(08-27-2021, 01:52 PM)crimsonghost747 Wrote: The thing that really skews this viewpoint is the fact that we are in a bull market that has lasted for the past 13 years. The more growthy things you have bought, the better it has worked for you. And this has quite literally gone on for so long that the majority of investors, myself included, have never witnessed anything other than a strong bull market.....That is exactly what is going on. It's recency bias. I don't think we disagree on much. The article basically states valuation doesn't matter, good stonks go up. The problem is mediocre stocks go up too. Some stocks that haven't really grown since 2019 go up. Most of the weakest Aristocrats trade at valuations only the best ones commanded 5years ago. Everybody knows stonks just go up.
But in the end I think it's that it's more about finding the right balance between risk and reward (growth and value) which fits everyone's individual preference.
We agree on J Powell too. He does not intend to allow the market to dip. That is not really his job but he knows he'll be job hunting if he doesn't play the game for politicians. This is all about excess liquidity. Can the market be saved next time with -2% rates? How about -5% the year after that? I don't know the answer because we have never been here before. In the mean time "investors" will give themselves a high five for buying or holding through what seasoed investors consider an irrationally high multiple.
Hear me now, believe me later, asset bubbles do pop.
Don't ask me when. I am not an angry old value investor sitting on cash. I try to be a little cautious and have a little extra cash but I am not afraid to play the game. At all times I own a few speculative stocks. They go up to my disbelief and I look for the next ones. Meanwhile some of my conservative plays flounder, but mostly they just go up gradually too. The rising tide does lift all portfolios. The only thing I am sure of is I am not sure what happens the next few years. That would require some arrogance. I mix it up and hope I can get some of the prize and avoid some of the downdraft should it occur. That day will come. It seems it IS different this time due to never seen FED tactics, but I truly believe valuation principles are not dead forever. Bad balance sheets don't matter at all today but maybe they do eventually?
I hope the thread gets more participation. IMO it's the most important trend going on for years now.