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07-05-2022, 07:59 AM
Neither is the Dow
I wrote and warn about this extensively on this forum to warn gaianst entering too early.
Josh Tan is spot on as he writes about the "anchoring" effects. People think it is cheap only because they got used to excessive valuations.
The stock he used as an example is Amazon whose name he does not mention but is obvious. Among the FAANG Netflix is crush but it is not cheap. Facebook fell it is not cheap.
I will look at Nasdaq only after it gets below 10000 even then I don't think it is cheap and can fall further but there may be some good picks that can rise even as markets fall.
The US Market by every metric is expensive market cap to GDP (buffet favorite) PE ratio, price to book, price to cash. It's like a house of cards should a recession come it will crumble ......
Last year using Schiller CAPE adjusted for interest rate it looked reasonable ...but once you recalculate with rising rates it is too expensive.
Even if you don't want to sell.STOP BUYING and wait There are more rate hikes on the way. It is inching closer to recession and the US economy has mountain of debt that will a big problem once rates go up.
I wrote and warn about this extensively on this forum to warn gaianst entering too early.
Josh Tan is spot on as he writes about the "anchoring" effects. People think it is cheap only because they got used to excessive valuations.
The stock he used as an example is Amazon whose name he does not mention but is obvious. Among the FAANG Netflix is crush but it is not cheap. Facebook fell it is not cheap.
I will look at Nasdaq only after it gets below 10000 even then I don't think it is cheap and can fall further but there may be some good picks that can rise even as markets fall.
The US Market by every metric is expensive market cap to GDP (buffet favorite) PE ratio, price to book, price to cash. It's like a house of cards should a recession come it will crumble ......
Last year using Schiller CAPE adjusted for interest rate it looked reasonable ...but once you recalculate with rising rates it is too expensive.
Even if you don't want to sell.STOP BUYING and wait There are more rate hikes on the way. It is inching closer to recession and the US economy has mountain of debt that will a big problem once rates go up.
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
