe it's a balloon, not a bubble. Adios
Comments
Regards,
Ted
Really interesting chart.
Being smart or lucky enough to have bought a thirty year treasury or a 10 year CD (@ 14%) in the mid-eighties...wow. From your chart it is pretty clear that buying equities in 1938,1943, 1975, 2008 would have provided similar outsized returns, but who had the conviction?
To invest wisely through these gyrations is what we can only strive for.
Thanks for sharing.
As to the charts of long ago and p/e stuff, well, is this really valid from more than 10 or 20 years ago?
Some chartists would place this bubble talk or not, into the "Elliott Wave Theory".
I personally have a difficult time with comparing what may have happened before or after World War II and its meaning today based upon a chart view and all of the many other complex factors of today, versus then.
A simple example exists in the state of Michigan. From about 1982 the manufacturing complex had already started to decline. This was evident to those working and watching. There just we're many folks who really wanted to except the reality. But, the signs were showing in many areas.
Many small industries were supported by the auto industry for much work that was outsourced to local vendors.....small machine tooling shops, welding, etc.
As the auto industry began to fade more, these small operations began to close. In turn, the restaurants and other retail businesses then lost business. Well, you understand and known how this cycle works.
Of course, other factors were in play as the years moved along; but the large and small businesses disappeared. And these will not return in any great amount going forward; as foreign business and competition; as well as technology advances will continue to hold a lid of growth in these areas for employment.
While this example may seem out of place with the original linked article; the point is that regardless of charts from prior years indicating various aspects of a technical nature, the circumstances have a wide variety of inputs affecting everything that was taking place at a given time.
Heck, many things that were in place for a chart pattern from 1981; have little to do with today's charts and patterns. A lot has changed in this short time span; from accounting methods to everything global.
I have read a few articles by the lady in the original link and she seems to be fairly level headed. But, I am not convinced that what she noted is valid for making an investment decision.
Anyone know of her writings/comments between the period of June, 2007 and June, 2008?
Tired here from a long day at the work machine. Pillow time.
HEY, if you feel I am blowing out of my fannie with my comments......please, respond.
Regards,
Catch
Not sure who's blowing hot air, if anyone. Maybe it's a balloon, not a bubble.
Adios