Interested to hear your opinions on whether or not you believe we are in a bubble? If you do believe we are in a bubble how are you allocating your funds?
1 Like
Will allocate to my chosen ETFs every month regardless of any bubble or crash, I’m in it for 20+ years so any crash only resembles discounted pricing for me
11 Likes
I think there’s a bubble in certain tech stocks, people seem to think it’s impossible that they could go down, and FOMO seems to be driving the price. Although I don’t really think the broader market is a bubble.
My strategy isn’t changed by this. I’m not trying to chase the big hyped up story stocks. I’m well diversified. I think long term I’ll be alright even if we have a major correction or crash. I’ve also knocked a huge amount off my mortgage by over paying it last year. I may do more of that if I think the market is looking like it’s going to top
4 Likes
As long as interest rates stay low and QE continues, I don’t think the bubble is about to burst. In fact I think we could be entering a stimulus fuelled decade of growth in stock markets.
There will be corrections and some industries will do very badly though.
I’m allocating my funds to sectors I think will do well in this environment.
9 Likes
This doesn’t seem as unworkable as it did pre covid.
Universal basic income ( UBI ) is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.
2 Likes
Really good book on that called Utopia for Realists. It certainly looks like a good idea
2 Likes
I agree with @hookedinvesting, liquidity is king and there’s nothing you can do about it. I think we will get an inflationary surprise at some point though - not anything high obviously, but enough to cause a taper tantrum. I’m decidedly bearish on the US cap-weighted market though, especially since the election results and thats what Grantham seems to be getting at. I don’t think even the most ardent bull can point at the NASDAQ right now and categorically promise you 10%+ by 22. I can see something interesting happening when we’ve arrived at the vaccine-fuelled utopia of summer…
3 Likes
But how does the ‘system’ exit the stimulus period? That’s the burning question. The failure to raise interest rates is a disaster waiting to happen
1 Like
Cash out some of your current gains, hold, and reinvest on a dip if you’re that worried. Otherwise ride the wave and hold.
10 Likes
Spot on!
people/media/journalist are talking about a bubble since 2016…
1 Like
I think we’re moving towards Modern Monetary Theory (MMT), so governments will keep it going as long as they can.
But I agree, I’m not convinced on MMT and can see it going very wrong.
2032 
this guy is one to follow his film is okay to
https://www.armstrongeconomics.
ignore the link only found him last week the guys abit of a loon
There s no bubble.
We have lots of money from central banks, plus rate interest veeery low, so there are few alternatives to equity.
Enjoy this period… go big or go home!
1 Like
The market is not in a bubble but:
Tesla is most definitely a bubble but if it bursts now how much will it actually go down? 50-75% dip in Tesla would still leave many investors up.
Bitcoin is a bubble but it might not be even close to popping
3 Likes
There’s an interesting quote about Tesla in the link above
As a Model 3 owner, my personal favorite Tesla tidbit is that its market cap, now over $600 billion, amounts to over $1.25 million per car sold each year versus $9,000 per car for GM.
1 Like
MMT is a description of the monetary system and not so much a school of thought, with this year being a good example despite what Andrew Bailey says.
The questions that are more interesting are: where is the money going, how long can interest rates feasibly stay at the lower bound, what is government policy and how does this affect a country’s balance of payments? The US can sustain government and current account deficits because of global reserve status but what about if in 2040 most of the high tech/value goods in the world are exported from China, and the authorities dont mind slipping the renminbi to less than 6 to the dollar?
Ultimately the only reason QE works is that we all believe is has to work, that debts are actually worth something and that we will have a pension to retire on. All maintained by a government yes, but still simply a construct.
i dont know something just dosnt seem right or is it just me?
little theory of mine (pensions appear to be a problem and the lack of efforts in fight on covid in the west seem to indicate this)
Cannot put a reply better than this one, even if there are soo many theories to say about the USA valuations in tech.
1 Like
Speaking of pensions, I read this yesterday
Pension funds need a radical rethink - Subscribe to read | Financial Times
1 Like